VF Corp.'s (VFC) second-quarter profit fell 27% amid higher pension costs and currency changes as the world's largest apparel maker by revenue reported a bigger-than-expected revenue drop.
The company has outperformed its struggling retail competitors during the economic downturn. It vowed in March to maintain a five-year plan to expand and diversify through acquisitions and new boutiques. But the strong dollar has hurt international revenue, which had been a key source of growth.
"Business remains undeniably tough across most categories, channels and geographies, but I am pleased that our largest brands - Wrangler, Lee, The North Face and Vans - continue to gain share in most markets," said Chairman and Chief Executive Eric C. Wiseman. While highlighting cost cuts, he also said, "We see some signs of stabilization occurring." Still, VF is cautious about consumer spending the rest of the year.
The company posted a profit of $75.5 million, or 68 cents a share, down from $ 104 million, or 94 cents a share, a year earlier. The latest results included a 14-cent impact on higher pension costs and a net 8-centhit from foreign exchange.
Revenue decreased 11% to $1.49 billion, with three percentage points of the drop due to currency changes.
A survey of analysts by Thomson Reuters expected earnings of 58 cents a share on $1.53 billion in revenue.
Gross margin rose to 43.9% from 43.8%.
International revenue fell 4% on a constant-currency basis.
Sales of outdoor apparel were down 2%, but up 2% on a constant-currency basis. The North Face rose 4% on that measurement, with Vans jumping 14%. Jeanswear, though, fell 12% excluding foreign exchange.
Shares of VF, which reiterated its 2009 forecast, rose 3.6% to $62.78 in after-hours trading.
No comments:
Post a Comment