- Second quarter revenue from
continuing operations was up 1 percent to $2.4 billion;
- Outdoor & Action Sports revenue
up 2 percent;
- Jeanswear revenue up 3 percent (up 6
percent currency neutral);
- Imagewear revenue up 3
percent;
- Direct-to-consumer revenue up 6
percent (up 7 percent currency neutral); and,
- International revenue up 5 percent
(up 7 percent currency neutral).
VF Corporation (NYSE: VFC) today reported financial results for
its second quarter ended July 2, 2016. All per share amounts are
presented on a diluted basis. This release refers to “currency
neutral” and “reported” amounts, terms that are described under the
“Currency Neutral – Excluding the Impact of Foreign Currency”
paragraph. 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. Unless otherwise noted, currency neutral and
reported amounts are the same. This release also refers to both
“continuing” and “discontinued” operations amounts, concepts that
are described under the “Discontinued Operations – Contemporary
Brands” paragraph. Unless otherwise noted, results presented are
based on continuing operations.
“Our second quarter results were in line with our expectations,
despite a challenging environment with mixed economic and currency
conditions around the world,” said Eric Wiseman, VF Chairman and
Chief Executive Officer. “Earlier this year, we said we would
actively manage our portfolio of brands and we’re doing just that.
We expect to deliver on our current 2016 outlook and, as a result
of the actions we are taking, be even better positioned to provide
the strong long-term returns our shareholders have come to
expect.”
Discontinued Operations – Contemporary Brands
On June 30, 2016, the company announced it had reached an
agreement to sell its Contemporary Brands businesses, which include
the 7 For All Mankind®, Splendid® and Ella Moss® brands, to Delta
Galil Industries, Ltd. for $120 million, subject to various
regulatory approvals and working capital adjustments. Accordingly,
the company has classified the assets and liabilities of the
Contemporary Brands businesses as held for sale and included the
results of these businesses in discontinued operations for all
periods presented. The company expects to complete the sale of its
Contemporary Brands businesses in the third quarter of 2016.
The company’s net loss from discontinued operations was $97
million in the second quarter of 2016, which includes both the
estimated loss recorded for the expected sale of the Contemporary
Brands businesses and the operating results for the businesses
during the quarter, net of tax.
Income Statement Review
- Revenue increased 1 percent to
$2.4 billion driven by positive results from our Outdoor &
Action Sports, Jeanswear and Imagewear coalitions and our
direct-to-consumer and international businesses.
- Gross margin was up slightly
compared to the second quarter of last year at 48.1 percent on a
reported basis, as benefits from lower product costs, pricing and
mix were offset by changes in foreign currency and inventory
management.
- Operating income on a reported
basis was down 3 percent to $211 million compared with the same
period of 2015. Operating margin on a reported basis declined 40
basis points to 8.6 percent.
- Earnings per share was $0.35
compared with $0.39 during the same period last year. On a
comparative basis, the second quarter of 2016 was negatively
impacted by approximately $0.01 of net tax discretes while the
second quarter of 2015 benefitted by about $0.05 from net tax
discretes. Excluding the negative impact of foreign currency,
second quarter earnings per share was down 6 percent.
Coalition Review
Second quarter revenue for Outdoor & Action Sports
was up 2 percent to $1.4 billion.
- Revenue for The North Face® brand was
up 2 percent including low single-digit growth in the Americas; a
high-teen percentage rate increase in Europe (up low-teen currency
neutral); and, a high-teen percentage rate decline in Asia-Pacific
(down mid-teen currency neutral).
- Vans® brand revenue was up 4 percent
(up 6 percent currency neutral) driven by a high single-digit
percentage rate increase in the Americas business; a high
single-digit percentage rate increase in Asia-Pacific (up mid-teen
currency neutral); and, as expected, a high single-digit percentage
rate decrease in Europe where the brand continues to manage through
elevated inventories related to its Classics collection.
