What Happened?

Shares of lifestyle clothing conglomerate VF Corp (NYSE:VFC) jumped 28.3% in the morning session after the company reported third-quarter results that blew past analysts' EBITDA and EPS expectations. In addition, its constant currency revenue outperformed Wall Street's estimates. Notably, guidance for the next quarter implied continued sequential improvement in sales relative to the declines recorded since the start of CY'24. In terms of the regional breakdown, APAC reported positive year on year growth, partially offsetting the declines recorded in other regions. 

Moving to the bottom line, management confirmed that the business is on track to achieve the $300 million savings target by the end of FY25. Overall, it was a great quarter for the company, highlighting significant improvements.

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What The Market Is Telling Us

VF Corp’s shares are extremely volatile and have had 30 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 biggest move we wrote about over the last year was 9 months ago when the stock dropped 14.3% on the news that the company reported third-quarter results with revenue, operating margin, and EPS, missing analysts' expectations. This underperformance was driven by declines at The North Face ($1.2 billion of revenue vs estimates of $1.3 billion) and Vans ($668 million of revenue vs estimates of $720 million). 

Management attributed the weakness to multiple factors, including warm weather, tough comps compared to the previous year, underperformance in the Americas, adjustments made to clean up some channels, and the impact of a cyber incident at the end of the quarter. Overall, this was a weaker quarter for the company.

VF Corp is up 11.7% since the beginning of the year, and at $20.80 per share, it is trading close to its 52-week high of $21.31 from October 2024. Investors who bought $1,000 worth of VF Corp’s shares 5 years ago would now be looking at an investment worth $256.16.

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