VF Corp revenue, earnings slip as international, direct-to-consumer businesses thrive
VF Corporation on Friday released its first quarter results that were “right in line with our expectations,” according to VF Corp. President and CEO Steve Rendle. The first quarter marked as the company’s first results since announcing its 2021 growth plan that involves expanding its direct-to-consumer business, its international business, and its top performing brands.
“The company’s largest brands and international and direct-to-consumer platforms performed well, delivering solid results against a retail backdrop that continues to experience significant dislocation,” said Rendle.
International revenue increased 2%, including 5% growth in China, and the direct-to-consumer revenue increased 6%, with digital revenue up 25%. In addition, Outdoor & Action Sports revenue increased 2% with leading brands The North Face and Vans increasing 6% and 5%, respectively.
Despite the increases, first quarter revenue from discontinuing operations decreased 2% to $2.6 billion and earnings per share on a reported basis was down 8% to $0.52 compared to $0.56 per share in the previous year.
VF also reported a $5.5 million net loss from discontinued operations related to the estimated loss on the sale of the Licensing Business. The company entirely exited the licensing business, which includes the JanSport brand collegiate business, and the Licensed Sports Group business that VF is selling to Fanatics.
The company on April 4, 2017 reached an agreement to sell its Licensed Sports Business, including the Majestic brand, to Fanatics, which is replacing Majestic as a partner of Major League Baseball.
VF Corp also updated its 2017 outlook to exclude the Licensing Business. The company now expects its fiscal year revenue to increase at a low single-digit percentage rate and for earnings per share to be down at a low single-digit percentage rate compared to 2016 adjusted EPS of $2.98.
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