DENVER - VF Corporation (NYSE: NYSE:VFC), a global leader in branded lifestyle apparel, footwear, and accessories, today outlined its financial targets for Fiscal Year 2028 during the first session of its FY25 Investor Day. The company's President and CEO, Bracken Darrell, highlighted the progress of VF's transformation program, Reinvent, aimed at driving sustainable, profitable growth.
The company's updated strategy focuses on leveraging its multi-brand portfolio, anchored in performance and style, to fuel growth. VF is investing in six key areas to enhance its competitive edge, including design, marketing, commercial platforms, integrated business planning, AI, and talent development.
Efforts are underway to optimize VF's profit and loss structure through SG&A cost reductions, gross margin expansion, and positioning for future revenue growth. These initiatives are expected to create a scalable and cash-generative financial model.
VF also plans to strengthen its balance sheet by reducing debt and leverage, aiming for a net leverage ratio of 2.5x or below. The company remains committed to returning capital to shareholders through quarterly cash dividends, pending board approval.
The medium-term financial targets introduced by VF include an adjusted operating margin of at least 10%, an adjusted gross margin of at least 55%, and an adjusted SG&A as a percentage of revenue of 45% or lower.
These targets are part of VF's strategic plan to reshape the company's structure and culture, with the ultimate goal of enhancing profitability and shareholder value. The company's portfolio includes well-known brands such as The North Face®, Vans®, Timberland®, and Dickies®.
The investor day event is being broadcast live online, with an archived version available post-event. All presentations will also be posted on the company's website.
VF's forward-looking statements come with the usual caveats of potential risks and uncertainties that could affect actual results. These include consumer demand, economic conditions, material prices, market competition, and the company's ability to execute its transformation program effectively.
This news is based on a press release statement from VF Corporation.
In other recent news, VF Corporation reported its Q2 earnings for the fiscal year 2025, indicating a year-over-year revenue decline of 6%, an improvement from the 10% decline in Q1. The company's gross margin increased to 52.2%, and operating income stood at $315 million. VF Corporation's diluted earnings per share were noted at $0.60, slightly down from the previous fiscal year. In an effort to streamline, the company divested Supreme, generating net proceeds of about $1.5 billion and repaid $1 billion of term loans. The corporation also achieved $65 million in cost savings in Q2, amounting to $300 million for the fiscal year. For the upcoming quarters, VF Corporation projects Q3 revenue between $2.7 billion and $2.75 billion, with a decline of 1% to 3% year-over-year. The company's transformation efforts, led by CEO Bracken Darrell, have resulted in significant cost savings and debt reduction, setting the stage for potential future growth.
InvestingPro Insights
As VF Corporation (NYSE: VFC) outlines its ambitious financial targets for Fiscal Year 2028, recent data from InvestingPro provides additional context to the company's current position and future prospects.
VF's stock has shown significant momentum recently, with InvestingPro data revealing a strong 31.13% price return over the last three months and an impressive 75.65% return over the past six months. This positive trend aligns with the company's optimistic outlook and transformation efforts outlined in the Investor Day presentation.
However, investors should note that VF Corporation is currently trading near its 52-week high, with the stock price at 98.63% of its peak. This suggests that much of the optimism surrounding the company's transformation may already be priced in.
An InvestingPro Tip highlights that VF has maintained dividend payments for 54 consecutive years, underscoring the company's commitment to returning value to shareholders. This aligns with VF's stated intention to continue quarterly cash dividends, pending board approval.
Another InvestingPro Tip indicates that analysts anticipate a sales decline in the current year. This projection adds context to VF's focus on cost reductions and margin expansion as part of its strategy to enhance profitability despite potential revenue challenges.
For investors seeking a deeper understanding of VF Corporation's financial health and future prospects, InvestingPro offers 10 additional tips, providing a comprehensive analysis to inform investment decisions.
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