VF Corp missed Wall Street revenue and profit projections for the first quarter on Friday, owing to product delays caused by global supply chain disruptions and manufacturing bottlenecks in Vietnam.
In premarket trade, shares of the Denver-based firm plummeted 8.1 percent to $68.05.
COVID is making a comeback. Since mid-July, infections caused by the Delta variety have forced textile manufacturers to cease production or operate with considerably fewer personnel.
The factory closures have threatened to damage firms during the lucrative holiday shopping season, with the country serving as a significant manufacturing base for many brands like VF, Nike, and Adidas.
Clothing firms' margins have been squeezed as a result of rising freight costs and higher pricing for raw commodities like cotton and oil.
Last month, Nike warned of product delays for the holiday season owing to a supply chain shortage, estimating that it would take several months to restore full manufacturing capacity in Vietnam, where around half of the company's shoes are created.
Crocs announced on Thursday that it will move some of its manufacturing from Vietnam to China, Indonesia, and Bosnia and Herzegovina. This year, the casual footwear company had expected to source 70% of its production from Vietnam.
According to Cowen analysts, VF, which owns the Timberland and The North Face brands, sources around a quarter of its products from Vietnam, with the risk likely being higher for its iconic Vans brand.
According to Refinitiv IBES, the company's total revenue increased 23 percent to $3.20 billion in the second quarter, compared to expectations of $3.50 billion.
VF earned $1.11 per share on an adjusted basis, missing analysts' expectations of $1.15 per share.