Analysts were overall upbeat Tuesday as they reacted to the VF Corporation’s appointment of Bracken Darrell as its new president and CEO.
Darrell, who most recently served as president and CEO of Logitech International S.A, joins during a turbulent time for the footwear giant, which owns Vans, The North Face, Timberland and Supreme, among other brands. VF in May reported that yearly revenue for 2023 was down 2 percent from the prior year. At the time, executives announced that fiscal year 2024 would be a transitional year for VF to set it up for profitable growth in 2025 and beyond.
With Darrell’s appointment, analysts were overall positive on his potential to turn the company around, despite his lack of experience in the retail and footwear space. The market responded similarly, with shares for VF up slightly at market close Tuesday.
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Describing the appointment as a “strategic positive” for VF, Goldman Sachs analyst Brooke Roach in a note lauded Darrell’s leadership and turnaround experience and “history of managing diversified portfolios.”
Other analysts also called out Darrell’s brand turnaround experience. This is a crucial attribute for rightsizing business at VF Corp., which has been impacted by higher-than-usual inventory levels, executive turnover and a challenging wholesale environment.
“Darrell does seem to have a strong track record,” wrote Wedbush analyst Tom Nikic in a Tuesday note to investors. “The biggest question mark is the lack of direct industry experience, as the apparel/footwear industry can be very challenging.” Nikic highlighted two prominent industry challenges: long product development cycles and rapidly changing consumer trends.
According to Baird analyst Jonathan Komp, Darrell’s status as an industry “outsider” likely won’t impede his ability to affect change at the company. He noted that Darrell, who studied English in college, was relatively new to the technology industry when he joined Logitech in 2012 and was able to lead the company “through a period of meaningful transition, emphasizing new consumer technology categories, strengthening existing businesses and entering new markets.”
Stifel analyst Jim Duffy also addressed concerns of Darrell being untested in the footwear and retail industries.
“While not specific to footwear and apparel, we see the experience in consumer tech and consumer package goods as well as his outspoken commitment to social responsibility a good fit for leadership of the VFC organization,” Duffy wrote.
He added that the CEO vacancy has weighed on the company since Steve Rendle left the position in December. Now that this is resolved, the company will need to focus on other areas, such as improving the brand portfolio, building and developing new brands, leveraging a DTC focused supply chain and becoming more agile. The company outlined these priorities in September as part of a long-term plan to gorw business through 2027.
In fiscal 2024, VF expects total revenue growth to be between flat and up slightly in constant dollars. First quarter revenues are expected to be down in the high single digits. Earnings per share for the year are expected to land between $2.05 and $2.25.
