VF Corp. introduces 2021 growth plan
VF Corp.'s new strategy is focused on maintaining the company's longevity — even in a rapidly changing marketplace.
With a measurable goal of delivering top quartile total shareholder returns, VF Corp. unveiled its 2021 strategic growth plan. The five-year plan focuses on four opportunities that will serve as the foundational elements underlining its new strategy. These include:
*Reshaping the company’s brand portfolio and enabling VF’s powerful brands;
*Transforming to a consumer and retail-centric model;
*Elevating direct-to-consumer while prioritizing digital; and,
*Distorting investment toward Asia, with a heightened focus on China.
These goals will be enabled by amplified investments and a focus on six critical capabilities: design and innovation, demand creation and brand experience, insights and analytics, retail excellence, demand and supply chain agility, and talent, the company reported.
“Our 2021 strategic growth plan fuels our aspiration to consistently grow by creating amazing products and brand experiences that transform and improve the lives of consumers worldwide,” said Steve Rendle, VF Corp.’s president and CEO.
“The strength and consistency of our largest brands and business platforms give me great confidence in our ability to achieve our targets,” he said. “We remain sharply focused on our diversified value creation model, which is designed to deliver solid results across the many and varied business cycles and economies around the world.”
Looking ahead to its financial targets for 2021, VF expects revenue to grow at a five-year compounded annual growth rate (CAGR) between 4% and 6% The company expects these increases to be fueled by its largest brands (the Vans, The North Face and Timberland), and its international and direct-to-consumer business platforms.
VF expects gross margin to reach 51.5%, and operating margin to hit 16% by 2021. Earnings per share is expected to grow at a five-year CAGR of between 10% and 12%.
At this rate, the company expects to generate more than $9 billion of cash from operations on a cumulative basis between 2017 and 2021, and return $8 billion to shareholders through dividends and share repurchases.
The company also announced that its Board of Directors has authorized a change in VF’s fiscal year end from the Saturday closest to December 31 of each year to the Saturday closest to March 31 of each year, effective for the fiscal year beginning April 1, 2018.
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