North Face parent company VF Corp is set to release its fiscal-second-quarter earnings report on Monday. While North Face jackets continue to enjoy widespread popularity, VF stock (ticker: VFC) has experienced a significant decline of approximately 75% over the past two years. This poor performance has drawn the attention of activist investors Legion Partners and Engaged Capital.
Legion Partners has chosen not to disclose details about its VF investment. On the other hand, Engaged Capital has publicly discussed its stake in VF Corp through a 26-page presentation earlier this month. Encouraged by recent management changes within the company, Engaged Capital suggests that VF should focus on cutting costs by $300 million, divesting noncore assets, and making adjustments to the board. If these measures are implemented, Engaged believes that VF stock could potentially reach the mid-$40s range within three years, more than doubling its recent trading levels.
Market expectations for VF’s quarterly earnings are somewhat muted. Analysts surveyed by FactSet predict that the company will post a fiscal-second-quarter profit of $255 million, or 65 cents per share, reflecting a 10% decline compared to the year-ago quarter. Additionally, revenue is expected to decrease by 3% to $3 billion. The fiscal-first-quarter report released on August 1st was a mixed bag, prompting VF Chief Financial Officer Matt Puckett to acknowledge that it fell short of their usual standards in a press release.
VF responded to inquiries regarding these developments via email, expressing their appreciation for their shareholders’ perspectives. Under the leadership of new President and CEO Bracken Darrell, who assumed the position on July 17th, the company is already taking immediate and decisive actions to enhance its financial performance.