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V.F. (VFC) Q3 Earnings Miss Estimates, Decline Y/Y
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V.F. Corporation (VFC - Free Report) reported third-quarter fiscal 2024 earnings, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both metrics also declined year over year. The quarterly results were hurt by a shift in the timing of the wholesale deliveries, mostly pronounced for The North Face and the EMEA regions.
This currently Zacks Rank #3 (Hold) company's shares have lost 10.3% in the past three months compared with the industry’s 7.4% decline.
Q3 Highlights
V.F.’s adjusted earnings of 57 cents per share plunged 49.1% year over year and missed the Zacks Consensus Estimate of 79 cents.
Net revenues of $2,960.3 million fell 16% year over year and came below the consensus estimate of $2,995 million. At constant currency (cc), revenues also dipped 17% year over year.
V.F. Corporation Price, Consensus and EPS Surprise
Revenues in the Americas declined 24% year over year on a reported basis and 25% at cc. In the EMEA region, revenues fell 7% (down 12% at cc). Revenues in the APAC region increased 2% on a reported basis (up 3% at cc). This included Greater China revenues, which were up 5% and 7% at cc. The company’s international revenues were down 5% year over year on a reported basis (down 8% at cc).
Channel-wise, wholesale and direct-to-consumer revenues were down 26% and 8%, respectively, year over year on a reported basis. Meanwhile, our model estimated wholesale revenues and direct-to-consumer revenues to decline 6% and 6.5%, respectively. At cc, wholesale revenues fell 28%. Revenues for the direct-to-consumer channel dropped 9%.
The adjusted gross margin rose 40 basis points (bps) to 55.3%. The metric reflected 175 bps of a favorable mix, partly offset by a 135 bps adverse rate impact. Operating loss was $32.2 million against an operating income of $516 million in the year-ago period.
Segmental Details
Revenues in the Outdoor segment dipped 13% to $17.4 billion (down 15% at cc) versus our estimate of 3% growth. The Active segment reported revenues of $999.4 million, down 21% year over year on a reported basis and 22% at cc. Our model predicted Active revenues to decline 19%. Revenues in the Work segment fell 17% year over year (down 18% at cc) to $222.3 million compared with our estimate of a 16% decline.
Financial Details
V.F. ended the fiscal third quarter with cash and cash equivalents of $988 million, long-term debt of $4,755.3 million and shareholders’ equity of $21.1 billion. Inventories were down 17% year over year, amounting to $21.5 billion.
In the nine months ending December 2023, the company generated cash from operating activities of $11.1 billion. It returned $35 million to shareholders through dividend payouts in the fiscal third quarter. The company declared a quarterly cash dividend of 9 cents per share, to be paid out on Mar 20, 2024, to shareholders of record as of Mar 11.
Other Updates
In the reported quarter, management executed the Reinvent transformation program that is focused on brand-building and improved operating performance. The key points include improving North America results, delivering the Vans turnaround, lowering costs and reinforcing the balance sheet. The company continues pursuing opportunities to streamline its processes and invest in the business to drive brand heat and boost growth.
Concerning the Reinvent targets, the company initiated an in-depth strategic review of the brand assets within the portfolio to ensure it owns the brands and creates the greatest long-term value.
For fiscal 2024, management continues to expect a free cash flow of $600 million.
The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates an increase of 13.7% and 38.1%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS indicates growth of 18.4% and 23.7%, respectively, from the year-ago reported figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS indicates growth of 1.4% and 13.1%, respectively, from the year-ago reported actuals.
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V.F. (VFC) Q3 Earnings Miss Estimates, Decline Y/Y
V.F. Corporation (VFC - Free Report) reported third-quarter fiscal 2024 earnings, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both metrics also declined year over year. The quarterly results were hurt by a shift in the timing of the wholesale deliveries, mostly pronounced for The North Face and the EMEA regions.
This currently Zacks Rank #3 (Hold) company's shares have lost 10.3% in the past three months compared with the industry’s 7.4% decline.
Q3 Highlights
V.F.’s adjusted earnings of 57 cents per share plunged 49.1% year over year and missed the Zacks Consensus Estimate of 79 cents.
Net revenues of $2,960.3 million fell 16% year over year and came below the consensus estimate of $2,995 million. At constant currency (cc), revenues also dipped 17% year over year.
V.F. Corporation Price, Consensus and EPS Surprise
V.F. Corporation price-consensus-eps-surprise-chart | V.F. Corporation Quote
Revenues in the Americas declined 24% year over year on a reported basis and 25% at cc. In the EMEA region, revenues fell 7% (down 12% at cc). Revenues in the APAC region increased 2% on a reported basis (up 3% at cc). This included Greater China revenues, which were up 5% and 7% at cc. The company’s international revenues were down 5% year over year on a reported basis (down 8% at cc).
Channel-wise, wholesale and direct-to-consumer revenues were down 26% and 8%, respectively, year over year on a reported basis. Meanwhile, our model estimated wholesale revenues and direct-to-consumer revenues to decline 6% and 6.5%, respectively. At cc, wholesale revenues fell 28%. Revenues for the direct-to-consumer channel dropped 9%.
The adjusted gross margin rose 40 basis points (bps) to 55.3%. The metric reflected 175 bps of a favorable mix, partly offset by a 135 bps adverse rate impact. Operating loss was $32.2 million against an operating income of $516 million in the year-ago period.
Segmental Details
Revenues in the Outdoor segment dipped 13% to $17.4 billion (down 15% at cc) versus our estimate of 3% growth. The Active segment reported revenues of $999.4 million, down 21% year over year on a reported basis and 22% at cc. Our model predicted Active revenues to decline 19%. Revenues in the Work segment fell 17% year over year (down 18% at cc) to $222.3 million compared with our estimate of a 16% decline.
Financial Details
V.F. ended the fiscal third quarter with cash and cash equivalents of $988 million, long-term debt of $4,755.3 million and shareholders’ equity of $21.1 billion. Inventories were down 17% year over year, amounting to $21.5 billion.
In the nine months ending December 2023, the company generated cash from operating activities of $11.1 billion. It returned $35 million to shareholders through dividend payouts in the fiscal third quarter. The company declared a quarterly cash dividend of 9 cents per share, to be paid out on Mar 20, 2024, to shareholders of record as of Mar 11.
Other Updates
In the reported quarter, management executed the Reinvent transformation program that is focused on brand-building and improved operating performance. The key points include improving North America results, delivering the Vans turnaround, lowering costs and reinforcing the balance sheet. The company continues pursuing opportunities to streamline its processes and invest in the business to drive brand heat and boost growth.
Concerning the Reinvent targets, the company initiated an in-depth strategic review of the brand assets within the portfolio to ensure it owns the brands and creates the greatest long-term value.
For fiscal 2024, management continues to expect a free cash flow of $600 million.
Eye These Solid Picks
Some better-ranked companies are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Ralph Lauren (RL - Free Report) .
Royal Caribbean sports a Zacks Rank #1 (Strong Buy) at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates an increase of 13.7% and 38.1%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS indicates growth of 18.4% and 23.7%, respectively, from the year-ago reported figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS indicates growth of 1.4% and 13.1%, respectively, from the year-ago reported actuals.