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VF Reports Third Quarter 2017 Results; Raises Outlook and Dividend for 2017
- Third quarter revenue from continuing operations increased 5 percent to $3.5 billion (up 4 percent currency neutral);
- Gross margin from continuing operations improved 100 basis points (up 180 basis points currency neutral) to 50.1 percent;
- Outdoor & Action Sports revenue increased 8 percent (up 6 percent currency neutral); Vans® brand revenue increased 28 percent (up 26 percent currency neutral);
- International revenue increased 13 percent (up 10 percent currency neutral), including 18 percent growth in Europe (up 14 percent currency neutral) and 9 percent growth in China;
- Direct-to-consumer revenue increased 18 percent (up 17 percent currency neutral) with digital revenue up 38 percent (up 37 percent currency neutral);
- Reported earnings per share from continuing operations decreased 16 percent (down 12 percent currency neutral) to $0.97 due to a noncash goodwill impairment charge; adjusted earnings per share from continuing operations increased 6 percent (up 10 percent currency neutral) to $1.23;
- 2017 revenue now expected to increase about 6 percent on a reported basis (up 5.5 percent on a currency neutral basis) to approximately $12.1 billion;
- 2017 reported earnings per share is now expected to be $2.73; adjusted earnings per share from continuing operations is now expected to be $3.01, including an additional $25 million, or $0.05 per share, of incremental investment, up 1 percent on an adjusted basis (up 6 percent currency neutral) compared to 2016 adjusted earnings per share of $2.98; and,
- Quarterly dividend rate increased by 10 percent to $0.46 per share.
GREENSBORO, N.C.--(BUSINESS WIRE)--October 23, 2017--VF Corporation (NYSE: VFC) today reported financial results for its third quarter ended September 30, 2017. All per share amounts are presented on a diluted basis. This release refers to “reported” and “currency neutral” amounts, terms that are described under the heading “Currency Neutral – Excluding the Impact of Foreign Currency.” Unless otherwise noted, “reported” and “currency neutral” amounts are the same. This release also refers to “continuing” and “discontinued” operations amounts, which are concepts described under the heading “Discontinued Operations – Licensing Business and Contemporary Brands.” Unless otherwise noted, results presented are based on continuing operations. This release also refers to “adjusted” amounts, terms that are described under the heading “Adjusted Amounts – Excluding Noncash Impairment Charges and Williamson-Dickie Transaction and Deal Related Expenses.” Unless otherwise noted, “reported” and “adjusted” amounts are the same.
“VF’s third quarter results were strong, fueled by accelerated momentum across the company’s international and direct-to-consumer platforms and our Outdoor and Action Sports and Workwear businesses,” said Steve Rendle, President and Chief Executive Officer. “Based on the strength of our third quarter performance and the stronger growth trajectory we see for the remainder of 2017, we are again increasing our full year outlook and making additional growth-focused investments aimed at accelerating growth and value creation into 2018 and beyond. VF remains committed to returning cash to shareholders as evidenced by the increase in our dividend, which is supported by the strength of our balance sheet and the confidence we have in our strategic growth plan.”
Currency Neutral – Excluding the Impact of Foreign Currency
This release refers to “reported” amounts in accordance with U.S. generally accepted accounting principles (“GAAP”), which include translation and transactional impacts from foreign currency exchange rates. This release also refers to “currency neutral” amounts, which exclude both the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions. Reconciliations of GAAP measures to currency neutral amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.
Discontinued Operations – Licensing Business and Contemporary Brands
On April 28, 2017, the company completed the sale of its Licensed Sports Group (LSG) business, including the Majestic® brand. Accordingly, the company has removed the assets and liabilities of LSG at that date and included the operating results of LSG in discontinued operations for all periods presented. In conjunction with the LSG divestiture, VF executed its plan to entirely exit the licensing business and has classified the assets of the JanSport® brand collegiate business as held for sale and included the operating results in discontinued operations for all periods presented.
On August 26, 2016, the company completed the sale of its Contemporary Brands businesses, which included the 7 For All Mankind®, Splendid® and Ella Moss® brands. Accordingly, the company has included the operating results of those businesses in discontinued operations for all periods presented.
The company’s net loss from discontinued operations was less than $1 million in the third quarter of 2017, which includes an adjustment to the estimated loss on the sale of LSG recorded in the first quarter of 2017, and the after-tax operating results of the JanSport® brand collegiate business during the quarter.
Adjusted Amounts – Excluding Noncash Impairment Charges and Williamson-Dickie Transaction and Deal Related Expenses
This release refers to adjusted amounts that exclude a pretax noncash goodwill impairment charge related to the Nautica® brand of $105 million and $5 million of transaction and deal related expenses associated with the acquisition of Williamson-Dickie. Combined, the above charges impacted earnings per share by $0.26. All adjusted amounts referenced herein exclude the effects of these amounts.
Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items.
The following information was filed by V F Corp (VFC) on Monday, October 23, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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