The Zacks Analyst Blog Highlights: Best Buy Company, V.F. Corporation, Timberland, Gap and Sears Holdings

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Jun 15, 2011, 09:30 ET

CHICAGO, June 15, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Best Buy Company, Inc. (NYSE: BBY), V.F. Corporation (NYSE: VFC), Timberland Co. (NYSE: TBL), Gap Inc. (NYSE: GPS) and Sears Holdings Corporation (Nasdaq: SHLD).

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Here are highlights from Tuesday's Analyst Blog:

Best Buy Tops Estimate

Best Buy Company, Inc. (NYSE: BBY), a leading specialty retailer of consumer electronic products, recently posted better-than-expected first-quarter 2012 results, thereby sending the shares up $2.06 or 7.2% to $30.88 in pre-market trading.

The quarterly earnings of 35 cents a share topped the Zacks Consensus Estimate of 33 cents, but fell 2.8% from 36 cents earned in the prior-year quarter. The Zacks Consensus Estimate had remained stagnant prior to the earnings release with none of the 25 analysts covering the stock revising their estimates in the last 30 or 7 days.

Management reiterated its fiscal 2012 adjusted earnings guidance range of $3.30 to $3.55 per share. The current Zacks Consensus Estimate for the fiscal year is $3.46.

Gross profit dropped marginally by 0.9% to $2,768 million, whereas gross margin contracted 60 basis points (bps) to 25.3%. Operating income slipped 9.9% to $282 million, whereas operating margin fell 30 bps to 2.6%.

Richfield, Minnesota-based Best Buy said that total revenue climbed 1.4% to $10,940 million from the prior-year quarter. However, the company registered a fall of 1.7% in comparable-store sales versus growth of 2.8% in the year-ago quarter.

The total revenue also came ahead of the Zacks Consensus Estimate of $10,697 million. For fiscal 2012, Best Buy projected revenue between $51 billion and $52.5 billion.

VF Corp. to Acquire Timberland

V.F. Corporation (NYSE: VFC), in an endeavor to grow its outdoor and action sports business through expansion, entered into a merger agreement with Timberland Co. (NYSE: TBL). The company has offered to pay $43 for each Timberland share or $2.2 billion net of cash acquired.

The inclusion of Timberland in the V.F. Corporation portfolio of brands of outdoor and action sports business comprising Vans, Jansport, Eastpak and other brands, will make 50% of the company's total revenue, expected to rise to 60% by 2015.

The deal, which is expected to reach fruition by the end of third quarter of fiscal 2011, will increase V.F. Corporation's profit by 25 cents a share and revenues by $700 million in fiscal 2011.

In fiscal 2012, the deal is expected to add 75 cents to the earnings of the company. Timberland is expecting annual sales of $1.6 billion in 2011 while V.F. Corporation targets an annual revenue growth of 10%.

The transaction, subject to customary conditions, including receipt of Timberland stockholder approval and applicable regulatory approvals, will be financed by the company through cash in hand, commercial paper and term debt.

Timberland is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and accessories for consumers. Timberland markets products under the Timberland, Timberland PRO, Mountain Athletics, SmartWool, Timberland Boot Company and Howies brands.

Based in Greensboro, North Carolina, V.F. Corporation is one of the world's largest apparel companies. The company, together with its subsidiaries, engages in the design, manufacture, and marketing of branded apparel and related products in the United States and internationally. Major competitors of the company are Gap Inc. (NYSE: GPS) and Sears Holdings Corporation (Nasdaq: SHLD).

V.F. Corporationcurrently retains a Zacks #2 Rank, which translates to a short-term Buy rating. However, we maintain a long-term Outperform recommendation on the stock.

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