VF Corp: single-digit growth in third quarter

By

Olivier Guyot

Published
Oct 26, 2015

VF Corp. is still in line with its growth forecast after the third quarter closed at the end of September. The US group, owner of The North Face, Lee and Kipling among others, recorded a 3% rise in its revenues for a value of nearly $3.613 billion. In like-for-like terms, the rise is 8%.

The Outdoor and Action Sports segment continued to be the group's driving engine. Its revenues rose by 5% to $2.296 billion, and by 13% at a constant exchange rate. Its three leading brands thus maintain double-digit growth (in like-for-like terms), with an 11% rise for The North Face, 10% for Vans and a 21% leap for Timberland. The latter also recorded a 40% rise in the Americas region.

VF Corp.'s Jeanswear segment rose by 4% in like-for-like terms, but remained stable within the group at $748 million. The Wrangler brand posted a 3% rise and Lee an 8% rise. Imagewear, which is chiefly located in North America, recorded a 1% rise in like-for-like terms, and its accounts remained stable at $292 million. Sportswear, with Nautica, recorded a 1% decline reaching $162 million, while contemporary brands shrank by 13% in like-for-like terms and by 16% after applying 2015 exchange rates, at a value of $83 million.

The group stated that international sales rose by 9% at constant exchange rates - while they shrank by 5% at 2015 exchange rates - Europe growing by 5% and Asia-Pacific by 12%. Excluding the US, the Americas jumped 19%. Finally, international revenues accounted for no more than 38% of the total, compared to 41% a year earlier.

The group's direct sales segment on the other hand still accounted for 22% of revenues. At a constant exchange rate the growth was 8%, but if 2015 exchange rates are applied, it shrinks to 3%.

The group's operating income for the quarter was nearly $643 million, compared to $633 million a year ago. Net income instead declined by 2%, at just under $460 million.

For the whole of the fiscal year, the group expects to record growth of 7.5% at a constant exchange rate and of 3% at a current exchange rate.