Global exchange hurdles: Why The North Face, Timberland 1Q sales don’t look so hot

Unfavorable exchange rates result in minimal gains for some of the outdoor industry's largest, global brands.
Author:
Updated:
Original:

That strengthening dollar you’ve been hearing about — giving Americans more buying power of foreign goods, from cheaper oil to electronics — it has a flip side to it.

The strong dollar effectively weakens foreign currencies, meaning when U.S. businesses sell more overseas, they see less bang for their yen, yuan and eruo.

We’ll leave it to Janet Yellen for what’s ultimately better for the U.S. economy, but the reality is global outdoor brands like VF Corp’s The North Face and Timberland are beginning to feel the pinch.

VF Corp’s (NYSE:VFC) Outdoor Group, which includes The North Face, Timberland, Vans, Jansport, Eagle Creek SmartWool and others, reported sales up just 2 percent to $1.6 billion during the first quarter 2015. On a currency neutral basis — if there were no exchange rates — sales would have been up 10 percent, officials said.

By brand, The North Face sales inched up 1 percent (7 percent on a currency-neutral basis) and Timberland sales remained flat (or up 10 percent currency neutral), officials said. Strength came from the U.S. — at home, a stronger dollar can help — plus double-digit growth in direct-to-consumer sales.

Overall, VF Corp., which also sells jeans and contemporary wear, saw its first-quarter 2015 revenue rise 2 percent to $2.8 billion.

--David Clucas

Related

vfoutdoorlogo

The North Face sees 1Q sales up, but slowing; profits strong

It’s hard to stop a freight train, but eventually it slows down. VF Outdoor, parent to The North Face, Timberland, Vans and SmartWool, reported a healthy 10 percent increase in sales for the first-quarter 2013, but those gains slowed from a year ago. While the cool spring ...read more

VFOutdoor

The North Face, Timberland, Vans 1Q sales all up double digits as direct-to-consumer sales soar

VF Corp., parent to The North Face, Timberland and Vans and numerous other outdoor brands, continues to up is direct connections with consumers, and signaled higher confidence for the outdoor industry in 2014. The company’s Outdoor & Action Sports segment reported first-quarter ...read more

VFOutdoor

Lucky 13: The North Face, Timberland and rest of VF Outdoor group see combined 2014 sales up 13 percent

Another strong earnings report from the outdoor industry as VF Corp (NYSE:VFC), parent to The North Face, Timberland, Vans and SmartWool, Eagle Creek, Jansport and others reported 13 percent growth both for the fourth quarter (to $2.16 billion) and full year 2014 (to $7.2 ...read more

Financials09sm.jpg

While we were away at Summer Market: The North Face, Columbia, Black Diamond and more report earnings

The North Face, Vans 2Q sales up, Timberland down  Despite a decline in domestic wholesale sales, The North Face reported its revenue up 5 percent in the second quarter 2013 on higher international and direct-to-consumer sales. Parent VF Outdoor President Steve Rendle said the ...read more

VF_Logo.gif

Retailer caution leads to flat 3Q wholesale orders at The North Face; direct-to-consumer sales up 28 percent

For some time now, outdoor brands have had a knack of asking retailers to order next year’s products earlier and earlier. But after two weak winters in a row, it would seem that not even The North Face could move the calendar forward for this year. The top-selling outdoor brand ...read more

Financials09sm.jpg

Columbia, The North Face bank on direct-to-consumer business to save winter sales

It’s year-end and fourth-quarter earnings season on Wall Street where we get to see how companies, including several big-name outdoor brands, closed out 2013. You might think with early snow hitting at the peak holiday period, it would be a blockbuster season for the outdoor ...read more

VFOutdoor

Timberland begins to shine for VF Outdoor

VF Corp. the parent company of The North Face, Timberland and numerous other outdoor and wintersport brands reported an 11 percent rise in third-quarter sales for its Outdoor and Action Sports segment. Group profit rose 13 percent to $475 million. Leading the way for the group ...read more

W_Ultra_Kilowatt_Green_BlueThumb

The North Face brings strength to performance apparel, footwear

It’s not just CrossFit that’s taking over the fitness scene — it’s functional training in general. Athletes are craving activities that make them stronger, faster and better at what they do, from climbing to trail running. Tucked away in Jackson Hole, Wyo. is a facility called ...read more

ColumbiaBrands2

Columbia, Prana, Sorel 1Q sales shine; Mountain Hardwear lags

Columbia Sportswear (Nasdaq: COLM), parent to its namesake brand, Mountain Hardwear, Prana, Montrail and Sorel, reported another record quarter thanks to its Prana acquisition, strong North American sales and a recovering European market. First-quarter 2015 sales rose 13 percent ...read more