Double-digit growth on both the top and bottom lines in its Outdoor & Action Sports coalition pushed VF Corp.’s fourth-quarter earnings up 10 percent.
However, the company’s sales and earnings fell shy of analysts’ consensus estimates, as did the company’s initial guidance for 2014.
VF noted that 2013 marked the arrival of The North Face as its first $2 billion brand globally, while Vans surpassed $1.7 billion in sales to become its second largest brand.
In the three months ended Dec. 28, the Greensboro, N.C.-based apparel giant reported net income of $367.7 million, or 82 cents a diluted share, from $334.2 million, or 75 cents, in the year-ago quarter. Revenues rose 8.5 percent to $3.29 billion from $3.03 billion.
Analysts had estimated EPS of 84 cents and revenues of $3.34 billion.
“The combined power of our brands and platforms remains our greatest competitive advantage, enabling us to push the envelope on product innovation to connect even more intensely with consumers and providing stellar returns to our shareholders,” said Eric Wiseman, chairman and chief executive officer of VF.
Gross margin in the quarter hit 48.2 percent of revenues, up from 47.4 percent a year ago, based on shifts to higher-margin businesses and comparably lower product costs. Last year, VF’s direct-to-consumer businesses grew 13 percent and accounted for 22 percent of revenue, 1 point higher than in 2012.
The Outdoor & Action Sports group’s sales were up 12.3 percent to $1.92 billion in the quarter, with operating income in the segment up 11.2 percent to $358.2 million. Jeanswear sales declined less than 0.1 percent, to $734.1 million, while profits in the group moved up 2.2 percent to $134.3 million.
For 2014, VF projected earnings of between $3 and $3.05 a share on sales growth of between 7 and 8 percent, which would lift revenues to about $12.2 billion. Wall Street began the day expecting EPS of $3.09 on revenues of $12.45 billion. The disparity pushed VF shares down more than 5 percent in pre-market trading Friday.
VF said it expected the pace of business to accelerate as the year progresses, with midsingle-digit growth in the first half of the year followed by high-single-digit growth in the latter half.
Full-year profits were up 11.4 percent to $1.21 billion, or $2.71 a diluted share, while revenues rose 5 percent to $11.42 billion.
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