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Takeaways from VF Corp.’s 2017 Investor Day

Executive Summary

  • The theme of VF Corp.’s Investor Day 2017 was “diversified growth.” The company outlined its five-year plan for growth, which incorporates mid-single-digit sales growth and a 10%–12% earnings CAGR. The company expects lower growth in the plan’s earlier years and accelerating growth in the later years. In terms of regional growth, VF Corp. expects it to be driven by international markets, specifically China. The company expects the direct-to-consumer channel, particularly digital, to grow the fastest. Sales growth in the company’s three biggest brands (Vans, The North Face and Timberland) will contribute as well.
  • Vans is expected to be the best performer among VF Corp.’s major brands over the next five years; the company projects Vans will grow at a CAGR of 8%–10%. The brand is very clear about what it is and what it is not, and management is transparent about the fact that Vans is not for everyone. The brand offers a strong point of view and a clear story.
  • The North Face experienced some weakness in recent years, driven in part by external challenges as well as by internal challenges related to less newness and product innovation. The brand plans to target four distinct sports category/lifestyle segments and to focus on attracting new customers, lessening seasonality and solidifying its mountain sports leadership. The North Face has seen some success in reaching new customers in Europe and is working on that in the US and other markets, too.
  • Timberland is expanding beyond its core category of men’s boots into men’s footwear more generally, as well as women’s footwear and men’s apparel, categories that represent an overall market value of $450 billion.
  • Wrangler is leveraging its strengths to drive future growth. It is shifting from a channel focus and a denim category dominant position to a consumer lifestyle focus on both sides.

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