Supreme Owner Slides on Earnings Miss Amid Supply Chain Complications

This post was originally published on this site – Shares of VF Corporation (NYSE:VFC), which recently acquired Supreme, were down over 7% Friday after reporting an earnings miss and margin erosion for the fourth quarter even as revenue topped estimates.

On the issue of supply chain, a critical situation that has plagued many manufacturers and retailers with several countries still locked down, the company said governmental restrictions have resulted in isolated product delays and that it is working with suppliers to minimize disruption.

VFC, which also owns the The North Face, announced earnings per share of $0.27 on revenue of $2.58 billion. Analysts polled by anticipated EPS of $0.28 on revenue of $2.51 billion.

Gross margin decreased 100 basis points to 52.1% for the quarter ending March. The company blamed this on elevated promotional activity to clear excess inventory and the timing of net foreign currency transaction activity. One basis point is one-hundredth of a percentage points.

The company forecast fiscal 2022 EPS of $3.05, versus the consensus of $3.02, according to StreetInsider. The sales estimate of $11.8 billion compares to the consensus of $11.41 billion.

VF Corporation completed its acquisition of red-hot streetwear brand Supreme, which had been a privately-owned, for $2.1 billion.

The company’s net income came at $89.52 million, a swing from a net loss of $483.77 million in the same quarter a year.