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Q3 gross margins at VF Corp reach record 46.5%
22 Oct '10
5 min read
Jeanswear: Our Global Jeanswear business also achieved both top and bottom line growth in the quarter. Global Jeanswear revenues grew 1% in the quarter, or 2% on a constant currency basis. The exit of our European mass market business impacted the revenue comparisons by 2%. Domestic revenues rose 5% with growth in all three major businesses: Mass Market revenues grew 7% in the quarter, and revenues in our Lee and Western businesses rose 1% and 5%, respectively.
International jeans revenues decreased 7%, with 2 percentage points of the decline due to foreign currency translation and the rest due primarily to the exit of our mass business in Europe. Jeanswear revenues in Asia increased 44%, with growth also achieved in Mexico, Latin America and Canada.
Operating income increased 6%, with operating margins rising by nearly one full percentage point to 17.6% in the quarter reflecting improved profitability in our international jeans businesses.
Imagewear: Our Imagewear business delivered excellent results in the quarter, with a 10% increase in revenues and a 68% increase in operating income. The Licensed Sports and Image Apparel businesses both generated solid growth for the second consecutive quarter. Growth in the Image business resulted from improved business conditions and increased market share with our key industrial customers.
Image's flame-resistant apparel business performed particularly well in the quarter. The Licensed Sports apparel business is also gaining market share, helped by our quick response retail replenishment capabilities during the Major League Baseball divisional playoff races and strong retail response to new women's programs.
Sportswear: As anticipated, a shift in the timing of Nautica shipments for special programs from the third quarter to the fourth resulted in a decline in Sportswear revenues of 13%. Sales of Nautica men's sportswear at our major wholesale partners are running up over 20% season to date versus last year. This trend, along with higher shipments resulting from the aforementioned shift in timing, should drive a mid-teen increase in Nautica brand revenues in the fourth quarter. Kipling brand revenues in the U.S. increased 42% in the quarter, reflecting the successful launch earlier this year of a new program that is exclusive with Macy's.
The shift in third quarter revenues, combined with higher spending to support a new Nautica marketing campaign, resulted in lower Sportswear operating income and margins in the quarter. Substantially better comparisons are anticipated in the fourth quarter.
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International jeans revenues decreased 7%, with 2 percentage points of the decline due to foreign currency translation and the rest due primarily to the exit of our mass business in Europe. Jeanswear revenues in Asia increased 44%, with growth also achieved in Mexico, Latin America and Canada.
Operating income increased 6%, with operating margins rising by nearly one full percentage point to 17.6% in the quarter reflecting improved profitability in our international jeans businesses.
Imagewear: Our Imagewear business delivered excellent results in the quarter, with a 10% increase in revenues and a 68% increase in operating income. The Licensed Sports and Image Apparel businesses both generated solid growth for the second consecutive quarter. Growth in the Image business resulted from improved business conditions and increased market share with our key industrial customers.
Image's flame-resistant apparel business performed particularly well in the quarter. The Licensed Sports apparel business is also gaining market share, helped by our quick response retail replenishment capabilities during the Major League Baseball divisional playoff races and strong retail response to new women's programs.
Sportswear: As anticipated, a shift in the timing of Nautica shipments for special programs from the third quarter to the fourth resulted in a decline in Sportswear revenues of 13%. Sales of Nautica men's sportswear at our major wholesale partners are running up over 20% season to date versus last year. This trend, along with higher shipments resulting from the aforementioned shift in timing, should drive a mid-teen increase in Nautica brand revenues in the fourth quarter. Kipling brand revenues in the U.S. increased 42% in the quarter, reflecting the successful launch earlier this year of a new program that is exclusive with Macy's.
The shift in third quarter revenues, combined with higher spending to support a new Nautica marketing campaign, resulted in lower Sportswear operating income and margins in the quarter. Substantially better comparisons are anticipated in the fourth quarter.
Click here for more details
VF Corporation
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