VF Corporation’s Lee and Wrangler Struggle from Weak Wholesale


May. 3 2017, Updated 9:06 a.m. ET

Evaluating the performances of VFC’s segments

In this part of the series, we’ll look at the performances of VF Corporation’s (VFC) Jeanswear, Imagewear, and Sportswear segments during the first quarter of 2017. The company competes closely with Gap (GPS), PVH (PVH), and Ralph Lauren (RL) in several of its product categories.

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Jeanswear witnesses a sluggish first quarter

VFC’s Jeanswear segment, which includes the famous Lee and Wrangler brands, recorded a 9.0% YoY (year-over-year) fall in 1Q17 sales, which stood at $647.0 million for the quarter. On a currency-neutral basis, sales fell 8.0%. It was the third consecutive fall in quarterly sales for this segment.

Wrangler’s global revenue fell 9.0% as low double-digit growth in the direct-to-customer channel was offset by a low double-digit fall in wholesale sales.

Revenue fell in the low single digits in Europe and Asia. It fell in the low-teen rate in the United States, offsetting a high-teen growth in the non-US business.

Sales for Lee fell 6.0% YoY as the high single-digit fall in wholesale sales washed away the gains from the mid-teen growth in the direct-to-customer business.

VFC sells its licensing business for $225 million

Revenue for VFC’s Imagewear segment fell 5.0% YoY to $135.0 million. The company sold its licensing business, which was earlier included in the Imagewear coalition, for $225.0 million in early April 2017. The company also exited the licensing business of Jansport. These businesses were thus classified as discontinued operations during the quarter.

The Sportswear segment continued to fall due to the difficult scenario for US department stores. Sales fell 17.0% to $98.0 million.

If you want exposure to VFC, you could consider the VanEck Vectors Morningstar Wide Moat ETF (MOAT), which invests 2.0% of its portfolio in VFC.

In the next part, we’ll look at VFC’s bottom-line performance in 1Q17.


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