Growth from all its divisions positively affected VF Corp.’s sales in the 2nd quarter, which rose by 8 percent to $1,548,055,000. For its so-called Outdoor Coalition, revenues increased by 24 percent to $371.0 million, growing both at home and abroad, but corporate investment in various units reduced the profit margin by 250 basis points to 11.4 percent.
The Vans brand outperformed group expectations with a 24 percent climb in revenues and a 50 percent jump in comparable store sales. For JanSport, turnover rose by more than 30 percent, with daypacks selling well and back-to-school merchandise being shipped early. Kipling’s sales increased by 20 percent on expanded distribution in the UK, Spain and Belgium. Reef grew by more than 20 percent.
Turnover went up by 16 percent for The North Face in the period, which is the brand’s lowest volume quarter of the year. After recently opening a flagship store in Munich, the group is set to open a similar, 2,000 square-foot TNF outlet in Antwerp within a few weeks. There are plans to open in Prague and elsewhere throughout Europe, with a goal of raising the door count to 23 before year’s end, up from the11 locations operating at the beginning of the year. Napapijiri recently opened its first store in New York City.
VF’s Imagewear division saw its revenues increase by 4.3 percent to $188,496,000 in the quarter, generating an operating margin of 15.4 percent. Overall, the group’s net income improved to $99,032,000, as compared to $96,749,000 in the year-ago period, but would have dropped without the addition of $7.7 million worth of extraordinary gains. Group operating income was up by 5 percent to $161.2 million.
Going forward, VF Corp. is projecting annual revenues to grow by 7 percent to almost $7 billion, generating about $600 million in cash flow from operations. The group has upped its marketing spend for the 2nd and 3rd quarters to 12-14 percent of sales, though for the full year this figure is expected to be just 5.2-5.3 percent. The group’s company-owned retail business represented about 13 percent of revenues in the period, or $201.2 million.
