VF Corp, the parent company of popular brands like Vans, The North Face, and Timberland, has announced lower-than-expected profits for the third quarter, causing a decline in the company’s shares. The CFO, Matt Puckett, has also revealed his plans to step down. These disappointing results come after VF Corp withdrew its annual forecasts last October and implemented cost reduction measures. As part of its efforts to address the challenges it is facing, the company has initiated an in-depth review of its Global Packs business, which includes brands such as Kipling and JanSport.
Similar to other apparel and footwear companies, VF Corp has been struggling with weak wholesale demand. Retailers have been reducing their inventory levels due to a decrease in discretionary spending in the United States. The company’s revenue for the third quarter dropped by 16%, largely driven by a decline in sales of its Vans sneaker brands in the United States, Europe, and Asia. Specifically, revenue from the Vans brand decreased by 28%, while the Americas region as a whole experienced a 24% decline. The North Face business also saw a downturn in volumes, particularly in the United States.
During a post-earnings call, Matt Puckett acknowledged the challenging market conditions, citing slowing consumer confidence and increased caution in the wholesale channel. The company also noted soft demand during the crucial holiday shopping period, especially outside of the promotional window. To boost sales, VF Corp has increased promotions for its Vans sneakers in the United States, but these efforts have not yet yielded significant results, as the brand’s revenues have been declining for multiple quarters.
In terms of financial performance, the company reported an adjusted profit of 57 cents per share for the third quarter, falling short of market expectations of 77 cents per share. Third-quarter revenue was $2.96 billion, lower than analysts’ average estimate of $3.24 billion.
These disappointing results and the departure of the CFO have raised concerns among investors about VF Corp’s ability to navigate the challenging retail landscape. The strategic review of the Global Packs business will likely play a crucial role in the company’s future plans and its efforts to adapt to changing market dynamics. Investors will closely monitor VF Corp’s actions to address these challenges and regain momentum in the coming quarters.
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