V.F. Corporation VFC has reported third-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Moreover, the company’s revenues and earnings improved year over year, driven by improvements across its brands. VFC is on track with its Reinvent program and expects to deliver on its cost-saving target.

The company reported adjusted earnings per share of 62 cents, an increase from 57 cents in the prior year. The bottom line also surpassed the Zacks Consensus Estimate of 34 cents.

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Net revenues of $2.83 billion improved 1.9% year over year on both reported and constant-currency basis. Revenues surpassed the consensus estimate of $2.75 billion.

The gross margin expanded 150 basis points (bps) to 56.3% due to lower product costs and fewer promotions. The adjusted operating margin increased 360 bps from the year-ago period to 11.4%. Selling, general and administrative costs, as a percentage of revenues, declined 220 bps year over year to 46.5%, benefiting from the Reinvent and other savings initiatives.

Driven by the better-than-expected results, VFC shares rose about 3% in the pre-market trading session today. The Zacks Rank #1 (Strong Buy) company's shares have gained 54.4% in the past year compared with the industry’s 0.7% growth.

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V.F. Corp’s Revenue Details

On a regional basis, revenues in the Americas rose 1% year over year on a reported basis and 2% on a constant-currency basis. In the EMEA region, revenues were up 1% on both reported and constant-currency basis. Revenues in the APAC region increased 5% on both reported and constant-currency basis. The company’s international revenues grew 1% year over year on a reported basis and 2% on a constant-currency basis.

Channel-wise, wholesale revenues advanced 8% on both reported and constant-currency basis. Direct-to-consumer revenues were down 3% year over year on a reported basis and 2% on a constant-currency basis. Our model estimated the wholesale and direct-to-consumer revenues to fall 0.7% and 11.5%, respectively, year over year.

Based on reporting segments, revenues in the Outdoor segment improved 6% year over year on a reported basis and 7% on a constant-currency basis to $1.85 billion. In the Active segment, revenues of $766.3 million declined 6% year over year on both a reported and constant-currency basis. Revenues in the Work segment dropped 3% year over year on a reported basis and 2% on a constant-currency basis to $216.5 million.

Our model predicted fiscal third-quarter revenues to decline 4%, 13% and 7% year over year, respectively, for the Outdoor, Active and Work segments. In constant-currency, revenues were expected to be down 5%, 14% and 8%, respectively, for the Outdoor, Active and Work segments.

Financial Details of VFC

V.F. Corp ended the fiscal third quarter with cash and cash equivalents of $1.37 billion, long-term debt of $3.88 billion, and shareholders’ equity of $1.68 billion. Inventories declined 14% year over year with levels down across most brands.

Net debt was down $1.9 billion year over year. The company has paid off a $1-billion term loan with Supreme sale proceeds and expects to retire $750 million in April 2025.

The company’s board declared a quarterly dividend of 9 cents a share, payable Mar. 20, 2025, to shareholders of record as of Mar. 10, 2025.

What to Expect From VFC in FY25?

For fourth-quarter fiscal 2025, management expects revenues to decline 4-6% year over year on a reported basis and 2-4% in constant-currency. This implies revenue decline of 1-2% for the second half of fiscal 2025, indicating significant progress from the 6% decline reported in the fiscal second quarter and the 10% decline recorded in the first quarter. Adjusted operating income is expected between a loss of $30 million and break-even.

For fiscal 2025, the company expects a free cash flow of $440 million, an increase from the prior mentioned $425 million. This reflects higher-than-expected proceeds on the sale of non-core physical assets and improved core fundamentals.

Other Key Picks

Some other top-ranked companies are G-III Apparel Group GIII, Wolverine World Wide WWW and lululemon athletica LULU.

G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. GIII sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

GIII Apparel has a trailing four-quarter earnings surprise of 113.4%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2025 sales and EPS indicates increases of 1.7% and 3%, respectively, from the year-ago period’s reported levels.

Wolverine is engaged in the designing, manufacturing and distribution of a wide variety of casual, as well as active apparel and footwear. WWW currently flaunts a Zacks Rank #1.

The consensus estimate for Wolverine’s current financial year’s EPS of 90 cents indicates significant growth from the year-ago reported EPS of 5 cents. WWW has a trailing four-quarter earnings surprise of 17%, on average.

lululemon is a yoga-inspired athletic apparel company that creates lifestyle components. LULU carries a Zacks Rank of 2 (Buy) at present.

The Zacks Consensus Estimate for lululemon’s current financial-year sales and EPS indicates growth of 9.7% and 12.5%, respectively, from the year-ago reported figures. LULU has a trailing four-quarter earnings surprise of 6.7%, on average.

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V.F. Corporation (VFC) : Free Stock Analysis Report

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