VF Corp posts fourth quarter earnings of $3.6 billion, set to sell its Nautica business
Apparel conglomerate VF Corp, parent company of brands including North Face, Vans and Timberland, is selling its Nautica business. During the fourth quarter of 2017, the company reached the decision to sell Nautica, determining that it met the “held-for-sale and discontinued operations accounting criteria”.
Earlier in 2017, the company had divested its Licensed Sports Group business, and in August, also sold its Contemporary Brands businesses, which included the 7 For All Mankind and Ella Moss brands.
These discontinued operations contributed a fourth quarter after-tax net loss of $17 million. This was announced on Wednesday alongside the company’s financial results for the fourth quarter and full year ended December 30, 2017.
The company's after-tax net loss from discontinued operations was $106 million for the full year, which includes the loss on sale of the licensing business.
It wasn’t all about divested businesses, though. Revenue for Q4 increased 20 percent to $3.6 billion, which included a $247 million contribution from VF’s October acquisition of Williamson-Dickie, a global workwear company. This was a touch below analysts’ estimations of US$3.66bn.
VF Corp earned $1.01 a share, up 4 percent, again, marginally below expectation. Company shares dropped 8.6 percent in early trading.
Full year 2017 revenue increased seven percent to $11.8 billion. Excluding the Williamson-Dickie acquisition, full-year revenue increased five percent.
“VF's fourth quarter results were stronger than we expected as growth continues to accelerate across core dimensions of our portfolio,” said Steve Rendle, Chairman and Chief Executive Officer. “We remain in the early phase of a multi-year journey to become a purpose led, agile, consumer centric organization. I am pleased with our early progress and look forward to building on our momentum in 2018.”
Apparel makers have fought a crowded market in the U.S. but revenue growth numbers, the company reported, were fueled by momentum in VF's international businesses and demand growth in its outdoor and sports portfolio.
The company has announced a change in its fiscal year end from the current Saturday closest to Dec 31 to the Saturday closest to Mar 31. Revenue from continuing operations for the transition quarter ending March 31, 2018 is expected to approximate $2.9 billion with an EPS of $0.65.
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