The Greensboro, N.C.-based firm said its Q1 net income decreased 20 percent year over year, to $209.2 million, or 50 cents per diluted share, from $260.3 million, or 61 cents per diluted share, in the same period a year ago.
Sales diminished 2 percent year over year to $2.56 billion, from $2.61 billion in 2016.
VF Corp. did see an increase in revenue from its Outdoor & Action Sports division. The firm reported a 2 percent revenue increase, with The North Face’s revenue rising 6 percent and Vans’ revenue moving up 5 percent.
Also increasing for the quarter was VF’s international revenue, which climbed 2 percent, including 5 percent growth in China. Direct-to-consumer revenue also rose, by 6 percent, with digital revenue increasing 25 percent.
“VF’s first-quarter results were right in line with our expectations. The company’s largest brands and international and direct-to-consumer platforms performed well, delivering solid results against a retail backdrop that continues to experience significant dislocation,” said Steve Rendle, president and CEO of VF Corp., during the company’s conference call. “Our diversified value-creation model and our focus on becoming a more agile and consumer-centric organization position us to accelerate growth through 2017 and execute against our recently announced 2021 strategic growth plan.”
Also during the call, VF updated its outlook for the year with the recent sale of its Licensed Sports Group. (The firm announced the sale on April 4.)
“Reported revenue is still expected to be up at a low single-digit rate, including about a 2 percentage point negative impact from foreign currency,” said Scott Roe, CFO and VP of VF Corp. “However, this is off an adjusted 2016 base to reflect the sale of LSG. We expect gross margin to improve about 20 basis points to 49.6 percent, which includes a 70 basis point headwind from FX.”