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VF Corporation, the parent company of Vans and Timberland, missed market expectations for the Q3 results amid the slowing demand. This result pushed the share price to dip by nine percent in the extended trading.
Decline of Demand
According to Reuters, VF Corp. also revealed it commenced a comprehensive strategic review of its Global Packs business brands, which include Eastpak, JanSport, and Kipling. This comes after the company withdrew its annual forecasts in October 2023 and unveiled a cost reduction program.
This comes as the company struggled with weak demand for wholesale this fiscal year. This reportedly happened as retailers cut back on their inventories amid low demand in the United States. VF Corp. showed a massive 16% drop in its third-quarter revenue report. The company was affected by the low sales in the U.S., Asia, and Europe, which are its key markets.
CFO to Step Down
As the Vans owner announced its results for the third quarter, it also divulged that its chief financial officer, Matt Puckett, is set to step down later this year. This news further sent shares down in the extended trading.
The Wall Street Journal reported that Puckett is leaving as the apparel and footwear firm looks to turn around its businesses in North America. He will continue to serve as the CFO until the company finds a successor.
Onto the Next Phase of the Transformation Plan
Meanwhile, VF Corporation's president and chief executive officer, Bracken Darrell, said that this quarter has already marked the start of the next phase of the company's transformation plan, including "resetting the marketplace for Vans, reviewing our brand portfolio and continuing to build the organization of the future."
"Our third quarter top-line performance was disappointing but we are confident the actions we are implementing as part of Reinvent will enable VF to stabilize and then grow revenue and improve operational performance across brands and regions," the CEO said in a press release for the company's Q3 fiscal 2024 results.
He added, "We have already begun to see the impact of our efforts to right-size the company's cost structure and improve its inventory position, resulting in stronger than expected cash flow and expanded gross margin in the quarter."
Photo by: Arturo Rey/Unsplash
