VFC
#Sure, I can comment.
I think you're seeing one of the strategic reasons we have a direct-to-consumer channel, which is we're able to adjust our inventories within our stores very, very quickly.
Because it's all our inventory.
I think that's one of the reasons that our DTC business was up 8% in the first quarter versus our wholesale business, which was up low single-digits.
We are able to react for our wholesale partners, at the same speed.
But we can't comment about all the inventory they have in their stores.
They buy based on what they see consumers wanting, with the reality of what their current inventory situation is.
Not just in our brands but across the total operation.
So they have an ---+ we have an advantage quite frankly in that, because all the inventory in The North Face Company is North Face inventory.
So we can move it back and forth and in and out of our stores.
It just makes us a little bit more nimble.
I think that's one reason we are seeing growth.
It's just a different business model.
I forgot the second half of your questions, was it on wholesale inventory.
Yes, it's a different model because they come and place orders with us to buy for fall or for holiday well in advance.
We flow that into them when they need it.
There is not a wholesale inventory model.
Every wholesale partner we have has their own way of doing business.
So it's really impossible for me to answer that more specifically because we deal with very different models with very different retailers.
Yes, <UNK> <UNK> here.
As I mentioned in the script, we believe we have strong elements to believe this is not a brand issue, but it is a category issue.
We mentioned DTC was up.
DTC gives us the possibility to merchandise in very short times, the product offering.
What I did not mention in the script but is very relevant, our reorders were up close to 10% in Q1, which really shows that we don't have a brand issue but we have a product issue.
Now, the good news is the product issue is related to a few styles, which are relevant in the collection, that's why need a little bit more time.
But we actually expect the situation to improve in the second half in a significant way.
No.
No, no, no, we have many elements of other products we see on the brand which are really doing well.
Many categories in many styles.
It is related to a few specific styles which especially in a few areas which are a bit larger markets, UK is a good example, are under pressure in terms of sell-through.
But even in our own stores in the UK, where we have a better and a faster possibility to merchandise, we see very good results.
A lot of it.
<UNK>, we have learned ---+ if I go back 12 years, we didn't have any full-price retail stores.
A lot that we learned from having our own retail stores which is a $3.3 billion business for us now, we've learned how to read daily sales and get stuff into the stores.
Our stores are other people stores.
The top of that, we run the Company with around 100 days worth of inventory.
That's a forward-looking assessment of inventory.
So any day during the year, we've got kind of the next 100 days worth of inventory sitting on the shelves in some capacity in our warehouses.
So we have the inventory.
The question is, how do we read it and get it out.
This hasn't been a change that happened like a light switch change, it is evolving slowly every year with retailers wanted to manage their stores more efficiently.
That means with less inventory.
Rather than placing all their orders well in advance of the season, they are placing some of their orders in advance of the season and asking us to be able to respond.
We are able to do that.
<UNK>, do you want to add anything to that.
Yes, <UNK>, I would add to <UNK>'s comment.
I think the consumer in this ---+ we can call it buy now wear now, or consumers just being very thoughtful and very prescriptive of what they want when.
It's in our responsibility to really think about the frequency of flow of new products.
Historically, you know our businesses well or these industries well, it's a two to four season model.
I think to really win with the consumer, who I believe, call me the eternal optimist, is very incented to purchase.
But you have to put very interesting offers in front of them, new products with very compelling stories.
If we do that on a more frequent basis, like a real retailer would, thinking through a monthly flow lens, our brands with the strength of their connection with that consumer and our ability to drive these new innovative products, especially going forward with our innovation centers.
I think we're particularly well positioned and situated here to grow in this changing dynamic that all of us have to contend with.
You may remember, <UNK>, our fourth quarter, we took pretty aggressive actions to get a lot of that behind us.
I won't say there was no action in the first quarter, but it was not significant from our margin standpoint.
I'll take the e-commerce question and then I will pass the tax happily to <UNK>.
(laughter) On e-commerce, you have heard us talk the last few calls about our investments around our one commerce platform specifically in our digital capability common platform with a very specific set of capabilities that we were able to utilize and leverage across our brand platform.
We will continue to invest behind this important area.
It's a powerful tool to deliver content, that experiential expect of our connected to our consumer, and I think we've been able to marry nicely the commerce component and make that a real seamless interaction for our consumers as they interact with us on our website.
So see that as a very important growth opportunity in the future.
We've got some very exciting innovation projects that you will see come live into the second half of the year tied to our digital platform with a few of our brands.
As this is a really important exciting area of growth.
As it relates to the tax issue, we said in the comments and I think I said earlier, it's $0.03 in the quarter.
We expect that to be the majority of the benefit, although there will be some for the balance of the year.
The reason it's first quarter focused is because in our equity comp cycle that's when our grants mature.
That's where the majority of the activity is historically.
That's what we based it on.
I would also ask you to just remember the other comment I made, and that is that while, yes, we did have a benefit from this tax in the first quarter and that would benefit the full year, on the other hand, we've absorbed the impact of bankruptcies in the first quarter and through the balance of the year.
We talked about our sportswear CBC business being a little bit weaker through the first quarter.
When you add all that up, given the fact that we are one quarter into the year with about 80% of our revenue and profit to go, none of these items are individually significant to VF.
In total, it's really not material to our outlook.
So that's why the way we're looking at it, our outlook is unchanged.
We reiterated what we said 60 days ago.
Sure, thank you all for your time and attention this morning.
As we've said, here during this call, the first quarter came in pretty much exactly as we planned, which changed since February as we've got better visibility into the back half of the year because borrows have begun to shore up and that's coming in, do exactly as we thought it was and our outlook for the year is unchanged.
So we'll continue to execute as well as we do around here and talk to you in July.
Thanks so much.
Bye-bye.
