VF Corp: Branded for Growth
The world's largest apparel maker generates fashionable sales, yet its stock doesn't sport a marked-up price, analysts say.
Clothing maker VF Corp. has been dressing for success by adding upscale brands. As a result, some analysts say the stock of this high-quality company (symbol VFC) could be a good fit for long-term investors.
VF is the world's largest publicly traded apparel maker. Its wide-ranging stable of brands is anchored in denim names, such as Lee and Wranger, as well as intimate apparel labels, including Vanity Fair. The mass-market jeans business generates a lot of cash, but competition is tough. VF's real sales growth lately has been coming from so-called lifestyle brands that the company acquired over the past few years. Sales at The North Face, for example, have more than doubled since the VF added the brand to its collection in 2000. "The lifestyle businesses are on fire, with plenty of long-term growth and margin expansion opportunity," says Prudential analyst Lizabeth Dunn.
In addition to The North Face, VF's fast-growing brands include Vans footwear and JanSport backpacks, as well as Kipling and Napapijri, which are popular in Europe. Dunn is also optimistic about future sales growth at the acquired sportswear brand Nautica. VF's outdoor lifestyle and sportswear brands account for 32% of sales, and the company aims to increase that proportion to 55% to 60% by 2010, according to Value Line Investment Survey. Analysts agree that VF has been successful in incorporating and, in some cases, turning around its purchased brands. The company remains on the lookout for future acquisitions.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Brad Stephens, an analyst at Memphis-based investing firm Morgan Keegan, views VF as the gold standard of the apparel business. He says that VF distinguishes itself by regularly exceeding the Street's quarterly earnings expectations, "while the majority of its competitors have disappointed at least once (and some many times)." He also likes VF's impressive free cash flow and strong balance sheet. The company has a share-repurchasing program, but Stephens thinks more cash ought to be devoted to buybacks.
VF's earnings per share grew 9% in 2005, and analysts expect 10% annual growth over the long term. The stock, which closed Friday at $57, trades at 12 times 2006 estimates of $4.82 per share, and it yields 2.1%.
--Lisa Dixon
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
Stretch Your Holiday Shopping Budget Further with These Under-$50 Gifts That Don't Feel Cheap
Amazon October Prime Day is the perfect chance to nab some under-$50 gifts that feel more expensive than they are (because normally they would be).
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have Today
Bank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have Today
ORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity Risk
Amid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have Today
Sherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have Today
UNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for a Fall Interest Rate Cut by the Fed
A lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?
Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?