VF Corp. Q3 Results Miss View; Lifts Full-year Earnings Projection

(RTTNews) - Branded lifestyle apparel maker VF Corp. (VFC) Monday reported 8 percent rise in the third-quarter profit, as revenue rose by strong growth in Outdoor & Action Sports coalition. Profit as well as revenue came in below Street estimates. The company lifted its earnings per share outlook for full year, and backed its revenue growth view.

VF Corp also announced a 22 percent increase in quarterly dividend.

Net income for the recent quarter increased to $470.53 million or $1.08 per share from $433.76 million or $0.97 per share in the previous year.

On average, 24 analysts polled by Thomson Reuters expected the company to report profit per share of $1.09 for the quarter. Analysts' estimates typically exclude special items.

The Greensboro, North Carolina-based makers of Wrangler and Lee jeans said its quarterly revenues rose 7 percent to $3.52 billion from $3.30 billion, while 21 analysts expected revenue of $3.57 billion for the quarter.

Outdoor & Action Sports revenues climbed 11 percent from last year to $2.2 billion, with double-digit growth in the Americas, European and Asia Pacific regions.

Revenues from the North Face brand rose 9 percent, Vans brand revenues were up 12 percent, and revenues from Timberland brand grew 15 percent from last year.

Eric Wiseman, chairman, president and chief executive officer of the company said, "Led by another outstanding performance from our Outdoor & Action Sports coalition, we delivered strong growth in revenue and earnings. We are squarely on track to deliver another record year for VF and our shareholders."

International revenues increased 9 percent, or 10 percent excluding the impact of foreign currency, with continued strong growth in Europe and Asia Pacific. Revenues in Europe increased 8 percent and in the Asia Pacific region, it was up 18 percent from the prior year.

Direct-to-consumer revenues increased 16 percent, with growth from every brand and double-digit growth in every region.

Gross margin improved 70 basis points to 48.3 percent, driven mainly by continuing shift of revenue mix toward higher margin businesses, the firm said. Operating margin was 18 percent, compared with 17.6 percent a year earlier.

For full year 2014, the company now expects earnings of $3.08 per share, up from its prior expectation of $3.06 per share. Analysts now expect earnings of $3.10 per share.

The company continues to expect revenues to increase 8 percent, and to reach $12.3 billion. Gross margin and operating margin are expected to reach 49 percent and 15 percent, respectively.

On October 16, VF's board of directors declared a quarterly dividend of $0.32 per share, up 22 percent from last year, to shareholders of record on December 9, 2014, payable on December 19.

VFC closed Friday's trading at $63.76.