Analyst Note| David Swartz |
Narrow-moat VF missed our sales forecast in its fiscal 2022 second quarter, ended September, as it could not overcome the production and transportation delays (especially in Asia) that have plagued the apparel and footwear industry over the past few months. Revenue of $3.2 billion fell about 10% short of our estimate as sales in the active coalition (primarily composed of Vans and Supreme) increased just 16% versus our 35% forecast. However, management's fiscal 2022 sales guidance of $12 billion matches our estimate, suggesting that VF can make up for some of the lost sales in the second half of the year. The shares fell about 4% on the report but remain slightly above our $66 fair value estimate, which we do not expect to change.