V.F. Corporation VFC reached a new 52-week high of $23.49 yesterday, a significant milestone that has caught investors’ attention. The stock momentum is driven by the company’s ongoing strategic initiatives and Reinvent transformation program focused on strengthening its brands and improving operational performance. This continued rise in share price leaves investors weighing whether to buy the stock at these levels, hold their positions or book profits.

In the past month, V.F. Corp.'s shares surged 19.8%, outpacing the industry’s growth of 11.1%. It has outperformed the broader Consumer Discretionary sector and the S&P 500 index, both of which declined by 0.4% and 0.3%, respectively.

     VFC Stock Past Month Performance

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Technical indicators support V.F. Corp.'s strong performance. The stock currently trades above its 50-day and 200-day moving averages, indicating robust upward momentum and price stability. This technical strength implies a positive market sentiment and growing confidence in VFC’s prospects.

ROST Trades Above 200 & 50-Day Moving Average

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Factors Driving V.F. Corp.'s Momentum

V.F. Corp.’s Reinvent transformation program mainly targets four objectives, including improving North America performance, Vans’ turnaround, reducing costs and strengthening the balance sheet.

V.F. Corp. is on track to significantly lower its cost base, achieving an additional $65 million in cost savings in the third quarter of fiscal 2025. This brings cumulative savings to approximately $200 million since the program's inception. The company has fully executed the actions required to reach $300 million in cost savings by the end of the fiscal year, demonstrating strong progress and financial discipline.

V.F. Corp. remains focused on fixing its U.S. business, with the Americas showing sequential improvement in the last reported quarter. The company’s brand-elevation efforts are gaining traction, particularly with the Vans turnaround. Vans is leveraging the OTW premium label and Influencer program to engage influencers and early adopters through strategic city targeting and product collaborations.

The company’s strategic approach to selling the Supreme brand marks a significant shift and aims to refocus on its core business and improve operational efficiency. The company acknowledges that Supreme lacked synergy with its broader portfolio, leading to its divestiture. This move will help V.F. Corp. streamline its operations and enhance financial flexibility by reducing leverage.

For the third quarter of fiscal 2025, gross margin is expected to improve year over year, driven by lower product costs and reduced reserves, aligning with a projected 20-basis-point expansion. The company anticipates sequential improvement in its overall business and revenue trends during the fourth quarter, with gross margin and SG&A growth rates mirroring those of the third quarter.

What Could Derail the VFC Stock’s Momentum?

Despite all the positives, V.F. Corp. faced challenges in regional and channel-wise performance in the second quarter of fiscal 2025, as revenues reflected a year-over-year decline. Weakness across regions, particularly in the Americas and EMEA, contributed to the dip, alongside softer results in international markets. 

Additionally, declines in the wholesale and direct-to-consumer channels, driven by underperformance in the Americas' wholesale and e-commerce businesses, further impacted the company’s top line. Looking ahead, similar challenges in these channels are expected to persist, which may weigh on overall performance despite the company’s ongoing efforts to drive growth and transformation.

The North Face brand is struggling with shifting consumer preferences and increased competition, making it difficult to maintain its premium positioning while appealing to a broader audience. Vans is battling a saturated sneaker market and a decline in popularity among younger customers, impacting its sales.

What Do Estimates Say About VFC?

In the past 60 days, the Zacks Consensus Earnings Estimate for fiscal 2024 has fallen by a penny to 48 cents per share. This estimate implies a year-over-year decline of 35.14% from the year-ago quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Final Thoughts on VFC Stock

VFC has recently seen strong performance, reaching a 52-week high, benefiting from its ongoing strategic initiatives, particularly the Reinvent transformation program. The company's efforts to strengthen brands like Vans and The North Face, reduce costs and enhance its balance sheet are promising.

However, there are significant headwinds that could impact the stock’s momentum. Regional weaknesses, particularly in the Americas and EMEA and underperformance in key channels like wholesale and direct-to-consumer, present concerns. While potential investors could wait for a better time to enter, for existing investors, holding onto VFC stock appears prudent. V.F. Corp. currently has a Zacks Rank #3 (Hold).

Three Picks You Can’t Miss

Some better-ranked stocks in the Consumer Discretionary space are Wolverine World Wide WWW, GIII Apparel Group GIII and Steven Madden, Ltd. SHOO.

Wolverine World Wide designs, manufactures and distributes a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 89 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 17.03%, on average.

G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It carries a Zacks Rank #2 (Buy) at present.

GIII Apparel has a trailing four-quarter earnings surprise of 113.44%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 2.9% from the year-ago figure.

Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank #2.

The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 8.6% and 13.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.8%.

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