VF Corp. Q4 Results Miss Estimates, Guides 2014 Below View

(RTTNews) - Branded lifestyle apparel maker VF Corp. (VFC) reported Friday a profit for the fourth quarter that increased 10 percent from last year, reflecting improved margins and sales growth. Both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also provided earnings and revenue growth guidance for the full-year 2014, below Street view.

The company also announced that it expects to return more than $1 billion to shareholders in 2014 through share repurchases and dividends.

The Greensboro, North Carolina-based makers of Wrangler and Lee jeans reported net income of $367.67 million or $0.82 per share for the fourth quarter, higher than $334.17 million or $0.75 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $368.24 million or $0.82 per share, compared to $344.39 million or $0.77 per share in the year-ago quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.84 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total coalition revenues for the quarter grew 8 percent to $3.29 billion from $3.03 billion in the same quarter last year, but missed twenty-one Wall Street analysts' consensus estimate of $3.34 billion by a whisker.

Revenues growth of 8 percent was driven by double-digit growth in Outdoor & Action Sports, Sportswear, international and direct-to-consumer businesses, and high single-digit percentage growth in Imagewear coalition.

Outdoor & action sports revenues rose 12 percent to $1.92 billion, while jeanswear revenues remained relatively flat with last year at $734 million from last year.

Imagewear revenues grew 9 percent to $287 million, and sportswear revenue increased 14 percent to $208 million from a year ago. Contemporary Brands revenue edged up 1 percent to $108 million from last year.

International revenues increased 11 percent or 10 percent on a constant currency basis, and direct-to-consumer revenues were up 14 percent from a year ago.

Operating margin for the quarter expanded 70 basis points to 15.5 percent, aided by an 80 basis points improvement in gross margin to 48.2 percent, reflecting the continuing shift of revenue mix toward higher margin businesses as well as lower year-over-year product costs.

VF's Board of Directors also declared a quarterly dividend of $0.2625 per share, payable on March 20 to shareholders of record on March 10, 2014.

"2013 was a terrific year for VF with record gross margin and earnings per share. The combined power of our brands and platforms remains our greatest competitive advantage enabling us to push the envelope on product innovation to connect even more intensely with consumers and providing stellar returns to our shareholders," Chairman and CEO Eric Wiseman said in a statement.

For fiscal 2014, the company reported net income of $1.21 billion or $2.71 per share, higher than $1.09 billion or $2.43 per share in the prior year. Excluding items, adjusted earnings for the year was $1.22 billion or $2.73 per share, compared to $1.08 billion or $2.41 per share in the year ago.

Total coalition revenues for the full year grew 5 percent to $11.42 billion from $10.88 billion in the previous year.

Analysts expected the company to report full-year 2013 earnings of $2.75 per share on annual revenues of $11.48 billion.

Looking ahead to fiscal 2014, the company expects earnings in a range of $3.00 to $3.05 per share, on projected revenue growth of 7 to 8 percent including growth in every coalition. Street is currently looking for full-year 2014 earnings of $3.09 per share, on annual revenue growth of 8.4 percent to $12.45 billion.

The company also warned that first-quarter earnings will face a tougher comparison against last year due to the inclusion of $0.03 per share from discrete tax benefits primarily related to the impact of U.S. tax law changes enacted in January 2013.

"As we look to 2014, we are confident in the continued global success of VF's portfolio of powerful brands and platforms. 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," Wiseman added.

In Friday's regular trading session, VFC is currently trading at $55.82, down $4.07 or 6.80% on a volume of 0.20 million shares.