V F Corporation (VFC) has reported 15.33 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $264.33 million, or $0.63 a share in the quarter, compared with $312.21 million, or $0.72 a share for the same period last year. On an adjusted basis, profit per share for the quarter was almost stable at $0.97, when compared with the last year period. On an adjusted basis, earnings per share were at $0.97 for the quarter. Revenue during the quarter went down marginally by 0.17 percent to $3,320.57 million from $3,326.28 million in the previous year period. Gross margin for the quarter expanded 87 basis points over the previous year period to 49.09 percent. Total expenses were 90.36 percent of quarterly revenues, up from 83.82 percent for the same period last year. That has resulted in a contraction of 653 basis points in operating margin to 9.64 percent.
Operating income for the quarter was $320.12 million, compared with $538.04 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $508.78 million.
"The pace of change in both our industry and the broader consumer landscape is happening at an accelerated rate," said Steve Rendle, president and chief executive officer. "The proliferation of technology and innovation across all aspects of our lives has shifted consumers’ shopping behaviors and elevated their expectations when engaging with our brands. We are pivoting to become more agile and consumer centric to compete and win in this changing global marketplace."
For fiscal year 2017, the company projects operating income to grow at 14 percent.
Operating cash flow improvesV F Corporation has generated cash of $1,477.92 million from operating activities during the year, up 22.81 percent or $274.49 million, when compared with the last year. The company has spent $112.41 million cash to meet investing activities during the year as against cash outgo of $322.82 million in the last year.
The company has spent $1,076.88 million cash to carry out financing activities during the year as against cash outgo of $840.22 million in the last year period.
Cash and cash equivalents stood at $1,227.86 million as on Dec. 31, 2016, up 29.85 percent or $282.26 million from $945.60 million on Dec. 31, 2015.
Working capital increases
V F Corporation has recorded an increase in the working capital over the last year. It stood at $2,507.70 million as at Dec. 31, 2016, up 12.89 percent or $286.27 million from $2,221.42 million on Dec. 31, 2015. Current ratio was at 2.40 as on Dec. 31, 2016, up from 2.14 on Dec. 31, 2015.
Cash conversion cycle (CCC) was almost stable at 41 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 16 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 42 days for the quarter compared with 40 days for the previous year period. At the same time, days payable outstanding was almost stable at 18 days for the quarter, when compared with the previous year period.
Debt increases substantially
V F Corporation has witnessed an increase in total debt over the last one year. It stood at $2,318.90 million as on Dec. 31, 2016, up 25.02 percent or $464.14 million from $1,854.76 million on Dec. 31, 2015. Total debt was 23.81 percent of total assets as on Dec. 31, 2016, compared with 19.24 percent on Dec. 31, 2015. Debt to equity ratio was at 0.47 as on Dec. 31, 2016, up from 0.34 as on Dec. 31, 2015.
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