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Biz remains undeniably tough across most categories at VF
22
Jul '09
VF Corporation, a global leader in branded lifestyle apparel, announced results for the second quarter of 2009. All per share amounts are presented on a diluted basis.

Second quarter revenues were $1,485.6 million, a decline of 11% compared with $1,677.5 million in the second quarter of 2008, with foreign currency translation accounting for 3 percentage points of the decline. Net income in the current quarter was $75.5 million compared with $104.0 million in the prior year's quarter. Earnings per share declined to $.68 from $.94, with over half or $.14 per share of the decline due to higher pension expense and foreign currency translation impacts of $.11 and $.03 per share, respectively.

For the first half of 2009, revenues were $3,211.1 million, down 9% from the $3,523.8 million in the first half of 2008. Foreign currency translation accounted for 4 percentage points of the decline. Net income and earnings per share each declined 30%, to $176.5 million and $1.59 respectively. Over half or $.36 per share of the earnings per share decline was due to higher pension expense and foreign currency translation impacts of $.23 and $.13 per share, respectively.

“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. I am also pleased by how our brands and businesses have risen to these challenging times by controlling costs, reducing inventories and remaining focused on the long-term drivers of growth,” said Eric C. Wiseman, Chairman, President and Chief Executive Officer. “While we see some signs of stabilization occurring, we remain very cautious about the outlook for consumer spending for the balance of the year. We will continue to plan our business conservatively while investing in our brands and maximizing every effort to gain market share.”

He continued, “Both revenues and earnings in the second half of the year should show a marked improvement from those reported in the first half, reflecting easier comparisons, initiatives to control our expenses and steps taken to capture new revenue opportunities. We are confident that VF's business model, built on a foundation of powerful brands, great diversity, a proven set of growth strategies and financial strength, is the right one for these difficult times, and one that will allow us to continue to build our competitive advantage in the months and years to come.”

Second Quarter Business Review
Outdoor and Action Sports

Our Outdoor and Action Sports coalition reported another quarter of strong results, with revenues up 2% on a constant currency basis and down 2% on a reported basis. Global revenues of The North Face and Vans brands grew 4% and 14%, respectively, in the quarter on a constant currency basis. Revenues in our Americas businesses rose 3% while international revenues were up 2% inconstant dollars, with a 32% increase in revenues in Asia. Total direct-to-consumer revenues for our Outdoor and Action Sports coalition rose 19% in the quarter, with double-digit growth in our The North Face and Vans brands. Our direct-to-consumer revenues reached 22% of total Outdoor and Action Sports revenues in the quarter.


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