Breaking Down V.F. Corporation (VFC) Financial Health: Key Insights for Investors

Is V.F. Corporation (VFC) a ticking time bomb or a phoenix waiting to rise? With a complex financial landscape, understanding the key metrics is crucial for investors. Did you know that in fiscal year 2024, VFC's revenue stood at $10.45 billion, a 9.97% decrease from the previous year? The company's net debt was $5.3 billion at the end of Q4'FY24, a reduction of approximately $540 million relative to the prior year. Moreover, the annual free cash flow for 2024 was $0.895B, a staggering 223.98% decline from 2023. With such dramatic shifts, how can investors navigate these turbulent waters and make informed decisions? Read on to uncover the insights that will help you assess VFC's financial health and potential.

V.F. Corporation (VFC) Revenue Analysis

Analyzing V.F. Corporation's revenue streams involves understanding where the company generates its income, how quickly these streams are growing (or shrinking), and the relative importance of each segment to the overall financial picture. Here’s a detailed look at these aspects, incorporating the latest available data.

Primary Revenue Sources: V.F. Corporation's revenue is derived from a diverse portfolio of apparel, footwear, and accessories brands. These are generally categorized by:

• Products: Apparel (clothing), Footwear, and Accessories.
• Geographic Regions: The Americas, Europe, and Asia-Pacific.
• Brands: Major brands include names such as Vans, The North Face, Timberland, and Dickies.

Year-over-Year Revenue Growth Rate: Monitoring the year-over-year revenue growth rate provides insights into the company's performance trends. For instance, V.F. Corporation reported that revenue declined 10% in fiscal year 2024. When looking at the fourth quarter of fiscal 2024, revenue decreased 13%. These declines reflect broader challenges such as macroeconomic headwinds and specific issues within certain brands and regions.

Contribution of Different Business Segments to Overall Revenue: Examining the contribution of different business segments helps to identify strengths and weaknesses within V.F. Corporation's portfolio. Here's a general overview based on available information:

Analysis of Significant Changes in Revenue Streams: Several factors have influenced V.F. Corporation's revenue streams recently:

• Strategic Reviews and Brand Divestitures: V.F. Corporation has been actively reshaping its brand portfolio to focus on high-growth, high-return opportunities.
• Macroeconomic Factors: Economic conditions, such as inflation and changes in consumer spending, have impacted sales across various regions.
• Supply Chain Issues: Although improving, supply chain disruptions have previously affected the availability of products and, consequently, revenue.
• Direct-to-Consumer (DTC) Performance: V.F. Corporation's DTC channel is an important area of focus, with efforts to enhance online and in-store experiences. DTC revenue was down 3% in fiscal year 2024.

For further insights, you might find this resource helpful: Breaking Down V.F. Corporation (VFC) Financial Health: Key Insights for Investors

V.F. Corporation (VFC) Profitability Metrics

Analyzing V.F. Corporation's profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health. These metrics reveal how efficiently the company generates profit from its revenue and manages its expenses.

Here's a breakdown of V.F. Corporation's profitability, based on the most recent fiscal year data:

• Gross Profit: For the fiscal year 2024, V.F. Corporation reported a gross profit of $4.49 billion.
• Gross Margin: The gross margin for the same period was 51.2%.

V.F. Corporation's operating and net profit margins provide deeper insights into its profitability trends. The operating profit is calculated by deducting operating expenses from the gross profit, while the net profit represents the profit remaining after all expenses, including taxes and interest, are accounted for.

• Operating Income: The reported operating income was $400.3 million for fiscal year 2024.
• Operating Margin: The operating margin stood at 4.6%.
• Net Loss: V.F. Corporation experienced a net loss of $30.9 million for fiscal year 2024.

A comparison of V.F. Corporation’s profitability ratios with industry averages helps to benchmark its performance and identify areas for improvement. While specific industry averages can fluctuate, comparing these ratios to those of its competitors and the broader apparel and footwear industry offers valuable context.

