VF corp., parent of Vans, the North Face and Timberland, says sharper marketing efforts and a push to sell direct-to-consumers is paying off. The company says revenue climbed 6% to $2.3 billion, including a 20% jump at Vans and a 9% rise at the North Face. Digital sales advanced 24% and D2C revenues increased 14%.
Operating income, on an adjusted basis, improved 23% to $163 million. The company, in the midst of a relocation to Denver, is bullish enough about the remainder of the year that it is dialed up its financial forecast for the full year, calling for a sales increase of 6%.
This is its first quarterly report since the company spun off its denim brands, including Lee and Wrangler, into a company called Kontoor brands.
"Our first-quarter results demonstrate the power of VF's evolved portfolio and our progress along our journey to become a purpose-led, performance-driven, value-creating enterprise anchored in our commitment to be more consumer-minded and retail-centric in everything we do,” states Steve Rendle, chairman, president and CEO, in its announcement.
Fashion trends, including athleisure and retro styles, continue to bode well for VF, writes David Swartz, an analyst who follows VF for Morningstar. “Vans has become everyday wear for consumers in its key demographic of teens and young adults, and one of the most popular shoe brands for teens of both sexes. It is viewed as less of a sports brand than a brand for creative people.” And the customizations it offers, as is true with rival Nike, “are very popular among consumers aged 13-24.”
The North Face gained 10% in the U.S., benefiting from its “Explore Mode” marketing campaign and the National Geographic collection.
Timberland results continue to lag, as did sales at Dickie’s, VF’s workwear brand, with both easing 1%. But in the U.S., sales of Timberland had a strong showing, up 7%.
In a conference call discussing the results, Rendle said that the company’s efforts to “elevate the brand from a creative standpoint, including marketing and experiential aspects,” are working, both in classic styles as well as more updated looks. “That's the part of the diversification strategy that we've been working very, very hard on.”