Third quarter revenue at VF Corporation decreased 6 percent or 8 percent in constant dollars to 3 billion dollars driven by store closures and lower consumer demand as a result of the Covid-19 outbreak and related government actions and regulations. VF said, gross margin decreased 250 basis points to 54.7 percent and on an adjusted basis, gross margin decreased 150 basis points to 55.7 percent. Operating income for the quarter on a reported basis was 412 million dollars and on an adjusted basis, operating income was 458 million dollars, while operating margin was 13.9 percent and adjusted operating margin was 15.4 percent. The company’s earnings per share were 83 cents on a reported basis and 93 cents on an adjusted basis.
“Our third quarter results were largely ahead of expectations despite the impact of additional Covid-19-related disruption to our business,” said Steve Rendle, VF’s Chairman, President and CEO in a statement, adding, “Our portfolio remains on track to return to growth in the fiscal fourth quarter and we are confident in VF’s plans to accelerate growth into fiscal 2022.”
VF raises full year outlook
For the fiscal year 2021, VF said, revenue is now expected to be in the range of 9.1 billion dollars to 9.2 billion dollars, reflecting a decrease of 12 percent to 13 percent on an adjusted basis. The updated outlook includes approximately 125 million dollars of revenue from the Supreme brand. This compares to the previous expectation of at least 9 billion dollars, reflecting a decrease of approximately 14 percent on an adjusted basis.
Adjusted earnings per share are expected to be approximately 1.30 dollars, reflecting a decrease of approximately 51 percent. The updated outlook includes approximately 5 cents of adjusted earnings per share from the Supreme brand. This compares to the previous expectation of at least 1.20 dollars, reflecting a decrease of approximately 55 percent.
VF’s board of directors declared a quarterly dividend of 49 cents per share, payable on March 22, 2021, to shareholders of record on March 10, 2021.
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