VF Corporation (NYSE: VFC) announced financial results for its third fiscal quarter (Q3’FY23) ended December 31, 2022, as well as a series of actions to accelerate the path to its target leverage ratio and sharpen its focus, including the declaration of a quarterly per share dividend of $0.30, a 41% decrease from the previous quarter’s dividend.
After navigating an increasingly difficult fiscal Q3, Interim President and CEO Benno Dorer stated that they are pleased to reaffirm the recently communicated full year 2023 EPS outlook with revenue growth of approximately 3%. Spending the last few weeks with VF’s dedicated and talented teams around the world has reinforced my belief in our company’s tremendous opportunity. We are committed to improving execution by narrowing our focus on the most promising consumer opportunities and improving operational performance.
He added, in line with this goal, they are shifting resource priorities throughout the Company, including by reducing the dividend, exploring the sale of non-core assets, cutting costs and eliminating non-strategic spend, and enhancing the focus on the consumer through targeted investments. They are confident that these actions will result in a return to profitable and sustainable growth, as well as significant shareholder value creation.
In the short to medium term, the Company’s capital deployment priorities are focused on optimizing and driving portfolio performance, reducing leverage, and returning capital to shareholders. VF is also evaluating and implementing a series of strategic actions to strengthen the Company’s financial position and sharpen focus on its greatest value creation opportunities, such as: rightsizing the dividend payout to accelerate the Company’s return to its target leverage ratio and provide additional financial flexibility, positioning VF to navigate the current macroeconomic challenges while continuing to make investments to advance its strategy. As a result, VF’s next quarterly per share payment will be reduced from $0.51 to $0.30. The company expects future dividends to increase in line with earnings.
CFO Matt Puckett stated: “We have clear plans in place to address the ongoing challenging macroeconomic environment in the near term as we close FY23 and enter FY24. I am confident that the actions we are taking will result in improved operating performance and a stronger financial position for the company, allowing VF to deliver long-term, sustainable, and profitable growth.”