VFC VF Corporation

By Chelsey Dulaney 

Shares in VF Corp., the owner of brands such as North Face and Wrangler, fell to their lowest point in a year Friday after the company trimmed its outlook for the year, and indicated it wouldn't be adding to its roster of brands soon.

The apparel conglomerate said on a conference call with analysts to discuss its third-quarter earnings that it hasn't made progress on an acquisition. VF executives have said this year that acquisitions are the company's top priority and expressed frustration about the lack of movement on the deals front.

Chief Executive Eric Wiseman said Friday that "fortunately and unfortunately nothing has changed." The company is still working on opportunities, he said, but didn't make progress last quarter.

"Eventually something will happen," he said. "We just don't know when that will be." VF's last big deal was its nearly $2 billion acquisition of the Timberland brand in 2011.

Shares of the company tumbled as much as 16% Friday as it also reported softer-than-expected sales for the third quarter and lowered its outlook for the year. Shares were off 13.5% at $63.36 a share in late trading.

One contributor to VF's soft results and guidance, the company said, is the slowdown in oil exploration, which is weighing on sales in its Bulwark workwear brand that sells protective gear such as coveralls and bib overalls.

VF said it now expects sales in that segment, which includes its MLB and NFL licensed-sports apparel, to be flat for the year. It had previously expected a mid single-digit percentage increase in sales.

Since crude oil prices headed south more than a year ago, energy companies have been laying off workers and idling rigs. Graves & Co., a Houston consulting firm, recently projected the number of energy-company layoffs world-wide at over 200,000. More cuts are expected as crude has shown little sign of rebounding soon.

The workwear business is a small part of VF's overall revenue. But the company is also feeling weakness in its sportswear and contemporary brands businesses. On the call with analysts, Mr. Wiseman said VF's consumer traffic was down across the board in the quarter.

For the year, VF said it is now expecting revenue, excluding currency fluctuations, to grow 7.5%, down from its July guidance for 8% growth. It is now expecting a profit of $3.18 a share, down four cents from its previous outlook, because of a bigger hit from foreign exchange.

Sam Poser, an analyst at Sterne Agee CRT, said retailers are currently in a slow period, between the back-to-school season and the holiday season, which has magnified some concerns over the industry's health.

"There are a lot of people nervous," he said.

Mr. Poser pointed to strength in VF's top brands, such as Timberland, where sales rose 21% excluding currency swings during the third quarter, and North Face, which logged 11% growth on a constant-currency basis.

In the third quarter, VF booked a profit of $459.9 million, or $1.07 a share, down from $470.5 million, or $1.08 a share, a year earlier.

Revenue rose 2.6% to $3.61 billion. Adjusted for currency fluctuations, sales were up 8%.

Analysts had projected earnings of $1.12 a share on $3.68 billion in revenue, according to Thomson Reuters.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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(END) Dow Jones Newswires

October 23, 2015 16:09 ET (20:09 GMT)

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