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VF Reports Record 2012 Fourth Quarter And Full Year Results, And Sets Guidance For Fiscal 2013

2013 Guidance

“The year ahead presents tremendous opportunities for us to expand our presence globally, lead our industry in product innovation and identify new platforms to support long-term growth,” said Wiseman. “We are confident that we are the best positioned company in our industry, and look forward to delivering another year of record results to our shareholders.”

Key points related to our full year 2013 outlook include:
  • Strong, balanced revenue growth, with sales expected to increase by about 6 percent to $11.5 billion including growth in every coalition. Outdoor & Action Sports revenues should increase by about 10 percent with a near 20 percent increase for the Vans ® brand, a high single-digit increase for The North Face ® brand and mid single-digit growth for the Timberland ® brand. Jeanswear is expecting modest revenue growth driven by a 3-4 percent increase in the Americas region. Contemporary Brands (excluding John Varvatos) and Sportswear are each expected to grow revenues at a high single-digit rate, and mid single-digit growth is expected in Imagewear.
  • 10 percent growth in international revenues, with continued strength in Asia, where revenues are expected to increase at a low teen rate; high single-digit revenue growth in Europe; and mid-teen growth in the Americas (non-U.S.) region. International revenues should approximate 38 percent of total revenues in 2013.
  • Mid-teen growth in direct-to-consumer revenues, driven by approximately 160 store openings in 2013, comp store growth and an increase of over 30 percent in e-commerce revenues. Direct-to-consumer revenues are expected to grow to 23 percent of total revenues in 2013.
  • Substantial margin expansion, including a 100 basis point improvement in gross margin and nearly a 100 basis point increase in operating margin.
  • Adjusted earnings per share grows to $10.70, representing an 11 percent increase. On a GAAP basis, earnings per share are expected to increase 9 percent to about $10.60 from $9.70 in the prior year, which included the $0.32 per share gain from the John Varvatos sale. In addition, 2013 GAAP earnings per share guidance include a negative $0.10 per share in Timberland acquisition-related expenses, which were $0.25 per share in 2012.
  • Record cash flow from operations, approaching $1.4 billion.
  • Other full year assumptions include a 24 percent effective tax rate, a euro to U.S. dollar conversion rate of 1.30 and capital expenditures of approximately $325 million.

In terms of the quarterly revenue comparisons in 2013, first quarter revenue growth should be more modest, given seasonal shipments that boosted the prior year’s first quarter revenues. Fourth quarter revenue growth should be the strongest, reflecting the growing contribution and expansion of our direct-to-consumer business.

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