VF Corp. can still skate with scuffed vans

The slowing growth of the youth-focused Vans brand of VF Corp. raises concerns. Although less exciting, investors need to be assured that the business has its adult business down.

During the quarter ended April 3, sales of the brands of VF Corp. rose 19% from a year earlier after eliminating currency fluctuations, a figure slightly higher than analysts polled by Visible Alpha had expected. For its full year, sales from continuing operations decreased 14% in constant dollars. This is worse than the 7% drop in revenue that industry leader Nike saw, but far better than the 29% drop at Ralph Lauren in their comparable periods.

Its three biggest brands – Vans, The North Face and Timberland – recorded better-than-expected sales, largely due to strong demand in Asia. In particular, The North Face’s sales in the Asia-Pacific region nearly doubled at constant exchange rates in the last quarter.

Another bright spot was the stronger-than-expected performance of Supreme, VF Corp’s latest acquisition. In the first quarter in which VF Corp. integrated the brand’s results, it generated $ 142 million in revenue, higher than the $ 125 million expected by analysts. The company also said Supreme is expected to generate $ 600 million in revenue this fiscal year, up nearly 20% year-over-year.

Yet VF Corp. stock prices slipped 8% after its results were announced on Friday morning, and are now down about a fifth from pre-pandemic levels.


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