Outdoor financials: VF's Q2 results exceed analyst predictions, plus Sara Lee, Sportsman's Guide, Winmark

Outdoor financials: VF's Q2 results exceed analyst predictions. Sara Lee spin-off expected in fall. The Sportsman's Guide offers Q2 update. Winmark reports Q2 income results.
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VF's Q2 results exceed analyst predictions
VF Corp. (NYSE: VFC) turned in another record quarter, beating analyst expectations with revenues that rose 8 percent and earnings per share that grew 4 percent for the second quarter. It also raised its full-year financial forecast.

Net income for the quarter was $99 million, or $0.88 per share, up from last year's $96.7 million, or $0.85 per share, which included a gain of $7.7 million, or $0.07 per share. Revenue rose 8 percent to $1.57 billion from $1.45 billion in the year-ago period. Analysts had forecast a profit of $0.86 per share on projected sales of $1.53 billion.

VF hiked its 2006 earnings guidance to $5 per share, up from a previous estimate of $4.95 and expects revenue to rise 7 percent to nearly $7 billion. Third-quarter earnings are expected to increase about 6 percent, on a 8 percent increase in revenue.

VF's growth was led by its Outdoor Coalition, which includes brands such as The North Face, JanSport, Eastpak and Vans. Overall, revenue for that group grew 24 percent.

Prudential Equity Research analyst Lizabeth Dunn called the results "impressive." She said she liked that all the other divisions were in line with her estimates and that the outdoor division vaulted 24 percent, driven by the Vans, Jansport, Reef and Kipling brands. "This gives us confidence that it's not all about North Face, though the brand turned in a solid 16 percent increase as well," she said in a research note.

VF CEO and Chairman Mackey McDonald told Dow Jones Newswires that the company was still hunting for acquisitions, but that strong competition in the mergers and acquisitions market was making it harder to find suitable targets.

"We have a lot of things we're working on, and I would think that out of all the things we're working on, some of them will happen," McDonald said in an interview with Dow Jones. "I'm very confident that despite the environment, we'll continue to find acquisitions that'll be very meaningful to us."

Sara Lee spin-off expected in fall
Sara Lee (NYSE:SLE) said its apparel business will borrow $2.6 billion to establish itself as a separate, publicly traded company and Sara Lee will in turn receive a one-time payment of $2.4 billion from the new entity, to be called Hanesbrands Inc. The new business will include brands such as Duofold, and will most likely be spun off to Sara Lee shareholders in early September, Sara Lee said. Sara Lee has been divesting businesses in an attempt to rebound from a long stretch of sluggish results. It will not retain any ownership in Hanesbrands following the spinoff.

The Sportsman's Guide offers Q2 update
The Sportsman's Guide (Nasdaq: SGDE) said it anticipates its second-quarter results to be consistent with the company's budget expectations and in-line with recent analyst estimates.

Net sales for the quarter are expected to be in range of $69 million to $70 million, compared with net sales of $63.8 million for the same period one year ago. Fully diluted earnings per share are anticipated to be in a range from $0.34 to $0.36 per share, compared to earnings per share of $0.31 for the same period one year ago.

Sportsman's Guide also noted that its final results for the period will be available when it files its 10-Q with the Securities and Exchange Commission on Aug. 11, but given its pending acquisition by Redcats USA, it doesn't expect to hold a conference call for the second quarter. The sales transaction with Redcats USA is on track to close during the third quarter.

Winmark reports Q2 income results
Winmark Corp. (Nasdaq: WINA), parent of the Play It Again Sports franchise, reported net income for the second quarter of $650,400, or $.11 per share diluted, compared to net income of $542,600, or $.08 per share diluted, in 2005.

"During the second quarter the franchising business continued its modest growth and our leasing businesses added assets at an acceptable level," said John Morgan, Winmark's CEO and chairman, in a statement. "We launched a $50 million subordinated debt offering which, when combined with our bank line of credit and cash flow from operations will allow us to finance our growth for the foreseeable future."

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