Research Desk Line-up: Xcel Brands Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 16, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for global apparel and footwear manufacturer V.F. Corp. (NYSE: VFC), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=VFC. The Company announced on August 14, 2017, that it has signed an agreement to acquire Williamson-Dickie Mfg. Co., a family owned and privately held workwear company. The acquisition would allow the creation of a global company with a leading position in the workwear section and total annual revenue of approximately $1.7 billion. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Textile - Apparel Clothing industry. Pro-TD has currently selected Xcel Brands, Inc. (NASDAQ: XELB) for due-diligence and potential coverage as the Company announced on August 09, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Xcel Brands when we publish it.
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Details of the acquisition
V.F. Corp would pay approximately $820 million in cash for the acquisition and excludes transaction and deal related expenses. V.F. Corp. expects the transaction to be immediately accretive to the Company's earnings and cash flows in FY17 itself. In the last 12 months, Williamson-Dickie has generated revenue of approximately $875 million. The acquisition of Williamson-Dickie is expected to add more than $1 billion of revenue by 2021. The acquisition is also in-line with V.F. Corp.'s growth strategy of expanding business via active portfolio management. The transaction is expected to close in Q4 2017.
Once the transaction is completed Williamson-Dickie will be merged into V.F. Corp.'s Imagewear business vertical. Philip Williamson, the current CEO of Williamson-Dickie will continue to helm the Company's operations from its headquarters in Fort Worth, Texas.
Commenting on the acquisition Steve Rendle, President and CEO of V.F. Corp. said:
"When we introduced our 2021 global business strategy earlier this year, reshaping our portfolio to accelerate growth was our highest priority. The acquisition of Williamson-Dickie is another meaningful step that delivers on that commitment and further demonstrates our focus on being an active portfolio manager to drive transformative growth for VF and value creation for our shareholders."
Philip Williamson, CEO of Williamson-Dickie added:
"Today's announcement is an authentic and natural next step as we look to combine the strengths of our two Companies to create significant opportunities for our employees, vendors, retail partners, and ultimately our customers. We expect that under VF's leadership, we'll be able to experience the next wave of growth and better meet the needs of workers everywhere."
Fort Worth, Texas based Williamson-Dickie started operations in 1922 as an overalls manufacturer. Presently it is a family-owned, privately held global workwear Company that owns performance workwear brands like Dickies®, Walls®, Van Moer, Kodiak®, Terra®, and Workrite®. The Company's products and brands are sold in more than 100 countries through a network of owned retail stores, franchisees, volume retailers, department stores, independent stores and online sites. It is supported by a global team of 7,000 employees.
Revised Outlook for FY17
Following the announcement of the acquisition of Williamson-Dickie, V.F. Corp. revised its outlook for FY17. The impact excludes transaction and other deal-related expenses, which is estimated to be approximately $0.04 per share.
After the acquisition, revenue for FY17 is expected to touch $11.85 billion and includes $200 million in revenues from the Williamson-Dickie deal. This is 2% higher than the previous outlook of $11.65 billion expected by the Company in FY17.
Revised gross margin for FY17 is expected to be 49.5% compared the earlier expectations of 49.8%, including the impact of the current acquisition.
The Company's operating margin post the acquisition is expected to be approximately 13.7 % compared to the previous expectations of 14%.
The earnings per share (EPS) for FY17 are now expected to be $2.96 compared to the previous expectations of $2.94. The revised EPS includes $0.02 contribution from the acquisition of Williamson-Dickie.
Revised Financial Targets for FY21
V.F. Corp. has also revised its financial guidance and outlook for FY21 and includes the impact of the acquisition of Williamson-Dickie, excluding transaction and other deal-related expenses.
V.F. Corp. expects its revenue to grow at a five-year compounded annual growth rate (CAGR) till 2021, or approximately $15 billion, compared to the previous guidance of the five-year CAGR in the range of 4% to 6%. Williamson-Dickie is expected to contribute more than $1 billion of revenue by 2021.
V.F. Corp. expects its EPS to grow at a five-year CAGR in the range of 11% to 13% to more than $5 as against the previous guidance of the five-year CAGR in the range of 10% to 12%. Williamson-Dickie is expected to contribute more than $0.25 by 2021.
About V.F. Corporation
Greensboro, North Carolina based V.F Corp. was founded in 1899. V.F. Corp. is one of the world's largest apparel, footwear and accessories Companies with socially and environmentally responsible operations spanning numerous geographies, product categories, and distribution channels. Its portfolio of iconic lifestyle brands includes Vans®, The North Face®, Timberland®, Wrangler®, and Lee®. The Company's operations are supported by 62,000 associates and have over $12.4 billion in annual revenues.
Last Close Stock Review
On Tuesday, August 15, 2017, the stock closed the trading session at $63.90, slightly climbing 0.63% from its previous closing price of $63.50. A total volume of 4.05 million shares have exchanged hands, which was higher than the 3-month average volume of 2.65 million shares. V.F. Corp.'s stock price surged 13.70% in the last one month, 21.97% in the past three months, and 25.61% in the previous six months. Furthermore, since the start of the year, shares of the Company have rallied 19.78%. The stock is trading at a PE ratio of 24.24 and has a dividend yield of 2.63%. The stock currently has a market cap of $25.01 billion.
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