The North Face keeps up in Europe, 2Q sales rise by double digits

Despite worries of a tough consumer environment in Europe coupled with a slowdown in the U.S. economic recovery, The North Face and its sister outdoor brands saw double-digit sale gains worldwide for the second quarter 2012.
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The outdoor giant keeps growing.

Despite worries of a tough consumer environment in Europe coupled with a slowdown in the U.S. economic recovery, The North Face and its sister outdoor brands saw double-digit sale gains worldwide.

Parent company VF Corp. (NYSE:VFC), reported its Outdoor & Action Sports group revenue up 45 percent for the second quarter, to nearly $1.04 million, or 12 percent growth, excluding last year’s Timberland and SmartWool acquisition, which contributed $239 million.

By brand, officials said The North Face saw its sales rise 14 percent and Vans jumped 25 percent. Growth was steady worldwide, with little effect seen from Europe’s economic turmoil, so far. One theory being bandied around by industry officials is that just as in the U.S. economic recession, European consumers might flock to the outdoors as an affordable activity during rough times.

The positive outdoor product performance lifted total VF second-quarter revenue up 16 percent to $2.1 billion, or up 6 percent minus Timberland and SmartWool. Quarterly net income rose 20 percent to $155 million, or $1.40 per share.

VF provides a good diversified picture in how the outdoor market continues to outperform the general consumer categories. In the same quarter, VF’s Contemporary Brands fell 9 percent, Jeanswear dropped 3 percent, Sportswear declined 2 percent and Imagewear ticked up 3 percent.

VF officials remained bullish for the rest of the year, raising their 2012 earnings per share projection to $9.50, up 5 cents from previous guidance. The year’s revenue projections remained at $10.9 billion.

Investors cheered the earnings results Thursday, sending VF's stock up 7.5 percent.

--David Clucas

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