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VF Corp’s earnings dip due to Vans, supply chain issues


VF Corp’s earnings have fallen short of expectations. Revenue in the active segment, which includes the Vans footwear line, also fell short of estimates. Port congestion and the ongoing coronavirus outbreaks have constrained suppliers. VF is the latest apparel company to blame operational woes on a snarled global supply chain, with clogged ports and factory shutdowns in countries such as Vietnam.

A resurgence of Covid-19 lockdowns in key sourcing countries has resulted in additional manufacturing capacity constraints. The Vans brand also experienced lower-than-expected sales during the back-to-school season. Supply chain bottlenecks have affected the company’s ability to source and move products to the US. Virtually all of its brands are experiencing delays in shipping merchandise, while consumer demand remains high.

VF gets about 10 per cent of its products from factories in Vietnam. For its Supreme brand, the percentage rises to 25 per cent. VF Corp also owns brands such as the North Face and Timberland. Vietnam, which has become a hub for the global apparel industry, has struggled to contain the Covid-19 pandemic.