VF Earnings: Signs of Progress as Second-Quarter Profitability Outperforms; Shares Very Undervalued

Although each of no-moat VF's coalitions and key brands recorded sales declines in its fiscal 2025 second quarter, shares jumped 23% in Oct. 28, 2024, post-market trading as margins beat our estimates. The company has a long way to go under its Reinvent plan to lower costs, improve its balance sheet, stabilize the US business, and turn Vans around, but there are positive signs. We continue to rate its shares as very undervalued relative to our $39 per share fair value estimate, which we do not expect to change. Our expectation is that it can return to consistent sales growth and annual double-digit operating margins by fiscal 2027.