- Revenue from continuing operations
increased 23 percent (up 21 percent in constant dollars) to $2.8
billion; revenue from continuing operations increased 12 percent
(up 10 percent in constant dollars) excluding the revenue
contribution from acquisitions;
- Active segment revenue increased 25
percent (up 22 percent in constant dollars) including a 35 percent
(32 percent in constant dollars) increase in Vans® brand
revenue; Outdoor segment revenue increased 6 percent (up 3 percent
in constant dollars) including an 8 percent (5 percent in constant
dollars) increase in The North Face® brand revenue and a
6-percentage point revenue growth contribution from
acquisitions;
- International revenue increased 27
percent (up 22 percent in constant dollars), including a
13-percentage point revenue growth contribution from
acquisitions;
- Direct-to-consumer revenue increased
22 percent (up 20 percent in constant dollars), including a
6-percentage point revenue growth contribution from acquisitions;
Digital revenue increased 54 percent (up 50 percent in constant
dollars), including a 21-percentage point revenue growth
contribution from acquisitions;
- Gross margin from continuing
operations increased 70 basis points to 50.3 percent; on an
adjusted basis, gross margin increased 90 basis points to 50.5
percent; excluding the impact of acquisitions, on an adjusted
basis, gross margin increased 170 basis points to 51.3
percent;
- Earnings per share from continuing
operations was $0.40. Adjusted earnings per share from continuing
operations increased 62 percent (up 56 percent in constant dollars)
to $0.43, including a $0.04 contribution from
acquisitions;
- Full year fiscal 2019 revenue is now
expected to be in the range of $13.6 billion to $13.7 billion,
reflecting an increase of 10 percent to 11 percent; and,
- Full year fiscal 2019 adjusted
earnings per share is now expected to be in the range of $3.52 to
$3.57, reflecting an increase of 12 percent to 14 percent.
VF Corporation (NYSE: VFC) today reported financial results for
its first quarter ended June 30, 2018. All per share amounts
are presented on a diluted basis. This release refers to “reported”
and “constant dollar” amounts, terms that are described under the
heading “Constant Currency - Excluding the Impact of Foreign
Currency.” Unless otherwise noted, “reported” and “constant dollar”
amounts are the same. This release also refers to “continuing” and
“discontinued” operations amounts, which are concepts described
under the heading “Discontinued Operations - Nautica® Brand
Business and Licensing Business.” Unless otherwise noted, results
presented are based on continuing operations. This release also
refers to “adjusted” amounts, terms that are described under the
heading “Adjusted Amounts - Excluding Williamson-Dickie,
Icebreaker® and Altra® Transaction and Deal Related Expenses and
the Provisional Impact of U.S. Tax Legislation.” Unless otherwise
noted, “reported” and “adjusted” amounts are the same.
“VF's first quarter results were strong, driven by continued
broad based acceleration across our core brands and platforms,”
said Steve Rendle, Chairman, President and Chief Executive Officer.
“We are executing well against our 2021 growth plan and continuing
on our journey to reshape the portfolio and transform VF into a
purpose-led, performance driven, consumer-centric organization
focused on and committed to delivering superior returns to
shareholders.”
Reportable Segment Change
In light of recently completed acquisitions, divestitures, and
organizational realignments, the company has changed its reporting
structure to better support and assess the operations of the
business. The company's new reportable segments are Outdoor,
Active, Work and Jeans. In this release, the company has recast
historical financial information to reflect the new reportable
segments. The recast historical financial information is included
in the attached supplemental financial tables.
Constant Currency - 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 impacts from foreign currency exchange rates.
This release also refers to “constant dollar” amounts, which
exclude the impact of translating foreign currencies into U.S.
dollars. Reconciliations of GAAP measures to constant currency
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 - Nautica® Brand Business and
Licensing Business
On April 30, 2018, the company completed the sale of its
Nautica® brand business. Accordingly, the company has classified
the assets and liabilities of the Nautica® brand business as
held-for-sale through the date of sale and has included the
operating results of this business in discontinued operations for
all periods presented.
On April 28, 2017, the company completed the sale of its
Licensed Sports Group (LSG) business, including the Majestic®
brand. In conjunction with the LSG divestiture, VF executed its
plan to entirely exit the licensing business and completed the sale
of the assets of the JanSport® brand collegiate business in the
fourth quarter of 2017. Accordingly, the company has removed the
assets and liabilities of the licensing business as of the dates
noted above and included the operating results of these businesses
in discontinued operations for all periods presented.
