VF Corp. Pulls Full-Year Guidance on Vans Weakness. The Stock Drops.

“Despite pockets of continued strong performance throughout the first half and solid profit margins in the second quarter, it’s not enough and we are not making sufficient progress at Vans or in the U.S.,” said Matt Puckett, the company’s chief financial officer, in a news release.

Vans’ performance isn’t expected to improve in the second half of the fiscal year, the company added.

In the second quarter, Vans sales fell 21% compared with a year ago. Total revenue declined by 2% year-over-year to $3 billion. That was roughly in line with forecasts. Adjusted earnings of 63 cents a share, however, fell shy of consensus estimates for 65 cents a share, according to FactSet.

VF stock was down 10.3% to $15.35 in after-hours trading.

The company introduced on Monday a new plan to turn business around, called Project Reinvent. It aims to improve its business in North America, fast-track the Vans revamp, reduce costs, and strengthen the company’s balance sheet. As part of Project Reinvent, Kevin Bailey, Vans global brand president, will be stepping down to lead Project Reinvent. The company is looking for a new brand president, but meanwhile, CEO Bracken Darrell will take a “more active role” in heading up the brand, VF said. VF also plans to cut $300 million in costs.

Vans has been dragging on VF’s performance for several quarters now. Not even The North Face’s strong results—sales increased 19% this quarter—have been able to give the stock a boost. Shares are down 38% this year. The company’s underperformance have made it a prime target for activist investors, which are lobbying for sweeping changes at the company.

Write to Sabrina Escobar at [email protected]