VF Corporation (NYSE: VFC) hs hosted a meeting with investors and analysts in Beaver Creek, Colo., to provide an update to the company’s strategic growth plan and key initiatives to deliver long-term sustainable growth and value creation.
This release refers to “adjusted” amounts which reflect adjustments to fiscal 2019 reported amounts related to Williamson-Dickie, Icebreaker, Altra, Reef, the Van Moer business, and Jeans spin-off transaction and deal related expenses, costs related to office relocations and other specified strategic business decisions, and the provisional impact of U.S. tax legislation. This release also refers to “free cash flow”, a term that is defined as operating cash flow less capital expenditures. Reconciliations of measures calculated in accordance with GAAP to adjusted amounts, which are considered non-GAAP measures, are presented in the Appendix to the Investor Day presentation that identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.
“Today is an exciting day for VF Corporation as we step into the next phase of our journey as an evolved company,” said Steve Rendle, Chairman, President and Chief Executive Officer. “The past two-and-a-half years represent one of the most transformative periods in VF’s 120-year history. We’ve emerged with a sharpened focus on what’s required to become even more consumer minded and retail centric. With greater clarity to the opportunities ahead, we’re confidently updating our five-year strategic growth plan and financial outlook.”
Fiscal 2024 Strategic Growth Plan
VF’s fiscal 2024 strategic growth plan is an evolution of its 2021 strategic growth plan announced at the 2017 meeting with investors in Boston. The updated five-year growth plan focuses on a slightly modified set of strategic choices. These choices begin with the foundation: 1) transforming into a consumer-minded and retail-centric enterprise in a hyper-digital manner, followed by: 2) driving and optimizing the portfolio; 3) distorting investments to Asia; and, 4) elevating direct channels, while prioritizing digital
Fiscal 2024 Financial Targets
- Revenue through fiscal 2024 is expected to grow at a five-year compounded annual growth rate (CAGR) between 7 percent and 8 percent, fueled by VF’s largest brands (the Vans®, The North Face, Timberland and Dickies brands) and the company’s International and Direct-to-Consumer business platforms.
- Gross margin is expected to exceed 55.5 percent in fiscal 2024.
- Operating margin is expected to exceed 15.0 percent in fiscal 2024.
- Earnings per share (EPS) is expected to grow at a five-year CAGR of between 12 percent and 14 percent as compared to fiscal 2019 adjusted EPS.
- The company expects to generate approximately $8 billion of free cash flow on a cumulative basis between fiscal 2020 and fiscal 2024 and intends to return $10 billion to shareholders through dividends and share repurchases.
- VF expects to deliver annual total shareholder return (TSR) in the 14 percent to 16 percent range.
As part of the Investor Day event, VF is introducing an evolved corporate logo and branding, the company’s first such update in 21 years.
“To capture the spirit of our evolution and our focus on always becoming a better version of ourselves, we’re introducing an evolved logo that honors our 120-year history while also conveying the energy, confidence and optimism we have for our future,” said Rendle. “And, we’ve incorporated a new tagline that clearly communicates the type of company we are and will continue to be: Purpose led and Performance driven.”