The company’s after-tax net income from discontinued operations
was $0.4 million in the first quarter of fiscal 2019, which
includes the operating results of the Nautica® brand business
during the period through the date of sale.
Adjusted Amounts - Excluding Williamson-Dickie,
Icebreaker® and Altra® Transaction and Deal Related
Expenses and the Provisional Impact of U.S. Tax Legislation
This release refers to adjusted amounts that exclude transaction
and deal related expenses associated with the acquisitions of
Williamson-Dickie, Icebreaker® and Altra®. Total transaction and
deal related expenses were approximately $19 million in the first
quarter of fiscal 2019.
Adjusted amounts in this release also exclude the provisional
amounts recorded due to recent U.S. tax legislation. On December
22, 2017, the U.S. government enacted comprehensive tax legislation
commonly referred to as the Tax Cuts and Jobs Act. Measurement
period adjustments related to the provisional net charge resulted
in a benefit of approximately $3 million in the first quarter of
fiscal 2019.
Combined, the above net charges negatively impacted earnings per
share by $0.03 during the first quarter of fiscal 2019. All
adjusted amounts referenced herein exclude the effects of these
amounts.
Reconciliations of measures calculated in accordance with GAAP
to adjusted 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.
First Quarter Fiscal 2019 Income Statement Review
- Revenue increased 23 percent (up
21 percent in constant dollars) to $2.8 billion, including a $249
million revenue contribution from the Williamson-Dickie,
Icebreaker® and Altra® acquisitions. Excluding acquisitions,
revenue increased 12 percent (up 10 percent in constant dollars),
driven by broad-based strength across VF’s international and
direct-to-consumer platforms and Active and Work segments.
- Gross margin improved 70 basis
points to 50.3 percent, as benefits from a mix-shift toward higher
margin businesses and continued focus on fundamentals were
partially offset by the impact of acquisitions. On an adjusted
basis, gross margin increased 90 basis points to 50.5 percent.
Adjusted gross margin, excluding acquisitions, increased 170 basis
points to 51.3 percent.
- Operating income on a reported
basis was $231 million. On an adjusted basis, operating income
increased 57 percent to $250 million, including an $20 million
contribution from acquisitions. Operating margin on a
reported basis increased 130 basis points to 8.3 percent. Adjusted
operating margin increased 200 basis points to 9.0 percent.
Adjusted operating margin, excluding acquisitions, increased 210
basis points to 9.1 percent.
- Earnings per share was $0.40 on
a reported basis. On an adjusted basis, earnings per share
increased 62 percent (56 percent in constant dollars) to $0.43,
including a $0.04 contribution from acquisitions.
Balance Sheet Highlights
Inventories were up 20 percent compared with the same period
last year. Excluding the impact of acquisitions, inventories
increased 2 percent. The company has $4 billion remaining under its
current share repurchase authorization.
Adjusted Full Year Fiscal 2019 Outlook
The following outlook for fiscal year 2019 is on an adjusted
basis and has been updated to include the following:
- Revenue is now expected to be in
the range of $13.6 billion to $13.7 billion, reflecting an increase
of 10 percent to 11 percent, and includes more than a $150 million
negative impact from unfavorable foreign currency exchange rates
relative to the prior outlook. This compares to the previous
expectation of revenue between $13.45 billion and $13.55 billion,
which reflected a 9 percent to 10 percent increase. By segment,
revenue for Outdoor is expected to increase 6 percent to 8
percent; revenue for Active is expected to increase 13
percent to 14 percent; revenue for Work is expected to
increase more than 35 percent; and, revenue for Jeans is
expected to be about flat compared to the prior year.
- International revenue is now
expected to increase between 12 percent and 13 percent versus the
previous expectation of a 13 percent to 15 percent increase. By
geographic region, Europe revenue is expected to increase 12
percent to 13 percent (previously 13 percent to 15 percent); Asia
Pacific revenue is expected to increase 14 percent to 15 percent
(previously 15 percent to 17 percent); and, Americas (non-U.S.)
revenue is expected to increase 9 percent to 10 percent (previously
10 percent to 12 percent).
- Direct-to-consumer revenue is
now expected to increase between 11 percent and 13 percent versus
the previous expectation of an 8 percent to 10 percent increase.
Digital revenue is now expected to increase more than 30 percent
versus the previous expectation of a more than 25 percent
increase.
- Gross margin is still expected
to approximate 51 percent.
