V.F. Corp. issued medium-term financial targets and key pillars of its enterprise strategy ahead of the company’s Investor Day on Wednesday.

The Medium-Term Financial Targets include:

  • Adjusted operating margin of at least 10 percent
  • Adjusted gross margin of at least 55 percent
  • Adjusted SG&A as a percentage of revenue of 45 percent or lower
  • Net leverage of 2.5x or below

The Investor Day represented the first of a two-part with a focus on broader enterprise strategies. Brand presentations are scheduled for the second Investor Day.

VF also updated the key pillars of its enterprise strategy:

  • Capitalizing on VF’s multi-brand portfolio anchored in performance: VF’s brands will remain anchored in the
    performance category with style elements that further expand the platform for growth. The company is adopting a unified
    way of operating that can be scaled across the multi-brand portfolio.
  • Investing in scalable capabilities: VF is investing in six key areas to build capabilities and enhance the company’s
    competitive advantage: elevated design function, modern marketing, global commercial platform, best-in-class integrated
    business planning, use-case centric AI and talent development.
  • Creating the optimal value-building P&L structure: A series of integrated workstreams are underway and making
    progress addressing key capability gaps with a focus on reducing the SG&A cost base, expanding gross margin and
    positioning the company for future revenue growth. These actions together are expected to create a scalable and highly
    cash generative P&L structure.
  • Committing to further strengthening the balance sheet: VF intends to further reduce debt and leverage to reach its
    optimal capital structure. The company will continue to prioritize free cash flow2 and debt reduction with a goal of further
    reducing net leverage. While prioritizing debt paydown, VF remains committed to returning capital to shareholders
    through paying a quarterly cash dividend, subject to approval by VF’s Board of Directors.

Bracken Darrell, VF’s president and CEO, said in a statement: “We activated our transformation program, Reinvent, during my first 15 months at VF, through which we are making excellent progress advancing our priorities and reshaping the company. We are accelerating the pace of change by building new capabilities across our organization to leverage our powerful portfolio of brands for  long-term, sustainable, profitable growth. We are beginning to see benefits from our initiatives, but significant upside remains as we create a structure primed for growth while transforming our company and its culture. This strong foundation positions us to quickly enhance VF’s profitability while enabling further investment in sustainable shareholder value creation.”

VF’s largest brands are The North Face, Vans, Timberland and Dickies.

Image courtesy VF Corp.