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BB&T Capital Downgrades V.F. Corporation to ‘Hold’



Price movement of V.F. Corporation

V.F. Corporation (VFC) has a market cap of $26.8 billion. VFC fell by 1.1% to close at $63.38 per share on April 25, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -1.8%, -1.1%, and 2.4%, respectively, as of the same day. This means that VFC is trading 1.0% below its 20-day moving average, 0.80% below its 50-day moving average, and 4.0% below its 200-day moving average.

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Related ETF and peers

The PowerShares DWA Momentum ETF (PDP) invests 1.0% of its holdings in V.F. Corporation. The ETF tracks an index of 100 US-listed large- and midcap companies selected and weighted by relative stock performance. The YTD price movement of PDP was -1.3% as of April 22, 2016.

The market caps of V.F. Corporation’s competitors are as follows:

The Gap (GPS) — $9.3 billion

Ralph Lauren (RL) — $7.9 billion

Columbia Sportswear Company (COLM) — $4.3 billion

BB&T Capital downgraded V.F. Corporation

BB&T Capital Markets has downgraded V.F. Corporation rating to ‘hold’ from ‘buy’.

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Performance of VFC in 4Q15 and 2015

V.F. Corporation (VFC) reported fiscal 4Q15 total revenues of $3,412.8 million, a fall of 4.6% compared to total revenues of $3,578.9 million in fiscal 4Q14. Revenues of outdoor & action sports, jeanswear, imagewear, sportswear, and contemporary brands segments fell by 2.9%, 2.5%, 13.1%, 9.2%, and 18.9%, respectively, in fiscal 4Q15, compared to fiscal 4Q14. It reported impairment of goodwill and intangible assets of $143.6 million in fiscal 4Q15, compared to $396.4 million in fiscal 4Q14.

VFC’s net income and EPS (earnings per share) rose to $312.2 million and $0.72, respectively, in fiscal 4Q15, compared to $122.1 million and $0.28, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, VFC reported total revenues of $12,376.7 million, a rise of 0.77% YoY (year-over-year). Its net income and EPS rose to $1,231.6 million and $2.85, respectively, in fiscal 2015, compared to $1,047.5 million and $2.38, respectively, in fiscal 2014.

VFC’s cash and cash equivalents fell by 2.7% and inventories rose by 8.7% in fiscal 2015. Its current ratio fell to 2.1x and debt-to-equity ratio rose to 0.79x, in fiscal 2015, compared a current ratio and a debt-to-equity ratio of 2.5x and 0.75x, respectively, in fiscal 2014.


V.F. Corporation (VFC) has made the following projections for fiscal 2016:

  • Revenue is expected to increase at a mid-single-digit percentage rate, including about 1% of negative impact from changes in foreign currency.
  • Gross margin is expected to improve by about 0.50% to 48.8%, which includes about 0.70% of headwinds from changes in foreign currency.
  • EPS is expected to increase by 11%.
  • Cash flow from operations is expected to be $1.3 million.
  • An effective tax rate of ~23%.
  • Capital expenditures of ~$300 million.
  • VFC expects to repurchase ~$1 billion under its share repurchase program.

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