Operational efficiency is crucial for maintaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of strong operational performance. V.F. Corporation's ability to manage its cost of goods sold (COGS) and control operating expenses directly impacts its profitability.

• Cost of Goods Sold (COGS): In fiscal year 2024, V.F. Corporation's COGS amounted to $4.27 billion.

Analyzing these figures and trends provides a comprehensive view of V.F. Corporation's financial health and its ability to generate profits. For more detailed insights, you can explore Breaking Down V.F. Corporation (VFC) Financial Health: Key Insights for Investors.

V.F. Corporation (VFC) Debt vs. Equity Structure

Understanding how V.F. Corporation (VFC) manages its debt and equity is crucial for investors. This balance sheet analysis provides insights into the company's financial strategy and risk profile. For more information on V.F. Corporation's investor base, check out: Exploring V.F. Corporation (VFC) Investor Profile: Who’s Buying and Why?

V.F. Corporation's financial health can be evaluated by examining its debt levels, specifically both long-term and short-term debt. As of fiscal year 2024, V.F. Corporation had a total debt of $5.14 billion. This total comprises both short-term borrowings and long-term debt obligations. A detailed look into these figures helps to understand the company’s immediate and future financial obligations.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. V.F. Corporation's debt-to-equity ratio stands at 1.47. This indicates that for every dollar of equity, the company carries $1.47 in debt. When compared to the industry average, this ratio provides context on whether V.F. Corporation is more or less leveraged than its peers. The apparel and footwear industry generally sees debt-to-equity ratios varying widely, but a ratio of 1.47 suggests V.F. Corporation relies more on debt than equity to finance its operations.

Recent activities, such as debt issuances, credit ratings, and refinancing, significantly impact V.F. Corporation's financial standing. In recent years, V.F. Corporation has strategically managed its debt through various measures. For example, in fiscal year 2024, the company's interest expenses amounted to $241.2 million. Monitoring these activities provides insights into the company's ability to manage its financial obligations and optimize its capital structure. Standard & Poor's rating for V.F. Corporation is at BBB with a negative outlook as of November 2024.

Balancing debt financing and equity funding is crucial for sustainable growth. V.F. Corporation strategically uses a mix of debt and equity to fund its operations and growth initiatives. While debt can provide leverage and potential tax advantages, equity helps maintain a stable financial base. The decision to lean more towards debt or equity depends on various factors, including market conditions, investment opportunities, and the company's overall financial strategy. As of 2024, the company's total equity was reported at $3.5 billion.

V.F. Corporation (VFC) Liquidity and Solvency

Analyzing V.F. Corporation's (VFC) financial health requires a close look at its liquidity and solvency, which are crucial indicators of its ability to meet short-term obligations and sustain long-term operations. Let's delve into key financial metrics to assess VFC's current standing.

Assessing V.F. Corporation's (VFC) Liquidity:

Liquidity ratios provide insights into a company's ability to cover its short-term liabilities with its current assets. Here’s a breakdown of key liquidity measures for VFC:

• Current Ratio: The current ratio is calculated by dividing current assets by current liabilities. A ratio above 1 indicates that a company has more current assets than current liabilities, suggesting good liquidity.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative measure of liquidity. This ratio assesses a company's ability to meet its short-term obligations with its most liquid assets.

Analysis of Working Capital Trends:

Working capital, defined as the difference between current assets and current liabilities, is a vital sign of a company's operational efficiency and short-term financial health. Monitoring trends in working capital can reveal whether VFC is efficiently managing its resources.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of all the cash inflows and outflows of a company. These statements are divided into three main categories:

• Operating Activities: Cash flow from operating activities reflects the cash generated from the company's core business operations. It indicates whether the company can generate sufficient cash from its operations to maintain and grow its business.
• Investing Activities: Cash flow from investing activities includes transactions related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Activities: Cash flow from financing activities involves transactions related to debt, equity, and dividends. It shows how the company is funding its operations and returning value to shareholders.

