VF Corp Shares Slide As Supply Chain Woes Hurt Q2 Bottomline

VF Corp VFC reported second-quarter FY22 sales growth of 23% year-on-year, to $3.198 billion, missing the analyst consensus of $3.50 billion.
Revenue from the Active segment increased 16% Y/Y, the Outdoor segment rose 31%, and the Work segment grew 18%. Direct-to-consumer revenue rose 32% Y/Y, and Digital increased 24%.
The gross margin expanded 290 basis points to 53.7%. The operating margin was 17.5%, and operating income for the quarter rose 74.5% to $558 million.
Adjusted EPS of $1.11 missed the analyst consensus of $1.15.
The company noted the resurgence of COVID-19 lockdowns in key sourcing countries has resulted in additional manufacturing capacity constraints during Q2. VF said it is working with its suppliers to minimize disruption.
"While the recovery has been impacted by further pandemic-related disruptions, we continue to see accelerating demand signals across our business," said CEO Steve Rendle.
VF Corp held $1.4 billion in cash and equivalents as of September 2021.
VF's Board declared a quarterly dividend of $0.50 per share, payable on December 20, 2021, to shareholders of record on December 10, 2021. VF intends to continue to pay its regularly scheduled dividend.
Outlook: VF has reaffirmed its FY22 outlook of $12 billion in revenue against the consensus of $11.96 billion. Adjusted EPS of around $3.20 versus the consensus of $3.17.
Price action: VFC shares are trading lower by 6.84% at $69 in premarket on the last check Friday.

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