VF Corporation announced results for its second quarter ended
June 30, 2012. Revenues rose 16 percent to $2.1 billion from $1.8 billion in 2011, and included $239 million from Timberland. Organic revenue growth in the quarter was three percent (six percent in constant dollars), driven by strong growth in the Outdoor & Action Sports and international businesses.
Gross margin wasa better than anticipated in the quarter, rising by 20 basis points to 46.1 percent compared with 45.9 percent in the same period in 2011. Operating income was $169 million on an adjusted basis in the second quarter of 2012. Net income on an adjusted basis was $123 million, which excludes Timberland acquisition-related expenses and the gain on the John Varvatos sale, compared to $129 million in the same period last year. Adjusted earnings per share declined 5 percent to $1.11 per share from $1.17 in last year’s same period, reflecting a loss of $0.12 per share from Timberland and an $0.11 per share combined negative impact from foreign currency translation and higher pension expense ($0.06 and $0.05 per share, respectively). On a GAAP basis, second quarter net income was $155 million while earnings grew 20 percent to $1.40 per share.
For the first half of the fiscal 2012, company’s revenues increased 24 percent to $4.7 billion from $3.8 billion in the first half of 2011, reflecting growth in every coalition and $595 million from Timberland. Organic revenue growth in the period was 8 percent (10 percent in constant dollars).
Net income on an adjusted basis increased three percent to $341 million in the first half of 2012 from $330 million reported in the 2011 period. Adjusted earnings per share rose two percent in the current period to $3.05 from $2.99 last year.
Based on the strong results achieved in the first half of 2012, adjusted earnings per share in 2012 are now expected to rise to approximately $9.50 per share, up $0.05 from the $9.45 per share guidance provided on April 27.
VF Corporation is into manufacturing lifestyle apparel including jeanswear, outdoor products, image apparel, sportswear and contemporary apparel brands.