Vans, The North Face Go in Opposite Directions for VF Corp.
The North Face, along with VF Corp’s outdoor emerging brands in the aggregate, had the strongest sales growth in the third quarter for VFC at 14 percent. TNF’s 14 percent constant currency sales increase (8% on a reported basis) included double-digit growth across all regions and channels. Fellow VFC brand Vans, meanwhile, continued to struggle, posting an 8 percent constant-currency sales decline for the period ended Sept. 30 on a disappointing Back-To-School season in the Americas and record low store traffic. VFC is vowing to prioritize efforts to drive store traffic in the second half.
Elsewhere for VFC in Q3, Timberland sales, slightly impacted by shipment timing, rose 3 percent. Supreme revenues jumped 7 percent on a good opening to the brand’s fall/winter season and solid trends in Japan. Altra sales rose mid-single digits in the Americas; Smartwool sales increased by low-double digits driven by mid double-digit growth in apparel; and Icebreaker sales climbed mid-single digits in Q3.
Overall, VFC is maintaining its full-year revenue guidance of 5-6 percent thanks to its balance portfolio and a building recovery in China but has also lowered some key metrics due to currency headwinds, higher inventory levels and a more promotional retail environment. The annual adjusted operating margin outlook has been decreased to 11 percent from 12 percent due to higher inefficiencies in the supply chain, store costs for excess inventory and the emerging promotional environment in North America.