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Stock Market Reaction to VF Corporation’s 2Q17 Results

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VFC stock performance after 2Q17 results

VF Corporation (VFC) stock inched higher after the company posted better-than-expected 2Q17 results on July 24, 2017. The stock rose 3.4% on July 25, 2017, to close at $61.05. It’s now sitting on a YTD (year-to-date) profit of 14.5%. That compares to YTD losses of 17.0% in 2015 and 14.0% in 2016.

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Performances of apparel peers

The performances of apparel stocks have been mixed this year. Companies such as PVH (PVH), Hanesbrands (HBI), and Coach (COH) have risen 31.5%, 39.0%, and 9.3%, respectively, YTD. On the other hand, Under Armour (UAA), Ralph Lauren (RL), and Michael Kors (KORS) have fallen 30.7%, 17.0%, and 19.0%, respectively.

The seven-company S&P 500 Apparel and Accessories Index is in the green and has risen 6.5% YTD. It has, however, underperformed the S&P 500 Index (SPX-INDEX), which has risen nearly 20.0% to date.

VF boosts shareholder returns through buybacks and dividends

VF is a dividend aristocrat. The company is included in the select group of S&P 500 Index companies that have increased their dividends for at least 25 consecutive years. VFC has increased its dividends for 44 consecutive years.

With its 2Q17 results, VF’s board of directors announced a quarterly dividend of $0.42 per share, which is a 13.5% rise from the year-ago period. The dividend will be payable on September 18, 2017.

In addition, the company repurchased $760.0 million shares during the quarter. That brings the total share buyback to $1.2 billion and total cash returned to shareholders (including dividends) to more than $1.8 billion so far this year.

VF is included in the holdings of the SPDR S&P Dividend ETF (SDY). SDY invests 1.3% of its portfolio in VFC.

In the next part of this series, we’ll look at recent analyst actions for VFC.

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