VF Says Brands Will be ‘Anchored in Performance’ As It Outlines Growth Agenda at Investor Day
As its turnaround plan takes hold, VF Corporation is introducing new strategic goals and financial targets.
The parent company to Vans, The North Face and more brands announced a new set of medium term financial targets its investor day on Wednesday, which included achieving an adjusted operating margin of at least 10 percent, adjusted gross margin of at least 55 percent and adjusted SG&A as a percentage of revenue of 45 percent or less, all by fiscal year 2028.
VF also rolled out broader targets for the business, such as keeping its brands “anchored in the performance category with style elements that further expand the platform for growth.” VF also said it would invest in design, marketing, business planning, AI and talent development and streamline workstreams to reduce costs.
In 2023, VF laid out “Reinvent,” a strategic business transformation plan that involved revitalizing the Vans brand and reviving business in the U.S. In its second quarter earnings report on Monday, the company cited progress and said it is on track to hit $300 million in savings by the end of fiscal year 2025.
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“We are accelerating the pace of change by building new capabilities across our organization to leverage our powerful portfolio of brands for long-term, sustainable, profitable growth,” VF chief executive officer Bracken Darrell said in a statement. “We are beginning to see benefits from our initiatives, but significant upside remains as we create a structure primed for growth while transforming our company and its culture. This strong foundation positions us to quickly enhance VF’s profitability while enabling further investment in sustainable shareholder value creation.”
In the second quarter, sales at The North Face were $1.09 billon, down 3 percent from the prior year. The improving Vans brand, which in May tapped former Lululemon chief product officer Sun Choe as its new global brand president, saw sales decline 11 percent to $667.4 million. Timberland sales dropped 3 percent to $475.3 million and Dickies was down 11 percent to $152.4 million.
In the third quarter, VF Corp. expects revenues of between $2.7 billion and $2.75 billion, which would represent a decline of between 1 and 3 percent over the prior year and include negative impacts from foreign exchange headwinds. Adjusted operating income is expected in the range of $170 million to $200 million.
