I guess VF Corp.
Well, compete it does. Growth was not torrid this quarter -- sales were up 8% and adjusted earnings were up 11% -- but VF Corp. is a company that nevertheless produces double-digit returns on capital and has done so rather consistently for quite some time. And though I'm a little concerned with overall operating margins and the performance in the intimates business, some of the margin issues seem tied to building the brands and the business. Given the historical returns here, I'm willing to give management the benefit of the doubt when making those types of investments.
I suppose every industry or sector is perpetually beset by worries; such is the nature of Wall Street. But it seems to me that retail stands out as a bit above-average in that regard. Still, I think VF's strategy is a good one for navigating the ups and downs of consumer taste.
While it has attractive brands like Vans and North Face, it also has a sizable mass-market business (Wal-Mart
I appreciate that VF is a quality company, but I'm still a little concerned about the goodwill on the balance sheet and the recent pace of inventory and accounts receivable movements relative to sales. That said, that's not my biggest issue right now. This stock has had a heckuva run since the spring, and while I don't think it's undervalued, I don't put new money to work in a name unless I'm getting a discount to fair value.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).