VF (VFC) reports a loss for the fourth quarter, ignores revenue estimates

VF (VFC) came out with quarterly loss of $0.32 per share versus the Zacks Consensus Estimate of $0.01. For comparison, a year earlier earnings per share were $0.17. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -3,300%. A quarter ago, it was expected that this maker of brands including Vans, North Face, and Timberland would post earnings of $0.79 per share when it actually produced earnings of $0.57, delivering a surprise of -27.85% .

The company has failed to beat consensus EPS estimates over the last four quarters.

VF, which belongs to the Zacks Textile – Apparel industry, posted revenues of $2.37 billion for the quarter ended March 2024, missing the Zacks Consensus Estimate by 1.26%. For comparison, year-ago revenues were $2.74 billion. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

VF Shares have lost about 33.7% since the beginning of the year compared to the S&P 500’s gain of 11.6%.

What’s next for VF

While VF Has has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Estimate revisions trend for VF Mixed ahead of earnings release. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.15 on revenue of $1.97 billion for the coming quarter and $1.35 on revenue of $10.58 billion for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Textiles & Apparel industry is currently in the top 20% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Oxford Industries (OXM), is yet to release results for the quarter ending April 2024.

The owner of the Tommy Bahama, Lilly Pulitzer and Southern Tide clothing lines is expected to post quarterly earnings of $2.70 per share in its upcoming report, representing a year-over-year change of -28.6%. The consensus EPS estimate for the quarter has been revised upwards by 3% over the last 30 days to the current level.

Oxford Industries’ revenue is expected to be $408.4 million, down 2.8% from the same quarter last year.

Want the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report

VF Corporation (VFC): Free Stock Analysis Report

Oxford Industries, Inc. (OXM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research