Things You Must Know Ahead of V.F. Corp's (VFC) Q4 Earnings

V.F. Corporation VFC is slated to report fourth-quarter fiscal 2022 results on May 19, after the market close. 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 fourth-quarter earnings is pegged at 46 cents per share, which suggests substantial growth of 70.4% from 27 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 $2.83 billion, indicating growth of 9.6% from that reported in the year-ago quarter.

The Zacks Consensus Estimate for the company’s fiscal 2022 earnings is pegged at $3.20, indicating 144.3% growth from the year-ago quarter’s reported figure. Meanwhile, the consensus mark for revenues is pegged at $11.85 billion, suggesting a 28.2% increase from the prior-year quarter’s reported figure.

The company posted an earnings surprise of 11.6% in the last reported quarter. Also, its earnings surpassed the Zacks Consensus Estimate by 35.5%, on average, in the trailing four quarters.

V.F. Corporation Price and EPS Surprise

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

Key Factors to Note

V.F. Corp has been gaining from broad-based momentum across the company’s brands. Also, strength in the North Face brand, along with a contribution from the Supreme brand on the back of Supreme’s strong follower base among the younger generation, bodes well. Growth in the EMEA and North America regions, as well as strength in its largest brands, including The Vans, The North Face, Timberland and Dickies, is expected to have aided the top line in the fiscal fourth quarter.

The company 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.

However, management continues to reel under elevated freight expenses related to supply-chain disruptions. The sluggish performance in Greater China due to volatility in retail traffic stemming from the pandemic-led lockdowns are also likely to have acted as deterrents.

Management, on its last reported quarter’s earnings call, expected travel restrictions and constrained consumption to hurt results in the Chinese New Year holiday season. As a result, it anticipated low-single-digit growth for China in fiscal 2022. Fiscal 2022 revenues in the APAC region were forecast to rise 7-9%, down from the previously stated 12-14% growth.

The company expected revenues of $11.85 billion, suggesting year-over-year growth of 28%. The view compares unfavorably with the earlier mentioned $12 billion revenues, indicating year-over-year growth of 30%. International revenues were predicted to rise 22-24%, down from the prior mentioned 24-26% growth. Region-wise, revenues in EMEA were expected to increase 28-30%, down from the earlier stated 30-32% growth, and the APAC region was expected to increase 7-9%, down from the previously stated 12-14% growth.

It predicted direct-to-consumer revenue growth of 32-34%, down from a 34-36% rise mentioned earlier. VFC also expected more than 15% growth in digital revenues, down from the earlier stated 20% rise. The company anticipated an adjusted gross margin of 55%, suggesting year-over-year growth of 170 bps. This compares unfavorably with the previously mentioned 56% gross margin, implying year-over-year growth of 270 bps.

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 0.00%.

Stocks With Favorable Combination

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

PVH Corp PVH currently has an Earnings ESP of +2.32% and a Zacks Rank #3. PVH is anticipated to register top-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.1 billion, indicating an improvement of 0.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

However, the Zacks Consensus Estimate for PVH Corp’s bottom line has been unchanged in the past 30 days at $1.58 per share. However, the estimate suggests a decline of 17.7% from the year-ago quarter. PVH has delivered an earnings beat of 83.8%, on average, in the trailing four quarters.

lululemon athletica LULU has an Earnings ESP of +0.28% and a Zacks Rank of 3 at present. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings moved up 2.1% to $1.43 per share in the past 30 days, suggesting an increase of 23.3% from the year-ago quarter’s reported number.

Lululemon’s top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.55 billion, which suggests a rise of 26% from the figure reported in the prior-year quarter. LULU has delivered an earnings beat of 0.3%, on average, in the trailing four quarters.

Vail Resorts MTN currently has an Earnings ESP of +1.00% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings moved up 0.3% in the past 30 days to $9.13 per share, suggesting 35.9% growth from the year-ago quarter’s reported number.

Vail Resorts’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.15 billion, indicating a rise of 29.7% from the figure reported in the prior-year quarter. MTN has delivered an earnings beat of 1.7%, on average, in the trailing four quarters.

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