• Q3 earnings up 8.5%
  • Gross margin widens 70 bps
  • Sales climb 7%
VF Corp has upped its full-year earnings per share outlook

VF Corp has upped its full-year earnings per share outlook

Apparel and footwear giant VF Corp has upped its full-year earnings outlook as it revealed "strong" third-quarter revenue and profit growth.

Earnings amounted to US$470.5m in the three months to the end of September, an 8.5% increase on net profit of $433.8m in the prior year period.

Gross margin improved 70 basis points to 48.3%, driven primarily by the continuing shift of the group's revenue mix toward higher margin businesses.

Revenues rose 7% to $3.49bn from $3.27bn last year, due to strong growth in VF's Outdoor & Action Sports coalition and its international and direct-to-consumer businesses.

As a result, the company upped its full-year earnings per share outlook to $3.08, representing 14% growth over 2013 results. Revenues are expected to reach $12.3bn, growing 8% over last year, while gross margin is expected to expand to around 49%.

"Our third quarter results validate our growth strategy and demonstrate our ability to manage our powerful portfolio in ways that ensure we deliver solid results," said Eric Wiseman, VF chairman, president and CEO.

"Led by another outstanding performance from our Outdoor & Action Sports coalition, we delivered strong growth in revenue and earnings. We are squarely on track to deliver another record year for VF and our shareholders."

UBS Investment Bank analyst Michael Binetti believes VF Corp delivered a "decent" third-quarter, despite what he says are clear signs the end markets slowed intra-quarter.

"The burden is on VFC today to build confidence that it can hit raised 4Q guidance. In particular, we look forward to comments about ongoing challenges in US jeans (w/potential negative reads for mid-tier department stores JCP/KSS, or other denim brands like PVH)," he adds.