The North Face sees 1Q sales up, but slowing; profits strong

VF Outdoor reported a healthy 10 percent increase in sales for the first-quarter 2013, but those gains slowed from a year ago.
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It’s hard to stop a freight train, but eventually it slows down.

VF Outdoor, parent to The North Face, Timberland, Vans and SmartWool, reported a healthy 10 percent increase in sales for the first-quarter 2013, but those gains slowed from a year ago.

While the cool spring definitely helped VF Corp.’s (NYSE:VFC) collection of outdoor brands post positive sales of a combined $1.4 billion during the first quarter, the gains cooled from last year, even when accounting for company’s recent Timberland acquisition.

The North Face, for example, gained 6 percent in the first quarter 2013, versus a 14 percent gain a year ago. Vans, which likely benefited more from the cooler weather, kept its pace up with a 25 percent increase, while Timberland sales inched up 2 percent.

The positive, but slowing gains likely exhibit the benefit VF Outdoor saw from lower spring temperatures — indeed the group’s direct-to-consumer sales showed strong double-digit percentage gains from its top brands — but at the same time, retailers played conservative with orders as they work through leftover inventory from last year’s lack of winter weather.

VF Outdoor’s quarterly operating income stayed strong, rising 12 percent to $227 million.

Overall, VF Corp., which also sells jeans, sports and contemporary wear reported a 2 percent increase in revenue to $2.6 billion for the first quarter. Quarterly net income rose $273 million versus $219 million a year ago. Direct-to-consumer sales, companywide, rose 12 percent and now account for 20 percent total revenues, officials said.

Looking ahead, company officials kept their full-year 2013 revenue guidance steady — projecting a 6 percent increase to $11.5 billion — but they did raise profit projections.

--David Clucas

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