The company's gross margin improved to 50.5 per cent, as benefits from a mix-shift towards higher margin businesses and changes in foreign currency were partially offset by the impact of the Williamson-Dickie acquisition. On an adjusted basis, gross margin increased to 50.8 per cent. Excluding the impact of the Williamson-Dickie acquisition, adjusted gross margin increased to 51.9 per cent.
Operating income on a reported basis was $311 million. On an adjusted basis, operating income increased 14 per cent to $330 million, including a $16 million contribution from the Williamson-Dickie acquisition. Operating margin on a reported basis decreased to 10.2 per cent. Adjusted operating margin went down to 10.8 per cent. Adjusted operating margin, excluding the Williamson-Dickie acquisition, declined to 11.2 per cent.
"VF's transition period results were strong as the broad-based growth acceleration that began in the second half of 2017 continued," said Steve Rendle, chairman, president and chief executive officer. "Our core growth engines are driving strong global momentum as we begin to enter the acceleration phase of our 2021 strategy. VF is in the midst of a transformation to become a purpose-led, consumer-centric organisation. We are evolving and adapting to a rapidly changing marketplace and remain committed to delivering top quartile returns for our shareholders."
For fiscal 2019, revenue is expected to be in the range of $13.45 billion to $13.55 billion, reflecting growth of approximately 9 per cent to 10 percent. By coalition, revenue for outdoor and action sports is expected to increase 8 per cent to 10 per cent; revenue for jeanswear is expected to be about flat compared to prior year; and imagewear revenue is expected to increase more than 35 per cent.
International revenue is expected to increase 13 per cent to 15 per cent. By geographic region, European revenue is expected to increase 13 per cent to 15 per cent. In the Asia Pacific region, revenue is expected to increase 15 per cent to 17 per cent. And, in the Americas (non-U.S.) region, revenue is expected to increase 10 per cent to 12 per cent.
The company forecasts gross margin to be about 51 per cent and operating margin by approximately 13.2 per cent. The adjusted earnings per share is expected to be in the range of $3.48 to $3.53, reflecting growth between 11 per cent and 13 per cent. (RR)
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