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.
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.