Supply chain challenges persist at VF Corp as revenues drop
VF Corp has reported a 3% drop in revenue to £2.8 billion ($3.5 billion) for the third quarter ending 31 December 2022, with sales down at Vans and Dickies.
The group noted that supply chain challenges remained persistent in the quarter and "are being addressed" with "actions in place to return to full customer service at a normalised cost".
For the third quarter, VF Corp shared the following brand results:
- Vans revenue down 13% to £766 million ($926 million).
- The North Face revenue up 7% to £1 billion ($1.3 billion).
- Dickies sales revenue 16% to £146 million ($177 million).
- Timberland revenue up to £492 million ($595 million).
- Other brands revenue down 2% to £421 million ($510 million).
The group also saw revenues decline across all regions, with EMEA down 2% to £813.1 million ($983.3 million). Direct-to-consumer revenue fell 2% to £1.5 billion ($1.9 billion), whilst wholesale dropped 3% to £1.2 billion ($1.5 billion).
Looking ahead, VF Corp expects FY23 revenue to rise 3% in constant currency. For FY24, the group predicts revenue to increase low-single digits in constant currency.
Benno Dorer, Interim President and CEO of VF Corp, said: “Spending the last few weeks with VF's dedicated and talented teams around the world has reinforced my belief in the tremendous opportunity ahead for our company. We are committed to improving execution through a sharpened focus on the biggest consumer opportunities and enhanced operational performance.
"Consistent with this objective, we are shifting resource priorities across the company, including by reducing the dividend, exploring the sale of non-core assets, cutting costs and eliminating non-strategic spend, whilst enhancing the focus on the consumer through targeted investments. We are confident these actions will enable a return to profitable and sustainable growth."