(Reuters) - VF Corp VF.N fell short of Wall Street estimates for its quarterly profit and revenue on Friday, hit by growing competition for its popular brands Vans and Timberland, sending shares of the apparel maker down as much as 10%.
The company didn’t benefit significantly from its move to ramp up direct selling and boost online business to compete with larger players such as Nike (NKE.N) and Under Armour (UAA.N) that pulled in more customers with new launches and a stronger digital presence.
VF Corp’s unchanged full-year sales and earnings forecast, reflecting a 7-cents hit from higher tariffs, the ongoing disruption in Hong Kong and a stronger dollar, also disappointed investors.
Shares of the Colorado-based company, which in May spun off its less profitable jeans business, Kontoor Brands (KB.N), were down 7% at $84.48, having gained 35.25% so far this year.
VF Corp has been trying to reduce its reliance on China imports as consumer-facing brands start to come in the range of fire of the latest round of proposed U.S.-China tariffs on $300 billion worth of goods that target apparel and footwear.
Chief Financial Officer Scott Roe said on a call with analysts the company plans to keep its sourcing from the country at about 4% next year, down from 7% presently.
Revenue from Vans grew 14% in the second quarter ended Sept. 28, slowing from a growth of 26% last year, while that from its work segment, which includes brands Dickies and Timberland, fell 4%. Profit dropped 24% in the segment prompting VF Corp to cut full-year outlook for the unit.
Net income rose to $649 million, or $1.61 per share, from $507.1 million, or $1.26 per share, a year earlier.
Excluding items, the company earned $1.26, missing the average analyst estimate of $1.31.
Net revenue rose 5.4% to $3.39 billion, but missed the average analyst estimate of $3.42 billion, according to IBES data from Refinitiv.
Reporting by Aditi Sebastian; Editing by Shinjini Ganguli