Branded lifestyle apparel company V.F. Corp. (VFC) Friday lifted its adjusted earnings per share outlook for full-year 2012, based on its strong first-quarter results, that also topped analysts' expectations. Organic revenues grew 12 percent, partly due to earlier shipments and stronger sales of seasonal products. The company also expects to deliver another year of record revenues and earnings.
Looking ahead to the second quarter, the company said its earnings per share comparisons will be particularly challenging due to several factors. Thus it expects a negative combined earnings impact of $0.36 per share in the second quarter.
According to the company, all VF coalitions achieved solid revenue growth in the first quarter, with the strongest increase in Outdoor & Action Sports, where total revenues rose 60 percent and organic growth was 15 percent.
Eric Wiseman, chairman and chief executive officer of the company said, "Our excellent first quarter performance spotlights our success in driving brand growth across our portfolio and the ability of VF's diversified business model to deliver healthy, sustainable growth on both the top and bottom lines."
In the first quarter, net income attributable to the company increased to $215.22 million or $1.91 per share from $200.7 million or $1.82 per share reported last year.
Adjusted earnings per share increased 7 percent year-over-year to $1.94 per share, including $0.12 per share accretion from Timberland. On average, 19 analysts polled by Thomson Reuters expected the company to earn $1.87 per share. Analysts' estimates typically exclude special items.
The company noted that the adjusted figures exclude Timberland acquisition-related expenses and anticipated gain on the sale of John Varvatos Enterprises, Inc.
Revenues for the quarter grew 31 percent to $2.56 billion from $1.96 billion a year ago, which also exceeded analysts' estimate of $2.45 billion.
V.F stated that organic results exclude the Timberland and Smartwool brands acquired on September 13, 2011.
Gross margin declined to 45.7 percent from 47.2 percent a year ago, mainly due to the continued negative impact of higher jeanswear product costs. Operating margin, on an adjusted basis, was 12.5 percent.
Based on strong first quarter results, the company now sees full-year 2012 adjusted earnings per share to be about $9.45 per share, up $0.15 from the $9.30 per share guidance provided on February 16.
Revenue guidance for 2012 remains unchanged, with revenues expected to rise by nearly 15 percent to $10.9 billion. Analysts expect the company to earn $9.40 per share, on revenues of $11.02 billion.
Further, the Board of Directors declared a quarterly cash dividend of $0.72 per share, payable on June 18, 2012 to shareholders of record as of the close of business on June 8, 2012.
VFC closed Thursday's regular trading at $154 on the NYSE. In the pre-market activity, the shares are down 1.37 percent.
by RTT Staff Writer
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