It’s been another good quarter for VF Corporation, owners of The North Face, Vans, Timberland, and Wrangler, among others, with their second quarter revenues up 5%, lead by Vans which is up 23%.
“Our second quarter was another strong illustration of the ability of our global, diverse and powerful brands and platforms to deliver consistent, profitable growth,” said Eric Wiseman, VF Chairman and Chief Executive Officer. “Our strategy for continued growth and fueling our momentum is working: Keep the consumer at the center of everything we do; deliver innovative and relevant product; and focus our execution and discipline to maximize long-term growth opportunities.”
Here are some highlights:
Revenue rose 10 percent on a currency neutral basis driven by growth in our Outdoor & Action Sports and Jeanswear coalitions, and international and direct-to-consumer businesses. On a reported basis, revenue increased 5 percent over the 2014 quarter.
Second quarter revenue for the Outdoor & Action Sports coalition was up 16 percent on a currency neutral basis (up 9 percent reported to $1.4 billion) driven by a similar growth rate in both its wholesale and direct-to-consumer businesses.
Second quarter currency neutral revenue for The North Face® brand rose 10 percent (up 6 percent reported), including a 20 percent increase (up 15 percent reported) in its direct-to-consumer business. By region, The North Face® brand’s revenue was up at a low double-digit percentage rate in the Americas, up at a mid single-digit rate (down low-teen percentage reported) in Europe and up at a low-teen percentage rate in the Asia Pacific region. For the full year, the company’s expectation for low double-digit currency neutral revenue growth for The North Face® brand remains unchanged.
Currency neutral revenue for the Vans® brand in the second quarter was up 23 percent (up 17 percent reported) including a 25 percent increase (up 21 percent reported) in direct-to-consumer sales and 22 percent growth (up 15 percent reported) in wholesale sales. Revenue in the Americas region was up greater than 20 percent, up more than 30 percent in the Asia Pacific region, and up at a mid-teen percentage rate (down mid single-digit reported) in Europe. In 2015, the company continues to expect a mid-teen currency neutral percentage rate increase in revenue for the Vans® brand.
Second quarter revenue for the Timberland® brand was up 10 percent on a currency neutral basis (up 2 percent reported) including a 17 percent increase (up 9 percent reported) in its wholesale business. In the Americas region, revenue was up at a mid single-digit percentage rate (up low single-digit reported). In Asia Pacific, revenue in the second quarter was up at a high single-digit percentage rate (up low single-digit reported) and in Europe, up at a high-teen percentage rate (down slightly reported). There is no change to the company’s expectation for Timberland® brand revenue to increase at a low-teen percentage rate on a currency neutral basis in 2015.
Jeanswear second quarter currency neutral revenue was up 4 percent (flat reported, at $608 million). Revenue for the Americas region improved at a mid single-digit percentage rate (low single-digit reported). In Europe, revenue was flat (down high-teen reported) and in the Asia Pacific region, revenue increased at a low double-digit percentage rate.
Currency neutral revenue for the Wrangler® brand in the second quarter was up 7 percent (up 4 percent reported) driven by strength in the Americas region, which realized high single-digit growth (up mid single-digit reported). Revenue in Europe was down at a mid single-digit rate (down more than 20 percent reported) due to ongoing weakness in Eastern Europe and up more than 20 percent (high-teen reported) in the Asia Pacific region.
Direct-to-consumer revenue, on a currency neutral basis, grew 13 percent (up 7 percent reported) in the second quarter with positive comparable sales growth in all regions and particular strength in Asia Pacific. Forty-nine stores were opened during the second quarter bringing the total number of VF-owned retail stores around the world to 1,438. On a reported basis, direct-to-consumer revenue reached 26 percent of total revenue in the second quarter, the same percentage as last year’s second quarter.
2015 Outlook: Full year revenue expectations are unchanged, with an 8 percent increase on a currency neutral basis (up 3 percent reported). Revenue for the Outdoor & Action Sports coalition is expected to increase at a low double-digit currency neutral percentage rate (up mid single-digit reported). Jeanswear is now expected to grow at a mid single-digit currency neutral rate (up low single-digit reported) compared with the previous expectation of a low single-digit increase. Imagewear and Sportswear coalition revenue is expected to grow at a mid single-digit currency neutral percentage rate. Contemporary Brands revenue is now expected to be down at a mid single-digit currency neutral rate (down at a high single-digit reported rate) versus the previous expectation of nearly flat currency neutral revenue (down at a mid single-digit reported rate).