VF Corp predicts decline in full-year sales
VF Corporation, the owner of Vans, The North Face and Timberland, announced on Tuesday that it now expects its full-year revenues to total between $11.3 billion and $11.4 billion in the fiscal year ended March 28, 2020, down from $13.85 billion in the previous year.
The prevision includes the contribution of VF’s occupational and workwear business, which the company is currently in the process of spinning off, as financial closing procedures have not yet been concluded.
When it reported its third-quarter results in January, VF announced that it was expecting annual revenues to total $11.75 billion, a figure which was, in itself, revised down from an earlier estimate of $11.8 billion.
However, in light of the economic disruption caused by the ongoing Covid-19 pandemic, the company withdrew this guidance last month.
As the health crisis continues, VF’s stores in North America and EMEA will remain closed through at least May 3, but the company has reopened most of its stores in China. In contrast to a number of its industry peers, the group has thus far continued to provide pay and benefits for its retail associates during the temporary store closures.
However, as reported on April 7, VF CEO Steve Rendle has taken a 50% salary reduction, with the remaining members of the company’s executive team taking a 25% cut.
The group has also drawn down the remaining $1 billion that was available under its senior unsecured revolving credit facility and suspended its share repurchase program.
On Tuesday, VF announced that, in order to repay its creditors, it is intending to offer senior notes underwritten by Barclays, BofA Securities, J.P. Morgan and Morgan Stanley.
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