VF reduces Q4 guidance to reflect current market challenges
18 Oct '08
2 min read
VF Corporation announced record results for the third quarter of 2008. All per share amounts are presented on a diluted basis and, unless otherwise noted, reflect continuing operations.
Third quarter revenues rose over 6% to a record $2,206.6 million, compared with $2,073.2 million in the third quarter of 2007. Due primarily to the continued deterioration in market conditions, as well as the impact of the strengthening dollar on foreign currency translations, this increase was below our prior expectation for 9% growth in revenues.
Income from continuing operations in the current quarter was $233.9 million, compared with $209.3 million in the prior year's quarter. Earnings per share from continuing operations reached $2.10 in the third quarter, compared with $1.86 last year.
Current period results included a net benefit of $.07 per share from unusual items. Net favorable income tax adjustments benefited earnings by $.14 per share, while charges for cost reduction initiatives and for costs for a duty and tax issue related to a recent acquisition negatively impacted earnings by $.07 per share.
For the first nine months of 2008, revenues were up 9% to a record $5,730.5 million from $5,264.2 million. Income from continuing operations increased 8% to $486.9 million, compared with $449.2 million in the prior year period. Earnings per share from continuing operations were up 10% to $4.37.
"The achievement of another quarter of record revenues and earnings is a tremendous accomplishment by our brands and businesses given the challenging market conditions," said Eric Wiseman, Chairman and Chief Executive Officer. "We remain confident in our business model, which is built on a strong foundation of diversity across geographies, products and channels of distribution and supported by some of the best-known and most powerful apparel brands in the world."
He continued, "However, global market conditions have continued to deteriorate beyond what we could have anticipated, with a marked change particularly during the last several weeks. While our brand portfolio is healthy, general economic conditions are not, necessitating that we take a much more conservative stance toward our fourth quarter guidance. Despite this additional caution, we continue to look forward to record revenues and earnings in the fourth quarter, and to delivering our sixth consecutive year of record performance in 2008."
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