- Timberland® brand revenue was down 7
percent in the second quarter including a high-teen percentage rate
decrease in the Americas region; a low double-digit percentage rate
increase in Europe (up high single-digit currency neutral); and, a
high single-digit decline in Asia-Pacific.
Second quarter operating income for Outdoor & Action Sports
declined 9 percent to $123 million (down 5 percent currency
neutral). Operating margin was 8.7 percent compared to 9.7 percent
in the same period last year.
Jeanswear second quarter revenue was up 3 percent (up 6
percent currency neutral) to $629 million.
- Wrangler® brand revenue was up 2
percent (up 4 percent currency neutral) with a low single-digit
percentage rate increase in the Americas business (up
mid-single-digit currency neutral); a low single-digit percentage
rate increase in Europe (up mid-single-digit currency neutral);
and, a low double-digit decline in the Asia-Pacific region (down
high single-digit currency neutral).
- Revenue for the Lee® brand was up 8
percent (up 10 percent currency neutral) including a high
single-digit percentage rate increase in the Americas region (up
low double-digit currency neutral); a mid-teen percentage rate
increase in Europe; and, a low single-digit percentage rate
increase in the Asia-Pacific region (up mid-single-digit currency
neutral).
Operating income for Jeanswear in the second quarter was up 4
percent to $109 million (up 7 percent currency neutral) and
operating margin was up 10 basis points to 17.3 percent.
Imagewear second quarter revenue was up 3 percent to $255
million with a mid-teen percentage rate increase in the Licensed
Sports Group business partially offset by a high single-digit
decline in the workwear business (down mid-single-digit currency
neutral), which continues to be impacted by oil and gas exploration
declines. Second quarter operating income for Imagewear was up 3
percent (up 1 percent currency neutral) to $36 million, with
operating margin at 14.3 percent compared with 14.2 percent in the
same period last year.
Sportswear second quarter revenue declined 19 percent to
$115 million including a 20 percent decrease in Nautica® brand
revenue and a mid-teen decrease in the Kipling® brand’s North
American business compared with the same period last year,
reflecting ongoing challenges in the U.S. department store and
outlet channels, and general category demand. Operating income for
Sportswear decreased 56 percent to $6 million with a 470 basis
point decrease in operating margin to 5.5 percent.
International Review
International revenue in the second quarter was up 5 percent (up
7 percent currency neutral). Revenue in Europe was up 5 percent (up
3 percent currency neutral) and in the Asia-Pacific region was up 4
percent (up 6 percent currency neutral). Revenue in the Americas
(non-U.S.) region was up 7 percent (up 20 percent currency
neutral). The international business represented 35 percent of
total VF second quarter sales, compared with 34 percent in last
year’s same period.
Direct-to-Consumer Review
Direct-to-consumer revenue was up 6 percent (up 7 percent
currency neutral) in the second quarter driven by a low
double-digit percentage rate increase in the Outdoor & Action
Sports business, which was partially offset by a mid-teen decline
in Sportswear. The company’s e-Commerce business continued its
strong momentum with a nearly 30 percent increase in revenue.
Excluding the Contemporary Brands coalition, there were 1,461
VF-owned retail stores at the end of the quarter compared with
1,319 for last year’s same period. Direct-to-consumer revenue
reached 27 percent of total revenue in the second quarter compared
with 26 percent in last year’s same period.
Balance Sheet Review
- Inventories were up 6 percent
compared with the same period of 2015. Consistent with the 2015
year-end report in February and the first quarter report in April,
about half of this amount is related specifically to core styles of
cold-weather product expected to fill demand in the second half of
2016.
- During the second quarter, the company
purchased 1.9 million shares of its own stock for $120 million
under a program authorized by its Board of Directors. In 2016, the
company has purchased a total of 13.2 million shares for $834
million, well on track to achieve its $1 billion target for the
full year. There are approximately 17 million remaining shares
authorized for purchase.
