Vans and Supreme Power VF Corp. Gains in Quarter
VF Corp. is charging back from the first rush of the pandemic — with its fiscal first quarter sales and profits as well as its annual outlook all rising — but now it’s working through “isolated product delays” given an increasingly tangled global supply chain.
The parent to Vans, The North Face, Timberland and Supreme said the majority of its supply chain is currently operational, but pointed to some disruptions. “Suppliers are complying with local public health advisories and governmental restrictions which has resulted in isolated product delays,” the company said. “The resurgence of COVID-19 lockdowns in key sourcing countries has resulted in additional manufacturing capacity constraints during the first quarter. Additionally, port delays, equipment availability and other logistics challenges have contributed to product delays. VF is working with its suppliers to minimize disruption and is employing expedited freight as needed.”
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Any costs from the supply chain troubles are being outweighed by the consumer resurgence that began in the U.S. and Europe — although shoppers now face the prospect of continued COVID-19 worries even with higher vaccination rates.
VF’s net income for the quarter ended July 3 totaled $324.2 million, or 82 cents a share, reversing year-ago losses of $285.6 million, or 73 cents. Adjusted earnings per share from continuing operations rose to 27 cents — well ahead of the 10 cents analysts were looking for on average.
Revenues doubled to $2.2 billion from $1.1 billion.
Vans led the way with sales growth of 110 percent while The North Face was up 93 percent, Timberland gained 70 percent and Dickies rose 61 percent.
VF’s quarterly results also broke out the contribution of Supreme, which the company bought for $2.1 billion-plus in December.
Supreme’s contribution to VF’s total results for the quarter included $145.7 million in sales, $88.8 million in gross profit, operating income of $31.7 million and 7 cents a diluted share.
“Our teams delivered an outstanding first quarter, powering VF back to pre-pandemic revenue levels while driving an earnings recovery ahead of our expectations,” said Steve Rendle, VF’s chairman, president and chief executive officer. “We continue to see broad-based momentum across the portfolio, supporting an increase to our fiscal 2022 outlook for each of our largest brands. Though the first quarter is a relatively small portion of our total year, this strong start reinforces my confidence in our ability to accelerate growth through fiscal 2022 and beyond.”
VF boosted its outlook for the year and is now expecting revenues of at least $12 billion, including $600 million from Supreme and reflecting growth of 30 percent. Previously, the company anticipated revenue growth of 28 percent, to $11.8 billion.
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