VF slashes fiscal 2023 guidance amid Vans' weaker back-to-school performance

Sep. 28, 2022 9:47 AM ETV.F. Corporation (VFC)By: Shweta Agarwal, SA News Editor40 Comments

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  • VF (NYSE:VFC) lowered fiscal 2023 guidance on Wednesday beside releasing second quarter estimates below consensus amid weaker than anticipated back-to-school performance.
  • For full-year, the company lowered its adjusted EPS guidance to $2.60-$2.70, well below the prior forecast of $3.05-$3.15, vs. consensus of $3.05.
  • VF Revenue is expected to be up about 5% to 6% for the full-year versus previous outlook of at least +7%.
  • Adjusted gross margin is expected to be down approximately 50 basis points to 12% vs. priorly expecting an increase to 13.2%.
  • Capital expenditures expected to be approximately $240M.
  • Issued Q2 FY 2023 Guidance: Revenue expected to be up low single digit % in constant currency and adjusted EPS expected to be in the range of $0.70 to $0.75 vs. consensus of $1.01.
  • "VF is revising its FY23 outlook due to lower-than-expected Q2’FY23 results, coupled with ongoing uncertainty in the current environment, weaker than anticipated back-to-school performance at Vans and increasing inventories leading to a more promotional environment in North America in the fall," the company said.
  • In the long-run through FY 2027, free cash flow generation is projected to be approximately $5.5B with a total of approximately $7B in cash expected to be available to return to shareholders through dividends and share repurchases.
  • EPS is expected to grow at a five-year CAGR of high-single to low double-digit %
  • Recap: Vans' owner V.F. Corp slides after first quarter results amid "softer" trends

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