The coronavirus pandemic has dealt a blow to VF Corp.’s business.
The Vans and The North Face parent posted fourth-quarter adjusted earnings that declined 70% to 10 cents per share. Revenues also fell 11% to $2.1 billion, which the company attributed to lower consumer demand as a result of the COVID-19 health crisis.
“Through the first 10 months of fiscal 2020 our business delivered results above our stated long-term growth objectives,” chairman, president and CEO Steve Rendle said in a statement. “Then the world changed for all of us as a result of COVID-19.”
In mid-March, the Denver-based company’s stores across North America were shut down to help slow the spread of the coronavirus. It announced plans for a phased reopening of its stores based on state and local guidelines, with expectations for most of its outposts to open back up by mid-calendar year. (The majority of its wholesale customers in North America are still closed but have unveiled reopening plans for the coming weeks.)
In the Asia-Pacific region, including China, VF has reopened all of its locations but retail store traffic remains “down significantly” compared with the prior year period. It has also started opening back up its units in Europe, the Middle East and Africa.
In an effort to boost its balance sheet, the apparel and footwear company has cut its executive chief’s base salary by half and its senior leadership team’s paychecks by 25%; temporarily suspended its share repurchase plan; and moved forward with the divestiture of its workwear business as previously planned. As of today, VF has roughly $3 billion in cash on hand, plus $2.2 billion available under its revolving credit facility.
“These prudent actions, most of which have been precautionary, have helped us preserve liquidity and given us more flexibility to manage our global business operations through the prolonged crisis,” Rendle added. “Moving forward, we’re committed to using this moment to set VF and our brands up for the next successful chapter in our 121-year history.”
For the full year, the company’s revenues improved 2% to $10.5 billion, while adjusted earnings per share climbed 5% to $2.68. Although it did not provide a financial outlook for the full year, VF predicted first-quarter revenues to be down “slightly more” than 50%.