V.F. Corporation (NYSE:VFC) Q4 2014 Earnings Conference Call - Final Transcript

Feb 13, 2015 • 08:30 am ET


V.F. Corporation (NYSE:VFC) Q4 2014 Earnings Conference Call - Final Transcript


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Good day and welcome to the VF Corporation Fourth Quarter 2014 Earnings Conference Call. Today's call is being recorded. At this time I would like to turn the conference over to Lance Allega, Vice President of Investor Relations. Please go ahead, sir.

Lance Allega

Thank you, operator, and good morning to everyone and thanks for joining us today on our fourth quarter and full year 2014 results earnings call.

Before we begin, I would like to remind everybody that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in documents filed regularly with the SEC.

Participants may also reference non-GAAP financial measures where applicable. You can find presentations of comparable GAAP measures in our press release which was issued at 7 AM Eastern time today and our website at vfc.com.

Joining us on today's call will be Chairman, President and CEO, Eric Wiseman; Bob Shearer, our CFO; and VF executives Scott Baxter, Steve Rendle and Karl Heinz Salzburger. Following our prepared remarks, we will open the call for questions and ask that you please limit yourself to two questions per caller.

Now I will turn the call over to Eric.

Eric Wiseman

Thanks, Lance. Good morning everyone and thank you for joining us.

Our fourth-quarter and full-year results demonstrate the strength of VF's business model, our powerful brands and the powerful platforms that support those brands to consistently deliver strong returns to our shareholders. Consistency is in VF's DNA. It is part of how we manage our business, it is what we expect from our people and it is consistency that our shareholders have come to expect from us. We take pride in it.

One year ago we laid out expectations for 7% to 8% revenue growth and 11% to 13% EPS growth for 2014 and while this past year has presented plenty of challenges, we achieved our top-line target and actually exceeded our bottom-line goal delivering record returns to our shareholders.

Last year we spoke about momentum and 12 months later it is the same story, outstanding performances from our four largest brands as well as some notable up and comers, and the powerful platforms that became demonstrably stronger during the year.

Before we dive into a few highlights of the quarter and the year, let's first touch on a non-cash accounting matter. During the past few years, our Contemporary Brands business which represents about 3% of VF's total revenues has operated in a challenging environment. In this morning's release you saw that we concluded that the carrying value of our 7 For All Mankind, Splendid and Ella Moss brands has declined.

As a result, in the fourth quarter we took an after-tax impairment charge of $307 million which is about $0.70 of EPS to reduce the carrying value of those brands assets on our books. Bob will take you through more detail on this in