Third quarter revenue at VF Corporation increased 22 percent, also up 22 percent in constant dollars to 3.6 billion dollars.
Excluding the impact of acquisitions, the company said, revenue increased 15 percent or 16 percent in constant dollars driven by the EMEA and North American regions, which experienced a negative impact from Covid-19 in the prior year period.
We delivered strong double-digit top and bottom line results and returned about 500 million dollars in cash to shareholders in the third quarter, all of which has been achieved amidst continuing macro headwinds,” said Steve Rendle, VF's chairman, president and CEO in a statement.
Highlights of VF’s this quarter performance
VF’s gross margin increased 140 basis points to 56.1 percent, while on an adjusted basis, gross margin increased 60 basis points, including a 20 basis point positive impact from acquisitions, to 56.3 percent.
Operating income on a reported basis was 678 million dollars and on an adjusted basis increased 40 percent in reported and constant dollars to 643 million dollars. Operating margin on a reported basis was 18.7 percent, while adjusted operating margin increased 230 basis points, including a 50 basis point positive impact from acquisitions, to 17.7 percent.
Earnings per share were 1.32 dollars on a reported basis. On an adjusted basis, earnings per share increased 45 percent or 44 percent in constant dollars to 1.35 dollars, including a 11 cents contribution from acquisitions.
VF reaffirms full year earnings outlook
VF expects full year revenue to be approximately 11.85 billion dollars, reflecting growth of around 28 percent, including an approximate 600 million dollars contribution from the Supreme brand.
By segment, revenue for outdoor is now expected to increase between 26 percent and 28 percent versus the previous expectation of a 25 to 27 percent increase; revenue for active is now expected to increase between 31 percent and 33 percent versus the previous expectation of a 35 to 37 percent increase; revenue for work is still expected to increase between 19 and 21 percent.
International revenue is expected to increase between 22 percent and 24 percent. By geographic region, in the EMEA region, revenue is expected to increase between 28 percent and 30 percent. In the Asia Pacific region, revenue is expected to increase between 7 percent and 9 percent. And, in the Americas (non-U.S.) region, revenue is expected to increase between 33 percent and 35 percent. Direct-to-consumer revenue is now expected to increase between 32 percent and 34 percent versus the previous expectation of 34 percent and 36 percent, including digital revenue growth of greater than 15 percent versus the previous expectation of about 20 percent.
Adjusted gross margin is expected to be at least 55 percent, which represents an estimated increase of at least 170 basis points. Adjusted operating margin is expected to increase at least 500 basis points to at least 13 percent.
Adjusted earnings per share are expected to be around 3.20 dollars, including an approximate 25 cents contribution from the Supreme brand.
VF’s board of directors declared a quarterly dividend of 50 cents per share, payable on March 21, 2022, to shareholders of record on March 10, 2022.