VF Corp. may have posted a 9.9 percent decline in first-quarter profits, but its top 5 brands showed gains for the period.
For the quarter ended March 31, net income was $260.3 million, or 61 cents a diluted share, compared with net income of $288.7 million, or 67 cents, a year ago. Total revenues were flat at $2.84 billion. That included net sales at $2.81 billion for the quarter, up slightly from $2.80 billion a year ago. The balance of revenues was from royalty income.
On a currency neutral basis, The North Face posted an 8 percent gain in revenues. Vans gained 2 percent, while Timberland rose 3 percent. In jeanswear, Wrangler saw revenues rose 4 percent, while the Lee brand also saw a sales gain of 4 percent.
By category, the outdoor and action sports coalition reported sales of $1.64 billion, followed by jeanswear at $711 million. Imagewear was $269 million, with sportswear at $118 million and contemporary brands hitting $74 million.
Eric Wiseman, VF chairman and chief executive officer said in a conference call to Wall Street analysts, “In the first quarter, we delivered results right in line with expectations and, yes, our first-quarter performance puts us right on track to our goals for 2016.”
He said the real strength in the quarter was from VF’s direct-to-consumer business, which was up 8 percent and included a low-single-digit comp. “What this tells us is that our brands and products are resonating strongly with consumers who are happy to show their approval by buying,” Wiseman said.
The company didn’t change its outlook provided in February when it reports fourth-quarter results. It still expects revenues to rise at a midsingle-digit percentage rate, gross margin to improve by 50 basis points to 48.8 percent, operating margin to reach 14.4 percent and earnings per share to rise 11 percent, compared with adjusted EPS of $3.08 in 2015.
The stock was trading down 1 percent at $61.85 in early trading.