VF Corp. fails to deliver yet again, stock tumbles nearly 12%

VF Corp. failed to exceed consensus estimates for quarterly sales and profit for a fourth consecutive quarter. The latest bad news for the parent of The North Face, Vans, Timberland and Dickies, among others, sent VF’s shares down 11.7 percent in after-market trading yesterday. The stock has fallen 34 percent since the start of 2024. 

The Q4 operating loss was $355.8 million against a loss of $160.9 million for the period ended March 31. The net loss, meanwhile, rose by 95 percent year-over-year to $418.3 million versus a loss of $214.9 million in the year-ago period. Gross margin slid by 120 basis points to 48.4 percent. Total revenues fell by 13 percent to $2.37 billion from $2.74 billion, with all major segments, except The North Face, posting double-digit, constant-currency sales declines. 

There were positives in the period, including a year-over-year debt reduction of approximately $540 million and a 23 percent decline in inventories. The group generated about $40 million in savings from its “Reinvent” transformation program in Q4 and approximately $55 million in associated charges.

Q4 Regional Sales were worst in the Americas

In its home market, VF suffered a 23 percent constant-currency decline in Q4 sales to $1,126.2 million. Meanwhile, EMEA and APAC each fell 3 percent to $869.9 million and $377.7 million, respectively. By channel, wholesale revenues sunk by 20 percent to $1,280.1 million and DTC sales dipped by 4 percent to $1,093.8 million. 

From a brand segment perspective, The North Face was the only major business not to suffer a double-digit, constant-currency sales drop in the final quarter by declining only 5 percent to $814.3 million. Vans year-over-year sales contracted by 27 percent to $631.2 million while Timberland’s sales fell by 14 percent to $341.5 million and Dickies’ sales dipped by 15 percent to $162.4 million. 

FY results breakdown 

While the numbers in the income statement are not pretty, the group expressed satisfaction that it ended the FY with $1 billion in operating cash flow and over $800 million in free cash flow, both of which exceeded the company’s guidance.

Full-year revenues declined by 11 percent on a constant-currency basis to $10.45 billion from $11.61 billion as adjusted gross margin contracted by 50 basis points to 52.1 percent. The annual operating loss was $34.1 million, against a year-ago profit of $327.7 million. The FY net loss was $968.9 million, versus a profit of $118.6 million during the prior year. 

By region, annual EMEA sales declined by 4 percent on a constant-currency basis and were flat on a reported basis at $3.43 billion. APAC sales rose 7 percent on a constant-currency basis to $1.56 billion. Americas’ FY sales tumbled by 19 percent to $5.46 billion. By channel, constant-currency wholesale revenues were down by 15 percent at $5.49 billion, as DTC annual sales contracted by 6 percent year-over-year to $4.97 billion. 

The North Face squeezed out a 1 percent constant-currency sales increase for the FY to $3.67 billion. But Vans’ sales for the year cascaded downward by 25 percent to $2.79 billion and fell by 14 percent at Timberland to $1.56 billion. Dickies’ annual sales, meanwhile, declined by 15 percent to $618.4 billion. 

In a statement, CEO Bracken Darrell said the company would continue to execute its broader turnaround plans in FY25, which commenced on April 1. That strategy will be led by fixing the group’s Americas business, turning around Vans, lowering costs and further paying down debt. 

In a senior management development, VF Corp. has named Paul Vogel, most recently CFO for Spotify Technology S.A., as its new CFO to succeed Matt Puckett. Vogel will begin his new position on July 8.