The most recent decline in Bloomberg VF Corp., the owner of Vans sneakers and Supreme streetwear brand, fell the most in more than two years after cutting its forecast and announcing the retirement of Chairman and Chief Executive Steve Rendle.
The retailer saw sales for the full year rise no more than 4%, excluding the impact of currency, down from its previous guidance of as much as 6%. It expects to have a lower profit than previously forecast. The company said that lower demand in North America is causing more promotions as well as order cancellations in the wholesale channel.
Credit Suisse has cut its rating on the stock to neutral from outperform after the news caused shares of VF to fall as much as 12%, their biggest drop since March 2020. In recent months, retailers have been offering deep discounts to clear excess inventory that resulted in a combination of over-ordering and sinking consumer demand. Some wholesale partners, including department stores, have canceled orders in order to minimize the amount of merchandise they are acquiring, because inflation-strained consumers are more cautious.
The outlook is being hurt by the Covid 19 restrictions in China and inflation in Europe, but to a lesser extent than in North America, according to the company.
For almost six years, Rendle, 63, was part of a nearly 25-year career with VF. Benno Dorer, 58, the lead independent director on VF's board, has been named interim CEO while the company seeks a permanent replacement. Richard Carucci will serve as interim chairman.
Rendle leaves four major US apparel brands with interim CEOs: Gap Inc. and Kohl s Corp. Under Armour Inc. and VF.