VF Corp’s Q1 revenues expected to halve

Worldwide
Published:  19 May, 2020

For the fiscal year ending March 28, 2020, the parent company of the Timberland brand posted revenue up 2% to US$10.5 billion, but revenue declined 11% for the fourth quarter to US$2.1 billion dollars, due to lower consumer demand amid lockdowns in several key markets worldwide.

VF Corp’s gross margin for the year increased 70 basis points to 55.3%, while operating income on a reported basis totalled US$928 million, and operating margin decreased 280 basis points to 8.8%. Earnings per share totalled US$1.57 on a reported basis. On an adjusted basis, earnings per share increased 5%, or up 7% in constant dollars, to US$2.68. In the fourth quarter, VF Corp also reported a net loss of US$483.8 million compared with US$128.8 million in earnings in the same period of the previous fiscal year.

Currently, all of VF's retail stores in the APAC region, including Mainland China, have re-opened. While retail store traffic has improved recently, it remains down significantly compared with the prior year, according to the Group, which has started a phased reopening of its retail stores in the EMEA region. In North America, VF is prepared to begin a phased reopening of its retail stores and currently expects most of its retail stores to be open by mid-calendar year 2020. While most of VF's wholesale customers in North America and EMEA remain closed, many have announced reopening plans in the coming weeks. The Group said its digital platform remains a high priority, consistent with its long-term strategy.

The Covid-19 pandemic is said to have also impacted some of VF's suppliers, including third-party manufacturers, logistics providers and other vendors. At this time, many of VF's facilities continue to manufacture and distribute products globally in a reduced capacity. The footwear and apparel Group’s first quarter fiscal 2021 revenues are expected to be down slightly more than 50% and full-year fiscal 2021 free cash flow is expected to exceed US$600 million.