Timberland was the star performer at VF Corporation in the third quarter ended Sept. 30, while The North Face and Vans did not do as well as expected. Globally, Timberland's sales increased by 15 percent during the quarter, in contrast with increases of 9 percent at TNF and 12 percent at Vans. All three brands belong to VF's Outdoor & Action Sports Coalition, whose total revenues went up by 10.6 percent in the quarter to $2.18 billion. Sales grew outside the U.S. by 9 percent in dollars and by 10 percent in local currencies. At 21.8 percent of sales, its operating margin was 0.4 percentage points better than a year ago.
TNF grew at a low double-digit rate in the Americas during the quarter. The brand's sales in Europe went up by a low single digit in Europe, where they were essentially flat at the wholesale level, due to a sluggish outdoor retail environment and a shift in the timing of deliveries to the fourth quarter. In both regions, TNF experienced an increase of almost 30 percent in the direct-to-consumer (DTC) business.
In Asia, TNF enjoyed a mid-single-digit sales increase. The management noted improved inventories for the brand in China, where its new Thermoball collection has been adopted by more than 450 dealers' shops. Thermoball continued to perform strongly also in Europe with the support of a regional marketing campaign.
Vans' sales continued to grow at a strong pace of 40 percent in Asia, rising at an even higher rate in China. The brand's sales grew by a high single digit in the Americas, but here again, some shipments have been shifted to the fourth quarter. Vans' sales rose at a mid-teen rate in Europe, where DTC revenues rose by 25 percent. The performance of the new House of Vans opened in London in August exceeded expectations. European sales were supported by the launch of new “weatherized” products.
Timberland's growth of 15 percent in Europe was the highest for the quarter in several years. In the Americas, Timberland grew by 22 percent, with an increase of more than 30 percent at the wholesale level. The brand's global sales are now expected to increase by 13 percent for the full year, against a previous forecast of 12 percent, in line with the recently outlined business plan for the next few years.
Timberland has launched a new campaign in Europe, focusing on its apparel collection, in collaboration with one of Europe's leading youth media companies. It has opened Footwear Plus stores in London and Rome, with others to follow in other European countries.
The group's net earnings increased by 8.5 percent to $470.5 million. Total revenues increased by 6.7 percent to $3.49 billion, a little more slowly than analysts had expected, but the management is sticking to its forecast of 8 percent growth to $12.3 billion for the full financial year. Earnings per share are even projected to exceed a previous forecast, rising by 14 percent for the year.
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