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Factors Likely to Decide V.F. Corp's (VFC) Fate in Q2 Earnings

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V.F. Corporation VFC is slated to report second-quarter fiscal 2022 results on Oct 22, before the opening bell. The lifestyle apparel designer is expected to have witnessed earnings and sales growth in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $1.17 per share, which suggests substantial growth of 74.6% from 67 cents reported in the year-ago quarter. Earnings estimates have been unchanged in the past 30 days. The consensus mark for revenues is pegged at $3.5 billion, indicating growth of 34.3% from that reported in the year-ago quarter.

The company delivered an earnings surprise of 145.5% in the last reported quarter. Its earnings surpassed the Zacks Consensus Estimate by 42%, on average, in the trailing four quarters.

Key Factors to Note

V.F. Corp has been witnessing broad-based momentum across its portfolio, which is likely to have continued in the fiscal second quarter. Strong performance across segments, channels and geographic regions also bode well.

The company’s robust China business, driven by digital strength and solid demand, has been aiding sales in the APAC segment. On its last reported quarter’s earnings call, management predicted continued momentum in China, with mid-teens growth expected for the fiscal second quarter.

It remains on track with the digital and hyper-digital business model transformation, which has been boosting the top line for the past few quarters. Buy online, pickup in store, and curbside delivery options have been aiding digital sales. The digital business is also expected to have benefited from the sturdy performance across almost every brand in the portfolio, including the pure-play digital wholesale partners.

However, management continues to reel under supply-chain issues along with the shortage of labor and factory closures in China, Malaysia and Vietnam, which are expected to have led to an unfulfilled demand. Elevated SG&A costs and other expenses related to the transformation plan, and other cost-cutting measures are likely to have been concerning. Higher freight costs are also likely to have acted as a deterrent.

V.F. Corporation Price and EPS Surprise

V.F. Corporation Price and EPS Surprise
V.F. Corporation Price and EPS Surprise

V.F. Corporation price-eps-surprise | V.F. Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for V.F. Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

V.F. Corp has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.57%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Central Garden & Pet Company CENT presently has an Earnings ESP of +22.22% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fox Corporation FOXA currently has an Earnings ESP of +7.66% and a Zacks Rank #2.

Steven Madden SHOO has an Earnings ESP of +4.55% and a Zacks Rank #2 at present.


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V.F. Corporation (VFC) : Free Stock Analysis Report

Central Garden & Pet Company (CENT) : Free Stock Analysis Report

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Fox Corporation (FOXA) : Free Stock Analysis Report

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