VF Corporation (NYSE: VFC) Faces Revenue Drop in Q4 FY24 Amid Inventory Adjustments

2 min read | May 23, 2024 02:54 PM PDT | By Team Kalkine Media

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VF Corporation (NYSE: VFC) Faces Revenue Drop in Q4 FY24 Amid Inventory Adjustments — Image source: shutterstock

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VF Corporation (NYSE: VFC), one of the world's leading apparel, footwear, and accessories companies, today announced its financial results for the fourth quarter (Q4 FY24) and the fiscal year ending March 30, 2024 (FY24). Despite facing challenges, the company remains focused on strategic initiatives to drive future growth.

Q4 FY24 Financial Highlights

VF Corporation reported revenue of $2.4 billion for the fourth quarter, marking a 13% decline compared to the same period last year. Key brand performance details include:

- The North Face®: Revenue decreased by 5%, with the brand's Direct-to-Consumer (DTC) sales up by 6% (7% in constant dollars). This growth in DTC was offset by ongoing weaknesses in the US wholesale market.

- Vans®: Revenue fell by 26% (27% in constant dollars), consistent with the previous quarter. The decline reflects deliberate efforts to adjust inventories in the wholesale channel.

The reported and adjusted gross margin for Q4 FY24 was 48.4%, a decrease of 120 basis points. Adjusted gross margin saw benefits of 180 basis points from a favorable mix, but these were outweighed by 300 basis points of unfavorable rate impacts, including reset actions, promotional activities, and negative transactional foreign currency effects.

FY24 Financial Review

For the full fiscal year 2024, VF Corporation reported revenue of $10.5 billion, down 10% (11% in constant dollars). The company's gross margin was 52.0%, with an adjusted gross margin of 52.1%, both down 50 basis points. The adjusted gross margin benefited by 90 basis points from a favorable mix but faced a 140 basis points unfavorable rate, including 100 basis points of negative transactional foreign currency impacts.

FY25 Outlook

Looking ahead, VF Corporation expects to generate approximately $600 million in free cash flow, bolstered by the benefits from the sale of non-core assets. The company remains optimistic about its strategic initiatives and operational efficiencies driving future growth.

About VF Corporation

Founded in 1899, VF Corporation is one of the world's largest apparel, footwear, and accessories companies. VF connects people to the lifestyles, activities, and experiences they cherish most through its family of iconic outdoor, active, and workwear brands. The company is dedicated to fostering growth and innovation in its diverse portfolio of brands.

CEO's Statement

"Despite the challenges we faced in the fourth quarter, our focus on direct-to-consumer growth and strategic inventory management has positioned us well for the future," said VF Corporation's CEO. "We are committed to driving long-term value for our shareholders through disciplined execution and continued investment in our iconic brands."

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