VF Corp. rolled out Thursday a five-year strategic plan that included targets of 4 to 6 percent annualized revenue growth and an increase in operating margin to 16 percent by 2021.
The filing with the Securities and Exchange Commission also announced that $5 billion in share repurchases had been authorized by the board of directors.
The targets are optimistic for the clothing and apparel company, which experienced slow growth in 2016.
Last year the company’s operating margin was 12.5 percent, down from 15 percent in 2015 and 2014, and total revenue of $12 billion was unchanged from the year before.
The company expects gross margin to increase to nearly 52 percent in 2021, compared to 48 percent in 2016.
The company also projects earnings per share to increase at an annualized rate of 10 – 12 percent. In 2016 the company’s earnings per share fell 8 percent to $2.82 from the year before.
Over the next five years, the company hopes to generate $9 billion in operations and return $8 billion to shareholders in the form of share repurchases and dividends.
Other deliverables of the five-year plan include increasing investment to Asia and in particular China, elevating direct-to-consumer business while prioritizing digital, and transforming to a consumer and retail-centric model.
The company says the strategic changes will enable it to adapt to the quickly changing market environment.
“The strength and consistency of our largest brands and business platforms give me great confidence in our ability to achieve our targets,” said President and CEO Steve Rendle. “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.”
In the press release the company also announced a change in its fiscal year from the Saturday closest to Dec. 31, to the Saturday closest to March 31.
According to the company this will provide greater visibility into projecting revenue growth and reducing volatility, due to the “seasonality and increasing weight of direct-to-consumer business.”
VF Corp. is a clothing and footwear company that has more than 30 brands, including Vans, The North Face, Timerland, Wrangler and Jansport.
More than half the backpacks sold in the U.S. are supplied by brands owned by VF Corp.
The company’s stock declined by $2.07, or 3.7 percent, to $54.13 on Thursday.
