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VF reports first quarter fiscal 2022 results

By Hemanth on Aug 01, 2021 | 05:31 AM IST


VF Corporation [VFC] today reported financial results for its first quarter ended July 3, 2021. 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 - Occupational Workwear Business.” Unless otherwise noted, results presented are based on continuing operations. This release also refers to “adjusted” amounts, a term that is described under the heading “Adjusted Amounts - Excluding Transaction and Deal Related Activities and Costs Related to Specified Strategic Business Decisions.” Unless otherwise noted, “reported” and “adjusted” amounts are the same.

"Our teams delivered an outstanding first quarter, powering VF back to pre-pandemic revenue levels while driving an earnings recovery ahead of our expectations,” said Steve Rendle, VF's Chairman, President and CEO. "We continue to see broad-based momentum across the portfolio, supporting an increase to our fiscal 2022 outlook for each of our largest brands. Though the first quarter is a relatively small portion of our total year, this strong start reinforces my confidence in our ability to accelerate growth through fiscal 2022 and beyond.”


First Quarter Fiscal 2022 Income Statement Review:

Revenue increased 104 percent (up 96 percent in constant dollars) to $2.2 billion. Excluding the impact of acquisitions, revenue increased 90 percent (up 83 percent in constant dollars) driven by VF's largest brands and the EMEA and North American regions, which experienced a significant negative impact from COVID-19 in the prior year period.

Gross margin increased 360 basis points to 56.5 percent, primarily driven by reduced promotional activity. On an adjusted basis, gross margin increased 260 basis points, including a 30 basis point positive impact from acquisitions, to 56.7 percent.

Operating income on a reported basis was $203 million. On an adjusted basis, operating income increased 164 percent (160 percent in constant dollars) to $148 million, including a $32 million contribution from acquisitions. Operating margin on a reported basis was 9.2 percent. Adjusted operating margin increased 2820 basis points, including a 110 basis point positive impact from acquisitions, to 6.8 percent.

Earnings per share was $0.39 on a reported basis. On an adjusted basis, earnings per share increased 148 percent (up 144 percent in constant dollars) to $0.27, including a $0.07 contribution from acquisitions.


Raises Full Year Fiscal 2022 Outlook

Revenue from continuing operations increased 104 percent (up 96 percent in constant dollars) to $2.2 billion; excluding acquisitions, revenue increased 90 percent (up 83 percent in constant dollars);

Active segment revenue increased 128 percent (up 120 percent in constant dollars) including a 110 percent (102 percent in constant dollars) increase in Vans® brand revenue and a 26 percentage point revenue growth contribution from acquisitions; Outdoor segment revenue increased 81 percent (up 72 percent in constant dollars) including a 93 percent (83 percent in constant dollars) increase in The North Face® brand revenue; Work segment revenue increased 69 percent (up 66 percent in constant dollars) including a 61 percent (58 percent in constant dollars) increase in Dickies® brand revenue;

International revenue increased 84 percent (up 68 percent in constant dollars) including a 10 percentage point revenue growth contribution from acquisitions; Europe revenue increased 126 percent (up 106 percent in constant dollars); Greater China revenue increased 19 percent (up 9 percent in constant dollars), including a 23 percent (12 percent in constant dollars) increase in Mainland China;

Direct-to-Consumer revenue increased 97 percent (up 90 percent in constant dollars) including a 27 percentage point revenue growth contribution from acquisitions; Digital revenue increased 25 percent (up 20 percent in constant dollars) versus the prior year including a 29 percentage point revenue growth contribution from acquisitions; excluding acquisitions, Digital revenue increased 72 percent versus the first quarter of fiscal 2020;

Gross margin from continuing operations increased 360 basis points to 56.5 percent; on an adjusted basis, gross margin increased 260 basis points to 56.7 percent including a 30 basis point positive impact from acquisitions;

Operating income from continuing operations on a reported basis was $203 million; on an adjusted basis, operating income from continuing operations increased 164 percent (160 percent in constant dollars) to $148 million including a $32 million contribution from acquisitions;

Earnings per share from continuing operations was $0.39; adjusted earnings per share from continuing operations increased 148 percent (up 144 percent in constant dollars) to $0.27 including a $0.07 per share contribution from acquisitions;

Full year fiscal 2022 revenue is now expected to be at least $12.0 billion, reflecting growth of at least 30 percent, including an approximate $600 million contribution from the Supreme® brand; full year fiscal 2022 adjusted earnings per share is now expected to be at least $3.20, including an approximate $0.25 contribution from the Supreme® brand.

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