VF Corp. posted another period of record sales and earnings during the first quarter, propelled by explosive growth across all brands in its outdoor segment and significant gains in jeanswear.
The strong results prompted management to raise estimates for 2007. Revenues are expected to rise more than 12 percent to about $7 billion, up from an increase of 8 percent. Earnings per share are anticipated to also climb 12 percent, up from previous guidance of a 10 percent increase.
The Greensboro, N.C.-based apparel giant reported Tuesday that earnings increased 7.9 percent to $138.3 million, or $1.17 a diluted share, for the three months ended March 31, compared with earnings of $128.2 million, or $1.05 a share, in the same period a year ago.
Revenues grew 15 percent to reach a record $1.67 billion during the quarter from $1.46 billion in the year-ago period. Sales rose 15.1 percent to $1.65 billion from $1.44 billion while royalty income rose 5.8 percent to $20 million from $18.9 million.
Booming growth in the company's outdoor segment, which includes brands such as The North Face, Vans, Kipling, Reef and Napapijri, has been a recurring theme in earnings calls, and the trend continued during the first quarter as revenues rose 29.7 percent to $538.8 million from $385.6 million.
"I can only say that our outdoor team's performance both domestically and internationally has been amazing," said Eric Wiseman, president and chief operating officer, during a conference call with analysts.
Domestic revenues in the outdoor division rose 31 percent on top of a 52 percent increase in international revenues. Vans, The North Face, Kipling, Reef, Napapijri and Eastpak all posted double-digit revenue gains.
Although the company's younger lifestyle brands tend to attract the bulk of attention with their eye-popping growth, the first quarter also showed the company's success in energizing and expanding even its largest and most mature business segment — jeanswear. Revenues for the segment, which includes the Wrangler, Lee and Riders brands, increased 8.1 percent to $760.8 million from $703.8 million. Domestic revenues increased 5 percent, driven by gains in the Lee brand and in the men's mass channel segment.
"Our efforts to revitalize Lee are clearly working, particularly on the women's side," Wiseman said.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"