- Second quarter revenue from
continuing operations increased 2 percent to $2.4 billion (up 3
percent currency neutral);
- Gross margin from continuing
operations improved 80 basis points (up 160 basis points currency
neutral) to 49.7 percent;
- Outdoor & Action Sports revenue
increased 4 percent (up 5 percent currency neutral); Vans®
brand revenue increased 8 percent (up 9 percent currency
neutral) and The North Face® brand revenue increased 5
percent (up 6 percent currency neutral);
- International revenue increased 4
percent (up 6 percent currency neutral), including 13 percent
growth (18 percent currency neutral) in China;
- Direct-to-consumer revenue increased
13 percent (up 14 percent currency neutral) with digital revenue up
34 percent (up 36 percent currency neutral);
- Earnings per share from continuing
operations decreased 11 percent (flat currency neutral) to 29
cents;
- 2017 earnings per share now expected
to be $2.94, including a $40 million, or 8 cents per share, impact
from additional investments to fuel accelerated growth;
and,
- VF expects to return more than $1.8
billion to shareholders in 2017 through share repurchases and
dividends, up from the prior outlook of $1.6 billion.
VF Corporation (NYSE: VFC) today reported financial results for
its second quarter ended July 1, 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.
“VF’s second quarter results were solid and consistent with our
expectations, driven by strong results from our largest global
brands, the company’s international and direct-to-consumer
platforms, and our growing workwear businesses,” said Steve Rendle,
President and Chief Executive Officer. “We have really good
momentum as we move into the second half of 2017 and are confident
in our growth engines, as evidenced by an increase in our full year
outlook and our plan to increase our cash returns to shareholders.
Based on the strength of the first half of 2017 and our
expectations for the second half of the year, we are making
growth-focused investments in our largest brands and platforms to
generate additional value for our shareholders both in the near and
long term.”
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 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 classified the assets and liabilities of the Contemporary
Brands businesses as held for sale as of June 2016 and included the
operating results of those businesses in discontinued operations
for all periods presented.
The company’s net loss from discontinued operations was $5.0
million in the second 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 LSG and
the JanSport® brand collegiate business during the quarter.
Income Statement Review
- Revenue increased 2 percent to
$2.4 billion (up 3 percent currency neutral), driven by broad-based
strength across our international and direct-to-consumer platforms,
our Outdoor & Action Sports coalition, and our workwear
businesses.
- Gross margin improved 80 basis
points to 49.7 percent on a reported basis, as benefits from
pricing, lower product costs and a mix shift toward higher margin
businesses were partially offset by changes in foreign currency.
Changes in foreign currency negatively affected reported gross
margin by 80 basis points during the quarter.
- Operating income on a reported
basis was down 14 percent to $168 million compared to the same
period of 2016. Changes in foreign currency negatively affected the
operating profit decline by 8 percentage points during the quarter.
Operating margin on a reported basis decreased 130 basis
points to 7.1 percent. Changes in foreign currency negatively
affected reported operating margin by about 70 basis points in the
quarter.
- Earnings per share on a reported
basis was down 11 percent to $0.29 compared to $0.32 during the
same period last year. Excluding the impact of changes in foreign
currency, second quarter earnings per share was in line with last
year’s second quarter.
Balance Sheet and Cash Flow Highlights
Inventories were up 3 percent compared with the same period of
2016. During the second quarter, the company purchased 14 million
of its shares for approximately $760 million at an average price of
$54 per share under the company’s share repurchase program
authorized by VF’s Board of Directors in 2017. The company has
purchased 22 million of its shares for approximately $1.2 billion
thus far in 2017.
2017 Outlook Raised
The following outlook for 2017 has been updated and includes the
following:
- Revenue is now expected to
approximate $11.65 billion, up 2 percent on a reported basis (up 3
percent currency neutral). By coalition, revenue for Outdoor
& Action Sports is now expected to increase approximately 5
percent (up 6 to 7 percent currency neutral) versus the previous
expectation of a mid-single-digit percentage rate increase; revenue
for Jeanswear is still expected to approximate 2016 revenue;
Imagewear revenue is now expected to increase at a
mid-single-digit percentage rate versus the prior expectation of a
low single-digit percentage rate increase; and Sportswear is
still expected to decline at a high single-digit percentage
rate.
- Direct-to-consumer revenue is
now expected to increase between 10 percent and 11 percent versus
the previous expectation of a high single-digit percentage rate
increase. Digital revenue is now expected to increase more than 25
percent.
