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How VFC Stock Has Performed in 2018

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Stock up 6.7%

VFC (VFC) is an important name in the apparel space in the US. The company’s portfolio consists of brands such as Vans, Timberland, North Face, Kipling, Lee, and Wrangler. VFC’s Vans and North Face businesses continue to be strong. However, the weakness in its jeans business has been impacting the company’s sales growth. The company’s jeans business has been hit due to the growing demand for private denim brands and athleisure wear. Also, Sears Holdings’ bankruptcy compounded the jeans segment’s woes. All these factors have impacted the stock price movement. On a YTD basis, VFC stock is up 6.7% to $78.97 as of November 23.

Given the weakness, VFC announced it would separate its jeans (Wrangler and Lee) and VF Outlet businesses into a new company, while VFC will retain its profitable apparel and footwear business.

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Now let’s take a look at the Vans and North Face business. In the second quarter of fiscal 2019, Vans revenue was up 26%, while the North Face witnessed growth of 7%. VFC projects it will generate $5.0 billion in revenue from the Vans brand alone by 2023. Furthermore, VFC’s international business trends remain impressive. In the second quarter, the company’s international sales rose 27%. VFC’s top line is also being driven by acquisitions. Some of the recent acquisitions include Altra, Icebreaker, and Williamson-Dickie. All these acquisitions are expected to drive the top-line growth over the long term.

Comparison with peers’ stock price movement

Hanesbrands (HBI) stock has lost 26.8% of its value so far in 2018. Hanesbrands is being affected by weakness in its intimate apparel business. Third-quarter innerwear sales fell 6.9% due to slow replenishment orders. However, management has projected fourth-quarter sales to be unchanged YoY due to better alignment in shipments and higher point-of-sales.

Under Armour (UAA) has gained 49.0% on a YTD basis. Extensive strategic endeavors and strong growth in the international market are driving the stock.

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