VF Corporation (NYSE: VFC) the parent company of The North Face (TNF), JanSport, and Eastpak, posted a $448.3 million net loss for its first quarter, but still felt performance was better than expected because of reductions in inventory and a strong cash-flow. Inventories were down $300 million compared with the year ago period, cash increased more than $125 million and total debt declined $400 million. Cash flow from operations reached $131 million, the highest the Company has achieved in any previous first quarter period. First quarter sales were $1,273.1 million, compared with $1,423.3 million in the prior year's quarter. Net income rose to $79.0 million or $.69 per share (before the effect of a change in accounting policy), compared with $77.5 million or $.67 per share in the 2001 period. Net income increased to $80.5 million in the 2002 quarter. Mackey J. McDonald, chairman and chief executive officer, stated in a conference call that the outdoor businesses for VF continue to shine. Spring sell-through for TNF has been very strong in both North America and Europe. Thanks to "new product initiatives," TNF fall preseason orders are up 15 to 20 percent. When asked about growing the brands and expansion, Mackey stated, "We feel like the best investment is to extend the brands into new consumer segments." He followed by outlining that this is being accomplished in outdoor by targeting new product categories such as JanSport moving into luggage and TNF increasing its product mix in footwear as well as expanding into the sportswear category. Mackey also stated that VF will be placing more emphasis in the U.S. on marketing Eastpak while at the same time stating that Eastpak remains the brand of choice for youth in Europe. JanSport will be seeking to drive more business outside of the back too school market too, he says, by turning to new colors. SNEWS® View: New colors? Perhaps. However, we do wonder about the move into luggage. As anyone in the luggage market will tell you right now -- business ain't exactly in growth mode, no matter how great the luggage may be. As for TNF, the company continues to amaze us and president Mike Egeck is to be commended for continually thinking outside of the box. Who else could have forseen the Gucci shoe crowd would be a viable market in which an outdoor brand could build a retail presence?