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1. Company Snapshot

1.a. Company Description

V.F. Corporation, together with its subsidiaries, engages in the design, procurement, marketing, and distribution of branded lifestyle apparel, footwear, and related products for men, women, and children in the Americas, Europe, and the Asia-Pacific.It operates through three segments: Outdoor, Active, and Work.The company offers outdoor, merino wool and other natural fibers-based, lifestyle, and casual apparel; footwear; equipment; accessories; outdoor-inspired, performance-based, youth culture/action sports-inspired, streetwear, and protective work footwear; handbags, luggage, backpacks, and totes; and work and work-inspired lifestyle apparel and footwear.


It provides its products under the North Face, Timberland, Smartwool, Icebreaker, Altra, Vans, Supreme, Kipling, Napapijri, Eastpak, JanSport, Dickies, and Timberland PRO brand names.The company sells its products primarily to specialty stores, department stores, national chains, and mass merchants, as well as sells through direct-to-consumer operations, including retail stores, concession retail stores, and e-commerce sites, and other digital platforms.V.F. Corporation was founded in 1899 and is headquartered in Denver, Colorado.

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1.b. Last Insights on VFC

V.F. Corporation's recent performance was positively driven by its Q3 earnings release, which surpassed estimates with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.43 per share. The company's return to organic growth in Q3, following the divestment of Dickies, was a significant factor. Additionally, executives highlighted strength in the Americas and a first positive quarter for direct-to-consumer revenue in "a couple of years." V.F. Corp. was upgraded from sell to hold due to strong quarterly earnings results. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. VF Corp's Turnaround Gains Momentum

The company's Q3 financial performance was a notable improvement, with revenues coming in flat to up 2% on a constant dollar basis, and adjusted operating income in the range of $10 to $30 million. Earnings per share (EPS) was $0.58, beating analyst estimates of $0.43. Gross margin was flat to slightly up versus last year, while the SG&A rate was flat to slightly down. The company's pricing actions, combined with sourcing savings and cost reductions, are driving profitability. Adjusted gross margin is expected to be 54.5% or better for the full year, reflecting progress made on the company's work streams.

Publication Date: Feb -08

📋 Highlights
  • Pricing Actions Impact:: Pricing strategies across brands aim to boost revenue growth and profitability, with adjusted gross margin targeting 54.5% or better for the year.
  • Operating Margin Growth:: Expected operating margin of at least 6.5% in 2024, up from 5.9% in the prior year.
  • Q4 Revenue Guidance:: Full-year revenue projected flat to up 2% on a constant dollar basis, with a 5% positive FX benefit.
  • Altra Brand Potential:: Altra seen as a future "billion-dollar brand" with controlled distribution to build running market credibility.
  • Gross Margin Progress:: Progress toward FY2028 gross margin target of 55%, with Q3 margin beating due to sourcing benefits and pricing actions.

Revenue Growth Prospects

Analysts estimate next year's revenue growth at 2.1%, indicating a moderate pace. VF Corp's guidance for the full year remains unchanged, with revenue expected to be flat to up, and a focus on driving profitability through pricing actions, sourcing savings, and cost reductions. The company's brands, including Vans and The North Face, are showing positive signs, with e-commerce growth and strength in new products.

Valuation Metrics

VF Corp's valuation metrics indicate a relatively high price-to-earnings (P/E) ratio of 35.59, suggesting that the market has high expectations for the company's future growth. The price-to-book (P/B) ratio is 4.46, and the price-to-sales (P/S) ratio is 0.83. The EV/EBITDA ratio is 12.31, indicating a moderate valuation. Return on equity (ROE) is 14.79%, and return on invested capital (ROIC) is 3.27%, indicating room for improvement in capital allocation.

Debt Reduction and Cash Flow

VF Corp's debt reduction efforts are ongoing, with a focus on improving operating cash flow. The company's net debt-to-EBITDA ratio is 4.03, indicating a relatively high level of leverage. However, management is confident that debt reduction will continue to improve operating income and cash flow, helping to reduce leverage. As Bracken Darrell stated, "We've got a turnaround underway, and we're feeling confident about our growth prospects even in a choppy environment."

