Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why V.F. Corporation Gained 39% in 2017

By Asit Sharma - Jan 11, 2018 at 3:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Improved business trends and the success of an important brand lifted the "VFC" symbol over the last 12 months.

What happened

Shares of clothing brands holding company V.F. Corporation ( VFC 3.71% ) climbed 38.7% last year, according to data from S&P Global Market Intelligence.

So what

Solid operating results throughout the year provided a foundation for V.F. Corporation's stock appreciation in 2017. Through the first reported nine months of 2017, V.F. Corp. improved its top line by 2%, to $8.5 billion. By comparison, in the first nine months of 2016, revenue was flat against 2015. In the third quarter of 2017, revenue accelerated to 5% growth against the prior-year's comparable period.

More importantly, the composition of V.F. Corp.'s recent sales bodes well for future growth. In the third quarter, direct-to-consumer revenue increased 18% and digital revenue rose 38%. Non-U.S. top-line growth of 13% in the third quarter was highlighted by European expansion of 18% and sales improvement in China of 9%. Together, higher direct-to-consumer, digital, and international sales will help insulate V.F. Corp. from brick-and-mortar retail weakness in the U.S., which is a potential headwind to the company's growth. 

In 2017, V.F. Corp. also made efficient use of its resources, selling off its Licensed Sports Group and Contemporary Brands businesses, while training resources on product development and marketing in growth areas. A focus point is Vans, the company's largest, fastest growing brand, which has proved an extremely popular label among Millennial consumers. Vans' revenue increased 14% during the first three quarters of 2017 and accelerated to 28% growth in the third quarter.

Popular with skateboarders, Vans has seen particularly fast growth in Europe and Asia. Owning a key brand with global potential like Vans is a significant factor driving V.F. Corp.'s valuation as of late.

Now what

Young man on forest bridge with dark sunglasses wearing a Napapijri brand jacket.

Image source: V.F. Corporation.

V.F. Corporation is set to report full-year 2017 earnings in mid-February. While waiting for results, investors can enjoy the Dividend Aristocrat's recent dividend hike -- its 45th annual dividend increase in a row. Management will provide its 2018 outlook at the next earnings release, but as of now, V.F. Corporation appears to have the components in place to produce an enviable total return again in 2018.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

V.F. Corporation Stock Quote
V.F. Corporation
VFC
$74.39 (3.71%) $2.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.