The gross margin of the company was 52.2 per cent, up 120 basis points last year and operating margin was 9.9 per cent, down 210 basis points in comparison to last year and adjusted operating margin was down 60 basis points in comparison to last year’s 11.4 per cent.
VF Corporation reported Q2 FY25 revenue of $2.8 billion, down 6 per cent YoY.
Gross margin improved to 52.2 per cent, while EPS rose to $0.52 from a loss last year.
Key brands faced declines, except APAC, which grew 6 per cent.
CEO Bracken Darrell cited progress on cost savings and a promising Americas platform as part of the turnaround.
The earnings (loss) per share (EPS) was $0.52 vs Q2FY24 $(1.16); adjusted EPS $0.60 vs Q2FY24 $0.63. The DTC (direct-to-consumer) channel revenue for Q2 FY25 was $914.9 million in 2024, an 8 per cent decline from $997.5 million in the same period last year. For wholesale segment the revenue was $1,843.0 million in Q2 2024, down by 4 per cent (constant currency down 5 per cent) from $1,922.7 million in 2023, VF Corporation said in a press release.
The inventories of the company were down by 13 per cent relative to the prior fiscal. Net debt in this quarter stood at $5.7 billion, down by approximately $446 million relative to last fiscal. The North Face brand of the company earned a revenue of $1,091.4 million in Q2 FY25, witnessing a decrease of 3 per cent (constant currency decline of 4 per cent) from $1,128.8 million in 2023.
Vans in the Q2 FY25 generated a revenue of $667.4 million in 2024, an 11 per cent decrease from $748.8 million in 2023. Meanwhile Timberland earned $475.3 million in the same quarter, down 3 per cent from $488.6 million in Q2 FY24. Dickies’ revenue was $152.4 million in Q2 FY25, down by 11 per cent from $171.4 million in Q2 FY24.
Performance in H1 ended September
In terms of channel revenue, the DTC (direct-to-consumer) revenue for six months (H1) was $1,655.9 million in 2024, an 11 per cent decrease from $1,852.8 million in 2023 and for wholesale the revenue reached $2,871.1 million in 2024, a decrease of 5 per cent (constant currency down 6 per cent) from $3,035.4 million in 2023. The total revenue of the company across all channels saw a 6 per cent drop for the three months and a 7 per cent decline for the six months ending September 2024.
North Face’s H1 revenue was $1,615.6 million in 2024, down 3 per cent from $1,667.0 million in 2023. Vans earned $1,249.3 million in H1 period in 2024, a 16 per cent drop from $1,486.3 million in the six months period in 2023. Timberland’s H1 revenue was $704.8 million in 2024, a decrease of 5 per cent from $742.5 million in H1 2023, and Dickies’ revenue was $269.2 million in H1 in 2024, a decrease of 13 per cent (constant currency down 12 per cent) from $308.1 million in 2023.
Region-wise performance
For Americas revenue for Q2 FY25 was $1,355.9 million, a decrease of 10 per cent (constant currency down 9 per cent) from $1,506.1 million in FY24 and in H1 period it was $2,331.6 million in 2024, an 11 per cent decline from $2,624.9 million last fiscal.
For Europe, Middle East, and Africa (EMEA) revenue was $1,009.6 million in Q2 FY25, down by 3 per cent (constant currency down 5 per cent) from $1,042.8 million than a year prior and for six months in the same period the revenue was $1,541.9 million in 2024, a 4 per cent drop (constant currency down 5 per cent) from $1,607.1 million in FY24.
In the Asia-Pacific (APAC) region, the revenue for the company stood at $392.5 million in the Q2 FY25, showing an increase of 6 per cent (constant currency up 5 per cent) from $371.3 million in the previous fiscal, and in the six months it was $653.6 million in 2024, relatively stable from $656.3 million in 2023.
The overall international revenue of the company saw a slight decrease of 2 per cent in the three months ending September 2024, totalling $1,572.5 million, and a 4 per cent decrease for the H1, amounting to $2,482.2 million.
Outlook
For Q3 FY25, VF Corporation expects revenue in the range of $2.7 billion to $2.75 billion, down 1 per cent to down 3 per cent year-over-year in reported dollars, inclusive of an expected negative FX impact of approximately 100 basis points. The adjusted operating income is predicted in the range of $170 million to $200 million (Q3 FY24: $218 million).
Bracken Darrell, president and CEO, said: “Our results in the quarter met our expectations and reflect a sequential and broad-based improvement in year-on-year (YoY) trends. At the same time, we made further progress on our four reinvent priorities and we are on track to reach our previously announced $300 million savings target by the end of FY25. Following the completion of the supreme divestiture on October 1, 2024, we delivered on our commitment to pay down VF’s $1 billion term loan due December 2024. Our Americas regional platform is fully operational and showing promising signs, while the performance at Vans is improving. In summary, we advanced our turnaround plan towards a return to growth and strong, sustainable value creation at VF.”
Fibre2Fashion News Desk (SG)
