VF Corporation’s first quarter revenue of 2.3 billion dollars, was up 3 percent or 7 percent in constant dollars with big four brands up 2 percent or 6 percent in constant dollars and the balance of the portfolio up 9 percent or 16 percent in constant dollars.
VF is maintaining its currency adjusted FY23 outlook while revising its earnings outlook on a reported dollar basis to reflect ongoing negative impacts from foreign currency fluctuations.
Commenting on the first quarter trading, Steve Rendle, chairman, president and CEO of VF said: “We delivered solid top-line results in Q1, ahead of our initial expectations, led by strong consumer engagement with our outdoor, streetwear and active brands amidst a softer consumer environment and inflationary pressures. Importantly, we are maintaining our operating outlook for FY23, a testament to the resiliency of our purpose-built family of brands.”
VF’s Q1 earnings decline
The company said that The North Face revenue of 0.5 billion dollars, was up 31 percent or 37 percent in constant dollars and Vans revenue of 0.9 billion dollars, was down 7 percent or down 4 percent in constant dollars.
Gross margin for the quarter of 53.9 percent, was down 260 basis points; while adjusted gross margin of 54.1 percent, was down 260 basis points. Operating margin of 2.8 percent, declined 640 basis points; and adjusted operating margin of 3.4 percent, dropped 340 basis points.
The company added that loss per share was 14 cents, down 137 percent; while adjusted EPS of 9 cents, declined 68 percent.
VF adjusts FY23 financial outlook
The company now expects adjusted EPS of 3.05 dollars to 3.15 dollars, implying 4 percent to 7 percent growth versus the prior year on a constant dollar basis.
Total VF revenue is expected to be up at least 7 percent in constant dollars, unchanged from the previous outlook, adjusted gross margin to be up slightly versus previous outlook of up approximately 50 basis points, and adjusted operating margin approximately 13.2 percent versus previous outlook of approximately 13.6 percent.
VF’s board of directors has declared a quarterly dividend of 50 cents per share, payable on September 20, 2022, to shareholders of record on September 12, 2022.