North Face Parent VF Corp's Q3 Marks First Revenue Growth In Nine Quarters, But Goldman Sachs Stays Neutral

Goldman Sachs analyst Brooke Roach reiterated a Neutral rating on the shares of VF Corp VFC and raised the price target from $22 to $25.

VFC delivered a broad-based third-quarter beat, and raised its full-year 2025 free cash flow guidance, said the analyst.

However, the company provided a fourth-quarter revenue forecast below consensus, primarily due to wholesale timing shifts and foreign exchange impacts.

Overall, the analyst remains positive about the company’s progress with its Reinvent strategy, noting continued improvements in execution during the quarter.

According to the analyst, key highlights from the quarter include, year-over-year revenue growth for the first time in nine quarters, driven by growth across all regions, strong performances from TNF and Timberland, and sequential improvement at Vans with favorable comparisons.

The analyst also highlighted positive year-over-year sell-through for Vans in the U.S. non-value channel during the holiday season, solid gross margin expansion, benefiting from easier comparisons to last year’s inventory reset, product cost tailwinds, and lower promotional activity.

Greater-than-expected savings in SG&A costs, with management on track to achieve approximately $300 million in SG&A run-rate savings by the end of FY25; and ongoing debt reduction, with the company remaining on track to meet its medium-term leverage target of 2.5x or lower by FY28.

The analyst views this quarter as a significant indication of early progress with VFC's Reinvent plan, and is optimistic about the business’s margin trajectory, especially in terms of SG&A.

The analyst is eager to receive a more detailed update on the recent performance and future strategy of each brand during the second segment of the company's Investor Day, scheduled for March 6.

Price Action: VFC shares are trading higher by 4.65% at $26.75 at the last check Thursday.

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