History Is on This Apparel Brand’s Side

The 123-year track record should give you confidence [View in browser]( BROUGHT TO YOU BY: Proprietary Data Insights Financial Pros Apparel Brand Searches in the Last Month Rank Name Searches #1 VF Corp. 878 #2 Gap 745 #3 American Eagle Outfitters 387 #4 G-III Apparel Group 281 #5 Abercrombie & Fitch 223 #ad [Where the Big Money’s Looking]( Brought to you by [Global Insider News.com]( [PROFESSIONAL INVESTMENT IDEAS DELIVERED TO YOUR INBOX]( The Insider Newsletter is published by professional investors responsible for managing hundreds of millions of dollars, with decades of money management and entrepreneurial experience at the highest levels [Join Us Today]( Teen Apparel Brands History Is on This Apparel Brand’s Side Retail stocks tend to fare well when Christmas is just around the corner. And based on the latest data from Trackstar, our proprietary sentiment indicator, one apparel company in particular has been making a splash: VF Corp. (VFC). The company’s search volume from financial pros has spiked from an average of 30-40 searches per week to 450 in a single day! This is likely because of VFC’s current value. Some of that comes from VFC director Clarence Otis’ recent $254,873 insider buy. The company trades at: - A P/E non-GAAP ratio of 10.7x vs. its five-year average of 22.5x - A price-to-sales ratio of 0.9x vs. its five-year average of 2.7x Moreover, it has a nearly 50-year history of raising dividends and has weathered many economic downturns in its 123 years in business. While the economic outlook for 2023 is bleak, is that already priced into VFC? VF Corp.’s Business VF Corp. designs, produces, and markets clothing, footwear, and accessories for men, women, teens, and children. It owns a portfolio of brands including Vans, The North Face, Timberland, Dickies, Altra, Eastpak, Jansport, Kipling, Smartwool, Supreme, and Napapijri. The company’s four largest brands are Vans, The North Face, Timberland, and Dickies. But out of those four, only The North Face grew revenues in the first half of fiscal year 2023 at 15%. Meanwhile, Vans declined 10% (down 6% constant currency), Timberland was flat (up 7% constant currency), and Dickies was down 17% (down 14% constant currency). The company is growing in its outdoor-related brands, such as The North Face, Eastpak, and Timberland. [Financials] Source: VF Corp. VFC sells clothing across the globe. Revenues in Europe, the Middle East and Africa rose 16% constant currency. But in Asia, revenues dropped 6% constant currency in the first half of fiscal year 2023. [Financials] Source: VF Corp. VFC has faced several challenges, including weakening consumer sentiment, growing European economic headwinds, elevated inventories, and greater inflationary pressures. Financials [Financials] Source: Stock Analysis While the firm’s revenues are similar to last year’s, the company’s operating expenses have increased substantially, from $4.6 billion in the first half of 2021 to $5.3 billion in the first half of 2022. Consequently, net income dropped from $788 million in the first half of 2021 to -$174 million in the first half of 2022. On the bright side, its current long-term debt has fallen from $1 billion in the first six months of 2021 to $501 million in the first half of 2022. VFC doesn’t have any near-term liquidity issues. The company’s current ratio is 1.06x. Its annual operating cash flow is $121.4 million, and it pays an annual dividend of $2.04 per share. Valuation [Valuation] Source: Seeking Alpha VFC trades at a P/E GAAP ratio of 25.8x, relatively cheaper than peers Gap (GPS) at 96.9x, Abercrombie & Fitch (ANF) at 40.8x, and American Eagle Outfitters (AEO) at 25.9x. But it’s significantly higher than G-III Apparel Group (GIII) – which owns brands including DKNY, Andrew Marc, and Karl Lagerfeld Paris – at 3.7x. VFC trades at a price-to-sales of 0.9x, notably higher than competitors GPS at 0.3x, GIII at .2x, ANF at 0.3x, and AEO at 0.5x. Profitability [Profit] Source: Seeking Alpha VFC’s gross margin declined 230 basis points in Q2 FY 2023 to 51.4%. Its operating margin also sank 2.9%. The company is working to address near-term challenges at Vans, the ongoing COVID-related disruption in China, and the broader macroeconomic and geopolitical headwinds. It still operates at an impressive EBITDA margin of 14.5%, significantly better than peers GPS at 3.3%, GIII at 8.9%, ANF at 6%, and AEO at 9.2%. Its return on equity of 12.6% is outstanding compared to GPS at 2%, GIII at 11.3%, ANF at 4.7%, and AEO at 8.4%. Growth [Growth] Source: Seeking Alpha While most companies in the space have struggled, VFC has managed to grow revenues 7.7%, notably more than GPS at -4%, ANF at -0.3%, and AEO at 4.3%, but not as strong as GIII at 22.6%. Its YoY EBITDA growth of 5.9% is significantly higher than GPS’ -64.6%, GIII’s -7.7%, ANF’s -53.8%, and AEO’s -40.7%. [Investor Alert: 3 Investment Trends for 2023 & Beyond]( Inflation is out of control. The Fed plans to hike rates until we’re all in the poorhouse. And there’s a recession right around the corner… But you don’t have to settle for doom and gloom. In this free exclusive report, we dive into three key investment trends – and our top recommendations to play them to grow your wealth. [Go here to learn where to put your money for 2023 and beyond.]( Our Opinion 6/10 Shares of VFC have had a brutal 2022. They’re down -61.4% for the year. But you’ll find its current valuation compelling if you’re a long-term investor. The company’s diversified collection of brands makes it more appealing than other apparel companies offering less variety. We’d buy at these levels and accumulate more shares on further dips. News & Insights Just Spilled - [Alt Investments Are Heating Up]( - [Markets Are About to Move. We Can Tell You Why]( - [Opportunity in This Earnings Sell-Off]( - [A Gift From the FTX Fallout?]( [We want to hear from you! Let us know your thoughts by clicking here]( [Link]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [allow us on your list]( Spill&email=TheSpill@news.investingchannel.com). Update your email preferences or unsubscribe [here](. Manage your subscriptions with our [preference center]( View our privacy policy [here](. Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.