E-commerce sales jump 18% for VF Corp. in Q3
October 25, 2016 12:32 PM
E-commerce helped slightly offset what apparel manufacturer VF Corp. calls “especially sluggish retail conditions” in the third quarter, as sales on the web increased 18% year over year companywide.
VF Corp., No. 92 in the Internet Retailer 2016 Top 500 Guide, does not break out e-commerce sales figures on a quarterly basis. Internet Retailer estimates the merchant sold $420.0 million on the web in 2015, up 20.0% from $350.0 million in 2014.
VF Corp., the parent company of multiple outdoor and apparel brands including The North Face, Timberland and Vans, says total sales dropped 1% for the period.
CEO Eric Wiseman says the retailer faced a variety of challenges in the last year, including tough comparables, as 2015 was one of the company’s strongest years on record.
“Last October, our year-to-date revenue on a comp basis was up 9%,” he told analysts Monday on a conference call transcribed by SeekingAlpha. “However, during the past four quarters, weak consumer spending, the warmest winter on record, retail bankruptcies and excess inventory in the off-price channel have had an outsized impact, particularly on our U.S. business.”
Wiseman is likely referring in part to excess inventory discounted this year as a result of the bankruptcy of retail chain Sports Authority Inc., which occurred in the spring. The liquidation involved inventory from 463 Sports Authority stores. Around the same time, Vestis Retail Group LLC, which runs Sport Chalet, Eastern Mountain Sports and Bob’s Stores, also filed for bankruptcy.
On the bright side, VF Corp.’s direct-to-consumer business, which includes e-commerce and sales through 1,475 VF-owned retail stores, was relatively strong during the period, as sales increased 6% to roughly $800 million. Direct-to-consumer sales represented 23% of total sales during the period, up from 21% in the third quarter of last year.
Here are some more details on how company executives say various brands performed globally on the web during Q3:
- In The North Face business, e-commerce sales more than doubled in Asia, thanks in part to a revamped retail site for consumers in that region.
- At Vans, e-commerce sales increased 15% year over year in the Americas.
- European online sales at Vans increased more than 40%, largely due to a new e-commerce site.
- E-commerce sales at Timberland.com increased 30% year over year in the Americas, and more than 50% in Asia.
- Last week, Timberland launched its first localized e-commerce site for consumers in Southeast Asia with a dedicated site for consumers in Singapore.
- Online sales for the Lee jeanswear business increased more than 20% in Asia.
For the period ended Sept. 30 VF Corp. also reported:
- Total sales of $3.49 billion, down 1.1% from $3.53 billion in the third quarter of last year.
- Net income of $498.5 million, up 8.4% from $459.9 million.
For the first nine months of the year, the retailer also posted:
- Total sales of $8.70 billion, down 0.1% from $8.71 billion during the same period in 2015.
- Net income of $809.8 million, an 11.9% decrease from $919.4 million.