Following yesterday’s release of the VF Corp’s figures for the three months to 30 March 2024; Louise Deglise-Favre, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “The struggle continues at VF Corp, with group revenue declining 13.3% to $2.4bn in its Q4 FY2023/24, bringing full year revenue to a fall of 10.0% to $10.5bn – the second consecutive year of decline for the American group. While the group has blamed poor wholesale performances in the US and deliberate inventory reductions, its main woes lie in the subsiding appeal of its core brands, as consumers continued to exert caution with their purchases amid macroeconomic challenges. Despite the group not providing exact guidance for the year ahead, it remains hopeful that its Reinvent program will improve its operating performance and help strengthen brand perceptions through cost cutting and tighter inventory control.
“Unsurprisingly, Vans’ sales continued to plummet, falling 26.3% in Q4 and 24.4% for the year, plagued by its lack of desirability among consumers due to a confusing product offering and brand image which is aimed at a younger audience yet has so far failed to modernise its perception as a brand from the 2010s. However, its new marketing strategy, focusing on fewer but more impactful campaigns, seems to have started to bear fruit in Europe, where direct-to-consumer (DTC) sales were positive in Q4. VF is also deliberately reducing Vans’ wholesale presence to gain better control of its stock management, brand image and pricing strategy, however it will most likely take time and drastic strategy changes to steer the ship in a new direction. Once the shining brand of the group, The North Face’s sales declined 5.3% in Q4 and 1.7% for the year – a stark contrast to the enviable growth it has achieved in the last couple of years, as demand is slowing for outdoor sportswear and its high prices may have deterred some financially cautious consumers. VF Corp’s other core brands Timberland and Dickies also saw revenues drop by 13.6% and 15.2% respectively in Q4, leading to full year declines of 12.8% and 14.7%.
“The Americas remained VF Corp’s worst performing region, with constant currency revenue declining 23% in Q4 and 19% for the year, due in part to its heavy reliance on wholesale partners which cut back on their orders amid slowing demand. EMEA dropped 5% in Q4, resulting in a flat performance for the year, dampened by a difficult economic environment, with many consumers still reeling from the impact of high inflation. APAC was VF Corp’s only beacon of light, albeit tame, with sales rising 2% in Q4 and 7% for the year, driven by the growing appetite for sportswear in the region which led The North Face to register an impressive growth of 31% for the year.”
