U.S. Markets closed

Will V. F. Corp (VFC) Miss Earnings This Season?

Zacks Equity Research

V. F. Corp. (VFC) is scheduled to report its fourth-quarter and fiscal 2013 results on Feb 14. Last quarter, this footwear and apparel retailer posted a positive earnings surprise of approximately 4.3%. Let's see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

V. F. Corp. came up with strong third-quarter fiscal 2013 earnings mainly driven by improved top line and margins. Top-line improvement stemmed from robust growth in Outdoor & Action Sports, Jeanswear and International as well as Direct-to-Consumer revenues, while gross margin benefited from improvement in higher margin businesses and lower product costs.  Further, the company provided an encouraging guidance for fiscal 2013. Moreover, the company’s recently completed 4:1 stock split instilled further confidence into the stock.

Earnings Whispers?

Our proven model does not conclusively project V. F. Corp. as likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here due to the following factors:
Zacks ESP: ESP (Expected Surprise Prediction) for V. F. Corp. is 0.00% since the Most Accurate estimate stands at 84 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks #3 Rank (Hold): V. F. Corp’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into earnings announcement, especially when the company is undergoing negative estimate revisions.

Other Stocks to Consider

V. F. Corp. is not the only firm we are looking up to this earnings season. Our model shows that the following stocks have the right combination to post an earnings beat:

Foot Locker Inc. (FL) has an Earnings ESP of +1.33% and a Zacks Rank #2 (Buy).

Finish Line Inc. (FINL) has an Earnings ESP of +1.18% and a Zacks Rank #2 (Buy).

The Home Depot Inc. (HD) with an Earnings ESP of +1.39% holds a Zacks Rank #3 (Hold).

Read the Full Research Report on VFC
Read the Full Research Report on HD
Read the Full Research Report on FL
Read the Full Research Report on FINL

Zacks Investment Research