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VF Corporation's full year revenues increase 12 percent

By Prachi Singh

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Business

For its fourth quarter and full year ended March 30, 2019, VF Corporation , said revenue increased 6 percent or 9 percent in constant dollars to 3.2 billion dollars and 12 percent or 13 percent in constant dollars to 13.8 billion dollars, respectively. VF’s board of directors declared a quarterly dividend of 51 cents per share, payable on June 20, 2019, to shareholders of record on June 10, 2019.

“Fiscal 2019 marked one of the most significant periods of transformation in VF's 120-year history, highlighted by our announcement to spin off our Jeans business as an independent, publicly traded company,” said Steve Rendle, VF’s Chairman, President and CEO in a statement, adding, “Despite the tremendous workload, we remained sharply focused and delivered another year of strong financial results and top quartile returns to our shareholders."

Review of VF’s Q4 and full year results

Fourth quarter gross margin declined 20 basis points to 50.3 percent on a reported basis and on an adjusted basis, gross margin increased 30 basis points, including a 70 basis point negative impact from Kontoor Brands, to 51.1 percent. Operating margin on a reported basis declined 420 basis points to 6.0 percent and adjusted operating margin declined 110 basis points, including a 70 basis point negative impact from Kontoor Brands, to 9.7 percent.

Full year gross margin increased 10 basis points to 50.7 percent on a reported basis and on an adjusted basis, gross margin increased 30 basis points, including a 10 basis point negative impact from Kontoor Brands, to 51 percent. Excluding acquisitions net of divestitures, adjusted gross margin increased 70 basis points to 51.4 percent. Operating margin on a reported basis decreased 30 basis points to 12.1 percent, while adjusted operating margin increased 110 basis points, including a 50 basis point negative impact from Kontoor Brands, to 13.8 percent.

Earnings per share were 32 cents on a reported basis and on an adjusted basis, earnings per share declined 10 percent or 4 percent in constant dollars to 60 cents. Full year earnings per share on a reported basis increased 63 percent to 3.14 dollars, while adjusted earnings per share increased 20 percent or 22 percent in constant dollars to 3.78 dollars.

VF updates full year outlook

VF said that the revenue for the year ahead is expected to be in the range of 11.7 billion dollars to 11.8 billion dollars, reflecting growth of approximately 5 percent to 6 percent, or approximately 7 percent to 8 percent on a constant dollar basis excluding the impact of acquisitions net of divestitures. By segment, revenue for outdoor is expected to increase approximately 4 percent to 5 percent, or approximately 5 percent to 6 percent on a constant dollar basis, excluding the impact of acquisitions; revenue for active is expected to increase approximately 6 percent to 7 percent, or approximately 9 percent to 10 percent on a constant dollar basis excluding the impact of divestitures; and, revenue for work is expected to increase approximately 3 percent to 5 percent, or approximately 4 percent to 6 percent on a constant dollar basis, excluding the impact of divestitures.

International revenue is expected to increase approximately 4 percent to 6 percent, or approximately 7 percent to 9 percent on a constant dollar basis, excluding the impact of acquisitions net of divestitures. By geographic region, European revenue is expected to increase approximately 1 percent to 3 percent, or approximately 5 percent to 7 percent on a constant dollar basis, excluding the impact of acquisitions net of divestitures. In the Asia Pacific region, revenue is expected to increase approximately 12 percent to 14 percent, or approximately 14 percent to 16 percent on a constant dollar basis. And, in the Americas, revenue is expected to increase approximately 2 percent to 4 percent, or approximately 3 percent to 5 percent on a constant dollar basis.

Direct-to-consumer revenue is expected to increase approximately 9 percent to 11 percent, or approximately 10 percent to 12 percent on a constant dollar basis, including 25 percent growth in digital. Adjusted gross margin is expected to approach 54 percent, which represents an estimated increase of approximately 60 basis points. Adjusted operating margin is expected to be 13.7 percent, which represents an estimated increase of approximately 60 basis points. Adjusted earnings per share is expected to be in the range of 3.30 dollars to 3.35 dollars, reflecting estimated growth of approximately 15 percent to 17 percent, or approximately 17 percent to 19 percent on a constant dollar basis.

Picture:Facebook/Timberland

VF Corporation