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Will V.F. Corp's (VFC) Robust Earnings Trend Continue in Q1?

V.F. Corporation VFC is slated to release results for first-quarter fiscal 2019 on Jul 20, before the market opens.

In the last reported quarter, this designer, manufacturer, and marketer of branded apparel and related products delivered a positive earnings surprise of 3.1%. This marked the company’s third top- and bottom-line beat in the last four quarters. The company recorded an average positive surprise of 3.9% in the last four quarters.

What to Expect?

The question lingering on investors’ minds is whether V.F. Corp will be able to deliver positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is 33 cents per share, reflecting year-over-year growth of 13.8%.

We note that the Zacks Consensus Estimate has witnessed an uptrend ahead of the earnings release. Analysts polled by Zacks anticipate revenues of $2.7 billion, up 12.3% from the year-ago quarter.

V.F. Corporation Price and EPS Surprise

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

Moreover, we note that the stock has outperformed the industry in the past year. Its shares have increased 49.4% while the industry recorded 42% growth.

Factors at Play

V.F. Corp is gaining from its progress on the 2021 growth strategy, which focuses on responding to the changing marketplace while targeting shareholder returns. The company’s focus on this plan is evident from growth in direct-to-consumer and digital businesses as well as the international segment, which are among the key aspects of the 2021 plan.

Additionally, the company is gaining from the strength in the Outdoor & Action Sports coalition and workwear businesses. Moreover, the company’s acquisition strategy appears to be reaping good results. Notably, contributions from the recently-concluded Williamson-Dickie buyout are aiding results. The company’s shareholder-friendly moves and a supportive balance sheet bode well.

Driven by the robust quarterly performance trend and the progress on the 2021 strategy, the company provided a solid fiscal 2019 view. V.F. Corp expects revenues of $13.45-$13.55 billion, an increase of 9-10%. This includes revenue growth anticipation of 8-9% for the Outdoor & Action Sports coalition, nearly flat revenues for Jeanswear and an increase of more than 35% for Imagewear. Further, the company expects revenue growth of 13-15% for the International and 8-10% for the direct-to-consumer business.

Further, it envisions adjusted earnings per share of $3.48-$3.53, representing growth of 11-13% year over year.

However, a tough global environment and an intense competition continue to be hurdles. In fact, the company is being troubled by a difficult global economic environment for over a year now.

What the Zacks Model Unveils

Our proven model shows that V.F. Corp is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has a Zacks Rank #2 and an Earnings ESP of 0.00%, which makes earnings surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination to deliver an earnings beat:

lululemon athletica inc. LULU has an Earnings ESP of +0.88% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Columbia Sportswear Co. COLM has an Earnings ESP of +51.61% and a Zacks Rank #2.

Guess?, Inc. GES has an Earnings ESP of +4.08% and a Zacks Rank #2.

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