NEW YORK — Digesting its $585.6 million deal to buy Nautica Enterprises and lower second-quarter earnings, VF Corp. hasn’t lost its appetite for acquisitions.

Having probed the lifestyle niche with Nautica, VF is looking to play in the outdoors again. “We are still looking at acquisitions in the outdoor category,” Mackey McDonald, chairman and chief executive officer of VF, told Wall Street Tuesday in a conference call to discuss VF’s second-quarter earnings, which fell 15.7 percent but landed 8 cents above consensus estimates.

VF’s Outdoor coalition business — The North Face, JanSport and Eastpak brands — has been doing well, so well that North Face continues to outperform the competition with a 14 percent increase in shipments in the second quarter, the ceo said. He also told Wall Street that VF was putting more funds and muscle behind its marketing for the North Face brand, which is expanding in market share in Europe.

Another highlight for the sector is the Eastpak brand, which had a 25 percent sales gain in the quarter.

The Nautica acquisition, on track to close during the fourth quarter, raises the firm’s debt-to-total capital ratio at year-end to between 30 to 35 percent. Because the ratio is still below the company’s long-term target of 40 percent and continued strong cash flow will help pay the debt levels “down fairly quickly this year,” the firm is still investigating its options, the ceo said.

McDonald said while the outdoor category is a priority, the company would also consider expanding its intimate apparel category and even another jeans brand to add to its existing portfolio. According to the ceo, there is nothing in the Nautica acquisition agreement that would prevent the firm from acquiring another status denim brand.

Shares of VF closed Tuesday at $37.18, up $1.33, or 3.7 percent, in New York Stock Exchange trading.

VF’s second-quarter net income slid to $74.9 million, or 68 cents a diluted share, for the three months ended July 5, from $88.9 million, or 79 cents, a year ago. Last year’s quarter included a benefit of 3 cents in EPS from unusual items.

Wall Street’s EPS consensus, according to First Call/Thomson Financial, was 60 cents. Several analysts had reduced expectations after VF said last month that earnings would decline because retailers, in planning for a weaker economy, had pulled back on their orders.Sales fell by 2 percent to $1.13 billion from $1.16 billion. Excluding the benefit from foreign currency translation, sales were down 5 percent from a year ago.

McDonald told Wall Street that results were better than the revised guidance issued on June 13 because some orders for new programs shipped ahead of schedule. However, he noted, as for the overall retail environment, “we still don’t see signs of apparel spending.” While there’s been an improvement in weather, which boosted sales of seasonal goods, McDonald pointed out that there is still a “high level of price deflation at retail caused by markdowns.”

The company said while international jeans sales rose 5 percent, boosted in part by the positive impact of foreign currency translation, domestic jeans sales dipped by 4 percent. Sales in the firm’s Outdoor coalition business rose 12 percent in the quarter. Global intimate apparel sales fell by 3 percent, hurt in part by reductions of inventories by retailers and store closures.

McDonald cited Kmart as particularly “aggressive” in its pull back on orders. He also noted some of the stores Kmart closed during its bankruptcy were locations where jeans sales in particular were better than in the stores kept open. “Those were bigger factors than expected,” the ceo said.

Elsewhere in the denim front, Levi Strauss & Co. is just beginning to ship into Wal-Mart, but there have been no surprises so far. Riders, another VF brand, is one of the fastest-growing jeans brands for women. As reported, VF is relaunching Riders for men at Kmart and, as reported, Blue Jeans by Lee is just now hitting Target’s discount stores.

Imagewear sales in the quarter dropped by 8 percent, reflecting continued weakness in the manufacturing and transportation sectors and reduced discretionary spending by corporations.

McDonald told analysts on the call, “We are hopeful for the second half of the year that shoppers will be back at retail and selecting our products.”

VF’s provided guidance for full-year EPS to increase 3 to 5 percent from the $3.24 a share from continuing operations reported in 2002. Sales are projected to decline slightly, while cash flow from operations is expected in the $350 million to $450 million range.For the third quarter, VF said sales are projected to decrease by 2 percent, with EPS possibly down between 15 and 20 percent. The latter includes a possible loss in the event that the children’s Playwear business is sold. The company said it continues to review alternatives for that business, and expects to reveal its plans for it during the current third quarter.

For the six months, the company was back in the black with income of $167 million, or $1.51 a diluted share, versus a net loss of $359.4 million, or $3.18, in the same period last year. Last year’s red ink includes a $527.3 million effect from a change in goodwill accounting. Sales inched up slightly by 0.5 percent to $2.38 billion from $2.37 billion.

Robert Shearer, chief financial officer, said the company suspended its stock buyback program in the second quarter after it announced it would acquire Nautica. So far, 1 million shares of VF have been purchased by the company.

Separately, the company said its board declared a regular quarterly dividend of 25 cents a share, payable on Sept. 19, 2003, to shareholders of record as of Sept. 9.

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