3. NewsRoom

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Innovative Designs (OTCMKTS:IVDN) versus V.F. (NYSE:VFC) Head-To-Head Contrast

Feb -22

Source: defenseworld.net

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Investment Manager Sheds $10.6 Million VFC Shares, According to Recent SEC Filing

Feb -17

Source: fool.com

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V.F. Corporation (NYSE:VFC) Receives Average Rating of “Hold” from Brokerages

Feb -06

Source: defenseworld.net

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V.F. Corp.: The Results Look Better, But Still A Lot Of Concerns

Feb -04

Source: seekingalpha.com

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V.F. Q3 Earnings Call Highlights

Jan -30

Source: defenseworld.net

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V.F. Corp.: The Turnaround Is Advancing

Jan -28

Source: seekingalpha.com

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V.F. Corp. Q3 Earnings & Revenues Beat Estimates, Sales Up Y/Y

Jan -28

Source: zacks.com

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V.F. Corporation (VFC) Q3 2026 Earnings Call Transcript

Jan -28

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.13%)

6. Segments

Outdoor

Expected Growth: 1.2%

The Outdoor segment's 1.2% growth is driven by increasing consumer participation in outdoor activities, a growing demand for sustainable and eco-friendly products, and V.F. Corporation's strategic investments in e-commerce and digital marketing, which have enhanced the segment's online presence and customer engagement.

Active

Expected Growth: 1.1%

V.F. Corporation's 1.1% active segment growth is driven by increasing outdoor enthusiast demographics, rising demand for sustainable and eco-friendly products, and strategic acquisitions expanding its portfolio of outdoor brands. Additionally, the company's focus on digital transformation and e-commerce growth initiatives contribute to its steady growth.

Work

Expected Growth: 0.9%

V.F. Corporation's 0.9 growth is driven by its diversified portfolio of outdoor and action sports brands, such as The North Face and Timberland, which cater to the growing demand for sustainable and outdoor lifestyle products. Additionally, the company's strategic acquisitions and investments in digital marketing and e-commerce capabilities have enhanced its online presence and fueled growth.

Other

Expected Growth: 0.8%

V.F. Corporation's 'Other' segment growth is driven by increasing demand for outdoor and action sports, expansion of The North Face and Timberland brands, and strategic investments in digital marketing and e-commerce platforms, resulting in 0.8% growth.

7. Detailed Products

The North Face

Outdoor apparel, footwear, and equipment

Timberland

Outdoor footwear, apparel, and accessories

Wrangler

Denim jeans and casual apparel

Lee

Denim jeans and casual apparel

Dickies

Workwear and casual apparel

JanSport

Backpacks, luggage, and outdoor gear

Eastpak

Backpacks, luggage, and accessories

Kipling

Backpacks, luggage, and accessories

Napapijri

Outdoor apparel and accessories

Icebreaker

Merino wool activewear

8. V.F. Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for V.F. Corporation is medium due to the presence of alternative products in the market, but the company's strong brand portfolio and diversified product offerings mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers for V.F. Corporation is low due to the company's strong brand recognition and diversified product offerings, which reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for V.F. Corporation is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations and diversified supply chain mitigate this threat.

Threat Of New Entrants

The threat of new entrants for V.F. Corporation is low due to the high barriers to entry in the industry, including high capital requirements and the need for established distribution networks.

Intensity Of Rivalry

The intensity of rivalry for V.F. Corporation is high due to the presence of several established competitors in the market, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.06%
Debt Cost 3.95%
Equity Weight 20.94%
Equity Cost 11.56%
WACC 5.54%
Leverage 377.55%

11. Quality Control: V.F. Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.23$

Current Price

21.23$

Potential

-0.00%

Expected Cash-Flows