VF Corp.’s plans to reset Vans and the rest of its portfolio bore out in another quarter of red ink for the Denver apparel and footwear company.
VF’s disappointing fiscal fourth quarter was led by a 27 percent drop in Vans revenue to $631.2 million. The Costa Mesa-based footwear company’s performance was the steepest decline within VF’s brand portfolio, with all divisions’ revenue shrinking in the three months through March 30.
Vans is one of VF Corp.’s largest brands and its improvement is key to VF’s overall turnaround, which has seen layoffs and facility closures in a bid to cut costs, leadership changes and a ramp in product innovation.
“While overall financial results have not yet improved, we are deep in execution and we are starting to see very early green shoots,” VF President and CEO Bracken Darrell said of Vans during an earnings call Wednesday.
If there was one bright spot for Vans during the quarter, it was the division’s European direct-to-consumer business.
Fashionable Takes
Executives focused on several of the same themes that have been discussed on previous earnings calls for Vans: the rise of new styles such as the Knu Skool (now the company’s No. 2 shoe) and cleaning up distribution.
Darrell referred to the former as part of Vans “icon management strategy,” aimed at diversifying revenue beyond the Classic styles that have continued to see pressure as consumer tastes shift.
“I think it shows that we can launch a new style and turn it into a strong franchise almost out of the gate,” the CEO said of the Knu Skool.
The company’s Ave 2.0 skate show, developed for skaters, is another new style Darrell said has so far done well.
Much of the focus for Vans more recently has been on its OTW line of fashion-forward styles.
The line made its debut last June at Paris Fashion Week Men’s. That was followed up in February through Vans’ collaboration with Sterling Ruby during the Freize Los Angeles contemporary art festival. Last week the brand hosted an event in Shanghai’s Bund district.
Ultimately, Darrell told analysts the market reset for Vans is now “largely done.”
“I feel like we’re either at the bottom or super close,” he said.
‘Multiple Directions’
Even with Wednesday’s rosy remarks, VF’s revenue overall fell 13 percent to $2.4 billion. Its net loss increased to $406.6 million, compared to a net loss of $216 million in the year-earlier period.
The company’s Dickies brand was down 15 percent to $162.4 million; Timberland declined 14 percent to $341.5 million; The North Face fell 5 percent to $814.3 million; and the division with the rest of the company’s brands, which includes Supreme, slipped 2 percent to $424.4 million.
Supreme, which the company rarely offers details on and does not break out its revenue results, was up in the low-double digits for sales.
The skate-streetwear brand’s performance in Korea was called out, in addition to its opening of a store in Shanghai towards the end of the March quarter.
It’s uncertain what brands, if any, may possibly go on the sales block as part of a portfolio-wide strategic review that began this year.
The company confirmed the review is now complete, but the conclusion and whether or when any action will be taken remains unclear, with Darrell saying there are “multiple directions to go.”
Be First to Comment