Outdoor brand sales boost VF's Q1 bottom line
VF Corp. (NYSE: VFC) said first-quarter profit rose 8 percent, helped by sales of its outdoor brand division. VF is the parent of The North Face, JanSport, Eastpak, Eagle Creek, Vans and Reef, among others.
Profit for the three months ended March 31 rose to $149 million, or $1.33 per share, from $138.3 million, or $1.20 per share in last year's first quarter.
Revenue rose 10 percent to $1.85 billion, from $1.67 billion last year.
"Our international and retail businesses, both of which grew by over 20 percent in the quarter, are proving to be very beneficial to us as we navigate through what are clearly challenging economic conditions in the U.S.," Eric Wiseman, VF's president and CEO, said in a statement.
Outdoor brands revenue rose 18 percent to $636.2 million, with double-digit growth both internationally and domestically. The North Face, Vans, Kipling and Napapijri brands each posted double-digit revenue gains in the quarter. Operating income rose 26 percent, with operating margins rising a full percentage point to 16.6 percent.
The company said it anticipates double-digit top line growth and higher operating margins in 2008 for the outdoor group.
Sales in the company's largest segment, jeanswear, which includes Wrangler and Lee, fell 6 percent to $712.2 million. Sportswear sales -- including brands such as Nautica and Kipling -- fell 11 percent to $132.2 million.
VF said it expects profit to fall in the second quarter, due to the seasonality of its outdoor business. The company said it expects operating margins to decline in the second quarter, due to the absence of the gain from the sale of its H.I.S trademarks in last year's second quarter. That added 4 cents per share to earnings last year.
Operating margins are also expected to decline due to the seasonality of its outdoor business. The company said higher spending in retail, distribution and advertising in its outdoor business will hurt profitability in the period, which is the slowest period of the year for segment. As a result, the company expects earnings of $0.80 per share, down from $0.93 a year ago.
It added that it continues to expect earnings per share to rise 10 percent and revenue to rise 9 percent in fiscal 2008. That implies earnings of $5.95 per share, based on earnings from continuing operations of $5.41 per share in 2007, on implied revenue of $7.87 billion based on 2007 results.
Additionally, VF's board declared a cash dividend of $0.58 per share, payable on June 20, 2008, to shareholders of record as of the close of business on June 10, 2008.
Wolverine names CFO
Wolverine World Wide (NYSE: WWW), parent of Merrell, named Don Grimes senior vice president and chief financial officer, starting at the end of May. Most recently, he served as CFO of Keystone Automotive Operations.
In October, the company said CFO Stephen Gulis would become president of its global operations group when current head Arthur G. Croci retires in 2008, but would retain the CFO position until a replacement was named.
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