2016 Outlook Highlights
The following adjusted outlook is presented on a continuing
operations basis and excludes the Contemporary Brands businesses,
which has been presented as discontinued operations for fiscal
years 2016 and 2015.
- Revenue is expected to increase
3 to 4 percent versus the previous outlook of a mid-single-digit
percentage rate increase. Revenue for the Outdoor & Action
Sports coalition is now expected to increase at a
mid-single-digit percentage rate compared with previous
expectations of a high single-digit percentage rate increase.
Jeanswear revenue is still expected to grow at a
mid-single-digit currency neutral percentage rate and expectations
for Imagewear growth remains the same at a low single-digit
percentage rate increase. Sportswear coalition revenue is
now expected to decline at a low double-digit percentage rate
versus the previous expectation of a slight decline.
- The exclusion of Contemporary Brands
from continuing operations results in a reduction of gross
margin by about 10 basis points in 2015. The company expects
gross margin to improve by about 50 basis points to 48.7 percent,
which includes about 70 basis points of headwind from changes in
foreign currency.
- The exclusion of Contemporary Brands
from continuing operations results in an improvement of
operating margin of about 10 basis points in 2015. Operating
margin is expected to reach 14.5 percent, including about 60 basis
points of negative impact from changes in foreign currency.
- The exclusion of Contemporary Brands in
continuing operations results in a reduction of earnings per
share by $0.03 from our previous outlook for 2016. Accordingly,
reported earnings per share is expected to increase 5 percent to
$3.20 (up 11 percent currency neutral) compared to EPS from
continuing operations of $3.04 in 2015 as presented in the
financial tables below.
- Other full year assumptions include an
approximate 21 percent effective tax rate versus the
previous 23 percent expectation and cash flow from
operations, which is unchanged at $1.3 billion.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.37
per share, payable on September 19, 2016, to shareholders of record
on September 9, 2016.
Currency Neutral – Excluding the Impact of Foreign
Currency
This release 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. This
release also 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. Reconciliations of
GAAP measures to currency neutral amounts are presented in the
supplemental financial information included with this release,
which identify and quantify all excluded items.
Webcast Information
VF will host its 2016 second quarter conference call beginning
at approximately 8:30 a.m. Eastern Time on July 22, 2016. The
conference call will be broadcast live over the Internet,
accessible at ir.vfc.com. For those unable to listen to the live
broadcast, an archived version will be available at the same
location.
About VF
VF Corporation (NYSE: VFC) is a global leader in the design,
manufacture, marketing and distribution of branded lifestyle
apparel, footwear and accessories. The company’s highly diversified
portfolio of powerful brands spans numerous geographies, product
categories, consumer demographics and sales channels, giving VF a
unique industry position and the ability to create sustainable,
long-term growth for our customers and shareholders. The company’s
largest brands are The North Face®, Vans®, Timberland®,
Wrangler®, Lee® and Nautica®. For more information,
visit www.vfc.com.
Forward-looking Statements
Certain statements included in this release and the attachments
are "forward-looking statements" within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
therefore involve a number of risks and uncertainties. You can
identify these statements by the fact that they use words such as
“will,” “anticipate,” “estimate,” “expect,” “should,” and “may” and
other words and terms of similar meaning or use of future dates. We
caution that forward-looking statements are not guarantees and that
actual results could differ materially from those expressed or
implied in the forward-looking statements. Potential risks and
uncertainties that could cause the actual results of operations or
financial condition of VF to differ materially from those expressed
or implied by forward-looking statements in this release include,
but are not limited to: foreign currency fluctuations; the level of
consumer demand for apparel, footwear and accessories; disruption
to VF’s distribution system; VF's reliance on a small number of
large customers; the financial strength of VF's customers; VF's
ability to implement its business strategy; VF's ability to grow
its international and direct-to-consumer businesses; VF’s and its
customers’ and vendors’ ability to maintain the strength and
security of information technology systems; stability of VF's
manufacturing facilities and foreign suppliers; continued use by
VF's suppliers of ethical business practices; VF’s ability to
accurately forecast demand for products; VF's ability to protect
trademarks and other intellectual property rights; possible
goodwill and other asset impairment; changes in tax liabilities;
legal, regulatory, political and economic risks; and adverse or
unexpected weather conditions. More information on potential
factors that could affect VF's financial results is included from
time to time in VF's public reports filed with the Securities and
Exchange Commission, including VF's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q.
