Stocks of the Vans and The North Face Owner Surge Following Announcement of Better-than-Expected Revenues
Apparel and footwear company VF Corp.’s stock witnessed a notable rise in after-hours trading due to a swing to profit and revenues surpassing expectations. The corporation, which is the parent company to numerous brands including Vans and The North Face, reported a decrease in revenues for the quarter by 6% at $2.8 billion. However, this figure was higher than analysts surveyed by Yahoo Finance had expected and was also an improvement from the first quarter. VF Corp.’s adjusted earnings per share came in at 60 cents, a few cents lower than the 63 cents of the same period in the previous year.
The company’s stock value increased by more than 16% after markets closed on Monday. When broken down by brand, The North Face’s sales were $1.09 billion, a decrease of 3% from the year before. The Vans brand, which has been on an upward trajectory and recently appointed Sun Choe, former Lululemon chief product officer, as its new global brand president, experienced a decline in sales of 11% to $667.4 million. Meanwhile, Timberland sales dropped 3% to $475.3 million and Dickies was down by 11% to $152.4 million.
Regional revenue performance was weakest in the Americas, which saw sales drop by 10%. Nonetheless, VF Corp. CEO Bracken Darrell said in a statement that the second-quarter results were in line with expectations. Darrell elaborated: “a sequential and broad-based improvement in year-on-year trends.” The executive affirmed that the brand was on track to achieve $300 million in savings by the fiscal year 2025, with its turnaround plan taking effect. VF Corp. also utilized the proceeds from its $1.5 billion deal of selling Supreme to EssilorLuxottica to reduce its debt.
“Our Americas regional platform is fully operational and showing promising signs, while Vans’ performance is improving,” added Darrell. “In summary, we advanced our turnaround plan toward a return to growth and strong, sustainable value creation at VF.” The company outlined a strategic business transformation plan in the previous year, with key strategies focusing on the revitalization of the Vans brand and improving business performance in the U.S.
Projecting its prospects for the third quarter, VF Corp. expects revenues to be between $2.7 billion and $2.75 billion. This represents a decline of between 1% and 3% over the prior year and includes negative impacts from foreign exchange headwinds. However, adjusted operating income is projected to be in the range of $170 million to $200 million.