VF Corp. Q1 Results Top Estimates, Boosts 2014 EPS Outlook

(RTTNews) - Branded lifestyle apparel maker VF Corp. (VFC) reported Friday a profit for the first quarter that increased 10 percent from last year, reflecting improved margins and sales growth.

Both earnings per share and quarterly revenues topped analysts' expectations. The company also raised its earnings outlook for the full-year 2014, while maintaining annual revenue growth guidance.

"VF's first quarter results reflect the continued strength of our brands and our global business platforms. Led by outstanding performance from the Outdoor & Action Sports coalition, which had balanced growth across all channels and geographies, we delivered strong growth in revenue and profitability," Chairman and CEO Eric Wiseman said in a statement.

The Greensboro, North Carolina-based makers of Wrangler and Lee jeans reported net income of $297.19 million or $0.67 per share for the first quarter, higher than $270.42 million or $0.60 per share in the prior-year quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter grew 6 percent to $2.78 billion from $2.61 billion in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $2.76 billion by a whisker.

Net sales growth of 7 percent was driven by double-digit growth of 14 percent in outdoor & action sports, 16 percent in direct-to-consumer businesses and 11 percent in international.

Jeanswear revenues were down 4 percent, while imagewear revenue grew 4 percent from last year. Sportswear revenue increased 3 percent, while revenues for the contemporary brands were down 5 percent from last year.

Operating margin for the quarter expanded 80 basis points to 14.5 percent, aided by a 130 basis points improvement in gross margin to 49.4 percent, partially offset by a 50 basis points increase in selling, general and administrative expenses as a percentage of total revenues.

On Tuesday, VF's Board of Directors also declared a quarterly dividend of $0.2625 per share, payable on June 20 to shareholders of record on June 10, 2014.

Looking ahead to fiscal 2014, the company now expects earnings of about $3.06 per share, up from the prior forecast range of $3.00 to $3.05 per share, while continuing to anticipate revenue growth of 7 to 8 percent, but at its high end. Street is currently looking for full-year 2014 earnings of $3.06 per share, on annual revenue growth of 7.5 percent to $12.28 billion.

The company added that second-quarter revenues are expected also projected to increase at a similar level to that of the first quarter, driven primarily by strength from outdoor & action sports coalition.

"Looking towards the balance of 2014 - we are confident in our business plan and look forward to delivering another record year for our shareholders," Wiseman added.

VFC closed Thursday's regular trading session at $60.11, down $0.46 on a volume of 1.95 million shares.