Steve Rendle
Chairman, President & Chief Executive Officer at V.F.
Good afternoon, everyone, and thank you for joining our Second Quarter Fiscal 2023 earnings call. I'll provide an operational update for the quarter and for the year-to-date, and Matt will provide a review of our financial performance.
I'd like to first start with a few words on the macroeconomic environment which even since we met for our Investor Day exactly a month ago, continues to dynamically evolve. While consumer health remains relatively intact across most of our markets, we continue to see global trends result in more choiceful and cautious spending behavior. In North America, we saw a mixed back-to-school result across product categories, and today, are seeing variable traffic patterns across channels, and an elevated [Phonetic] promotional environment in most markets. The situation in China continues to improve, although rolling lockdowns have slowed this progress. Despite continued softness in China, we're seeing pockets of growth in this market, led by The North Face, as the brand's global leadership role and the important outdoor TAM continues to influence this relatively underpenetrated market.
Outside of China, we're seeing further improvement across rest of Asia, led by Japan and Korea, which remain highly influential on Greater China. And we had another quarter of strong growth across our portfolio, our brands in Europe, despite a backdrop of deteriorating consumer confidence. Despite this mixed macroeconomic picture, our portfolio of brands continues to deliver a broad-based performance as consumers continue to prioritize their active lifestyles and lean in on our brands to fulfill those needs. And the investments we're driving into our key strategic growth capabilities and platforms continue to support the growth of our brands.
For the quarter, our revenue grew by 2% and our adjusted operating income was approximately $380 million. We returned $194 million in cash to shareholders, bringing the year-to-date total to nearly $390 million. As you heard at our recent Investor Day, we are committed to building on those things that have always made us uniquely VF and to growing our highly intentional portfolio of brands.
So, to start with Vans. Our actions to accelerate momentum at the brand are still early. And as anticipated, sales in the second quarter were lower, primarily as a result of a disappointing back-to-school season in the Americas. Q2 sales were down 8%, bringing year-to-date revenue to minus 6% and minus 1%, excluding China.
As mentioned at Investor Day, we have a deep and broad bench of strong talent at VF and are now strategically deploying this into the Vans business. We recently made two important appoint -- appointments, adding a new position of Chief Product and Merchandising Officer and bringing a key leader for North Face to head up digital.
In terms of Vans product, innovation in the Progression footwear line, which today represents 25% of brand sales. continues to drive an uptick in demand with the new UltraRange EXO MTE Hi showing strong initial sell-through. As you heard from Kevin Bailey at Investor Day, it will take some time for the product-facing initiatives to be introduced, and when they come, we are confident that they will have a positive impact on the brand's results.
Traffic to our stores and digital platforms continued to be below historic levels, while the industry-leading conversion in-store remains in line with our historic levels. And our test-and-learn in-store merchandising experience are showing early indications of improvement in both stores and online.
Our focus in the second half is to prioritize initiatives that drive traffic into our direct channels where we have the opportunity to benefit from our strong conversion rates. I remain confident that we have the right people and the right strategy and will execute to deliver results advance.
Now, to The North Face, which continues to deliver strong and broad-based performance and prove its [Phonetic] undisputed leadership in the outdoor category with revenue up 14% versus last year, reflecting double-digit growth across all regions and channels and leading to our biggest second quarter ever for the brand, bringing the year-to-date growth to 21%.
As you heard from Nicole Otto at the Investor Day, product innovation remains at the forefront of the brand's continued momentum. With a good start to the season in outerwear, we showed strength in softshells, [Phonetic] fleece, and lightweight insulated jackets, as consumers prepared for the coming fall/winter conditions. In addition to the good performance of outerwear, the continued focus on 365-day apparel in the Americas led to a double-digit growth in D2C for this region.
Bags and luggage saw global success with recovering summer travel and a strong back-to-school season, driving energy for the brand. And finally, The North Face and Gucci Chapter 3 collab launched and drove meaningful brand heat. The brand continues to push boundaries with its technical innovation and was recently recognized by Outside's 2023 Winter Gear Guide, which featured eight, that's right, I said eight products from The North Face as season's must-haves.
In addition, I'm extremely proud that The North Face VECTIV Fastpack insulated FUTURELIGHT boot received the Editor's Choice Award and a feature-length review alongside its inclusion in the best winter hiking boots of 2023. I encourage you to check this out. The North Face continues to deploy innovative tactics in order to deepen its understanding and connection with consumers and to enhance engagement.
Explore Past membership added more than 800,000 new members in Q2, surpassing 15 million members in total. Overall, the brand has strong and balanced momentum and is well-positioned to continue to generate long-term sustainable growth.
Onto Timberland. Q2 sales growth was up 3% versus last year, impacted slightly by shipment timing. Sales for the first half were up 7% versus last year, running slightly ahead of its long-term plans as the brand continues to perform well.
You heard recently from Global Brand President, Susie Mulder, about Timberland's sharpened focus and it's paying off. Our new integrated brand and product campaign Built for the Bold taps into our cultural relevance and work in outdoor heritage with progressive products like the GreenStride Turbo Hiker, the number one new fall '22 style across all regions and channels, and the new TrailQuest Hiker, driving growth during launch week. As part of our marketplace strategy, the campaign launched in New York City and London, driving sales traffic and strong growth across digital platforms. Overall, the campaign has topped an impressive 1 billion impressions.
