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VF Corporation Misses Top-Line Expectations Again in 1Q17

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VFC’s top line misses expectations again

VF Corporation’s (VFC) total revenue from continuing operations fell 2.0% YoY (year-over-year) to $2.6 billion in 1Q17. Currency headwinds continued to negatively impact the business. Excluding the currency impact, sales fell just 1.0%.

The key drivers for VFC’s top line were its direct-to-customer channel, which rose 7.0% YoY, and its international business, which rose 5.0% YoY. The North American market as well as wholesale channel sales delivered muted performances during the quarter.

Its Outdoor & Action Sports segment delivered stronger-than-expected results. In the next part of this series, we’ll look at the performances of the company’s key revenue segments.

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Steve Rendle, VFC’s president and chief executive officer, said, “VF’s first quarter results were right in line with our expectations. The company’s largest brands and international and direct-to-consumer platforms performed well, delivering solid results against a retail backdrop that continues to experience significant dislocation.”

The company missed Wall Street’s top-line estimate by $140.0 million. It was VFC’s fourth consecutive top-line miss.

If you’re looking for exposure to VFC, you could consider the VanEck Vectors Morningstar Wide Moat ETF (MOAT), which invests 2.6% of its portfolio in VFC.

Competitor performances in recent quarters

Competitors PVH (PVH) and Ralph Lauren (RL) also reported recent falls in their quarterly top lines. Sales for PVH fell 0.20% YoY to $2.1 billion as the company continued to face currency headwinds and weakness in North American sales.

Ralph Lauren’s sales fell 12.0% YoY to $1.7 billion. It was the company’s seventh consecutive fall in quarterly sales. Wholesale revenues remained sluggish and were 26.0% lower than the same quarter last year. However, unlike VFC, both these companies came in ahead of Wall Street expectations.

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