Why VF Corp stock fell today

stock VF Corporation (V.F.C. -3.45%) The struggling apparel company is trading lower today as it reports another disappointing earnings report for its fiscal fourth quarter.

As of 1:05 PM ET on Thursday, shares were down 3.5% after trading as low as 11% in early trading.

Image source: Getty Images.

VF’s worries continue

Overall sales for the quarter fell 13% to $2.4 billion, continuing a pattern of declining sales for key brands like Vans and The North Face. This was slightly below expectations of $2.41 billion.

Vans experienced a 26% drop in sales as it tried to right-size inventory in its wholesale channel to meet demand. North Face sales fell 5% due to continued wholesale weakness, but direct-to-consumer sales in the channel increased 6%.

Not surprisingly, the income statement results were weaker, as adjusted gross margin fell 180 basis points to 48.4% and the company reported an adjusted operating margin of minus 2.1%, down from 5.6% in the year-ago quarter. Deleveraging due to declining sales was the main cause of the decline.

Finally, the company reported an adjusted loss of $0.32 per share, down from a profit of $0.17 in the year-ago quarter and worse than expected with a profit of $0.01.

“We made progress advancing our Reinvent transformation program in the fourth quarter, and we closed out the fiscal year with additional inventory reductions,” said CEO Bracken Darrell.

What’s next for VF Corp?

In its fiscal 2025 guidance, VF called for only free cash flow and non-core asset sale benefits totaling $600 million. This is an essentially meaningless figure because the sale of an asset is a one-time event and should not be included in free cash flow.

Data points suggest VF plans to bring in cash this year, but the lack of guidance elsewhere is a big hint that business still has a long way to go before it recovers. It’s best to avoid the stock until the company can grow again.