VF CORPORATION
Condensed Consolidated Statements of
Income
(Unaudited)
(In thousands, except per share
amounts)
Three Months Ended June % Six Months Ended
June %
Year Ended
December
2016a 2015 Change
2016a 2015 Change
2015b Net sales $ 2,418,370 $ 2,397,968
1 % $ 5,153,849 $ 5,114,405 1 % $ 11,909,635
Royalty income
26,889 29,018 (7 %) 56,354
62,345 (10 %) 123,020
Total revenues 2,445,259 2,426,986
1 % 5,210,203 5,176,750 1 % $
12,032,655
Costs and operating expenses Cost
of goods sold 1,268,773 1,260,938 1 % 2,705,182 2,668,890 1 %
6,235,699
Selling, general and administrative
expenses
965,062 947,068 2 % 1,961,344
1,897,531 3 % 4,009,029 Total
costs and operating expenses 2,233,835
2,208,006 1 % 4,666,526 4,566,421
2 % 10,244,728
Operating income
211,424 218,980 (3 %) 543,677 610,329 (11 %) $ 1,787,927
Interest, net (21,421 ) (20,965 ) 2 % (41,468 ) (40,557 ) 2
% (81,620 )
Other income (expense), net 1,501
672 123 % 2,793 1,495 87
% 1,028
Income before income taxes
191,504 198,687 (4 %) 505,002 571,267 (12 %) 1,707,335
Income taxes 43,210 30,845 40 %
99,842 120,300 (17 %) 392,204
Income from continuing operations 148,294
167,842 (12 %) 405,160 450,967 (10 %) 1,315,131
Income (loss) from discontinued
operations, net of tax
* * (97,279 ) 2,969 (93,876 )
8,553 (83,538 )
Net income $ 51,015
$ 170,811 (70 %) $ 311,284 $ 459,520
(32 %) 1,231,593
Earnings per common share
- Basic Continuing operations $ 0.35 $ 0.39 (10 %) $ 0.96 $
1.06 (9 %) $ 3.09 Discontinued operations (0.23 )
0.01 * (0.22 ) 0.02 * (0.19 )
Total earnings per common share - Basic $ 0.12 $ 0.40 (70 %)
$ 0.74 $ 1.08 (31 %) $ 2.90
Earnings per common share -
Diluted Continuing operations $ 0.35 $ 0.39 (10 %) $ 0.95 $
1.04 (9 %) $ 3.04 Discontinued operations (0.23 )
0.01 * (0.22 ) 0.02 * (0.19 )
Total earnings per common share - Diluted $ 0.12 $ 0.40 (70
%) $ 0.73 $ 1.06 (31 %) $ 2.85
Weighted average shares
outstanding Basic 415,991 424,349 418,870 425,305 425,408
Diluted 422,059 430,703 425,596 432,407 432,079
Cash
dividends per common share $ 0.37 $ 0.32 16 % $ 0.74 $ 0.64 16
% $ 1.33
Basis of presentation of condensed consolidated
financial statements: VF operates and reports using a 52/53
week fiscal year ending on the Saturday closest to December 31 of
each year. For presentation purposes herein, all references to
periods ended June 2016, December 2015 and June 2015 relate to the
13-week and 26-week fiscal periods ended July 2, 2016, the 52-week
fiscal period ended January 2, 2016 and the 13-week and 26-week
fiscal periods ended July 4, 2015, respectively.
