VF Corp. (VFC, Financial) sank -60.4%, detracting -1.3% from the Fund’s total return. The apparel and footwear company owns a portfolio of lifestyle brands, including North Face, Timberland, Vans and many others. Shares suffered their worst annual performance in over 20 years due to company missteps amid heightened macro uncertainty. Management lowered their outlook three times in three months, as U.S. sales slowed with the end of stimulus payments, inflation waylaid European consumers and Chinese sales collapsed under COVID-19-lockdowns. Moreover, an inventory glut, unfavorable foreign exchange, and an impairment charge on the company’s earlier purchase of streetwear brand Supreme all weighed on profitability, culminating in the retirement of the company’s long-time CEO. We held our shares, encouraged by the company’s efforts to revitalize Vans and by evidence that problems related to inventory, freight and inflation are beginning to abate.
From the Parnassus Value Equity Fund (Trades, Portfolio)'s fourth-quarter 2022 commentary.
