Net loss significantly widened at VF Corp to $258.9m versus $57.4m and operating losses increased to $239m from $8.99m for the three months ending June (Q1).
The dent is believed to have come from impairment of goodwill and intangible assets charges.
Still, an upbeat Darrell said after his first year at VF, he feels “more energised than ever.”
"While the business is still down, the rate of decline moderated quarter-over-quarter versus Q4 and across almost all our brands. We advanced further on the Reinvent transformation plan. We are on track to deliver our targeted cost savings and we have addressed one of our top financial priorities to strengthen the balance sheet with the announced sale of Supreme. Together with the first-class leadership team I have built, we are confident we will continue to make progress to return to growth and drive strong, sustainable value creation at VF."
Louise Deglise-Favre, apparel analyst at GlobalData, noted the decline was “less severe” than the 13.3% drop in Q4 FY2023/24, but adds the group clearly has not yet solved the desirability issues faced by some of its core brands.
“The group has stated that it is making progress on its Reinvent strategic plan and is on track to deliver its targeted cost savings and improve its balance sheet, helped by the sale of Supreme which should be complete by the end of 2024. This will bring some much-needed liquidity to VF Corp, which should be used to boost demand for its core brands through marketing and rejuvenated designs.
“Vans remains the thorn in VF Corp’s side, with sales declining 21.1% in Q1, as demand for the brand continues to be at a standstill due to changing trainer trends towards more sporty, comfortable styles and Vans’ unclear positioning among demographics, with it struggling to retain relevance amongst Millennials while also failing to inspire Gen Z. However, Vans’ renewed marketing efforts in Europe seem to be paying off as the brand only registered a 3% decline in EMEA. The North Face’s sales continued to decline for the third consecutive quarter, down 2.6%, after a couple of years of tremendous growth, as the streetwear and outdoor markets continue to slow down in the Americas and Europe. VF Corp’s other core brands, Timberland and Dickies, also saw their sales fall by 9.6% and 14.5% respectively.
“VF Corp’s home region of the Americas continued to drag down sales the most, with constant currency revenue falling 12%, as lasting macroeconomic woes and the tense political climate in the US dampened consumer confidence and led shoppers to remain cautious with their spending. EMEA’s sales declined 5%, as consumers continue to recover from the impact of continuous high inflation. APAC continued to be VF Corp’s outperforming region with sales rising 2%, as strong demand persisted for streetwear and outdoor sportswear led the North Face to grow 35% in the region.”
