V.F. Corporation (VFC) is making significant progress with its various growth initiatives. The company seems to be well on track as its solid brand portfolio, expansion strategies and earnings results have been driving it forward.
One of the world’s largest apparel companies, V.F. Corporation’s diversified brand portfolio positions it in a higher stratum than its peers, helping it generate above-average industry growth and sustain itself in the current challenging environment. Given the strength of many of its brands and opportunities with regard to distribution, we believe that the company is poised for long-term growth.
Further, V.F. Corporation is aggressively looking for opportunities to expand its global footprint, particularly in the Asia Pacific, which is one of the fastest growing regions. Moreover, the company achieved its target of a 38% contribution from global operations to revenues in 2013 and now expects to increase it to 43% by 2017. The company’s sustained focus on expansion is likely to boost its top line in the long run, while reducing the risks of operating in a single market.
Further, V.F. Corporation recently delivered its third-quarter 2014 results, wherein both the top and the bottom line witnessed year-over-year improvement though they fell slightly short of expectations. The company has recorded improved year-over-year financial results over the last several quarters and is expected to retain its upbeat performance, going forward.
With promising top-line growth as well as margin expansion, V.F. Corporation appears to be an attractive option for investors in the near future. Management’s impressive guidance for 2014 also enhances the company’s growth prospects.
In addition to all the aforementioned factors, V.F. Corporation hit a 52-week high of $75.92 yesterday. However, the stock eventually closed at $75.46, rising 23.1% year-to-date.
Although the company’s growth prospects look promising, the prevalent soft macroeconomic environment, volatile raw material prices and stiff competition from peers like Ralph Lauren Corporation (RL) and Sears Holdings Corporation (SHLD) remain as concerns.
V.F. Corporation currently carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
A better-ranked stock in the retail sector is Columbia Sportswear Company (COLM) with a Zacks Rank #1 (Strong Buy).
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