VF Corporation, known for brands such as Vans and The North Face, reported a 6% drop in quarterly revenue.
- Sales for The North Face and Timberland saw a decrease of 3%, while Vans experienced a significant 11% decline.
- Revenue in the Asia Pacific region increased by 6%, showcasing contrasting performance across markets.
- Gross margins improved, signaling some financial stability amid declining sales.
- VF Corporation remains committed to its strategic goals, including a $300 million savings target.
VF Corporation, the owner of brands like Vans, The North Face, and Timberland, saw a 6% decline in its second-quarter revenue compared to the previous year, totalling $2.8 billion (£2.1 billion). This performance reflects a challenging period for the company as it navigates fluctuating market conditions.
Sales figures for specific brands highlight these challenges, with The North Face and Timberland each experiencing a 3% drop in sales. The situation was more severe for Vans, which reported an 11% decrease. These numbers point to a broad trend of declining sales across key segments for VF Corporation.
In contrast, the Asia Pacific region showed promising results with a 6% rise in revenue, amounting to $392.5 million (£302.5 million). This growth offsets some declines seen in the Americas and the EMEA (Europe, the Middle East, and Africa) regions, which recorded declines of 10% and 3%, respectively.
Despite these mixed results, VF Corporation’s gross margin increased to 52.2%, up 120 basis points from the previous year. This improvement suggests some level of cost efficiency or pricing strategy that has helped to bolster the company’s financial standing during a tough quarter.
Bracken Darrell, VF’s President and CEO, expressed confidence in the company’s strategic direction, stating: “Our results in the quarter met our expectations and reflect a sequential and broad-based improvement in year-on-year trends…and we are on track to reach our previously announced $300 million (£231 million) savings target by the end of FY25.” His statement underscores the leadership’s focus on long-term growth and financial health.
Following the Supreme divestiture on October 1, 2024, VF Corporation made progress in addressing its financial obligations by reducing a $1 billion (£77 million) term loan due in December 2024. This move is part of a broader strategy to stabilize and strengthen the company’s balance sheet.
Looking ahead, VF Corporation anticipates third-quarter revenue to be slightly lower than last year, with projections between $2.7 billion (£2.08 billion) and $2.75 billion (£2.11 billion). Adjusted operating income is expected to be in the range of $170 million (£131 million) to $200 million (£154 million), reflecting cautious optimism in VF’s ongoing efforts to enhance performance.
VF Corporation faces a challenging economic landscape but remains focused on strategic growth initiatives to drive future success.
