VF Corp meets revenue expectations in Q2, adjusts year outlook
VF Corporation reported its second quarter 2016 financial results on Friday, which was in line with expectations for the quarter according to VF Chairman and CEO Eric Wiseman.
Revenue increased 1% to $2.4 billion driven by a 2% increase in revenue for the Outdoor & Action Sports category, and 3% increases for both Jeanswear and Imagewear. The Outdoor & Action Sports category reached $1.4 billion; Jeanswear hit $629 million and Imagewear increased to $255 million.
North Face, Vans, Wrangler and Lee Jeans revenues performed well increasing 2%, 4%, 2% and 8%, respectively, but Timberland revenue decreased 7%. The Sportswear category also declined 19% to $115 million including a 20% decrease in Nautica revenue, despite the brand’s recent relaunch.
The poor performing category and brands were offset by the company’s better performing International and Direct-to-Consumer sectors, which increased in revenue by 5% and 6%, respectively.
VF Corp also took a $97 million net loss from the discontinued operations of its Contemporary Brands businesses. On June 30, 2016, the company agreed to sell its 7 For All Mankind, Splendid and Ella Moss brands to Delta Galil for $120 million. The company expects the sale to be completed in the third quarter of 2016.
Eric Wiseman, VF Chairman and Chief Executive Officer, said, “Earlier this year, we said we would actively manage our portfolio of brands and we’re doing just that. We expect to deliver on our current 2016 outlook and, as a result of the actions we are taking, be even better positioned to provide the strong long-term returns our shareholders have come to expect.”
For 2016, VF Corp expects its revenue to increase 3 to 4 percent versus the previous outlook of a mid-single-digit percentage rate increase. The company expects its Outdoor & Action Sports, Jeanswear and Imagewear categories to increase in revenue over the year and for the Sportswear coalition revenue to decline.
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