VF Corp raises full-year outlook on first-quarter sales; The North Face, Vans still strong
U.S. apparel and footwear maker VF Corp raised its full-year guidance on Wednesday, as its revenue climbed 6 percent to $2.3 billion in the first quarter, ended June 29.
The quarter-period marked the company’s first since it completed the spin-off of its jeans business, which included the Wrangler, Lee and Rock & Republic brands, as well as the VF Outlet business, into an independent, publicly traded company under the name Kontoor Brands Inc.
"Our first quarter results demonstrate the power of VF's evolved portfolio and our progress along our journey to become a purpose-led, performance-driven, value-creating enterprise anchored in our commitment to be more consumer-minded and retail-centric in everything we do,” said Steve Rendle, president and chief executive officer.
The group’s active segment, which includes the Vans, Eastpak and Kipling brands, among others, increased 8 percent including a 20 percent increase in Vans brand revenue.
Likewise, its outdoor segment revenue increased 7 percent, including a 9 percent increase in The North Face brand revenue.
By region, international revenue increased 2 percent, with a 21 percent increase in China sales. By channel, VF’s direct-to-consumer business saw revenue growth of 14 percent, pushed by a 24 percent growth in digital revenue.
Still, net income fell to $49.2 million, or 12 cents per share, in the quarter, from $160.4 million, or 40 cents per share a year earlier, primarily due to the spin-off of its jeans business. Adjusted earnings from continuing operations increased 61 percent to 30 cents.
Since 2017, VF has been following its “2021 growth plan”, which includes an increased focus on its international and direct-to-consumer businesses.
Part of the growth plan is to prioritize digital and direct-to-consumer, increase focus on the Asian market, particularly China, and reshape the company’s brand portfolio, which the company is continuing to do.
Due to its strong results in the first quarter, VF now expects full year fiscal 2020 adjusted revenue from continuing operations to reach $11.8 billion, reflecting growth of approximately 6 percent.
Full year fiscal 2020 adjusted earnings per share are expected to be in the range of $3.32 to $3.37, including an additional $20 million, or $0.04 per share, of incremental investment, reflecting growth of 16 percent to 18 percent.
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