Annual profit falls 91 percent

The US clothing group VF Corporation had to accept declines in sales and earnings in the 2022/23 financial year. However, the figures presented by the company on Tuesday evening were slightly better than the analysts had feared in advance.

In the fiscal year that ended in March, consolidated sales amounted to 11.6 billion US dollars (10.8 billion euros). It was two percent below the level of 2021/22. Adjusted for exchange rate changes, however, sales grew by three percent.

The North Face shows strength, Vans and Dickies weaken

The outdoor brand The North Face provided a positive highlight, with annual sales increasing by eleven percent (currency-adjusted +17 percent) to USD 3.6 billion. On the other hand, other important corporate labels went down. Vans sales fell 12 percent (-8 percent at constant currency) to $3.7 billion, while Dickies saw sales fall 13 percent (-11 percent at constant currency) to $725.2 million.

Timberland’s revenue fell 2 percent to $1.8 billion, but grew 4 percent on a constant currency basis. The other group brands together came to 1.8 billion US dollars and thus exceeded the previous year’s level by three percent (currency-adjusted +9 percent).

The group sees the first successes in its reform projects

Higher discounts, increased product costs and extensive value adjustments ensured that operating profit slipped by 80 percent to $327.7 million. Adjusted for one-time factors, it fell by 27 percent to $1.1 billion. Reported net income was $118.6 million (€110.0 million), down 91 percent from a year earlier.

For the current 2023/24 financial year, interim CEO Benno Dorer expects positive effects from the reforms that have already been initiated. “I am confident that we have the right plan in place to achieve better operational performance and financial results,” he said in a statement. The efficiency of the supply chain has already been “significantly improved”, and the measures to achieve the “turnaround” at the ailing label Vans have made “progress according to plan”. He also noted the continued strength of The North Face brand and the recent uptick in business in China.

Specifically, for 2023/24, management expects currency-adjusted sales to remain constant or increase slightly. Diluted earnings per share, which were $0.31 last year, are expected to increase to between $2.05 and $2.25.