10 Footwear Apparel Stocks Affected By China Tariffs

6. V.F. Corporation (NYSE:VFC)

V.F. Corporation is a branded lifestyle footwear, accessories, and apparel designer, distributor, and marketer. The company operates in Active, Outdoor, and Work segments. It sells its products mainly to mass merchants, department stores, independently operated partnership stores, national chains, specialty stores, and direct-to-consumer platforms. The company sources 15% of its products from China.

VFC recently released its Q3 earnings report, beating analyst estimates. Financial results indicated non-GAAP EPS topped by $0.28 while revenue surpassed by $80 million. The company reported a solid YoY growth of 1.8% and showed a 56.3% gross margin expansion.

While margin expansion is a growth trend, it was partly associated with lower promotional expenses so the sustainability of this expansion is yet to be determined. The company’s cost reduction program is working as expected as SG&A (selling, general & administrative) expenses were reduced by 3% as compared to the previous year on an adjusted basis. For long-term investors, the key highlight was a 43% decline in net debt excluding operating leases. Given the strong Q3 performance and share price performance of 14% in January, now is the time for investors to consider an entry into the stock.