All per share amounts are presented on a diluted basis.
In a release on
"2013 was a terrific year for VF with record gross margin and earnings per share," said
"Among many noteworthy brand performances, two significant milestones included The North Face brand passing
Fourth Quarter 2013 Review
Revenues rose 8 percent to
Gross margin improved 80 basis points to 48.2 percent, compared with 47.4 percent in the same period of 2012, with improvements in nearly every coalition. The higher gross margin reflects the continuing shift of our revenue mix toward higher margin businesses as well as lower year-over-year product costs.
SG&A as a percent of revenues rose 10 basis points to 32.7 percent in the fourth quarter. This increase includes the impact of an incremental investment of nearly
Operating income on an adjusted basis grew 11 percent to
Net income on an adjusted basis grew 7 percent to
Full Year 2013 Review
Revenues increased 5 percent to a record
Gross margin rose by 160 basis points to a record 48.1 percent, compared with 46.5 percent in 2012, with improvements in nearly every business. For the full year, the improvement in gross margin reflects the continued shift in our revenue mix toward higher margin businesses as well as lower product costs.
SG&A as a percent of full year revenue rose 50 basis points to 33.6 percent. This increase includes the impact of higher marketing expense that increased the SG&A ratio by 60 basis points, including the nearly
Operating income on an adjusted basis increased 11 percent to
Net income on an adjusted basis rose 13 percent to
Revenues for the Outdoor &
Fourth quarter revenues for The North Face brand rose 12 percent globally driven by more than 30 percent growth in direct-to- consumer sales and a mid single-digit increase in the brand's wholesale business. By region, The North Face brand's revenues were up 10 percent in the
Revenues for the Vans brand in the fourth quarter were up 14 percent with strong, double-digit growth across all geographies, as well as in the brand's wholesale and direct-to-consumer platforms. Revenues in the
Revenues for the Timberland brand were up 13 percent in the fourth quarter. In the
Fourth quarter operating income for Outdoor &
Jeanswear fourth quarter revenues were flat at
Fourth quarter revenues for the Wrangler brand were up 5 percent driven by strength in the
Operating income for Jeanswear in the fourth quarter rose 2 percent to
Imagewear revenues were up 9 percent in the fourth quarter to
Sportswear had a strong quarter with revenues increasing 14 percent to
In a business environment that continues to be challenging for premium denim, fourth quarter revenues for the Contemporary Brands coalition were up 1 percent to
International revenues in the fourth quarter increased 11 percent, up 10 percent on a constant currency basis. Revenues in
Direct-to-consumer revenues grew 14 percent in the fourth quarter driven by a 32 percent increase in The North Face brand, a 12 percent increase in the Vans brand, 8 percent increases from both the Timberland and Nautica brands, and a 44 percent increase in the Kipling brand. Fifty-three stores were opened across our brands during the quarter bringing the total number of VF owned retail stores to 1,246. For the full year 2013, direct-to-consumer revenues grew 13 percent and accounted for 22 percent of total VF revenues compared with 21 percent in 2012.
Balance Sheet Review
Inventories were up 3 percent compared with
"As we look to 2014, we are confident in the continued global success of VF's portfolio of powerful brands and platforms," Wiseman said. "Our proven execution and financial discipline makes us the best positioned company in our industry to consistently deliver products and experiences that consumers want and returns that shareholders have come to expect."
Key points related to VF's full year 2014 outlook include:
-Revenue expected to increase by 7 to 8 percent including growth in every coalition. Outdoor &
-International revenue should grow 10 percent, driven by high- teen growth in
-In 2014, to better represent the operations of its direct-to- consumer business, VF will begin to include its concession locations in its direct-to-consumer revenues. Concessions are retail locations (outside the U.S.) where the company is responsible for all aspects of operations without ownership of the retail space. After adjusting 2013 direct-to-consumer revenues for this change, direct-to- consumer is expected to grow at a high-teen percentage rate in 2014 and should represent 26 percent of total VF revenues. Direct-to- consumer growth in 2014 will be driven by approximately 150 store openings, comp store growth and an expected increase of more than 30 percent in e-commerce revenues.
-Expect continued margin expansion, including a 90 basis point improvement in gross margin to 49 percent, and about 60 basis point increase in operating margin to 15 percent.
-Earnings per share should increase 11 to 13 percent to
-Expect record cash flow from operations, approaching
-Expect to spend approximately
-Other full year assumptions include a 23.5 to 24 percent effective tax rate, a negligible impact from changes in foreign currency and capital expenditures of approximately
In terms of quarterly revenue comparisons in 2014, the cadence should be similar to that of 2013 - although at a higher percentage increase per quarter. Accordingly, we expect mid single-digit growth in the first half of 2014 followed by high single-digit growth in the second half of the year. First quarter earnings will face a tougher comparison against last year's first quarter earnings per share due to the inclusion of
Share Repurchase Authorization
Repurchases under VF's new program will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements and other relevant factors. This share repurchase plan does not obligate VF to acquire any particular amount of common stock, and it may be suspended at any time at the company's discretion. VF had approximately 440 million shares of common stock outstanding as of
VF's Board of Directors declared a quarterly dividend of
((Comments on this story may be sent to firstname.lastname@example.org))
All per share amounts are presented on a diluted basis.