Oct 24, 2011
VF raises FY view and dividend, shares rise
Oct 24, 2011
Oct 24 (Reuters) - VF Corp's chief executive said he has seen little evidence of the tough global economy hurting sales, and the parent of brands such as North Face, Nautica and Wrangler raised its 2011 revenue and profit forecast and its dividend. Its shares rose 5 percent in early trading.
VF's strongest sales gains in its third quarter were in its outdoor division, which includes North Face and Vans and makes up more than half of its sales. North Face and Vans sales rose 22 percent and 25 percent, respectively.
The slowest category was jeans, which includes the Wrangler and Lee brands and where high cotton costs pinched margins. Jeans sales in dollar terms rose 8 percent, but sales of less expensive brands fell slightly, as did the number of pairs of jeans sold.
The company forecast improving gross margins toward mid-2012 as cotton prices have fallen in recent months.
VF gets a third of its sales overseas and said international sales rose 37 percent in the third quarter, excluding the impact of currency, with gains in China, where sales rose by half, and India, leading the pack.
VF, which bought Timberland in June, said that footwear brand has performed well and raised its estimate of what it would contribute to full-year earnings by 22 percent to 55 cents per share.
The company said the profitability of its higher-end fashion division, which includes John Varvatos and 7 For All Mankind improved.
VF is focusing on its outdoor division. Earlier this year it bought Timberland for $2 billion to fill a footwear gap in its portfolio. Earlier this year, Wiseman said he wanted outdoor gear to reach 60 percent of company sales by 2015.
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