"We delivered solid top-line results in Q1, ahead of our initial expectations, led by strong consumer engagement with our outdoor, streetwear and active brands amidst a softer consumer environment and inflationary pressures. Importantly, we are maintaining our operating outlook for FY23, a testament to the resiliency of our purpose-built family of brands (…) While uncertainty persists across geographies and marketplaces from ongoing macro-economic headwinds, we are focused on the things that we can control and will continue our strategic investments to ensure long-term, sustainable and profitable growth", commented Steve Rendle, Chairman, President and CEO of VF.

First Quarter Results

In the first quarter of fiscal 2023, VF's revenue increased by 3% (by 7% in constant dollars), reaching 2.3 billion US dollars, on a comparable basis to the same quarter of last year. This growth was driven by increases in the EMEA and Americas regions, partially offset by a decline in the APAC region, mainly due to COVID-19 lockdowns in China.

The North Face reported a revenue increase of 31% (37% in constant dollars) to 481.1 million US dollars and Timberland's revenue amounted to 269.5 US dollars, up by 8% (by 14% in constant dollars). Vans and Dickies did not fare so well, however: Vans' revenue totalled 946.8 million US dollars, down by 7% (by 4% in constant dollars) and Dickies' revenue declined by 15% (by 13% in constant dollars) to 170.4 million US dollars. Other brands' revenue was up by 9% (by 16% in constant dollars), adding up to 393.9 million US dollars, on a comparable basis to the first quarter of fiscal 2022.

In the three months to the 2^nd of July, gross margin decreased by 260 basis points to 53.9%, "primarily driven by mix and higher freight costs partially offset by price increases", and adjusted gross margin declined 260 basis points to 54.1%.

The company reported a net loss of 56 million US dollars in the first quarter of the current fiscal year, as compared to a net income of 324.4 million US dollars in the same period of the prior year.

Earnings per share shrank to 0.14 US dollars on a reported basis from 0.82 US dollars in the first quarter of fiscal 2022. On an adjusted basis, earnings per share decreased by 68% (down by 59% in constant dollars) to 0.09 US dollars.

Fiscal 2023 Outlook

For fiscal 2023, VF is maintaining its currency-adjusted full year outlook, while revising its earnings outlook on a reported dollar basis to reflect ongoing negative impacts from foreign currency fluctuations. Hence, it is now expecting adjusted earnings per share of 3.05 US dollars to  3.15 US dollars, implying a 4% to 7% growth over the prior year on a constant dollar basis. Revenue growth forecast for fiscal 2023 of up at least 7% in constant dollars remains unchanged from the previous outlook

Image Credits: forbes.com