PR: Vans Reports Record First Quarter
9/29/98

(Press Release, September 24, 1998)-Vans, Inc. (Nasdaq: VANS) recently announced record financial results for the first fiscal quarter ended August 29, 1998. Net sales for the quarter increased 21.4% to $65.5 million, compared to $54.0 million for the first quarter of fiscal 1998. Net income rose to $4.7 million, versus net income of $4.0 million in the same period last year, and diluted earnings per share increased to $0.35 versus diluted earnings per share of $0.29 in the first quarter of fiscal 1998.

Gary H. Schoenfeld, Vans' President and Chief Executive Officer, stated "We are very pleased with the record sales and earnings results from the first quarter. Our strong top line growth is a solid reaffirmation that the VANS brand name continues to perform well in a competitive footwear market." Total U.S. sales, including sales through Vans' 101 U.S. retail stores, increased 39.3% in the first quarter to $50.8 million versus $36.5 million for the same period a year ago. Total international sales, including sales through the Company's two international retail stores, decreased 16.0% to $14.7 million versus $17.5 million for the same period last year. Domestic wholesale sales in the first quarter increased 43.4% to $34.0 million, versus $23.8 million a year ago. Overall sales through the Company's 103-store retail chain increased 31.8% to $16.8 million in the first quarter, from $12.7 million for the same period a year ago, while comparable store sales rose 9.9% versus the same period last year.

Commenting on the Company's sales growth, Mr. Schoenfeld stated, "The better than 40% growth in our U.S. wholesale business, driven predominantly by increased penetration in our existing accounts, demonstrates retailers' heightened commitment to the VANS brand. The strong sell-ins and sell-throughs we are currently experiencing give us confidence with regard to our future business. The more than 30% growth in our overall retail business and the 10% comp store increase, is further evidence of the continued growing acceptance of our product lines. And while our international business remains difficult primarily due to the ongoing crisis in the Far East, we are optimistic with regard to the second half of the year particularly as we are implementing our plans for Europe."(1)

Gross margins for the quarter increased 260 basis points to 42.9% versus 40.3% a year ago, primarily due to a channel mix more heavily skewed toward the higher-margin national wholesale and retail businesses. In addition, better sourcing in Asia also contributed to the margin improvement. Pre-tax profit increased 21.3% to $7.5 million vs. $6.2 million, on a period-to-period basis. Also during the quarter, the Company repurchased 261,000 shares pursuant to its stock repurchase program. To date, Vans has repurchased approximately 70% of the shares authorized for repurchase under such program.

Mr. Schoenfeld concluded, "We remain focused on becoming the premier footwear brand for the youth market, which will continue to be one of the fastest growing demographics into the new millennium. We are ideally positioned to benefit from the ongoing trends impacting this consumer. Vans is recognized as a leader in the lifestyle, music and enthusiast sports of young people. As this movement continues to grow exponentially, evidenced by significant increases in participation, heightened media attention and increased visibility, we have the opportunity to continue to capture market share and expand our business.(1) Our continued brand building efforts through our sponsorships of events such as the VANS Warped Tour and the VANS Triple Crown Series, and their high degree of acceptance and success, is testimony to the accuracy of our strategies and the commitment to our mission."

Vans, Inc. designs, markets and distributes active-casual footwear, clothing and accessories, performance footwear for enthusiast sports, snowboard boots, Swith(TM) step-in bindings, and outerwear worldwide to a target customer base of 10 to 24 year-old men and women. Products are sold through a network of independent and national retailers, internationally through distributors and sales agents for 80 countries and Company subsidiaries in the United Kingdom, Mexico, Brazil, Uruguay and Argentina, and through 104 Company-owned stores and factory outlets (as of September 24, 1998).

Back to Business Main