VFC Reported 2.6% Rise in Revenue in 3Q15 over 3Q14
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Price movement of VF Corporation
VF Corporation (VFC) has a market cap of $26.0 billion. Its YTD (year-to-date) price movement has been falling quarter-over-quarter in fiscal 2015. VFC fell by 2.2% to close at $60.87 per share as of January 4, 2016. The price movement on a weekly, monthly, and YTD basis is -2.3%, -6.5%, and -2.2%, respectively.
Technically, the stock has broken the support and is trading below all moving day averages. Currently, VFC is trading 3.1% below its 20-day moving average, 5.9% below its 50-day moving average, and 12.8% below its 200-day moving average.
The PowerShares DWA Consumer Cyclicals Momentum Portfolio (PEZ) invests 3.5% of its holdings in VFC. The ETF tracks an index of US consumer cyclical firms selected and weighted by price momentum.
The PowerShares DWA Momentum ETF (PDP) invests 1.2% of its holdings in VFC. The ETF tracks an index of 100 US-listed large-cap and mid-cap companies selected and weighted by relative stock performance.
The market caps and competitors of VFC are as follows:
Kohl’s (KSS): $9.4 billion
The Gap (GPS): $10.3 billion
Columbia Sportswear Company (COLM): $3.5 billion
Performance of VF Corporation in 3Q15
VFC reported 3Q15 total revenue of $3.6 billion, a rise of 2.6% when compared to net sales of $3.5 billion in 3Q14. The company’s operating income rose by 1.5% in 3Q15 as compared to the prior-year period. Its net income and EPS (earnings per share) fell to $459.9 million and $1.07, respectively, in fiscal 3Q15 as compared to net income and EPS of $470.5 million and $1.08, respectively, in fiscal 3Q14.
Meanwhile, cash and cash equivalents and inventories rose by 14.1% and 11.8%, respectively, in 3Q15 as compared to the prior-year period. Its debt-to-equity ratio rose to 0.99 in 3Q15 as compared to a debt-to-equity ratio of 0.84 in 3Q14.
The company has made the following projections for fiscal 2015:
revenue to rise 7.5%
gross margin to rise by 70 basis points
EPS to rise by 15%
VFC and its peers
Now let’s look at a comparison of VFC against its peers as of January 4, 2016, in terms of some key metrics. First, let’s compare VFC and its peers based on PE (price-to-earnings) ratio:
VFC: 25.3x
Kohl’s: 13.2x
The Gap: 10.5x
Columbia Sportswear: 21.0x
Now let’s look at PBV (price-to-book value) ratios:
VFC: 4.8x
Kohl’s: 1.7x
The Gap: 4.0x
Columbia Sportswear: 2.5x
Next, let’s see how VFC compares with its peers based on PS (price-to-sales) ratio:
VFC: 2.1x
Kohl’s: 0.49x
The Gap: 0.64x
Columbia Sportswear: 1.5x
Thus, VFC has outperformed its peers based on PE, PBV, and PS.
Comparing VFC and its ETFs
Now let’s look at a comparison of VFC and its ETFs:
The YTD price movements of VFC, PEZ, and PDP are -2.2%, -0.79%, and 1.1%, respectively.
The PE ratios of VFC, PEZ, and PDP are 25.3x, 22.3x, and 25.4x, respectively.
The PBV ratios of VFC, PEZ, and PDP are 4.8x, 7.5x, and 5.7x, respectively.
Thus, these ETFs have outperformed VF Corporation based on price movement and PBV.
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