The world's largest apparel company and make of Lee and Wrangler jeans, VF Corp, on Thursday reported a 25 per cent year-on-year jump in third quarter profit as it reaped the rewards of low inventories and reduced markdowns.

The North Carolina-based firm, whose other brands include Vanity Fair, North Face, Lee Sport and Lily of France, posted earnings of $128.6 million, or $1.15 a share, compared with $103.2m, or 90 cents a share, in 2001.

The jeans giant, which said its results for the quarter included costs of $1.4m, or one cent a share, related to its restructuring program, added net sales were flat at $1.4 billion compared to $1.41bn a year earlier.

Nine month earnings soared 18 per cent to $296.1m from $250.4m. Including the goodwill write-down related to the change in accounting policy, the company reported a net loss of $231.1m for the nine month period, equal to $2.20 per share.

VF Corp chairman and CEO, Mackey McDonald, said: "We are extremely pleased with these excellent results. With our strategic repositioning program, we took the right actions at the right time, as demonstrated by our ability to deliver record earnings despite very challenging market conditions.

"At the same time, the increase in marketing investment behind our brands is paying off in the form of market share gains across our major consumer categories, including most of our jeans, intimates and outdoor businesses."

The firm said its jeans and outdoor brands are "performing strongly in Europe" with total European jeans sales up 20 per cent in the quarter and international sales of outdoor brands up 14 per cent.

It added sales in its domestic outdoor and image wear businesses were flat, while its domestic jeans and intimates businesses posted low single digit sales declines due to "soft consumer spending on apparel and generally weak retail apparel sales".

Gross margins improved nearly three percentage points to 37.8 per cent and inventories fell 15 per cent to $878m versus the year-ago period.

"Today's markets demand superior execution, and our disciplined and aggressive approach to managing our businesses continues to serve us well," concluded Mr McDonald.