Yahoo Finance V.F. Corp (VFC) Stock Stumbles on Q4 Loss & Revenue Miss
V.F. Corporation VFC reported fourth-quarter fiscal 2024 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both metrics also declined year over year. The quarterly results were hurt by the ongoing softness in the U.S. wholesale business.
V.F. Corp reported an adjusted loss per share of 32 cents against earnings per share of 17 cents in the prior-year quarter. The bottom line also compared unfavorably with the Zacks Consensus Estimate of earnings of 1 cent.
Net revenues of $2.37 billion declined 13% year over year and in constant-currency. Revenues also missed the Zacks Consensus Estimate of $2.4 billion.
V.F. Corporation Price, Consensus and EPS Surprise
V.F. Corporation price-consensus-eps-surprise-chart | V.F. Corporation Quote
The adjusted gross margin contracted 120 basis points (bps) to 48.4%. This was driven by a 300-bps adverse rate impact, mainly stemming from its reset actions and ongoing promotional activity, as well as negative transactional foreign currency impacts. The decline was partly offset by gains of 180 bps from a favorable mix.
The company reported an operating loss of $355.8 million compared with an operating loss of $160.9 million in the year-ago period.
Driven by the soft fourth-quarter fiscal 2024 results, shares of V.F. Corp. declined 11.8% in the after-hours trading session on May 22. The Zacks Rank #3 (Hold) company's shares have lost 20.5% in the past three months compared with the industry’s 18.8% decline.
Image Source: Zacks Investment Research
Revenue Details
On a regional basis, revenues in the Americas declined 22% year over year on a reported basis and 23% in constant currency. In the EMEA region, revenues fell 3% and were down 5% in constant currency. Revenues in the APAC region dropped 3% on a reported basis and 2% in constant currency. The company’s international revenues were down 4% year over year, both on a reported and constant-currency basis.
Channel-wise, wholesale and direct-to-consumer revenues were down 20% and 4%, respectively, year over year on both reported and constant-currency basis. Our model estimated wholesale and direct-to-consumer revenues to decline 10% and 11.9%, respectively, for the fiscal fourth quarter.
Based on reporting segments, revenues dipped 8% year over year, on both reported and constant-currency basis, in the Outdoor segment to $1.2 billion. In the Active segment, revenues of $914 million declined 19% year over year on both reported and constant-currency basis. Revenues in the Work segment dropped 16% year over year on both reported and constant-currency basis to $240.3 million.
Our model predicted fourth-quarter fiscal 2024 revenues to decline 4%, 18% and 14% year over year, respectively, for the Outdoor, Active and Work segments. In constant-currency, revenues were expected to be down 5%, 23% and 18%, respectively, for the Outdoor, Active and Work segments.
Financial Details
V.F. Corp ended fiscal 2024 with cash and cash equivalents of $674.6 million, a long-term debt of $4.7 billion and shareholders’ equity of $1.7 billion. Inventories declined 23% year over year in fourth-quarter fiscal 2024. In fiscal 2024, inventories were down 23% year over year, amounting to $1.8 billion.
In fiscal 2024, VFC generated cash from operating activities of $1.02 billion and a free cash flow of $804 million. It returned $35 million to shareholders through dividend payouts in the fiscal fourth quarter. In fiscal 2024, it returned $303 million to shareholders through dividend payments.
The company declared a quarterly cash dividend of 9 cents per share, which is payable on Jun 20, 2024, to shareholders of record as of Jun 10.
Other Updates
V.F. Corp remains on track with its Reinvent transformation program that is focused on brand-building and improved operating performance. The key points include improving North America results, delivering the Vans turnaround, lowering costs and reinforcing the balance sheet. The company continues pursuing opportunities to streamline its processes and invest in the business to drive brand demand and boost growth.
Concerning the Reinvent targets, the company initiated an in-depth strategic review of the brand assets within the portfolio to ensure it owns the brands and creates the greatest long-term value.
In fiscal 2024, the company generated gross cost savings of $80 million through the Reinvent program. Additionally, it incurred about $105 million of charges related to the program in fiscal 2024.
Eye These Solid Picks
Some better-ranked companies are Hanesbrands HBI, Crocs Inc. CROX and Gildan Activewear Inc. GIL.
Hanesbrands engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children in the United States and internationally. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HBI’s current financial-year earnings indicates an increase of 650% from the year-ago period’s reported levels. Hanesbrands has a trailing four-quarter earnings surprise of 10.2%, on average.
Crocs is one of the leading footwear brands with its focus on comfort and style. CROX carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and earnings indicates growth of 4.4% and 5.2%, respectively, from the year-ago reported figures. CROX has a trailing four-quarter earnings surprise of 17.1%, on average.
Gildan Activewear is a manufacturer and marketer of premium quality branded basic activewear for sale principally in the wholesale imprinted activewear segment of the North American apparel market. The company has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and EPS indicates growth of 2.1% and 14.4%, respectively, from the year-ago reported actuals. GIL has a trailing four-quarter earnings surprise of 5.6%, on average.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
V.F. Corporation (VFC) : Free Stock Analysis Report
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
Crocs, Inc. (CROX) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