- Gross margin is now expected to
reach 49.8 percent, versus the previous expectation of 49.6
percent, a 40 basis point increase over 2016 gross margin, and
includes about a 70 basis point negative impact from changes in
foreign currency.
- Operating margin is still
expected to approximate 14 percent, consistent with the 2016
adjusted operating margin, including about a 60 basis point
negative impact from changes in foreign currency.
- Earnings per share is now
expected to be $2.94, down approximately 1 percent on a reported
basis (up at a mid-single-digit percentage rate currency neutral)
compared to 2016 adjusted EPS of $2.98. This compares to the
company’s prior outlook range of $2.89 to $2.94. Relative to our
prior outlook, the company’s updated 2017 earnings per share
outlook includes about a $0.08 per share ($40 million pre-tax)
impact from additional investments to drive accelerated growth into
2018 and beyond.
- Other full year assumptions include an
effective tax rate in the low 20 percent range and cash
flow from operations of about $1.45 billion.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.42
per share, payable on September 18, 2017 to shareholders of record
on September 8, 2017.
Webcast Information
VF will host its 2017 second quarter conference call beginning
at approximately 8:30 a.m. Eastern Time today. The conference call
will be broadcast live via 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) outfits consumers around the world
with its diverse portfolio of iconic lifestyle brands, including
Vans®, The North Face®, Timberland®, Wrangler® and Lee®.
Founded in 1899, VF is one of the world’s largest apparel, footwear
and accessories companies with socially and environmentally
responsible operations spanning numerous geographies, product
categories and distribution channels. VF is committed to delivering
innovative products to consumers and creating long-term value for
its customers and shareholders. For more information,
visit www.vfc.com.
Forward-looking Statements
Certain statements included in this release and 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 several 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;
fluctuations in the price, availability and quality of raw
materials and contracted products; disruption and volatility in the
global capital and credit markets; VF's response to changing
fashion trends, evolving consumer preferences and changing patterns
of consumer behavior, intense competition from online retailers,
manufacturing and product innovation; increasing pressure on
margins; 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;
continuity of members of VF’s management; VF's ability to protect
trademarks and other intellectual property rights; possible
goodwill and other asset impairment; maintenance by VF’s licensees
and distributors of the value of VF’s brands; 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
% 2017 2016
Change 2017 2016 Change
Net sales $ 2,333,288 $ 2,294,762 2 % $ 4,888,981 $
4,901,744 0 %
Royalty income 26,293
25,704 2 % 52,277 53,139 (2 %)
Total revenues 2,359,581 2,320,466
2 % 4,941,258 4,954,883 0 %
Costs and operating expenses Cost of goods sold
1,187,011 1,185,247 0 % 2,473,696 2,535,947 (2 %)
Selling, general and administrative
expenses
1,004,548 940,797 7 % 2,008,066
1,912,717 5 % Total costs and operating
expenses 2,191,559 2,126,044 3 %
4,481,762 4,448,664 1 %
Operating
income 168,022 194,422 (14 %) 459,496 506,219 (9 %)
Interest, net (20,607 ) (21,394 ) (4 %) (40,795 ) (41,414 )
(1 %)
Other (expense) income, net (1,653 )
1,501 * (1,720 ) 2,793 *
Income from continuing operations
before income taxes
145,762 174,529 (16 %) 416,981 467,598 (11 %)
Income
taxes 30,897 38,036 (19 %)
87,437 89,170 (2 %)
Income from
continuing operations 114,865 136,493 (16 %) 329,544 378,428
(13 %)
Income (loss) from discontinued
operations, net of tax
(4,976 ) (85,478 ) * (10,492 ) (67,144
) *
Net income $ 109,889 $ 51,015 115 % $
319,052 $ 311,284 2 %
Earnings (loss) per common share -
basic (a)
Continuing operations $ 0.29 $ 0.33 (12 %) $ 0.81 $ 0.90 (10 %)
Discontinued operations (0.01 ) (0.21 ) *
(0.03 ) (0.16 ) *
Total earnings per common share -
basic $ 0.28 $ 0.12 126 % $ 0.79 $ 0.74
6 %
Earnings (loss) per common share -
diluted (a)
Continuing operations $ 0.29 $ 0.32 (11 %) $ 0.81 $ 0.89 (9 %)
Discontinued operations (0.01 ) (0.20 ) *
(0.03 ) (0.16 ) *
Total earnings per common share -
diluted $ 0.27 $ 0.12 127 % $ 0.78 $ 0.73
7 %
Weighted average shares outstanding Basic
397,065 415,991 404,527 418,870 Diluted 400,512 422,059 408,236
425,596
Cash dividends per common share $ 0.42 $ 0.37
14 % $ 0.84 $ 0.74 14 %
* Calculation not meaningful
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 2017, December 2016 and June 2016 relate to the 13-week and
26-week fiscal periods ended July 1, 2017, the 52-week fiscal
period ended December 31, 2016 and the 13-week and 26-week fiscal
periods ended July 2, 2016.
