VF continues to outperform the related industry but also continues to take the punishment for the poor results of the likes of FTL,Levis,Russel and Starter. Anybody Know why the analysts dont have a more favorable view of a stock that consistently trades at 13 times earnings?
From the standpoint of an economist, VF is a producer of 'inferior goods' that is they are not the first name people associate with, for instance, blue jeans. That recognition goes to Levi Straus the 'superior goods' manufacturer. In economic downturns people replace superior goods with inferior goods. In upturns the cost of a pair of blue jeans is not important. Very few people associate the corporate name VF Corp with the brands they manufacture. I wonder do the analysts wear Wrangler jeans or Levis jeans ?
First of all an economist looks at supply and demand not a marketing or psychological term such as 'inferior'. Nike is the superior brand in athletic footwear under your definition and they have been struggling for a while. K-Swiss doesn't come to mind first, but they are growing at a rapid rate. If Levi was only in the jean business they would have laid off half there employees by now. There jeans business is off over 30% and not performing at retail. Dockers and Slates are keeping them afloat. They even plan on selling more casuals than jeans this year. It doesn't matter if consumers relate the varioius brands back to the VF parent. The important aspect is that they view Jansport, Jantzen, Wrangler, LEE, Vanity Fair, Healthtex, etc. as quality products at a fair price. Who owns Hanes and who cares? VF is not after the trendy, and fickle young fashion oriented customer as there base. They want the mass market and have done well to service it. They are the largest publicly held apparel corp. They continually look to bring new brands into the fold under aquisitions. For long term constant growth this stock is a winner. And if you want to see something stange go to a rodeo and see what jeans they are wearing. 100% market share across the middle of the country. ESII