August 15, 2017

Director of Research & Consulting

VF Corporation: Let’s Go Shopping

Forward View is reiterating our Hold rating on shares of VF Corporation following the company’s announcement that it will acquire privately-held Williamson-Dickie Mfg. Co. for $820M, less than 1x Williamson-Dickie’s TTM revenue of $875M. Williamson-Dickie owns several major workwear brands including Dickies, Workrite, Kodiak, Terra and Walls. The deal looks cheap based on revenue, but VF paid 11x Williamson-Dickie’s adjusted TTM EBITDA. Our price target for VF’s stock has been increased by $1 due to the significant revenue added through the acquisition. Our excitement is tempered by the fact that Williamson-Dickie’s FY16 operating margin was around 5% while VF’s Workwear business boasted a 16.3% FY16 operating margin. We believe that VF can certainly improve Williamson-Dickie’s margins, but strengthening the business won’t happen overnight. We like this deal overall, but it doesn’t drastically change our valuation of VF. The company just bought a… project.

Forward View is reiterating our Hold rating on shares of VF Corporation

following the company’s announcement that it will acquire privately

held

Williamson

Dickie Mfg. Co. for $820M, less than 1x Williamson

Dickie’s TTM

revenue of $8

5M.

Williamson

Dickie owns several major workwear brands

including Dickies, Workrite, Kodiak, Terra

and

Walls.

The deal looks cheap

based on revenue, but VF paid 11x Williamson

Dickie’s adjusted

TTM

EBITDA.

Our price target for VF’s stock has been increased by

$1 due to the significant

revenue added through the acquisition. Our excitement is tempered by the fact

that Williamson

Dickie’s

16 operating margin was around 5% while VF’s

Workwear business boasted

a 16.3% FY16 operating margin. We believe that VF

can

certainly improve

Williamson

Dickie’s

margins, but strengthening the

business won’t happen overnight. We like this deal overall, but it doesn’t

drastically change our valuation of VF. The company just bought a... project.

One

Year Stock Price Chart

VF Corporation

Let

’

Go Shopping

VF Corporation

NYSE: VFC

August 15, 2017

Nathan Yates, M.S.F.

Director of Research

nathan@forwardviewconsulting.com

Guidance Changes

•

Revenue

is now expected to reach $11.85 billion, up 3.5 percent on a reported basis (up 4.5 percent

currency neutral), and

includes about a $200 million contribution from Williamson

Dickie. This

compares to the previous expectation of $11.65 billion, a 2 percent increase on a reported basis (up 3

percent currency neutral).

•

Gross margin

is now expected to reach 49.5 percent, v

ersus the previous expectation of 49.8 percent,

and includes the impact of Williamson

Dickie. Excluding the impact of Williamson

Dickie, gross margin

is still expected to be 49.8 percent and includes about a 70 basis point negative impact from changes in

oreign currency.

•

Operating margin

is now expected to approximate 13.7 percent, versus the previous expectation of

about 14 percent, and includes the impact of Williamson

Dickie. Excluding the impact of Williamson

Dickie, operating margin is still expected

to be about 14 percent and includes about a 60 basis point

negative impact from changes in foreign currency.

•

Earnings per share

is now expected to be $2.96, versus the previous expectation of $2.94, and includes

about a $0.02 contribution from Williamson

ickie. Accordingly, EPS is expected to decline

approximately 1 percent on a reported basis (up at a mid

single

digit percentage rate currency neutral)

compared to 2016 adjusted EPS of $2.98. A reconciliation of 2016 GAAP earnings per share to adjusted

earn

ings per share is presented in the supplemental financial information included with the press

release dated February 17, 2017.

•

Transaction and deal

related expenses are estimated to approximate $0.04 per share.

2021 Financial Targets Increased

The followin

g outlook for 2021 has been updated to include the impact of the Williamson

Dickie acquisition,

excluding transaction and other deal

related expenses, and includes the following:

•

Revenue

through 2021 is now expected to grow at a five

year compounded annual

growth rate (CAGR)

between 5 percent and 7 percent to more than $15 billion, versus the previous expectation of a 4 percent

to 6 percent five

year CAGR. Williamson

Dickie is expected to contribute more than $1 billion of

revenue by 2021.

•

Earnings per shar

is now expected to grow at a five

year CAGR between 11 percent and 13 percent to

more than $5.00, versus the previous expectation of a five

year CAGR between 10 percent and 12

percent. Williamson

Dickie is expected to contribute more than $0.25 by 2021.

VF Corporation

K dated August 14, 2017.

Earnings Estimates

Valuation

Quantitative Forecast

Disclaimers & Disclosures

Analyst Certification:

I, Nathan Yates, certify that the views expressed in this publication accurately reflect

my personal views about the subject companies and

their securities. I also certify that I have not, am not, and

will not be compensated directly or indirectly in exchange for expressing any specific recommendation in this

report.

Required Disclosures:

Nathan Yates

may own long or short positions in securities mentioned in Forward

View Consulting

research, however I will not invest in securities listed in the Forward View Formal Coverage

document. I will not trade in any securities that have been mentioned in Forward View Consulting research

within the three days following publication of said resea

rch. I confirm there is no known affiliate ownership in,

or employment by, companies formally covered by Forward View Consulting. I also confirm that I have, and

will seek, no insider knowledge of companies formally covered by Forward View Consulting.

Imp

ortant Disclosures:

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investment ratings, target prices and conclusions. Certain risks to our ratings, target prices and ultimate

investment conclusions exist which include, wi

thout limitation, a company’s failure to achieve financial results,

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Recommendation

Expected Return

Buy

Shares are expected to deliver alpha

Hold

Shares are expected to match the market's

risk

adjusted

return

Sell

Shares are expected to underperform

the market

Disclaimers & Disclosures