(a) Amounts have been calculated using unrounded numbers.
VF CORPORATION Condensed Consolidated Balance
Sheets (Unaudited)
(In thousands)
June
December June 2017 2016
2016 ASSETS Current assets Cash and
equivalents $ 672,542 $ 1,227,862 $ 676,262 Accounts receivable,
net 1,155,674 1,161,393 1,121,053 Inventories 1,712,972 1,471,300
1,667,895 Other current assets 356,147 296,698 304,612 Current
assets of discontinued operations 315 135,845
298,194 Total current assets 3,897,650 4,293,098
4,068,016
Property, plant and equipment 918,975
926,010 927,058
Intangible assets 1,895,287 1,797,271
1,921,151
Goodwill 1,736,407 1,708,323 1,767,525
Other
assets 725,409 929,190 899,772
Other assets of discontinued
operations - 85,395 90,586
Total assets $ 9,173,728 $ 9,739,287 $ 9,674,108
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Short-term borrowings $ 921,109 $ 26,029
$ 1,404,493 Current portion of long-term debt 253,783 253,689 3,566
Accounts payable 502,908 642,970 480,797 Accrued liabilities
753,343 827,507 720,374 Current liabilities of discontinued
operations - 35,205 51,403 Total
current liabilities 2,431,143 1,785,400 2,660,633
Long-term debt 2,111,623 2,039,180 1,400,636
Other
liabilities 986,623 977,076 967,729
Other liabilities of
discontinued operations(a) - (3,290 )
(3,327 )
Total liabilities 5,529,389 4,798,366
5,025,671
Stockholders' equity 3,644,339
4,940,921 4,648,437
Total
liabilities and stockholders' equity $ 9,173,728 $ 9,739,287
$ 9,674,108
(a) This line contains deferred income tax liabilities that
reflect VF's consolidated netting by jurisdiction.
VF CORPORATION Condensed Consolidated Statements
of Cash Flows (Unaudited) (In thousands)
Six Months Ended June
2017
2016 (a)
Operating activities Net income $
319,052 $ 311,284 Depreciation and amortization 131,908 137,472
Other adjustments (455,506 ) (432,168 ) Cash (used)
provided by operating activities (4,546 ) 16,588
Investing activities
Proceeds from sale of businesses, net of
cash sold
208,215 - Capital expenditures (78,211 ) (82,642 ) Software
purchases (33,731 ) (17,361 ) Other, net (7,148 )
(1,297 ) Cash provided (used) by investing activities 89,125
(101,300 )
Financing activities Net increase in
short-term borrowings 894,708 954,424 Payments on long-term debt
(1,821 ) (11,536 ) Payments of debt issuance costs - (327 )
Purchases of treasury stock (1,200,304 ) (833,846 ) Cash dividends
paid (337,606 ) (309,583 )
Proceeds from issuance of Common Stock,
net of shares withheld for taxes
14,713 12,417 Cash used by financing
activities (630,310 ) (188,451 )
Effect of foreign currency rate changes
on cash, cash equivalents and restricted cash
(8,355 ) 8,342
Net change in cash,
cash equivalents and restricted cash (554,086 ) (264,821 )
Cash, cash equivalents and restricted cash - beginning of
year (b) 1,231,026 946,396
Cash, cash equivalents and restricted cash - end of
period (b) $ 676,940 $ 681,575
(a) Reflects the impact of adopting the new accounting
guidance on the presentation of restricted cash and restricted cash
equivalents as of the beginning of the first quarter of 2017, which
resulted in a $4.8 million reclassification of cash flows used by
operating activities in the Condensed Consolidated Statement of
Cash Flows for the six months ended June 2016.
(b) The cash flows related to discontinued operations have not
been segregated, and are included in the Condensed Consolidated
Statements of Cash Flows. The cash amounts presented above differ
from the Condensed Consolidated Balance Sheets due to cash included
in the "Current assets of discontinued operations" and the adoption
of new accounting guidance as discussed in (a) above.
