VF Corp., a leading apparel company known for brands such as North Face and Vans, faced challenges in its fourth-quarter performance, attributing the difficulties to weakened consumer demand and an excess of inventory. This unexpected setback prompted the company to report a loss per share for the quarter, contrary to analyst expectations, and resulted in revenue falling short of forecasts. In response to these disappointing results, VF Corp. announced a significant change in its leadership structure by appointing a new chief financial officer (CFO).
Following the release of the earnings report after Wednesday’s market close, VF Corp. shares experienced a notable decline in Thursday’s trading session, reaching their lowest level in over 15 years.
For the fiscal fourth quarter of 2024, VF Corp. reported an adjusted loss per share of 32 cents, surprising analysts who had anticipated a modest gain. The company’s revenue also disappointed, sliding by 13% to $2.37 billion, missing market expectations.
Sales across all major brands under VF Corp.’s umbrella experienced declines during the quarter. The North Face, the company’s flagship brand and largest revenue contributor, saw a 5% decrease in sales, amounting to $814.3 million, primarily due to weakness in the U.S. wholesale segment. Vans, another prominent brand, faced a more significant sales decline of 26%, totaling $631.2 million. This decline was attributed in part to deliberate actions taken to address inventory levels in the wholesale channel. Sales for other brands such as Timberland and Dickies also experienced decreases of 14% and 15%, respectively.
The company’s gross margin took a hit, dropping by 120 basis points to 48.4%. This decline was attributed to various “reset actions” and ongoing promotional activities aimed at addressing inventory challenges.
Despite these challenges, VF Corp.’s CEO, Bracken Darrell, expressed optimism about the company’s progress in its turnaround efforts. He highlighted ongoing initiatives to reduce inventory and rebuild the leadership team as key steps toward addressing the current challenges. As part of this effort, VF Corp. announced the appointment of Paul Vogel, former CFO of Spotify Technology, as its new CFO, effective July. Vogel will replace Matt Puckett, who announced his departure in February.
The disappointing performance has led to a significant decline in VF Corp.’s stock value, with shares losing more than a third of their value since the beginning of the year. As of Thursday afternoon, VF Corp. shares were trading 4.6% lower at $11.76.