VF Corp.’s Outdoor business had a fair fiscal fourth quarter but the segment’s results were heavily reliant on The North Face. The Outdoor segment, which includes The North Face, Timberland, Icebreaker, Smartwool and Altra, reportedly saw ongoing strength in the fourth quarter, increasing 3.6 percent (+7 percent constant-currency) to $1.32 billion in the 13-week period ended April 1, 2023. Operating profits were down 13.5 percent to $114.8 million from $132.8 million in the prior-year comp quarter.
VF management pointed to the “outstanding performance” from The North Face, which delivered 12 percent growth, or +16 percent in constant-currency terms for the period. The North Face contributed $859.5 million to total revenues in the 2023 Q4 period, compared to $769.5 million in the year-ago period.
For the fourth quarter, The North Face revenues grew 4 percent in the Americas and revenues increased 24 percent in the EMEA region. The North Face saw 35 percent growth in the APAC region. “In particular, The North Face delivered a standout performance in Greater China, up nearly 40 percent as the brand continues to fuel demand with the local consumer and achieve high sales productivity amidst the recovering marketplace environment,” Dorer said.
VF Interim President and CEO Benno Dorer said The North Face continues to execute strongly with engaging marketing and a steady stream of innovative styles. “Our core snow sports category was a standout in Q4, while the iconic Nuptse jacket continued its strong momentum,” he shared.
“We saw further growth in trail running footwear particularly behind our proprietary active technology underlying the brand’s significant opportunity in footwear,” Dorer said. “The North Face continues to resonate with a growing consumer base with the XPLR Pass adding over 1 million new members to surpass 18.5 global members at the end of Q4.”
VF is increasing product and marketing investments to support consumer acquisition, innovation and marketplace sell-through and the expansion of the brand into new adjacent categories based on clear permission from consumers to do so, according to Dorer.
“Regionally, our focus is to improve execution in the Americas,” Dorer admitted. “The first quarter will be difficult here as we work to regain the confidence of an already cautious set of U.S. wholesale customers in our ability to deliver full customer service after a difficult 2022 in that respect, but we should see significant improvements starting this fall.”
Dorer also pointed to the recent appointment of Jen McLaren to the newly created role to lead the company’s U.S. Key account management as part of that stronger focus as they work with customers to capitalize on “the many available partnership opportunities that exist.” He said they expect EMEA to be resilient and generate profitable revenue growth in fiscal year 2024 behind its “hallmark execution strength,” and APAC is anticipated to grow double-digits this fiscal year, which he said they will fuel with increased brand investments.
Timberland was down 9 percent (- 6 percent constant-currency) for the quarter to $395.6 million from $434.9 million in the prior-year Q4. Timberland posted a 6 percent constant-currency decline in the fiscal fourth quarter, a 1 percent constant-currency decline in EMEA and sales fell 18 percent in constant-currency terms in the APAC region for the fiscal 2023 fourth quarter.
Outdoor segment full-year revenues increased 6 percent (+12 percent constant-currency) to $5.65 billion from $5.33 billion in the prior year. Segment operating profit was $785.4 million in fiscal 2023, compared to $795.5 in fiscal 2022.
The TNF brand reportedly grew by double-digits across all channels and all regions on a global basis for the full fiscal year 2023, posting 12 percent constant-currency growth in the Americas, a 19 percent increase in the EMEA region, and 31 percent growth in the APAC region for the year.
Timberland revenues were down 2 percent (+4 percent constant-currency) to $1.78 billion for the full fiscal 2023 year, compared to $1.82 billion in the prior year. Constant-currency revenues were down 1 percent in the Americas, up 13 percent in the EMEA region and down 5 percent in the APAC region for the fiscal year.
For the SGB Executive report on the full VF Corp. business, go here—EXEC: VF Sees Weak Vans, Timberland Offset Strong TNF In Mostly Flat Q4
Photo courtesy TNF