VF Corp. (NYSE: VFC) reported better-than-expected revenue for the fourth quarter 2010, primarily driven by strong growth in its Outdoor & Action Sports sector, including The North Face and Vans.
The Greensboro, N.C.-based apparel company reported fourth-quarter revenue of nearly $2.13 billion ending Dec. 31, 2010, up 11 percent from the same period a year ago.
VF’s Outdoor & Action Sports brands led the growth companywide with a 20-percent increase to about $897 million for the quarter, followed by increases of: 11 percent in Sportswear ($158 million), 7 percent in Jeanswear ($688 million) and 5 percent in Imagewear ($234 million). VF’s Contemporary Brands revenue slipped nearly 9 percent to $115 million.
Despite the strong revenue growth, VF’s fourth-quarter 2010 net income slipped 19 percent to a profit of $54.2 million, or $0.49 per diluted share, compared to a profit of $66.9 million, or $0.60 per diluted share, during the fourth quarter 2009. Company officials said part of the decline reflected “a disproportionately high level of incremental marketing investments made during the quarter,” along with continuing “heavy investments” in China.
For the full year 2010, VF’s revenue rose to $7.7 billion – up 7 percent from 2009 — again spurred primarily by its Outdoor & Action Sports brands, which saw 14-percent revenue growth for the year. Net income for 2010 rose to $571.4 million, or $5.18 per diluted share in 2010 – up 24 percent from $461.3 million, or $4.13 per diluted share in 2009.
Looking ahead, VF Chairman and CEO Eric Wiseman projected companywide revenue growth between 8 percent and 9 percent in 2011 along with higher earnings per share between $7 and $7.10. He expects VF’s Outdoor & Action Sports brands to continue to lead the way with mid-teen percentage revenue growth in 2011. Wiseman added that the company has a strategic priority to continue revenue growth in China and India – expected to grow by 25 percent this year.
“We enter 2011 with excellent top and bottom line momentum, and our brands very well-positioned to grow and capture additional market share,” Mr. Wiseman said in a statement. “2011 should mark the highest rate of organic revenue growth since 2007. The investments made last year to drive organic growth were successful and will continue this year, further strengthening our foundation for delivering solid, sustainable growth in 2011 and beyond.”
VF’s board of directors declared a quarterly cash dividend of $0.63 per share, payable on March 21, 2011 to shareholders of record as of the close of business on March 11, 2011.
VF also announced Tuesday the promotion of Todd Spaletto to president of The North Face, Americas. Spaletto replaces Steve Rendle, who was promoted to vice president of VF Corp. and group president, Outdoor & Action Sports Americas in January.
— Compiled by David Clucas
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