VF Corp, the parent company of popular brands like Vans and The North Face, reported a 5% increase in revenue for the third quarter, which fell short of analysts’ expectations. Despite this, the company’s total revenue for the quarter ended December 28, 2019, reached $3.38 billion, up from $3.23 billion in the same period last year.

While VF Corp owns a portfolio of brands, including Timberland, the performance of its active segment, led by Vans, stood out with an 8% rise in revenue. The outdoor segment, which includes The North Face, also experienced a 3% increase. Revenues from international markets showed strong growth, with China leading the way with a 30% increase, and Europe seeing a 4% rise.

Direct-to-consumer sales, including the digital channel, also saw growth, increasing by 7% overall. The digital channel performed particularly well, with a 16% rise in sales. These results indicate the company’s ability to adapt to the changing retail landscape and meet the demands of consumers.

Net income for the quarter was $465.0 million, slightly higher than the $463.5 million in the same period last year. Diluted earnings per share also increased by 11% from $1.02 to $1.13.

Despite the strong performance, VF Corp has revised down its full-year guidance. Annual revenue is now expected to reach around $11.75 billion, a 5% increase from the previous year, compared to the previous guidance of $11.8 billion. Adjusted earnings per share are predicted to be $3.30, reflecting a growth of approximately 15%, compared to the previous guidance range of $3.32 to $3.37.

The news of the disappointing revenues and reduced annual guidance led to a 1.7% drop in VF Corp’s shares during premarket trading on Thursday.

Useful links:
1. VF Corp
2. Vans