Amid Wholesale Challenges Parent Company of Vans, The North Face, and Supreme Reports Ongoing Losses
Shareholders of VF Corporation, the parent company overseeing renowned brands such as Vans, The North Face, and Supreme, have experienced a notable decline in the stock price, plummeting by over 57 percent within the past year. The company’s net losses for the first quarter expanded from $56 million to $57.4 million in comparison to the previous year.
Adjusted losses per share were registered at 15 cents, slightly weaker than the 12-cent deficit projected by Wall Street analysts, according to data from FactSet. Over the three months culminating on June 1, revenues suffered an 8 percent decline, totaling $2.1 billion in contrast to the $2.3 billion recorded a year ago, aligning with expectations.
Amid a mix of promising developments during the quarter, including a 12 percent revenue growth for The North Face, which reached $538.2 million, and a 31 percent surge in VF’s Greater China business, these gains were insufficient to offset weaknesses in other sectors. Vans, VF’s most substantial business unit, reported a substantial 22 percent revenue decrease, amounting to $737.5 million. This decline was primarily attributed to a significant 39 percent drop in wholesale revenue in the Americas. Throughout the company, wholesale revenues declined by 12 percent, and the direct-to-consumer business observed a 3 percent dip.
While VF Corporation maintained its earnings projection for the year, anticipating earnings per share ranging from $2.05 to $2.25, it anticipates ongoing challenges in the wholesale sector to impact revenues. Consequently, VF Corporation has revised its yearly revenue forecast from the initial projection of “flat to up slightly” in May to a new expectation of “modestly down to flat” for the year.
As part of its strategic response to these challenges, VF Corporation remains committed to enhancing its supply chain efficiency and implementing a turnaround plan for Vans, two facets that have historically been areas of strength for the company.