Vans parent lifts guidance on strong sneaker sales
The US apparel company, which owns and operates a range of bands, including Vans, The North Face, Timberland, Wrangler, Lee and others, revealed that revenue grew 8 per cent in the third quarter of FY19, to $5.45 billion (US$3.9 billion). This caused its share price to leap from $102.29 to $115.15 (US$73.26 to US$82.47) on Friday, an increase of 12.39 per cent
The revenue gain was driven largely by its Vans footwear brand, which saw an increase of 25 per cent in brand revenue, as well as outdoor brand The North Face, which likewise saw a 14 per cent increase.
“VF’s third-quarter results were fuelled by strong growth in our largest brands and balanced growth across the core dimensions of our portfolio,” VF Brands president, chairman and chief executive Steve Rendle said.
Revenue from VF’s ‘active’ segment, which includes brands such as Vans and JanSport, increased 16 per cent, while revenue from its ‘outdoor’ segment, which includes brands such as The North Face and Timberland, increased 11 per cent.
VF reported $826.58 million (US$592 million) in operating income, 22 per cent up on the prior year’s $675.78 million (US$484 million). Net income for the period was $646.46 million (US$463 million), a 613 per cent increase over the $125.66 million (US$90 million) loss posted in the same period last year.
“Based on the strength of our third-quarter performance and the growth trajectory we see for the remainder of fiscal 2019, we are again increasing our full year outlook,” Rendle said.
The group revised its FY19 outlook off the back of these results. It now expects at least $19.25 billion (US$13.8 billion) in revenue, compared to the $19.13 billion (US$13.7 billion) it initially expected for the year. Expectations for international revenue fell from 12 to 13 per cent to 10 to 11 per cent.
The business expects revenue from its ‘work’ segment, which includes brands such as Dickies, is expected to increase 39 percent, while revenue from its ‘active’ segment is expected to increase 16 per cent and revenue from its ‘outdoor’ segment is expected to grow 8 per cent.
VF expects revenue from its ‘jeans’ segment, which includes brands such as Wrangler and Lee, to decline 3 per cent, while direct-to-consumer revenue is expected to increase 13 per cent, and digital revenue is set to increase by more than 30 per cent.
Adjusted earnings per share, which was previously thought to reach $5.10 (US$3.65) per share for the year, is now expected to by $5.21 (US$3.73) per share – an increase of 19 per cent.
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