VF pleased with fourth quarter and full year revenue, EPS slips in both periods
VF Corporation on Friday released its fourth quarter and full year 2016 results. Revenue increased slightly in both periods, and the company expects the growth to continue into 2017.
“VF’s global business model, diverse brand portfolio and focused operational discipline helped the company deliver solid results in 2016 despite an inconsistent U.S. marketplace,” said Eric Wiseman, Executive Chairman of the Board. "We’re pleased with the improved quality of our revenue, which reflects continued growth in our international and direct-to-consumer platforms, and our strong gross margin and cash generation performance that enabled us to return a record $1.6 billion to our shareholders."
Fourth quarter revenue increased 1% to $3.3 billion and full year revenue increased to $12.0 billion. Vans drove the revenue increase posting a 14% increase in fourth quarter revenue and a 6% increase in full year revenue.
The jeanswear and sportswear segments struggled in both periods, with jeanswear fourth quarter revenue falling 5% and full year revenue decreasing 2%. Sportswear revenue also decreased 17% in the fourth quarter and 16% in the year.
Direct-to-consumer revenue increased 11% and 8% in the fourth quarter and full year, respectively, and the international business increased 5% in the quarter and 4% for the year. The international business represented 38% of VF’s total sales in 2016 and direct-to-consumer revenue was 28% of total VF revenue in 2016.
Despite the solid revenue performance, earnings per share fell in both periods. Fourth quarter EPS was down 33% at $0.63 compared to $0.94 in the fourth quarter of 2015, and full year EPS was down 9% at $2.78 versus $3.04 in the prior year. Excluding foreign currency changes, fourth quarter EPS increased 8% and full year EPS increased 7%.
In addition, gross margin improved 90 basis points to a record 49.1% in the fourth quarter and improved 20 basis points to 48.4% for the year.
For 2017, VF Corp. expects all segments to increase in revenue except for the sportswear business, which is expected to decline at a high single-digit percentage rate. Gross margin is expected to be about 48.6%, which is consistent with 2016 gross margin on an adjusted basis, and earnings per share is expected to be down at a low single-digit percentage rate.
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