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VF’s revenue in line with expectations

Jul 12, 2016 United States
VF’s revenue in line with expectations
First quarter revenue totaled 2.8 billion US dollars, up by 2% on a currency neutral basis. International revenue up by 1% (up by 4% currency neutral)
“Our first quarter results demonstrate the ability of our diversified business model to perform as expected in an inconsistent environment”, stated Eric Wiseman, VF Chairman and Chief Executive Officer, adding: “By leveraging our strengths – driving innovation into the marketplace, connecting with consumers and operating with financial discipline – we are on track to deliver results consistent with our 2016 outlook, while also delivering on our commitment to shareholders.”

First quarter revenue, reaching 2.8 billion US dollars, was in line with expectations, growing by 2% (currency neutral), driven by strength in the Outdoor & Action Sports and Jeanswear coalitions and by the international businesses.

First quarter revenue for the Outdoor & Action Sports segment was up by 2% (up by 4% currency neutral) totaling 1.6 billion US dollars. Within these, revenue for The North Face brand was up by 6% (up by 8% currency neutral) driven by a low single-digit rate increase in the Americas; a high-teen percentage rate increase in Europe and a mid-single-digit percentage rate increase in Asia-Pacific. In line with expectations, Vans brand revenue was down by 1% (up by 2% currency neutral) including a mid-single-digit increase in the Americas business, a high single-digit increase in Asia-Pacific and a mid-teen percentage rate decrease in Europe where the brand continues to manage through elevated inventories related to its Classics collection. Timberland brand revenue was up by 2% (up by 3% currency neutral) in the first quarter including a low single-digit increase (up mid-single-digit currency neutral) in the Americas region, a mid-single-digit increase in Europe and a mid-single-digit decline in Asia-Pacific (down low single-digit currency neutral).

First quarter operating income for Outdoor & Action Sports declined by 13% totaling 228 million US dollars (flat currency neutral).

Jeanswear first quarter revenue was up by 2% (up by 4 percent currency neutral) reaching 711 million US dollars, while Imagewear’s revenue declined by 5% totaling 269 million US dollars (down 4% currency neutral). A declining trend was also registered within the Sportswear segment, with revenue decreasing by 13% to total 118 million US dollars.

International revenue in the first quarter was up by 1% (up by 4% currency neutral). Revenue in Europe was up by 1% (up by 2% currency neutral) and in the Asia-Pacific region by 2% (up by 6% currency neutral). Revenue in the Americas (non-US) region was down by 1% (increasing by 12% currency neutral). The international business represented 41% of total VF first quarter sales, compared with 40% in last year’s same period.

According to the company's outlook for the year, revenue is expected to increase at a mid-single-digit percentage rate, including about one percentage point of negative impact from changes in foreign currency.

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