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Here's How V.F. Corp (VFC) Looks Just Ahead of Q4 Earnings

V.F. Corporation VFC is likely to register year-over-year top and bottom-line decreases  when it posts fourth-quarter fiscal 2024 earnings on May 22, after the closing bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.42 billion, indicating an 11.8% decline from the prior-year quarter’s reported figure.

The consensus estimate for earnings is pegged at 2 cents per share, suggesting a sharp decline from the 17 cents reported in the year-ago quarter. The metric has been unchanged in the past 30 days.

V.F. Corp has a trailing four-quarter negative earnings surprise of 3.9%, on average. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 27.9%.

Key Factors to Note

V.F. Corp has been grappling with a tough operating environment and dismal wholesale performance, along with sluggishness in the Americas region. The company’s wholesale business, mainly in the United States, has been witnessing challenges as its major partners have been taking a more cautious approach to forward orders. Also, elevated promotional activity and higher product costs are likely to have dented the bottom-line performance.

On its last earnings call, management had highlighted caution from wholesalers in the company’s key markets, with softer future order books globally and the highest impact in the Americas. It also cited that the North Face wholesale channel, mainly in the United States, is likely to remain challenged with a choppier Americas and European macro environment.

We anticipate sales at Vans brand and the Americas region to decline 16.8% and 11.3% year over year, respectively, in the fiscal fourth quarter. Our model suggests a fall of 10% in wholesale revenues.

However, the company’s transformation program – Reinvent -, which aims to enhance focus on brand-building and improve the operating performance, appears encouraging. The plan focuses on four objectives, which include improving the North America performance, Vans’ turnaround, reducing costs and strengthening the balance sheet. The execution of the plan is expected to have cushioned the company’s performance to some extent.

Valuation Picture

V.F. Corp exhibits a forward 12-month price-to-earnings ratio of 9.12X, below the Textile – Apparel industry's average of 11.98X and significantly below its five-year high of 59.87X. Investors may view this as an opportunity, considering V.F. Corp’s strong market position and potential for improvements in performance. The current Value Score of A adds weight to this optimistic view.

However, recent market movements show that V.F. Corp’s shares lost 21.3% in the last three months compared with the industry's 13.9% decline.

The Zacks Model

Our proven model does not conclusively predict an earnings beat for V.F. Corp this time around. 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 before they’re reported with our Earnings ESP Filter.

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

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V.F. Corp currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are three companies, which according to our model,  have the right combination of elements to post an earnings beat this season:

The TJX Companies TJX currently has an Earnings ESP of +3.52% and a Zacks Rank of 2. TJX is likely to register top and bottom-line growth when it reports first-quarter results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.46 billion, which indicates 5.8% growth from that reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for TJX’s earnings is pegged at 86 cents per share, which implies 13.2% growth from the year-ago quarter's actuals. TJX has a trailing four-quarter earnings surprise of 6.3%, on average.

Ralph Lauren RL currently has an Earnings ESP of +0.76% and a Zacks Rank of 3. The company is expected to register an increase in the top and bottom lines when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.65 suggests a rise of 83.3% from the year-ago quarter.

The consensus mark for RL’s revenues is pegged at $1.55 billion, which implies an increase of 0.8% from the figure reported in the year-ago quarter. RL has a trailing four-quarter earnings surprise of 18.7%, on average.

Deckers Outdoor Corporation DECK currently has an Earnings ESP of +14.31% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fourth-quarter numbers. The Zacks Consensus Estimate for quarterly revenues is pegged at $876.1 million, which indicates an increase of 10.7% from the figure reported in the prior-year quarter.

The consensus estimate for the quarterly earnings per share of $2.68 suggests a decline of 22.5% from the year-ago quarter. DECK has a trailing four-quarter earnings surprise of 32.1%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The TJX Companies, Inc. (TJX) : Free Stock Analysis Report

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

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Ralph Lauren Corporation (RL) : Free Stock Analysis Report

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