US: VF raises FY guidance after strong Q3
- Q3 net profit up 24% to US$300.7m
- Revenues rise 23% to $2.75bn
- Gross margin dips on higher product costs
Apparel giant VF Corporation has raised its full-year earnings and revenue guidance after a strong third quarter in which profits and sales both increased by more than 20%.
The company recorded organic revenue growth, excluding its recent Timberland acquisition, of 16%, but gross margin declined to 45.3% from 46.5% last year thanks to higher product costs.
All VF divisions reported revenue gains: outdoor and action sports, now including the newly acquired Timberland and Smartwool brands, was up 37%; jeanswear increased 8%; imagewear rose 14%; sportswear was up 18%; and contemporary brands rose 11%.
“The strength of VF’s diversified brand portfolio has never been more evident,” said Eric Wiseman, chairman and CEO. “These results – in this environment – clearly demonstrate that VF has the right brands and strategies for strong and sustainable long-term growth.
“Our businesses continue to post healthy and very profitable organic growth, and the acquisition of Timberland further strengthens our portfolio with the addition of two outstanding outdoor brands.”
International revenues were up 44%, with 15% of that growth attributable to Timberland, while direct-to-consumer revenues increased 21%.
VF now expects revenues to increase by 22-23% in fiscal 2011, with adjusted earnings per share predicted to reach $8.15, up from the previous forecast of $7.50.
Click here for more insight: VF sees cotton costs playing out "as planned”
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