V F Corporation (VFC) has reported a 19.64 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $209.16 million, or $0.50 a share in the quarter, compared with $260.27 million, or $0.61 a share for the same period last year. On an adjusted basis, earnings per share were at $0.55 for the quarter.
Revenue during the quarter went down marginally by 2 percent to $2,581.68 million from $2,634.42 million in the previous year period. Gross margin for the quarter expanded 143 basis points over the previous year period to 50.16 percent. Total expenses were 88.71 percent of quarterly revenues, up from 88.16 percent for the same period last year. That has resulted in a contraction of 55 basis points in operating margin to 11.29 percent.
Operating income for the quarter was $291.47 million, compared with $311.80 million in the previous year period.
"VF's first quarter results were right in line with our expectations. The company's largest brands and international and direct-to-consumer platforms performed well, delivering solid results against a retail backdrop that continues to experience significant dislocation," said Steve Rendle, President and Chief Executive Officer. "Our diversified value-creation model and our focus on becoming a more agile and consumer-centric organization position us to accelerate growth through 2017 and execute against our recently announced 2021 strategic growth plan."
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $2.89 to $2.94 on adjusted basis.
Operating cash flow remains negative
V F Corp has spent $210.16 million cash to meet operating activities during the quarter as against cash outgo of $145.57 million in the last year period.
The company has spent $68.34 million cash to meet investing activities during the quarter as against cash outgo of $43.26 million in the last year period.
The company has spent $346.48 million cash to carry out financing activities during the quarter as against cash outgo of $189.96 million in the last year period.
Cash and cash equivalents stood at $604.44 million as on Mar. 31, 2017, up 3.26 percent or $19.08 million from $585.36 million on Mar. 31, 2016.
Working capital increases sharply
V F Corp has recorded an increase in the working capital over the last year. It stood at $2,255.19 million as at Mar. 31, 2017, up 56.24 percent or $811.78 million from $1,443.41 million on Mar. 31, 2016. Current ratio was at 2.23 as on Mar. 31, 2017, up from 1.57 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 63 days for the quarter from 116 days for the last year period. Days sales outstanding were almost stable at 45 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 58 days for the quarter compared with 109 days for the previous year period. At the same time, days payable outstanding went up to 39 days for the quarter from 37 for the same period last year.
Debt moves up marginally
V F Corp has witnessed an increase in total debt over the last one year. It stood at $2,593.90 million as on Mar. 31, 2017, up 2.04 percent or $51.97 million from $2,541.93 million on Mar. 31, 2016. Total debt was 28.12 percent of total assets as on Mar. 31, 2017, compared with 25.85 percent on Mar. 31, 2016. Debt to equity ratio was at 0.59 as on Mar. 31, 2017, up from 0.52 as on Mar. 31, 2016.
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