Shares of VF Corp Jump 11.8% on Support From Activist Investor and Founding Family
Shares of lifestyle clothing conglomerate VF Corp jumped 11.8% in the morning session after activist investor Engaged Capital gained the support of the company’s founding family. Engaged Capital, led by Glenn Welling, has been pushing for board seats and faster changes at VF Corp. The investor has already influenced cost-cutting measures and strategic reviews at the company and has identified director candidates with retail and turnaround expertise. The Barbey family, which owns a significant stake in VF Corp, has stressed the urgency of implementing changes to benefit shareholders.
This news had a significant impact on the market’s perception of VF Corp, as the company’s shares have been somewhat volatile over the past year, with 27 moves greater than 5%. However, moves of this magnitude are rare for VF Corp, indicating the market’s reaction to the news.
Just five days ago, VF Corp experienced a big drop of 14.3% following the release of its third-quarter results, which fell short of analysts’ expectations. The company cited various factors for the underperformance, including warm weather, tough comparisons to the previous year, underperformance in the Americas, adjustments made to clean up Vans channels, and the impact of a cyber incident at the end of the quarter. The drop in share price was primarily driven by declines at popular brands The North Face and Vans.
Since the beginning of the year, VF Corp’s shares have declined by 7.2%, trading at $17.31 per share, a significant 37.8% below its 52-week high of $27.84 in February 2023. This highlights the challenges faced by the company in recent months. Investors who purchased $1,000 worth of VF Corp’s shares five years ago would now only have an investment worth $199.73, further emphasizing the struggles the company has faced.
The support from the Barbey family and the involvement of Engaged Capital may bring renewed hope for investors in VF Corp, as they push for faster changes and improved performance. The deadline for director nominations is imminent, and the company’s response to Engaged Capital’s efforts remains unclear. However, the backing from the founding family underscores the urgency of implementing changes to benefit shareholders.
Analyst comment
Positive news: Shares of VF Corp jumped 11.8% following the support of activist investor Engaged Capital and the involvement of the Barbey family. This may bring renewed hope for investors and improve the company’s performance.
Short analysis: With the support of Engaged Capital and the Barbey family, VF Corp may experience faster changes and improved performance. The market’s perception of the company has significantly improved, as reflected in the share price surge. However, the company’s response to Engaged Capital’s efforts and the implementation of changes remain uncertain.