* Calculation not meaningful
a Reflects the impact of adopting the new accounting
guidance on stock compensation as of the beginning of the first
quarter of 2016, which resulted in a $1.8 million and $17.6 million
tax benefit in the Consolidated Statements of Income for the three
and six months ended June 2016, respectively.
b The
2015 Consolidated Statement of Income has been presented to reflect
discontinued operations of the Contemporary Brands Coalition.
VF CORPORATION
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands)
June December June 2016
2015 2015a ASSETS Current
assets Cash and equivalents $ 676,262 $ 944,423 $ 658,485
Accounts receivable, net 1,165,200 1,289,962 1,170,150 Inventories
1,775,893 1,555,360 1,678,800 Other current assets 307,494 284,215
443,453 Current assets of discontinued operations 143,167
89,176 102,815 Total current assets 4,068,016
4,163,136 4,053,703
Property, plant and equipment
942,044 945,491 915,841
Intangible assets 1,967,306
1,948,611 1,987,367
Goodwill 1,796,161 1,788,407 1,796,769
Other assets 900,581 583,866 662,568
Other assets of
discontinued operations - 210,031 360,667
Total assets $ 9,674,108 $ 9,639,542 $ 9,776,915
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Short-term borrowings $ 1,404,493 $ 449,590 $
1,158,516 Current portion of long-term debt 3,566 3,351 3,240
Accounts payable 502,847 680,606 495,103 Accrued liabilities
723,624 782,148 766,447 Current liabilities of discontinued
operations 26,103 26,018 26,432 Total current
liabilities 2,660,633 1,941,713 2,449,738
Long-term
debt 1,400,636 1,401,820 1,401,553
Other liabilities
964,402 900,256 950,126
Other liabilities of discontinued
operations - 10,915 11,703
Total
liabilities 5,025,671 4,254,704 4,813,120
Stockholders' equity 4,648,437 5,384,838
4,963,795
Total liabilities and stockholders' equity
$ 9,674,108 $ 9,639,542 $ 9,776,915
a Reflects the
impact of adopting the new accounting guidance on classification of
debt issuance costs and deferred income taxes as of December 2015
on a retrospective basis. The new guidance requires classification
of debt issuance costs related to a recognized debt liability as a
direct reduction of that liability, and classification of all
deferred taxes as noncurrent.
VF CORPORATION
Condensed Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 2016
2015a Operating
activities Net income $ 311,284 $ 459,520 Depreciation and
amortization 137,472 129,265 Other adjustments (436,982 )
(841,503 ) Cash provided (used) by operating activities
11,774 (252,718 )
Investing activities Capital
expenditures (82,642 ) (125,504 ) Software purchases (17,361 )
(43,450 ) Other, net (1,297 ) 10,631 Cash used
by investing activities (101,300 ) (158,323 )
Financing
activities Net increase in short-term borrowings 954,424
1,139,103 Payments on long-term debt (11,536 ) (2,203 ) Payments of
debt issuance costs (327 ) (1,475 ) Purchases of treasury stock
(833,846 ) (731,527 ) Cash dividends paid (309,583 ) (271,519 ) Net
impact of stock issuance 12,417 3,752
Cash (used) provided by financing activities (188,451 ) 136,131
Effect of foreign currency rate changes on cash and
equivalents 8,481 (37,215 )
Net
change in cash and equivalents (269,496 ) (312,125 )
Cash and equivalents - beginning of periodb
945,605 971,895
Cash and equivalents
- end of periodb $ 676,109 $ 659,770
a Reflects the impact of adopting the new accounting
guidance on stock compensation as of the beginning of the first
quarter of 2016, which resulted in a $33.7 million reclassification
of cash flows from financing activities to operating activities in
the Condensed Consolidated Statement of Cash Flows for the six
months ended June 2015.
b The cash flows related to
discontinued operations have not been segregated, and are included
in the Condensed Consolidated Statement of Cash Flows. The cash and
equivalents amounts presented above differ from cash and
equivalents in the Condensed Consolidated Balance Sheets due to
cash included in the "Current assets of discontinued operations".
