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

After two weak winters, retailer caution leads The North Face to shift a sizable chunk of its wholesale ordering back to the fourth quarter.
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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 reported flat wholesale orders for the third-quarter 2013, saying it had shifted a sizable chunk of its ordering back to the fourth quarter because of retailer caution.

“Absent the calendar shift, which totaled about $40 million in revenues for The North Face, third quarter revenues would have been up nicely at a high-single digit rate,” VF Outdoor President Steve Rendle told investors. “As you'd expect, you will see this benefit in our fourth quarter results when revenues should approximate a low double-digit growth rate.”

And it wasn’t all bad news for The North Face in the third quarter, the brand saw a 28 percent boost in its direct-to-consumer sales, fueling an overall 3 percent gain in quarterly sales, despite the flat wholesale business.

Revenues for VF’s Outdoor & Action Sports segment — which includes The North Face, Timberland, Vans, SmartWool, and others — increased 6 percent to $2 billion for the third quarter, versus a year ago. Vans reported sales up 16 percent and Timberland sales were up 2 percent. Operating income for the outdoor group rose 2 percent to $421 million.

Overall, VF Corp., which also sells jeans, contemporary wear and sportswear, reported third-quarter revenue up 5 percent to $3.3 billion with quarterly net income rising to $433.8 million versus $381.3 million during the same period a year ago.

Officials maintained total 2013 revenue guidance at $11.5 billion. Investors mostly cheered the results, sending the stock (NYSE:VFC) up 5 percent Monday.

--David Clucas

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