Lee and Wrangler continued to boost Jeanswear sales
VF Corporation’s (VFC) jeanswear segment includes the famous Lee and Wrangler brands. The company is second in terms of the worldwide market share for jeanswear, trailing Levi Strauss.
During 2Q16, this segment accounted for about 26% of the company’s total revenue.
The jeanswear segment’s revenue rose by 3% to $629 million in 2Q16, driven by a 2% rise in the sales of the Wrangler brand and an 8% rise in the sales of the Lee brand.
The current quarter marks the seventh consecutive quarter of sales growth for the company’s jeanswear segment. The segment’s operating income rose by 4% to $109 million, while its operating margin rose by 10 basis points to 17.3%.
Performances of Lee and Wrangler in 2Q16
The company’s Lee brand was the star performer of the quarter. The brand’s revenue rose by 10% on a constant currency basis, driven by strong growth in the Americas, Europe, and the Asia-Pacific region.
The Wrangler brand reported a 4% rise in revenue on a constant currency basis. While the American and European businesses reported impressive mid-single-digit sales growth on a currency neutral basis, the Asia-Pacific region reported a high single-digit sales fall.
Jeanswear remains strong in the Americas and Europe
Jeanswear revenue registered mid-single-digit growth in the Americas, driven by a mid-single-digit rise in Wrangler sales and a low double-digit rise in Lee sales. In Europe, the jeanswear segment’s revenue rose in the high single digits based on impressive sales of both Wrangler and Lee. Lee, in particular, performed well during the quarter, driven by positive results across all categories.
VFC and other apparel companies such as Coach (COH), Under Armour (UA), Michael Kors (KORS), and PVH Corporation (PVH) are part of the Consumer Discretionary Select Sector SPDR ETF (XLY). XLY invests 2.1% of its portfolio in these companies.