VF Corporation, despite owning well-established brands, has seen a 6% drop in revenue for the second quarter, totaling $2.8bn.
- Sales for renowned brands such as Vans and The North Face have fallen by 11% and 3% respectively, highlighting significant challenges.
- Despite a general downturn, the Asia Pacific region recorded a 6% increase in revenue, marking a small beacon of growth.
- CEO Bracken Darrell remains optimistic, emphasizing the progress in their turnaround plan aimed at sustainable growth.
- Looking ahead, VF Corp anticipates a slight decline in third-quarter revenue, estimating between $2.7bn to $2.75bn.
VF Corporation reported a 6% decrease in revenue for the second quarter, ending September 28, with total earnings of $2.8 billion. This decline highlights the financial pressures on brands like The North Face and Vans, which saw sales decrease by 3% and 11%, respectively. Similarly, Timberland and Dickies experienced a 3% and 11% dip in their sales.
However, not all regions mirrored this decline. The Asia Pacific region saw a revenue increase of 6%, reaching $392.5 million. In contrast, revenues in the Americas and EMEA (Europe, the Middle East, and Africa) regions fell by 10% and 3%, respectively. The gross margin for the quarter improved by 120 basis points, standing at 52.2% compared to the previous year — a positive sign for VF Corporation amidst the financial challenges.
CEO Bracken Darrell expressed confidence in VF Corporation’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 $300m savings target by the end of FY25.” He also noted the successful completion of the Supreme divestiture on October 1, 2024, which enabled the company to address its $1 billion term loan.
Looking forward, VF Corporation has forecasted third-quarter revenue between $2.7 billion and $2.75 billion, reflecting a 1% to 3% decline year-over-year in reported dollars. Adjusted operating income is anticipated to range from $170 million to $200 million. While the Americas regional platform shows promise and improvement is noted at Vans, the corporation acknowledges ongoing challenges as they work through their turnaround plan.
VF Corporation is navigating a challenging market environment, strategizing for a recovery in growth and value generation.
