VF Corp Reports Profit and Sales Growth

(Reuters) – Vans parent VF Corp (NYSE:VFC) turned a profit after two consecutive quarterly losses and beat second-quarter sales estimates on Monday. This improvement was fueled by better performance in its direct-to-consumer business and leaner inventory, leading to a 16% rise in shares after the announcement.

CEO Bracken Darrell’s turnaround strategy, which includes appointing executives such as Sun Choe as global brand president for Vans and selling the streetwear brand Supreme, has resulted in stronger growth in China, followed by the Americas and EMEA.

VF Corp's quarterly revenue grew 9% in China (in constant currency), compared to a 4% increase in the same period last year. However, the company's overall revenue declined 6% to $2.76 billion, still surpassing analysts' estimates of $2.71 billion, according to data from LSEG.

Margins improved further due to inventory clearance initiatives, which included increased promotions and discounts. Despite rising reinvestment costs, VF Corp’s gross margin expanded 120 basis points to 52.2%.

On an adjusted basis, VF Corp earned 60 cents per share, exceeding analysts' expectations of 37 cents per share. Peers Deckers Outdoor (NYSE:DECK), Gap, and Abercrombie & Fitch also reported an uptick in demand for trendy apparel and footwear.

Analysts from Guggenheim Securities noted that VF Corp may see improvement in wholesale throughout FY25, as retailers are anticipated to increase orders for The North Face and Vans during the Spring season.