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VF Corp. Cuts 2016 Guidance While Jeanswear Stays Strong

The jeanswear category was one of the few bright spots for VF Corp., as the company cut estimates for 2016 following a rocky Q2. The sportwear segment, including Nautica and Kipling brands, experienced the most drastic declines due to continuing struggles with U.S. department stores and outlet channels.

Revenue is now expected to increase only 3 to 4 percent, as compared to the previous outlook of a mid-single digit percentage rate increase. Earnings per share for Q2 were $0.35 compared with $0.39 during the same period last year.

The jeanswear segment saw second quarter revenue up 3 percent to $629 million. The Wrangler brand revenue increased 2 percent across regions and Lee brand was up 8 percent with the highest jump in Europe, with a mid-teen percentage rate increase.

The largest decline came from the sportswear category, which decreased 19 percent to $115 million. There was a 20 percent decrease in Nautica brand revenue and a mid-teen decrease in the Kipling brand’s North American business compared with the same period last year.

The contemporary segment, which consists of 7 For All Mankind, Splendid and Ella, was classified as discontinued operations in the report, following the June sale of the category to Delta Galil Industries, Ltd. for $120 million.