Is V. F. Corp. (VFC) Likely to Beat Earnings Estimates?

Zacks

We expect the footwear and apparel retailer V. F. Corp. (VFC) to beat expectations when it reports second-quarter 2014 results before the market opens on Jul 18.

Why a Likely Positive Surprise?

Our proven model shows that V. F. Corp. may beat earnings because it has the right combination of two key components.

Positive Zacks ESP: V. F. Corp. currently has an Earnings ESP of +5.71%. This is because the Most Accurate estimate stands at 37 cents per share, while the Zacks Consensus Estimate is pegged at 35 cents.

Zacks Rank #2 (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have a higher chance of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of V. F. Corp.'s Zacks Rank #2 (Buy) and Earnings ESP of +5.71% makes us confident of a positive earnings beat.

What is Driving Better-than-Expected Earnings?

V.F. Corporation’s diversified brand portfolio and approach toward brand management allows each of its brands to develop further through rigorous marketing strategies, financial control and operating leverage. We believe that, given the strength of many of its brands and opportunities with regard to distribution, the company is poised for long-term growth. The company also looks attractive based on its ongoing initiatives to capitalize on opportunities in the emerging markets and its focus on core business activities. The company’s growth prospects look promising, given its sustained focus on opportunistic acquisitions and expansion of its global operations, which will boost its top and bottom lines.

Further, following the strong first-quarter 2014 results the company seems confident about rest of 2014, mainly on the back of its strong brand portfolio. For the second quarter, the company expects revenue growth similar to that of first-quarter, driven by continued strength at the Outdoor & Action Sports coalition.

For 2014, it envisions delivering results at the high end of its previously stated guidance of a 7%-8% increase in revenues, considering favorable growth in all its coalitions. Adjusted earnings for 2014 are expected to rise 13% year over year to $3.06 per share.

V.F. Corp. has topped the Zacks Consensus Estimate in three of the trailing four quarters with an average positive surprise of 4.23%. In the last concluded quarter, the company outdid the Zacks Consensus Estimate by 4.69%.

Other Stocks to Consider

V. F. Corp. is not the only firm we are looking up this earnings season. The following companies are also likely to beat earnings in the to-be-reported quarter:

Caterpillar Inc. (CAT) with an Earnings ESP of +0.67% holds a Zacks Rank #1 (Strong Buy).

Chipotle Mexican Grill Inc. (CMG) has an Earnings ESP of +2.30% and a Zacks Rank #2.

Marinemax Inc. (HZO) has an Earnings ESP of +13.21% and a Zacks Rank #2.

Read the Full Research Report on CMG
Read the Full Research Report on VFC
Read the Full Research Report on CAT
Read the Full Research Report on HZO


Zacks Investment Research

View Comments (0)