VFC: Wrangler Sales Improve, Lee Sales Slide


Oct. 30 2017, Updated 6:32 a.m. ET

Wrangler sales improve while Lee struggles

Let’s look at the performance of VF Corporation’s (VFC) Jeanswear and Imagewear businesses during 3Q17. VFC’s Jeanswear segment, which includes the Lee and Wrangler brands, recorded a 0.5% YoY (year-over-year) decline in 3Q17 sales.

Wrangler’s global revenues increased 4.0% during the quarter, supported by growth in the high teens in its D2C (Direct-to-Customer) business and mid-single-digit growth in wholesale revenues.

Geography-wise, there was a 6.0% increase in its Americas sales, a 2.0% decline in its Europe sales, and a 10.0% decline in its Asia sales.

Lee’s sales continued to decline and fell 8.0% YoY during the quarter. The 15.0% growth in D2C revenues was more than offset by a low double-digit decline in wholesale sales.

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Lee’s sales in America struggled as the ongoing channel headwinds and consolidations pushed that metric down 14.0% during the quarter. Lee’s Europe business, however, improved 7.0%, driven by 20.0% growth in D2C and a mid-single-digit rate increase in its wholesale business. Like other VFC brands, Lee’s digital sales were robust and accelerated ~40.0% during the quarter.

Imagewear and Workwear businesses show strength

Lee’s Imagewear revenues rose 8.0% during 3Q17. The core business, excluding its LSG (Licensed Sports Group) jersey sales, grew 4.0%.

Lee’s Workwear business grew 11.0%. This segment includes the company’s image business, Timberland Pro, and Wrangler RIGGS footwear revenues.

Investors looking for diversified exposure to VFC can consider the Morningstar Wide Moat ETF (MOAT), which invests 2.9% of its portfolio in VFC.

Move on to the next article to read about Lee’s bottom-line performance in 3Q17.


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