VF Corp. met expectations for first-quarter earnings and sales as currency translation cut into its bottom line.
The company lifted its guidance for currency-neutral earnings for the full year.
In the three months ended April 4, the Greensboro, N.C.-based apparel giant reported net income of $288.7 million, or 67 cents a diluted share, 2.9 percent below the $297..2 million, or 67 cents, reported in the 2014 period. The result matched analysts’ consensus estimates for the period. At constant currency, EPS would have risen 13 percent, the company said.
Revenues were up 2 percent to $2.84 billion, again matching estimates, from $2.78 billion in the prior-year quarter. Eliminating currency effects, revenues were up 8 percent.
The company’s Outdoor & Action Sports Coalition saw revenues rise 2.1 percent to $1.61 billion with The North Face up 1 percent, Vans up 8 percent and Timberland flat. On a currency neutral basis, the coalition’s sales rose 10 percent while North Face was up 8 percent, Vans up 16 percent and Timberland up 10 percent. The group’s operating income dropped 5 percent to $261 million.
“The proven strength of VF’s growth strategy, driven by consistent execution and solid operation discipline, has led us to increase our expectations for full-year currency-neutral earnings,” said Eric Wiseman, chairman, president and chief executive officer, “putting us on track to deliver another record year to shareholders.”
Full-year EPS, excluding currency effects, are now project to rise 14 percent from the $3.08 reported in fiscal 2014. Earlier the projection had been for 12 percent EPS growth.
International revenues were down 5 percent on a reported basis and up 9 percent at constant currency with the biggest currency impact in Europe, where reported revenues were down 14 percent versus a 4 percent increase without currency’s effects.
Direct-to-consumer revenues were up 5 percent on a reported basis and up 11 percent at constant currency, with European DTC performance particularly strong. DTC rose to 24 percent of revenues from 23 percent a year ago.