“We're pleased with the strength of our second quarter and first half results, driven by our two largest brands and our international and direct-to-consumer platforms", commented Steve Rendle, Chairman, President and Chief Executive Officer, adding: "The quality and fundamentals of our business remain solid as a result of the focus and strategic execution of our business teams around the globe. Despite an increasingly uncertain geopolitical and macroeconomic environment, we are confident in the trajectory of our business as we move into the second half of our fiscal year, as reaffirmed by our outlook. We remain deeply committed to transforming VF into a more consumer-minded and retail-centric organization while delivering superior returns to shareholders."

Second Quarter Results

Revenue increased by 5% (up by 7% in constant dollars) to 3.4 billion US dollars. Excluding the impact of acquisitions and divestitures and on an adjusted basis, revenue increased by 6% (up by 8% in constant dollars), driven by VF's two largest brands, and the international and direct-to-consumer platforms.

Operating income on a reported basis was 579 million US dollars. On an adjusted basis, operating income increased by 7% (up by 10% in constant dollars) to 606 million US dollars. Operating margin on a reported basis increased 20 basis points to 17.1%. Adjusted operating margin increased 40 basis points to 17.9%.

Fiscal 2020 Outlook

Revenue is expected to approximate 11.8 billion US dollars, reflecting an increase of approximately 6% (8% on a constant dollar basis excluding the impact of acquisitions and divestitures).

By segment, revenue for Outdoor is still expected to increase approximately 5% (6% to 7% on a constant dollar basis, excluding the impact of acquisitions). Revenue for Active is now expected to increase approximately 8% to 9% (11% to 12% on a constant dollar basis, excluding the impact of divestitures). Revenue for Work is now expected to increase approximately 2% to 3% (4% to 5% on a constant dollar basis, excluding the impact of divestitures).

International revenue is now expected to increase approximately 4% to 5%, or approximately 8% to 9% on a constant dollar basis, excluding the impact of acquisitions and divestitures.  Direct-to-consumer revenue is now expected to increase approximately 11% to 12% (12% to 13% on a constant dollar basis), including about 25% growth in digital.

 

Dividends

VF’s Board of Directors declared a quarterly dividend of 0.48 US dollars per share, reflecting a 12% increase over the previous quarter's dividend. This dividend will be payable on the 20th of December 2019, to shareholders of record on the 10^th of December 2019.