Vans parent VF Corporation turned in profit after two consecutive quarterly losses and beat Q2 sales estimates on Monday after results. VF Corp earnings was high as it benefiting from sequential improvement in its direct-to-consumer business and leaner inventory. This sent VF Corp shares up about 23% after the bell.
CEO Bracken Darrell of VF Corp’s turnaround strategy including appointment of executives like Sun Choe as global brand president for Vans, sale of its streetwear brand Supreme has started to show stronger growth in China followed by Americas and EMEA.
VF Corp profit
VF Corp is a global apparel, footwear, and accessories retailer. The company owns renowned brands such as Vans, North Face, and Timberland. Investors seem impressed by the surprise profit in Q2 after two consecutive quarters of losses. The company sold its Supreme brand on October 1 and paid down $1 billion of its term loan, due December 2024.
VF Corp earnings result
VF Corp’s quarterly revenue rose 9% in China, on a constant currency basis, compared with a 4% increase in the year ago period. The revenue of VF Corp fell 6% to $2.76 billion from a year ago, beating analysts’ estimates of $2.71 billion, according to data compiled by LSEG.
The company’s margins continued to improve due to inventory clearance initiatives implemented in the previous quarters, even in the face of rising business reinvestment.
VF Corp’s quarterly gross margin expanded 120 basis points to 52.2%.
On an adjusted basis, VF Corp posted a profit of 60 cents per share, compared with analysts’ estimates of 37 cents per share.
VF Corp wholesale rise
Peers Deckers Outdoor, Gap and Abercrombie & Fitchalso saw a boost in demand for their trendier apparel and footwear.
Analysts from Guggenheim Securities noted earlier this month that VF Corp could see sequential improvement in wholesale throughout FY25, as retailers are expected to increase orders for both The North Face and Vans during the Spring season.
Stock update
VF Corp stock rose to a price of 17.03 by 23% on Monday’s after-hours trading yesterday after the company reported a solid Q2 FY25. Wall Street closed higher on Monday ahead of a packed week of earnings from mega cap companies and the final stretch before the November 5th presidential election.
