North Face, Vans boost VF Corp. 1Q earnings
North Face and Vans helped VF Corp. raise its first-quarter 2011 revenue by 12 percent and profit by 23 percent. The company also increased its 2011 guidance, but said rising material costs kept the financial forecast cloudy.
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VF Corp. (NYSE:VFC) reported higher revenue and profit for the first quarter, led by its Outdoor & Action Sports segment, including the North Face and Vans brands.
The Greensboro, N.C.-based diversified apparel company said its revenue rose 12 percent to $1.96 billion in the first quarter 2011. VF’s quarterly net income climbed to $200.7 million — up 23 percent from $163.5 million during the same period a year ago.
The Outdoor & Action Sports segment led the way for VF’s earnings with record quarterly figures – increasing revenue by 16 percent in the first quarter to 788.2 million and operating income by 13 percent to $144 million, compared to the first quarter 2010.
The company’s two largest outdoor brands, North Face and Vans exhibited strong first-quarter revenue growth figures of 17 percent and 20 percent, respectively. VF’s Reef brand revenue were up 18 percent, Kipling rose 29 percent and Napapijri grew 9 percent.
International sales, aided by a weaker dollar, also helped the segment’s revenue growth – up 21 percent from a year ago, compared to 12 percent growth in the Americas. Direct-to-consumer revenues for Outdoor & Action Sports rose 12 percent in the quarter.
In the company’s other segments, Jeanswear rose 9 percent to $679 million, Imagewear grew 12 percent to $246 million, Sportswear increased 10 percent to $112 million and Contemporary Brands were up 8 percent to $112 million.
Looking ahead, VF increased its full-year 2011 guidance. It expects revenue to increase by 10 percent, up from previous expectations between 8 and 9 percent. Earnings per share are anticipated to increase to $7.25, up from previous guidance between $7.00 to $7.10 per share.
On the company’s conference call, April 29, VF CEO Eric Wiseman said forecasts remain cloudy due to higher cotton and material costs. The company has started to implement higher prices in response, but it is unclear how consumers will react, he said.
And despite the good first-quarter figures and raised guidance, investors sent the stock down 7 percent by mid-day April 29, on concerns of VF’s inventory growth of 24 percent to $1.18 billion, outpacing full-year revenue growth projections.
There also was concern after it was announced that one of VF’s smaller jeanswear distribution centers in Hackleburg, Ala. had been destroyed by the tornadoes in the South earlier in the week.
–Compiled by David Clucas
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