On Monday, Williams Trading reiterated its Sell rating on VF Corp (NYSE:VFC) with a steady price target of $10.00. The firm expressed skepticism about the company's prospects, citing a lack of formal guidance and overreliance on The North Face (TNF) brand to offset weaknesses in other areas.
VF Corp's first quarter results for fiscal year 2025 surpassed consensus estimates, yet concerns were raised about the company's strategic direction. Williams Trading highlighted the 12% decline in sales in the Americas and the limited potential for significant sales improvements both domestically and internationally.
The analyst day scheduled for October 30th in New York City is anticipated to provide insights into VF Corp's plans, but Williams Trading remains unconvinced about the effectiveness of the Reinvent transformation plan in revitalizing core brands. Despite the recent sale of Supreme, VF Corp is expected to continue grappling with over $3.5 billion in debt.
The lack of full-year 2025 guidance, despite management's claims of eight months of predictable business, adds to the uncertainty surrounding the company's trajectory. Williams Trading pointed out that while there are positive signs for the Vans Knu Skool, particularly in black as the back-to-school season kicks off, the wide range of colors could lead to increased promotional activity, which may not align with the brand's need for a more measured, scarcity-driven approach.
In other recent news, VF Corp has been making strategic financial maneuvers. The company recently reported a smaller-than-expected adjusted loss per share of $0.33, with sales and gross margin exceeding initial forecasts due to effective inventory management. BMO Capital Markets has responded to these developments by raising its price target for VF Corp from $13 to $14, while maintaining its Market Perform rating.
VF Corp also announced plans to divest its Supreme brand for $1.5 billion, a move aimed at focusing on the company's core business. Furthermore, the company reported an additional $50 million in cost savings in the first quarter of fiscal year 2025. Despite declines in its Americas platform and key brands such as Vans and The North Face, VF Corp anticipates modest revenue improvements in the second quarter.
InvestingPro Insights
VF Corporation (NYSE:VFC) is currently trading with a market capitalization of approximately $6.45 billion, reflecting investor sentiment and the company's scale in the retail industry. Despite recent challenges, VF Corp has shown significant stock price appreciation with a one-month return of 26.55% and a three-month return of 40.92%, indicating a strong short-term recovery. This performance aligns with one of the InvestingPro Tips, which notes a strong return over the last month and three months.
InvestingPro Tips also highlight VF Corp's commitment to shareholder value, maintaining dividend payments for 54 consecutive years. However, the company's P/E ratio stands at -5.53, and when adjusted for the last twelve months as of Q1 2025, it further dips to -12.12, suggesting profitability challenges. This is corroborated by another InvestingPro Tip that states the company was not profitable over the last twelve months, although analysts predict profitability this year.
For readers interested in a deeper analysis, there are 17 additional InvestingPro Tips available, providing a comprehensive view of VF Corp's financial health and market position. These insights could be invaluable for investors considering VF Corp's stock, especially in light of the upcoming analyst day and the company's strategic plans.
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