VF Corporation reported financial results for its first quarter ended March 29, 2014. All per share amounts are presented on a diluted basis. Driven by continued momentum in its Outdoor & Action Sports coalition, earnings per share in the quarter were up 12 percent primarily due to strong demand for The North Face, Vans and Timberland brands and gross margin expansion in every coalition.
-Revenues up 6.5 percent to $2.8 billion
-Outdoor & Action Sports revenues up 14 percent; double-digit growth in every region
-Direct-to-consumer revenues up 16 percent; double-digit growth in every region
-International revenues up 11 percent; double-digit growth in Europe and Asia Pacific
-Gross margin up 130 basis points to 49.4 percent
-Earnings per share up 12 percent to $0.67
-2014 revenues now expected to increase to high end of 7 to 8 percent range
-2014 earnings per share now expected to grow 13 percent to $3.06
“VF’s first quarter results reflect the continued strength of our brands and our global business platforms,” said Eric Wiseman, VF Chairman, President and Chief Executive Officer. “Led by outstanding performance from the Outdoor & Action Sports coalition, which had balanced growth across all channels and geographies, we delivered strong growth in revenue and profitability. Looking towards the balance of 2014 – we are confident in our business plan and look forward to delivering another record year for our shareholders.”
First Quarter 2014 Review
Revenues rose 6.5 percent to $2.8 billion, compared with the same period of 2013, driven by double-digit growth in our Outdoor & Action Sports, international and direct-to-consumer businesses.
Gross margin improved 130 basis points to 49.4 percent, an all-time high for any quarter in VF’s history, with improvements in every coalition. The higher gross margin is primarily driven by the continuing shift of our revenue mix toward higher margin businesses and includes 30 basis points related to the previously disclosed change in classification of retail concession fees.
SG&A as a percent of revenues rose 50 basis points to 34.9 percent in the first quarter. This increase includes 30 basis points related to the inclusion of retail concession fees.
Operating income increased 13 percent to $403 million in the first quarter, compared with $358 million in the same period of 2013. Operating margin was 14.5 percent compared with 13.7 percent in the first quarter of 2013.
Earnings per share increased 12 percent to $0.67 per share compared with $0.60 per share during the same period last year.