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VF Corporation: Analysts’ Revenue Estimates for Q3 2019

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Analysts’ projections

Wall Street analysts estimate that VF Corporation (VFC) will report revenues of $3.87 billion in the third quarter of fiscal 2019. The company is scheduled to announce its third-quarter results on January 18. VF Corporation’s management hasn’t provided an outlook for the third quarter. The top line will likely be driven by acquisitions, strength in brands (Vans and North Face), and strong international and direct-to-customer operations.

For Hanesbrands (HBI), analysts expect the revenues to grow 3.9% YoY (year-over-year) to $1.71 billion for the fourth quarter. For Under Armour (UAA), analysts expect the top line to increase 1.0% YoY to $1.38 billion for the fourth quarter.

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Past performance

In the second quarter, which ended on September 30, VF Corporation reported revenue growth of 15.0% YoY to $3.90 billion. The revenue growth topped analysts’ estimate by 1.1%. The Williamson-Dickie, Altra, and Icebreaker acquisitions added $324 million to the top line. After excluding the acquisitions, the second-quarter revenues increased 6%.

The international revenues increased 13% YoY, while the direct-to-customer business generated 19% revenue growth. In the direct-to-consumer business, the digital platform’s revenues increased 48% YoY.

However, the jeans business fell 7% YoY in the second quarter. Higher demand for athleisure wear and private denim brands impacted the company’s jeans business. Sears Holdings’ bankruptcy is adding to the woes. For fiscal 2019, the jeans business is expected to see its revenues fall 1%–2%.

VF Corporation announced a spin-off of its jeans (Wrangler and Lee) and VF Outlet businesses into a new company. VF Corporation will retain its profitable apparel and footwear business.

Management’s fiscal 2019 outlook

For fiscal 2019, VF Corporation expects the net revenues to be at least $13.70 billion—compared to the previous revenue guidance of $13.60 billion–$13.70 billion.

Management expects the direct-to-customer business to see revenue growth of 12%–14% for fiscal 2019. The digital revenues are expected to deliver growth of over 30.0% YoY. International operations are projected to post revenue growth of 12.0%–13.0%.

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