VF Corp. is projecting a compound annual growth rate (CAGR) in its total sales of between 4 and 6 percent over the next five years, driven by continued growth at Vans and the resumption of growth at The North Face (TNF) and Timberland, which have under-performed lately, especially in the U.S. Those three brands should account for 90 percent of the group's overall growth, excluding possible acquisitions.

Running his first investors' day since he became the company's new chief executive in January, Steve Rendle indicated that most of the future growth would take place in China and other international markets and through e-commerce. VF blamed the recent disruption in the U.S. retail sector for missing the targets set in a previous five-year plan, adding that the disruption will likely continue, and that it may even accelerate.

VF will slow down investments in new physical stores, especially in the U.S., to focus more on its e-commerce business, with a target to deliver 28 percent in CAGR in the next five years. That would raise sales from this business to more than $2.1 billion, up from $600 million in the past year. It has already tripled since 2012. About 85 percent of the group's overall growth is due to come from direct-to-consumer (DTC) and digital sales.

The Outdoor & Action Sports Coalition, which includes Vans, TNF, Timberland and other brands, should represent 71 percent of the VF group's turnover at the end of the period excluding divestments or acquisitions, up from the current share of 66 percent.

Timberland, whose annual sales now stand at about $1.8 billion, is expected to go back to a previous CAGR of 4 to 6 percent, mostly through a diversification of its product line, led by a stronger development of women's footwear and men's apparel. The footwear business will have to be more diversified in the U.S., where classics represent 40 percent of the mix against 18 percent overseas.

Also at Timberland, digital sales will lead the growth with a CAGR of 23-25 percent budgeted for the next five years. Geographically, Timberland is aiming for CAGR of 3-5 percent in the U.S., 4-6 percent in Europe and 6-8 percent in Asia-Pacific.

With regard to the three major brands in VF's portfolio, the biggest one of them with sales of $2.3 billion, Vans, is seen rising at a CAGR of 8 to 10 percent, reaching an implied level of $3.5 billion in five years. The fastest growth is expected to take place in China and the rest of the Asia-Pacific region, with a CAGR of 17-19 percent, followed by Europe, the Middle East and Africa (EMEA) with 6-8 percent and the U.S. with 5-7 percent growth. The U.S. would thus drop from 48 to 55 percent of Vans' total sales. DTC would rise from 38 to 48 percent of the turnover, with digital's share growing from 7 to 16 percent.

Apparel and accessories will drive Vans' growth going forward, rising from 21 percent to 27 percent of the product mix. In the footwear segment, which currently generates annual sales of $1.9 billion, the brand will try to expand beyond classic styles, which now represent half of the mix. Vans has already started to offer customized footwear in the U.S., and the project will be extended this year to Canada, Europe and Asia.

The group will change its fiscal year-end from Dec. 31 to March 31 in 2016 to reflect the end of its important winter business. The management promises to improve the product development process, using more analytics, as it aims to deliver more innovative and relevant products and to better regulate the flow of seasonal goods.

The gross margin is projected to rise by 1.4 percentage points to 51.5 percent in five years' time, thanks to higher international and DTC components as well as stronger growth for higher-margin brands. The operating margin is seen growing more slowly to a level of 16 percent, up from 14 percent this year, and this should help VF to generate a 10-12 percent CAGR in earnings per share, with three percentage points coming from share repurchases.

VF intends to be active in the area of mergers and acquisitions. It is particularly interested in big brands or brands that have the potential to cross the $1 billion sales barrier, but any takeover will have to be accretive to the group's results.

VF bought TNF in 2000, Vans in 2004 and Timberland in 2010. The company still has a large jeans business with Lee and Wrangler. It recently decided to divest its Contemporary Brands and Licensed Sports business groups, and to fold Lucy into TNF. A few days ago, it sold its Licensed Sports business group to Fanatics, the largest online sports retailer in the U.S.. The sale includes Majestic, whose current main asset is a deal for Major League Baseball uniforms, and its U.S. manufacturing plant, but the MLB contract is set to be transferred to Under Armour in 2020.