VF Earnings: New CEO’s Strategy Offers Hope, but Turnaround Will Take Time; Shares Very Undervalued

Narrow-moat VF’s sales and adjusted earnings in its (September-ended) fiscal 2024 second quarter aligned with our forecast, but these results were overshadowed by a dim near-term outlook and the reveal of a new strategic plan from CEO Bracken Darrell (joined in July). The plan, called Reinvent, includes changes in how VF manages its operations in the Americas, more innovation and a new president at Vans, cost-cuts to bring about $300 million in annual savings, and aggressive debt reduction. Some parts of the plan line up with recent proposals from activist investors (see our Oct. 17 note), so they are likely to be supportive.