Cramer’s “Benefit of the Doubt” portfolio is down 8% since March. Except for VF Corp., that is.
Retailers with strong leadership and a history of outperformance earn the benefit of the doubt if they a missed same-store sales number one month or something similar, Cramer said. Normally, that could cause a sell-off in the stock. But when management can be trusted to turn things around, Cramer sees the dip as a buying opportunity.
Unfortunately, on average, his picks are down. But VF is up 12.4% since March 26.
The company is a real ROWer, with 27% of sales coming from overseas. VFC’s Jeanswear division is growing at a 40% annual clip in China to boot. The outdoor division – North Face, Eastpak, and others – grew sales at 20% last quarter. The balance sheet is good. And VFC has a history of making smart acquisitions, which is a trend that could continue if the market continues to beat down other retailers, Cramer said.
“We’re always looking for additional brands,” Chairman and CEO Mackey McDonald told Cramer today.
The company doesn’t look for what is available so much as what its needs are, Mackey said, “and then we find the best brands in the business to fill those needs, and we go after them and acquire those that we can.”
“They’re just being more selective,” McDonald said. “They’re only choosing their favorite brands that make a clear statement about their lifestyle. They’re choosing new, innovative products, high-quality and good value. And our great portfolio of brands…deliver all these criteria.”
As far as Cramer is concerned, McDonald has done a wonderful job running VF, and that’s “why that stock’s going to go higher with or without a strong American consumer.”
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