By Victoria Stilwell
VF Corp.'s (VFC) second-quarter profit climbed 20% as the
branded-apparel maker reported higher revenue and a gain from the
sale of one of its brands.
The company raised its full-year adjusted earnings forecast to
about $9.50 a share, up from the $9.45 a share predicted in April.
The revised guidance covers an additional 7-cent negative impact
from foreign currency exchange. The company continues to see
revenue growth of 15%.
VF, which makes clothes with brands including the North Face,
Wrangler and Nautica, has seen its recent results helped by last
year's $2.3 billion acquisition of footwear company Timberland Co.
The company reported strong profits despite 2011's high cotton
prices as VF aimed to pass through costs to consumers.
Moody's Investors Services in March said it expects a continuing
decline in cotton prices to help ease pressure on the apparel
industry's margins starting in the second half of the year.
For the second quarter, the company reported a profit of $155.3
million, or $1.40 a share, up from $129.4 million, or $1.17 a
share, a year earlier. Excluding Timberland acquisition-related
expenses and a gain on the sale of John Varvatos Enterprises Inc.,
adjusted earnings were $1.11 a share. The company in March agreed
to sell the majority ownership interest on the brand to Lion
Capital LLP.
Revenue improved 16% to $2.14 billion, while revenue growth
excluding the Timberland and Smartwool brands rose 3%.
Analysts surveyed by Thomson Reuters recently expected earnings
of 94 cents a share on revenue of $2.18 billion.
Gross margin widened to 46.1% from 45.9% as high costs
associated with the jeanswear segment eased.
Sales at the outdoor and action-sports segment, the largest
top-line contributor, rose 45% to $1.04 billion, with organic
revenue growth of 12%. Timberland and Smartwool added $239 million
to revenues.
In its jeanswear business--its second-largest segment--sales
decreased 3.2%, reflecting a shift of spring seasonal products that
helped first-quarter results.
Shares rose 3.2% to $146.35 in light premarket trade. The stock
is up 23% in the last 12 months through Wednesday's close.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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