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North Face owner VF Corp misses quarterly revenue estimates, posts loss as demand sags

Published 05/22/2024, 04:54 PM
Updated 05/22/2024, 04:56 PM
© Reuters. FILE PHOTO: Bags are seen for sale at The North Face, a brand owned by VF Corporation, in Manhattan, New York City, U.S., May 20, 2022. REUTERS/Andrew Kelly/File Photo
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(Reuters) - VF Corp (NYSE:VFC) posted a fourth-quarter loss and reported revenue below analysts' estimates on Wednesday as sales declined across its brands, reflecting choppy demand for its apparel and footwear amid strained consumer spending.

Shares of the North Face owner, which have declined 34.5% so far this year, were down nearly 8% in extended trading.

The Denver-based apparel retailer also named Spotify (NYSE:SPOT)'s former CFO Paul Vogel as its new finance chief, effective July 8. He will succeed Matt Puckett, who announced his decision to step down in February.

Premium apparel, footwear and handbag retailers like Under Armour (NYSE:UA), Calvin Klein-owner PVH Corp (NYSE:PVH), and Tapestry (NYSE:TPR) have all grappled with a demand slowdown in the United States.

VF Corp, which owns brands such as Altra and Timberland and streetwear brand Supreme, had shelved its fiscal 2024 forecast back in October. It did not provide a forecast for profit and sales for the fiscal year 2025.

CEO Bracken Darrell, who joined the company in July last year, has been attempting to turn around the business by laying off staff and cutting costs.

"As we move into fiscal year 2025, we will continue to execute our broader turnaround plans, including... fixing the Americas, turning around Vans, reducing costs and paying down debt, while progressing on the actions resulting from our strategic portfolio review," Darrell said.

Sales at VF Corp's biggest brand Vans, which made up about 32% of the company's total revenue in 2023, were down 26% owing to inventory clearance efforts in the wholesale channel.

Revenues in Americas, its biggest market, fell 22%, with Greater China emerging as the only bright spot, where sales rose 5% from last year.

© Reuters. FILE PHOTO: Bags are seen for sale at The North Face, a brand owned by VF Corporation, in Manhattan, New York City, U.S., May 20, 2022. REUTERS/Andrew Kelly/File Photo

Its fourth-quarter revenue fell to $2.37 billion in the quarter ended March 30, compared with analysts' estimates of $2.41 billion, according to LSEG data.

The company reported posted a quarterly loss of 32 cents per share, compared to analysts' expectations of a 1 cent profit.

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