- Operating margin is now expected
to increase 70 basis points to about 13.4 percent, versus the
previous expectation of about 13.2 percent.
- Earnings per share is now
expected to be in the range of $3.52 to $3.57, reflecting an
increase of 12 percent to 14 percent, and includes about a $0.06
negative impact from unfavorable foreign currency exchange rates
relative to the prior outlook. This compares to the previous
expectation of $3.48 to $3.53, which reflected an increase of
between 11 percent and 13 percent.
- Cash flow from operations is now
expected to exceed $1.7 billion (up from $1.6 billion
previously).
- Other full year assumptions include an
effective tax rate of approximately 16.5 percent (down from
17 percent previously) and capital expenditures of
approximately $275 million.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.46
per share, payable on September 20, 2018 to shareholders of record
on September 10, 2018.
Webcast Information
VF will host its first quarter fiscal 2019 conference call
beginning at 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.
Presentation
A presentation on first quarter fiscal 2019 results will be
available at ir.vfc.com beginning at approximately 7:30 a.m.
Eastern Time today and will be archived 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; VF's ability to
execute and integrate acquisitions; changes in tax laws and
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
% 2018 2017 (a) Change
Net sales $ 2,765,695 $ 2,252,590 23 %
Royalty income
22,451 16,030 40 %
Total revenues 2,788,146
2,268,620 23 %
Costs and operating expenses
Cost of goods sold 1,384,977 1,142,476 21 % Selling, general and
administrative expenses 1,172,287 966,468 21 % Total
costs and operating expenses 2,557,264 2,108,944 21 %
Operating income 230,882 159,676 45 %
Interest, net
(23,884 ) (20,607 ) 16 %
Other income (expense), net (20,666
) (3,217 ) *
Income from continuing operations before income
taxes 186,332 135,852 37 %
Income taxes 26,379
28,760 (8 )%
Income from continuing operations
159,953 107,092 49 %
Income from discontinued operations, net of
tax 405 2,797 *
Net income $ 160,358
$ 109,889 46 %
Earnings per common share -
basic (b) Continuing operations $ 0.41 $ 0.27 50 %
Discontinued operations — 0.01 *
Total earnings
per common share - basic $ 0.41 $ 0.28 47 %
Earnings per common share - diluted (b) Continuing
operations $ 0.40 $ 0.27 50 % Discontinued operations — 0.01
*
Total earnings per common share - diluted $ 0.40
$ 0.27 46 %
Weighted average shares
outstanding Basic 394,165 397,065 Diluted 399,548 400,512
Cash dividends per common share $ 0.46 $ 0.42 10 % *
Calculation not meaningful
Basis of presentation of
condensed consolidated financial statements: VF operates and
reports using a 52/53 week fiscal year. In connection with the
change in fiscal year end to the Saturday closest to March 31 from
the Saturday closest to December 31, VF's current fiscal year will
run from April 1, 2018 through March 30, 2019 (“Fiscal 2019”). For
presentation purposes herein, all references to periods ended June
2018 and June 2017 relate to the 13-week fiscal period ended June
30, 2018 and the 13-week fiscal period ended July 1, 2017,
respectively, and references to March 2018 relate to the balance
sheet as of March 31, 2018. (a) In the first quarter of
fiscal 2019, the Company adopted ASU 2017-07, "Compensation -
Retirement Benefits (Topic 715): Improving the Presentation of Net
Periodic Pension Cost and Net Periodic Postretirement Benefit Cost"
and restated the prior period to conform to current year
presentation. For the three months ended June 2017, operating
income increased and other income (expense), net decreased by $1.6
million. (b) Amounts have been calculated using unrounded
numbers.
