VFC
#Yes, <UNK> we don't give the comp specifically.
We just talked about from a shave standpoint, low single-digit.
Thanks.
Yes, I guess I'd go first, I mean we all get to watch the TV these last few weeks and I think there's an over-arching theme going on in our political atmosphere that's giving consumers a little bit of pause and potentially making them a bit conservative as we are all uneasy about where we are ultimately going here.
I think last year's Fall season has had a compounding effect not just on the winter goods but in apparel and footwear in general.
And we've seen bankruptcies come into view, having an impact on certainly where businesses like ours have the opportunity to sell, but also where consumers are looking to engage.
So I think the US market just finds itself in maybe a similar situation of where our European business was two or three years ago and as we've got a lot of lessons learned and are employing a lot of really great solutions, I think you saw the growth we delivered here for Q3, I think we have a really strong playbook of how to navigate this.
Because I think at the center here is powerful brands.
Consumers absolutely want to connect with them, engage with them, and purchase from them and it's really in our court to create the compelling products and the demand creation that draws them to us and really create that loyal relationship that we can build on year over year.
I'll add just a little bit of context for you <UNK>, because there is a consumer thing and then there's the thing that <UNK> talked about, the bankruptcies and the inventory hangover from last winter.
So peeling it back for The North Face because it's such an important part of our story.
In the quarter in the Americas our direct-to-consumer business was up mid-teens and in Europe, it was up high-teens, and in Asia it was up mid-teens, so we're all kind of right in the same pocket, where we're selling products to consumers through our stores.
It's in the wholesale side that there's a different story.
In outside the US and inside the US and a big part of that is the bankruptcies and the inventory hangover from last year.
And as I've stacked them up geographically, and by the way you see about the same thing in Vans wherein Americas it was up low-teens and in EMEA it was up over 20%, it was still strong growth in our own stores and differences in the wholesale piece of the business.
But real quick our model is very intact.
Our wholesale partner relationships are very important, it's over 70% of our total revenue today.
And I think our best wholesale partners are looking to and actively evolving their model that marries with our model, and we use our stores to really position our brands in the most complete way.
And that learning flows into our best wholesale partners.
And as we evolve our model and really move to more frequency of deliveries across the seasons, this idea of pre-book and wait for reorders starts to give way to more monthly or every six to eight weeks drops of meaningful collections across the different channel partners that our brands have to work with.
In putting the right product for that consumer in front of them and using the powerful demand creation to draw them in to transact with us directly or through our powerful wholesale partners.
Thank you, <UNK>.
<UNK>, this is <UNK>.
So obviously I think if VF is known for anything we're known for the way we manage our inventory.
And we look at this very carefully every month really, not even every quarter.
And we set targets based on the balance between trying to manage the balance sheet and the cash flow versus making sure we're matching with demand, and you look at our days, they are right in line with what we've historically run from our standpoint.
Our business mix has changed a bit.
Our model has evolved a bit as we go to a little more D to C.
That has impacts, if you look over a long period of history, but I guess the short answer is we're right about where we want to be from an inventory standpoint and it's back in line from the hangover that we had a year ago.
Yes, <UNK>, we don't get into profitability by brand.
I think you can logically say that our largest brands are also our largest contributors to both gross margin and operating margin expansion.
That's just the law of big numbers, but in terms of actually quoting the profitability we don't do that by brand.
Yes, we've given you the growth on the top five brands and beyond that we really don't give more detail.
Thanks, <UNK>.
The inventory levels across our channel partners in Jeanswear is fine.
It's in line with expectation.
Ours is really looking at coming off a strong Q2 and that shift in our Asia business from Q3 to Q4, and just really moderating shipments based on consumer demand with our channel partners, which our Jeanswear team does extremely well.
If anything they are the benchmark that all of our other businesses have learned from.
I tried to answer this question.
I mentioned before in my script, we had an issue during the year on Vans which is normalizing as you saw in our results.
As far as we know there's no real issue in the market in other brands or in other channels.
Sure.
There have not been any cancellations to our order books.
If anything its been that shift to the right of demand from what historically was Q3 into Q4.
What really caused us to talk about mitigating our inventory positions in the marketplace really has to do with what we see in the off price channel, really driven from the record warm winter of last year but also the bankruptcies that compounded.
And as we rolled into September and just were able to see the amount of inventory out there not just ours but of all brands, it just ---+ we've taken the position to be very proactive and thoughtful about managing long-term integrity of our brands.
And these are great channel partners, but there's a finite amount of capacity out there and we want to be really thoughtful about how we're utilizing it.
No, well I think high level answer to that is, we run our business on average we have about 100 days of inventory, so right now our plans are kind of in that zip code.
I hope we end the year with 90 days of inventory because that would mean that we had a good winter and we were able to sell some more through, but it's not like we're standing here with no product to sell.
The question is, does it match up with what demand is, and that's never going to be perfect.
But I don't want people to think we don't have the ability to chase some things.
We just can't chase everything.
I don't think we're capable of that.
Great question.
Sure, well the numbers I gave in an earlier comment and I was focused on the North Face for our direct-to-consumer business was up mid-teens both in the Americas and Asia and high-teens in EMEA.
Guaranteed there's unit sales increase in that because we certainly don't have mid-teens to high-teens price increases in our products.
Particularly in the third quarter, where we're not selling our most expensive outerwear products or selling other kinds of products in those stores.
So it implies, it actually tells you that there's a unit price increase, that might be slightly below those because we haven't taken big retail price increases.
Thank you.
Thank you and thank you all for being with us on this call.
I said at the opening that we had a lot to cover, that's why we went a little long on the Q&A.
We wanted to give you a chance to ask your questions.
I hope you heard from us a lot of confidence about the upcoming quarter.
As I said earlier, the fourth quarter is where our business model shifts and our direct-to-consumer business peaks, both in dollars and as a percent of our revenues.
And that's our best indicator and that's where we've been performing strongly, we're up 7% year to date.
We also have confidence in our wholesale business because by this stage in the game, we obviously are in the quarter we have the most visibility of any quarter in terms of what's going to happen from a wholesale business, and we sit here confident that we can deliver the year as promised.
Even though we have ---+ it is not what we promised at the beginning of the year for lots of reasons that we've discussed.
I hope we gave you some clarity and look forward to talking to you in February.
