For its second quarter, VF Corporation’s revenue declined 2 percent or 4 percent in constant dollars to 3 billion dollars.
Loss per share for the quarter widened to 1.16 dollars, while adjusted earnings per share were 63 cents versus 73 cents per share in the same period last year.
The company has announced a transformation program to drive growth and quarterly per share dividend of 9 cents, a 70 percent decrease from the previous quarter’s dividend. Due to implementation of the Project Reinvent, VF is also withdrawing its FY24 revenue and earnings outlook.
Commenting on the trading update, Bracken Darrell, VF president and CEO, said: "Our transformation plan, Reinvent, will improve our brand-building and execution while addressing with urgency our top priorities of improving North America, accelerating the Vans turnaround, significantly reducing our fixed costs and reducing leverage.”
Highlights of VF’s Q2 results
The company’s The North Face brand delivered revenue growth of 19 percent or 17 percent in constant dollars, while Vans brand was down 21 percent or 23 percent in constant dollars.
VF’s wholesale sales were down 1 percent or 3 percent in constant dollars, primarily driven by the Americas, down 11 percent and direct-to-consumer (DTC) declined 3 percent or 5 percent in constant dollars but rose 10 percent or 9 percent in constant dollars excluding Vans.
Revenues in the Americas were down 11 percent or 3 percent excluding Vans. International business was up 10 percent or 5 percent in constant dollars. Revenues in Greater China were up 8 percent or 14 percent in constant dollars, with the APAC region up 2 percent or 6 percent in constant dollars. EMEA revenue was up 14 percent or 6 percent in constant dollars.
VF expects negative Vans performance and difficult US wholesale environment to significantly impact revenue and profit in the second half of FY24.
VF announces Reinvent to drive growth
The company is introducing Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance. The company said that the first steps in this transformation cover four key priorities: improve North America results, deliver the Vans turnaround, reduce costs and strengthen the balance sheet.
The company plans to create an Americas regional platform, modelled on the company's successful operations in EMEA and APAC. With this change, VF added that Martino Scabbia Guerrini has been promoted to the newly created role of chief commercial officer, with responsibility for go-to-market execution globally.
The company further said that Kevin Bailey will be stepping down from the position of global brand president, Vans but will remain on the executive leadership team reporting to Bracken Darrell, and will transition to lead Reinvent. VF will appoint a new brand president for Vans and in the interim, Darrell will take a more active role in leading the brand and delivering its turnaround strategies.