VF Corporation, owner of brands like Vans and The North Face, reported a significant operating loss in Q2.
- Revenue for VF Corp in the second quarter was $1.9bn, a decline of 9% from the previous year.
- The North Face sales saw a modest dip of 3%, while direct-to-consumer sales improved by 6%.
- Vans experienced a sharp revenue decline of 21%, and Timberland sales decreased by 10%.
- Despite current challenges, VF Corp aims to achieve cost savings and return to growth.
VF Corporation reported an operating loss of $239.9 million (£188.9 million) for the quarter ending June 29. This marks a substantial increase from the $8.9 million (£7 million) loss recorded in the same period last year. The company’s revenue for the second quarter stood at $1.9 billion (£1.5 billion), reflecting a year-on-year decline of 9%.
The North Face, one of VF Corp’s prominent brands, experienced a 3% decrease in sales. However, there was a positive development in the brand’s global direct-to-consumer sales, which rose by 6%. This growth was overshadowed by a significant 21% decline in revenue for Vans, another key brand under the corporation. Additionally, Timberland witnessed a 10% decrease in sales, while Dickies saw a 15% drop.
In response to the financial challenges, VF Corp has entered into an agreement to sell Supreme, a streetwear brand it acquired in 2020, to EssilorLuxottica. The deal, valued at $1.5 billion (£1.15 billion) in cash, is expected to be finalised by the end of 2024. This sale is part of VF Corp’s strategy to strengthen its balance sheet and focus on cost-saving initiatives.
Bracken Darrell, the President and CEO of VF Corporation, stated: “While the business is still down, the rate of decline moderated quarter over quarter versus Q4 and across almost all our brands. We advanced further on the reinvent transformation plan.” He expressed confidence in achieving targeted cost savings and returning to growth, thereby driving sustainable value creation.
The company’s strategic restructuring, including the Supreme sale, aims to address the financial difficulties it is facing. With a focus on optimising operations and resource allocation, VF Corp is determined to create long-term value and emerge stronger as market conditions improve.
VF Corp is committed to overcoming current financial setbacks by leveraging strategic initiatives and leadership to return to growth.
