What Happened?
Shares of lifestyle clothing conglomerate VF Corp (NYSE: VFC) fell 10% in the afternoon session after the company's weak first-quarter guidance overshadowed its fourth-quarter earnings beat.
For the fourth quarter, the owner of brands like The North Face and Vans reported revenue of $2.83 billion and adjusted earnings per share (EPS) of $0.61, surpassing analysts' expectations on both fronts. However, this positive news was not enough to satisfy investors. The company guided for first-quarter revenue of $2.02 billion, which fell short of the $2.08 billion consensus estimate. This disappointing forecast signaled potential challenges ahead, causing the initial optimism from the earnings beat to evaporate and sending the stock sharply lower as the market focused on the weaker-than-expected outlook.
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What Is The Market Telling Us
VF Corp’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. But moves this big are rare even for VF Corp and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 3.8% on the news that Needham & Company added the stock to its Conviction List, citing brand strength, and the company announced plans to redeem some of its debt.
The analyst firm pointed to strong holiday results for The North Face and Timberland brands and noted early signs of improvement for the long-struggling Vans brand. Needham also expressed expectations for steady improvement in the company's margins and balance sheet over the next two to three years.
VF Corp is up 1.6% since the beginning of the year, but at $18.46 per share, it is still trading 31.5% below its 52-week high of $26.93 from January 2025. Investors who bought $1,000 worth of VF Corp’s shares 5 years ago would now be looking at an investment worth $232.52.
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