VF Corporation’s first quarter revenue of 2.1 billion dollars, was down 8 percent with the big four brands down 11 percent and the balance of the portfolio up 7 percent.
The North Face revenue of 0.5 billion dollars, was up 12 percent, while Vans brand revenue of 0.7 billion dollars, was down 22 percent.
The company’s loss per share of 15 cents, was down 2 percent; and adjusted loss per share was 15 cents versus adjusted earnings per share of 9 cents in the previous year’s first quarter.
“VF has a portfolio of globally recognized, iconic brands, a deeply embedded purpose and impressive talent, all of which gives me every confidence we have all the necessary ingredients to unlock the company's significant potential and return to delivering strong, sustainable and profitable growth which will translate to elevated shareholder returns,” said Bracken Darrell, VF’s president and CEO in a statement.
Operating highlights of VF’s Q1 results
The company added that Vans performance was impacted by wholesale in the Americas, which declined 39 percent and 40 percent in constant dollars as the turnaround work continues at the brand.
The company’s wholesale revenue was down 12 percent, including wholesale in the Americas down 18 percent. Direct-to-consumer (DTC) was down 3 percent or down 2 percent in constant dollars and up 6 percent or 7 percent in constant dollars excluding Vans.
Revenues in the international markets increased by 3 percent or 4 percent in constant dollars. The company reported growth of 24 percent or 31 percent in constant dollars in Greater China, leading further improvement in the APAC region of up 13 percent or 18 percent in constant dollars. EMEA revenue was down 2 percent or 3 percent in constant dollars, reflecting continued growth in DTC, but lower wholesale revenue.
The company’s gross margin of 52.8 percent, was down 110 basis points; while adjusted gross margin of 52.8 percent, declined 130 basis points. Operating margin was negative 0.4 percent, down 320 basis points; and adjusted operating margin, also negative 0.4 percent, was down 380 basis points.
VF reiterates FY24 EPS outlook
The company reiterates the full year EPS guidance range of 2.05 dollars to 2.25 dollars. Revenue is now expected to be modestly down to flat for the year, reflecting ongoing weakness in the wholesale business and a longer than anticipated turnaround for Vans.
“While our Q1 performance is not reflective of our standards, we achieved our earnings target in the quarter. We remain focused on improving our operational execution, although it will take time for our revenue performance to benefit from actions that are underway,” added Matt Puckett, CFO.
VF’s board of directors has declared a quarterly dividend of 30 cents per share payable on September 20, 2023, to shareholders of record at the close of business on September 11, 2023.