Business 101 4 November 2011 Analyst Report Part 1: Executive Summary VF Corporation is a multi million-dollar industry that produces and distributes apparels from various brand names. Throughout the past two years VF Corp has performed very well as concluded on its annual report. By looking at the annual report for 2010 it is very clear that VF Corp has performed very well over the past year. The total revenues for 2010 were $482,303 more than the total revenues for 2009. The long-term debt for the company reduces by $2,612 from 2009.
With the various brand names that VF Corp has, it is clear that the total revenue will always increase as the demand for those brands increases, which they have been increasing. To add to their brand base VF Corp just recently bought the company Timberland so that too will help increase their earnings. By purchasing another popular name brand VF Corp will have a number of appealing brands that the public is always interested in purchasing. This helps VF Corp in the future because the more brands they purchase, the larger their consumer population will become.
By doing so they are also highlighting one of their major goals addressed in their mission statement, which states “Our goal is to continuously exceed the expectations of our consumers, customers, shareholders and business partners. ” Part 2: Company Profile • Ticker symbol: VFC • Mission Statement as it is printed in the Annual Report: We will grow by building leading lifestyle brands that excite consumers around the world. Ours is a perpetually driven culture, focused on constant innovation. Using deep research and insights, we combine the art and science of apparel to create products that excite consumers and brands that inspire loyalty.
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We responsibly manage the industry's most efficient and complex supply chain, which ps multiple geographies, product categories and distribution channels.?? Our goal is to continuously exceed the expectations of our consumers, customers, shareholders and business partners. We help our retail partners win with consistently solid execution and outstanding service. And we continually find ways to improve our performance and generate bottom line results. • Corporate headquarters location: 105 Corporate Center Blvd. Greensboro, NC 27408 • Name of CEO: Eric C.
Wiseman • Name of CFO: Robert K. Shearer • Stock classifications (common, preferred, both): Common • Exchange (NYSE, Nasdaq): New York Stock Exchange (NYSE) Part 3: Projections: Based on the graph of the stock performance I project that the stock prices will steadily increase in the years to come. During the 2009 recession the stock levels for VF Corp went down but bounced right back up towards the 70’s closer to 2010. Since then the stock levels slowly increased each month and now are at a steady positive increase and I believe that it will continue to increase.
Also VF Corp is associated with various clothing and apparel companies and regardless of how serious the economy might decline, people will still go out and buy clothes. VF Corp is also associated with a number of big name brands such as The North Face, Lee, Vans, Timberland, Nautica, Wrangler, Majestic, Jansport, and many other brands. These different brands are very popular these days and their sales are always going up so the overall stocks for VF Corp will continue in a positive slope. [pic] Part 4: Current Events The first article discusses how VF Corp is purchasing “VF Arvind Brands Private Limited”.
This company is responsible for marketing VF Corp’s brands throughout India. This is helpful for VF Corp because it can market its own brands and spread throughout Asia as well. This would allow VF Corp to not only have the final say on how exactly it markets its products but to also choose the locations that they want the products to be marketed at. Overall this purchase will greatly benefit VF Corp right now and in the future as well. The second article discusses how VF Corp is set to buy the brand Timberland. By doing so not only is VF Corp helping increase its profits but Timberland’s as well.
