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Q2FY16 EPS up 22% on currency neutral basis at VF Corp
Jul '15
For its second fiscal quarter ended July 4, 2015, US based apparel marketer VF Corporation reported a 22 per cent hike in earnings per share on a currency neutral basis and up 11 per cent on a reported basis.

As per a VF Corp press release, the quarter benefitted $0.02 from a lower tax rate relative to 2014, which included discrete items related to the settlement of prior years' tax audits.

In the quarter under review, inventories were up 8 per cent compared to the 2014 quarter, in line with expectations.

Overall revenue rose 10 per cent on a currency neutral basis year over year, while on a reported basis; revenue climbed 5 per cent over the 2014 quarter.

“This growth came, driven by growth in the Outdoor & Action Sports and Jeanswear coalitions and international and direct-to-consumer businesses,” the apparel marketer said.

Gross margin stood at 48.3 per cent on a reported basis, down 10 basis points as against the same quarter of the previous fiscal, but 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 added.

For the second quarter of fiscal 2016, operating income on a reported basis was up 1 per cent to $223 million from the same period in fiscal 2015.

Operating margin on a reported basis however, declined 30 basis points to 8.9 per cent due to the negative impact from changes in foreign currency rates.

For the full fiscal, VF Corp kept revenue expectations unchanged, with an 8 per cent increase on a currency neutral basis and 3 per cent on reported basis.

The company also kept unchanged its expectation that currency neutral gross margin should improve by 70 basis points to reach about 49.5 per cent for the full fiscal.

Based on expected changes in foreign currency for the balance of the fiscal, reported gross margin is now expected to be closer to 49 per cent compared with the previous expectation of 49.2 per cent.

Earnings per share, on a currency neutral basis, is now expected to rise 15 per cent compared to an adjusted EPS of $3.08 in 2014.

“This is an increase from the previous expectation of 14 percent per share growth provided on May 1, 2015,” the company explained.

Earnings per share, on a reported basis, is now anticipated to grow 5 per cent to $3.22 as against adjusted earnings per share of $3.08 in the previous fiscal.

The VF board of directors declared a quarterly dividend of $0.32 per share, payable on September 18, 2015, to shareholders of record on September 8, 2015.

“Our second quarter was another strong illustration of the ability of our global, diverse and powerful brands and platforms to deliver consistent, profitable growth,” CEO Eric Wiseman said. (AR)

Fibre2Fashion News Desk - India

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