Strong International Markets, D2C Channel Drive VFC’s 3Q17 Top Line

Sonya Bells - Author

Oct. 27 2017, Updated 10:40 a.m. ET

VFC beats 3Q17 consensus top-line expectations

VF Corporation (VFC) posted total sales of $3.5 billion during 3Q17. Sales from continuing operations rose 5.0% YoY (year-over-year) on a reported basis and 4.0% on a currency-neutral basis. The company beat Wall Street’s top-line expectations by $120.0 million.

VFC’s 3Q17 growth was driven by strong performance in its international markets. Revenues from its overseas business increased 13.0% YoY, including a 9.0% rise in China and 18.0% growth in Europe.

VFC’s direct-to-customer (or D2C) channel showed ongoing strength and recorded year-over-year growth of 18.0% during the quarter. Its digital sales were up 38.0%.

“VF’s third quarter results were strong, fueled by accelerated momentum across the company’s international and direct-to-consumer platforms and our Outdoor and Action Sports and Workwear businesses,” said Steve Rendle, VF Corporation’s president and CEO.

You can read about the performance of the company’s key revenue segments in the next section. Investors looking for exposure to VFC can consider the PowerShares High Yield Equity Dividend Achievers Portfolio ETF (PEY), which invests 1.4% of its portfolio in VFC.

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How have VFC’s competitors performed recently?

VF Corporation’s performance is impressive when compared with other apparel and accessory retailers. For instance, fashion giant Ralph Lauren (RL) reported a 13.0% YoY decline in revenues when it reported its quarterly results in August. 

RL’s management attributed most of this decline to its Way Forward plan, under which the company has been strategically reducing shipments in the wholesale channel, exiting brands, and lowering off-price sales.

High-end handbag maker Coach (COH) reported a 2.1% drop in sales during its last reported quarter. However, PVH Corp. (PVH), the owner of Calvin Klein and Tommy Hilfiger, posted a 7.1% YoY jump in its quarterly sales. Like VFC, PVH’s sales growth was driven mainly by strength in the international markets.


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