VF Corporation expects to return to growth in Q4
16 Oct 2020
Second quarter revenue at VF Corporation decreased 18 percent or 19 percent in constant dollars to 2.6 billion dollars driven by store closures and lower consumer demand as a result of the Covid-19 outbreak and related government actions and regulations. The company said in a statement that for the fiscal year 2021, revenue is expected to be at least 9 billion dollars, reflecting a decrease of approximately 14 percent on an adjusted basis, including low single-digit growth in the second half driven by a return to growth in the fourth quarter. The company further said that adjusted earnings per share are expected to be at least 1.20 dollars, reflecting a decrease of approximately 55 percent or approximately 56 percent in constant dollars.
“Our year to date results have surpassed our internal expectations across all brands, driven by digital and China, two of our key growth pillars,” said Steve Rendle, VF’s Chairman, President and CEO, adding, “We are beginning to see signs of stabilization and strength across all aspects of our business, supporting our decision to raise the dividend and provide a financial outlook for the balance of the year.”
The company’s gross margin decreased 340 basis points to 50.8 percent, while on an adjusted basis, gross margin decreased 350 basis points to 50.9 percent. Operating income on a reported basis was 320 million dollars and 342 million dollars on an adjusted basis, while operating margin was 12.3 percent and adjusted operating margin was 13.1 percent. The company added that earnings per share were 62 cents on a reported basis and 67 cents on an adjusted basis.
VF’s board of directors has declared a quarterly dividend of 49 cents per share, payable on December 21, 2020, to shareholders of record on December 10, 2020.