We continue to see momentum in EMEA, with growth over 50% in our community membership month-over-month, and with the business being up nearly 20% in the quarter. We also continued to drive brand heat and attract new consumers with collaborations like Veneda Carter with more than 70% of purchasers in EMEA being new to the brand.
And finally, our Pro business returned to growth this quarter, fueled by strong performance in brick-and-mortar and a new campaign focused on bringing new consumers into the skilled trades. In all, a solid quarter for Timberland with momentum as we head into Q3.
Finally, to round out the Big 4, Dickies. Global revenue was down 15% in Q2 and 14% in the half. In the quarter, we saw strong growth in EMEA, driven by work lifestyle as the brand continues to gain traction in this region. These results were outweighed by further impacts in the Americas relating to our largest wholesale customer, which continues to tightly manage inventory levels. This performance impacted global results by about 10% in the quarter. Outside the value consumer, the brand is healthy. As you recently heard from new Global Brand President, Lance Meller, at our Investor Day. The Icons business was up mid-single-digits in the Americas, with Women's being a significant contributor.
While overall Asia-Pac continues to feel the impacts from COVID-related disruption, we continue to make progress in key markets beyond Greater China, experiencing significant growth with partners in Japan, and successful expansion in South Korea. On the marketing front, the Made in Dickies campaign, celebrating the brand's 100-year Anniversary, continues to support brand awareness with a meaningful growth in impressions, driving organic pickup on prominent social media platforms. Dickies continues to expand its appeal with new consumers in all regions, while maintaining strong brand momentum, giving us confidence in our long-range plans for the brand.
Turning to the rest of the portfolio in Q2. I'll start with Supreme, where the brand grew revenue by 7%. The fall/winter season has had a good opening. We dropped the new Yohji Yamamoto collection as well as the Nike ACG release, and launched the Andre 3,000 poster campaign.
Stores continue to see strong foot traffic in all regions, with Japan showing particularly good trends leading into the reopening of tourism. We also renovated our Harajuku [Phonetic] store, with the opening event featuring performances by Bladee and Yung Lean. Our outdoor emerging brands in aggregate grew by 14%, driven by continued outstanding growth at Altra, which achieved a strong double-digit growth rate in both road running and trail running, and was up mid-teens in the Americas and triple-digits in EMEA. The brand's performance has been fueled by continued success of the Lone Peak, as well as launches of key styles like Torin 6, Olympus 5, Outroad, and the Mont Blanc BOA.
Smartwool revenue in Q2 grew by low double-digits, driven by apparel, up in the mid-20 range. We saw continued momentum in Base Layer, and the launch of entry Mid Layer collection.
Icebreaker was up mid-single-digits, led by strong brick-and-mortar performance and the launch of Shell+, a 100% natural Outer Layer, which has already won multiple innovation awards. Icebreaker launched their fourth transparency report, celebrating 95% plastic-free materials and pioneering the journey towards regenerative wool practices. Momentum in our PACS business continued in Q2, with high-teens growth for the quarter, driven by strong back-to-school performance and continued recovery in global travel trends.
Across the majority of our business, we are delivering strong revenue growth as the investments behind our strategic growth platforms are yielding positive results. As we have highlighted before, our intentionally built portfolio of brands is generating broad-based growth, excluding Vans, which is early in its work to reset, refocus, and accelerate, the remainder of our portfolio grew revenue by 11% in the first half, with outdoor emerging brands continuing to gain scale and our PACS business recovering nicely and seeing an acceleration of growth to plus 25% across the same period.
Regionally, our EMEA business continues to deliver consistently strong results outperforming the broader European marketplace. Our first-half revenue was up 16%, highlighting the strength of our portfolio. The relevance of our brand across all markets and the important strength of our net international platforms. The North Face business continues to power forward, including and importantly, The North Face Group first-half revenue by nearly 30% in Greater China, where most brands inside VF and across the broader market have been impacted by ongoing disruption.
And the Dickies brand is continuing to gain momentum across the work lifestyle segment, where sales excluding China, were up about 20% in the first half. We are continuing to actively manage the near-term challenges presented by our largest brand, Vans. The ongoing COVID-related disruption in China and the broader macroeconomic and geopolitical challenges which have created an unprecedented level of uncertainty, which all businesses and consumers are navigating.
I remain confident in our ability to deliver on our overall revenue targets as we prepare to maximize our potential when the macroeconomic environment improves, leveraging VF's powerful brands, unique business model, and critical strategic growth platforms.
In summary, our performance in Q2 reflects a balanced delivery of results and speaks to our resiliency as we adapt to an increasingly variable and softer consumer backdrop. Our purpose-built portfolio of iconic, deeply loved brands, continues to benefit from strong tailwinds in the outdoor, workwear, streetwear, and active spaces. We continue to invest behind digital and innovation, with our brands generating a regular cadence of new product initiatives, driving an increasingly closer connection to our consumers. The quality of our performance is a testament to our deep bench of strong talent and the incredible teams whose enthusiasm, hard work, and commitment continue to enable us to deliver results. I remain incredibly impressed and grateful for their ongoing contributions.
I will now hand over to Matt to take you through our financial performance. Matt?