Shares for VF Corp. are sliding in Thursday premarket trading after the Vans and The North Face parent lowered its outlook for the fiscal year and produced mixed results for the third quarter.
The Denver-based firm saw its stock fall nearly 6% to $89 as of 8:30 a.m. ET. It said today that it expects full-year revenues of roughly $11.75 billion, compared with previous expectations of $11.8 billion, and anticipates adjusted earnings per share to be approximately $3.30, versus earlier forecasts in the range of $3.32 to $3.37.
VF’s Q3 EPS was $1.13 on a reported basis, while adjusted EPS rose 14% to $1.23, topping Wall Street’s expected earnings of $1.21 per share. Revenues, on the other hand, improved 5% to $3.38 billion, missing analysts bets of $3.43 billion. The company said top line improvement was driven by Vans and The North Face as well as its direct-to-consumer and international businesses.
“Our third-quarter performance was strong, and our year-to-date results are at the high end of our long-term growth objectives,” added Chairman, President and CEO Steve Rendle. “Despite a mixed holiday season in the U.S., we’re on track to deliver solid performance and are well positioned for continued growth and value creation in fiscal year 2021.”
For the period ended Dec. 28, Vans’ brand revenue jumped 12%, leading sales in VF’s active segment, which increased 8%. The outdoor division’s revenues climbed 3%, including an 8% sales gain in The North Face.
Further, direct-to-consumer sales grew 7%, with digital revenues advancing 16%. International businesses also continued to power VF: Overall revenues were up 8%, with Europe rising 4% and China soaring 30%.
The earnings report comes two days after the company announced that it was reviewing strategic alternatives, including a sale, for the occupational portion of its work brands segment. The division comprised nine brands and businesses, including Red Kap, Bulwark, Terra, Work Authority and VF Solutions. VF reaffirmed its commitment to the Dickies and Timberland Pro brands, which are not part of the review.
“Divesting these brands would leave VF with a simplified portfolio of higher-growth, consumer-focused brands, while providing financial flexibility to fuel further strategic initiatives and enhance shareholder value,” Rendle said.
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