NEW YORK — Brands such as The North Face, Vans and Napapijri continue to boost VF Corp., with substantial sales in the company's outdoor segment spurring the $6.5 billion apparel giant to another record-setting quarter.
"I hope it's clear that VF is becoming a very different company than it was just a few years ago," Mackey McDonald, chairman and chief executive officer, said during the company conference call. "We've shown that we are disciplined acquirers with the skills and capabilities to identify, integrate and grow new brands, and we've leveraged the economies of scale, technology and operational expertise through our businesses to fuel a steady expansion in our margins."
For the three months ended March 31, Greensboro, N.C.-based VF's earnings vaulted 24.6 percent to $128.2 million, or $1.14 a share, compared with $102.9 million, or 89 cents a share, in the same period a year ago. However, during the fourth quarter of 2005, the company opted for the early adoption of new accounting practices that require including the impact of stock-option expenses on the balance sheet. Results for 2005 were adjusted under the new method, negatively impacting first-quarter results, but subsequently making for an easier comparison in the current quarter. Without the adjustments, earnings still would have gained 12 percent to $128.2 million from $114.7 million, or $1 a share.
Revenues for the quarter rose 5.3 percent to $1.67 billion from $1.58 billion. The outdoor segment led the charge, with revenues rising 35.1 percent to $385.6 million from $285.4 million. The bulk of this growth was attributable to a 40 percent increase in revenues from The North Face. In a nod to the company's new commitment to expand its direct retail operations, Eric Wiseman, president and chief operating officer, pointed out that the company's North Face stores posted same-store sales gains of 19 percent for the quarter. Fall bookings for the brand are already up more than 30 percent Wiseman said.
Vans and Napapijri also posted growth in the midteens, the company said. "Vans enjoyed a robust 42 percent increase in domestic full-price comp-store sales in the quarter," said Wiseman, who added that fall bookings are up 23 percent.
Revenues in the jeanswear division, VF's largest business segment, fell 1.4 percent to $703.8 million from $713.5 million. Domestic jeanswear sales rose "slightly," the company said, driven by the mass market and western specialty business. Reenergizing the Lee business has been a priority, and despite continued declines during the quarter, management said it is seeing signs of a rebound earlier than anticipated."We still have a long way to go to get Lee sales and profitability back to where they should be, but we are certainly encouraged by this progress," McDonald said.
The company is also nearing the conclusion of a yearlong "strategic review" of its jeanswear division, McDonald said. Specifics of any new jeanswear strategies will be shared later this year, although McDonald has acknowledged previously that VF has failed to fully exploit the potential of long-established brands such as Lee and Wrangler by expanding their product offerings.
Another potential threat to the company's denim segment may come from Wal-Mart, which has been stepping up efforts to attract customers to its private label brands. The impact already has been felt by competitors such as Levi Strauss. On April 12, Levi Strauss announced that sales of the company's mass channel Levi Strauss Signature brand fell 20.2 percent to $70.2 million during the first quarter, largely as a result of Wal-Mart taking back space for its own brands.
McDonald said Wal-Mart's efforts have centered not on getting more people into the stores, but getting more people into the apparel section. "They have been successful," he said, which has ultimately benefited VF. "We feel as the consumer gets more interested in apparel and as they compare pricing and compare products, they are choosing our brands, which has been beneficial to us."
The company's intimate apparel segment continued to struggle. Revenues fell 7.7 percent to $210.1 million from $227.7 million.
Sportswear revenues rose 2.1 percent to $163 million from $159.6 million, with the Nautica, John Varvatos and Kipling brands all showing growth. Wiseman said the company is on track for a "limited introduction" of the Nautica women's sportswear line this fall. "The launch should begin to hit the stores in the beginning of August with our national ad campaign kicking off in September.
Imagewear grew 3.4 percent to $194 million from $187.3 million, the segment's eighth consecutive quarter of increasing revenues.
The strong results prompted management to revise its guidance for the year regarding earnings and revenues. The company now anticipates revenues growing between 6 and 7 percent.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)