May 5, 2015
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VF Corp: first quarter affected by exchange rate fluctuations

May 5, 2015

For a company that is as international as VF Corp, the sharp rise of the dollar in recent months has inevitably had a significant impact on its revenues. The American giant indeed generated 43% of its sales outside of its home market in its first quarter of 2014.

Vans grew by 8% after currency conversions - Vans

Positive momentum nonetheless allowed the company’s turnover to grow during the first quarter of 2015 ending in late March. Following the application of exchange rates, it grew by 2% at 2.837 billion dollars (2.620 billion euros). But in local currencies, the company’s overall growth was by 8%. 

Abroad, VF Corp saw its turnover rise by 9% currency neutral, but the strength of the dollar caused it to decline by 5%. Therefore, solid 17% and 16% growth respectively for the Asia-Pacific and the Americas (excluding the US) were limited to 13% and 4% reported. But the impact of the dollar was especially felt in the Europe Middle East Africa region, with an increase of 4% currency neutral and down by 14% reported.

Globally, after exchange rate conversions, the group saw sales of its Outdoor & Action Sports division rise by 2% to 1.607 billion dollars (1.484 billion euros), with +1% (+7% currency neutral) for The North Face, which makes up 20% of its wholesale sales, +8% (+16% currency neutral) for Vans and stability (+10% currency neutral) for Timberland. 

Jeanswear grew by 1% (+6%), approaching 700 million dollars (646 million euros) thanks to respective 5% and 1% increases for Wrangler and Lee (+9% and +4% currency neutral). 

The very American Imagewear division, which manufactures products for sports teams, was up 7% (+8 % currency neutral) at 283 million (261 million euros). Sportswear, which includes Nautica and Kipling at the fore, grew by 3% to 136 million (126 million euros), while its contemporary brands division (7 For All Mankind, Splendid and Ella Moss) continued to lose ground with -11% (-7% currency neutral) at less than 88 million dollars (81 million euros). The group's other business accounted for nearly 25 million dollars (+8%, 23 million euros). 

During its first quarter, VF Corp saw its operating profit fall by 1% to 398 million dollars (367 million euros). Its net profit fell by 3% to less than 289 million dollars (267 million euros).

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