What Happened?
Shares of lifestyle clothing conglomerate VF Corp (NYSE: VFC) fell 25.3% in the afternoon session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%.
From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
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What The Market Is Telling Us
VF Corp’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for VF Corp and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 28.3% on the news that the company reported strong third-quarter results that blew past analysts' EBITDA and EPS expectations. In addition, its constant currency revenue outperformed Wall Street's estimates. Notably, guidance for the next quarter implied continued sequential improvement in sales relative to the declines recorded since the start of CY'24. In terms of the regional breakdown, APAC reported positive year on year growth, partially offsetting the declines recorded in other regions.
Moving to the bottom line, management confirmed that the business was on track to achieve the $300 million savings target by the end of FY25. Overall, it was a great quarter for the company, highlighting significant improvements.
VF Corp is down 44.7% since the beginning of the year, and at $11.91 per share, it is trading 55.8% below its 52-week high of $26.93 from January 2025. Investors who bought $1,000 worth of VF Corp’s shares 5 years ago would now be looking at an investment worth $243.56.
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