VF Corporation reported financial results for its second quarter ended June 28, 2014. All per share amounts are presented on a diluted basis. Strong contribution from our Vans, Timberland, The North Face, Kipling and Wrangler brands drove an 8 percent increase in revenues and a 16 percent increase in earnings per share in the second quarter.
Highlights:
-Revenues up 8 percent to $2.4 billion; earnings per share up 16 percent to $0.36.
-Outdoor & Action Sports revenues up 16 percent including an 11 percent increase in The North Face brand revenues, a 21 percent increase in Vans brand revenues, and a 19 percent increase in Timberland brand revenues.
-Direct-to-consumer revenues up 18 percent with strong results from nearly every brand and double-digit growth in every region.
-International revenues up 14 percent with double-digit growth in Europe and Asia Pacific.
-Full year earnings per share expected to increase 13 percent to $3.06.
“Our strong second quarter results, led by our Outdoor & Action Sports coalition, put us right in line with our full-year outlook and long-term growth commitments,” said Eric Wiseman, VF Chairman, President and Chief Executive Officer. “Looking toward the second half of 2014, our powerful brands and platforms have us well-positioned to continue our momentum and deliver another record year for VF and its shareholders.”
Second Quarter 2014 Review
Revenues rose 8 percent to $2.4 billion driven by double-digit growth in our Outdoor & Action Sports, international and direct-to-consumer businesses.
Gross margin was 48.4 percent, down 10 basis points against last year’s same period. Continued benefit from the shift of our revenue mix toward higher margin businesses was offset by foreign currency impact, as anticipated, and efforts to aggressively manage inventories especially in our Jeanswear business. The company’s expectation for a 90 basis point improvement for the full year remains unchanged.
SG&A as a percent of revenues was down 10 basis points to 39.3 percent.
Operating income increased 9 percent to $220 million in the second quarter, compared with $201 million in the same period of 2013. Operating margin was 9.2 percent compared with 9.1 percent in the second quarter of 2013.
Earnings per share increased 16 percent to $0.36 per share compared with $0.31 per share during the same period last year.
