VF Corp targets 17 billion in sales by 2017
The American sporting group has announced an ambitious growth plan that should see the company bring in 17 billion dollars in sales in 2017.
During a recent investor meeting, the group announced that it is aiming for a five-year compounded annual sales target of 10% by 2017. In addition to this, VF Corp also raised projections for its margins moving from 46.5% and 13.5% in 2012 to 49.5% and 16% in 2017 for gross and operating profit respectively.
To support such ambitious targets, the group is relying on three key points to drive growth. Firstly, the company will focus on its outdoor segment (The North Face, Vans and Timberland), which the company considers to be a key driving force. The North Face is anticipated to grow at a 12% annual growth rate, with revenues reaching $3.3 billion by 2017 from $1.9 billion in 2012. Vans has raised its average annual revenue growth projection, initially provided in June of 2012, from 13 percent to 15 percent. The brand is now targeting total revenues of $2.9 billion by 2017, up from $1.5 billion in 2012. Timberland continues to anticipate growing revenues at an annual CAGR of 10 percent over the next five years, increasing to $2.3 billion by 2017 from $1.5 billion in 2012. Outdoor & Action Sports revenues are expected to reach 64 percent of VF’s total revenues by 2017, up from 54 percent in 2012.
Secondly, the group is counting on direct-to-consumer sales to make up 25% of its activity up from 21% in 2012. It is aiming for a 14% increase in e-commerce and own store sales to reach total DTC sales of 3.3 billion dollars.
Lastly, the group is planning to open 645 stores in the next five years to total 1,775 stores in total by 2017, therefore pushing its international development. VF Corp expects increases in this segment of 12% for North America, 15% for the Asia-Pacific region and 21% in Europe, the Middle East and Africa.
The group aims to do 43% percent of its business outside of its domestic market of North America by 2017, up from the 37% it currently does. Sales in North America should increase by 15% while Europe and the Asia-Pacific area are aiming for increases of 11% and 17% respectively.
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