VF Corporation Locking In Inventory Early with Supply Chain Snags Ongoing

VF Corporation — whose stable of brands include Dickies, Timberland, The North Face and Vans — has begun buying the raw materials for its apparel and footwear on an average of a few weeks earlier than usual as supply chain snafus persist, The Wall Street Journal reported Tuesday (Feb. 8).

Denver-based VF has been buying materials including greige fabric — a cotton that can be converted into multiple colors — and the canvas used to make Vans shoes a few weeks early on average, and in some cases even further ahead of when they’re needed, Chief Financial Officer Matt Puckett told WSJ.

“One of the challenges in this whole scenario around supply and demand has been just getting the capacity that is required to support the business at the time you want it,” he said.

VF said during its most recent earnings call late last month that it expects to be dealing with logistics issues for most of 2022, if not the entire year. The company received products from about 265 factories in 36 countries run by independent contractors during fiscal 2021, which ended in April, the WSJ report says. That’s down from 300 factories in 40 countries the year before, according to the report.

Some of VF’s partners’ factories in Vietnam are running at 80% to 90% capacity, and they closed briefly during 2021 because of COVID-19 concerns.

Related: VF Corporation Stock Continues Six-Month Struggle

VF’s revenue was up across the board, according to its fiscal 2022 third-quarter earnings call in late January. VF’s revenue uptick in the quarter was highlighted by continuing operations revenue of $3.6 billion, an increase of 22% for the three months ending in January.

The active segment of VF’s business saw a 25% revenue increase, including an 8% uptick in Vans revenue and 17% growth from its acquisitions.

VF’s outdoor segment revenue increased 23% in the third quarter of fiscal 2022, led by a 28% jump in The North Face revenue. The work segment of the businesses jumped 6% in the quarter, highlighted by a 4% boost in Dickies revenue.

The international revenue for VF jumped 19% for Q3, led by a 26% hike in Europe. VF’s Greater China revenue dipped 6% for the quarter, with an 8% dip in mainland China doing the most damage.