NEW YORK -- The costs of slimming down to grow sank VF Corp.'s bottom line in the fourth quarter when the firm absorbed losses of $112.6 million, or $1.03 a diluted share.
Results for the quarter compare with year-ago earnings of $10.2 million, or 8 cents. Excluding restructuring charges in both periods, earnings slumped 33.9 percent, to $57.4 million, or 50 cents a diluted share, from $86.8 million, or 74 cents. The pro forma performance was 2 cents ahead of Wall Street's estimates of 48 cents a share.
VF's restructuring cost it $236.8 million, or $1.53 a share, during the quarter. In the year-ago period restructuring costs mounted to $119.9 million, or 67 cents a share. The company also said that it expects the full costs of realignment to be smaller than originally anticipated. Annualized cost reductions of $130 million are expected from the charges taken during the quarter.
Sales for the period ended Dec. 29 dropped 11.4 percent, to $1.3 billion from $1.46 billion a year ago. U.S. sales from the company's jeanswear business retreated 11 percent, while intimate apparel sales slid 5 percent during the period.
Shares of the firm slid 59 cents, or 1.4 percent, to close at $40.45 on the New York Stock Exchange on Tuesday, before results were reported.
As reported, VF in November unveiled a restructuring plan that would effect the elimination of 13,000 jobs worldwide, the sale of underperforming businesses and a hunt for new brands to bolster its portfolio. VF also said it would outsource more of its manufacturing operations and exit its swimwear and private label knits businesses.
Although charges related to the plan were expected to mount to $280 million to $320 million, VF now expects the one-time item cost to be $265 million, most of which was taken during the most-recent quarter.
In a statement, chairman and chief executive officer Mackey McDonald said 2001 had been "a year unlike any other in our history, primarily due to the events that transpired during the fourth quarter." In addition to integrating VF's past acquisitions, he noted that the firm also "cut costs, strengthened our sourcing capabilities and realigned capacity with current demand."
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