VF Corporation Reports Financial Results for Q2 FY25
VF Corporation (NYSE: VFC) has announced its financial results for the second quarter of fiscal year 2025, which ended on September 28, 2024.
Key Financial Metrics
| Metric | Q2 FY25 | Q2 FY24 | YoY Change | Consensus Estimates | Difference |
|---|---|---|---|---|---|
| Total Revenue | $2.8 billion | - | -6% | $2.7 billion | Above |
| Earnings Per Share (EPS) | $0.52 | $(1.16) | - | $0.37 | Above |
| Adjusted Earnings Per Share (EPS) | $0.60 | $0.63 | - | - | - |
VF Corporation reported a total revenue of $2.8 billion, surpassing the consensus estimate of $2.7 billion, yet reflecting a 6% decline year-over-year. The EPS of $0.52, an improvement from the loss reported in the previous year, exceeded the market expectations of $0.37. The adjusted EPS decreased slightly from $0.63 in the same quarter last year to $0.60.
Revenue Performance by Segment
| Segment | Q2 FY25 Performance | Previous Guidance |
|---|---|---|
| The North Face | Down 3% | As expected |
| Vans | Down 11% | - |
The North Face experienced a 3% revenue decline, aligning with prior guidance, whereas Vans saw an 11% drop compared to Q2 FY24. Despite these declines, the performance marks an improvement over the previous quarter results.
Key Developments and Operational Highlights
- Gross Margin : Increased by 120 basis points to 52.2% year-over-year.
- Operating Margin : Decreased by 210 basis points to 9.9%.
- Inventory : Ending inventories fell by 13% compared to the prior year.
- Debt Management : Net debt was reduced by approximately $446 million, partly due to proceeds from the Supreme sale completed on October 1, 2024.
Executive Commentary
Bracken Darrell, President and CEO of VF Corporation, highlighted the company’s progress towards its Reinvent transformation, emphasizing achievements in operational efficiency and debt reduction. The completion of the Supreme divestiture played a crucial role in paying down VF's $1 billion term loan due December 2024. Darrell expressed optimism about the company's steady advancement towards growth and value creation.
Dividend Announcement
The Board of Directors has declared a quarterly cash dividend of $0.09 per share, payable on December 18, 2024, to shareholders on record as of December 10, 2024.
Forward Guidance
For Q3 FY25, VF anticipates revenue between $2.7 billion and $2.75 billion, representing a 1% to 3% year-over-year decline, accounting for currency impacts. The company expects adjusted operating income of $170 million to $200 million.
Stock Price Movement
Following the earnings release, VF Corporation's stock price increased by approximately 1.79%, reflecting market confidence in the company's strategic direction and financial performance.
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