=V.F. Corp (VFC) reported earnings on Fri 19 Feb 2016 (before open)

Clothing supplier V.F. Corp. (VFC) reported weaker-than-expected sales and earnings in the most-recent quarter. The company makes North Face, Lee and Wrangler jeans, jackets, shirts and other products, and its per-share profit of 95 cents missed the average forecast of $1.01. Sales dropped 4.6%.

V.F. Corp misses by $0.06, misses on revs; guides FY16 below consensus :

• Reports Q4 (Dec) earnings of $0.95 per share, excluding non-recurring items, $0.06 worse than the Capital IQ Consensus of $1.01; revenues fell 4.6% year/year (-1% ex-FX) to $3.41 bln vs the $3.64 bln Capital IQ Consensus.
  • Outdoor & action sports sales -3%, Jeans -2%, Imagewear -13%, sportswear -9%, contmemporary brands -19%, 
  • 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.
• Co issues downside guidance for FY16, sees EPS  +5% to ~$3.23 vs. $3.44 Capital IQ Consensus Estimate. Revenue is expected to increase at a mid single-digit percentage rate (consensus +7.7%), including about one percentage point of negative impact from changes in foreign currency.
  • By coalition, revenue for Outdoor & Action Sports is expected to increase at a high single-digit percentage rate; mid single-digit growth for Jeanswear; low single-digit growth for Imagewear; a slight decline in Sportswear; and, a mid single-digit decline in the Contemporary Brands business. International revenue is expected to increase at a high single-digit rate on a currency neutral basis (up mid single-digit reported). Direct-to-consumer revenue is expected to grow at a low double-digit percentage rate, including about a point of negative impact from changes in foreign currency.
  • Gross margin is expected to improve by about 50 basis points to 48.8 percent, which includes about 70 basis points of headwind from changes in foreign currency.
  • VF expects to spend ~$1 billion under the company's share repurchase program
• "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."