Updated 4:22 p.m. ET on Jan. 28
A remade VF Corp. gained some more momentum in its fiscal third quarter.
The company — parent to The North Face, Vans and Timberland — has been in a period of deep transition, with a snap change in the C-suite in late 2022, a sale of Supreme in 2024 and a sale of Dickies in September.
The trimmer profile is working for the company.
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Excluding Dickies, which Bluestar Alliance bought for $600 million, VF Corp.’s revenues rose 4 percent to $2.8 billion. And earnings per share of 58 cents came in 14 cents ahead of the 44 cents Wall Street projected, according to Yahoo Finance. The company is also paying a 9 cent dividend for the quarter.
Bracken Darrell, president and chief executive officer, told WWD in an interview that there were “green shoots” everywhere throughout the company.
“You’ve got product green shoots,” he said, pointing first to Vans, which is still a trouble spot with sales down 10 percent in constant currencies for the fourth quarter.
“You’ve got Super Lowpro, which continues to do really well. The Skate Loafer, which is the weirdest thing in the world, but it’s really a cool idea. And honestly, I could play basketball on this thing. It’s that comfortable and functional, but it looks great,” the CEO said, taking off the in-disguise slip-on sneaker-shoe and holding it up for the camera in the Zoom interview.
At The North Face, Darrell pointed to the brand’s ability to grow in its elevated assortment, which now sells jackets at $1,100.
“The cool thing is the average price in the U.S. is significantly below the rest of the world, so there’s a lot of opportunity to do that, but also opportunity just to grow through better execution — really a much more dynamic approach where we’re just getting product where it needs to be, nuts and bolts stuff that really is important.”
The North Face, which saw third-quarter sales expand by 5 percent in constant currencies, is also expanding beyond the fall and winter offerings that traditionally made up the bulk of its business.
“I’m impressed by the path we’re on to get to four seasons,” Darrell said. “I love the footwear we’re doing. It’s doing really well. It’s growing double digits around the world, so we got a lot of good stuff going in North Face.”
To reach these achievements, the company has had to make some deep changes, pushing harder for growth at existing brands and not betting that the next sales bump would come from another acquisition.
“Why didn’t we grow footwear [in The North Face]?” Darrell said. “Because we really didn’t have to. And so now we have to, because we set specific goals, we know exactly what we’re doing. Our own buyers have to buy that stuff. So now we’re growing by double digits consistently, quarter over quarter.”
VF’s overall direct-to-consumer business grew 3 percent, in constant currencies and excluding Dickies, driven by the digital channel. And the go-forward Americas business was up 6 percent in constant currencies.
Reported net income for the quarter ended Dec. 27 rose to $300.8 million from $167.9 million a year earlier while revenues increased 1.5 percent to $2.9 billion.
“If I look across every dimension of our business, we see a path to improvement,” Darrell said. “So we’re not dependent on one thing. We drove our own traffic into our own sites this time in a way we haven’t been able to do before across the U.S. business, which is great. We’re just not quite as dependent on, ‘Hope the consumer’s there.’”
For the fourth quarter, VF is predicting that its adjusted revenues will range from flat to up 2 percent while adjusted operating income tallies $10 million to $30 million.
Investors, who have been trading shares of VF up since they hit a low of $9.41 last April, decided it was time to take a step back.
Shares of the company fell 5.8 percent to $19.11 on Wednesday, which Darrell shrugged off as a reaction to the stock’s recent run.
“There were probably a lot of positive expectations priced in,” he said. “People are profit taking. I’m not worried about it at all.”