Branded lifestyle apparel maker VF Corp. (VFC) reported Friday a profit for the first quarter that increased from last year, reflecting improved margins and sales growth. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also raised its earnings guidance for the full-year 2013, while maintaining its revenue forecast.
"VF's first quarter performance is a great example of our strong business model, disciplined execution and our ability to leverage all aspects of our portfolio," Chairman and CEO Eric Wiseman said in a statement.
The Greensboro, North Carolina-based makers of Wrangler and Lee jeans reported net income of $270.42 million or $2.41 per share for the first quarter, higher than $215.22 million or $1.91 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter was $272.65 million or $2.43 per share, compared to $218.51 million or $1.94 per share in the year-ago quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $2.18 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total coalition revenues for the quarter grew 2 percent to $2.61 billion from $2.56 billion in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $2.64 billion by a whisker.
The company noted that the sale of John Varvatos in April 2012 negatively impacted VF's revenue growth comparison by 1 percentage point in the first quarter.
Outdoor & action sports revenues rose 10 percent to $1.38 billion, while jeanswear revenues decreased 3 percent to $718 million from last year.
Imagewear revenues declined 9 percent to $253 million, while sportswear revenue grew 4 percent to $128 million from a year ago. Contemporary Brands revenue decreased 18 percent to $104 million from last year.
International revenues increased 6 percent, and direct-to-consumer revenues were up 12 percent from a year ago.
Operating margin for the quarter expanded 140 basis points, aided by a 240 basis points improvement in gross margin to 48.1 percent, reflects lower year-over-year product costs and the continued shift in our revenue mix towards higher margin businesses.
Looking ahead to fiscal 2013, the company raised its adjusted earnings guidance to $10.75 from the prior forecast of $10.70 per share, while maintaining revenue guidance at $11.5 billion. Street is currently looking for full-year 2013 earnings of $10.80 per share, on annual revenues of $11.57 billion.
"The combination of powerful brands and strong operating platforms creates a unique engine capable of delivering consistent, long-term shareholder value. With a strong start to the year, we're well positioned to achieve our full year goals," Wiseman added.
VF's Board of Directors also declared a quarterly dividend of $0.87 per share, payable on June 20 to shareholders of record on June 10, 2013.
In Friday's regular trading session, VFC is currently trading at $172.04, down $6.71 or 3.75% on a volume of 0.53 million shares.
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