Vans shoe maker VF Corporation cut its full-year revenue forecast on Friday as it struggles with material shortages, labour issues at factories and slump in sales in China due to pandemic-related lockdowns, sending its shares down more than 6%.
Fresh pandemic restrictions and store closures late last year in many Asian countries, including China, took a toll on many US apparel makers that for years have relied on these countries for the bulk of their production and sales growth.
VF said the fast-spreading Omicron variant of the coronavirus was also impacting its sales across the world.
“The latest virus surge across Europe has contributed to declining consumer confidence, deteriorating traffic and stretched retail staff in our stores,” VF chief financial officer Matt Puckett said on an earnings call.
Despite facing labour and raw material shortages, VF said it expected manufacturing to return to near full capacity in the coming weeks.
The company cut its fiscal 2022 revenue forecast to about $11.85 billion from $12 billion. It expects revenue for its Active unit, which houses the Vans and Supreme brands, to increase between 31% and 33%, compared with a prior range of 35% to 37% gain.
The Denver, Colorado-based company’s total revenue rose 22% to $3.62 billion in the third quarter ended January 1, slightly ahead of analysts’ average estimate of $3.60 billion, according to IBES data from Refinitiv.
Net income rose about 49% to $517.8 million, or $1.32 per share, from a year earlier.
- Reuters, with additional editing by George Russell
READ MORE:
Vietnam Lockdown to Hit US Consumers, Bank of America Says
Japanese Apparel Makers Bring Production Home – Nikkei
Levi Strauss Posts Strong Sales Amid Work-from-Home Boom
