Shares of VF Corp (VFC -2.88%) were heading lower today as the struggling apparel company posted yet another disappointing earnings report in its fiscal fourth quarter.
As of 1:05 p.m. ET on Thursday, the stock was down 3.5% after trading as low as 11% earlier in the session.
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VF's troubles continue
Overall revenue fell 13% in the quarter to $2.4 billion, continuing a pattern of falling sales at core brands like Vans and The North Face. That was slightly below estimates at $2.41 billion.
At Vans, revenue fell 26% due in part to efforts to right-size inventories in the wholesale channel to align with demand. North Face revenue was down 5% due to ongoing wholesale weakness, though direct-to-consumer sales in the channel were up 6%.
Not surprisingly, the results were weak further down the income statement as adjusted gross margin declined 180 basis points to 48.4%, and the company reported an adjusted operating margin of negative 2.1%, down from 5.6% in the quarter a year ago. Deleveraging from declining revenue was the primary reason for the decline.
Lastly, the company reported an adjusted loss of $0.32 per share, down from a profit of $0.17 in the quarter a year ago and worse than expectations at a profit of $0.01.
CEO Bracken Darrell said: "In Q4, we made progress advancing our Reinvent transformation program. We closed the fiscal year with further inventory reductions."
NYSE: VFC
Key Data Points
What's next for VF Corp?
In its guidance for fiscal 2025, VF only called for free cash flow plus the benefit of noncore asset sales totaling $600 million, a number that is essentially meaningless as asset sales are one-time events and shouldn't be factored into free cash flow.
The data point shows that VF plans to bring in cash this year, but the lack of guidance elsewhere is a big hint that the business is still a long way away from recovery. The stock seems best avoided until the company can get back to growth.