VF CORPORATION Supplemental Financial
Information Business Segment Information
(Unaudited)
(In thousands)
Three Months Ended June
Six Months Ended June
2017 2016
%Change
%
ChangeCurrencyNeutral*
2017 2016
%Change
%
ChangeCurrencyNeutral*
Coalition revenues Outdoor & Action Sports $
1,466,187 $ 1,412,751 4 % 5 % $ 3,144,997 $ 3,051,836 3 % 4 %
Jeanswear 600,807 629,180 (5 %) (4 %) 1,248,249 1,339,770 (7 %) (6
%) Imagewear 150,008 134,830 11 % 12 % 284,974 276,641 3 % 3 %
Sportswear 114,259 114,875 (1 %) (1 %) 212,576 233,272 (9 %) (9 %)
Other 28,320 28,830 (2 %) (2 %)
50,462 53,364 (5 %) (5 %) Total
coalition revenues $ 2,359,581 $ 2,320,466 2 % 3 % $
4,941,258 $ 4,954,883 0 % 1 %
Coalition profit (loss) Outdoor & Action Sports $
121,773 $ 123,253 (1 %) 12 % $ 352,717 $ 351,363 0 % 9 % Jeanswear
84,757 108,843 (22 %) (20 %) 202,776 246,137 (18 %) (17 %)
Imagewear 25,572 24,377 5 % 1 % 49,972 50,516 (1 %) (1 %)
Sportswear 11,345 6,300 80 % 80 % 10,276 11,076 (7 %) (7 %) Other
(293 ) (574 ) 49 % 49 % (2,488 ) (3,182
) 22 % 22 % Total coalition profit 243,154 262,199 (7 %) (1
%) 613,253 655,910 (7 %) (2 %)
Corporate and other
expenses (76,785 ) (66,276 ) 16 % 15 % (155,477 ) (146,898 ) 6
% 6 %
Interest, net (20,607 ) (21,394 ) (4 %)
(4 %) (40,795 ) (41,414 ) (1 %) (1 %)
Income from continuing operations
before income taxes
$ 145,762 $ 174,529 (16 %) (6 %) $ 416,981 $
467,598 (11 %) (4 %) *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 2017
As Reported Adjust for Foreign under
GAAP Currency Exchange Currency Neutral
Coalition revenues Outdoor & Action Sports $ 1,466,187 $
14,762 $ 1,480,949 Jeanswear 600,807 4,338 605,145 Imagewear
150,008 401 150,409 Sportswear 114,259 - 114,259 Other
28,320 - 28,320 Total
coalition revenues $ 2,359,581 $ 19,501 $ 2,379,082
Coalition profit (loss) Outdoor & Action
Sports $ 121,773 $ 16,020 $ 137,793 Jeanswear 84,757 1,876 86,633
Imagewear 25,572 (900 ) 24,672 Sportswear 11,345 - 11,345 Other
(293 ) - (293 ) Total coalition
profit 243,154 16,996 260,150
Corporate and other
expenses (76,785 ) 614 (76,171 )
Interest, net
(20,607 ) - (20,607 )
Income from
continuing operations before income taxes $ 145,762 $
17,610 $ 163,372
Diluted earnings per share
growth (11 %) 11 % 0 %
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) (In thousands)
Six Months Ended June 2017
As Reported Adjust for Foreign
under GAAP Currency Exchange Currency Neutral
Coalition revenues Outdoor & Action Sports $
3,144,997 $ 37,529 $ 3,182,526 Jeanswear 1,248,249 11,111 1,259,360
Imagewear 284,974 126 285,100 Sportswear 212,576 - 212,576 Other
50,462 - 50,462
Total coalition revenues $ 4,941,258 $ 48,766 $
4,990,024
Coalition profit (loss) Outdoor
& Action Sports $ 352,717 $ 30,101 $ 382,818 Jeanswear 202,776
1,369 204,145 Imagewear 49,972 (169 ) 49,803 Sportswear 10,276 -
10,276 Other (2,488 ) - (2,488 )
Total coalition profit 613,253 31,301 644,554
Corporate
and other expenses (155,477 ) 244 (155,233 )
Interest,
net (40,795 ) - (40,795 )
Income from continuing operations before income taxes $
416,981 $ 31,545 $ 448,526
Diluted earnings
per share growth (9 %) 7 % (2 %)
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 GAAP Continuing Operations EPS to Non-GAAP
Continuing Operations EPS (Unaudited)
Twelve Months
EndedDecember
2016 Diluted earnings per share from continuing
operations $ 2.65 Adjusted amounts (a) $ 0.33 Diluted
earnings per share from continuing operations - adjusted $ 2.98
Contribution from Licensing Business (b) $ 0.13
Adjusted diluted earnings per share from
continuing operations including contribution from Licensing
Business
$ 3.11
Non-GAAP Financial Information
The financial information above has been presented on a GAAP
basis and on an adjusted basis, which is described below in (a) and
(b). Management believes these measures provide investors with
useful supplemental information regarding VF's underlying business
trends and the performance of VF's ongoing operations and are
useful for period-over-period comparisons of such operations.
