Owner of popular brands like Vans and The North Face, VF Corp is facing headwinds from slowing consumer demand. Missing analysts’ expectations, the company’s Q3 revenues dropped by 16 per cent Y-o-Y in the current fiscal.
VF Corp also announced the stepping down of Matt Puckett, CEO, from his position later this year, sending the company’s shares down by about 9 per cent in extended trading
The company’s revenue for the third quarter declined to $2.96 billion as against the anaylsts’ estimates of $3.24 billion. Its adjusted EPS declined by 49 per cent Y-o-Y to 57 cents as against analysts' estimate of 77 cents.
The company’s revenue from its Vans brand declined by 28 per cent while revenues from the Americas region decreased by 24 per cent.
The company, which withdrew its annual forecasts in October and announced a cost reduction program, had also begun an in-depth strategic review of its Global Packs business, including brands such as Kipling and JanSport.
Parent company of the brand Timberland, VF Corp struggled with weak wholesale demand this fiscal year as retailers trim their inventories amid soft discretionary demand in the United States. The company suffered due to a reduction in consumer confidence that led reduced discretionary spending and inventory trimming by retailers. It was also impacted by a weak demand for Vans sneakers in the US and other key international markets, and a soft holiday season with lower sales outside of promotional periods.
To counter this decline, VF Corp plans to increase promotions its brand Vans. It also announced a cost reduction program in October 2023 and has begun an in-depth strategic review of its Global Packs business, including brands such as Kipling and JanSport.