) - one of the largest apparel retailers in the world - remains
on our Neutral list with a target price of $169.00. Moreover, the
company has a Zacks Rank #3 (Hold).
At one end where we remain impressed with the company's
consistent positive earnings surprise trend, strong organic
revenue growth and impressive management guidance, at other end
we remain cautious on the stock due to sluggish economic
recovery, slowdown in China as well as high household debt and
unemployment level, which may restrain consumers' spending.
The fourth quarter 2012 earnings of $3.07 per share at V.F.
Corp. exhibited an improvement of over 32% from the comparable
year-ago quarter as well as the Zacks Consensus Estimate of
$3.03. The year-over-year increase was primarily driven a strong
top-line growth along with improved margins.
Looking at the earnings surprise history, the company has
beaten the Zacks Consensus Estimates in the past 13 quarters. The
average positive surprise in the trailing 13 quarters comes to
Given the solid fourth-quarter results, the company expects
2013 revenue to increase 6% to $11.5 billion. Gross and operating
margins are anticipated to expand by 100 basis points. Based on
these forecasts, V.F. Corp. expects its adjusted earnings for
2013 to be $10.70 per share compared with $9.63 in 2012.
Currently, the Zacks Consensus Estimate stands at $10.81 per
share, which is substantially above the company's guidance.
Apart from strong fourth-quarter results, V.F. Corp.'s growth
story looks compelling. We believe that the company's sustained
focus on strategic acquisitions, along with expanding global
operations, bodes well for future growth.
On the flip side, the company operates in a competitive
environment and strives to maintain its market share, actively
competing with numerous manufacturers and distributors of apparel
and related products. The company primarily competes on the basis
of brand recognition, fashion, price, service, store location,
and quality. Failure to offer high-quality differentiated
products at a competitive price may hamper V.F. Corp.'s market
share, and thereby it's top and bottom line performances.
Other Stocks Worth Considering
Other stocks worth considering in the apparel retail industry
Michael Kors Holdings Limited
Ralph Lauren Corporation
). Guess and Michael Kors hold a Zacks Rank #1 (Strong Buy),
while Ralph Lauren carries a Rank #2 (Buy).
GUESS INC (GES): Free Stock Analysis Report
MICHAEL KORS (KORS): Free Stock Analysis
RALPH LAUREN CP (RL): Free Stock Analysis
V F CORP (VFC): Free Stock Analysis Report
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