V.F. Corp. said a change in tax accounting procedures and losses from discontinued operations caused it to post lower-than-expected fiscal first-quarter earnings.
The apparel conglomerate said its diluted EPS for the quarter ended April 1 fell 8% to 52 cents from 56 cents in the same quarter a year earlier. That figure missed the mean consensus of analysts' estimates for normalized EPS of 55 cents, according to S&P Capital IQ.
V.F.'s first-quarter net income declined 19.6% to $209.1 million, compared to approximately $260.3 million for the same period a year ago.
The apparel conglomerate said changes in discrete tax benefits negatively affected earnings per share growth by 8%. It also said it booked a loss, net of taxes, from discontinued operations of $5.5 million. V.F. sold its licensed sports business to Fanatics Inc. on April 4 and completed the sale of its contemporary brands business to Delta Galil Industries Ltd. on Aug. 26, 2016. The contemporary brands portfolio included 7 For All Mankind, Splendid and Ella Moss.
First-quarter revenue slid 2% to $2.56 billion for the fiscal first quarter from $2.61 billion a year earlier. V.F. cited weakness in its denim business, which consists primarily of Lee and Wrangler, and in its sportswear unit, which includes Nautica. But it said there were bright spots, including the growth of both of its international and direct-to-consumer business, as well as outdoor sporting goods sales.
V.F.'s denim division sales fell 9% to close to $650 million. Sales at it sportswear unit fell 17% to nearly $100 million. Revenue at its imagewear business, including brands such as workwear label Red Kap, saw revenue drop 5% to about $130 million.
The company's sporting goods division saw its sales grow 2% to $1.68 billion. Within that division, The North Face's sales grew 6%, while footwear brand Vans' revenue grew by 5%.
First-quarter operating income fell 7% to $291.5 million from $311.8 million a year ago.
V.F. updated its full-year 2017 outlook to exclude the licensed business it sold. It said it expects revenue to grow at a low-single-digit percentage, including the negative impact from foreign currency. V.F. said earnings per share is expected to decline by a low-single-digit percentage from 2016 adjusted EPS of $2.98.