KEY POINTS

  • VF Corporation reported 4Q17 adjusted EPS of $1.01. Revenues were $3.65 billion, slightly below the consensus estimate of $3.67 billion.
  • During the quarter, the company announced that it had reached a decision to sell its Nautica brand business.
  • The company guided for 1Q18 EPS of $0.65, above the consensus estimate of $0.63. The company expects 1Q18 revenue of $2.9 billion, which is lower than the consensus estimate of $2.95 billion.

VR Corp 4Q174Q17 Results

VF Corporation reported 4Q17 revenues of $3.65 billion, up 20.1% year over year and slightly below the $3.67 billion consensus estimate. The company decided during the quarter to sell its Nautica business and is discontinuing operations for the brand.

Adjusted EPS from continuing operations was $1.01, just missing the $1.02 consensus estimate.

For the full year, the company’s revenue increased by 7% year over year, to $11.8 billion, which included a contribution of two percentage points to revenue growth from the acquisition of Williamson-Dickie Manufacturing Company, a family-owned maker of workwear. The purchase was made for $820 million in cash on October 20, 2017.

Management commented that results were stronger than expected and had allowed the company to reinvest about $100 million back into the business.

Additional Details from the Quarter

Coalition Revenues

  • Revenues from the Outdoor & Action Sports business increased by 16% and were up 13% on a currency-neutral basis.
  • Revenues from Jeanswear increased by 2% and were up 1% on a currency-neutral basis.
  • Revenues from Imagewear increased by 176% and were up 176% on a currency-neutral basis.
  • Other revenues decreased by 1% and were down 1% on a currency-neutral basis.

Revenues for the Top Five Brands, Globally

  • Revenues from Vans increased by 37% and were up 35% on a currency-neutral basis.
  • Revenues from The North Face increased by 8% and were up 6% on a currency-neutral basis.
  • Revenues from Timberland increased by 11% and were up 8% on a currency-neutral basis.
  • Revenues from Wrangler increased by 3% and were up 2% on a currency-neutral basis.
  • Revenues from Lee increased by 1% and were down 1% on a currency-neutral basis.

Revenue Growth by Geography

  • Revenues from the Americas increased by 35% and were up 31% on a currency-neutral basis, including US growth of 1% (up 1% on a currency-neutral basis).
  • Revenues from EMEA increased by 33% and were up 26% on a currency-neutral basis.
  • Revenues from APAC increased by 17% and were up 13% on a currency-neutral basis.
  • Total International revenues increased by 29% and were up 23% on a currency-neutral basis.

Other Channels

  • Revenues from the  Wholesale division increased by 19% and were up 17% on a currency-neutral basis.
  • Revenues from the Direct-to-Consumer business increased by 22% and were up 20% on a currency-neutral basis.

Outlook

The company guided for 1Q18 EPS of $0.65, which includes a $0.02 contribution from the acquisition of Williamson-Dickie and is higher than the consensus estimate of $0.63. Excluding the Williamson-Dickie acquisition, the company expects adjusted EPS to increase by more than 20% due in part to changes in foreign currency.

The company expects 1Q18 revenue of $2.9 billion, which is lower than the consensus estimate of $2.95 billion. This includes a $200 million contribution from the Williamson-Dickie acquisition.

 

 

 


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