VF Corp. Is Betting Big on Timberland, Vans & The North Face for the Next 5 Years

VF Corp. today unveiled its 2021 strategic growth plan, and it shows the company placing its bets on power brands Vans, Timberland and The North Face.

The Greensboro, N.C.-based firm — which is hosting a meeting with analysts and investors in Boston today — said it expects those three brands as well as its international and direct-to-consumer businesses to drive revenue gains at a five-year compounded annual growth rate (CAGR) between 4 and 6 percent. Meanwhile, earnings per share are forecasted to grow at a double-digit pace — specifically, at a five-year CAGR of between 10 and 12 percent.

“Our 2021 strategic growth plan fuels our aspiration to consistently grow by creating amazing products and brand experiences that transform and improve the lives of consumers worldwide,” VF president and CEO Steve Rendle said. “VF has some of the most beloved and iconic brands in the world and a talented organization that has the passion and commitment to thrive in a rapidly changing marketplace.”

The company said it should generate more than $9 billion of cash from operations between 2017 and 2021 and return $8 billion to shareholders through dividends and share repurchases. VF’s gross margin is expected to hit 51.5 percent in 2021 with operating margin reaching 16 percent.

Among its largest initiatives, the firm said it would ramp up its focus on digital and direct-to-consumer and gear significant investments toward Asia, with a heightened focus on China.

“The strength and consistency of our largest brands and business platforms give me great confidence in our ability to achieve our targets,” Rendle said. “We remain sharply focused on our diversified value creation model, which is designed to deliver solid results across the many and varied business cycles and economies around the world.”

The company — which also owns Lee, Wranger, Nautica and a range of other footwear and apparel brands — moved the start of its fiscal year from the last Saturday in December to the last Saturday in March of each year, effective for the fiscal year beginning April 1, 2018.

VF’s board of directors today also approved a new $5 billion share repurchase authorization.

As of 11:50 a.m. VF’s shares were down 3.7 percent, to $54.13.

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