Read more about Vans’ performance last quarter on Shop Eat Surf, our sister site.
The North Face’s revenue growth in the Asia-Pacific region was offset by declines in the Americas in the second quarter ended Sept. 28, as parent company VF Corp. continues its efforts to return to growth.
Both The North Face and Timberland posted a 3% decline in reported revenue compared to the same quarter last year, with revenues of $1.091 billion and $475.3 million, respectively. Vans reported revenue of $667.4 million, an 11% decline. VF Corp.’s total revenue was $2.8 billion in the quarter, down 6%.
“My confidence and excitement about the transformation taking place at VF only continues to grow,” said CEO Bracken Darrell on the company’s earnings call on Oct. 28, adding that more details about the company’s plans would come on Wednesday’s Investor Day.
VF Corp. is on track to generate $300 million in cost savings this year, normalize inventories, reduce debt, and improve forecasting. It’s also focused on fixing its business in the U.S., where revenue was down overall by 10% year-over-year.
VF’s DTC revenue was $914.9 million in the quarter, down 8% year-over-year. Wholesale revenue was $1.8 billion, down by 4% year-over-year.
The company’s net income was $52 million in the quarter and a net loss of $206 million for the first half of the fiscal year.
The North Face
Darrell reminded listeners on the call that The North Face’s revenue was down sequentially in the second quarter because of the brand’s 17% increase last year. Demand for The North Face in APAC, particularly China, is strong, and September was the “strongest month ever” for the brand in EMEA, Darrell said.
For the quarter ending Sept. 28, The North Face reported:
- 14% decline in the Americas.
- 0% growth in EMEA.
- 20% increase in APAC.
- 3% decline globally.
The North Face launched its first global campaign in over three years, which resonated particularly well with women on digital media, Darrell said. It’s investing in retail, with a new Fifth Avenue store planned to open in 2025 in New York City. Its new store in Williamsburg, Brooklyn, now has a shop-in-shop for used gear, and backpacks sold well through the quarter, Darrell said.
Timberland
Revenue at Timberland improved in the second quarter, down by 3% compared to the 9% decline in the first quarter, Darrell said.
“The yellow boot continues to perform well globally, with ongoing momentum enhanced by the new iconic campaign launched in September which is driving traffic to our stores and online and also contributing to the growth of the boot,” Darrell said.
For the quarter ending Sept. 28, Timberland reported:
- 4% decline in the Americas.
- 3% decline in EMEA.
- 3% increase in APAC.
- 3% decline globally.
Darrell said he expects to see more sequential improvement in the third quarter.
VF Q3 Outlook
VF estimates its third quarter revenue to be in the range of $2.7 billion to $2.75 billion, which would be a 1% to 3% year-over-year decline.
Adjusted operating income will fall in the range of $170 million to $200 million, compared to $218 million in the same period last year.
The market appears to have liked VF’s results and outlook. The company’s stock price rose more than 25% to $21.43 on Tuesday morning.
Kate Robertson can be reached at kate.robertson@emeraldx.com.
