VF Corp (VFC) Piles Up Value

CNBC‘s Jim Cramer has been lately analyzing VF Corp (NYSE:VFC)’s performance with keen interest. The company’s price has been rising for a while, and currently floats around $66, some 2% more compared to yesterday. It’s amazing how only several key factors can cause such an important difference.


“I am telling you VF, I smell big upside surprise. Don’t forget that cotton prices have plummeted, they are a giant buyer of cotton,” said Jim Cramer.

He didn’t further suggest to look up VF Corp (NYSE:VFC)’s second quarter report, but if one does, he or she will not be left indifferent by the numbers. Revenues were $2.4 billion, 8% up on the year, operating income got to $220 million, 9% higher than one year ago, and earnings per share were $0.36, making investors 16% richer relatively to second quarter 2013. It sounds like a serious commitment towards a bigger valuation for the VF Corp (NYSE:VFC).

The secret of this impressive growth is in some of its brands’ spikes in sales. Two of them were mentioned in the video: Timberland and The North Face, which enjoyed a 19% and 11% respective increase in brand revenues. There’s also Vans with 21% boost in the same metric and without exact values Kipling and Wrangler are also mentioned as strong contributors to the overall growth. VF Corp (NYSE:VFC) might amplify its momentum as we approach the holidays, so it will be interesting to see how big its value could get.

Now, regarding the cotton prices, they have little influence on the revenues per se, so this is not a reason for VF Corp (NYSE:VFC)’s success. However, this cheapening of primary inputs makes the profit margin fatter, which pleases shareholders, who see their investment soar even if it’s not a long term boost. Patience and a sharp eye are all the needed instruments to make future decisions or predictions with respect to the company’s deeds.

Disclosure: none