VFC: Exhausted Revisions

V.F. Corporation (VFC) put up a decent quarter, beating on the EPS line but missing top-line due to weakness in Europe and a slowdown in The North Face brand. While the company’s SIGMA looks good, EPS revisions are exhausted and trending negatively for the company. If you're unfamiliar with VFC, they own a portfolio of popular brands including Timberland, The North Face, Nautica and Seven For All Mankind.

 

 

VFC: Exhausted Revisions - 10 22 2012 9 44 39 AM

 

 

After a five-year streak of upwards revisions of an average of 5-6% for FY12 on the print, VFC guided roughly in-line for the second quarter in a row. EPS have been the main factor where bears have gotten this stock wrong.  With increased spending to support growth, and continued challenges in key businesses, it’s tough to bank on real EPS upside aside from better FX rates. That’s not exactly a multiple enhancer.

 

We like VFC, but would begin to lighten our load here and use discretion when getting involved with the name. 


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