Supreme's sales were $523 million, down from an expected $600 million.
New York-based streetwear brand Supreme reported weak financial performance in the first quarter of 2023. VF Corp, which owns the brand, reported lower sales for the fiscal year ending March 2023.
Supreme's sales were $523 million, down from an expected $600 million. The company's net income fell from $82.4 million to $64.8 million.
VF Corp, whose portfolio includes Dickies, The North Face, Vans and Timberland, closed the acquisition of Supreme in late 2020. The deal was worth $2.1 billion. Last year, the company reshuffled Supreme's senior management team.
Supreme focuses on direct sales, unlike other global brands in VF Corp.'s portfolio. Analysts note that in today's market realities, "VF's inability to make the necessary adjustments to its operations given the changing characteristics, complexity and dynamics of the market could negatively impact VF's revenue, business health and bottom line."
Supreme's declining sales and bottom line may indicate the rapidly changing cycles of fashion trends in the U.S. market. Recently, many luxury brands have moved beyond streetwear. At the end of 2022, the New York-based brand lost its status as the most traded brand on StockX, losing to Jerry Lorenzo's Fear of God.