By Ananya Mariam Rajesh
(Reuters) -Vans shoe maker VF Corp cut its full-year revenue forecast on Friday as it struggles with material shortages, labor issues at factories and slump in sales in China due to COVID-related lockdowns, sending its shares down over 6%.
Fresh pandemic restrictions and store closures late last year in many Asian countries, including China, took a toll on many U.S. apparel makers that for years have relied on these countries for the bulk of their production and sales growth.
VF Corp said the fast-spreading Omicron variant of the coronavirus was also impacting its sales across the world.
“The latest virus surge across Europe has contributed to declining consumer confidence, deteriorating traffic and stretched retail staff in our stores,” VF Chief Financial Officer Matt Puckett said on an earnings call.
Despite facing labor and raw material shortages, VF said it expected manufacturing to return to near full capacity in the coming weeks.
The company cut its fiscal 2022 revenue forecast to about $11.85 billion from $12 billion. It expects revenue for its “Active” unit, which houses the Vans and Supreme brands, to increase between 31% and 33%, compared with a prior range of 35% to 37% gain.
The Denver, Colorado-based company’s total revenue rose 22% to $3.62 billion in the third quarter ended Jan. 1, slightly ahead of analysts’ average estimate of $3.60 billion, according to IBES data from Refinitiv.
Net income rose about 49% to $517.8 million, or $1.32 per share, from a year earlier.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli and Saumyadeb Chakrabarty)
