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.
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.