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V.F. Corp's (VFC) 2024 Growth Plan & Outlook Infuse Optimism
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After witnessing significant transformation as part of its 2021 strategy, including the recent spin-off of its jeans business, V.F. Corp. (VFC - Free Report) is set to follow a new growth plan for the 2020-2024 period. This five-year growth plan, which focuses on four key strategies, is an evolution of the company’s previous plan. Additionally, the company provided its financial outlook through 2024, as it takes on the next phase of its transformative journey.
Apart from announcing growth targets through 2024, the company unveiled its evolved corporate logo and branding during the investor meet held at Boston, MA. This marked its first such move in 21 years. The company also introduced a tagline — “Purpose led, Performance driven” — that clearly establishes its core business vision.
The company’s 2024 growth strategy primarily focuses on transitioning to a consumer-minded and retail-centric business in a hyper-digital way. Further, the company’s efforts will focus on creating a dynamic and optimum portfolio, directing investments to Asia and uplifting direct channels by prioritizing digital.
2024 Financial Targets
The strategy targets generating revenue growth of 7-8% at a five-year CAGR, through 2024. This growth will be primarily driven by its largest brands — The Vans, The North Face, Timberland and Dickies. Further, the company expects revenue growth through the period to be driven by continued strong contributions from the International and Direct-to-Consumer business platforms.
Other financial targets under the plan include earnings per share (EPS) growth of 12-14% at a five-year CAGR, from fiscal 2019 levels. In fiscal 2024, the company anticipates gross margin to exceed 55.5%, with an operating margin of more than 15%.
Further, the company expects to generate cumulative free cash flows of nearly $8 billion during the five years. Of this, the company plans to return about $10 billion to shareholders in the form of dividend payouts and share repurchases.
Additionally, V.F. Corp. anticipates delivering top quartile total shareholder return (TSR) performance with annual TSR of 14-16%.
Price Performance
Shares of V.F. Corp. did not react much to the company’s new five-year plan during the pre-market and the trading sessions on Sep 25, 2019. Meanwhile, this Zacks Rank #2 (Buy) stock has gained 22% year to date, outpacing the industry’s growth of 10.8%. Moreover, the stock has comfortably outperformed the broader Consumer Discretionary sector and the S&P 500 index’s growth of 15.6% and 17%, respectively.
Guess, Inc. (GES - Free Report) , also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 17.5%.
lululemon athletica inc. (LULU - Free Report) has an expected long-term earnings growth rate of 18.32% and a Zacks Rank #2.
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V.F. Corp's (VFC) 2024 Growth Plan & Outlook Infuse Optimism
After witnessing significant transformation as part of its 2021 strategy, including the recent spin-off of its jeans business, V.F. Corp. (VFC - Free Report) is set to follow a new growth plan for the 2020-2024 period. This five-year growth plan, which focuses on four key strategies, is an evolution of the company’s previous plan. Additionally, the company provided its financial outlook through 2024, as it takes on the next phase of its transformative journey.
Apart from announcing growth targets through 2024, the company unveiled its evolved corporate logo and branding during the investor meet held at Boston, MA. This marked its first such move in 21 years. The company also introduced a tagline — “Purpose led, Performance driven” — that clearly establishes its core business vision.
The company’s 2024 growth strategy primarily focuses on transitioning to a consumer-minded and retail-centric business in a hyper-digital way. Further, the company’s efforts will focus on creating a dynamic and optimum portfolio, directing investments to Asia and uplifting direct channels by prioritizing digital.
2024 Financial Targets
The strategy targets generating revenue growth of 7-8% at a five-year CAGR, through 2024. This growth will be primarily driven by its largest brands — The Vans, The North Face, Timberland and Dickies. Further, the company expects revenue growth through the period to be driven by continued strong contributions from the International and Direct-to-Consumer business platforms.
Other financial targets under the plan include earnings per share (EPS) growth of 12-14% at a five-year CAGR, from fiscal 2019 levels. In fiscal 2024, the company anticipates gross margin to exceed 55.5%, with an operating margin of more than 15%.
Further, the company expects to generate cumulative free cash flows of nearly $8 billion during the five years. Of this, the company plans to return about $10 billion to shareholders in the form of dividend payouts and share repurchases.
Additionally, V.F. Corp. anticipates delivering top quartile total shareholder return (TSR) performance with annual TSR of 14-16%.
Price Performance
Shares of V.F. Corp. did not react much to the company’s new five-year plan during the pre-market and the trading sessions on Sep 25, 2019. Meanwhile, this Zacks Rank #2 (Buy) stock has gained 22% year to date, outpacing the industry’s growth of 10.8%. Moreover, the stock has comfortably outperformed the broader Consumer Discretionary sector and the S&P 500 index’s growth of 15.6% and 17%, respectively.
Other Stocks to Consider
Columbia Sportswear Company (COLM - Free Report) has an impressive long-term earnings growth rate of 11.2% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Guess, Inc. (GES - Free Report) , also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 17.5%.
lululemon athletica inc. (LULU - Free Report) has an expected long-term earnings growth rate of 18.32% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>