VF Corp CEO Bracken Darrell announced a strategic review of VF’s brand portfolio as the next step in the company’s turnaround plan during the VF earnings call Tuesday afternoon.

“We’re objectively assessing what fits and what doesn’t as we look to reshape our business toward the greatest opportunities for near- and long-term logical growth and value creation,” he said during a conference call with investors.

VF overall reported a challenging quarter, with every large brand recording a double-digit revenue decline, led by Vans, which fell 29%.

The North Face, which had been a bright spot for VF, was not immune to the downturn. The brand saw global revenue drop 11% in constant currency during the quarter ended Dec. 30.

Darrell said North Face’s performance, especially in the Americas, was “particularly disappointing,” with revenue down 24% in the region.

Overall, VF’s total revenue dropped 17% in constant currency to $3 billion.

He attributed the VF revenue decline to several factors, including unseasonably warm weather for most of the quarter, underperformance in the Americas region, a “clean up” at footwear brand Vans, and a cyberattack last December.

Darrell also announced that VF CFO Matt Puckett would be stepping down later this year.

The North Face Q3 Results

The North Face posted an 11% revenue drop in constant currency to $1.19 billion for the third quarter ended Dec. 30.

“We expected a weaker quarter for The North Face, but results were worse than our expectations,” Darrell said.

The Americas region dragged down the results, while the brand’s international performance was better, he added.

The brand grew 28% in the Asia-Pacific region and more than 30% in greater China.

Despite the quarterly results, Darrell said he still views the brand as strong, and emphasized that the weather was a factor.

“All indications are that the brand strength continues to be in place,” he added.

Puckett added that The North Face’s performance was “choppy” throughout the quarter.

“While our core, best-selling lines continued to deliver strong sell-through, we saw softness in our cold-weather items and some seasonal product offerings,” he said.

He said the marketplace remains “pretty dynamic and pretty promotional, particularly in the outdoor segment.” Puckett expects to see that play out over the next couple of seasons as the company’s wholesale partners exercise caution.

Looking ahead, Puckett said he expects DTC to grow.

“It’s good to see the business bounce back in January, particularly the early part of January as the weather turned here and, to some degree, in Europe as well,” he added

Timberland Q3 Results

Timberland reported a 22% revenue decrease in constant currency to $473 million for the third quarter.

Darrell said the brand “sagged under the weight of warm, high-season weather and underperformance in the Americas.”

Puckett said channel inventory and retailer caution remained a headwind.

“Boots and other seasonal products have been challenged this season,” he added.

VF is taking a “hard look” at the Timberland business in the U.S., Puckett said.

Internationally, the brand performed relatively better, with low single-digit growth in the APAC region.

Darrell also mentioned the hiring of Nina Flood as global brand president for Timberland.

“She’s the second, strong VF leader I’ve promoted within my VF leadership team,” Darrell said. “Nina brings extensive experience across general management, brand marketing and strategy, with a 20-year career at VF spanning multiple leadership positions.”

VF FYQ3 Results

Overall, VF revenue was $3 billion, down 17% in constant currency compared to the prior-year period.

Gross margin was 55.1%, up 20 basis points.

The company posted a net loss of $42.5 million for the quarter, compared to net income of $507.9 million for the prior-year period.

Company-wide wholesale revenue was down 28% in constant currency to $1.17 billion for the quarter.

Direct-to-consumer sales were down 9% in constant currency to $1.77 billion for the quarter, despite the weather, Darrell said.

December Cyberattack

On Dec. 13, VF was hit with a cyberattack that disrupted the company’s brands, including hindering its ability to fulfill customer orders on e-commerce websites during the busy holiday season.

“It obviously impacted us, but it could have been much worse,” Darrell said. “Rarely have I seen a company rally so quickly and so effectively to a cause. Great preparation beforehand, leadership and teamwork, and meticulous follow through mitigated the impact.”

He added that the company has instituted a range of additional controls to “de-risk” the potential of any future incidents.