Examining the trends in these cash flow categories helps in understanding VFC's overall financial stability and its ability to fund its strategic initiatives.

Potential Liquidity Concerns or Strengths:

By analyzing the aforementioned metrics, investors and stakeholders can identify potential liquidity concerns or strengths within V.F. Corporation (VFC). For example:

• A declining current or quick ratio may signal potential liquidity issues.
• Negative trends in operating cash flow could indicate problems with core business operations.
• Effective management of working capital and positive cash flow trends can highlight the company's financial strengths.

For further insights into V.F. Corporation's (VFC) financial health, you can explore additional resources and analyses. Check this out: Breaking Down V.F. Corporation (VFC) Financial Health: Key Insights for Investors

V.F. Corporation (VFC) Valuation Analysis

Determining whether V.F. Corporation (VFC) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst sentiment.

Here's a breakdown of key valuation metrics for V.F. Corporation (VFC):

• Price-to-Earnings (P/E) Ratio:
• The latest P/E ratio for V.F. Corporation (VFC) is -12.94 as of April 15, 2025, which indicates negative earnings. A negative P/E ratio occurs when a company has no earnings or is losing money. The average P/E ratio for the last 5 years is 39.98.
• For 2024, the actual P/E ratio is 13.93. Estimates for future years are:
• 2025: 13.93
• 2026: 9.73
• 2027: 7.75
• Price-to-Book (P/B) Ratio:
• V.F. Corporation's current price/book ratio as of April 15, 2025, is 2.61.
• The average price/book ratio for 2024 was 4.42, a 48.82% decline from 2023.
• On April 11, 2025, the P/B ratio was 2.82, a 20.24% change year over year.
• The 52-week high P/B ratio is 6.84 on January 30, 2025, while the 52-week low is 2.14 on May 23, 2024.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:
• V.F. Corporation's latest twelve months EV/EBITDA is 10.7x.
• The EV/EBITDA for fiscal years ending March 2020 to 2024 averaged 19.2x.
• The EV/EBITDA peaked in April 2021 at 42.9x and hit a 5-year low in April 2023 of 10.3x.
• As of April 17, 2025, the EV/EBITDA ratio is 6.72.

Here's a summary of VFC's EV/EBITDA across the years:

Stock price trends reflect the market's evaluation of the company's prospects. Recent data indicates the following for V.F. Corporation (VFC):

• Current Price: As of April 17, 2025, V.F. Corporation (VFC) traded at $10.44.
• 52-Week Range: The 52-week high is $29.02, and the 52-week low is $9.41.
• 12-Month Performance: Over the last 12 months, V.F. Corporation (VFC)'s price has fallen by 15.06%.

Analyzing dividend yield and payout ratios can provide insights into the company's financial health and its commitment to returning value to shareholders.

• Dividend Yield: As of April 2025, the dividend yield (TTM) for V.F. Corporation (VFC) is 3.22%.
• Dividend per Share: The total amount per share for 2024 was $0.36.
• Payout Ratio: The payout ratio for V.F. Corporation (VFC) is 63.16%.

Analysts' consensus can offer a consolidated view on the stock's potential valuation.

• Consensus Rating: Based on 21 Wall Street analysts, V.F. Corporation (VFC) has a consensus rating of 'Hold'.
• Price Targets: The average 12-month price target is $22.35. The highest price target is $34.00, while the lowest is $11.00.

For more insights into V.F. Corporation's investors, check out this resource: Exploring V.F. Corporation (VFC) Investor Profile: Who’s Buying and Why?

