VF Corporation has reported what it describes as better-than-expected results for the first quarter, but a drop in share prices signaled that investors were not fully satisfied.
The company, which owns The North Face and Vans, posted a 5 per cent drop in overall revenue during the quarter ended June 27.
Excluding Dickies, whose divestment was finalized last November, sales were up 1 per cent on a reported basis but flat in constant currency.
The North Face sales rose 6 per cent (4 per cent in constant currency), led by the Americas region and DTC channel. Timberland was up 4 per cent (3 per cent in constant currency), driven by the Americas.
Sales at Vans slid 8 per cent on a reported basis and 9 per cent on a constant currency basis, mainly due to a decline in wholesale.
On the bottom line, the company recorded an operating loss of $83 million, a slight improvement compared to last year. Adjusted operating loss excluding Dickies was $95 million, ahead of the guidance of $100 million.
While CEO Bracken Darrell said the company had a “solid start” to the year with better-than-expected results, shares still fell 6 per cent in pre-market trading on Wednesday and closed down nearly 17.4 per cent at $15.08.
During the conference call, the company also announced that CFO Paul Vogel would transition out of the role during the current quarter. COO Abhishek Dalmia will have an expanded role that includes CFO responsibilities.
VF Corp has raised its guidance for the full year, expecting revenue to grow at least 2 per cent in constant currency, compared to the previous range of 1-2 per cent.
Last year, the company’s revenue was up 1 per cent, marking its first annual sales growth in three years. Excluding Dickes, sales were up at a higher rate of 4 per cent.
