Information regarding VF’s third quarter conference call webcast today at 8:30 a.m. ET can be found at the end of this release.
VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, today announced record results for the third quarter of 2011. All per share amounts are presented on a diluted basis.
The discussions in this release refer to adjusted amounts that exclude costs incurred in connection with the acquisition of The Timberland Company which are described under the heading “Adjusted Amounts – Excluding Timberland acquisition-related expenses.” Reconciliations of GAAP measures to adjusted amounts are presented in the supplemental financial information included with this release and identify and quantify all excluded items.
Third Quarter Results SummaryRevenues rose 23% to $2,750.1 million from $2,232.4 million in 2010. The acquisition of The Timberland Company (“Timberland”), which was completed on September 13, added $163.6 million to revenues. Excluding Timberland, organic revenue growth in the quarter was 16%. All VF coalitions achieved strong revenue gains: Outdoor & Action Sports revenues, which now include the Timberland® and Smartwool® brands, grew 37%; Jeanswear revenues rose 8%; Imagewear revenues increased 14%; Sportswear revenues grew 18%; and Contemporary Brands revenues were up 11%. Gross margin declined, as anticipated, to 45.3% from 46.5% in the 2010 period, reflecting the impact of higher product costs. Operating income of $430.1 million included a net benefit from the Timberland acquisition of $13.5 million, which included acquisition-related expenses of $26.6 million. Operating margin was 15.6% compared with 15.9% in the 2010 period, with acquisition-related expenses negatively impacting operating margin by approximately 100 basis points. On an organic basis, the third quarter operating margin increased to 16.1% from 15.9%. Net income grew 24% to $300.7 million from $242.8 million, while earnings per share increased 21% to $2.69 from $2.22. Adjusted earnings per share were $2.87, an increase of 29% over 2010 levels. The Timberland acquisition was accretive to adjusted earnings by $.25 per share in the quarter. On an organic basis, earnings per share grew 18% to $2.62. Foreign currency translation benefitted earnings by $.10 per share in the quarter. Nine Months Results Summary Revenues increased 17% to $6,549.0 million from $5,576.4 million in 2010, with strong growth in every coalition. The Timberland acquisition accounted for three percentage points, or $163.6 million, of the revenue growth in the period. Net income and earnings per share each increased by 22%, to $630.8 million and $5.69. Adjusted earnings per share were $5.89, an increase of 26% over 2010 levels. Earnings per share in the period also benefitted by $.11 in special items reported in the first quarter, $.07 from a gain on a facility closure reflected in second quarter earnings, and $.14 due to foreign currency translation. “The strength of VF’s diversified brand portfolio has never been more evident,” said Eric Wiseman, Chairman and Chief Executive Officer. “These results – in this environment – clearly demonstrate that VF has the right brands and strategies for strong and sustainable long-term growth. Our businesses continue to post healthy and very profitable organic growth, and the acquisition of Timberland further strengthens our portfolio with the addition of two outstanding outdoor brands.”