VF Corp.'s (VFC) first-quarter earnings climbed 7.2%, beating
expectations, as the branded-apparel maker reported higher revenue
boosted by its Timberland acquisition last year.
The company also raised its full-year earnings guidance by 15
cents, now expecting adjusted earnings of approximately $9.45 a
share. It continues to see 15% revenue growth.
VF, which makes clothes under brands such as Lee, the North Face
and Jansport, has seen its recent results boosted by last year's
$2.3 billion acquisition of footwear company Timberland Co. The
company has reported stronger profits over the past two years
despite high cotton prices, as VF looked to pass through costs to
customers. The apparel industry is expected to see margins improve
in the second half of the year as cotton prices ease.
The company reported a profit of $215.2 million, or $1.91 a
share, up from $200.7 million, or $1.82 a share, a year earlier.
Excluding acquisition-related expenses, earnings in the latest
quarter were $1.94 a share.
Revenue rose 31% to $2.56 billion.
Analysts polled by Thomson Reuters had predicted earnings of
$1.87 a share on revenue of $2.45 billion.
Gross margin narrowed to 45.7% from 47.2%, due to higher
jeanswear-product costs.
Sales at the outdoor and action-sports segment rose 60% to $1.26
billion, with organic revenue growth of 15%. The company said
Timberland added $356 million to revenues.
In its Jeanswear business, its second-largest segment, sales
were up 9.2%.
Shares closed at $154 Thursday and were inactive premarket. The
stock, which hit an all-time Thursday, is up 21% since the start of
the year.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com