VF Corporation said on Friday that its first-quarter revenue decreased 48 percent to $1.1 billion, driven by store closures and lower consumer demand as a result of the COVID-19 outbreak.
Gross margin decreased 340 basis points to 52.9 percent, and on an adjusted basis, gross margin decreased 220 basis points to 54.1 percent. Operating loss on a reported basis was 247 million dollars, while on an adjusted basis, operating loss was 230 million dollars. VF added that second-quarter revenues are expected to be down less than 25 percent and full-year free cash flow is still expected to exceed 600 million dollars.
The company further said that active segment revenue decreased 54 percent, down 53 percent in constant dollars including a 52 percent or 51 percent in constant dollars decrease in Vans brand revenue; outdoor segment revenue decreased 44 percent or 43 percent in constant dollars including a 45 percent or 44 percent in constant dollars decrease in The North Face brand revenue; work segment revenue decreased 19 percent or 18 percent in constant dollars including a 16 percent or 15 percent in constant dollars decrease in Dickies brand revenue.
“VF is built for this moment, which is what gives us continued confidence and optimism,” said Steve Rendle, chairman, president, and CEO of VF Corporation. “Our financial and operational rigor, the affinity consumers have for our iconic brands, and the progress we’ve made in recent years with our digital transformation have us well-positioned to not only manage the complexities of the current environment but to drive long-term growth. As we continue through our fiscal year, we’ll build on the strengths we’re already seeing in the core elements of our strategy, including maintaining our strong cash and liquidity position and further accelerating our digital business worldwide, especially in China.”
VF further stated that its retail stores in the APAC region, including Mainland China, reopened during the first quarter. Over 90 percent of VF’s retail stores in the EMEA region reopened during the first quarter, with most of the stores that remained closed located in the UK. In North America, 75 percent of all retail stores were open at the end of the first quarter.
Additional stores have reopened since the end of the quarter, partially offset by over 120 retail stores that have since temporarily re-closed due to localized resurgence of COVID-19 outbreaks and resulting government action and public health advisories. VF’s wholesale customers in APAC, North America, and EMEA have reopened most of their retail stores.