// VF Corp net income for third quarter drops by 25%
// Revenue at the company was down 6% year over year
// The decrease was largely due to temporary store closures implemented as part of the lockdown
VF Corp has recorded a 25 per cent drop in its third quarter net income, which was at $347.2 million (£250.6 million) compared to $465 million (£335.6 million) in the prior year.
For the third quarter ended December 26, 2020, the retail group said revenue at the company was down six per cent year over year, from $3.2 billion (£2.3 billion) to $3 billion (£2.1 billion). In constant currencies the decline was eight per cent.
The decrease was largely due to temporary store closures implemented as part of the lockdown, as well as low consumer demand.
The group, which owns The North Face, Vans and Timberland, was forced to close around 50 per cent of its EMEA stores by the end of the quarter.
In the Asia-Pacific (APAC) region, nearly all of the company’s stores remained open throughout the quarter.
VF Corp’s direct-to-consumer revenue decreased two per cent, despite a 53 per cent rise in digital sales. Wholesale revenues declined 10 per cent.
Quarterly revenues in the retailer’s active segment fell nine per cent year over year, including a six per cent decline at the Vans brand, while the company’s outdoor segment posted a five per cent decrease, including flat sales at The North Face.
“Our third quarter results were largely ahead of expectations despite the impact of additional Covid-19-related disruption to our business,” VF Corp chairman Steve Rendle said.
The company has also raised its full-year financial guidance, and now expects revenues to be in the range of $9.1 billion to $9.2 billion, a prevision that includes around $125 million in revenue from the newly acquired Supreme brand.
“Our portfolio remains on track to return to growth in the fiscal fourth quarter and we are confident in VF’s plans to accelerate growth into fiscal 2022 and to continue advancing our business model transformation,” Rendle said.
VF Corp announced in November that it was set to acquire streetwear brand and retailer Supreme in a $2.1 billion (£1.5 billion) deal.
Supreme founder James Jebbia and its senior leadership team will remain with the business.
Rendle said the company would take a “hands-off” approach to managing Supreme.