Apparel company VF Corp. (NYSE: VFC) reported a decline in fourth-quarter profit, despite an increase in revenues. Earnings, meanwhile, surpassed analysts’ forecast. Revenues moved up 6% to $3.21 billion, helped by solid demand in the Active, Outdoor and Work segments. The top-line matched the estimates.
Earnings, on an adjusted basis, dropped 10% annually to $0.60 per share but beat the consensus estimates. Reported profit was $128.8 million or $0.32 per share, compared to $252.8 million or $0.63 per share in the fourth quarter of 2018.
Revenues moved up 6%, helped by solid demand in the Active, Outdoor and Work segments
“Fiscal 2019 marked one of the most significant periods of transformation in VF’s 120-year history, highlighted by our announcement to spin off our Jeans business as an independent, publicly traded company. Despite the tremendous workload, we remained sharply focused and delivered another year of strong financial results and top quartile returns to our shareholders,” said CEO Steve Rendle.
FORECAST
For fiscal 2020, the management expects adjusted revenues, excluding the impact of acquisitions net of divestitures, in the range of $11.7 billion to $11.8 billion, representing a 5-6% annual growth. Adjusted gross margin is expected to be about 54%.
The estimate for adjusted earnings per share, excluding the impact of acquisitions net of divestitures, is between $3.30 per share and $3.35 per share, which reflects a 15-17% year-over-year increase. The company is looking for adjusted cash flow from operations of about $1.3 billion for the fiscal year.
Related: V.F. Corporation Q3 2019 Earnings Conference Call Transcript
KEY DEVELOPMENTS
During the quarter, the board of directors of VF Corp. declared a quarterly dividend of $0.51 per share, to be paid on June 20, 2019, to shareholders of record on June 10, 2019.
Among the other developments, last month the board approved the separation of the company’s jeans business. As part of the initiative, all of the shares of Kontoor Brands will be distributed to holders of VF common stock on the record date of May 10, 2019.
VF Corp. shares closed the last trading session higher but fell sharply after the earnings report on Wednesday. The stock has gained 29% since the beginning of the year and 13% in the past twelve months.