VF Corp meets first quarter expectations, reaffirms 2016 outlook
VF Corporation on Friday announced the financial results for its first quarter ended April 2, 2016. The company met its expectations for the quarter and reaffirmed its outlook on fiscal 2016.
First quarter revenue was $2.8 billion driven by the Outdoor & Action Sports and Jeanswear businesses, as well as the Direct-to-Consumer and International businesses. Gross margin was 48.2% on a reported basis, down 80 points compared with the same quarter last year, operating income was down 15% to $336 million and earnings per share was $0.61 compared to $0.67.
The Outdoor & Action Sports revenue increased 2% to $1.6 billion, but operating income decreased 13% to $228 million. Jeanswear increased 2% to $711 million, Imagewear decreased 5% to $269 million, Sportswear declined 13% to $118 million and Contemporary Brands dropped 15% to $74 million.
The International and Direct-to-Consumer businesses also increased by 1% and 7%, respectively, with the International business representing 41% of total VF first quarter sales and Direct-to-Consumer representing 26% of total revenue.
“Our first quarter results demonstrate the ability of our diversified business model to perform as expected in an inconsistent environment,” said Eric Wiseman, VF Chairman and Chief Executive Officer. “By leveraging our strengths – driving innovation into the marketplace, connecting with consumers and operating with financial discipline – we are on track to deliver results consistent with our 2016 outlook, while also delivering on our commitment to shareholders.”
VF reaffirmed its 2016 outlook and expects its revenue to increase at a mid-single-digit percentage rate, gross margin to improve by 50 basis points, operating margin to reach 14.4% and the earnings per share to increase 11%.
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