Street View: VF Corp taking right foundational steps to stabilize
Updates
** VF Corp VFC.N reported a smaller-than-expected drop in first-quarter revenue, helped by improvement in its China business as well as leaner inventory levels
** Shares of the Vans-parent rise as much as 14.7% to $18.86, hitting over seven-month high
HIGHER SALES WITHOUT SACRIFICING MARGIN
** Citi Research (PT: $20) says all key brands posted sequential sales improvement with gross margin better-than-expected; higher sales did not come at expense of margin
** Given that VFC has not provided much financial guidance in the last year, it is encouraging that they feel prepared to provide more details in the near future - Citi
** Telsey Advisory Group (PT: $19) says it remains encouraged with VFC's focus on improving balance sheet, delivering cost savings, and refocusing brand portfolio following the sale of Supreme
** Guggenheim (PT: $25) notes it remains optimistic that CEO Darrell's initiatives and fresh perspective should gain traction in H2 2024 and into 2025
** BMO Capital Markets (PT: $14) says that management sounded comfortable with their inflecting trajectory; adds for stock's next "leg up," VFC needs to turn around the still-challenged Vans and The North Face brands
** Barclays (PT: $19) believes that VFC is taking right foundational steps to stabilize and turn the business; adds it is leaning more constructive as the strategy unfolds
Reporting by Granth Vanaik in Bengaluru
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