Following today’s release of VF Corp’s figures for the three months ending 29 June 2024; Louise Deglise-Favre, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “FY2024/25 has suffered a difficult start for VF Corp, with sales declining 8.6% to $1.9bn in Q1. While this decline was less severe than the 13.3% drop in Q4 FY2023/24, 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.”
