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V.F. Corp.'s Timberland Outlines Revenue Targets for 2019 - Analyst Blog

V.F. Corporation 's ( VFC ) wholly owned subsidiary, Timberland , outlined its revenue targets for 2019 at an investor meeting held yesterday at its headquarter in Stratham, NH.

As part of its key financial targets, management of this outdoor lifestyle footwear and apparel brand expects to drive revenue to $3.1 billion by 2019, recording a 5-year compounded annual growth rate (CAGR) of 13%, reflecting an addition of $1.4 billion over the period.

Timberland intends to achieve this target through geographical and channel growth, mainly focusing on innovation and product differentiation. Furthermore, the company plans to open 130 stores across all geographical regions, bringing the global retail store count to nearly 360 by 2019.

Geographical Growth Targets

From geographical perspective, Timberland anticipates that approximately half of the targeted $1.4 billion revenue growth will be achieved from the Americas region, representing a CAGR of approximately 14%.

In the Europe, Middle East & Africa ( EMEA ) region, the brand projects an annual growth rate of 10%, adding nearly $380 million over the five years to reach a $1 billion revenue mark. Moreover, the brand sees huge growth potential in the United Kingdom, Italy, Germany, Austria and Switzerland.

Further, Timberland aims to double its revenue to $620 million in the Asia Pacific region, representing a CAGR of approximately 15% over the next five years. The brand believes that most of the growth will come from China and South Korea.

Channel Growth Targets

Channel-wise, the brand expects its wholesale division's revenues to grow by nearly $825 million over the next five years to reach a $2 billion revenue mark. The growth will represent CAGR of 13%, 8% and 14% across the Americas, EMEA and Asia Pacific regions, respectively.

Moreover, the brand believes that its direct-to-consumer business will grow at an annual rate of 15% through 2019. This will bring its channel revenues to $1.1 billion, increasing by approximately $570 million over the next five years. Furthermore, Timberland expects its e-commerce business to increase by $180 million, representing an annual growth rate of 31%.

We believe, the targets set in the meeting along with V.F. Corp's diverse brand portfolio, its approach to brand management, a proven strategy, an excellent operating team and competitive advantages, positions it well for significant long-term growth. With these targets, the company should successfully deliver consistent value for both consumers and shareholders, presently and going forward.

V.F. Corp. currently has a Zacks Rank #2 (Buy). A better-ranked stock in the apparel retail sector is Hanesbrands Inc. ( HBI ), carrying Zacks Rank #1 (Strong Buy). Other stocks worth considering in the same industry are Michael Kors Holdings Limited ( KORS ) and Vince Holding Corporation ( VNCE ), both carrying the same rank as V.F. Corp.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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