VF’s Transitional Quarter Beats on EPS, Revenues
VF Corp. has posted results for the transitional financial quarter ended March 31.
The company previously changed its fiscal year-end to the Saturday closest to March 31.
For the three months ended March 31, the company said net income was up 20.9 percent to $252.8 million, or 63 cents a diluted share, from $209.2 million, or 50 cents, a year ago. Earnings per share for continuing operations were 65 cents versus 51 cents a year ago. Adjusted EPS for the quarter was 67 cents, including a 3-cent contribution from its Williamson-Dickie acquisition. Total revenues rose 21.8 percent to $3.05 billion from $2.50 billion, which include a 21.7 percent gain in net sales to $3.02 billion from $2.48 billion. The balance of revenues was from royalty income.
Wall Street’s consensus estimate was 65 cents on revenues of $2.9 billion.
Steven Rendle, chairman, president and chief executive officer, told analysts at a conference call Friday, “VF’s results for the period were stronger than we expected as the broad-based growth, acceleration that began in the second half of 2017 continued. Our core growth engines are driving strong global momentum as we begin to enter the acceleration phase of our 2021 growth plan.”
He said that the firm’s three big brands “grew at a combined rate of 18 percent, with our Vans brand delivering another record quarter up 39 percent with strength across all regions, channels and franchises.” Rendle said momentum at The North Face grew 7 percent, while direct-to-consumer rose 24 percent, reflecting more than 40 percent growth in digital. The company’s Workwear business rose 4 percent, with Williamson-Dickie up 11 percent.
“Reshaping our portfolio remains our top priority and we’re committed to optimizing our portfolio to align with our financial aspirations,” the ceo said.
During the quarter, VF disclosed the planned sale of its Nautica business to Authentic Brands Group, which was completed on April 30. Nautica results were reported at discontinued operations for the quarter. Rendle noted that in March, the company acquired Altra, a technical, high-growth footwear brand. “This brings to VF a capability that, when applied across VF’s outdoor, D2C and international platforms, will serve as a catalyst for growth.
Subsequent to the quarter’s end, Rendle said the company in early April welcomed Icebreaker to VF’s porfolio of brands. “This acquisition amplifies VF’s natural fiber capabilities, which will be leveraged across multiple brands in the portfolio.…Icebreaker also marks VF’s first purpose-led acquisition,” the ceo said.
For fiscal 2019, Rendle said, “Key areas of focus for the coming year include reshaping and optimizing our portfolio, and while M&A will continue to be a top priority, we are intensely focused on protecting and enabling explosive growth in Vans, shepherding the positive momentum of The North Fact, and focusing on reenergizing growth in Timberland North America.”
He said that global revenue in the Timberland business fell 1 percent, although direct-to-consumer was up 12 percent, including 45 percent growth in digital. Some of the decline was in the core classics footwear business.
The company said it expects full year fiscal 2019 revenues to be in the range of $13.45 billion to $13.55 billion, with adjusted EPS between $3.48 to $3.53.