VF Corporation reported financial results for its third quarter ended Sept. 28, 2013. All per share amounts are presented on a diluted basis.
Highlights:
- Revenues up 5 percent to $3.3 billion: Outdoor & Action Sports up 6 percent, International up 7 percent and Direct-to-Consumer up 14 percent.
- Gross margin improved by 90 basis points to 47.6 percent.
- Adjusted EPS up 11 percent to $3.91 (up 14 percent to $3.89 on a GAAP basis).
- Four-for-one stock split announced.
- Full-year adjusted earnings guidance unchanged after incremental investments of $0.25 per share to drive future growth.
“VF is at its best when we empower our brands to deliver innovative products, connect with consumers, and operate with efficiency and discipline,” said Eric Wiseman, VF Chairman and Chief Executive Officer. “Our third quarter results validate our growth strategy and our ability to deliver strong results in a challenging economic environment.”
“Our solid year-to-date results allow us to make significant, incremental brand investments while still delivering on our long-term earnings growth target,” continued Wiseman. “The announced 21 percent increase in our dividend and stock split demonstrate the confidence we have in our ability to consistently generate strong returns for VF shareholders.”
Third Quarter 2013 Review
Revenues rose 5 percent to $3.3 billion, compared with the same period of 2012, led by Outdoor & Action Sports, Jeanswear, and our International and Direct-to-Consumer businesses. Changes in foreign currency exchange rates positively impacted total reported revenue growth by approximately one percentage point during the quarter.
Gross margin improved 90 basis points to 47.6 percent, compared with 46.7 percent in the same period of 2012. With improvements in nearly every coalition, the higher gross margin reflects the continuing shift in our revenue mix toward higher margin businesses and moderately lower year-over-year product costs.
SG&A as a percent of revenues rose 40 basis points to 30 percent in the third quarter. This increase includes an 80 basis point impact from higher marketing investments to support our largest and fastest growing businesses.