Is there a turnaround from Vans, what are you wearing?
Hopefully not plastic shoes from Crocs.
Vans' parent company, VF Corp, has returned to profit after two consecutive quarterly losses, beating sales estimates for the second quarter. The company benefited from a sequential improvement in direct sales and a streamlining of inventories, causing the company's shares to rise by around 16% in after-hours trading.
CEO Bracken Darrell's turnaround strategy, which includes the appointment of executives such as Sun Choe as Global Brand President for Vans, and the sale of the Supreme streetwear brand have led to stronger growth in China, followed by the Americas and EMEA.
VF Corp's quarterly sales in China increased 9% on a currency-adjusted basis, compared to a 4% increase in the same period last year.
The company's revenue fell 6% to $2.76 billion from the same period last year, beating analysts' estimates of $2.71 billion, according to data compiled by LSEG.
The company's margins continued to improve thanks to inventory reduction initiatives implemented in recent quarters - such as increased promotions and discounts - even as the company's reinvestment increased.
VF Corp's quarterly gross margin increased by 120 basis points to 52.2%.
On an adjusted basis, VF Corp reported earnings of 60 cents per share, compared to analyst estimates of 37 cents per share.
Competitors Deckers Outdoor, Gap and Abercrombie & Fitch also saw an increase in demand for trendier clothing and footwear.
Analysts at Guggenheim Securities had indicated earlier this month that VF Corp could see sequential improvement in wholesale during FY25 as retailers are expected to place more orders for The North Face and Vans during the spring season.
