VF Corp Provides Update On Coronavirus Impact

VF Corp Provides Update On Coronavirus Impact

VF Corp. said that at this time, about 60 percent of VF’s owned and partner stores in China have been temporarily closed due to coronavirus mitigation efforts. Stores currently open have experienced significant declines in retail traffic.

VF said it is working in accordance with local government guidelines to ensure the health, safety and overall well-being of the company’s associates and partners in the communities where they live and work.

“The safety and well-being of our associates and partners in China is our highest priority. Our thoughts are with those people affected by the coronavirus,” said Steve Rendle, VF’s chairman, president and CEO. “While the coronavirus will impact our financial results in the Asia Pacific region in the near term, VF’s growth opportunity in China and across the Asia Pacific region is significant and the fundamentals of our business are strong. VF is well-positioned to navigate the impact of the coronavirus situation given the diversity of our business and operating model in other key geographies.”

In fiscal 2019, the Asia Pacific region and mainland China represented 12 percent and 6 percent, respectively, of total VF revenue. And, while VF said it is not possible to gauge the impact to its supply chain at this point, approximately 16 percent of VF’s total cost of goods sold is sourced directly from mainland China, of which 7 percent is bound for the U.S. market.

The coronavirus situation in China was not contemplated at the time VF provided its adjusted fiscal 2020 outlook on January 23, 2020. VF said it will provide an update as to the operational and financial impacts of the coronavirus during VF’s fourth-quarter fiscal 2020 conference call in May 2020.