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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Despite Some COVID-19 Impact, Narrow-Moat VF Is Meeting Our Expectations; Valuation Is Unattractive

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Although affected by virus-related store closures in Europe and elsewhere, narrow-moat VF’s (March-ending) fiscal 2021 fourth-quarter sales and constant-currency adjusted earnings of $2.6 billion and $0.27, respectively, were close to our estimates of $2.5 billion and $0.29. Moreover, its outlook for fiscal 2022 adjusted EPS of $3.05 aligns with our current $3.04 estimate. VF’s shares, though, dropped about 7% on the report as investors may have been looking for stronger guidance. Regardless, we believe its major brands have good momentum as activewear and outdoor gear are in high demand. We expect to raise our per share fair value estimate on VF of $58 by a mid-single-digit percentage but view its shares as overpriced.

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Company Profile

Business Description

VF designs, produces, and distributes branded apparel and accessories. Its largest apparel categories include action sports, outdoor, and workwear. Its portfolio of about 15 brands includes Vans, The North Face, Timberland, Supreme, and Dickies. VF markets its products in the Americas, Europe, and Asia-Pacific through wholesale sales to retailers, e-commerce, and branded stores owned by the company and partners. The company has grown through multiple acquisitions and traces its roots to 1899.

Contact
1551 Wewatta Street
Denver, CO, 80202
T +1 720 778-4000
Sector Consumer Cyclical
Industry Apparel Manufacturing
Most Recent Earnings Mar 31, 2021
Fiscal Year End Apr 2, 2022
Stock Type Cyclical
Employees 40,000

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