VF Corp. held its “Reinvent to Grow” Part 2 Investor Day in New York City this week. There, it emphasized introducing its new brand leaders across its portfolio and outlined key strategic objectives for each.
Presentations during the meeting were conducted by the brand presidents of The North Face, Timberland, Dickies, Altra, and Vans. Also presenting during the 2.5-hour venue included VF President & CEO Bracken Darrell; Abhishek Dalmia, chief strategy, transformation and digital officer; and Paul Vogel, CFO.
Numbers, specific projections and timelines were lacking in the presentation, which concerned some analysts who tuned in to listen to the webinar, while others saw it as more prudent to limit multi-year forecasts.
In a no-growth scenario, VFC reaffirmed targets to achieve 10 percent-plus operating margins by Fiscal 2028.
VFC shares fell over 12 percent on Thursday, March 6, the day of the presentation, and were down another 7 percent on Friday, March 7.
Some market watchers believe investors sold off positions to minimize risks from the brewing trade war on VF’s business operations.
“The company, which designs, manufactures and markets branded apparel, including The North Face, Timberland, Vans, Dickies, Jansport, and Kipling, among others, is set to bear the brunt of higher fees on imports, manufacturing and raw materials caused by higher taxes as a result of the ongoing trade war,” commented Insider Monkey in a note to the market.
On March 6, Telsey Advisory Group reiterated its “Market Perform” rating and maintained its price target (PT) at $27 a share. Needham reiterated its “Buy” rating and maintained its PT at $28 per share. Stifel reiterated its “Buy” rating and its $35 PT. Citibank reiterated its “Buy” rating and its PT of $30 per share. VFC shares closed at $20.56 on Thursday, March 6.
On Friday, Wells Fargo maintained it “Underweight” rating on VFC shares but cut its PT from $19 to $17 per share, sending shares lower. VFC shares rebounded a bit in the afternoon but closed at $19.13 per share on Friday.
VFC management reiterated that if the company achieved $11 billion in sales in Fiscal 2028 versus the $10 billion assumed in their base scenario, EBIT margin would be 11.5 percent to 12.0 percent versus 10 percent assumed in the best case.
“Stifel estimates will remain street-high, however, reflecting our confidence in opportunities,” said Stifel Managing Director Jim Duffy in an investor note following the event. “All-in, we are impressed with the new brand leadership and are enthusiastic about strategies to reignite the brand portfolio. Paired with cost savings initiatives, a return to growth will yield margin leverage.”
Duffy added, “Across FY26, we see VFC establishing a credible case for durable growth. Along with margin improvement initiatives, we see opportunity for net leverage below 3x entering FY27 and believe the stock could be discounting $2 plus in earnings power in 12 months.”
Citibank’s Paul Lejuez also wrote, “While we didn’t expect specific sales targets for the next several years, the market was hoping for a little more than what they gave. Still, we continue to believe mgmt is laying the groundwork for a multi-year turnaround/growth story.”
Lejuez said that the presentation from Vans Brand President Sun Choe, who spoke extensively for the first time since joining the company in July, was “perhaps the most anticipated.”
Choe indicated that the market should expect more newness by back-to-school and see sequential improvements from there. A key focus will be building its women’s business. Vans has significantly pulled back on its presence in the value channel, representing one-third of Vans doors, while it had grown to over 50 percent at its peak. Management noted that Vans had pulled out of 1,800 value channel doors in the last year while adding 800 premium doors.
Bracken noted that VFC is not looking for a quick fix with Vans and that the fixes may take a few years.
The North Face Brand President Caroline Brown highlighted the recent success of TNF’s partnership with Kim Kardashian’s Skims brand, which the company sees as an opportunity to develop further. They also see an opportunity to double the TNF apparel business’s size and grow in categories outside of outerwear. Brown also suggested an opportunity to double the TNF equipment business and triple the TNF footwear business.
At Timberland, Brand President Nina Flood sees a significant opportunity to build on its apparel business, including outerwear and denim. Timberland management also plans to open stores in key cities globally.
As part of the Emerging Brands conversation, VFC noted that Altra is poised to grow in the Americas and expand into Europe.
At Dickies, Brand President Chris Goble used a Venn diagram to cast the Dickies brand at the intersection of consumers in the Work, Lifestyle and Value categories while splitting the brand into a core Dickies sub-brand serving the Lifestyle and Work segments and Genuine Dickies sub-brand serving the Value segment.
VFC management sees an opportunity in the trend of Gen-Z moving toward the blue-collar lifestyle, if not as a career.
A focus on better connecting with the female consumer was also a common thread across all brands.
Stifel said VFC also remains committed to delivering the balance sheet, cutting costs and focusing on organic growth rather than M&A in the near term.
“The turnaround is still in progress and communication remained noncommittal on both revenue targets and timelines for achievement of key initiatives,“ the Stifel team wrote. “We see it prudent for management to deliberately temper sell-side multi-year expectations until the portfolio can demonstrate a sustainable growth trajectory.”
Citibank wrote, “While we didn’t expect specific sales targets for the next several years, the market was hoping for a little more than what they gave. Still, we continue to believe mgmt is laying the groundwork for a multi-year turnaround/growth story.”
Image courtesy VF Corporation
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See below for SGB Media’s coverage of VF Corp.’s “Reinvent to Grow” Part 1 Investor Day.
