V.F. Corporation VFC is scheduled to release third-quarter 2016 results on Oct 24. Last quarter, the company had delivered a positive earnings surprise of 5.9%.
However, it has underperformed the Zacks Consensus Estimate by an average of 0.5% over the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
Factors Influencing this Quarter
Despite beating earnings estimates for two consecutive quarters, V.F. Corp. continues to battle foreign currency headwinds, which have been affecting its performance. Further, management expects this to prevail and hurt the company’s ongoing performance. Additionally, the company’s sale of its Contemporary Brands unit is likely to dent sales, margins and earnings in 2016. These factors, along with the bankruptcy in the sporting goods space caused the company to trim its 2016 sales view.
However, V.F. Corp.’s solid brand portfolio and opportunities with regard to distribution bode well. Further, the company’s focus on strategic buyouts and expansion of global operations emphasize its growth prospects. V.F. Corp.’s practice of ensuring that its portfolio is well aligned with its strategic plans position it well for growth and elevating shareholder value. Thus, we would wait and see what is in store for this apparel retailer when it reports third-quarter earnings.
Our proven model does not conclusively show that V.F. Corp. is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for V.F. Corp. is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at $1.15.
Zacks Rank: V.F. Corp. carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Big 5 Sporting Goods Inc. BGFV, expected to report earnings on Oct 25, has an Earnings ESP of +3.33% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alibaba Group Holding Limited BABA, anticipated to report earnings on Oct 25, has an Earnings ESP of +2.13% and sports a Zacks Rank #1.
Amazon.com Inc. AMZN, slated to report earnings on Oct 27, has an Earnings ESP of +6.98% and flaunts a Zacks Rank #1.
Confidential from Zacks
Beyond this Industry Outlook, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research