For the first fiscal quarter ended April 4, 2015, sales at NYSE listed VF Corporation dropped 2 per cent on reported basis, but was up 8 per cent on currency neutral basis, both comparisons made from a year ago quarter.
Gross margin stood at 49.0 per cent on a reported basis in the first quarter of fiscal 2016, down 40 basis points compared with the same quarter last year and which it said was in line with its expectations.
“Continued benefit from the shift of our revenue mix toward higher margin businesses was more than offset by the impact of foreign currency,” VF Corp said in a press release.
However, the company continues to expect a 70 basis point improvement for the full fiscal to achieve gross margin of 49.5 per cent on a currency neutral basis and 49.2 per cent on reported basis.
In the quarter under review, operating income on a reported basis was down 1 per cent year over year to $398 million, while operating margin declined 50 basis points to 14.0 percent.
Earnings per share were up 13 per cent on a currency neutral basis and were flat on a reported basis compared with last fiscal’s same period.
First quarter revenues for the Outdoor & Action Sports division rose 10 per cent on a currency neutral basis and 2 percent on reported basis to $1.6 billion.
Jeanswear division first quarter of fiscal 2015 revenues was up 6 per cent on currency neutral basis and 1 per cent on reported basis to $700 million.
Revenues in Jeanswear for the Americas improved at a mid single-digit percentage rate, while Europe reported hikes in mid single-digit percentage and in Asia, revenues were up at a high single-digit rate.
Imagewear division sales in the reporting quarter grew 8 per cent on currency neutral basis and 7 per cent on reported basis to $283 million, driven by increase in the workwear business.
In the first quarter of fiscal 2015, turnover from the Sportswear segment increased 3 percent year on year to $136 million.
However, sales at the Contemporary Brands division were down 7 percent on currency neutral and 11 per cent on reported basis to $88 million, which VF added, reflects ongoing challenges in demand.
International revenues, on a currency neutral basis, expanded 9 per cent on currency neutral and contracted 5 per cent on reported basis in the first quarter of fiscal 2015.
Direct-to-consumer revenues, on a currency neutral basis, mounted 11 per cent on currency neutral and 5 per cent on a reported basis, led by positive comparable sales growth in all regions.
Twenty-three stores were opened during the first quarter bringing the total number of VF-owned retail stores to 1,395.
On a reported basis, direct-to-consumer revenues reached 24 per cent of total revenues in the first quarter compared with 23 per cent in the same period of 2014.
During the first fiscal quarter, VF purchased a total of 10 million common shares for approximately $730 million under its share repurchase authorisation, but does not anticipate further repurchases in the fiscal.
