VF Corporation, the apparel giant behind iconic brands like Vans and Timberland, has been facing a rough patch.

Declining revenues, a cyberattack, and a strategic portfolio review have put the company under intense scrutiny.

Whispers of brand divestitures and leadership shakeups dominate the headlines. Yet, amidst this storm,

a quiet revolution is brewing within VF Corp, one that might be flying under the radar of even the most seasoned analysts.

The North Face, VF Corp's outdoor powerhouse, is exhibiting a level of resilience that deserves closer examination.

While the company's Q3 2024 earnings call painted a picture of overall struggles, particularly in the American wholesale channel,

The North Face's performance tells a different story. Despite battling an unseasonably warm winter and the broader retail slump,

the brand managed to achieve several crucial victories.

First, The North Face's global Direct-to-Consumer (DTC) business, encompassing both physical stores and online sales,

experienced a minimal decline, dropping only mid-single digits despite the weather challenges.

This performance contrasts sharply with the overall DTC decline of 9% for VF Corp and highlights the brand's growing consumer connection.

Second, the brand demonstrated remarkable agility. As soon as the cold weather finally hit in January, The North Face sprung back to life,

achieving growth across all three regions (Americas, EMEA, and APAC). This rapid response suggests a well-managed inventory

and a strong understanding of consumer demand, particularly for weather-dependent products.

Third, The North Face continues to be a global champion, particularly in the lucrative Asian market.

The brand achieved a stunning 28% growth in the APAC region and an even more impressive 30% surge in Greater China.

This consistent outperformance underscores The North Face's strong brand equity and effective execution

in a market known for its discerning consumers.

This data leads us to a compelling hypothesis: Could VF Corp be intentionally downplaying The North Face's success

to make other brands in its portfolio appear more attractive for a potential divestiture?

While the company has remained tight-lipped about its plans, the announcement of a strategic portfolio review has sparked intense speculation.

The sale of PACs, VF Corp's workwear division, is already in motion, but analysts are eagerly awaiting news

about the fate of larger brands like Vans and Timberland.

Revenue Performance: The North Face vs VF Corp

Let's delve into the numbers a bit further. VF Corp reported a total revenue decline of 17% in Q3 2024,

attributing 1.5% of this drop to intentional "reset actions" at Vans. The North Face's reported revenue decline

of 11% (mid-single digits excluding timing shifts) contributes significantly to this overall decline. However, if we consider

The North Face's positive growth in January and its ongoing strength in international markets, particularly Asia,

it's plausible that the brand's true performance is significantly better than what is being reflected in the reported numbers.

VF Corp's insistence on maintaining a veil of secrecy around its portfolio review only fuels the intrigue.

It's possible that the company is strategically positioning The North Face as a less desirable asset to amplify the perceived value of other brands,

creating a more favorable negotiating position for potential buyers. This tactic, while shrewd, raises questions about transparency

and the potential long-term impact on shareholder value.

VF Corp's decision to eliminate revenue and profit guidance for the remainder of fiscal year 2024 further obscures the picture.

While the company emphasizes its commitment to meeting its cash flow objectives, this move makes it difficult to accurately assess

the individual performance of its brands, including The North Face.

The quiet success of The North Face is a paradox within VF Corp's current narrative of struggle and uncertainty.

As the company navigates its transformation and portfolio review, investors and analysts alike should pay close attention to The North Face's trajectory.

It might just be the hidden champion that VF Corp is reluctant to reveal.

"Fun Fact: The North Face's iconic Half Dome logo was inspired by a photograph of Half Dome, a granite dome in Yosemite National Park, taken by photographer Ansel Adams in 1927."

Key Highlights:

VF Corp is undergoing a strategic portfolio review, potentially leading to brand divestitures.

The North Face shows resilience despite overall VF Corp struggles, especially in the U.S. wholesale channel.

The North Face's global DTC business and Asian market performance are particularly strong.

VF Corp's lack of transparency regarding individual brand performance raises concerns.

Investors should monitor The North Face's trajectory, as it could be a key asset for VF Corp's future.