Apparel maker VF Corporation (NYSE:VFC), perhaps best known for its Vans line of shoes, added over 3% in Friday afternoon’s trading as a little optimism came back into the picture. While the Vans brand is having trouble in the U.S markets, profit forecasts manage to exceed estimates. There were some other positive signs as well, and this was enough to light fires of optimism in at least some analysts.
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The earnings report VF brought out a little over a week ago didn’t exactly spur confidence. While revenue came in above estimates—if only just—it was down against the previous year. What’s more, the loss that VF posted in earnings was a broader loss than analysts were looking for, which is a double whammy to share prices. But the future guidance actually gave some hope; VF looked for full-year earnings between $2.05 and $2.25 per share. Analysts looked for $2.10, which is on the lower end of the stated range. That’s good news; a beat is significantly more likely than not.
Now here’s where things get a bit sticky, though. VF revealed that demand for its products in North America, one of the biggest markets for just about anything around, is in open decline. This is balanced out somewhat by sales in Greater China; the Americas market lost 15%, but the Chinese market jumped 24%. Further, VF is looking for big things out of one of its other brands: Supreme. Supreme, commonly regarded as an upscale brand, was already expected to bring in $600 million in revenue just in 2022 projections. Now, VF is planning to expand the brand outward and possibly bring in more yet.
Things could go either way for VF at this point, and the analyst consensus reflects as much. With six Buy ratings, eight Hold and two Sell, VF Corporation stock is considered a Hold. Further, VF Corporation stock comes with an 11.48% upside potential thanks to its average price target of $23.07.