) set a new 52-week high of $168.32 on Tuesday, October 16, 2012,
beating its previous 52-week high of $164.54. The closing price of
this home improvement retailer as of October 16, 2012 was $168.28,
which represented a solid year-to-date return of29.8%. Average
volume of shares traded over the last 3 months stands at
approximately 597.2 thousand.
An impressive record of beating the quarterly earnings
expectations, robust top-line growth, a raised 2012 outlook,
strategies to expand global reach were the major contributors of
growth for the shares of this company.
With respect to earnings surprise, VF Corp has topped the Zacks
Consensus Estimates for eleven straight quarters with an average of
VF Corp has been posting robust growth in its top line since the
last two quarters of 2012. During the first quarter, VF Corp's
revenue soared 31%, on the back of strong organic growth of 12% and
Timberland acquisition. Moreover, the company witnessed sales
growth of 16% in the second quarter of 2012, driven by robust
growth in Outdoor & Action Sports and international
Following the strong quarterly results, management raised
earnings forecast for 2012 by 5 cents per share to $9.50 per share,
while it had earlier forecasted earnings of $9.45 per share.
Moreover, the company augmented its cash flow projection and
forecasts to record $1.2 billion in 2012, mainly driven by strong
working capital management.
On September 19, 2012, VF Corp came up with massive plans for
Asia Pacific, one of the fastest growing regions in the world in
order to expand its global presence. The company revealed that it
aims to reach to a mark of $1.1 billion of sales in the
Asia-Pacific region over the tenure of five years, taking the total
regional sales to $2 billion mark by 2017. This represents an
annual growth of 17% from projected sales of $900 million for full
Earnings Estimate Revision
The Zacks Consensus Estimate for 2012 inched up 1% to $9.53 per
share over the last 90 days. The current year-over-year growth
estimate for 2012 is 18.5%.
For 2013, the Zacks Consensus Estimate was again raised by about
1% to $10.98 per share over the same time frame. The current
year-over-year growth estimate for 2013 is 15.3%.
Valuation looks reasonable for VF Corp, with shares trading at
17.7x 12-month forward P/E, at a premium of 21% with its peer group
average. Moreover, on a price-to-book basis, shares are currently
trading at 4.1x, a 23.3% premium to the peer group average of
Nevertheless, the stock looks attractive given a trailing
12-month ROE of 20.6%, which is higher than the peer group average
About the Company
Based in Greensboro, North Carolina, V.F. Corporation is one of
the world's largest apparel companies with more than 30 brands. The
company primarily generates its revenue from jeanswear, outdoor,
imagewear, contemporary brand and sportswear divisions. Major
competitors of the company are
Sears Holdings Corporation
).VF Corp has a market capitalization of about $18.5 billion.
Zacks Rank & Recommendation
Based on the above analysis, VF Corp currently carries a Zacks
#2 Rank, which translates into a short-term Buy rating for the next
1-3 months. However, we maintain our long-term 'Neutral'
recommendation on the stock.
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