US' VF Corporation reports revenue of $3.5 bn in Q3 FY23

The North Face reported a 7 per cent increase in revenue to $1.3 billion in Q3 FY23, which was up 13 per cent year-on-year (YoY) in constant dollars. On the other hand, Vans reported a 13 per cent (YoY) decrease in revenue to $0.9 billion, down 9 per cent in constant dollars, the company said in a press release.

The company's gross margin in Q3 FY23 was 54.9 per cent, down 120 basis points, and its adjusted gross margin was 54.9 per cent, down 140 basis points due primarily to increased promotions. The operating margin was 14.6 per cent, down 410 basis points, and the adjusted operating margin was 14.9 per cent, down 280 basis points.

Earnings per share (EPS) for the quarter were $1.31, down 1 per cent compared to the same period last year, and adjusted EPS was $1.12, down 17 per cent.

Revenue in EMEA region was down 2 per cent and up 10 per cent in constant dollars, the seventh consecutive quarter of double-digit growth in constant dollars.

The company’s revenue in Asia Pacific region in Q3 FY23 was down 7 per cent YoY and up 4 per cent YoY in constant dollars, reflecting a sequential improvement across the region and in Greater China, where sales were down 11 per cent and down 1 per cent in constant dollars, and continued strong growth in the rest of Asia.

For fiscal 2023, the company projects total revenue to increase by approximately 3 per cent in constant dollars, which is within its previous outlook range. The revenue of Vans is expected to decline by high single digits in constant dollars, which is a slight change from the previous outlook of down mid-single digits. On the other hand, The North Face is expected to see growth of at least 14 per cent in constant dollars, which is an improvement from the previous outlook of at least 12 per cent growth.

The company also anticipates a decrease in adjusted gross margin of approximately 200 basis points, compared to its previous outlook of a decrease of 100 to 150 basis points. The adjusted operating margin is expected to be approximately 9.5 per cent, compared to the previous outlook of approximately 11 per cent. The adjusted earnings per share (EPS) are expected to be $2.05 to $2.15, which is within its previous outlook range of $2 to $2.20.

For FY23, VF Corporation expects total revenue to be up by at least low-single digit percentage in constant dollars, gross and operating margin expansion, operating earnings to grow by double-digits, and operating cash flow to grow faster than earnings.

Fibre2Fashion News Desk (DP)