V.F. Corp Announces Changes in Management

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Apparel retailer V.F. Corporation (VFC) appointed Steve Rendle to the newly created post of Senior Vice President, Americas. Rendle’s responsibilities now encompass leadership of Outdoor & Action Sports, Jeanswear, Imagewear, Sportswear and Contemporary Brands Coalition.

Rendle has been the Vice President & Group President of Outdoor & Action Sports Americas since 2011 with a brilliant track record. The company also announced two other changes in its senior management.

Patrik Frisk has been appointed as the Coalition President of Outdoor Americas. He will now be in-charge of The North Face, Timberland, JanSport, lucy and SmartWool brands. Frisk, was earlier the president for Timberland brand, and following his promotion, management is on the look out for his successor.  

In addition, President of Vans brand, Kevin Bailey is promoted to the post of Coalition President, Action Sports Americas and Vans. Along with Vans, Reef and Eagle Creek brands will also be in his portfolio.

These changes in management are in consistence with the company’s long-term goals of achieving revenues of $17 billion by 2017.

Based in Greensboro, NC, V.F. Corp. is one of the world’s largest apparel companies. The company, together with its subsidiaries, designs, manufactures and markets branded apparel and related products in the United States and abroad.

The company’s diversified portfolio of brands, strategic initiatives to capitalize on the opportunities in emerging markets and its focus on core business activities will improve its operating performance. The company’s growth prospects also look promising, given its sustained focus on opportunistic acquisitions and expansion of its global operations, which will boost the top and bottom lines.

Furthermore, we are encouraged by the company’s capital strength, which facilitates investment to develop its business, while using the excess cash to enhance shareholder returns through dividend payouts and share buybacks.

Management laid out an impressive guidance for fiscal 2014 at its fourth-quarter fiscal 2013 earnings conference call. For 2014, it envisions a 7%–8% improvement in revenues, based on favorable growth in all its coalitions. Further, the company expects gross margin to rise 90 bps to 49% and operating margin to improve 60 bps to 15%.

V.F. Corp. projects adjusted earnings for 2014 to rise 11%–13% year over year and lie in the band of $3.00–$3.05 per share. Notably, the company’s fourth-quarter 2013 earnings and revenues grew 6% and 8% year over year respectively but missed the Zacks Consensus Estimate.

At present, V.F.Corp carries a Zacks Rank #3 (Hold).

Key Picks from the Sector

Some better-ranked apparel retail stocks include Hanesbrands Inc. (HBI), Columbia Sportswear Co. (COLM) and Under Armour, Inc. (UA). All of these have a Zacks Rank #2 (Buy).

Read the Full Research Report on VFC
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