While management believes that these non-GAAP financial measures
are useful in evaluating the business, this information should be
considered as supplemental in nature and should be viewed in
addition to, and not in lieu of or superior to, VF's operating
performance measures calculated in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly titled measures presented by other companies.
(a) Adjusted amounts in 2016 represent restructuring charges of
$58.1 million (net of $14.4 million tax), goodwill and intangible
asset impairment charges of $79.6 million (net of $15.5 million
tax) and a pension settlement charge of $50.9 million (net of $19.5
million tax). The EPS impact was calculated using 422,081,000
weighted average common shares. Excluding these charges, adjusted
operating income from continuing operations in 2016 was $1.6
billion. Adjusted operating margin from continuing operations in
2016 was 14%.
(b) In the first quarter of 2017, the Licensing Business met the
criteria for discontinued operations reporting and this adjusted
amount represents the results of our Licensing Business as if the
business was not reported as discontinued operations. The per share
amounts were calculated using weighted average common shares of
422,081,000.
Following is the reconciliation of diluted earnings per share
from discontinued operations to the adjusted amounts:
Twelve Months Ended December 2016 Diluted loss
per share from discontinued operations, as reported under GAAP $
(0.10 ) Diluted loss per share related to discontinued operations
of Contemporary Brands in 2016 0.23 Diluted per share
contribution from Licensing Business reported in discontinued
operations $ 0.13
VF CORPORATION
Supplemental Financial Information Top 5 Brand Revenue
Information (Unaudited)
Three Months Ended June 2017 Six
Months Ended June 2017
Americas
EMEA APAC Global Americas EMEA
APAC Global
Top 5 Brand
Revenue Growth
Vans®
% change
7 % 1 % 26 % 8 % 6 % (1 %) 23 % 7 % % change currency neutral* 7 %
5 % 29 % 9 % 7 % 3 % 25 % 8 %
The North Face®
% change
1 % 23 % (1 %) 5 % 3 % 17 % (3 %) 6 % % change currency neutral* 1
% 26 % 1 % 6 % 3 % 21 % 0 % 7 %
Timberland®
% change
3 % 2 % (2 %) 2 % (3 %) 0 % (4 %) (2 %) % change currency neutral*
4 % 4 % (1 %) 3 % (3 %) 2 % (4 %) (2 %)
Wrangler®
% change
(3 %) 4 % (10 %) (2 %) (7 %) 0 % (6 %) (6 %) % change currency
neutral* (2 %) 5 % (12 %) (2 %) (6 %) 1 % (7 %) (6 %)
Lee®
% change
(9 %) (6 %) (4 %) (7 %) (10 %) (2 %) (4 %) (7 %) % change currency
neutral* (9 %) (4 %) (1 %) (6 %) (10 %) 0 % 0 % (6 %) *Refer
to currency neutral definition on previous pages.
VF CORPORATION Supplemental Financial Information
Geographic and Channel Revenue Information
(Unaudited) Three
Months Ended June 2017 Six Months Ended June
2017
%Change
%
ChangeCurrencyNeutral*
%Change
%
ChangeCurrencyNeutral*
Geographic
Revenue Growth
U.S. 1% 1% (2%) (2%)
EMEA 1% 4% 1% 4% APAC 7% 9% 4% 6% China 13% 18% 8% 14%
Americas (non-U.S.) 5% 7% 5% 8%
International 4%
6% 3% 5% Three Months Ended
June 2017 Six Months Ended June 2017
%Change
%
ChangeCurrencyNeutral*
%Change
%
ChangeCurrencyNeutral*
Channel Revenue
Growth
Wholesale (3%) (2%) (4%)
(3%) Direct-to-Consumer 13% 14%
10% 11% As of June 2017
2016
DTC Store
Count
Total 1,510 1,461 *Refer to
currency neutral definition on previous pages.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170724005278/en/
VF CorporationJoe Alkire, 336-424-7711VP, Investor Relations and
Financial Planning & AnalysisorCraig Hodges, 336-424-5636Senior
Director, Corporate Communications
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