VF Corporation posts first results after Kontoor spinoff
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Apparel giant VF Corporation has reported a 9 percent increase in same-store sales on a currency-neutral basis in the June quarter, to US$2.3 billion.
VF Corporation owns a portfolio of outdoor and activity-based lifestyle and workwear brands, including Vans, The North Face, Timberland and Dickies. In May it spun off its denim business, which includes Lee and Wrangler labels, in a new company called Kontoor Brands.
The company said its gross margin increased by 140 basis points to 54.4 percent, driven by favorable mix and timing of foreign-currency transaction hedge gains.
Operating income was $133 million.
“Our first quarter represents a new chapter for VF following the spin-off of Kontoor Brands and our relocation to Denver, Colorado,” said Steve Rendle, chairman, president and CEO.
“Our first-quarter results demonstrate the power of VF’s evolved portfolio and our progress along our journey to become a purpose-led, performance-driven, value-creating enterprise anchored in our commitment to be more consumer-minded and retail-centric in everything we do.”
VF Corporation recorded an after-tax net loss from discontinued operations was of $48 million in the first quarter of fiscal 2020, which reflects the operating results of the jeans business, including $59.5 million of separation costs related to the spin-off.
Figures in the quarterly results above are compared with comparable trading period last year, after the removal of the discontinued (spun-off) business.
Questions & Answers
Q.What was VF Corporation's reported revenue for the June quarter on a currency-neutral basis?
What was VF Corporation's reported revenue for the June quarter on a currency-neutral basis?
VF Corporation reported revenue of US$2.3 billion for the June quarter. This figure represents a 9 percent increase in same-store sales on a currency-neutral basis for the period.
Q.Which brands are now part of VF Corporation's portfolio after the spin-off?
Which brands are now part of VF Corporation's portfolio after the spin-off?
After spinning off its denim business, VF Corporation's portfolio includes outdoor and activity-based lifestyle and workwear brands. These consist of Vans, The North Face, Timberland, and Dickies.
Q.What contributed to the increase in VF Corporation's gross margin?
What contributed to the increase in VF Corporation's gross margin?
The company's gross margin increased by 140 basis points to 54.4 percent. This improvement was driven by a favourable mix of products and the timing of foreign-currency transaction hedge gains.