VF Corp beat Wall Street expectations for fourth-quarter profit on Tuesday, powered by higher prices and resilient demand for the apparel maker’s North Face brand, especially in Europe and Asia.
Shares of the company rose nearly 3 percent in extended trading as it also pointed to a recovery in China.
The company has been lifting prices of its apparel and footwear to protect its profit margins from higher supply and distribution costs. However, air freight and ocean rates declined during the quarter in a boost to its bottom line.
VF Corp’s revenue from the North Face brand jumped 12 percent, while all its other brands, including Vans and Timberland, saw a decline amid a “challenging consumer environment.”
Sales in the Americas, the company’s biggest region, dropped 7 percent. Overall revenue was down 3 percent at $2.74 billion in the quarter ended April 1, but met analysts’ average estimates, according to Refinitiv.
The Vans sneaker maker’s full-year revenue and profit forecasts also came in below estimates as stubborn inflation hurts consumer spending on apparel and footwear in the Americas.
In the China market, however, the company recorded a 3 percent growth in sales after the country ended its strict zero-Covid policy late last year.
VF Corp expects annual profit per share between $2.05 and $2.25, compared with analysts’ average estimate of $2.17.
The Denver, Colorado-based firm posted quarterly adjusted earnings of 17 cents per share, beating expectations of 14 cents.
By Anne Florentyna Gnanaraja Sekar; Editor: Shilpi Majumdar
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