VF Corp. Q4 Adj. Profit Matches View; Sees Higher Earnings In 2015

(RTTNews) - Branded lifestyle apparel maker VF Corp. (VFC) on Friday reported a 67 percent decline in profit for the fourth quarter from last year, as higher revenues were more than offset by an impairment charge.

However, adjusted earnings per share for the quarter matched analysts' expectations. Looking ahead, the company forecast higher earnings and sales in fiscal 2015.

VF Corp's net income for the fourth quarter declined to $122.10 million or $0.28 per share from $367.67 million or $0.82 per share in the previous year.

In the quarter, Greensboro, North Carolina-based makers of Wrangler and Lee jeans recorded a non-cash impairment charge of $307 million, after-tax, or $0.70 per share to reduce the carrying value of the goodwill and intangible assets related to the company's 7 For All Mankind, Ella Moss and Splendid brands.

However, adjusted earnings for the quarter were $0.98 per share, compared to $0.82 per share in the year-ago period. On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.98 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 9 percent to $3.58 billion from $3.29 billion in the year-ago period. Analysts had a consensus revenue estimate of $3.59 billion for the quarter.

Outdoor & Action Sports revenues for the quarter grew 13 percent from last year to $2.17 billion. Jeanswear revenues rose 3 percent, and Imagewear revenues increased 4 percent strength in the Licensed Sports Group or LSG business. Sportswear revenues were up 4 percent, while Contemporary Brands coalition revenues declined 1 percent.

International revenues in the fourth quarter grew 5 percent, or 13 percent on a currency neutral basis. Direct-to-consumer revenues grew 22 percent, or 25 percent on a currency neutral basis, with strong double-digit increases in all regions of the world and growth in every VF brand with a retail format.

Gross margin improved 80 basis points to 49 percent, driven mainly by continuing shift of revenue mix toward higher-margin businesses, the company said.

For fiscal 2014, VF Corp.'s net income declined to $1.05 billion or $2.38 per share from $1.21 billion or $2.71 per share in the previous year. Adjusted earnings for the year were $3.08 per share, compared to $2.71 per share in the prior year.

Total revenues for the year rose 8 percent to $12.28 billion from $11.42 billion last year.

Street expected the company to report earnings of $3.08 per share for the year on revenues of $12.29 billion.

Eric Wiseman, chairman, president and chief executive officer of the company said,"We are very pleased to report that Vans passed the $2 billion dollar mark in 2014 to become VF's second $2 billion brand along with The North Face. As we end the second year of our five-year plan we're on track with our 2017 targets."

Looking ahead to fiscal 2015, VF Corp. forecasts earnings per share on a currency neutral basis to increase 12 percent, or up 4 percent on a reported basis, and revenues to increase 8 percent on a currency neutral basis, or up 3 percent reported.

Analysts expect the company to report earnings of $3.39 per share for the year on 6.4 percent growth in revenues to $13.07 billion.

VF Corp's board of directors declared a quarterly dividend of $0.32 per share, payable on March 20, 2015 to shareholders of record on March 10, 2015.

VF Corp. expects to spend about $700 million under the company's share repurchase program. When combined with the annual dividend, this will return more than $1.2 billion to shareholders in 2015.

VFC is trading at $73.88, up $2.88 or 4.06 percent on a volume of 901,927 shares.