VF Corporation reported revenue at its Outdoor & Action Sports coalition increased 5 percent to $2.3 billion in the third quarter ended Oct. 3, or 13 percent in currency-neutral (c-n) terms, driven by similar growth rates in both its wholesale and direct-to-consumer businesses.
The North Face
Third quarter currency neutral revenue for The North Face brand rose 6 percent (11.6 percent c-n), driven by balanced growth in its wholesale and direct-to-consumer businesses. By region, The North Face brand’s revenue was up at a low double-digit percentage rate in the Americas, down low-double digit (up low single-digit c-n) in Europe and up mid-teen percentage rate (high-teen c-n) in the Asia-Pacific region.
For the full year, the company’s expectation for low double-digit currency neutral revenue growth for The North Face brand remains unchanged.
Vans
Revenue for the Vans brand in the third quarter was up 2 percent (up 10 percent c-n) including a low-teen percentage rate increase (high-teen c-n) in direct-to-consumer sales and a mid single-digit decline (up mid-single c-n) in wholesale sales.
Revenue in the Americas region was up at a high-single-digit (up low double-digit c-n), up at a low-teen rate in the Asia-Pacific region (up high-teen c-n), and down at a low-teen percentage rate (up at a mid single-digit c-n) in Europe.
In 2015, the company continues to expect a mid-teen currency neutral percentage rate increase in revenue for the Vans brand.
Timberland
Third quarter revenue for the Timberland brand was up 11 percent (21 percent c-n) including mid-teen percentage growth (more than 25 percent c-n) in its wholesale business and mid-single-digit decline (low single-digit increase c-n) in direct-to-consumer sales.
In the Americas region, revenue was up more than 40 percent due to a combination of strong performance and lower third quarter revenue in 2014 due to phasing of orders. This growth should normalize to a full-year high-teen percentage rate increase, placing the Timberland brand’s Americas business in line with expectations.
In Europe, Timberland revenue was down at a high-single-digit percentage rate (up high single-digit c-n) and in the Asia-Pacific region, revenue in the third quarter was down at a low single-digit percentage rate (up low-single c-n).
There is no change in the company’s expectation that Timberland brand global revenue will increase at a low-teen percentage rate on a currency neutral basis in 2015.
Operating income
Third quarter operating income for Outdoor & Action Sports was up 3 percent to $488 million and operating margin declined 60 basis points to 21.2 percent, due to the continued strengthening of the U.S. dollar against most foreign currencies. Excluding the negative impact of foreign currency, operating income was up 16 percent in the quarter.
Full year guidance unchanged
VF Corp. full year guidance for the Outdoor & Action Sports coalition are unchanged. The company still expects revenues to increase at a low double-digit percentage rate in currency-neutral terms, or in the mid-single digits on a reported basis.
“2015 is on track to be another solid year for VF, driven by strong performances in our Outdoor & Action Sports and Jeanswear brands and our International and Direct-to-Consumer platforms,” Wiseman continued. “And while we see some softness in certain areas of our business and have elected to true up our full year outlook, our fundamentals remain solid and we have great confidence in our ability to provide sustainable, long-term returns for our shareholders.”
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VF CORPORATION Supplemental Financial Information Business Segment Information (Unaudited) (In thousands) |
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| % Change | % Change | ||||||||||||||||||||||||
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Three Months Ended September |
% | Currency |
Nine Months Ended September |
% |
Currency | ||||||||||||||||||||
| 2015 | 2014 | Change | Neutral** | 2015 | 2014 | Change | Neutral** | ||||||||||||||||||
| Coalition revenues | |||||||||||||||||||||||||
| Outdoor & Action Sports | $ | 2,296,551 | $ | 2,180,879 | 5% | 13% | $ | 5,299,784 | $ | 5,034,670 | 5% | 13% | |||||||||||||
| Jeanswear | 747,869 | 750,446 | 0% | 4% | |||||||||||||||||||||
