VF Corporation is making efforts to recover from recent financial setbacks, reporting a significant operating loss for the quarter ending 29 June.
- The company’s revenue declined 9% year-on-year, despite some increases in direct-to-consumer sales.
- A major drop in Vans revenue, alongside declines at Timberland and Dickies, contributed to the overall financial downturn.
- VF Corp announced a strategic move by selling Supreme to EssilorLuxottica, aiming to improve its financial standing.
- CEO Bracken Darrell expressed confidence in achieving cost savings and returning to growth.
VF Corporation has recorded an operating loss of $239.9 million (£188.9 million) for the quarter ending 29 June, a stark increase from the $8.9 million (£7 million) loss during the same period last year. This marks a substantial financial challenge for the company, known for its ownership of brands like Vans, The North Face, and Timberland. The revenue for the second quarter fell to $1.9 billion (£1.5 billion), showing a 9% decline compared to the previous year. While The North Face managed a 6% rise in global direct-to-consumer sales, this success was overshadowed by a severe 21% drop in Vans revenue, compounded by a 10% decline from Timberland and a 15% decrease in Dickies sales. The overall loss before tax widened to $297.5 million (£234.2 million), a significant increase from $62.2 million (£48.9 million) in the same timeframe in 2023.
In an effort to bolster its financial position, VF Corp disclosed its agreement to sell the streetwear brand Supreme to EssilorLuxottica for $1.5 billion (£1.15 billion) in cash, a transaction anticipated to conclude by the end of 2024. VF Corp had originally acquired Supreme in 2020 for $2.1 billion (£1.6 billion) from The Carlyle Group and Goode Partners. This divestiture is part of VF Corp’s strategy to streamline operations and concentrate resources on its core brands. CEO Bracken Darrell noted, “While the business is still down, the rate of decline moderated quarter over quarter versus Q4 and across almost all our brands.” He further mentioned advancements in the company’s transformation plan aimed at achieving targeted cost savings and addressing financial priorities such as strengthening the balance sheet through strategic decisions like the Supreme sale. He expressed confidence with the leadership team’s capabilities to drive a return to growth and sustainable value creation for VF Corp.
VF Corporation is focusing on strategic actions to address its financial challenges and aims for a recovery in growth.
