China, e-commerce shine for VF Corp
While second-quarter earnings declined for VF Corp, the parent of The North Face, Timberland and Vans, they exceeded expectations, with China and e-commerce being the star performers.
Revenue increased 2 per cent to US$2.4 billion, up 3 per cent currency neutral, for the quarter, while gross margin improved 80 points (160 basis points currency neutral) to 49.7 per cent.
Outdoor and action sports revenue grew 4 per cent (5 per cent currency neutral) while the Vans brand brought in 8 per cent (9 per cent) more revenue and The North Face 5 per cent (6 per cent) more.
International revenue increased 4 per cent (6 per cent), including 13 per cent growth (18 per cent) in China.
Direct-to-consumer revenue also grew 13 per cent (14 per cent) with digital revenue ballooning 34 per cent (up 36 per cent).
VF president/CEO Steve Rendle says the group’s growing workwear businesses helped drive results.
“Based on the strength of the first half of this year and our expectations for the second half, we are making growth-focussed investments in our largest brands and platforms.”
In April, the company completed the sale of its Licensed Sports Group (LSG) business, including the Majestic brand. In conjunction with this, VF executed its plan to entirely exit the licensing business and has classified the assets of the JanSport brand collegiate business as held for sale.
In August last year the company completed the sale of its contemporary brands businesses, including 7 For All Mankind, Ella Moss and Splendid.
Net loss from discontinued operations was $5 million for the second quarter.