VF Corp adjusts outlook after sales drop

VF Corp, the owner of The North Face and Vans, has reported a 4% decline in revenue to £2.6 billion ($3.1 billion) for the second quarter ending 1 October 2022.

The group saw DTC and wholesale revenue drop 4% to £951 million ($1.1 billion) and £1.6 billion ($1.9 billion), respectively. EMEA revenue was also down 4% to £806.5 million ($932.4 million).

VF Corp shared the following Q2 results:

• Vans revenue down 13% to £823.5 million ($952.1 million).
• The North Face revenue up 8% to £822.4 million ($950.8 million).
• Timberland revenue down 4% to £453.4 million ($524.2 million).
• Dickies down 19% to £161.2 million ($186.4 million).
• Gross margin 51.4%, down 230 basis points.

For the first half, VF Corp reported a 1% decrease in revenue to £4.5 billion ($5.3 billion).

The group's DTC revenue dropped 5% to £1.8 billion ($2.1 billion), whilst wholesale revenue was up 2% to £2.6 billion ($3.1 billion). EMEA revenues increased 1% to £1.2 billion ($1.5 billion).

VF Corp shared the following H1 results:

• Vans revenue down 10% to £1.5 billion ($1.8 billion).
• The North Face revenue up 15% to £1.2 billion ($1.4 billion).
• Timberland revenue of £686.4 million ($793.6 million).
• Dickies down 17% to £308.6 ($356.8 million).
• Gross margin 52.4%, down 240 basis points.

Looking ahead, VF Corp 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.

Steve Rendle, Chairman, President and CEO of VF Corp, said: "Our portfolio of 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 maximise 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."