The US clothing group VF Corporation also suffered in the second quarter of the 2022/23 financial year from the adverse economic conditions and the weakness of its largest brand, Vans. On Wednesday evening, the company reported a drop in sales and a three-digit million loss. In addition, management cut its profit forecast for the full year.
In the months July to September, group sales amounted to 3.08 billion US dollars (3.06 billion euros). Compared to the same quarter of the previous year, revenues fell by four percent. Adjusted for exchange rate changes, they increased by two percent.
The Vans brand has to accept further sales losses
The Vans label made a significant contribution to the drop in sales, with sales slipping by 13 percent (-8 percent after adjusting for currency effects) to 952.1 million US dollars. The Dickies brand also fell well short of the corresponding prior-year level. Their sales shrank by 19 percent (-15 percent at constant currency) to 186.4 million US dollars. Timberland revenue of $524.2 million fell 4 percent, but grew 3 percent on a constant currency basis.
Outdoor outfitter The North Face fared better, with sales up 8 percent (+14 percent at constant currency) to $950.8 million. The group’s smaller brands, which include Supreme, Eastpak and Jansport, together came to $467.1 million, an increase of four percent (+13 percent at constant currency).
The Group had to accept a drop in sales in all market regions. Revenues in the Americas fell 3 percent (-3 percent at constant currency) to $1.75 billion and in the EMEA region, which includes Europe, the Middle East and Africa, they increased by 4 percent (+12 percent at constant currency). $932.4 million and Asia-Pacific up 6 percent (+2 percent at constant currency) to $394.0 million.
Cost increases, discounts and special effects weigh on the result
Increased costs and higher discounts as well as value adjustments in the amount of almost 422 million US dollars burdened the result. The group posted an operating loss of $90.8 million after posting an operating profit of $558.5 million in the same quarter last year. The bottom line was a net loss of 118.4 million US dollars (117.6 million euros). In the second quarter of last year, the company posted a surplus of $464.1 million.
Reported diluted loss per share was $0.31, compared to earnings of $1.18 in the prior year period. Adjusted for special items, earnings per share fell 34 percent to $0.73, in line with market expectations.
The management caps the earnings forecast for the current financial year
In the entire first half of 2022/23, group sales were USD 5.34 billion and fell short of the corresponding prior-year level by one percent (currency-adjusted +4 percent). Reported net loss was $174.4 million. In the first six months of last year, the company had posted a surplus of $788.3 million.
In view of the latest development, management lowered its earnings forecast for the current financial year. It now only expects adjusted earnings per share to be in the range of $2.40 to $2.50, up from $2.60 to $2.70 previously, due to “exchange rate fluctuations, higher inventories and increasing discounting in the market environment”. -dollars.The revenue guidance remained unchanged.The company continues to expect constant currency growth of five to six percent.