VF
CORPORATION Condensed Consolidated Balance Sheets
(Unaudited) (In thousands) June
March June 2018 2018 2017
ASSETS Current assets Cash and equivalents $ 467,917
$ 680,762 $ 672,045 Accounts receivable, net 1,428,535 1,408,587
1,143,573 Inventories 1,993,825 1,861,441 1,663,052 Other current
assets 439,870 732,533 418,980 Total current assets
4,330,147 4,683,323 3,897,650
Property, plant and
equipment 1,018,164 1,011,617 903,024
Goodwill and
intangible assets 4,000,438 3,813,329 3,213,690
Other
assets 843,005 803,041 1,159,364
Total
assets $ 10,191,754 $ 10,311,310 $ 9,173,728
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Short-term borrowings $ 1,316,923 $ 1,525,106 $
921,109 Current portion of long-term debt 6,189 6,265 253,783
Accounts payable 675,581 583,004 492,480 Accrued liabilities
1,001,602 1,024,454 763,771 Total current liabilities
3,000,295 3,138,829 2,431,143
Long-term debt
2,156,627 2,212,555 2,111,623
Other liabilities 1,308,455
1,271,830 986,623
Total liabilities 6,465,377
6,623,214 5,529,389
Stockholders' equity
3,726,377 3,688,096 3,644,339
Total liabilities
and stockholders' equity $ 10,191,754 $ 10,311,310
$ 9,173,728
VF CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited) (In thousands) Three Months
Ended June 2018 (a) 2017
(a) Operating activities Net income $ 160,358 $
109,889 Depreciation and amortization 71,130 65,470 Other
adjustments 45,656 30,257 Cash provided by operating
activities 277,144 205,616
Investing activities
Business acquisitions, net of cash received (321,395 ) — Proceeds
from sale of businesses, net of cash sold 288,273 208,215 Capital
expenditures (68,919 ) (37,355 ) Software purchases (21,546 )
(13,074 ) Other, net (5,643 ) (324 ) Cash (used) provided by
investing activities (129,230 ) 157,462
Financing
activities Net (decrease) increase from short-term borrowings,
long-term debt and other (215,940 ) 631,635 Purchases of treasury
stock — (762,007 ) Cash dividends paid (181,517 ) (164,893 )
Proceeds from issuance of Common Stock, net of shares withheld for
taxes 53,500 11,430 Cash used by financing activities
(343,957 ) (283,835 )
Effect of foreign currency rate changes on
cash, cash equivalents and restricted cash (19,998 ) (10,583 )
Net change in cash, cash equivalents and restricted cash
(216,041 ) 68,660
Cash, cash equivalents and restricted cash -
beginning of year 689,190 608,280
Cash, cash
equivalents and restricted cash - end of period $ 473,149
$ 676,940 (a) The cash flows related to
discontinued operations have not been segregated, and are included
in the Condensed Consolidated Statements of Cash Flows.
VF CORPORATION Supplemental
Financial Information Reportable Segment Information
(Unaudited) (In thousands) Three Months
Ended June
% Change Constant Currency
(a)
% Change Organic (b) 2018 2017
(a) % Change Segment revenues Outdoor $
568,600 $ 536,250 6 % 3% 0 % Active 1,136,937 909,290 25 % 22% 25 %
Work 442,602 206,857 114 % 114% 8 % Jeans 603,767 587,903 3 % 2% 3
% Other 36,240 28,320 28 % 28% 28 % Total segment
revenues $ 2,788,146 $ 2,268,620 23 % 21% 12 %
Segment profit (loss) Outdoor $ (83,495 ) $ (62,018 ) (35 )%
(31)% Active 269,197 184,628 46 % 42% Work 55,244 34,159 62 % 62%
Jeans 87,049 81,258 7 % 5% Other 2,160 (322 ) * * Total
segment profit 330,155 237,705 39 % 36%
Corporate and other
expenses (119,939 ) (81,246 ) 48 % 47%
Interest, net
(23,884 ) (20,607 ) 16 % 16%
Income from continuing operations
before income taxes $ 186,332 $ 135,852 37 % 32%
VF's reportable segments reflect how the
chief operating decision maker allocates resources and assesses
performance and are comprised of the following primary brands:
Outdoor - Outdoor apparel, footwear and equipment
Primary brands: The North Face®,
Timberland® (excluding Timberland PRO®), Smartwool®, Icebreaker®
and Altra®
Active - Active apparel, footwear and accessories
Primary brands: Vans®, Kipling®,
Napapijri®, JanSport®, Reef®, Eastpak® and Eagle Creek®
Work - Work and work-inspired lifestyle apparel and footwear
and occupational apparel
Primary brands: Dickies®, Bulwark®, Red
Kap®, Timberland PRO®, Wrangler® RIGGS, Walls®, Terra®, Kodiak® and
Horace Small®
Jeans - Denim and casual apparel
Primary brands: Wrangler® (excluding
Wrangler® RIGGS), Lee® and Rock & Republic®
Other - not considered a reportable segment
Sales of non-VF products at VF Outlet®
stores and results from transition services related to the sale of
Nautica®
The business segment information provided
above reflects the changes in the Company's operating structure for
all periods presented. These changes had no impact on VF's
consolidated results of operations.
