V.F. Corp (VFC) Stock Gains On Q3 Earnings Beat, Rises Y/Y

V.F. Corporation’s (VFC - Free Report) third-quarter 2017 results marked its second consecutive quarter of both top and bottom-line beat. Also, earnings and sales grew year over year. The splendid quarter encouraged management to raise its outlook for full-year 2017. In fact, V.F. Corp. also announced a dividend hike last week, which further underscores management’s confidence in its future prospects.

The superb quarter and outlook was well received by investors, as shares of this branded apparel retailer are up in the midday trading session. Notably, this Zacks Rank #3 (Hold) stock has jumped 27.2% year to date, outperforming the industry’s rise of 3.6%.

Q3 Numbers

The company’s quarterly adjusted earnings from continuing operations came in at $1.23 a share, which jumped 6% year over year, alongside beating the Zacks Consensus Estimate of $1.12. On a currency neutral basis, earnings surged 10% year over year.

V.F. Corporation Price, Consensus and EPS Surprise
 

V.F. Corp. generated total revenues, including royalty income, of $3,508.8 million that increased about 5% year over year and surpassed the Zacks Consensus Estimate of $3,413 million.Net sales of $3,481.2 million also advanced 6% from the prior-year quarter. On a currency neutral basis, revenues jumped 4%. Revenues in the quarter continued to gain from strength in international and direct-to-customer platforms, the Outdoor & Action Sports coalition and the company’s workwear business.

The company’s reported gross margin increased 100 basis points (bps) to 50.1%, thanks to better pricing and favorable mix shift toward high margin businesses, which was partly negated by foreign currency headwinds and higher product costs. Notably, foreign currency hurt gross margin by 80 bps.

Adjusted operating income slipped 2% to $593 million, while the adjusted operating margin contracted 140 bps to 16.9%. Currency headwinds affected operating margin by 80 bps.

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