VF Corp Revenue Rises 1% as North Face, Timberland Offset 10% Vans Decline

VF Corp. reported second-quarter revenue of $2.7 billion, up 1% year on year, as growth at The North Face, Timberland and running brand Altra offset a nearly 10% decline at Vans to about $548 million. Vans posted its second straight quarter of disappointing results. The North Face grew 4% to $1.2 billion and Timberland rose 4% to nearly $526 million. Excluding the divested Dickies brand, "other brands" climbed 6% to over $414 million, led by Altra, which grew 40% and is expected to fully offset Vans footwear declines this year. Direct-to-consumer sales rose 1% to $915 million; wholesale fell 6% to $1.8 billion. Gross margin expanded 290 basis points to 55.4%, excluding Dickies, on lower product costs and currency effects. Net debt fell more than $1 billion, a 20% drop. CEO Bracken Darrell said retailer Vans inventory is clearing and orders for the next two quarters are picking up. Needham analyst Tom Nikic called it an "excruciatingly long Vans turnaround."