North Face 2015 Annual Report Download - page 46

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The Outdoor & Action Sports coalition includes the following brands: The North Face®,Vans®,
Timberland®,Kipling®(outside of North America), Napapijri®,JanSport®, Reef®,SmartWool®, Eastpak®,lucy®
and Eagle Creek®.
Global revenues for Outdoor & Action Sports increased 3% in 2015, reflecting 9% operational growth
despite the warmer weather in the fourth quarter and the softer retail environment compared with 2014. The
operational growth was partially offset by a negative 6% impact from foreign currency. The 53rd week in 2014
also negatively impacted 2015 revenue growth. Revenues in the Americas region increased 8% in 2015,
including a 2% negative impact from foreign currency. Revenues in the Asia Pacific region increased 10% in
2015 despite a 5% negative impact from foreign currency. European revenues declined 10% in 2015, including a
16% negative impact from foreign currency.
Global revenues for The North Face®brand increased 1% in 2015 over 2014, as operational growth in the
direct-to-consumer channel was partially offset by a negative 4% impact from foreign currency. Sales for The
North Face®brand were negatively impacted by the warm weather in 2015, particularly during the fourth quarter
when consumer demand for cold-weather products is typically at its peak. Vans®brand global revenues were up
7% in 2015, reflecting operational growth in both the direct-to-consumer and wholesale channels, partially offset
by a negative 7% impact from foreign currency. Global revenues for the Timberland®brand were up 2% in 2015
driven by strong wholesale revenues, partially offset by a negative 8% impact from foreign currency and reduced
consumer demand for outdoor apparel and footwear as a result of the warm weather noted above.
Global direct-to-consumer revenues for Outdoor & Action Sports grew 6% in 2015 over 2014, driven by
new store openings and an expanding e-commerce business. Foreign currency negatively impacted direct-to-
consumer revenues by 5% in 2015. Wholesale revenues were up 1% in 2015, including an 8% negative impact
from foreign currency.
The Outdoor & Action Sports coalition revenues increased 13% in 2014 over 2013 primarily due to growth
in The North Face®, Vans®and Timberland®brands, which achieved global revenue growth of 11%, 17% and
13%, respectively. Revenues in the Americas, European and Asia Pacific regions increased 14%, 9% and 17%,
respectively. Direct-to-consumer revenues rose 22% in 2014 driven by increases of 31% and 24% for The North
Face®and Vans®brands, respectively. New store openings and comparable sales growth, which includes an
expanding e-commerce business, all contributed to the direct-to-consumer revenue growth.
Operating margin decreased 110 basis points in 2015 due to the negative impact from foreign currency and
increased investments in direct-to-consumer businesses, partially offset by the leverage of operating expenses on
higher revenues.
Operating margin increased 90 basis points in 2014 driven by a shift in business mix towards higher margin
businesses and the leverage of operating expenses on higher revenues, partially offset by increased investments
in direct-to-consumer businesses and marketing.
Jeanswear
Percent
Change
Dollars in millions 2015 2014 2013 2015 2014
Coalition revenues ......................... $2,792.2 $2,801.8 $2,811.0 (0.3%) (0.3%)
Coalition profit ............................ 535.4 528.0 544.9 1.4% (3.1%)
Operating margin .......................... 19.2% 18.8% 19.4%
The Jeanswear coalition consists of the global jeanswear businesses, led by the Wrangler®and Lee®brands.
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