VFC VF Corporation

By Anne Steele 

Apparel conglomerate VF Corp. trimmed its outlook for the year and reported sluggish revenue growth below expectations in the most recent quarter.

VF -- which owns brands like Wrangler, Timberland and North Face -- now anticipates revenue growth for the year of 3% to 4% versus its previous guidance for a mid-single-digit percentage rate increase. Excluding its contemporary brands unit, which VF announced the sale of at the end of the quarter, the company now expects earnings of $3.20 a share, down from its previous outlook for $3.23 a share.

Chief Executive Eric Wiseman pointed to "a challenging environment with mixed economic and currency conditions around the world."

In the quarter ended June, VF said sales in its imagewear segment rose 3% as a midteen percentage rate increase in the licensed sports group business outweighed lower revenue in its workwear business, which the company again blamed on reduced oil and gas exploration.

Sportswear revenue tumbled 19%, hit by a 20% slide at the Nautica brand and midteen decline for Kipling amid "ongoing challenges in the U.S. department store and outlet channels."

Meanwhile, the much larger jeanswear unit saw a 3.4% gain and VF's outdoor and action sports unit -- which accounts for 58% of overall revenue -- rose 1.7%. In that unit, Timberland revenue fell 7%, nearly offsetting 2% growth for The North Face and a 4% gain at Vans.

Last month, VF announced it agreed to sell its contemporary brands business to Israeli textile company Delta Galil Industries Ltd. for $120 million, as the apparel company looks to reshape its portfolio. As such, the segment was classified as discontinued operations in the quarterly report.

In all for the quarter, VF posted a profit of $51 million, or 12 cents a share, down from $170.8 million, or 40 cents a share, a year earlier. Excluding items, per-share earnings fell to 35 cents from 39 cents, just above analyst estimates for 34 cents, according to Thomson Reuters.

Revenue rose 1% to $2.45 billion, below analysts' projection for $2.53 billion.

Total costs and operating expenses rose 1% to $2.23 billion.

Shares, inactive premarket, have slipped 1.5% this year.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

July 22, 2016 09:22 ET (13:22 GMT)

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