Consumer demand for leisure and retro styles has been a boon for Vans. The skateboard shoe and apparel brand grew sales +35% YoY in Q1 ’18, with international (+27%), direct-to-consumer (+22%) and digital (+54%) sales all contributing to the top line growth. Affordable price points ($50-$70) and a line of comfortable/versatile styles have enabled the “California lifestyle” brand to stand out in a sneaker market that’s been dominated by non-performance athletic lines over the last 12 months. Vans success drove parent company VF Corp’s (VFC) Q1 double-digit growth; corporate revenues rose +23% YoY to $2.8 billion and profits increased +46% YoY to $160.4 million.
Howie Long-Short: VF Corp. (VFC) owns several brands including the rugged outdoor labels The North Face and Timberland, but Vans is their golden goose. RBC analysts say Vans $3 billion business represents between 40%-50% of VFC’s entire value. “The North Face and Timberland are $2.3 billion and $2 billion businesses, respectively.”
Current fashion trends drove Vans sales up +19% in 2017 and the company’s Q1 financials certainly didn’t indicate that leisure/retro is falling out of style anytime soon; in fact, Vans increased FY18 sales growth guidance to +15%, including +25%+ growth in H1 ‘18. VFC shares are up 3.5% since the company reported on 7.20, closing on Tuesday at $92.40.
Fan Marino: We called Vans a skateboard brand, but as NPD Group analyst Matt Powell so eloquently explained, “most people who buy Vans don’t have a clue about how to skateboard”; no different than those who spend hundreds on athleisure, but never hit the gym.
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