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Why Is V.F. (VFC) Up 16.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for V.F. (VFC - Free Report) . Shares have added about 16.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is V.F. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
V.F. Corporation Posts Q4 Loss, Revenue Miss Estimates
V.F. Corp reported fourth-quarter fiscal 2024 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both metrics also declined year over year. The quarterly results were hurt by the ongoing softness in the U.S. wholesale business.
V.F. Corp reported an adjusted loss per share of 32 cents against earnings per share of 17 cents in the prior-year quarter. The bottom line also compared unfavorably with the Zacks Consensus Estimate of earnings of 1 cent.
Net revenues of $2.37 billion declined 13% year over year and in constant-currency. Revenues also missed the Zacks Consensus Estimate of $2.4 billion.
The adjusted gross margin contracted 120 basis points (bps) to 48.4%. This was driven by a 300-bps adverse rate impact, mainly stemming from its reset actions and ongoing promotional activity, as well as negative transactional foreign currency impacts. The decline was partly offset by gains of 180 bps from a favorable mix.
The company reported an operating loss of $355.8 million compared with an operating loss of $160.9 million in the year-ago period.
Revenue Details
On a regional basis, revenues in the Americas declined 22% year over year on a reported basis and 23% in constant currency. In the EMEA region, revenues fell 3% and were down 5% in constant currency. Revenues in the APAC region dropped 3% on a reported basis and 2% in constant currency. The company’s international revenues were down 4% year over year, both on a reported and constant-currency basis.
Channel-wise, wholesale and direct-to-consumer revenues were down 20% and 4%, respectively, year over year on both reported and constant-currency basis. Our model estimated wholesale and direct-to-consumer revenues to decline 10% and 11.9%, respectively, for the fiscal fourth quarter.
Based on reporting segments, revenues dipped 8% year over year, on both reported and constant-currency basis, in the Outdoor segment to $1.2 billion. In the Active segment, revenues of $914 million declined 19% year over year on both reported and constant-currency basis. Revenues in the Work segment dropped 16% year over year on both reported and constant-currency basis to $240.3 million.
Our model predicted fourth-quarter fiscal 2024 revenues to decline 4%, 18% and 14% year over year, respectively, for the Outdoor, Active and Work segments. In constant-currency, revenues were expected to be down 5%, 23% and 18%, respectively, for the Outdoor, Active and Work segments.
Financial Details
V.F. Corp ended fiscal 2024 with cash and cash equivalents of $674.6 million, a long-term debt of $4.7 billion and shareholders’ equity of $1.7 billion. Inventories declined 23% year over year in fourth-quarter fiscal 2024. In fiscal 2024, inventories were down 23% year over year, amounting to $1.8 billion.
In fiscal 2024, VFC generated cash from operating activities of $1.02 billion and a free cash flow of $804 million. It returned $35 million to shareholders through dividend payouts in the fiscal fourth quarter. In fiscal 2024, it returned $303 million to shareholders through dividend payments.
The company declared a quarterly cash dividend of 9 cents per share, which is payable on Jun 20, 2024, to shareholders of record as of Jun 10.
Other Updates
V.F. Corp remains on track with its Reinvent transformation program that is focused on brand-building and improved operating performance. The key points include improving North America results, delivering the Vans turnaround, lowering costs and reinforcing the balance sheet. The company continues pursuing opportunities to streamline its processes and invest in the business to drive brand demand and boost growth.
Concerning the Reinvent targets, the company initiated an in-depth strategic review of the brand assets within the portfolio to ensure it owns the brands and creates the greatest long-term value.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -106.62% due to these changes.
VGM Scores
Currently, V.F. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise V.F. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
V.F. belongs to the Zacks Textile - Apparel industry. Another stock from the same industry, Under Armour (UAA - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Under Armour reported revenues of $1.33 billion in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $0.11 for the same period compares with $0.18 a year ago.
For the current quarter, Under Armour is expected to post a loss of $0.08 per share, indicating a change of -500% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Under Armour. Also, the stock has a VGM Score of D.
