VF Corp.'s stock rises after ex-Lululemon chief product officer joins Vans as global brand president

By Steve Gelsi

New Vans sneaker exec praised as 'extremely strong hire' for VF Corp

VF Corp.'s stock rose Friday after the apparel and footwear company named former Lululemon chief product officer Sun Choe as global brand president of its Vans skateboard sneaker line in a move that drew praise on Wall Street.

Wedbush analyst Tom Nikic raised his price target by $1 to $11 a share for VF Corp. (VFC) due to the addition of Choe as an "extremely strong hire" for the footwear company.

Choe's departure as chief product officer from Lululemon Athletica Inc. (LULU) one week ago caused a roughly $3 billion drop in market value in the yoga apparel maker, Nikic said.

"This reflects how well-respected Ms. Choe and how much credit the Street gives her for her role in LULU's recent success," Nikic said.

VC Corp.'s stock was up by 5.4% in premarket trades on Friday.

While Wedbush's Nikic hiked his target price for VF Corp., he maintained a neutral rating, however.

"We remain cautious on VFC given that there is a lot of heavy lifting yet to do," he said.

During her tenure at Lululemon, Choe managed to grow the company's core female customer base as well as expand its offerings to men, and more recently introduced a footwear line.

She's stepping into a role that's been vacant since October, when Kevin Bailey left the job.

"It is no secret Vans has struggled mightily as of late, with constant-FX revenues down more than 20% for four consecutive quarters (led byweakness in the Americas region)," Nikic said.

"The hope is that the appointment of Ms. Choe can help reinvigorate the product line and bring excitement to the brand once again, though we'd caution that given the long lead times in the industry, it will be quite some time before Ms. Choe's impact will be felt on product," he said.

However, the naming of Choe amounts to a "key step in the right direction" for a brand that hasn't offered much positive news for years, he said.

In a statement late Thursday, Choe said Vans stands out as an "incredible brand with a storied history and devoted customer base" and that she plans to work to "build long-lasting, meaningful connections with consumers around the world."

VF Corp. Chief Executive Bracken Darrell said Choe brings a "proven track record of driving brand heat, and translating it into financial results."

Prior to Friday's moves, VF Corp.'s stock has fallen 34.4% in 2024, while the S&P 500 SPX has risen by 9.8%.

-Steve Gelsi

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05-31-24 0814ET

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