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Original Source: FD (FAIR DISCLOSURE) WIRE
UNIDENTIFIED PARTICIPANT: The disclosures are in the back of the room and also in PDF form on the website. We're very lucky to have with us today, Eric Wiseman, President and CEO of VF Corp. Also with us today in the audience is Cindy Knoebel, VP Financial and Corporate Communications. I'm just going to turn it right over to Eric. He tells the VF story much better than I do; and then we'll go into Q&A. Thanks.
ERIC WISEMAN, PRESIDENT & CEO, VF CORPORATION: I got this, I think. I think I have a mic on; I do. Good morning; delighted to be here today. A little bit concerned [while I come] up on the stage is that everybody's been talking about how great it is out there and how robust the economy is and how easy it is to sell apparel. So, I have a different perspective on that, but I'll share that with you as we go through our slides.
The good news is that while it is difficult out there, we think at VF we have a portfolio that allows us to perform pretty well in this environment. And we're pleased by the fact that the Street has rewarded our model with above-average earnings in our share price versus the S&P 500 and versus the sector, since the start of the year. But it's really coming down to what we have to get done.
This is our disclosure statement. You've all seen these before and you're fast readers, so I'll move on.
Three slides on last year looking backward to put this year in context and to put our agenda a little bit in context. I'm just going to take a minute to go through them. This is the fourth quarter look at how we did in the fourth quarter. We achieved record revenues and earnings in the fourth quarter and in fact beat our forecast and our guidance by a fair amount.
Our revenues were up 22% in what was a challenging fourth quarter overall. Our organic growth rate was 12% and our earnings per share grew by nearly 18% in the quarter.
Looking at the full year, 2007 was our fifth consecutive year of record revenues and earnings. Revenues were up 16% for the full year. 10% of that growth came organically. Our operating margins were stable at a very strong 13.4%. We don't apologize for that. And our earnings per share grew by 14%.
The figures at the bottom of the box are discontinued operations reflect our intimate apparel business which we divested early in 2007. So we finished the year on a pretty strong note and are very, very proud of what we got done in 2007.
Looking at the last couple of years, really since we launched our growth plan in 2004; many of you have been following the VF story, from back in 2001, 2002 and 2003 when we were not growing. And we launched a growth plan in 2004 that said we're going to become a different kind of company with different kinds of brands, in different kinds of countries, and a different business model.
And as we've been executing that, and that is a story that we're a long way from the end of the runway on that thing; it has given us pretty strong financial growth. Our compound annual revenue growth since 2004 has been 11%. Our operating margin expanded by 100 basis points. We had 15% compound annual growth in earnings per share and our dividend payout over that time period averaged 37%.
So that's where we've been for the last few years. I'm going to move on now to where we're headed in the future.
Many of you are aware that we held an investor conference and analyst web call back in January to lay out an updated five-year plan. And I say it's updated because it's current and it's relevant to the next five years and it really is taking the growth plan that we set out in 2004; looking at it again in 2007 with three years of execution against it and saying- where do we go from here to keep this momentum going?
I'm going to take the next few minutes and highlight some of the key details in those plans.
The first thing for you to kind of understand about VF is how we think about our agenda. And we do this consistently at the corporate level and at our business unit level. And it's really all about total shareholder return. That is how we look at our initiatives. It's how we measure our coalitions in the core brands within our coalitions. Everything is looked at through a TSR lens and that lens really has three components to it.
First is growth, second is margin expansion and the third lens is efficient capital deployment. And as we evaluate our businesses and look at growth opportunities and look at acquisitions and look at who is in our portfolio at this time and who is not; it's fundamentally important that you know that this is the tool we use to really rack and stack our brands and our coalitions and our initiatives and our future potential.
Through all of that, as we piece together a growth plan in 2007; and also as background, it took us all 12 months of 2007 to get this plan done. It is an incredibly robust plan that has been unbelievably well-discussed. We started in January of 2007 and didn't talk externally about it until January of 2008.
Every single business unit in VF and every single functional area participated in it. There was robust discussion. We kind of had the first draft of the plan by July. We spent five months really interrogating it; to the extent we did consumer research even to validate some of the hypotheses about our growth potential.
Out of that came a growth plan that, where we increased our revenue growth targets to 8 to 10%; the prior target was 8%. And that's where we expressed our confidence over the next five-year period in our ability to deliver strong organic growth.
We also initiated an earnings-per-share growth target- it's a new measure …