VF Corp Shares Plummet After Disappointing Q4 Results and Weak Demand

Key Points

• VF Corp reported a Q4 loss of 32 cents per share
• missing analyst estimates.
• Paul Vogel
• formerly of Spotify
• has been appointed as the new CFO
• effective July 8
• 2024.
• The company's shares dropped by 7.95% after the earnings announcement
• reflecting weak demand and retailer reluctance.

In this news

VF Corporation, the parent company of popular brands like Vans and The North Face, reported disappointing financial results for the fourth quarter, leading to a significant drop in its stock price. The company posted a loss of 32 cents per share, missing analyst estimates of a 1 cent profit. Quarterly sales were $2.4 billion, slightly below the expected $2.41 billion, and represented a 12.4% decrease from the previous year. This poor performance was attributed to weak consumer demand for shoes and clothing, as well as retailers' reluctance to stock up on new products.

In response to the disappointing results, VF Corp announced the appointment of Paul Vogel, formerly of Spotify, as the new Chief Financial Officer, effective July 8, 2024. CEO Bracken Darrell emphasized the company's progress in its Reinvent transformation program and highlighted the achievement of over $800 million in free cash flow. Looking ahead, VF Corp aims to generate around $600 million in fiscal year 2025 through free cash flow and non-core asset sales, focusing on turnaround strategies and debt reduction.

Despite these strategic plans, the market reacted negatively to the earnings report. Analysts from firms like Stifel, Goldman Sachs, BMO Capital, and Wells Fargo lowered their price targets for VF Corp, contributing to the selling pressure on the stock. The company's shares fell by 7.95% after-hours to $11.35. The broader industry context also shows challenges, with other premium apparel and footwear brands facing similar demand slowdowns in the United States. VF Corp's largest brand, Vans, experienced a 26% decline in sales, with revenues in the Americas falling by 22%, though Greater China showed some growth.