VF Corp, the apparel and footwear company based in Colorado, has reported better-than-anticipated earnings for the second quarter of 2020, indicating signs of recovery from the financial impact of the Covid-19 pandemic. The company announced a net income of $256.7 million, or $0.62 per share, which was lower than the $649.0 million, or $1.55 per share, reported in the same period last year. However, the adjusted earnings per share came in at $0.66, surpassing the $0.48 prediction made by FactSet analysts.

VF Corp, which owns popular brands Vans, The North Face, and Timberland, experienced a decline in quarterly revenue of 18% to $2.6 billion compared to $3.2 billion in the previous year. This decrease can be attributed to store closures and reduced consumer demand resulting from the pandemic and associated measures.

Among VF Corp’s segments, the outdoor segment experienced the steepest decline in revenues at 24%, followed by a 15% decrease in the active segment. However, the work segment saw a revenue increase of 14%. The company’s sales in the U.S. dropped by 21% during the quarter, while international revenues fell by 15%, with Europe and American markets (excluding the U.S.) experiencing decreases of 16% and 38% respectively. On the other hand, the Asia Pacific region saw a 2% increase, primarily driven by a 21% rise in Mainland China.

In terms of sales channels, global direct-to-consumer revenue declined by 17%, while direct-to-consumer digital revenue recorded an impressive 44% rise. For the first half of the fiscal year, VF reported total revenues of $3.7 billion, down from $5.2 billion in the same period last year. The company also reported a net loss of $28.9 million for the first six months, compared to earnings of $698.2 million a year ago.

Despite the challenges posed by the pandemic, VF Corp remains optimistic about the future. The company expects to report full-year revenue of at least $9.0 billion, reflecting a year-over-year decrease of approximately 14% on an adjusted basis. VF Corp anticipates low single-digit growth in the second half of the year, driven primarily by a return to growth in the fourth quarter. The group projects annual adjusted earnings per share to be at least $1.20.

To overcome the economic difficulties caused by the pandemic, VF Corp has implemented measures to reorganize its management structure and focus on its digital business and Chinese operations. As part of these efforts, Steve Murray was appointed as the president of The North Face, while Winnie Ma became VF president for Greater China.

VF Corp’s chairman, president, and CEO, Steve Rendle, expressed confidence in the company’s performance, stating that the results have surpassed internal expectations due to the digital and Chinese markets. He sees signs of stabilization and strength throughout the business, which supports the decision to increase the dividend and provide a financial outlook for the rest of the year.

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