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Why Is V.F. (VFC) Up 16.2% Since Last Earnings Report?
It has been about a month since the last earnings report for V.F. (VFC - Free Report) . Shares have added about 16.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is V.F. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
V.F. Corporation Posts Q4 Loss, Revenue Miss Estimates
V.F. Corp reported fourth-quarter fiscal 2024 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both metrics also declined year over year. The quarterly results were hurt by the ongoing softness in the U.S. wholesale business.
V.F. Corp reported an adjusted loss per share of 32 cents against earnings per share of 17 cents in the prior-year quarter. The bottom line also compared unfavorably with the Zacks Consensus Estimate of earnings of 1 cent.
Net revenues of $2.37 billion declined 13% year over year and in constant-currency. Revenues also missed the Zacks Consensus Estimate of $2.4 billion.
The adjusted gross margin contracted 120 basis points (bps) to 48.4%. This was driven by a 300-bps adverse rate impact, mainly stemming from its reset actions and ongoing promotional activity, as well as negative transactional foreign currency impacts. The decline was partly offset by gains of 180 bps from a favorable mix.
The company reported an operating loss of $355.8 million compared with an operating loss of $160.9 million in the year-ago period.
Revenue Details
On a regional basis, revenues in the Americas declined 22% year over year on a reported basis and 23% in constant currency. In the EMEA region, revenues fell 3% and were down 5% in constant currency. Revenues in the APAC region dropped 3% on a reported basis and 2% in constant currency. The company’s international revenues were down 4% year over year, both on a reported and constant-currency basis.
Channel-wise, wholesale and direct-to-consumer revenues were down 20% and 4%, respectively, year over year on both reported and constant-currency basis. Our model estimated wholesale and direct-to-consumer revenues to decline 10% and 11.9%, respectively, for the fiscal fourth quarter.
Based on reporting segments, revenues dipped 8% year over year, on both reported and constant-currency basis, in the Outdoor segment to $1.2 billion. In the Active segment, revenues of $914 million declined 19% year over year on both reported and constant-currency basis. Revenues in the Work segment dropped 16% year over year on both reported and constant-currency basis to $240.3 million.
Our model predicted fourth-quarter fiscal 2024 revenues to decline 4%, 18% and 14% year over year, respectively, for the Outdoor, Active and Work segments. In constant-currency, revenues were expected to be down 5%, 23% and 18%, respectively, for the Outdoor, Active and Work segments.
Financial Details
V.F. Corp ended fiscal 2024 with cash and cash equivalents of $674.6 million, a long-term debt of $4.7 billion and shareholders’ equity of $1.7 billion. Inventories declined 23% year over year in fourth-quarter fiscal 2024. In fiscal 2024, inventories were down 23% year over year, amounting to $1.8 billion.
In fiscal 2024, VFC generated cash from operating activities of $1.02 billion and a free cash flow of $804 million. It returned $35 million to shareholders through dividend payouts in the fiscal fourth quarter. In fiscal 2024, it returned $303 million to shareholders through dividend payments.
The company declared a quarterly cash dividend of 9 cents per share, which is payable on Jun 20, 2024, to shareholders of record as of Jun 10.
Other Updates
V.F. Corp remains on track with its Reinvent transformation program that is focused on brand-building and improved operating performance. The key points include improving North America results, delivering the Vans turnaround, lowering costs and reinforcing the balance sheet. The company continues pursuing opportunities to streamline its processes and invest in the business to drive brand demand and boost growth.
Concerning the Reinvent targets, the company initiated an in-depth strategic review of the brand assets within the portfolio to ensure it owns the brands and creates the greatest long-term value.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -106.62% due to these changes.
VGM Scores
Currently, V.F. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise V.F. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
V.F. belongs to the Zacks Textile - Apparel industry. Another stock from the same industry, Under Armour (UAA - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Under Armour reported revenues of $1.33 billion in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $0.11 for the same period compares with $0.18 a year ago.
For the current quarter, Under Armour is expected to post a loss of $0.08 per share, indicating a change of -500% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Under Armour. Also, the stock has a VGM Score of D.