VF Corp. Forecasts Growth After Logging 25 Percent Profit Drop
VF Corp. continued its bounce back in the third quarter — and is looking toward a solid boost from the newly acquired Supreme going forward.
Although both sales and profits declined for the three months ended Dec. 28, the trend improved significantly from earlier in the year, when the first wave of coronavirus lockdowns hit hard.
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Net profits fell 25 percent to $347.2 million from $465 million a year earlier, while adjusted earnings per share tallied 93 cents, 3 cents better than the 90 cents Wall Street analysts had penciled in.
Revenues decreased 6 percent to $2.97 billion from $3.16 billion a year earlier — a marked improvement from the nearly 30 percent drop logged in the first half.
By brand, Dickies sales were up 9 percent and The North Face was flat, while Vans declined 6 percent and Timberland dropped 14 percent.
All told, VF ended the quarter with $3.9 billion in cash and short term investments and the next day spent about $2 billion of that to close the Supreme deal.
“Our third-quarter results were largely ahead of expectations despite the impact of additional COVID-19-related disruption to our business,” said Steve Rendle, VF’s chairman, president and chief executive officer. “Our portfolio remains on track to return to growth in the fiscal fourth quarter and we are confident in VF’s plans to accelerate growth into fiscal 2022 and to continue advancing our business model transformation. We remain optimistic about the year ahead and look forward to improvements in our geopolitical, macroeconomic and pandemic-related situations.”
VF is looking for full year revenue to range from $9.1 billion to $9.2 billion, a drop of 12 percent to 13 percent on an adjusted basis. Adjusted earnings per share are slated to be down about 51 percent to $1.30.
Supreme is expected to add $125 million and adjusted EPS of 5 cents in the fourth quarter.
Next year, VF is looking for the uber hip street brand and fashion darling to add at least $500 million of revenue and 20 cents of adjusted EPS.
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