First quarter revenue increased 3 percent or 7 percent in constant dollars to 2.3 billion dollars at VF Corporation, driven by increases in the EMEA and Americas regions partially offset by a decline in the APAC region primarily due to COVID lockdowns in China.
Commenting on the results, Steve Rendle, chairman, President and CEO of VF said: “We delivered solid top-line results in Q1, ahead of our initial expectations, led by strong consumer engagement with our outdoor, streetwear and active brands amidst a softer consumer environment and inflationary pressures.”
VF’s Q2 performance and outlook
The company’s gross margin decreased 260 basis points to 53.9 percent and on an adjusted basis, gross margin decreased 260 basis points to 54.1 percent.
Operating income on a reported basis was 63.4 million dollars, while on an adjusted basis, operating income decreased 48 percent or down 40 percent in constant dollars to 77.5 million dollars. Operating margin on a reported basis was 2.8 percent, while adjusted operating margin decreased 340 basis points to 3.4 percent.
Loss per share was 14 cents on a reported basis. On an adjusted basis, earnings per share decreased 68 percent or 59 percent in constant dollars to 9 cents.
VF is maintaining its currency adjusted FY23 outlook while revising its earnings outlook on a reported dollar basis to reflect ongoing negative impacts from foreign currency fluctuations.
The company now expects adjusted EPS of 3.05 dollars to 3.15 dollars, implying 4 percent to 7 percent growth versus the prior year on a constant dollar basis
Total VF revenue up at least 7 percent in constant dollars, unchanged from the previous outlook.
Adjusted gross margin up slightly versus previous outlook of up approximately 50 basis points and adjusted operating margin approximately 13.2 percent versus previous outlook of approximately 13.6 percent.
VF’s board of directors declared a quarterly dividend of 50 cents per share, payable on September 20, 2022, to shareholders of record on September 12, 2022.