The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — VF Corp., the clothing company that owns the North Face and Nautica brands, suffered its worst stock decline since 1987's Black Monday after cutting its profit forecast.
Earnings will be $3.18 a share this year, dragged down by currency fluctuations, the Greensboro, North Carolina-based company said on Friday. VF had previously projected $3.22, and analysts were looking for $3.24 on average. Third-quarter sales and profit also fell short of estimates, according to data compiled by Bloomberg.
VF is facing challenges on multiple fronts. In addition to the effects of a strong dollar, sluggish retail sales have hurt demand for its apparel brands, which include Wrangler, Lee and Vans. Its inventory has been piling up, rising 12 percent last quarter from a year earlier. To combat the slump, VF is shifting its product mix to higher-margin goods and capitalizing on favorable product costs, Chief Financial Officer Scott Roe said on a conference call.
The company also boosted its quarterly dividend to 37 cents a share from 32 cents, though the move didn’t placate investors. The stock fell as much as 16 percent to $61.56 on Friday in New York, the biggest intraday decline since the day of the market crash on Oct. 19, 1987. Before the tumble, the shares were down just 2.3 percent this year.
By Lindsey Rupp; editors: Nick Turner, Kevin Orland.
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