Will VF Earnings Keep Sending the Stock Higher?

VF (NYSE: VFC  ) will release its quarterly report on Friday, but shareholders have started their celebration early, with shares having consistently set new all-time highs throughout 2013. Yet the perennial question with a soaring stock is whether VF earnings can keep up with the promise that its investors see in the company.

VF isn't well known, but it's the name behind popular brands North Face, Timberland, and Vans, as well as well-known jeans lines Wrangler and Lee. As the consumer recovery has started to accelerate, smart retail operations have capitalized, and you can see from VF's share price how good a job it has done in making hay while the sun shines. Let's take an early look at what's been happening with VF over the past quarter and what we're likely to see in its quarterly report.

Stats on VF

Analyst EPS Estimate

$1.17

Change From Year-Ago EPS

5.4%

Revenue Estimate

$2.26 billion

Change From Year-Ago Revenue

5.6%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Can VF earnings grow faster this quarter?
In recent months, analysts have had mixed views on VF earnings, cutting their June-quarter estimates by $0.02 per share but boosting their full-year 2013 estimates by double that amount. The stock has continued its recent tear, rising almost 20% just since mid-April.

VF's most recent quarterly results were extremely impressive, as the company managed to grow its earnings per share by 25% in the first quarter. Despite only a 2% rise in overall revenue, VF managed to boost its gross margins by 2.4 percentage points, a huge boost that reflects the company's strategic moves toward emphasizing higher-margin profits. As a result, the company raised its guidance for the year's earnings by a nickel per share.

But VF doesn't plan to stop there. The company has ambitious plans to raise its revenue by 50% to $17 billion annually by 2017, with a goal of earning $18 per share -- 67% higher than its current expectations for year-end 2013. In order to succeed, VF will need to focus on a couple of areas. Its high-priced jeans business has benefited recently from weakness from True Religion (NASDAQ: TRLG  ) , which is in the process of being acquired by a private equity firm. True Religion is vulnerable to its customers leaving for better values elsewhere, and if VF can claim its share, then it could help provide the growth the company's looking for.

The other big prospect for high-margin sales is the action-outdoor space, where VF has a nice lead in terms of financial performance. Columbia Sportswear (NASDAQ: COLM  ) has much lower margins but also has a well-known brand presence that will pose a threat to VF in the long run. Bigger competitors such as Under Armour (NYSE: UA  ) will also bear watching, especially if Under Armour decides to do what it's done in the past with footwear and expand into new markets with particularly promising profit potential.

In VF's earnings report, take a look at whether the company provides any further guidance on which areas it plans to emphasize in its drive toward massive growth. With VF having put so much pressure on itself, investors will have to watch closely to make sure the company doesn't bite off more than it can chew.

VF is a big player in retail, but is it forward-looking and capable enough to survive the big shakeout going on in the industry today? Find out in our new special report, in which we reveal the 3 Companies Ready to Rule Retail. Uncovering these top picks is free today; just click here to read more.

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