VF Corp (VFC) Slides As Sales and Profit Falls

October 26, 2009 5:20 PM EDT

VF Corp (NYSE: VFC) reported third-quarter results including an EPS of $1.94, below the analyst estimate of $1.95 and down from $2.10 last year. The third-quarter EPS was impacted by a $0.17 from higher pension expense and higher currency translation, $0.11 and $0.06 respectively. Revenue for the quarter fell 5% to $2.09 billion, which compares to the market consensus of $2.10 billion.

VF anticipates that 2009 revenues will decline 6 percent from the year-ago quarter. The company estimates a 2009 EPS between $4.85 and $5.00, down from the 2008 EPS of $5.42.

The company did announce a 2 percent increase in its quarterly dividend, to $0.60 per share.

A global-leader in lifestyle apparel, VF has attempted to weather the weak economy by using a disciplined cost cutting approach.

"Our relentless drive to control costs, reduce inventories and focus investments on our highest return opportunities has served us very well during these difficult and volatile times," Eric C. Wiseman, Chairman, President and CEO of VF stated. "We will continue this disciplined approach through the alance of this year and into 2010 to maximize opportunities for both top and bottom line growth."

VF leaned on its four top brands – Wrangler®, Lee®, The North Face® and Vans® to earn 60 percent of the company’s revenue. Each brand continues to be strong and grow market share.

"We are confident that VF has the right levers in place to drive long-term shareholder value: a foundation of powerful brands with significant long-term growth potential; expanding international and direct-to-consumer platforms that will enhance our brands' reach to consumers while also driving higher margins; and exceptionally strong cash flow that supports our solid dividend and acquisition strategy," Wiseman said.

On the conference call, the CEO Wiseman indicated that its European jeans business is under pressure. He also noted that consumer spending is challenged and the global economy is "not out of the woods yet." He also said credit problems are severe and unrecognized. On M&A Wiseman said they are "busy and active" but no deals to announce.

VF is trading at $73.83, down 6 percent in after-market movement.

Related Categories

Earnings

Stocks Mentioned

Related Entities

• Dividend
• Life, Style and Real Estate

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