Companies

VF Corp posts a weak first quarter

Aug 4, 2023 United States

The US-based footwear company posted an 8% decline in revenue in the first quarter of fiscal 2024, as compared to the same period of last year. Vans continues to struggle

“While our Q1 performance is not reflective of our standards, we achieved our earnings target in the quarter. We remain focused on improving our operational execution, although it will take time for our revenue performance to benefit from actions that are underway. We are well positioned to advance our key priorities this year with an emphasis on increasing operating earnings through improved gross margins, generating healthy cash flow and reducing debt, all of which lead to a strengthened financial position”, commented Matt Puckett, CFO of VF Corp.

First Quarter Results

In the first quarter of fiscal 2024, which ended on the 30^thof June, the company's revenue amounted to 2.1 billion US dollars, down by 8% on a comparable basis to the same period of the previous year; it added that the revenue of its big four brands also declined year-over-year by 11%.

Particularly, in this first quarter, Vans posted a 22% decrease in revenue to 737.5 million US dollars, Dickies saw its revenue decrease by 20%, totalling 136.6 million US dollars, and Timberland's revenue was down by 6% to 253.8 million US dollars, as compared to the same quarter of fiscal 2023. Therefore, out of the main four brands, only The North Face's revenue rose by 12% year-over-year, reaching 538.2 million US dollars.

Concerning regions, at the end of June, the company's revenue amounted to 1.18 billion US dollars in the Americas region, down by 15%, and 584.3 million US dollars in the EMEA region, on a comparable basis to the same period of last year. The APAC region, however, recorded a revenue increase of 13% in this period to 318.2 million US dollars, as compared to the first quarter of financial 2023.

In the first three months of the current fiscal year, VF's gross margin contracted by 110 basis points to 52.8%, on a comparable basis to a similar period of the prior year, with the adjusted gross margin also standing at 52.8%, down by 130 basis points from the first quarter of last year.

The footwear group also posted a loss per share of 0.15 US dollars in the first quarter of fiscal 2024, down by 2% from the same period of the previous year, and an adjusted loss per share of 0.15 US dollars, as compared to adjusted earnings per share of 0.09 US dollars in the first quarter of fiscal 2023.

Full Year 2024 Outlook

VF Corp is still expecting full year earnings per share in the range of 2.05 US dollars to 2.25 US dollars, while revenue is anticipated "to be modestly down to flat for the year, reflecting ongoing weakness in our wholesale business and a longer than anticipated turnaround for Vans”.

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United States Companies Footwear Quarter Results Results Vans VF Corp