// VF Corporation falls after cutting its revenue outlook amid supply chain woes
// The company, which owns brands such as The North Face, Supreme, and Vans now expects revenue for fiscal 2022 to be around $11.85 billion
VF Corp shares have slipped after cutting its revenue outlook for the year amid a slowdown in its activewear brands and international sales.
The group also said it was hit by delivery delays and worker shortages at Vietnam factories due to the Covid-19 pandemic.
The maker of Vans, Supreme and The North Face now expects revenue of about $11.85 billion for the fiscal year ending around April 1, down from a prior view of about $12 billion.
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Adjusted gross margin is now projected to be at least 55%, down one percentage point from the company’s October forecast.
Operating profit was up by 40% to £479 million during the three months while direct-to-consumer revenue increased 30% in the quarter, while digital revenue rose 21% year on year.
International revenue rose 19%, including Europe revenue, which was up 26%, However, Greater China revenue fell 6%, including an 8% decrease in mainland China.
In the EMEA region, 6% of stores were closed during third quarter, while in North America stores were open. In the Asia-Pacific region, including mainland China, nearly all stores were open at the beginning of the third quarter.
The company’s active segment, which is driven by revenue from its Vans brand, missed revenue consensus expectations, bringing in $1.41 billion while analysts were expecting $1.45 billion.
In October, VF said Active sales in China were hurt by weaker digital traffic for non-domestic brands.
Revenue for the full year to 1 April 2022 is expected to be £8.8 billion, compared with VF’s previous estimate of £9 billion.
VF said Covid-19 related manufacturing capacity constraints have continued during the third quarter, although “the situation has improved over time” and the company said it expects to be back to nearly full capacity in the coming weeks.
“Additionally, continued port congestion, equipment availability and other logistics challenges have contributed to ongoing product delays. VF is working with its suppliers to minimise disruption and is employing expedited freight as needed. VF’s distribution centres are operational in accordance with local government guidelines while maintaining enhanced health and safety protocols.”
“We delivered strong double-digit top and bottom line results and returned about $500m in cash to shareholders in the third quarter, all of which has been achieved amidst continuing macro headwinds,” said Steve Rendle, VF’s chairman, president and chief execuitve.
VF Corporation bought global streetwear brand Supreme for £1.6 billion in December 2020.
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