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Biz remains undeniably tough across most categories at VF
22 Jul '09
5 min read
Operating margins rose by more than one full percentage point in the quarter, despite our continued investments in retail, due to an increase in gross margins that reflect the strength of our brands.
Looking toward the second half of 2009, we continue to expect higher total revenues on both a reported and constant currency basis and further expansion in operating margins.
Jeanswear
Total Jeanswear revenues declined 16% in the second quarter, or 12% on a constant currency basis, with declines in both our domestic and international businesses. Domestic revenues of our large core Wrangler and Lee businesses declined at a mid single digit rate in the quarter, with total domestic revenues down 12%. We continue to grow market share in our Wrangler men's and our Lee men's and women's jeans and casuals businesses.
While our core Riders brand women's business also continues to gain share, a reduction in certain seasonal and plus-size programs impacted our domestic revenues disproportionately in the quarter. Also impacting results was a shift in the timing of shipments, as our customers continue to tightly control flows of merchandise and inventories, and the loss of volume due to customer bankruptcies in 2008.
International jeanswear revenues were down 12% on a constant currency basis in the quarter, reflecting deep recessionary conditions across Europe. In China, jeanswear revenues rose 10%.
Operating income declined in the quarter, but operating margins rose slightly, reflecting cost reduction actions.
We expect comparisons in the second half of 2009 for our global Jeanswear business to improve over those in the first half, which were impacted by the factors previously mentioned that were specific to the second quarter. We anticipate a mid-single digit decline in domestic jeans revenues in constant dollars in the second half, which is comparable to first half results.
The rollout of Wrangler brand denim shop-in-shops in the mass market channel and new programs such as the Lee brand's Slender Secret line for women should also benefit comparisons. The impact from customer bankruptcies will also be slightly lower in the second half than in the first half, considering the timing of those bankruptcies in 2008.
Internationally, second half revenue comparisons will continue to be difficult, with gains in our Asia business and improved comparisons in our Latin America and Mexico businesses being offset by declines in Europe, where we expect market conditions to remain weak.
On a reported basis, global revenues for our Jeanswear business are expected to decline at a high single digit rate in the second half, while operating margins should remain strong, in the mid-teens.
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Looking toward the second half of 2009, we continue to expect higher total revenues on both a reported and constant currency basis and further expansion in operating margins.
Jeanswear
Total Jeanswear revenues declined 16% in the second quarter, or 12% on a constant currency basis, with declines in both our domestic and international businesses. Domestic revenues of our large core Wrangler and Lee businesses declined at a mid single digit rate in the quarter, with total domestic revenues down 12%. We continue to grow market share in our Wrangler men's and our Lee men's and women's jeans and casuals businesses.
While our core Riders brand women's business also continues to gain share, a reduction in certain seasonal and plus-size programs impacted our domestic revenues disproportionately in the quarter. Also impacting results was a shift in the timing of shipments, as our customers continue to tightly control flows of merchandise and inventories, and the loss of volume due to customer bankruptcies in 2008.
International jeanswear revenues were down 12% on a constant currency basis in the quarter, reflecting deep recessionary conditions across Europe. In China, jeanswear revenues rose 10%.
Operating income declined in the quarter, but operating margins rose slightly, reflecting cost reduction actions.
We expect comparisons in the second half of 2009 for our global Jeanswear business to improve over those in the first half, which were impacted by the factors previously mentioned that were specific to the second quarter. We anticipate a mid-single digit decline in domestic jeans revenues in constant dollars in the second half, which is comparable to first half results.
The rollout of Wrangler brand denim shop-in-shops in the mass market channel and new programs such as the Lee brand's Slender Secret line for women should also benefit comparisons. The impact from customer bankruptcies will also be slightly lower in the second half than in the first half, considering the timing of those bankruptcies in 2008.
Internationally, second half revenue comparisons will continue to be difficult, with gains in our Asia business and improved comparisons in our Latin America and Mexico businesses being offset by declines in Europe, where we expect market conditions to remain weak.
On a reported basis, global revenues for our Jeanswear business are expected to decline at a high single digit rate in the second half, while operating margins should remain strong, in the mid-teens.
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VF Corporation
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