VFC
#<UNK>, here, and I'll take that <UNK>.
What we're seeing is that we did indeed see a higher input costs in the first quarter, and we see that to the first half.
That starts to mitigate in the second half, slightly, particularly more in leather than cotton, although there is a little bit of benefit there.
On the other hand, we do see that labor and overhead is an increase in cost.
So really not significant in the second half.
Going into next year, we should see some tempering petrochemicals, leather, again, which we've seen hide costs come down.
Again, that's directional, and these things change along with currencies.
So right now, I can't quantify that nor would we give any guidance into 2016 at this point.
I'll take that one.
We've been watching this for a number of months, even years, this has been going on.
It does appear that maybe making some progress.
It will have some benefit to us.
We're still evaluating that.
The details aren't fully worked out, and we'd have to look at it.
Our priorities in terms of ---+ should there be some opportunities, our priorities remain the same.
We would be investing in those growth drivers which have been successful for us so far.
Our lifestyle brands, international and D2C would be a priorities from an investment standpoint.
We do that because that's in the best interest of our shareholders long term.
Thank you.
<UNK>, this is <UNK>.
I'll take that, and perhaps KH might want to fill in from an international standpoint.
We absolutely remain very confident in our Outdoor & Action Sports businesses.
I think the effect that you see in Q1 that we didn't detail necessarily in our remarks was that impact of the 53rd week due to specifically The North Face and Timberland.
Two big drivers, was equal to 3 percentage points of growth, so if we would have put that to each one of those brands, North Face would've been at 10% and Timberland would of moved into the low teens.
Factoring that and understanding that we had that in our plans, we saw that coming, continues to give us confidence in the guidance that we gave last quarter.
<UNK>, there is not too much to add in international side.
It's a similar picture.
Starting with Asia, you heard us.
We're doing really well in Asia.
We expect nice growth in most of the Asian markets on the large brands, and similar picture in Europe.
We still ---+ the guidance we gave for Europe is to grow high-single digits.
There were some issues by quarter, but the full-year outlook is really good.
<UNK>, it's <UNK>.
I'll finish that comment, <UNK> mentioned that 53rd week switch that we had cost Timberland and The North Face 3 percentage points of growth, which is true.
For the global Outdoor & Action Sports coalition, it cost us 2%.
What we talked about as 10% as our constant-currency number, would have been a 12%.
I'Il take this, <UNK> <UNK> here.
Starting with Kipling, you heard us saying Kipling was the fastest growing brand in last year and two years ago.
Based on the outlook we have this year, it would be the fastest-growing brand again for the third year in a row.
So it's good.
We had a good quarter, we don't release that numbers, but we had a good quarter, in all key areas.
That's the good news, in the US in Europe and in Asia, and in several channels in wholesale and D2C.
Napa is a similar picture.
Napa is predominantly Europe.
We see a good year for Napa, and up high-single-digit, so yes the smaller brands are growing, especially Kipling is becoming a meaningful business for us.
We get the kind of discussion from lots of people when we talk with them.
We're very ---+ we continue to remain very disciplined about exploring our acquisition opportunities and creative about how we might bring one in.
Of course, the good news of the shareholder is, we're real disciplined about what will pay, too.
Part of it is how you pay for it, the other is what you'll pay.
We just haven't found the right combination to unlock that opportunity.
Just know that we are diligent, and it's something that we work on every single week.
Eventually, we will bring something in, but nothing to report today.
Okay, yes, it is.
Sure, Robbie I can.
We seen very positive trends in the mid-tier channels, so we've seen an uptick in our business.
We're really pleased with it.
The consumer is coming back to that channel for sure.
I think the consumer is really dialed into innovation in that channel, so we spent a lot of time on some innovative products, our Easy Fit, our Comfort Fit, our Modern Series.
Those products are really taking with the consumer very well, so really feeling bullish about that.
I think the single most important thing for us right now in the mid-tier channel is that we've introduced Wrangler to the mid-tier channel, very successfully.
We're rolling Wrangler out, still have a lot of opportunity, a lot more distribution in the mid-tier channel.
