VF Corp posts increase in Q4 sales and earnings

Image: Supreme website For the fourth quarter, revenue at VF Corporation, increased 23 percent or 19 percent in constant dollars to 2.6 billion dollars. Excluding the impact of acquisitions, revenue increased 16 percent, or 12 percent in constant dollars driven by VF’s largest brands, e-commerce growth and an increase in the APAC region. “I could not be more pleased with how our organization navigated fiscal 2021,” said Steve Rendle, the company’s chairman, president and CEO in a statement, adding, “Early in the year we took important actions to protect our people and the enterprise, while maintaining investments to drive our transformation and accelerate organic growth.” Fourth quarter highlights of VF Corp’s results Gross margin decreased 100 basis points to 52.1 percent, while on an adjusted basis, gross margin decreased 120 basis points, including a 60 basis point positive impact from acquisitions, to 52.7 percent. Operating income on a reported basis was 122 million dollars and on an adjusted basis, operating income increased 98 percent to 173 million dollars, including a 34 million dollars contribution from acquisitions. Operating margin on a reported basis increased to 4.7 percent. Adjusted operating margin increased 260 basis points, including a 100 basis point positive impact from acquisitions, to 6.7 percent. Earnings per share were 16 cents on a reported basis. On an adjusted basis, earnings per share increased 169 percent or 150 percent in constant dollars to 27 cents, including a 6 cents contribution from acquisitions. VF Corp’s full year financial performance Full year revenue decreased 12 percent or 14 percent in constant dollars to 9.2 billion dollars. On an adjusted basis, excluding the impact of acquisitions, revenue decreased 13 percent or 15 percent in constant dollars, driven by store closures and lower consumer demand as a result of the Covid-19 outbreak and related government actions and regulations. Gross margin decreased 260 basis points to 52.7 percent, while on an adjusted basis, gross margin decreased 220 basis points, including a 10 basis point positive impact from acquisitions, to 53.3 percent. Operating income on a reported basis was 608 million dollars. On an adjusted basis, operating income decreased 45 percent or 47 percent in constant dollars to 742 million dollars, including a 34 million dollars contribution from acquisitions. Operating margin on a reported basis decreased 220 basis points to 6.6 percent. Adjusted operating margin decreased 480 basis points, including a 20 basis point positive impact from acquisitions, to 8 percent. Earnings per share were 91 cents on a reported basis. On an adjusted basis, earnings per share decreased 51 percent or 54 percent in constant dollars to 1.31 dollars, including a 6 cents contribution from acquisitions. VF Corp expects 28 percent revenue growth in fiscal 2022 For fiscal year 2022, VF Corp said, revenue is expected to approximate 11.8 billion dollars, reflecting growth of approximately 28 percent, including an approximate 600 million contribution from the Supreme brand. By segment, revenue for outdoor is expected to increase between 23 percent and 25 percent; revenue for active is expected to increase between 34 percent and 36 percent; and, revenue for work is expected to increase between 10 percent and 12 percent. International revenue is expected to increase between 25 percent and 27 percent. By geographic region, in the EMEA region, revenue is expected to increase between 29 percent and 31 percent. In the Asia Pacific region, revenue is expected to increase between 18 percent and 20 percent. And, in the Americas (non-U.S.) region, revenue is expected to increase between 28 percent and 30 percent. Direct-to-consumer revenue is expected to increase between 38 percent and 40 percent, including Digital revenue growth of between 29 percent and 31 percent. Adjusted gross margin is expected to exceed 56 percent, which represents an estimated increase of more than 270 basis points. Adjusted operating margin is expected to approximate 12.8 percent, which represents an estimated increase of approximately 480 basis points. Adjusted earnings per share is expected to approximate 3.05 dollars, including an approximate 25 cents contribution from the Supreme brand. VF’s board of directors declared a quarterly dividend of 49 cents per share, payable on June 21, 2021, to shareholders of record on June 10, 2021.
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