VF CORPORATION
Supplemental Financial
Information
Business Segment Information
(Unaudited)
(In thousands)
Three Months Ended June
Six Months Ended June
2016 2015
%
Change
% Change
Currency
Neutral**
2016 2015
%
Change
% Change
Currency
Neutral**
Coalition revenues Outdoor & Action Sports $
1,419,528 $ 1,396,344 2 % 2 % $ 3,063,923 $ 3,003,233 2 % 3 %
Jeanswear 629,180 608,201 3 % 6 % 1,339,770 1,307,856 2 % 5 %
Imagewear 255,225 248,788 3 % 3 % 524,350 531,684 (1 %) (1 %)
Sportswear 114,875 142,191 (19 %) (19 %) 233,272 277,848 (16 %) (16
%) Other 26,451 31,462 (16 %) (16 %)
48,888 56,129 (13 %) (13 %)
Total coalition revenues $ 2,445,259 $ 2,426,986 1 %
1 % $ 5,210,203 $ 5,176,750 1 % 2 %
Coalition profit Outdoor & Action Sports $ 123,172 $
134,925 (9 %) (5 %) $ 350,943 $ 395,745 (11 %) (2 %) Jeanswear
108,843 104,568 4 % 7 % 246,137 236,500 4 % 5 % Imagewear 36,397
35,450 3 % 1 % 77,912 76,797 1 % (2 %) Sportswear 6,300 14,433 (56
%) (56 %) 11,076 27,274 (59 %) (59 %) Other (504 )
597 * * (2,862 ) 15,124 * *
Total coalition profit 274,208 289,973 (5 %) (3 %) 683,206 751,440
(9 %) (4 %)
Corporate and other expenses (61,283 )
(70,321 ) (13 %) (13 %) (136,736 ) (139,616 ) (2 %) 2 %
Interest, net (21,421 ) (20,965 ) (2 %) 2 %
(41,468 ) (40,557 ) (2 %) (2 %)
Income
before income taxes $ 191,504 $ 198,687 (4 %) 0 %
$ 505,002 $ 571,267 (12 %) (5 %) . * Calculation not
meaningful **Refer to currency neutral definition on the following
pages.
VF CORPORATION
Supplemental Financial
Information
Business Segment Information – Currency
Neutral Basis
(Unaudited)
(In thousands)
Three Months Ended June 2016 As
Reported Adjust for Foreign under GAAP
Currency Exchange Currency Neutral
Coalition revenues Outdoor & Action Sports $ 1,419,528 $
2,846 $ 1,422,374 Jeanswear 629,180 14,726
643,906 Imagewear 255,225 (180 )
255,045 Sportswear 114,875 -
114,875 Other 26,451 -
26,451 Total coalition revenues $ 2,445,259 $
17,392 $ 2,462,651
Coalition profit
Outdoor & Action Sports $ 123,172 $ 5,178 $ 128,350 Jeanswear
108,843 2,984 111,827 Imagewear 36,397 (640 ) 35,757 Sportswear
6,300 - 6,300 Other (504 ) - (504 )
Total coalition profit 274,208 7,522 281,730
Corporate and other expenses (61,283 ) (165 ) (61,448 )
Interest, net (21,421 ) -
(21,421 )
Income before income taxes $ 191,504
$ 7,357 $ 198,861
Diluted earnings per share
growth (10 %) 4 % (6 %)
Currency Neutral Financial Information
VF is a global company that reports financial information in
U.S. dollars in accordance with GAAP. Foreign currency exchange
rate fluctuations affect the amounts reported by VF from
translating its foreign revenues and expenses into U.S. dollars,
and from entering foreign currency transactions. These rate
fluctuations can have a significant effect on reported operating
results. As a supplement to our reported operating results, we
present currency neutral financial information, which is a non-GAAP
financial measure that excludes the incremental current year impact
of foreign currency exchange. We use currency neutral information
to provide a framework to assess how our business performed
excluding the effects of changes in the rates used to calculate
foreign currency translation, and transaction gains and losses.