We've got a really powerful two brands that we're bringing to the mid-tier channel in that bottoms category right now that's pretty important for us.
Does that answer your question.
Sure, I take this questions.
You heard us saying Vans had an amazing run in the last quarters in Asia, and it has become a meaningful brand for us.
Now, we have declared growth, which was in the areas of 50%.
Will that stay.
Probably hard going forward, but we are very confident on our long-term goals.
The good news is, the brand is doing well by geography, not only in China but in Asia, all over in Asia, in the more developed countries, Korea, Japan, but also in developing markets like Malaysia or Indonesia.
It's doing well by channel.
We see good comps.
It's doing well in wholesale, and it's doing well by category in footwear and apparel.
Yes, we are very positive for the long-term outlook for Vans in Asia.
Now, the question on the doors, was that related to China.
I always say, we have, now, I think we have around 2,500 doors altogether on primarily five brands, which if you benchmark that with the big, big brands which are playing in Asia, they all working around 5,000.
I think that the answer is implied, we still have room to grow by adding doors over time.
<UNK> <UNK> touched on this, but new markets, we launched our VF subsidiary in Korea two years ago.
We launched the Vans brand there was our starting point.
<UNK> <UNK> and I were actually there last month celebrating the success of that team.
It is off to a fantastic start.
We think the brand has a lot of legs, particularly in the Asia-Pacific region.
<UNK>, this is <UNK>.
From an Americas standpoint, the predominant percent of our growth for Q1 was footwear, though we are continuing to see expanded growth in our apparel, high-teen growth this last quarter.
Right in line with what we see going on with our footwear.
Men's and women's, in footwear, it's hard to tell because many of our styles are unisex.
But if we were to try to overlay, we're probably about a 60/40 men's to women's, if we were to try to capture the meaning of that unisex sizing.
Where would the growth come in the future.
We have a tremendous amount of opportunity here in the North America market.
You've heard us talk about our expansion strategies.
We move geographically with our stores.
It helps supercharger our wholesale distribution.
The brand is moving into athletic.
We opened up with Dick's Sporting Goods this quarter in a significant number of doors and in a new initiative that they have.
We're continuing to work with our partners at Foot Locker to expand the growth there.
A lot of opportunity here in the United States, Canada.
Our Mexico business is extremely strong and at the front end of its growth.
We're just beginning to convert distributors in South America.
It will give us a tremendous amount of upside in those developed markets there as well.
<UNK>, a similar picture for us on the international side.
You heard <UNK> saying before, we have it by geography.
We just opened a subsidiary in Korea, where Vans is doing extremely well.
It started three years ago, long way to go.
We still have the South Asian markets, which we just started.
We also have distributors there, which one day we probably can convert, so geography for sure.
The other one is category, similar picture for us.
Apparel is small, but it's growing faster than footwear, so that's a big expansion.
Then the other one is our D2C leg.
E-com is doing well and stores, so pretty articulated way of going forward.
As I mentioned in my comments, <UNK>, this was a particularly big international quarter.
Also the delta on currency, we had a 1.37 average a year ago versus 1.12 in the first quarter.
A combination of those two things put a lot of currency pressures on Outdoor's margins in the first quarter.
It was about 80 basis points.
Again, you said it in your question also, those sales that <UNK> mentioned on the 53rd week, those are profitable sales.
Really, those are the two largest factors that impacted the quarter.
Now, when we zoom out and look at the full year, we see the normal normalizing of the margins and we see expansion.
Outdoor & Actions Sports margins will go faster than revenue for the full year.
We continue to invest in demand creation.
It's roughly growing with sales.
It wasn't a big factor in the quarter.
Just real quick, <UNK>.
Where we put those dollars here in the Americas was first in Q1 around the FuseForm launch and really driving that story to support the placement.
As well as, I mentioned in my remarks, we are putting significant effort behind Mountain Athletics, as we look to extend The North Face into more of a 12 month out of the year brand and really help drive that shift in Outdoor towards the outdoor athletic space that we've been talking about over the last couple of years.
I guess you heard us saying we are ---+ our full-year outlook is intact.
The good news is we have seen no changes in our potential for the full year.
