VF Corp beats quarterly estimates, buoyed by turnaround plan

Vans' parent company VF Corp beat its third-quarter revenue and profit estimates, aided by its refreshed product lineup across Vans, Timberland and The North Face.

Shares in the American global footwear and apparel business were up nearly 6% in premarket trading.

Demand for active and outdoor wear was driven by favourable weather in the US, particularly over Christmas.

VF Corp's turnaround plan, which has involved cost-cutting measures including offloading skatewear brand Supreme from its portfolio, has strengthened the company's balance sheet.

Bootmaker Timberland grew its third-quarter adjusted operating margins by 360 basis points to 11.4%.

For the quarter ending 28 December, VF Corp's revenue rose 2% in the past 12 months to $2.83 billion (£2.27 billion), beating analysts' estimates of $2.75 billion (£2.21 billion), according to data from the London Stock Exchange Group.

On an adjusted basis, VF Corp posted profits of 62 cents (50p) per share, almost double the estimates of 34 cents (27p).

The Colorado-based company also expects Q4 revenue to fall between 4% and 6%, almost in line with expectations for a 4.96% decline.

This is a major improvement in outlook, given that in August last year VF Corp posted declines across almost all of its brands during the first quarter of the year. Its revenues were down by 9% to $1.9 billion (£1.5 billion), down 8% in constant dollars.

Bracken Darrell, President and CEO, said at the time: "As I complete my first year at VF, I feel more energised than ever. While the business is still down, the rate of decline moderated quarter-over-quarter versus Q4 and across almost all our brands. We advanced further on the Reinvent transformation plan.

"We are on track to deliver our targeted cost savings and we have addressed one of our top financial priorities to strengthen the balance sheet with the announced sale of Supreme. Together with the first-class leadership team I have built, we are confident we will continue to make progress to return to growth and drive strong, sustainable value creation at VF."