Management believes this information is useful to investors to
facilitate comparison of operating results and better identify
trends in our businesses.
To calculate foreign currency translation on a currency neutral
basis, operating results for the current year period for entities
reporting in currencies other than the U.S. dollar are translated
into U.S. dollars at the average exchange rates in effect during
the comparable period of the prior year (rather than the actual
exchange rates in effect during the current year period).
Similarly, transaction gains and losses on a currency neutral basis
are calculated using exchange rates from the comparable period of
the prior year.
These currency neutral performance measures should be viewed in
addition to, and not in lieu of or superior to, our operating
performance measures calculated in accordance with GAAP. The
currency neutral information presented may not be comparable to
similarly titled measures reported by other companies.
VF CORPORATION
Supplemental Financial
Information
Business Segment Information – Currency
Neutral Basis
(Unaudited)
Six Months Ended June 2016 As
Reported
Adjust for Foreign
under GAAP Currency Exchange Currency Neutral
Coalition revenues Outdoor & Action Sports $
3,063,923 $ 26,410 $ 3,090,333 Jeanswear 1,339,770 32,050 1,371,820
Imagewear 524,350 886 525,236 Sportswear 233,272 - 233,272 Other
48,888 - 48,888
Total coalition revenues $ 5,210,203 $ 59,346 $
5,269,549
Coalition profit Outdoor &
Action Sports $ 350,943 $ 38,094 $ 389,037 Jeanswear 246,137 2,695
248,832 Imagewear 77,912 (2,818 ) 75,094 Sportswear 11,076 - 11,076
Other (2,862 ) - (2,862 ) Total
coalition profit 683,206 37,971 721,177
Corporate and
other expenses (136,736 ) (171 ) (136,907 )
Interest,
net (41,468 ) (41,468 )
Income
before income taxes $ 505,002 $ 37,800 $ 542,802
Diluted earnings per share growth
(9
%) 8 % (1 %)
Currency Neutral Financial Information
VF is a global company that reports financial information in
U.S. dollars in accordance with GAAP. Foreign currency exchange
rate fluctuations affect the amounts reported by VF from
translating its foreign revenues and expenses into U.S. dollars,
and from entering foreign currency transactions. These rate
fluctuations can have a significant effect on reported operating
results. As a supplement to our reported operating results, we
present currency neutral financial information, which is a non-GAAP
financial measure that excludes the incremental current year impact
of foreign currency exchange. We use currency neutral information
to provide a framework to assess how our business performed
excluding the effects of changes in the rates used to calculate
foreign currency translation, and transaction gains and losses.
Management believes this information is useful to investors to
facilitate comparison of operating results and better identify
trends in our businesses.
To calculate foreign currency translation on a currency neutral
basis, operating results for the current year period for entities
reporting in currencies other than the U.S. dollar are translated
into U.S. dollars at the average exchange rates in effect during
the comparable period of the prior year (rather than the actual
exchange rates in effect during the current year period).
Similarly, transaction gains and losses on a currency neutral basis
are calculated using exchange rates from the comparable period of
the prior year.
These currency neutral performance measures should be viewed in
addition to, and not in lieu of or superior to, our operating
performance measures calculated in accordance with GAAP. The
currency neutral information presented may not be comparable to
similarly titled measures reported by other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160722005071/en/
VF CorporationLance Allega,
336-424-6082VP, Investor Relations & Strategic AccountsorCraig
Hodges, 336-424-5636Senior Director, Corporate Communications
VF (NYSE:VFC)
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