Changes headline to drop reference to the word "dims", changes attribution in paragraph 4 to CFO from CEO
By Sanskriti Shekhar
Jan 28 (Reuters) - Apparel and footwear maker VF Corp VFC.N forecast fourth-quarter revenue above analysts' estimate on Wednesday, but shares dropped 7% after executives said tariffs were "just starting to hit" its business.
The Vans parent, which sources about 85% of its products for sale in the U.S. through Southeast Asia and Central and South America, has taken several steps to mitigate the impact of tariffs, including ramping up production and shipments, working with suppliers to lower costs and taking selective price hikes.
But those measures will not be enough to offset the roughly $100 million profit hit the company expects in fiscal 2026.
"Tariffs are just starting to hit us. We've talked about our ability to mitigate those tariffs within fiscal 2027 and nothing's changed on that at all," CFO Paul Vogel said on an earnings call.
The cautious commentary eclipsed a robust holiday-quarter performance, supported by fresh collections that drove an 8% growth at both The North Face and Timberland brands across the Americas as well as Europe and Asia regions.
The company has been simultaneously working on turning around its struggling Vans unit, which reported an 8% fall in sales, while streamlining operations by shedding underperforming units such as Dickies last year.
"Vans is still grappling for a turnaround, particularly in the key U.S. market, there's little indication of a return to growth in sales or store traffic in sight," said Sky Canaves, analyst at Emarketer.
VF Corp reported third-quarter revenue of $2.88 billion, compared with analysts' average estimate of $2.76 billion, according to data compiled by LSEG.
Excluding one-time items and contributions from the Dickies brand, it posted adjusted earnings of 58 cents per share, topping the estimate of 45 cents.
The company expects fourth-quarter revenue in the range of flat to up 2%, while analysts expected a 2.6% decline.
(Reporting by Sanskriti Shekhar and Savyata Mishra in Bengaluru; Editing by Shilpi Majumdar)
((Sanskriti.Shekhar@thomsonreuters.com))