VF Corp Lifts Full-year View As Q2 Profit Tops Estimates - Update

(RTTNews) - Branded lifestyle apparel maker VF Corp. (VFC) Friday reported a decline in second-quarter profit, despite 4 percent growth in revenues. Earnings per share topped analysts' expectations, while revenues missed view. The company lifted its earnings per share outlook for the full year 2013, with revenue guidance remaining unchanged.

"Our strong second quarter results demonstrate that VF's diverse portfolio of brands supported by powerful platforms is a potent engine for growth,"said Eric Wiseman, chairman and chief executive officer of the company.

In the second quarter, the company's net income declined to $138.27 million or $1.24 per share from $155.3 million or $1.40 per share in the prior-year quarter.

Excluding Timberland acquisition-related items of $0.03 per share, adjusted earnings for the recent quarter totaled $1.27 per share, while the company posted $1.11 per share a year ago. On average, 22 analysts polled by Thomson Reuters expected earnings per share of $1.17 for the quarter. Analysts' estimates typically exclude one-time items.

Adjusted earnings per share for the prior year excluded a $0.32 per share gain from the sale of John Varvatos and $0.03 per share in acquisition-related expenses. Additionally, last year's second quarter earnings per share included a non-recurring $0.10 per share discrete tax benefit.

Total revenues for the quarter rose 4 percent year-on-year to $2.22 billion, but came below analysts' estimate of $2.26 billion. Revenues were driven by strength in Outdoor & Action Sports, international and direct-to-consumer businesses, the company noted.

Outdoor & Action Sports revenues grew 6 percent and increased to 50 percent of total sales in the quarter. International revenues were up 6 percent, with growth in every region. Direct-to-consumer revenues climbed 8 percent, with balanced U.S. and international growth.

Gross margin improved 240 basis points to 48.5 percent, reflecting lower year-over-year product costs and continued shift in revenue mix towards higher margin businesses.

The board also declared a quarterly dividend of $0.87 per share, to shareholders of record on September 10, 2013, payable on September 20.

For full-year 2013, the company now expects earnings to be $10.78 per share, including an estimated $0.07 per share in Timberland acquisition-related expenses. Earlier, the company forecast earnings of $10.65 per share. Adjusted earnings per share are now anticipated to be $10.85 per share, up from the earlier guidance of $10.75. Analysts anticipate full-year 2013 earnings of $10.85 per share.

However, 2013 revenue guidance remains unchanged, with revenues likely to increase by 6 percent to $11.5 billion, while 22 analysts project revenues of $11.53 billion for the year.

VFC is currently trading at $195.19, down $4.34 or 2.18 percent.