Timberland is a famous company that primarily sells boots. This would greatly increase VF Corp’s variety in terms of outdoor wear. By purchasing Timberland VF Corp will also be able to expand oversees as the article stated. Since most of the sales from Timberland occur in China, this would help VF Corp market not only Timberland but many of their other name brands. This purchase will definitely have some very positive results in the future and if more purchases like this are made then VF Corp will increase its earning greatly. Part 5: Recommendations:
Based on the information that I’ve gathered about this corporation I strongly suggest that investors should move fast and “buy” stocks from this company. Using the current ratio I can see that the company’s liquidity levels will be increasing in the years to come and since the economy is slowly recovering it is clear that VF Corp is going to do well in terms of stock sales. The difference between the current ratio of 2010 and 2009 is 0. 14. though this might not seem like a large enough of a number to make a huge difference, in reality it does. The profit margin between the two years has also increased by 1. %. All of this information tells me that VF Corp is a company that you should invest in because the company is only going on a positive direction. Article 1: VF Corporation To Acquire Joint Venture in India Published: November 2, 2011 GREENSBORO, N. C. , & BANGALORE, India--(BUSINESS WIRE)--Nov. 2, 2011-- VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, today announced that its subsidiary, VF Mauritius, has acquired full ownership of VF Arvind Brands Private Limited, a majority-owned joint venture between VF Mauritius and Arvind Limited formed in 2006 to market VF brands in India. Our business in India is strong, and now is the time to assume full ownership," said Eric C. Wiseman, Chairman, President and CEO of VF Corporation. "Anchored by our Lee® and Wrangler® brands, the Indian market will provide a robust platform for future growth in the Asia-Pacific region. " Aidan O’Meara, President, VF Asia, noted: “VF is grateful for the contribution Arvind made to the development of a fast-growing and profitable business for our brands in India. VF and Arvind will continue to have a strong working relationship, now and in the future. ”
O’Meara added that he does not expect any impact to jobs or changes in the day-to-day operations of the business in India. The new name of the wholly owned business in India has not yet been announced. Article 2: VF Corporation to Buy Timberland BY MICHAEL J. DE LA MERCED The VF Corporation agreed on Monday to buy the Timberland Company, the boot maker, for about $2 billion in cash, paying a big premium in an effort to bolster its outdoor clothing offerings. VF, which already owns lines like Wrangler and 7 for All Mankind, will add Timberland to a stable of outdoor brands like the North Face and Eastpak.
Eric C. Wiseman, VF’s chairman and chief executive, described the Timberland deal on Monday as a “transformative” acquisition that will add footwear to his company’s fastest-growing unit. The outdoor and action sports business reported a 14 percent gain in revenue last year, to $3. 2 billion. “We are confident in our ability to take big brands and make them bigger,” he said during an investor conference call. Still, VF is paying up: Under the terms of the deal, it will pay $43 a share, a more than 40 percent premium to Timberland’s Friday closing price.
Founded in Abington, Mass. , in 1952 by the Swartz family, Timberland became synonymous with American work garments and outdoor clothing, particularly with its hard-wearing boots. But the company has faced rising materials costs, with its operating margins falling to just 9 percent last year. It reported a 30 percent drop in first-quarter profits this year. VF executives appeared confident that it could wring profits by improving Timberland’s business performance, primarily by folding it into the apparel giant’s global platform and cutting costs.
On an investor call with analysts, VF’s chief financial officer, Bob Shearer, said his company planned to raise its new acquisition’s operating margin to 15 percent, in line with the rest of the conglomerate’s brands. In Timberland, VF also sees an opportunity to expand its presence overseas. Though Timberland’s popularity in the United States surged years ago, the brand remains popular in high-growth markets like China. The company also has a foothold in Japan, where VF is still building out its presence. VF executives expect to reap benefits from the Timberland deal soon after its closing, which is expected in the third quarter this year.
Timberland is expected to begin adding to VF’s earnings by 45 cents a share this year and 90 cents next year, excluding acquisition costs. VF plans to keep Timberland based in Stratham, N. H. Members of the Swartz family have agreed to support the deal. The Timberland sale appeared to stoke hopes that other outdoor apparel makers could soon go on the block as well. Among the big gainers was Wolverine World Wide, another maker of rugged work boots, whose shares jumped about 5. 1 percent to $39. 08. Columbia Sportswear, another purveyor of activewear, rose 1. 7 percent to $59. 43.
Shares of VF also rose, gaining 10 percent on Monday to $101. 01. Usually, an acquirer’s shares fall after a deal is announced, as shareholders worry about the transaction being overpriced. Shares in Timberland soared 44 percent to $43. 20. Analysts praised the deal, citing VF’s history of integrating brands into its business platform. “We regard Timberland as a high-quality brand that has been operationally challenged for a number of years,” analysts at Sterne Agee wrote in a research note on Monday. “We believe that VF has exhibited a strong track record and the capabilities to rectify many of the historical problems. ”
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