A Look at VF Corporation’s Key Revenue Drivers in Fiscal 2017



VFC’s top line to fall in 1Q17

As we’ve already seen, VF Corporation (VFC) will be reporting its fiscal 1Q17 results on April 28, 2017. It’s likely to see a YoY (year-over-year) fall of 4.2% in its top line, which is forecast to be around $2.7 billion.

In fiscal 2016, VFC’s sales fell 2.0% to $12.0 billion. While its international and direct-to-consumer business rose 4.0% and 8.0%, respectively, wholesale continued to grapple with ongoing channel disruptions in North America. Its e-commerce business remained robust and rose more than 20.0% during the year.

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Looking at 2017

VFC management has predicted a low single-digit rise in its fiscal 2017 top line. Currency headwinds are likely to have a two-percentage-point negative impact on sales. Its international business is expected to remain strong, with Europe posting a high single-digit rise in revenues. Asia is also expected to rise at a high single-digit rate, with low double-digit growth in China.

Outdoor & Action Sports, which accounts for more than 60.0% of the company’s business, is likely to rise at a mid-single-digit rate during the year. Among its outdoor brands, Vans is forecast to have the best growth and rise at a low double-digit rate. North Face and Timberland are likely to rise in the mid-single digits and low-single digits, respectively.

Sales for Jeanswear are expected to remain flat, with Wrangler and Lee posting low single-digit international growth. Imagewear is expected to rise at a low single-digit rate, while Sportswear is expected to fall at a high single-digit rate.

During 2016, Outdoor & Action Sports revenue rose 2.0%, and Jeanswear revenue fell 2.0%. Imagewear sales rose 2.0%, and the Sportswear segment revenue fell 16.0%.

If you’re looking for exposure to VFC, you could consider the VanEck Vectors Morningstar Wide Moat ETF (MOAT), which invests 2.6% of its portfolio in VFC.


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