V.F. Corp Stock Gains 25% in 3 Months: Book Profit or Stay Bullish?

Core Viewpoint - V.F. Corporation (VFC) has experienced a significant stock increase of 24.8% over the past three months, driven by strong financial performance and growth initiatives, raising questions about the potential for further growth or the need to lock in gains [1]. Financial Performance - VFC reported robust demand for its brands in the third quarter of fiscal 2025, achieving its fourth consecutive quarter of revenue growth, significantly outperforming the Zacks Textile - Apparel industry's growth of 3.7% [1]. - The company's stock closed at $25.51, which is 12.1$29.02, indicating potential for recovery [3]. - VFC's stock is currently trading above its 50-day and 200-day simple moving averages of $23.55 and$18.43, respectively, suggesting positive market sentiment and investor confidence [3]. Strategic Initiatives - VFC's direct-to-consumer (DTC) and wholesale channels showed strong performance, particularly benefiting from holiday season demand for brands like The North Face and Timberland [6]. - The company is actively pursuing its Reinvent transformation program, focusing on brand-building and operational performance improvements, with strategies aimed at cost reduction, balance sheet strengthening, and revitalizing brands like Vans [7]. - VFC has set medium-term financial goals, including an adjusted operating margin of at least 10% and an adjusted gross margin of a minimum of 55% [8]. Cost Management and Growth - VFC is targeting a $300 million run rate in initial gross reinvest cost savings by fiscal 2025, having generated$55 million in savings in the third quarter alone [9]. - The company aims for $500-$600 million in operating income expansion, with a significant portion expected from SG&A expense reductions, aligning with its long-term goal of achieving at least a 10% operating margin by fiscal 2028 [9][10]. Earnings Estimates - The Zacks Consensus Estimate for VFC's earnings per share has seen significant upward revisions, with current quarter estimates increasing by 68.8% to 73 cents and fiscal year estimates rising by 18.9% to $1.07 per share [11]. Investment Outlook - VFC is positioned as a compelling buy opportunity, supported by strong momentum, operational improvements, and a clear path to long-term profitability through its strategic initiatives [13].