VF Corp. today reported fourth-quarter 2019 results as it prepares to officially spin off its jeans and outlet business after the close of the New York Stock Exchange.
Net income was $128.8 million, or 32 cents a share, down from $252.8 million, or 66 cents a share, a year earlier.
On an adjusted basis, earnings per share declined 10 percent to 60 cents, but slightly ahead of analysts’ average forecasts, according to FactSet.
Revenue, meanwhile, increased 6 percent to $3.2 billion, driven by VF’s largest brands, international and direct-to-consumer businesses. This matched Wall Street estimates.
“Fiscal 2019 marked one of the most significant periods of transformation in VF’s 120-year history, highlighted by our announcement to spin off our Jeans business as an independent, publicly traded company,” said Steve Rendle, chairman, president and chief executive officer.
“Despite the tremendous workload, we remained sharply focused and delivered another year of strong financial results and top quartile returns to our shareholders.”
For the fiscal year 2020, VF is projecting revenue to be in the range of $11.7 billion to $11.8 billion, reflecting growth of about 5 percent to 6 percent.
Adjusted EPS are expected to be in the range of $3.30 to $3.35, reflecting estimated growth of approximately 15 percent to 17 percent.
The idea behind the spin off is to separate the relatively staid jeans brands, including Lee and Wrangler, from VF’s best-performing names, Vans and North Face.
As part of the deal, the new company, Kontoor, will stay in North Carolina while VF will move to Denver. Kontoor will get its own dedicated management team that can focus on capturing a bigger slice of the resurgent denim market — a category that is bouncing back after some tough ath-leisure competition.
Its executives will also no doubt be hoping that it can ride the wave of Levi Strauss & Co.’s blockbuster return to the stock market last month.