V.F. Corporation (NYSE:VFC) has reported a fall in fourth-quarter and full-year 2023 earnings that was cushioned by strength in its The North Face brand and a recovery in China.
The Denver, Colorado-based company, which also owns the Vans and Timberland brands, among others, blamed the decline on the challenging consumer environment.
Revenue for the three months to April 1, 2023, eased 3% to $2.7 billion and was unchanged in constant currency. Adjusted earnings per share (EPS) declined 62% to $0.17 but came in ahead of Wall Street estimates of $0.14.
For full-year 2023, revenue fell 2% to $11.6 billion and was up 3% in constant currency, while adjusted EPS declined by 34% to $2.10 compared with analysts' average estimate of $2.17.
“We delivered quarterly results in line with our guidance, led by ongoing strength in The North Face and our International business, with accelerating momentum in Greater China,” interim president and CEO Benno Dorer said in an earnings statement.
“As a result, we were able to close the fiscal year with 10 out of 12 brands flat or growing revenue, and five up double digits, despite the challenging consumer environment.”
While the company expects first-quarter 2024 revenue to fall by high single digits due to the challenging US wholesale environment, it expects full-year revenue to come in flat to slightly higher in constant currency. It guided for full-year EPS of $2.05 to $2.05.
“FY24 will be a year of progress as initiatives underway begin to drive results. We will be laser-focused on execution amidst an increasingly difficult near-term environment, particularly in US wholesale,” chief financial officer Matt Puckett added.
“We expect to improve our operating performance and financial results, highlighted by increasing gross margins, EBITDA growth, and strong cash generation, all of which supports our plan to de-lever. I remain confident VF is well positioned to return to sustainable and profitable growth beginning in FY24.”
The company’s shares were 1.4% higher in pre-market trading.
Contact the author at stephen.gunnion@proactiveinvestors.com