Having shed its Supreme business for $1.5 billion and moving forward with a transformation plan under CEO Bracken Darrell and a cast of new brand leaders, VF Corp. is expressing optimism that its flagging Vans segment is finally on the road to full recovery. And the EMEA appears to be leading that effort through encouraging signs in Vans’ wholesale business across the region. In Q1, for the first time in six quarters, the brand’s EMEA wholesale business improved due to positive momentum in key accounts.
“If you ask me what region might turn first (for Vans),” Bracken said, responding to an analyst question, “I’m somewhat optimistic that it will be EMEA first and partly because of the wholesale segment.”
In Q1 ended June 30, Vans’ business improved from Q4 in both the US and EMEA and declined by 21 percent overall to $581.8 million versus a 27 percent drop in Q4 as new products such as the AVE 2.0 and UltraRange NEO gained some traction with consumers. To that end, the group has launched a new marketing campaign focused on the brand’s steady stream of new products.
| VF Corp. - Revenue | |||
|---|---|---|---|
| 2024 | 2023 | Change | |
| Q1 (million) | |||
| Brands | |||
| The North Face | 524.2 | 538.2 | -2.6% |
| Vans | 581.8 | 737.5 | -21.1% |
| Timberland | 229.4 | 253.8 | -9.6% |
| Dickies | 116.8 | 136.6 | -14.5% |
| Other | 455.0 | 420.2 | 8.3% |
| Total | 1,907.3 | 2,086.3 | -8.6% |
| Segments | |||
| Outdoor | 790.2 | 829.7 | -4.8% |
| Active | 942.1 | 1,066.0 | -11.6% |
| Work | 175.0 | 190.6 | -8.2% |
| Total | 1,907.3 | 2,086.3 | -8.6% |
| Regions | |||
| Americas | 1,044.8 | 1,183.8 | -11.7% |
| EMEA | 552.9 | 584.3 | -5.4% |
| Asia-Pacific | 309.7 | 318.2 | -2.7% |
| International | 978.9 | 1,026.7 | -4.7% |
| Total | 1,907.3 | 2,086.3 | -8.6% |
| Channels | |||
| DTC | 879.2 | 973.6 | -9.7% |
| Wholesale | 1,028.1 | 1,112.7 | -7.6% |
| Total | 1,907.3 | 2,086.3 | -8.6% |
| Source: VF Corp. | |||
“Vans is a fantastic brand. It just lost the energy, really lost the energy,” opined Darrell, who has been at the VF Corp. helm for a year now. “And you can see how it happened. We got so over-rotated on a couple of styles…Now with franchise management, you’re going to see us take the gas out of some of the older styles for a while and then re-introduce them with key influencers before flowing them down. This is franchise management 101 plus innovation, which I think is the model for growing a footwear brand.”
In Q1, VF Corp. reported an operating loss of $239.9 million, up from $9.0 million, on an 8 percent constant-currency revenue decline to $1.9 billion. The net loss was $258.9 million, up from $57.4 million a year ago. Gross margin contracted by 80 basis points due to currency headwinds and an unfavorable mix. Period-end inventories were down by 24 percent year over year.
| VF Corp. - Income | |||
|---|---|---|---|
| Q1 ($ thousand) | |||
| 2024 | 2023 | Change | |
| Net revenues | 1,907,301 | 2,086,336 | -8.6% |
| Costs and operating expenses | 2,147,194 | 2,095,328 | 2.5% |
| Operating profit | -239,893 | -8,992 | -2567.8% |
| Interest expense, net | 55,677 | 49,719 | 12.0% |
| Other income, net | -1,950 | -3,567 | 45.3% |
| Pre-tax | -297,520 | -62,278 | -377.7% |
| Tax | -38,634 | -4,853 | -696.1% |
| Net income | -258,886 | -57,425 | -350.8% |
| Diluted EPS | -0.67 | -0.15 | -346.7% |
| Source: VF Corp. | |||
By brand on a constant-currency basis, The North Face sales dipped by 2 percent to $524.2 million; by 9 percent at Timberland to $229.4 million; and by 14 percent for Dickies to $116.8 million. Regionally, EMEA sales slipped by 5 percent to $552.9 million and fell by 12 percent in the Americas to $1.04 billion. Sales in APAC inched up by 2 percent to $309.7 million. By channel, DTC sales tumbled by 9 percent to $879.2 million and by 7 percent in Wholesale to $1,028.1 million.
