// VF Corp sees revenues for the recently ended second quarter dip 4%, on the back of declines across three of its major brands – Vans, Dickies and Timberland
// The group has lowered its full-year earnings outlook to “reflect increased negative impacts from foreign currency fluctuations”
VF Corp, the owner of Vans, Dickies, The North Face and Timberland has reported a 4% decline in revenue to £2.6 billion in the three months to 1 October 2022.
Operating income at the group fell 29% to £327m in the quarter as gross margin decreased by 230 basis points to 51.4%, driven by higher costs and promotional activity partially offset by price increases.
The group saw DTC and wholesale revenue drop 4% to £951 million and £1.6 billion respectively while EMEA revenue slipped 4% to £806.5 million.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Revenues at Vans slipped 13% to 820m in the quarter as revenues at Timberland fell 4% to £451m.
Dickies reported a 19% loss of revenues to £160m while The North Face revenues were up by 8% to £819m.
The group said it is maintaining its constant dollar revenue outlook but has lowered its full-year earnings outlook to “reflect increased negative impacts from foreign currency fluctuations as well as heightened inventory levels and increased promotional activity in the marketplace.”
Looking ahead, it now expects adjusted gross margin to be down 100 to 150 basis points for FY23, compared to the previous outlook of down 50 basis points.
VF Corporation chief executive, chairman Steve Rendle said: “Our purpose built portfolio of iconic, deeply-loved brands continues to benefit from tailwinds in the outdoor, active, streetwear and workwear spaces, while we also actively address the near-term challenges at Vans, the ongoing Covid-related disruption in China, and the broader macro-economic and geopolitical headwinds, which have created tremendous uncertainty for all businesses and consumers.
“In the near term, in light of the challenging environment, we are acting proactively to generate increased revenue through the balance of the year while protecting profitability by tightly controlling all non-strategic spend.
“I am confident in our ability to deliver on our targets and to maximize the potential of all our brands when the environment improves. We will remain focused on the things we can control and will continue leveraging VF’s unique business model and competitive strengths to drive consistent, sustainable and profitable growth.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
