North Face Parent Company Has Sad Valentine's Day

Things slowed down at VF Corp during its fourth quarter. Is it a sign of bad news to come or just a little bump in the long road?

Feb 14, 2014 at 8:14PM

Let's pretend you're training for a marathon coming up in a month. No matter how fast or slow you're training, your friends will probably be moderately impressed that you even got out there and ran in the rain. Now, suppose you tell them that you're shooting for five minute miles and you're currently hitting the nine minute mark. Less impressed; more worried. That's the risk of putting a target out there for the world to see, and it's the risk that's coming back to bite VF Corp (NYSE:VFC).

In 2013, VF said that that it was going to hit $17 billion in annual revenue in fiscal 2017. Now the market has a bar to measure success against. Today, VF released its fourth-quarter and full-year results, missing revenue and earnings estimates. So is the business still on track for 2017, or is this a sign of things to come?

Let's pretend we're married
What?  It's Valentine's Day... get in the spirit. Anyway, VF's biggest win this past quarter was a 30% increase in direct-to-customer sales of its North Face brand, driving total North Face sales more than $2 billion for the year. The laggard was in the company's denim brands, including Lee and Wrangler. North American denim sales were flat and fell in Central and South America. Overall denim revenue was flat, holding the business back just enough.

Competing denim retailers have also been weak recently. Buckle (NYSE:BKE), for instance, dropped comparable sales on a year-over-year basis in December and January. As part of a broader apparel trend, new pairs of jeans are being overlooked as shoppers focus on larger investments and purchases that they've held off on. Slow income growth is taking its toll on the retail market, as reflected in the fall of American retail sales in January this year. 

This is what it sounds like when doves cry
That VF got hit by some weak sales should in no way deter the long-term investor. North Face is still running strong, and the Vans brand also showed strength in 2013, hitting more than $1.7 billion in revenue. North Face continues to be one of the few consumer apparel brands that show growing interest each quarter. VF's marketing and pricing is clearly attracting the right kind of customer.

Today's 5% hit to the stock price is merely a readjustment, not a sign of a systemic problem. VF's portfolio continues to perform well, and there's nothing coming down the pipe from competitors that's likely to change that performance this year. In a world of bad news, here's something to love.

VF Corp is good, but it's not the best of 2014
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Andrew Marder owns shares of The Buckle. The Motley Fool recommends The Buckle. The Motley Fool owns shares of The Buckle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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