V.F. Corporation (VFC) has been a great performer in 2017, posting roughly a 50% rally from the lows reached in February. The company posted excellent top-line results in 2017, with a 7.1% increase in revenue, while margins showed mixed signals. In particular, in the chart below, we can see that gross margin has been on a long-term positive trend, while EBIT margin has contracted significantly from the levels of 2015, and it's now just 12.9% against levels in the mid-teens reported in 2015 and 2016.
Source: Sentieo.com
I tend to appreciate VFC as a business because it was able to react to the negative trends in the retail industry in North America and unlock growth through the increasing popularity of its Vans brand in a very difficult context. There are also other characteristics I like in this business.
