VF's third quarter record |
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| Thursday, 25 October 2007 | |
 Global branded lifestyle apparel, VF Corporation announced results for the third quarter and nine months ended September 29, 2007. All per share amounts are presented on a diluted basis and, unless otherwise noted, reflect continuing operations. Revenues rose 15% to a
record $2,073.2 million, compared with $1,810.1 million in the third quarter of 2006, driven by higher revenues across our Outdoor, Jeanswear and Imagewear businesses and from revenues from our 2007 acquisitions, including, most recently, Seven For All Mankind and lucy activewear. Income from continuing operations in the current quarter increased 13% to a record $209.3 million, compared with $186.0 million in the prior year's quarter. Earnings per share from continuing operations rose 13%, to a record $1.86 from $1.64 last year. Net income, including the effects of discontinued operations was $207.2 million, or $1.84 per share, compared with $197.7 million, or $1.75 per share in the prior year quarter.
"These results - in this environment - prove that VF has the right brands and strategies to win," said Mackey J. McDonald, Chairman and Chief Executive Officer. "We are uniquely positioned within the apparel industry for long-term success. What sets VF apart today is our highly diversified base of products and customers, our large and rapidly growing international business, our expanding base of owned retail stores and our very successful track record of acquisitions. VF's gross margins moved to 43.9% from 43.8%, while operating income rose 15% in the quarter, with operating margins reaching 16.0%. International growth continues to be a key driver. International revenues grew 19% in the third quarter and comprised 30% of total revenues in the period. Excluding the impact of foreign currency translation, international revenues were up 12%. Another key growth driver is the expansion of our direct-to-consumer business primarily through retail store expansion. VF is looking to grow their retail store base, ending the quarter with 608 owned retail stores, up from 544 at the end of the second quarter and reflecting the addition of 50 lucy(R) stores. The retail revenues grew 21% in the quarter, with double-digit revenue growth in our Vans(R), The North Face(R), Kipling(R) and John Varvatos(R) brand stores. For the future VF is expecting a very strong fourth quarter and full year results, despite current retail market conditions. For the fourth quarter, they expect an increase in revenues and earnings per share of 18% and 13%, respectively. Reflecting the better-than-anticipated results in the third quarter and our fourth quarter expectations, VF see full year revenues rising 15%, up from their previous guidance of 14%. Earnings per share should increase slightly more than 13%, versus our previous guidance of 12%. They also continue to expect another very strong year of cash flow from operations of approximately $625 million. The Board of Directors declared a quarterly cash dividend of $.58 per share, an increase of $.03. The dividend is payable on December 20, 2007 to shareholders of record as of the close of business on December 10, 2007. Image: Lee Jeans |
For the nine months of 2007, revenues rose 14% to a record $5,264.2 million from $4,617.0 million. Income from continuing operations also increased 14% to $449.2 million, compared with $393.7 million in the prior year period. Earnings per share from continuing operations rose 13% to $3.96. Net income, including the effects of discontinued operations, was $427.2 million, or $3.76 per share, compared with $424.9 million, or $3.77 per share in the prior year period.