VF Corp. earnings missed the mark for the fiscal year ended March 30.
The Denver-based company — parent to Vans, The North Face and Timberland, among others — said in a preliminary report today that it expects revenue to slip and land in the range of $11.3 billion to $11.4 billion, including its occupational workwear business, which it is in the process of spinning off. This marks a dip from last year, when the company posted sales of $13.85 billion.
In January, when it announced its Q3 earnings results, VF said it was expecting full-year revenues of roughly $11.75 billion, with adjusted earnings per share to be approximately $3.30. Those figures represented a downward adjustment from earlier forecasts of $11.8 billion and $3.32 to $3.37, respectively. But the company withdrew its guidance last month — a move also taken by other major shoe players such as Designer Brands Inc., Dick’s Sporting Goods and Skechers — as the coronavirus crisis began to escalate in the United States and Europe. The pandemic has decimated retail through forced store closures and reduced discretionary spending.
VF Corp. has closed its stores and offices in the U.S. and EMEA regions through at least May 3, with employees continuing to receive full pay and benefits. Conversely, most of its stores in China have reopened for business. But with a portion of its fleet shut, VF Corp. has taken several moves to maintain cash flow. For one, it announced on April 7 that chairman and CEO Steve Rendle is taking a 50% salary reduction, while the rest of the executive team is having their pay cut of 25%.
Further, like other companies such as Columbia Sportswear and PVH Corp., VF has tapped its credit line to “best position” itself “as it emerges from the COVID-19 pandemic.” The corporation had roughly $2.4 billion in cash on hand as of April 7, when it also announced it would draw down the remaining $1 billion available under a senior unsecured revolving credit facility.
As it looks to repay those borrowings, VF Corp. announced today that it plans to offer senior notes, underwritten by Barclays, BofA Securities, J.P. Morgan and Morgan Stanley. After creditors have been paid back, any funds remaining will go toward general corporate purposes, VF said.