Analyst Note| David Swartz |
The resurgence of the coronavirus in parts of Europe and the United States negatively affected narrow-moat VF in the third quarter of fiscal 2021, but the firm’s results were mostly in line with our estimates anyway. Nearly all of VF’s stores in these regions were open at the beginning of the quarter, but many were forced to close temporarily soon after. Vans, especially, was affected by temporary closures of its many stores in California and Europe. Revenue for the active coalition (38% of quarterly sales) fell 9%, missing our estimate of a 1% drop. Still, VF’s total revenue decline of 5.8% in the quarter was just 130 basis points worse than our forecast, thanks primarily to strong results from The North Face, which posted flat sales on double-digit growth in Asia-Pacific as well as Europe, the Middle East, and Africa.