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VF Corporation Reported Mixed Quarterly Results for Fiscal 4Q15

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Price movement of VF Corporation

VF Corporation (VFC) has a market cap of $25.0 billion. VFC fell by 4.4% to close at $58.55 per share as of February 19, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases were 3.1%, 6.5%, and -5.9%, respectively.

Technically, the stock has broken the support and is trading below all moving day averages. Currently, VFC is trading 1.7% below its 20-day moving average, 2.7% below its 50-day moving average, and 13.3% below its 200-day moving average.

The PowerShares DWA Momentum ETF (PDP) invests 1.0% of its holdings in VFC. The ETF tracks an index of 100 US-listed large-cap and mid-cap companies selected and weighted by relative stock performance. The YTD price movement of PDP is -8.2% as of February 18, 2016.

The market cap of VF Corporation’s competitors are as follows:

  • Gap (GPS) — $10.6 billion
  • Ralph Lauren (RL) — $7.4 billion
  • Columbia Sportswear (COLM) — $4.1 billion
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Performance of VFC in fiscal 4Q15 and fiscal 2015

VFC reported fiscal 4Q15 total revenues of $3,412.8 million, a fall of 4.6% compared to total revenues of $3,578.9 million in fiscal 4Q14. Revenues of outdoor and action sports, jeanswear, imagewear, sportswear, and contemporary brands segments fell by 2.9%, 2.5%, 13.1%, 9.2%, and 18.9%, respectively, in fiscal 4Q15, compared to fiscal 4Q14. It reported impairment of goodwill and intangible assets of $143.6 million in fiscal 4Q15, compared to $396.4 million in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $312.2 million and $0.72, respectively, in fiscal 4Q15, compared to $122.1 million and $0.28, respectively, in fiscal 4Q14.

The company has declared a quarterly dividend of $0.37 per share on its common stock. The dividend will be paid on March 18, 2016, to shareholders of record at the close of business on March 8, 2016.

Fiscal 2015 results

In fiscal 2015, VFC reported total revenues of $12,376.7 million, a rise of 0.77% YoY (year-over-year). Its net income and EPS (earnings per share) rose to $1,231.6 million and $2.85, respectively, in fiscal 2015, compared to $1,047.5 million and $2.38, respectively, in fiscal 2014.

Meanwhile, its cash and cash equivalents fell by 2.7%, and inventories rose by 8.7% in fiscal 2015. Its current ratio fell to 2.1, and debt-to-equity ratio rose to 0.79 in fiscal 2015, compared to a current ratio and a debt-to-equity ratio of 2.5 and 0.75, respectively, in fiscal 2014.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of VFC are 20.5x and 4.6x, respectively, as of February 19, 2016.

On February 17, 2016, the company elected W. Rodney McMullen as a director, effective February 16, 2016.

Company projections

VFC has made the following projections for fiscal 2016:

  • Revenue is expected to increase at a mid-single-digit percentage rate, including about 1 percentage point of negative impact from changes in foreign currency.
  • Gross margin is expected to improve by about 0.50%–48.8%, which includes about 0.70 percentage points of headwinds from changes in foreign currency.
  • EPS is expected to increase 11%.
  • Cash flow from operations is expected to be $1.3 million.
  • The effective tax rate is expected to be ~23%.
  • Capital expenditures is expected to be ~$300 million.
  • VFC expects to repurchase ~$1 billion of shares under its share repurchase program.

Now let’s take a look at Archer-Daniels Midland.

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