We have some issues sometimes in the quarter, but no, the answer is we're pretty confident.
We have seen no signals which would change our mind for the full-year goals, which we have given.
This is true the large brands, but also for the smaller brands, which I commented before.
Just to add to that, <UNK> mentioned the 53rd week impact, which also be a factor in Europe as well, which would hold down your growth rates a little bit in the first quarter.
We still see high-single digit for the year, and there is no change in the overall ---+
First quarter came in as we expected.
We've been very bullish for the last umpteen quarters about the growth of Timberland, and I think you can probably hear that in our comments today.
It is broad based.
We are seeing success across all of our collections, certainly driven from the heritage of the boot, but absolutely moving into casual silhouettes both spring and fall.
We're seeing it across all channels, our own D2C as well as wholesale, and across wholesale the various points that we come to sell in.
We're seeing it in men's and women's as well as youth.
I think it's really safe to say that this brand and our leaders there have really embraced the information that they've taken out of our consumer research, applied it to their product strategy.
That's a global comment.
And we really have understood how to bring our brands to life, to our consumer deliver content to where they are.
We really have understood how to bring our brand to life, to our consumer, delivering content to where they are.
We see just continued growth.
We're very bullish and just see great upside not just in our footwear, but also in our PRO workwear business and as well as apparel.
Apparel, we are learning.
It's a really good word to use.
I think we've been clear.
We've started slow.
We are incrementally increasing doors with the partners that we've launched with.
Each season we continue to see good growth.
We are seeing weekly sell-through rates here in the US market in the high single-digit rate.
That's good from a retail sell point.
That's helping us gain confidence to expand our collection, expand our doors and really move towards that long-term projection.
Apparel is much larger on an international standpoint, with our largest penetration in Europe, but also significant growth in opportunity in Asia.
We don't give quarterly outlooks, but I would say for the year, when you look at our cash flow and our balance sheet projections, we see no issue within inventory.
We are really confident that the quality is there, and we not concerned about the inventory.
Let me make an opening comment on that, and then I'll hand it over to <UNK> and <UNK> <UNK>.
Some context, <UNK>, in 2007 ---+ I know I just went way back in history, but I happen to know the numbers, so I'll do that.
Our global e-commerce business across all brands was $7 million.
We have been working hard since that time to try to put in place e-com platforms around the world that make sense.
We are ---+ when I look at that as part of our future growth, I look at is being one of the largest sources or our future growth because of how underdeveloped we are versus all of the other levers we have to pull.
As you would expect, while we're building these sites brand by brand and country by country, we're focused most on our biggest brands.
We have a lot of brands to add and a lot of countries to add and a lot more to deal with.
Then, I'll turn it over to <UNK> and let you weigh in on this.
E-commerce, to <UNK>'s point, is really new as one of the tools.
It was North Face that has led VF into really understanding how to really bring our brands to life digitally.
Year to date, our e-commerce business is about 18% of our D2C.
We talked a lot about our new platform that Vans came live on last year, and we saw a great acceleration through the second half of the year and that absolutely continued to be the case here this year.
Timberland has just launched in April.
North Face and JanSport are going live today.
Following them will be our Wrangler and Lee businesses, our lucy, Reef and SmartWool towards the back half of the year.
We are really happy with our website.
It's an adaptive, responsive of website, and I don't want to get too geeky here but our brands have rich, rich content.
We've developed a platform that marries content with product, helps us a tell very strong stories connected with our products, which drive conversion and ultimately help drive sales.
It's also a site that's very easy to adapt content to mobile, as we see our consumers shift to accessing our sites from their mobile devices.
Operator, that will conclude our remarks today.
I think <UNK> might have a couple words and we will close the call.
I'll just thank you for spending your morning with us, talking about the current status and future of our Company.
As I said in my comments, we are confident about where we are this year.
I think I also mentioned that we our heads down ensuring that we deliver the results that we promised for this year.
The last comment I'll make is a special shout out to <UNK> Shearer.
We know you're listening.
<UNK>, give me a call and let it me know what it's like on the other side of this line.
Thanks, everybody, see you in 90 days.
Bye-bye.
