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Outdoor financials: VF's Q2 profit up 27 percent, plus Rocky, Lacrosse, Forzani

VF's Q2 profit was up 27 percent, Rocky Brands was awarded $7.2 million in military contracts, LaCrosse Footwear opened a subsidiary in Denmark, and Forzani completed an issuer bid.

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VF’s Q2 profit up 27 percent

VF Corp. (NYSE: VFC) said strong sales of its outdoor brands and gains from acquisitions boosted its second-quarter profit. VF is parent of The North Face, JanSport, Eastpak and Eagle Creek, among others.

Profit rose to $104 million, or $0.94 per share, from $81.7 million, or $0.72 per share, in the corresponding period a year earlier.

Sales rose 11 percent to $1.67 billion, from $1.52 billion a year earlier.

Results in the most recent quarter include a $0.07 tax gain, and $0.04 in expenses to improve the company’s cost structure. The year-ago quarter includes a $0.04 gain from the sale of a business.

“Our ability to deliver record revenues and earnings per share in the face of exceptionally challenging economic conditions clearly demonstrates the strength and resilience of VF’s business model,” said Eric Wiseman, VF’s president and CEO, in a statement.

The company’s contemporary collection, which includes a number of brands bought last year, added $88 million to total revenue, VF said.

The company said strength of its outdoor brands around the world contributed to another quarter of exceptionally strong performance. Total revenues rose 17 percent with double-digit growth in both its domestic and international businesses.

The North Face global brand revenues grew over 40 percent in the quarter, with comparable increases both domestically and internationally and growth across most product categories. The brand’s wholesale and retail revenues each rose in the quarter, with retail revenues up nearly 50 percent driven by strong same-store sales gains as well as new store openings.

Additionally, its Vans, Napapijri, Kipling, Eastpak and Eagle Creek brands also achieved solid growth in the quarter.

Outdoor operating income rose 11 percent in the quarter reflecting the strong volume gains. Operating margins declined in the quarter due to the seasonality of its growing owned retail businesses and the impact of investments in such areas as new retail store openings and advertising.

VF said it expects 15-percent revenue growth for the outdoor coalition in the second half of this year, with solid gains anticipated both domestically and internationally.

VF raised its full-year profit growth target to 12 percent from 10 percent, which translates to about $6.05 per share. It also expects $7.9 billion in sales for 2008. The company’s full-year outlook reflects the expectation for stronger earnings per share growth in the fourth quarter, partly reflecting seasonality of its outdoor business, among other factors.

VF said it also expects 9 percent growth in profit and sales for the third quarter. The company reported profit of $1.89 per share on revenue of $2.07 billion for the 2007 third quarter, implying expectations for earnings per share of $2.06 and revenue of $2.26 billion for the current period.

Additionally, VF’s board declared a cash dividend of $0.58 per share, payable on Sept. 19 to shareholders of record on Sept. 9. The board also elected Charles V. (Chip) Bergh to serve as a director, effective immediately. Bergh is group president, global personal care for the Procter & Gamble Company.

Rocky Brands awarded $7.2 million in military contracts

Rocky Brands (Nasdaq: RCKY) said it has received a $6.0 million extension to an existing contract in addition to a new $1.2 million contract from the U.S. Military.

The $6.0 million contract is an extension of a $6.4 million contract awarded to Rocky Brands in July 2007 for Army Combat “Hot Weather” boots. Shipment of the boots is expected to begin in early 2009 after the initial contract has been completed.

The $1.2 million contract is for Rocky’s S2V tactical assault footwear developed specifically for U.S. Military Special Forces. The first order for $500,000 is expected to be delivered in fourth quarter 2008.

LaCrosse Footwear opens subsidiary in Denmark

LaCrosse Footwear (Nasdaq: BOOT) said it has established a subsidiary in Copenhagen, Denmark, named LaCrosse Europe, ApS. The company purchased the assets for $3.2 million in cash from its established distributor partner, Gateway Footgear, in order to strengthen LaCrosse’s direct sales and marketing support to customers in Europe. The LaCrosse brand presence has grown for more than 10 years in the Scandinavian countries.

LaCrosse Europe, ApS acquired certain assets from Gateway, including inventory and sales order backlog. Customer service and sales representation from Gateway have joined the new LaCrosse Europe team. In addition, LaCrosse said it intends to expand its international sales and marketing team to better target its customers and extend its presence in Europe.

Forzani completes issuer bid

The Forzani Group Ltd. (TSX: FGL) said it has purchased, and returned to treasury for cancellation, more than 2.6 million Class “A” common shares. All purchases were made through the facilities of the TSX.

The bid was put in place because the company said it believes that the common shares were undervalued in the market and are a good investment for the company at current and recent prices. Presently, the company has more than 30.4 million common shares outstanding.

The Forzani Group is Canada’s largest national retailer of sporting goods, and its stores include Sport Chek, Coast Mountain Sports, Sport Mart, National Sports, Sports Experts, The Fitness Source and Athletes World.

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