The world's largest apparel maker, VF Corp, on Tuesday posted a sharp fall in second quarter earnings as it was hurt by sluggish sales of its branded clothing and warned it may miss its full-year targets.

The North Carolina-based company, whose brands include Lee, Wrangler, Riders, Rustler, Vanity Fair, Vassarette and Lily of France, reported earnings from continuing operations of $74.9 million, or 68 cents per share, versus $88.5m, or 79 cents, in the year-ago period.

VF, which recently agreed to buy New York-based clothing group Nautica Enterprises Inc for about $586m, said sales slipped two per cent to $1.13 billion from $1.16bn last year and added excluding foreign currency effects, sales fell five per cent year-on-year.

International jeans sales rose five per cent reflecting the positive effects of foreign currency translation while sales in its outdoor coalition, which includes The North Face, JanSport and Eastpak brands, rose 12 per cent in the quarter, driven by double-digit sales increases of The North Face brand products.

The firm revealed domestic jeans sales and global intimate apparel sales declined by four per cent and three per cent, respectively, reflecting continued efforts by retailers to reduce inventories and a number of store closings by customers.

Imagewear sales fell eight per cent due to "continued weakness in the manufacturing and transportation sectors and reduced discretionary spending by corporations".

It added its licensed sports business continued its positive momentum and it is continuing to review alternatives for its kids’ clothing Playwear business.

Commenting on the results, VF chairman and CEO Mackey McDonald, said: "Our sales and earnings performance in the quarter was better than we had anticipated, due in part to earlier than planned load-ins of new programs.

"We remain confident in the strength of our brands and businesses, despite a retail environment that continues to be less than robust."

He added: "This year may fall short of our original expectations, but we are pleased that we will maintain our earnings at prior year levels, demonstrating our ability to successfully manage our way through these extraordinary times.

"We are very excited about our recently announced plans to acquire Nautica. The transaction will add a solid lifestyle brand to our growing portfolio, give us new capabilities in sportswear and boost our presence in the jeanswear category."

VF said it now expects full-year earnings to rise by three per cent to five per cent from last year's $3.24 a share, including restructuring charges, with seen as slipping slightly.

It added it third quarter earnings could fall as much as 20 per cent year-on-year due to from inventory and cost controls and a loss from the potential sale of a unit, with quarterly sales seen down two per cent year-on-year.