VF Corp.’s international presence
VF Corporation (VFC) has a strong international presence. The company derived more than 40% of its revenues from international markets in fiscal 3Q16. Other apparel companies that have a strong overseas presence include Nike (NKE), PVH Corp. (PVH), and Ralph Lauren (RL), which derive ~55%, ~45%, and ~35%, respectively, of their revenues from outside North America.
International business drives growth for VFC
VFC’s US business reported a decline in sales due to weak consumer spending, warm winters, retail bankruptcies, and excess inventory. The company’s International segment grew 5% during fiscal 3Q16 and 4% for the first nine months of 2016. Its growth was driven by strength in the Europe and Asia-Pacific regions. Excluding the negative impact of currency, the sales increase was ~6% for fiscal 3Q16 and 9M16.
Sportswear companies Nike and Under Armour (UAA), which reported their quarterly results recently, also reported strong international businesses, which outpaced the growth in their domestic markets.
Under Armour reported a robust 55% increase in its international revenues in the last quarter. The company’s North American revenues fell short of expectations and drove Under Armour’s revenue miss.
Nike reported double-digit growth in Western Europe and a 13% YoY increase in emerging market sales on a constant currency basis. With its strong hold over America’s sportswear market, Nike reported a 3% increase in the region’s sales, driven primarily by strong DTC sales.
Investors looking for exposure to VF Corp. through ETFs can consider the Morningstar Wide Moat ETF (MOAT), which invests 2% of its portfolio in the company.