May 15, 2020 / 11:46 AM / 2 months ago

CORRECTED-Vans owner VF Corp expects quarterly sales to halve as stores shut

(Corrects to says “fiscal 2021”, not “current first quarter” in paragraph 8)

May 15 (Reuters) - VF Corp, the maker of Timberland boots and The North Face backpacks, warned on Friday that it expects current-quarter revenue to more than halve due to the coronavirus-induced store closures.

Shares fell about 4% before the bell, as the company also did not provide an outlook for its fiscal 2021, citing uncertainty over the duration and severity of the health crisis.

“Through the first 10 months of fiscal 2020 our business delivered results above our stated long-term growth objectives. Then the world changed for all of us as a result of COVID-19,” Chief Executive Officer Steve Rendle said in a statement.

VF said its suppliers, including third-party manufacturers, logistics providers and other vendors, have also been hit and that many of its facilities were operating at a reduced capacity.

Retail stores in the Asia-Pacific region, including China, have reopened, the company said, adding that retail store traffic has improved recently, but remains significantly lower than last year.

In Europe, Middle East and Africa, the company has started a phased reopening of its retail stores and is preparing for a gradual restart in North America. It expects most of its stores to be open by mid-2020.

Several retail and department stores that sell the company’s merchandise were also closed, forcing the company to limit business to its online offerings.

The Denver, Colorado-based company said it expects free cash flow to exceed $600 million in fiscal 2021.

For the fourth quarter ended March, the company reported a net loss of $483.8 million, or $1.22 per share, compared with a profit of $128.8 million, or 32 cents per share, a year earlier, as it discontinued some operations.

Excluding one-time items, the company earned 10 cents per share, compared with the average analyst estimate of 14 cents, according to IBES data from Refinitiv.

Net revenue fell about 2% to $2.10 billion, missing estimate of $2.28 billion.

Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila

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