// VF Corporation tumbles after slashing revenue outlook amid supply chain issues
// The company, which owns brands including The North Face, Supreme and Vans, now expects fiscal 2022 revenue to be around $11.85 billion.
Shares of VF Corp fell after slashing its revenue outlook for the year amid slowing sportswear brands and international sales.
The group also said it was hit by delivery delays and labor shortages at Vietnamese factories due to the Covid-19 pandemic.
The maker of Vans, Supreme and The North Face now expects revenue of around $11.85 billion for the fiscal year ending around April 1, down from an earlier forecast of around $12 billion. of dollars.
Adjusted gross margin is now expected to be at least 55%, down one percentage point from the company’s October guidance.
Operating profit rose 40% to £479m in the three months, while direct-to-consumer revenue was up 30% in the quarter, while digital revenue was up 21% d one year to the next.
International revenue increased by 19%, including revenue in Europe, which increased by 26%. However, Greater China revenue fell 6%, including an 8% decline in Mainland China.
In EMEA, 6% of stores were closed during the third quarter, while in North America, stores were open. In the Asia-Pacific region, including mainland China, almost all stores were open at the start of the third quarter.
The company’s active segment, which is driven by revenue from its Vans brand, missed consensus revenue expectations, reporting $1.41 billion while analysts had expected $1.45 billion.
In October, VF said Active’s sales in China were hurt by weaker digital traffic for non-domestic brands.
Revenue for the full year to April 1, 2022 is expected to be £8.8bn, compared to VF’s previous estimate of £9bn.
VF said manufacturing capacity constraints related to Covid-19 continued during the third quarter, although “the situation has improved over time” and the company said it expects to return to almost full capacity in the coming weeks.
“In addition, continued port congestion, equipment availability and other logistical challenges have contributed to continued product delays. VF works with its suppliers to minimize disruption and uses expedited freight as required. VF’s fulfillment centers are operating in accordance with local government guidelines while maintaining enhanced health and safety protocols.
“We delivered strong double-digit revenue and earnings results and returned approximately $500 million in cash to shareholders in the third quarter, which was achieved amid continued macroeconomic headwinds,” said Steve Rendle, Chairman and CEO of VF.
VF Corporation bought global streetwear brand Supreme for £1.6 billion in December 2020.
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