We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
V.F. Corp (VFC) Sells Workwear Brands to Reshape Portfolio
Read MoreHide Full Article
V.F. Corporation (VFC - Free Report) has agreed to sell the occupational unit of its Work segment to Redwood Capital Investments, LLC. The occupational unit comprises work apparel brands, including Kap, VF Solutions, Bulwark, Workrite, Walls, Terra, Kodiak, Work Authority and Horace Small. However, the Dickies and Timberland PRO brands will not be part of this divestiture deal.
This move is in sync with the company’s efforts to optimize its portfolio, keeping in mind consumers’ shifting preferences amid the COVID-19 crisis. The deal is anticipated to be concluded by the first quarter of fiscal 2022 and is currently subjected to customary closing conditions.
That said, we hope that its latest development is likely to bring some respite to the company, which continues to witness significant impacts of the pandemic like store closures and lower consumer demand due to social distancing.
What Else Should You Know?
V.F. Corp is on track with the digital and hyper-digital business model transformation. Driven by its investments and the increased consumer shift to digital platforms amid the pandemic, the company’s global digital revenues rose 53% (up 49% in constant dollars) in third-quarter fiscal 2021. The digital business benefited from strong performance by almost every brand in the portfolio, including the pure-play digital wholesale partners.
Apart from these, buy online, pickup in store and curbside delivery options have been aiding digital sales. Backed by the strong performance, the company now estimates digital revenue growth of more than 50% for fiscal 2021, on a reported basis.
The company is also benefiting from the latest acquisition of the privately-owned streetwear brand – Supreme. Notably, Supreme’s strong follower base in the younger generation, even when consumers are moving away from apparel to essential spending, bodes well for V.F. Corp.
The Supreme buyout is expected to contribute about $125 million to revenues and 5 cents per share to adjusted earnings in the fourth quarter of fiscal 2021. Additionally, it expects synergies of at least $500 million in revenues and 20 cents per share in adjusted earnings in fiscal 2022 from this deal.
Further, V.F. Corp witnessed strong momentum in China and across its digital platform. The company notes that China has been witnessing a spike in consumer spending, with growth in apparel and footwear categories.
Also, the direct-to-consumer business in Mainland China accelerated 20% year over year, led by 24% growth in digital during the fiscal third quarter. The robust China business resulted in the APAC region returning to growth in the said quarter. Considering these, the company is confident of continued momentum in China.
The company also recently unveiled a transformation plan for its Asia-Pacific operations, which is likely to help build stronger ties with consumers in China. The plan aims at evolving the organizational design and footprint in the region alongside developing capacities to speed up brand growth.
Notably, V.F. Corp will relocate the hub of its brand operations from Hong Kong to Shanghai under this plan. Also, the company will establish an additional shared services center for the Asia-Pacific region, in Kuala Lumpur, Malaysia. This, in turn, will help V.F. Corp expand its back-end operational functions, which support its brands as well as supply chain in the Asia Pacific.
Driven by such well chalked-out efforts and anticipated recovery from COVID-19 disruptions, management expects to return to growth in fourth-quarter fiscal 2021 with plans to accelerate growth in fiscal 2022. In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 14.3% compared with the industry’s growth of 18.6%.
Ralph Lauren Corp. (RL - Free Report) sports a Zacks Rank #1 and long-term earnings growth rate of 8.2%.
Gildan Activewear (GIL - Free Report) has a long-term earnings growth rate of 9%. The company flaunts a Zacks Rank #2 (Buy).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
V.F. Corp (VFC) Sells Workwear Brands to Reshape Portfolio
V.F. Corporation (VFC - Free Report) has agreed to sell the occupational unit of its Work segment to Redwood Capital Investments, LLC. The occupational unit comprises work apparel brands, including Kap, VF Solutions, Bulwark, Workrite, Walls, Terra, Kodiak, Work Authority and Horace Small. However, the Dickies and Timberland PRO brands will not be part of this divestiture deal.
This move is in sync with the company’s efforts to optimize its portfolio, keeping in mind consumers’ shifting preferences amid the COVID-19 crisis. The deal is anticipated to be concluded by the first quarter of fiscal 2022 and is currently subjected to customary closing conditions.
That said, we hope that its latest development is likely to bring some respite to the company, which continues to witness significant impacts of the pandemic like store closures and lower consumer demand due to social distancing.
What Else Should You Know?
V.F. Corp is on track with the digital and hyper-digital business model transformation. Driven by its investments and the increased consumer shift to digital platforms amid the pandemic, the company’s global digital revenues rose 53% (up 49% in constant dollars) in third-quarter fiscal 2021. The digital business benefited from strong performance by almost every brand in the portfolio, including the pure-play digital wholesale partners.
Apart from these, buy online, pickup in store and curbside delivery options have been aiding digital sales. Backed by the strong performance, the company now estimates digital revenue growth of more than 50% for fiscal 2021, on a reported basis.
The company is also benefiting from the latest acquisition of the privately-owned streetwear brand – Supreme. Notably, Supreme’s strong follower base in the younger generation, even when consumers are moving away from apparel to essential spending, bodes well for V.F. Corp.
The Supreme buyout is expected to contribute about $125 million to revenues and 5 cents per share to adjusted earnings in the fourth quarter of fiscal 2021. Additionally, it expects synergies of at least $500 million in revenues and 20 cents per share in adjusted earnings in fiscal 2022 from this deal.
Further, V.F. Corp witnessed strong momentum in China and across its digital platform. The company notes that China has been witnessing a spike in consumer spending, with growth in apparel and footwear categories.
Also, the direct-to-consumer business in Mainland China accelerated 20% year over year, led by 24% growth in digital during the fiscal third quarter. The robust China business resulted in the APAC region returning to growth in the said quarter. Considering these, the company is confident of continued momentum in China.
The company also recently unveiled a transformation plan for its Asia-Pacific operations, which is likely to help build stronger ties with consumers in China. The plan aims at evolving the organizational design and footprint in the region alongside developing capacities to speed up brand growth.
Notably, V.F. Corp will relocate the hub of its brand operations from Hong Kong to Shanghai under this plan. Also, the company will establish an additional shared services center for the Asia-Pacific region, in Kuala Lumpur, Malaysia. This, in turn, will help V.F. Corp expand its back-end operational functions, which support its brands as well as supply chain in the Asia Pacific.
Driven by such well chalked-out efforts and anticipated recovery from COVID-19 disruptions, management expects to return to growth in fourth-quarter fiscal 2021 with plans to accelerate growth in fiscal 2022. In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 14.3% compared with the industry’s growth of 18.6%.
3 Stocks to Consider
G-III Apparel Group (GIII - Free Report) currently has an impressive long-term earnings growth rate of 11.6% and a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren Corp. (RL - Free Report) sports a Zacks Rank #1 and long-term earnings growth rate of 8.2%.
Gildan Activewear (GIL - Free Report) has a long-term earnings growth rate of 9%. The company flaunts a Zacks Rank #2 (Buy).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>