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Key Takeaways
- Shares of Vans and The North Face owner VF Corporation slid Monday as JPMorgan put the apparel giant on its “Negative Catalyst Watch” list.
- JPMorgan analysts told clients after field work and discussions with management, they cut their estimate for VF’s fiscal 2025 earnings per share.
- The analysts pointed to “wholesale challenges” with The North Face, and “ongoing traffic headwinds” across brands.
Shares of Vans and The North Face owner VF Corporation (VFC) slumped Monday as JPMorgan put the apparel giant on its “Negative Catalyst Watch” list and warned about its financial outlook.
JPMorgan analysts wrote in a note to clients that after “recent fieldwork and management access,” they cut their fiscal 2025 earnings per share (EPS) estimate to 65 cents, which they noted was 35% below the Wall Street consensus. The analysts based that on an 8% year-over-year decline in revenue, also worse than consensus forecasts.
‘Ongoing Traffic Headwinds’
JPMorgan warned of “continued wholesale challenges” at The North Face, noting management said retailers were reluctant to take inventory risks because of the warmer start to the fall and winter last year. The analysts added their research found “ongoing traffic headwinds globally across brands in the portfolio” impacting direct-to-consumer revenues.
The analysts maintained a “neutral” rating on the stock, with a price target of $16, implying about 12% downside from Monday’s intraday price of $18.25.
VF shares were down nearly 7% in intraday trading Monday, and have lost close to 3% of their value since the start of the year.
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