VF Corp cut its full-year revenue forecast on Friday as it struggles to stock store shelves because of delivery delays caused by worker shortages at factories in Vietnam, a manufacturing hub for many U.S. apparel companies.
The company's shares fell 2.3% in premarket trading, as it also warned of a slower-than-anticipated growth in its main brands - Supreme streetwear and Vans sneakers and sportswear.
Worker shortages in Vietnam have hurt many retail companies that had just begun to recover from forced factory closures due to COVID-19 lockdowns last year. Port congestion and higher freight charges have also added to U.S. apparel makers' woes.
VF Corp said COVID-19 related manufacturing capacity constraints affected third-quarter results, but added that it expects capacity be back to near full in the coming weeks.
The Jansport backpacks maker said it expects revenue for its Active unit, which houses the Vans and Supreme brands, to increase between 31% and 33%, compared with its previous expectation of a 35% to 37% increase.
The apparel maker forecast fiscal 2022 revenue of about $11.85 billion, below its prior estimate of about $12 billion.
VF's adjusted gross margin increased 60 basis points to 56.3%, but came in below the company's own forecast of 57%.
"It is hard to ignore that despite the inventory scarcity across the industry, (gross margin) continues to disappoint," BMO Capital Markets analyst Simeon Siegel wrote in a note.
The Denver, Colorado-based company's total revenue rose 22% to $3.62 billion in the third quarter ended Jan. 1, beating analysts' average estimate of $3.60 billion, according to IBES data from Refinitiv.
The company's net income rose about 49% to $517.8 million, or $1.32 per share, from a year earlier.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli and Saumyadeb Chakrabarty) ((AnanyaMariam.Rajesh@thomsonreuters.com;))