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VF raises five-year growth plan targets

09 Jan '08
4 min read

Each of our coalitions is expected to achieve organic growth over the coming years. Our Lifestyle businesses - Outdoor, Contemporary Brands and Sportswear - will continue to be our growth engines. Revenues in our Outdoor and Contemporary Brands coalitions are expected to grow at a high single-digit to low double-digit rate, with Sportswear growing at a mid single-digit rate. Our Heritage businesses - Jeanswear and Imagewear - will continue to be important contributors to our Growth Plan, providing growth and the profits and cash flow to fuel our expansion.

• 15% Operating Margin. We are also raising our operating margin target from 14% to 15%, as we leverage our costs across an expanded revenue base, grow our international and retail businesses and continue our relentless focus on cost reduction.

• 10-11% EPS Growth. We are establishing a new target for earnings per share growth of 10-11%. EPS are expected to grow at a faster rate than revenues, reflecting continued expansion in our operating margins.

• 40% Dividend Payout. Returning cash to shareholders continues to be an important component of our TSR (total shareholder return) strategy, and we expect to maintain a dividend payout rate of approximately 40% over the next five years.

2008 Guidance:
2008 should be another very strong year of growth in both revenues and earnings, right in line with our newly established targets. We are anticipating revenue growth of 9% and earnings per share growth of 10%, excluding the impact of any new acquisitions. This will represent our sixth consecutive year of record revenues and profits.

"We're bullish about our prospects for 2008, despite the sharp downturn in investor sentiment surrounding many consumer-focused sectors. Not only do we expect to wrap up 2007 with a great fourth quarter, as previously announced on December 19, but we look forward to continuing our momentum in 2008 with another year of record performance," concluded Wiseman.

VF Corporation

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