Vans has powered parent company VF Corp. to yet another earnings win.
The skate lifestyle brand saw revenues climb 25 percent during the third quarter — its strongest in the last two years, noted VF chairman, president and CEO Steve Rendle during a conference call with investors and analysts. (The company posted total sales that hit $3.94 billion, up 8 percent and ahead of Wall Street forecasts of $3.87 billion.)
Much of Vans’ success is owed to its direct-to-consumer online channel, which saw 50 percent growth year over year in the quarter. During VF’s analyst day in September, the company said it expected the bulk of the brand’s sales to come from its DTC business model — targeting about $3 billion, or 60 percent of its revenues, over the next five years.
And instead of adapting to trends, Vans continues to invest in art, music and street culture — the very offerings that solidified loyalty in its customer base.
A steady series of on-brand collaborations, including a partnership with the Van Gogh Museum, coupled with more durable technology in its shoes (think the All Weather MTE collection), have also put Vans ahead of the pack. While Vans is best recognized for its Old Skool footwear, the company noted that its slip-on shoes are gaining traction, becoming the brand’s fastest-growing style this quarter.
“Their connection with their consumer, the growth of their loyalty program, how they use that digital platform, our customs platform — it really is hard to call when you have a brand that has such an intimate connection with a very unique and specific consumer group, and they are able to execute that both online and in-store in a way that’s consistent with their overall culture,” Rendle said.
Despite fears that the economic slowdown in China would spread beyond its borders, VF has yet to see an impact on the company’s bottom line. It also reiterated plans to boost Vans’ revenues to $5 billion by the fiscal year 2023, with expectations of full-year growth to reach 23 percent — driven by its performance in North America and Asia.
“Our international business remains resilient amidst political uncertainty and macroeconomic pressures that we’ll be reminded of every day,” Rendle said. “We declare China a strategic investment priority, and it is paying of, with over 20 percent growth in the quarter. In Europe, we strengthened our platform and continued to broaden our brand offering, which has led us to consistent growth, tracking ahead of our long-range commitments.”
VF purchased Vans in 2004. In August, the corporation announced plans to spin off its jeans division in an effort to double down on its footwear and outdoor business. It also shared plans to relocate its headquarters from Greensboro, N.C., to Denver. The company aims to further grow Vans at an annual rate of 10 to 12 percent through a “diversified and balanced” strategy across geographies.
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