VF Reports First Quarter Fiscal 2021 Results.
Highlights:
Revenue from continuing operations decreased 48 percent (down 47 percent in constant dollars) to
Active segment revenue decreased 54 percent (down 53 percent in constant dollars) including a 52 percent (51 percent in constant dollars) decrease in Vans brand revenue; Outdoor segment revenue decreased 44 percent (down 43 percent in constant dollars) including a 45 percent (44 percent in constant dollars) decrease in The North Face brand revenue; Work segment revenue decreased 19 percent (down 18 percent in constant dollars) including a 16 percent (15 percent in constant dollars) decrease in Dickies brand revenue;
International revenue decreased 39 percent (down 37 percent in constant dollars);
Direct-to-Consumer revenue decreased 37 percent; Digital revenue increased 78 percent (up 81 percent in constant dollars);
Gross margin from continuing operations decreased 340 basis points to 52.9 percent; on an adjusted basis, gross margin decreased 220 basis points to 54.1 percent;
Operating income (loss) from continuing operations on a reported basis was
Earnings (loss) per share from continuing operations was
VF ended the first quarter of fiscal 2021 with inventories up 2 percent, approximately
DENVER-
'VF is built for this moment, which is what gives us continued confidence and optimism,' said
Constant Currency - Excluding the Impact of Foreign Currency
This release refers to 'reported' amounts in accordance with
Discontinued Operations - Occupational Workwear Business
On
During the three months ended
Adjusted Amounts - Excluding Costs Related to Specified Strategic Business Decisions
The adjusted amounts in this release exclude costs related to strategic business decisions in
Combined, the above items negatively impacted earnings per share by
Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management's view of why this information is useful to investors.
COVID-19 Outbreak Update
As the global impact of COVID-19 continues, VF remains first and foremost focused on a people-first approach that prioritizes the health and well-being of its employees, customers, trade partners and consumers around the world. To help mitigate the spread of COVID-19 and in response to public health advisories and governmental actions and regulations, VF has modified its business practices, including the temporary closing of offices and retail stores, instituting travel bans and restrictions, implementing health and safety measures including social distancing and quarantines.
All of VF's retail stores in the APAC region, including Mainland China, re-opened during the first quarter. Over 90 percent of VF's retail stores in the EMEA region re-opened during the first quarter, with most of the stores that remained closed located in the
The majority of VF's supply chain is currently operational. Suppliers are complying with local public health advisories and governmental restrictions which can result in product delays. VF is working with its suppliers to minimize disruption. VF's distribution centers are operational in accordance with local government guidelines but are experiencing intermittent disruptions while maintaining enhanced health and safety protocols.
VF is continuing to monitor the COVID-19 outbreak globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers. As COVID-19 uncertainty continues, VF expects ongoing disruption to its business operations.
First Quarter Fiscal 2021 Income Statement Review
Revenue decreased 48 percent (down 47 percent in constant dollars) to
Gross margin decreased 340 basis points to 52.9 percent, primarily driven by elevated promotional activity to clear excess inventory, partially offset by favorable mix shift toward higher margin businesses. On an adjusted basis, gross margin decreased 220 basis points to 54.1 percent.
Operating income (loss) on a reported basis was
Earnings (loss) per share was
Balance Sheet Highlights
Inventories were up 2 percent compared with the same period last year. During the quarter, VF returned approximately
Full Year Fiscal 2021 Outlook
Due to the uncertainty of the duration and severity of COVID-19, governmental actions and regulations in response to the pandemic and the speed with which the pandemic is developing and impacting VF, its consumers, customers and suppliers, it is not possible to provide a financial outlook for full-year fiscal 2021 at this time. However, second quarter fiscal 2021 revenues are expected to be down less than 25% and full-year fiscal 2021 free cash flow is still expected to exceed
Dividend Declared
VF's Board of Directors declared a quarterly dividend of
Webcast Information
VF will host its first quarter fiscal 2021 conference call beginning at
Presentation
A presentation on first quarter fiscal 2021 results will be available at ir.vfc.com beginning at approximately
About VF
Founded in 1899,
Forward-looking Statements
Certain statements included in this release are 'forward-looking statements' within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as 'will,' 'anticipate,' 'estimate,' 'expect,' 'should,' and 'may' and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding VF's plans, objectives, projections and expectations relating to VF's operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. VF undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel, footwear and accessories; disruption to VF's distribution system; the financial strength of VF's customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF's response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers; manufacturing and product innovation; increasing pressure on margins; VF's ability to implement its business strategy; VF's ability to grow its international and direct-to-consumer businesses; retail industry changes and challenges; VF's and its vendors' ability to maintain the strength and security of information technology systems; the risk that VF's facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; VF's ability to properly collect, use, manage and secure consumer and employee data; foreign currency fluctuations; stability of VF's manufacturing facilities and foreign suppliers; continued use by VF's suppliers of ethical business practices; VF's ability to accurately forecast demand for products; continuity of members of VF's management; VF's ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF's licensees and distributors of the value of VF's brands; VF's ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; the risk of economic uncertainty associated with the exit of the
Condensed Consolidated Statements of Operations: See details at:
https://www.vfc.com/news/press-release/1729/vf-reports-first-quarter-fiscal-2021-results
Refer to constant currency definition on previous pages.
(a) Excludes the operating results of jeanswear wind down activities inSouth America post the separation ofKontoor Brands for the three months endedJune 2019 . Refer to Non-GAAP financial information on 'Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three Months EndedJune 2019 ' page for additional information.
(b) Royalty revenues are included in the wholesale channel for all periods.
Vice President, Corporate Development, Investor Relations and
or
Vice President, Corporate Affairs
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