2016 revenue expected to increase at a mid single-digit percentage rate
Surfersvillage Global Surf News, 22 February, 2016 - Greensboro, North Carolina - VF Corporation reported financial results for its fourth quarter and full year ended January 2, 2016. The report concluded that 2015 revenue was up 1 percent while 2015 revenue increased 7 percent.
“The final quarter of 2015 challenged many companies to leverage core strengths and adapt quickly to a changing landscape,” said Eric Wiseman, VF Chairman and Chief Executive Officer.
“Our focus, discipline and agility amid a softer consumer environment, record warm weather and a strengthening U.S. dollar have us well positioned to navigate what we believe to be a relatively short-term challenge. Going forward, I remain confident in VF’s ability to deliver continued long-term profitable growth and value creation for our shareholders.”
“Our full year 2015 was also affected by many of the same challenges we saw in the fourth quarter, including a tough comparison against 2014’s 53rd week,” continued Wiseman. “In fact, when normalized over 2014 and 2015, currency neutral revenue grew 7 percent and earnings grew 13 percent annually over this period, in line with our long-term earnings growth target.”
Fourth Quarter 2015 Review
Revenue was down 5 percent (down 1 percent currency neutral). Excluding the impact of changes in foreign currency and the 53rd week, fourth quarter revenue increased 3 percent.
Gross margin was 49.0 percent on a currency neutral basis, in line with last year. Reported gross margin was down 70 basis points to 48.3 percent as benefits from more favorable product costs and continued mix shift to higher margin businesses were offset by foreign currency headwinds and aggressive efforts to manage inventory.
A $144 million pre-tax, noncash impairment charge ($0.23 per share after tax) was recorded to reduce the carrying value of intangible assets related to our 7 For All Mankind®, Ella Moss® andSplendid® brands.
Operating income, on an adjusted basis, declined 6 percent to $541 million in the fourth quarter. On a GAAP basis, fourth quarter operating income was $397 million.
Adjustedoperating margin reached 15.8 percent, net of 70 basis points of foreign currency headwinds, compared with 16.2 percent in the fourth quarter of 2014. On a GAAP basis, fourth quarter operating margin was 11.6 percent compared with 5.1 percent in last year’s same period.
Adjusted earnings per share was $0.95 per share compared with $0.98 per share during the same period last year. Excluding the negative impact of foreign currency, fourth quarter adjusted earnings per share was up 5 percent. On a GAAP basis, earnings per share was up 157 percent to $0.72.