VF Corp Shares Slide as 2nd-Quarter Earnings, Yearly Forecasts Miss Street Expectations

Press Release

VF Corp. (VFC), whose clothing brands include Vans and North Face, on Friday posted fiscal second-quarter earnings that missed Wall Street’s target and reaffirmed guidance that was below analyst expectations.

Adjusted earnings rose to $1.26 per share from $1.19 a year earlier, but analysts polled by Capital IQ were looking for $1.30 per share.

VF shares were 6.3% lower in afternoon trading.

The company said the adjusted amounts exclude expenses related to its purchases of the Icebreaker and Altra brands and expenses from the spin-off of its jeans business. They also excluded costs from the company’s relocation of its headquarters to Denver and the impact of Swiss tax legislation, among other items. The items combined “positively impacted earnings per share by $0.36 during the second quarter of fiscal 2020 and $0.30 during the first six months of fiscal 2020,” the company said.

VF said revenue during the quarter rose to $3.39 billion from $3.22 billion a year before. Total revenue was aided by a 14% rise in sales of Vans-branded items, which in turn boosted its active segment by 9%. The North Face brand posted an 8% revenue increase, helping the outdoor part of the business pull in 4% more sales. But the total revenue figure missed the Street projection of $3.42 billion.

“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,” VF Chief Executive Steve Rendle said in a statement.

The company said it still expects full-year 2020 adjusted EPS of $3.32 to $3.37. That call was under the Street projection of $3.39. It also held onto its full-year revenue forecast of $11.8 billion, which falls short of the $11.87 billion consensus estimate by the Street.

VF said it is raising its dividend by nearly 12%, to $0.48 per share from $0.43. The payout is due Dec. 20 to shareholders of record on Dec. 10.

This post was originally published on Health Opinion

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