WYOMISSING, Pa. -- Hurt by reduced fleecewear volume, VF Corp. reported fourth-quarter profits fell 13.4 percent and predicted first-quarter earnings will be flat to down slightly.
In the quarter ended Jan. 1, the company earned $61.1 million, or 94 cents a share, including a 16-cent-per-share charge from writedowns at the Girbaud division. In the year-ago period, VF earned $70.6 million, or $1.18, after a special gain of 17 cents a share. In the latest period, average shares outstanding increased to 64.5 million from 59.1 million, reflecting a stock offering in January 1993.
VF's principal business segments showed sharp declines in operating profits for the quarter. Jeans, which include the Lee, Wrangler and Girbaud brands, dropped 16.4 percent to $62.3 million, casual/sportswear fell 36 percent to $10.4 million and intimate apparel tumbled 46.1 percent to $9.4 million. Operating profits improved significantly at the international division, increasing nearly sevenfold to $11.1 million, and at the other apparel division (uniforms and Healthtex), nearly doubling to $23.7 million.
Lawrence R. Pugh, chairman and chief executive officer, said fourth quarter results were in line with expectations and reflected the same issues that hurt the third quarter, including lower fleecewear volume, manufacturing inefficiencies at Vanity Fair and poor performance at Girbaud. He noted the company is "very upbeat about our prospects for 1994," citing the recent acquisitions of H.H. Cutler and Nutmeg, which form "the cornerstone of a new decorated knitwear strategy."
He also said Vanity Fair should improve with the help of a new product mix and sourcing shift this year, while new management works to reduce product and cost problems at Girbaud. Sales in 1994 should approach $5 billion, and net earnings could grow 10 percent, he said.
However, VF remains cautious about comparisons for the first half of 1994. Sales in the quarter increased 6.7 percent to $1.1 billion from $1 billion. Most of the divisions saw only modest sales increases, with the exception of international, which surged 53.8 percent to $143.9 million. Jeans sales rose 3.2 percent to $528.9 million; intimate apparel inched up 1.6 percent to $117.7 million and the uniforms-Healthtex category increased 12.7 percent to $135.3 million.Reflecting the fleecewear slump, casual/sportswear sales were down 9.2 percent to $171.7 million. In the year, net earnings for the corporation were up 4 percent to $246.4 million, or $3.80, from $237 million, or $3.97, in 1992. In the year, operating profits followed the same pattern as in the quarter. Jeans were down 2.8 percent to $266.7 million; casual/sportswear, down 53.5 percent to $24.3 million and intimate apparel, down 24.7 percent to $40.2 million.
Operating profits for the year at the international division more than doubled to $70.9 million, while the uniform-Healthtex category was up 46 percent to $67.8 million.
Total sales for the year advanced 13 percent to $4.3 billion from $3.8 billion.
Sales for the year at the divisions were: jeans, up 10.6 percent to $2.1 billion; intimate apparel, up 3.8 percent to $436.5 million; international, up 52.7 percent to $641.8 million, and other apparel, up 16.2 percent to $505.6 million. At the casual/sportswear division, sales were down 2.1 percent to $639 million. VF stock dropped 1 to 45 5/8 on the New York Stock Exchange Tuesday.
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