The North Face store in Brooklyn.

VF Corp. is moving from the now to the next. 

The fashion giant, home to The North Face, Vans, Timberland and Dickies, has framed its approach to the earliest days of the pandemic as an effort to deal with the “now” of the crisis by fortifying its business and the “next” of accelerating out of the pandemic stronger. 

Steve Rendle, chairman, president and chief executive officer, said the company is entering the “next” phase and is ready to make the most of its advantages, which include a fortress balance sheet with $2.7 billion in cash and short-term investments and the ability to do some big-time dealmaking with the right brand. (VF had the financial wherewithal to raise its quarterly dividend 2 percent to 49 cents a share.)

Already, VF returned to profitability in the second quarter, boosted its dividend and — in a big step back toward “normal” — determined its crystal ball has cleared enough to offer some guidance for the future.  

“Our stores are open, that’s a big deal,” Rendle told WWD in an interview going over second-quarter results Friday. “Our wholesale partners are open. Our supply chain is working as well. We really do find ourselves in a more-solid position, a more stable position.”  

That doesn’t mean all is well in the world, but it does suggest that Team VF and its partners all have a good enough handle on how to work in today’s world that they can push on even with the uncertainty of the pandemic and whatever restrictions it is likely to bring.

Scott Roe, executive vice president and chief financial officer — who was responsible for the “now” part of the equation while Rendle prepared for the “next” at VF — noted how quickly things have changed over the past three months. 

“Ninety days ago, we still didn’t have our stores open,” Roe said, adding that only Los Angeles county stores were closed at the end of the second quarter ended Sept. 26 and that they are now open, too. 

And he said the supply chain, while changed, is working and that the company has figured out how to keep it humming — or at least in motion — even with the coronavirus. The same goes for stores. 

All of that has helped the company become more comfortable with the future. 

In its quarterly update, VF said assuming “no material deterioration to the company’s current business operations as a result of COVID-19, governmental actions and regulations” its revenues this fiscal year would tally at least $9 billion this fiscal year. That would be a 14 percent drop, on an adjusted basis, with a return to growth in the fourth quarter (suggesting continued sales declines during the holiday selling season). Adjusted earnings per share would be at least $1.20, down about 55 percent from a year earlier. 

Not a banner year for sure, but even the projection still marks an accomplishment in a time when sheer survival counts as success.

To get there, the company is still wading through an extremely tough market, but is back making money again after first-quarter losses. 

VF’s second-quarter net earnings fell to $256.7 million, or 66 cents a share, from $649 million, or $1.63, a year earlier. 

Revenues for the three months decreased 18 percent to $2.6 billion from $3.2 billion. By brand, the results were mixed, with The North Face sales down 25 percent, Timberland off 24 percent, Vans down 10 percent and Dickies running countertrend and gaining 19 percent.

Rendle pinned the success at Dickies on the nature of the brand, which is rooted in workwear, but has also broader consumer appeal. 

“Here in the U.S., it’s doing extremely well in those core work segments,” he said. But it’s also connecting with the creative community, engaged in making things and interested in tapping into the brand’s heritage. Rendle described it as similar to The North Face, which is both a brand for mountaineering and just being outdoors.

It’s a trick that could work with any number of brands — if handled right — and VF is always on the lookout for its next deal.

And with the stresses of the pandemic, the deal market could be starting to heat up. 

“We’re really strategically guided here, so we’re not looking for a bargain,” Roe said. “But if there’s something strategically appropriate and it fits all our boxes and it is a valuation that makes sense…that’s more likely today.”

More from WWD:

WWD List: Fashion’s Pricing Powerlessness

Levi Strauss Returns to Profitability

Fashion’s Forced Labor Test in Xinjiang

WATCH: What Makes a Fashion Brand Successful? 

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