VFC Weighs In On Supreme, Other Portfolio Brands

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The recently acquired Supreme business is projected to contribute $125 million to VF Corporation’s topline in the fourth quarter and at least $500 million in revenues in FY22.

Responding to an analyst’s question about possible synergies, VF Corp. EVP/CFO Scott Roe said, “…that doesn’t mean that we don’t see the opportunity, but it also is recognizing this is a beautiful, simple machine and we don’t want to mess it up, frankly…They have beautiful fundamentals already and we don’t need synergies to make the deal work economically.”

But VF is apparently keen on taking cues from Supreme elsewhere in its branded portfolio. VFC Chairman, President and CEO Steve Rendle says there will be “more frequent deliveries of new innovations, new color stories and collaborations married with the appropriate amount of marketing to drive that demand.”

Last week, VFC raised its FY21 outlook to $9.1-9.2 billion in revenues, full-year EPS of $1.30 and free cash flow of $650 million.

Among other key VFC developments:

  • Reported FY21 revenue for The North Face is projected to fall less than 10 percent, including greater than 20 percent growth in the fourth quarter. In the third quarter, TNF sales dipped 2 percent that included continued improvement in the Americas and global digital growth of 61 percent. Futurelight has been expanded deeper into the brand’s merchandise assortment.
  • An initial target of 20 percent of overall revenues from digital has been surpassed. Now at 23 percent. Combined with U.S. Wholesale, digital penetration is approximately 30 percent.
  • Timberland revenues dropped 17 percent in the third quarter, but VFC executives were encouraged by the brand’s new Work Summit boot launch that helped contribute to record traffic on the brand’s PRO digital site and see growth opportunities from new TrueCloud and GreenStride initiatives.
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