The Vans brand continues to lift VF Corporation's results. The brand's sales for the three months ended March 31 jumped by 45 percent in dollars and by 39 percent in local currencies, with balanced growth across regions and channels. In reported dollars, Vans' turnover was up by 53 percent from the year-ago quarter in Europe, the Middle East and Africa (EMEA), by 45 percent in the Americas and by 32 percent in Asia-Pacific.
The management credited the brand's commitment to deep consumer connectivity as a chief driver for growth. In the quarter, Vans debuted the Vans Family Loyalty program in the U.S., which allows members to access exclusive designs, experiences and earn and redeem points from purchases. The program garnered one million subscriptions, greatly surpassing VF's expectations.
Vans' wholesale revenues increased by more than 30 percent, while the direct-to-consumer (DTC) retail business rose by nearly 50 percent, including growth of more than 75 percent in digital and over 40 percent in comparable store sales. It was supported by the brand's customization platform, where traffic tripled in the quarter.
Vans' sales of Classic shoes rose by more than 50 percent in the quarter, with strength in the Old Skool and Slip-On styles and particular momentum in checkerboard designs. Progression footwear advanced by 30 percent, with growth from its new signature Pro Skate, the Chima Pro 2, designed and built with Chima Ferguson, a well-known Australian skateboarder. Sales of Vans apparel and accessories grew by 35 percent.
The North Face (TNF) also had a good quarter, with global revenues advancing by 11 percent in dollars and by 7 percent in constant currencies (more on this brand in Sporting Goods Intelligence Europe and The Outdoor Industry Compass).
At Timberland, global revenues declined by 1 percent. DTC increased by 12 percent, including growth of 45 percent in digital, offset by a high single-digit decline in wholesale revenues. The brand's sales decreased by 7 percent in the Americas, but gained 4 percent in Europe and 2 percent in Asia.
Men's apparel performed well at Timberland, with strength in outerwear. In Europe, locally-designed items continued to drive demand, highlighted by the new Berlin Park women's collection. Casual and sport lifestyle footwear models sold well.
The group's total revenues from its Outdoor & Action sports segment, which include these and other brands, went up by 19 percent in dollars and by 13 percent in constant currencies, reaching a level of $2,014 million for the quarter. They generated operating income of $292.3 million, up by 26 percent in dollars and by 20 percent in local currencies from the year-ago period. DTC revenues in the segment rose by 34 percent. Revenues from outside the U.S. advanced by 27 percent, or by 16 percent in constant currencies.
Adding imagewear and jeanswear, the group's total sales for the quarter were up by 22 percent to $3,022 million, or by 17 percent in constant currencies. Ten percentage points of growth came from last year's acquisition Williamson-Dickie, the family-owned workwear company behind the Dickies brand. Organically, sales went up by 12 percent in dollars and by 8 percent in local currencies.
The group's gross margin moved up by 0.2 percentage points to 50.5 percent and its net income jumped by 21 percent to $252.8 million.
The management said that VF is in the midst of a transformation to become a purpose-led, consumer-centric organization. It referred to the first quarter as a transition period, with the new financial year-end starting from now on April 1.
Revenues for the new fiscal year are expected to be in the range of $13,450 million to $13,550 million, reflecting growth of approximately 9 percent to 10 percent globally and of 13 percent to 15 percent outside the U.S. The bottom line is seen rising by between 11 and 13 percent.
The management highlighted the group's recent sales of Nautica and its acquisitions of Altra Footwear, a fast-growing American brand of sports shoes, and Icebreaker, a brand of merino wool apparel from New Zealand. It considers these moves to be catalysts for innovation and growth, especially online and in foreign markets.
It also mentioned the company's recent hiring of Velia Carboni as chief digital officer in order to raise e-commerce capabilities across VF's portfolio.