(a) Refer to constant currency definition on the following
pages.
(b) Excludes the operating results of
Williamson-Dickie, Icebreaker® and Altra®. Refer to Non-GAAP
financial information on "Reconciliation of Select GAAP to Non-GAAP
Measures" page for additional information.
* Calculation not meaningful
VF
CORPORATION Supplemental Financial Information
Reportable Segment Information – Constant Currency Basis
(Unaudited) (In thousands) Three Months
Ended June 2018 As Reported Adjust for
Foreign under GAAP Currency
Exchange Constant Currency Segment revenues
Outdoor $ 568,600 $ (15,843 ) $ 552,757 Active 1,136,937 (26,862 )
1,110,075 Work 442,602 (509 ) 442,093 Jeans 603,767 (2,436 )
601,331 Other 36,240 — 36,240 Total segment
revenues $ 2,788,146 $ (45,650 ) $ 2,742,496
Segment profit (loss) Outdoor $ (83,495 ) $ 1,993 $ (81,502
) Active 269,197 (7,338 ) 261,859 Work 55,244 6 55,250 Jeans 87,049
(1,943 ) 85,106 Other 2,160 — 2,160 Total
segment profit 330,155 (7,282 ) 322,873
Corporate and other
expenses (119,939 ) 383 (119,556 )
Interest, net (23,884
) — (23,884 )
Income from continuing operations before
income taxes $ 186,332 $ (6,899 ) $ 179,433
Diluted earnings per share growth 50 % (5 )% 45 %
Constant Currency 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. These rate
fluctuations can have a significant effect on reported operating
results. As a supplement to our reported operating results, we
present constant currency financial information, which is a
non-GAAP financial measure that excludes the impact of translating
foreign currencies into U.S. dollars. We use constant currency
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. 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 constant
currency 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). These constant currency 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 constant currency information presented may not be comparable
to similarly titled measures reported by other companies.
VF CORPORATION
Supplemental Financial Information Reconciliation of
Select GAAP Measures to Non-GAAP Measures (Unaudited)
(In thousands, except per share amounts) Three
Months Ended June 2018 As Reportedunder GAAP
Transaction and Deal Related
Costs (a)
Impact of Tax Act
(b)
Adjusted
Contribution from
Acquisitions (c)
Adjusted Organic
Revenues $ 2,788,146 $ — $ — $ 2,788,146 $ (248,822 ) $
2,539,324
Gross profit 1,403,169 4,323 — 1,407,492
(105,423 ) 1,302,069
Percent 50.3 % 50.5 % 42.4 % 51.3 %
Operating income 230,882 19,155 — 250,037 (20,164 )
229,873
Percent 8.3 % 9.0 % 8.1 % 9.1 %
Diluted
earnings per share from continuing operations (d) 0.40
0.04 (0.01 ) 0.43 (0.04 ) 0.39 (a) Transaction and deal
related costs for the three months ended June 2018 include
acquisition and integration costs related to the acquisitions of
Williamson-Dickie and the Icebreaker® and Altra® brands. The
transaction and deal related costs resulted in a net tax benefit of
$3.5 million. The diluted earnings per share impact was calculated
using 399,548,000 shares. (b) On December 22, 2017, the U.S.
government enacted comprehensive tax legislation commonly referred
to as the Tax Cuts and Jobs Act (“Tax Act”). Measurement period
adjustments related to the provisional net charge were recorded
during the three months ended June 30, 2018, resulting in a tax
benefit of $2.9 million. The diluted earnings per share impact was
calculated using 399,548,000 shares. (c) The contribution
from acquisitions represents the operating results of
Williamson-Dickie for the three months ended June 2018, the
operating results of Icebreaker® beginning on the acquisition date
of April 3, 2018 and the operating results of Altra® beginning on
the acquisition date of June 1, 2018. The operating results of all
acquisitions exclude transaction and deal related costs. The
contribution from acquisitions resulted in tax expense of $3.2
million and the diluted earnings per share impact was calculated
using 399,548,000 shares. (d) Amounts shown in the table
have been calculated using unrounded numbers.
Non-GAAP
Financial Information The financial information above
has been presented on a GAAP basis, on an adjusted basis, which
excludes the impact of transaction and deal related costs and the
provisional impact of tax reform, and on an adjusted organic basis,
which excludes the operating results of Williamson-Dickie,
Icebreaker® and Altra®. Contributions from acquisitions also
exclude transaction and deal related costs. These adjusted
presentations are non-GAAP measures. 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. Management uses the above
financial measures internally in its budgeting and review process
and, in some cases, as a factor in determining compensation. 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.
