VF expects its transformation program to reduce debt and drive profitability

VF Corp. has announced the medium-term financial targets including adjusted operating margin of at least 10 percent, adjusted gross margin of at least 55 percent, adjusted SG&A as a percentage of revenue of 45 percent or lower and net leverage of 2.5x or below.

Commenting on the update ahead of the company’s investor day, Bracken Darrell, VF president and CEO, said: "We activated our transformation program, Reinvent, during my first 15 months at VF, through which we are making excellent progress advancing our priorities and reshaping the company. This strong foundation positions us to quickly enhance VF’s profitability while enabling further investment in sustainable shareholder value creation."

The company has updated the key pillars of its enterprise strategy to drive profitability. It said in a statement that capitalising on VF’s multi-brand portfolio anchored in performance, the company is adopting a unified way of operating that can be scaled. VF is investing in six key areas to build capabilities and enhance the company’s competitive advantage

The company intends to further reduce debt and leverage to reach its optimal capital structure. VF will continue to prioritise free cash flow and debt reduction with a goal of further reducing net leverage, while remaining committed to returning capital to shareholders through paying a quarterly cash dividend.