VF Corp: first quarter affected by exchange rate fluctuations

By

Olivier Guyot

Published
May 5, 2015

For a company that is as international as VF Corp, the sharp rise of the dollar in recent months has inevitably had a significant impact on its revenues. The American giant indeed generated 43% of its sales outside of its home market in its first quarter of 2014.

Positive momentum nonetheless allowed the company’s turnover to grow during the first quarter of 2015 ending in late March. Following the application of exchange rates, it grew by 2% at 2.837 billion dollars (2.620 billion euros). But in local currencies, the company’s overall growth was by 8%. 

Abroad, VF Corp saw its turnover rise by 9% currency neutral, but the strength of the dollar caused it to decline by 5%. Therefore, solid 17% and 16% growth respectively for the Asia-Pacific and the Americas (excluding the US) were limited to 13% and 4% reported. But the impact of the dollar was especially felt in the Europe Middle East Africa region, with an increase of 4% currency neutral and down by 14% reported.

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Globally, after exchange rate conversions, the group saw sales of its Outdoor & Action Sports division rise by 2% to 1.607 billion dollars (1.484 billion euros), with +1% (+7% currency neutral) for The North Face, which makes up 20% of its wholesale sales, +8% (+16% currency neutral) for Vans and stability (+10% currency neutral) for Timberland. 

Jeanswear grew by 1% (+6%), approaching 700 million dollars (646 million euros) thanks to respective 5% and 1% increases for Wrangler and Lee (+9% and +4% currency neutral). 

The very American Imagewear division, which manufactures products for sports teams, was up 7% (+8 % currency neutral) at 283 million (261 million euros). Sportswear, which includes Nautica and Kipling at the fore, grew by 3% to 136 million (126 million euros), while its contemporary brands division (7 For All Mankind, Splendid and Ella Moss) continued to lose ground with -11% (-7% currency neutral) at less than 88 million dollars (81 million euros). The group's other business accounted for nearly 25 million dollars (+8%, 23 million euros). 

During its first quarter, VF Corp saw its operating profit fall by 1% to 398 million dollars (367 million euros). Its net profit fell by 3% to less than 289 million dollars (267 million euros).