VF CORPORATION
Supplemental Financial Information Top 5 Brand Revenue
Information (Unaudited) Three Months Ended
June 2018 Top 5 Brand Revenue Growth Americas
EMEA
APAC
Global Vans®
% change
36% 33% 34% 35%
% change constant
currency*
36% 23% 27% 32%
The North Face®
% change
0% 21% 32% 8%
% change constant
currency*
0% 12% 26% 5%
Timberland®
% change
6% 5% (11)% 2%
% change constant
currency*
6% (1)% (14)% (1)%
Wrangler®
% change
5% 5% (5)% 4%
% change constant
currency*
6% (1)% (3)% 5%
Lee®
% change
(4)% 7% 13% 1%
% change constant
currency*
(3)% 1% 7% (1)% *Refer to constant currency definition on
previous pages.
VF CORPORATION Supplemental
Financial Information Geographic and Channel Revenue
Information (Unaudited) Three Months Ended
June 2018 % Change
% Change Constant
Currency*
% Change Organic (a)
Geographic
Revenue Growth
U.S. 20% 20% 11% EMEA 32% 24% 18% APAC
24% 18% 14% China 45% 35% 31% Americas (non-U.S.) 21% 23% 5%
International 27% 22% 14%
Three Months Ended June 2018 % Change
% Change Constant
Currency*
% Change Organic (a)
Channel Revenue
Growth
Wholesale 23% 21% 10%
Direct-to-consumer 22% 20% 16%
Digital 54% 50% 33% As of
June
2018 (b) 2017
DTC Store
Count
Total 1,513 1,432 *Refer to constant
currency definition on previous pages. (a) Excludes the
operating results of Williamson-Dickie, Icebreaker® and Altra®.
Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP to Non-GAAP Measures" page for additional information.
(b) The June 2018 DTC store count includes 97
Williamson-Dickie, Icebreaker
® and Altra
® stores.
VF CORPORATION
Supplemental Financial Information Revised Reportable
Segment Information - Trailing Twelve Months Ended March 31,
2018 (Unaudited) (In thousands) Three
Months EndedJuly 1, 2017 Three Months
EndedSeptember 30, 2017 Three Months
EndedDecember 30, 2017 Three Months EndedMarch
31, 2018 Trailing TwelveMonths Ended March 31,
2018 Segment revenues Outdoor $ 536,250 $ 1,381,002 $
1,456,654 $ 888,039 $ 4,261,945 Active 909,290 1,089,616 983,983
1,071,598 4,054,487 Work 206,857 210,062 482,827 442,258 1,342,004
Jeans 587,903 682,884 692,506 623,266 2,586,559 Other 28,320
29,370 33,313 20,285 111,288 Total
segment revenues $ 2,268,620 $ 3,392,934 $ 3,649,283
$ 3,045,446 $ 12,356,283
Segment profit
(loss) Outdoor $ (62,018 ) $ 250,596 $ 275,509 $ 44,673 $
508,760 Active 184,628 273,092 198,872 237,620 894,212 Work 34,159
34,260 57,509 40,024 165,952 Jeans 81,258 117,563 93,196 103,805
395,822 Other (322 ) (782 ) 209 (3,074 ) (3,969 ) Total
segment profit $ 237,705 $ 674,729 $ 625,295 $
423,048 $ 1,960,777 The information provided
above reflects changes in VF's reportable segment information for
all periods presented - see segment discussion at "Supplemental
Financial Information - Reportable Segment Information" for
additional detail.
Non-GAAP Financial Information
In connection with the change in fiscal year end to the
Saturday closest to March 31 from the Saturday closest to December
31, VF's current fiscal year will run from April 1, 2018 through
March 30, 2019 (“Fiscal 2019”). The financial metrics
provided for the trailing twelve months ended March 31, 2018 are a
non-GAAP measure and have been presented in order to provide a
comparison that aligns with VF's new fiscal year end. 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.
Management uses the above financial measures internally in its
budgeting and review process. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180720005032/en/
VF CorporationJoe Alkire,
336-424-7711Vice President, Corporate Development, Investor
Relations andFinancial Planning & AnalysisorCraig Hodges,
336-424-5636Senior Director, Corporate Communications
VF (NYSE:VFC)
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