Why VF Corp Stock Tumbled Today
Key Points
VF posted a wider loss than expected.
The company is bringing in a new CFO.
Vans is expected to recover in the second half of the year.
Shares of VF Corporation (NYSE: VFC) were taking a dive today after the diversified apparel company reported another wide loss in its first-quarter earnings report.
As of 2:29 p.m. ET, the stock was down 18.8% on the news.
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VF's struggles continue
VF reported a 5% decline in revenue to $1.67 billion, ahead of estimates at $1.64 billion. Excluding Dickies, which VF sold last November, revenue was up 1%.
Vans continued to struggle, with revenue down 8%, while The North Face, which is now its largest brand, reported 6% revenue growth. Timberland sales were up 4%.
On the bottom line, VF reported an adjusted operating loss of $95 million, excluding Dickies, which compared to a $59.8 million loss from Dickies in the quarter a year ago.
On a per-share basis, adjusted loss per share widened from $0.25 to $0.27, which was worse than the consensus at $0.22.
The company also announced a CFO transition, saying that COO Abhishek Dalmia would now also serve as CFO, replacing Paul Vogel.
Despite the loss and the sell-off in the stock, CEO Bracken Darrell struck an optimistic tone, saying, "We had a solid start to the year, beating our revenue and operating income guidance." He also said Vans' global wholesale was a source of weakness, but said that would improve in the second half of the year.
What's next for VF
VF actually raised full-year guidance slightly, calling for currency-neutral revenue growth of 2%, compared with its earlier guidance of 1%-2%, and it continued to see an adjusted operating margin of 8%.
However, that wasn't enough to please investors, who also seemed to be surprised by the CFO change. Still, given the comment on the Vans sales in the second half, the sell-off in the apparel sector seems exaggerated.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.