Here is a summary of VF’s fourth quarter and year-end earnings. For a more detailed report from the company’s conference call this morning, including more details about Vans and Reef, see our Executive Edition story.
Vans global revenues grew 14% in the fourth quarter and parent company VF Corp. said it will increase its investment in the brand in 2010 to fuel its continued growth.
In 2010, VF will invest an additional $50 million in Vans, The North Face and 7 For All Mankind, with a majority of the money devoted to increased marketing spending.
Overall, revenues for VF’s Outdoor & Action Sports Coalition grew 8% in the fourth quarter. The North Face, the other top-performing brand in the group, saw revenues increase 7%.
Direct to consumer sales for the coalition grew 21%. Operating margins were 20%.
In the Americas, coalition revenues rose 4%. International revenues grew 9% in constant dollars, with strong growth in Asia.
The news wasn’t quite as good for Reef. VF took a goodwill noncash impairment charge for Reef, in addition to the company’s lucy and Nautica brands. VF still sounds supportive of Reef and the other brands, however.
“While we continue to believe that each brand has opportunities for improved performance, we concluded that the fair value of our investments in these businesses has declined as we have not achieved the forecasted growth and cash flows originally projected at the dates of acquisition,” VF CEO Eric Wiseman said in a press release.
For more details about what VF executives said about Reef during the conference call, see our Executive Edition story.
VF results
Q4 revenue: up slightly to $1.9 billion
Q4 net income: Including charges, down 42.2% to $66.9 million. Excluding charges, net income totaled $181.3 million.
Full year revenue: down 6% to $7.2 billion.
Full year net income: down 23% to $461.3 million. Excluding charges, net income fell 4.5% to $575.7 million.
Q4 gross margins: up 380 basis points to 46.3%, with a large boost from the company’s direct business.
Full year gross margins: 44.3%
Direct to consumer: up 7% in Q4, with increases in Vans, The North Face, 7 For All Mankind and Napapijri. VF opened 31 new stores during the quarter and ended the year with 757 stores.
Cash and equivalents: VF ended the year with $732 million in cash and equivalents, nearly double its cash position last year.
2010 outlook
Revenue: up 2% to 3%
Earnings per share: up 9% to 11%, excluding charges.
Outdoor & Action Sports: up high single digits led by The North Face and Vans.
Asia: up 20%.
Direct to consumer: VF will open 80 to 90 new stores in 2010, and expects low single digit comp store growth.
