VF Corp. is trading in the red after projecting full-year revenues that fell below estimates.
The Greensboro, N.C.-based company saw 2018 sales that climbed 12% to $13.8 billion, driven by Vans‘ sneakers and The North Face’s clothing, as well as its international and direct-to-consumer businesses. However, it adjusted its 2020 sales expectations in the range of $11.7 billion to $11.8 billion — compared with forecasts of $14.6 billion — and adjusted earnings per share of $3.30 to $3.35.
At Wednesday’s market open, shares for VF Corp. were down 5% to $87.
The report comes on the heels of a busy year for the firm, which not only relocated its global headquarters to Denver but also announced the spin-off of its less profitable denim businesses into a separate corporate entity.
“Fiscal 2019 marked one of the most significant periods of transformation in VF’s 120-year history, highlighted by our announcement to spin off our jeans business as an independent, publicly traded company,” said chairman, president and CEO Steve Rendle. “Despite the tremendous workload, we remained sharply focused and delivered another year of strong financial results and top-quartile returns to our shareholders.”
For the fourth quarter, VF posted adjusted earnings of 60 cents per share — besting Wall Street estimates by 2 cents — on revenues that rose nearly 6% to $3.2 billion.
In August, the firm revealed its split into VF — which focuses on its more profitable active and outdoor businesses, such as Vans, Timberland and The North Face — and Kontoor Brands Inc., which houses heritage denim brands Wrangler and Lee, as well as the corporation’s outlet operations.
As with prior quarters, Vans continued to prove lucrative for its parent company. The skate-lifestyle label once again delivered double-digit gains, recording 14% revenue growth for the fourth quarter and 24% for the full year. (In January, Rendle said that Vans’ third quarter was “its strongest quarter in the last two years.”)
“As we enter fiscal 2020, our portfolio is well positioned, and our growth and momentum are strong, fueled by the investments we are making in support of our long-term strategy,” Rendle added. “The bold decisions we continue to make to evolve our company underpin the transformational journey we’re on to deliver on our commitment to be a purpose-led, performance-driven and value-creating enterprise capable of delivering sustainable long-term shareholder value.”
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