V.F. Corporation (VFC) Risk Factors

V.F. Corporation (VFC) faces a variety of internal and external risks that can significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Here's an overview of key risks impacting V.F. Corporation (VFC):

• Industry Competition: The apparel and footwear industry is highly competitive. V.F. Corporation (VFC) faces competition from numerous global and regional players, including established brands and emerging direct-to-consumer businesses. Intense competition can lead to price pressures, reduced margins, and the need for increased marketing expenses to maintain market share.
• Regulatory Changes: Changes in trade policies, tariffs, and regulations related to sourcing, manufacturing, and distribution can significantly affect V.F. Corporation (VFC)'s supply chain and cost structure. For example, increased tariffs on imported goods can raise costs and reduce profitability.
• Market Conditions: Economic downturns, shifts in consumer preferences, and fluctuations in currency exchange rates can impact V.F. Corporation (VFC)'s sales and profitability. A decrease in consumer spending or a shift away from the company's key product categories can negatively affect revenue.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. Here's a closer look:

• Operational Risks: Supply chain disruptions, such as those caused by geopolitical events or natural disasters, can impact V.F. Corporation (VFC)'s ability to meet demand and maintain inventory levels. Inefficient inventory management can also lead to markdowns and reduced profitability.
• Financial Risks: Fluctuations in foreign currency exchange rates can affect V.F. Corporation (VFC)'s reported earnings, as a significant portion of its revenue comes from international markets. Additionally, changes in interest rates can impact the cost of debt and overall financial performance.
• Strategic Risks: The failure to adapt to changing consumer preferences or to successfully execute strategic initiatives, such as brand acquisitions or divestitures, can hinder V.F. Corporation (VFC)'s growth and profitability.

V.F. Corporation (VFC) has outlined several mitigation strategies to address these risks. These include:

• Diversifying Supply Chain: Reducing reliance on any single sourcing location or supplier can help mitigate the impact of supply chain disruptions.
• Hedging Currency Risk: Using financial instruments to hedge against currency fluctuations can help stabilize earnings.
• Investing in Innovation: Continuously innovating and developing new products that meet evolving consumer preferences can help maintain market share and drive growth.

For instance, V.F. Corporation (VFC)'s efforts to streamline its brand portfolio and focus on high-growth brands are part of its strategic risk mitigation. As detailed in their Mission Statement, Vision, & Core Values of V.F. Corporation (VFC).

Furthermore, V.F. Corporation (VFC) reports the below data in their 2024 fiscal year:

These strategies reflect V.F. Corporation (VFC)'s proactive approach to managing risks and ensuring long-term financial stability.

Understanding these risks and mitigation strategies is essential for investors to assess V.F. Corporation (VFC)'s financial health and make informed investment decisions.

V.F. Corporation (VFC) Growth Opportunities

V.F. Corporation (VFC) is focusing on several key strategies to drive future growth. These include product innovation, strategic market expansions, targeted acquisitions, and cultivation of key partnerships. These strategies aim to enhance brand strength, increase market penetration, and improve overall financial performance.

Analysis of V.F. Corporation's growth drivers reveals several critical areas:

• Product Innovation: VFC is investing in innovative designs and technologies to meet evolving consumer preferences and demands.
• Market Expansion: The company is expanding its presence in high-growth markets, particularly in Asia-Pacific, to capitalize on increasing consumer spending and emerging market trends.
• Strategic Acquisitions: VFC has a track record of acquiring brands that complement its existing portfolio, enhancing its market position and diversifying its revenue streams.
• Key Partnerships: Collaborations and partnerships with other companies and influencers are helping VFC reach new audiences and strengthen its brand image.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, analysts' estimates provide a general outlook. Keep in mind that these estimates can vary. For example, one source indicates an estimated revenue of $10.5 billion for fiscal year 2024. However, investors should consult multiple sources and consider various factors when evaluating future growth potential.

Strategic initiatives and partnerships are expected to play a significant role in V.F. Corporation's future growth. These initiatives are designed to improve operational efficiency, enhance supply chain capabilities, and strengthen relationships with key retailers and distributors. VFC's competitive advantages include a strong brand portfolio, a global distribution network, and a proven track record of innovation. These strengths position the company to capitalize on growth opportunities and maintain its competitive edge in the market.

Here's a look at V.F. Corporation's financial performance:

For more in-depth insights into V.F. Corporation's financial health, you can check out: Breaking Down V.F. Corporation (VFC) Financial Health: Key Insights for Investors