VF Corp. hinted at the pain still to come in the coronavirus shutdown, revealing a sales miss for its fiscal year, which ended March 30 as the U.S. was still just settling into the lockdown.
The corporate parent to Vans, The North Face and Timberland said revenues from continuing operations would tally $11.3 billion to $11.4 billion (including the firm’s Occupational Workwear business, which is set to be divested).
As recently as Jan. 23, the company was expecting revenues to rise 5 percent to $11.75 billion.
VF is now looking for operating income from continuing operations, including the Occupational Workwear business, to be in the range of $1 billion to $1.1 billion.
While a sales shortfall as sharp as $450 million over the course of five weeks is stark — even for VF, one of fashion’s strongest companies — the update did come with a silver lining.
The company released the figures as it moved to sell bonds and use the proceeds to repay borrowings under its senior unsecured revolving credit facility.
That is a sign that the lending market is still functioning — at least for stronger companies — even as the retail market has seized up with stores closed and other markets have broken down; for instance, forcing investors to pay for the privilege of unloading their crude oil investments.
Any little bit of normality is a welcome sign in the COVID-19 shutdown, which started in China in January and spread to Europe then the U.S.
In a regulatory filing, VF said it has reopened stores in the Asia-Pacific region, where foot traffic is improving but still “down significantly” from a year earlier.
The company’s manufacturing and distributions systems are up, but running at a reduced capacity.
Shares of VF were down 3.1 percent to $55.10 in morning trading, leaving the company with a market capitalization of $21.4 billion. The market in general was down with the Dow Jones Industrial Average slipping 1.9 percent, or 441.39 points, to 23,209.05.