VF Corporation (NYSE: VFC) reported financial results for its third quarter ended December 26, 2020.
Steve Rendle, VF’s Chairman, President and CEO:
Our third quarter results were largely ahead of expectations despite the impact of additional COVID-19-related disruption to our business. Our portfolio remains on track to return to growth in the fiscal fourth quarter and we are confident in VF’s plans to accelerate growth into fiscal 2022 and to continue advancing our business model transformation. We remain optimistic about the year ahead and look forward to improvements in our geopolitical, macroeconomic and pandemic-related situations.
Here are the highlights of the report:
- Revenue from continuing operations decreased 6 percent (down 8 percent in constant dollars) to $3.0 billion;
- Active segment revenue decreased 9 percent (down 11 percent in constant dollars) including a 6 percent (8 percent in constant dollars) decrease in Vans® brand revenue; Outdoor segment revenue decreased 5 percent (down 7 percent in constant dollars) including flat revenue (down 2 percent in constant dollars) in The North Face® brand; Work segment revenue increased 8 percent (up 6 percent in constant dollars) including a 9 percent (7 percent in constant dollars) increase in Dickies® brand revenue;
- International revenue was flat (down 4 percent in constant dollars); Europe revenue increased 1 percent (down 4 percent in constant dollars); Greater China revenue increased 18 percent (up 11 percent in constant dollars), including a 22 percent (15 percent in constant dollars) increase in Mainland China;
- Direct-to-Consumer revenue decreased 2 percent (down 4 percent in constant dollars) including a 53 percent (49 percent in constant dollars) increase in Direct-to-Consumer Digital revenue;
- Gross margin from continuing operations decreased 250 basis points, including a 90 basis point negative impact from the timing of net foreign currency transaction activity, to 54.7 percent; on an adjusted basis, gross margin decreased 150 basis points to 55.7 percent;
- Operating income from continuing operations on a reported basis was $412 million; on an adjusted basis, operating income from continuing operations was $458 million;
- Earnings per share from continuing operations was $0.83; adjusted earnings per share from continuing operations was $0.93;
- VF ended the third quarter of fiscal 2021 with inventories down 14 percent compared to the prior year; at the end of the third quarter the company had approximately $3.9 billion of cash and short-term investments, including approximately $2 billion of cash designated for the acquisition of the Supreme®brand that was completed in the fourth quarter, in addition to $1.9 billion remaining under VF’s revolving credit facility; the company also returned $191 million to shareholders through dividends;
- Full year fiscal 2021 revenue is now expected to be in the range of $9.1 billion to $9.2 billion, reflecting a decrease of 12 percent to 13 percent on an adjusted basis; full year fiscal 2021 adjusted earnings per share is now expected to be approximately $1.30, reflecting a decrease of approximately 51 percent.
The full report can be found here: