Shares of VF Corp. (NYSE:VFC) tumbled more than 10% in premarket trading Wednesday after the company’s Q3 earnings and revenue missed analysts’ estimates.
The apparel and footwear company posted Q3 earnings per share (EPS) of $0.57, topping the consensus estimates of $0.79. Revenue came in at $2.96 billion, also below the projected $3.25 billion.
Outdoor segment revenue was reported at $1.74 billion, well below the consensus estimates of $1.95 billion.
Adjusted gross margin stood at 55.3%, compared to 54.9% in the year-ago period and 55.1% estimated by analysts.
"We have already begun to see the impact of our efforts to right-size the company's cost structure and improve its inventory position, resulting in stronger than expected cash flow and expanded gross margin in the quarter,” the company said.
In the aftermath of the report’s release, analysts at Goldman Sachs downgraded VFC to Neutral from Buy and reduced the price target on the stock to $14 from $19.
“While we continue to see opportunity for strategic transformation initiatives to drive long-term recovery, we now have less conviction in the outlook ahead for revenue and margin performance,” they wrote.
“As evident this quarter, core brands across the portfolio have delivered sharper declines than our forecasts and we believe the outlook for revenue growth has worsened across geographies (but particularly NA / Europe) and channels (in particular, wholesale).”