(Bloomberg) -- VF Corp., parent to brands including Vans and North Face, reported sales that beat expectations, a sign that its transformation plan is showing results.
Revenue climbed 2% to $2.8 billion last quarter, the company said in a presentation, beating analyst estimates compiled by Bloomberg. Sales for the Timberland brand rose 11% during the period.
Shares was up 2.1% at 10:51 a.m. in Wednesday trading in New York. The stock has gained more than 50% over the past 12 months while the S&P Small Cap 600 Index grew 11%.
VF Corp. raised its full-year free cash flow guidance to $440 million, up from $425 million previously. For the fourth quarter, the company expects revenue to fall 4% to 6%.
The company’s attempted turnaround in its Americas division has been challenged by shoppers squeezed by several years of high inflation. A number of consumer companies announced holiday sales earlier this month. While some, like Lululemon, were able to find a bright spot, others, such as Macy’s Inc. issued downbeat guidance.
Chief Executive Officer Bracken Darrell said on a call with analysts that the Americas reported the first quarter of growth in over two years. “It’s early days, so we may not see growth every quarter as turnarounds often aren’t linear,” he said, noting that there’s still “a lot to do” to improve that business.
The company introduced its turnaround plan shortly after Darrell assumed the top role in July 2023. The strategy includes $300 million in cost reductions and a reorganization of its leadership team in pursuit of a revitalization of its brands, which also include Altra, Eastpak, Icebreaker and Jansport.
VF Corp. has struggled to turn its plans into reality. Vans fell 9% in the most recent quarter and Dickies sank 10%.
Edward Jones analyst Brian Yarbrough said the company’s plan to slash Vans’ product offerings about a third and improve marketing “will lead to growth accelerating over the longer term.”
(Adds CEO remarks in the sixth paragraph, analyst commentary in the last paragraph and updates shares. A previous version corrected the spelling of Eastpak in the seventh paragraph.)
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