VF Corp profit beats, but outlook lags Wall Street view
(Reuters) - VF Corp (VFC.N) reported a higher-than-expected fourth-quarter profit, saying demand for its flagship clothing brands like The North Face and The Vans increased in global markets, but it gave a 2013 outlook below analysts' estimates.
The Greensboro, North Carolina-based company said it expects revenue to increase about 6 percent $11.5 billion. Analysts on average were expecting $11.86 billion, according to Thomson Reuters I/B/E/S.
VF forecast 2013 earnings of $10.70 a share before special items. While that would be up 11 percent from last year, the outlook is below analysts' estimates of $10.95.
On a conference call with analysts, Chief Executive Officer Eric Wiseman said margins are likely to expand by 100 basis points, even as revenue rises.
A warm winter pulled down The North Face's performance last year, Wiseman said, and a weak economy in Europe, which accounts for about 22 percent of VF's overall business, also hurt results.
"Beyond 2013, our confidence in the power of VF's portfolio to deliver 10 percent revenue growth remains high," Wiseman said.
VF, which also owns the Wrangler, Timberland and 7 For All Mankind brands, said Asia would remain its strongest region, with sales growing at a low-teen percentage rate there in 2013.
Shares of the company were up 2.4 percent at $156.46 in morning trading.
In the fourth quarter ended December 29, the company earned $334 million, or $2.98 a share, compared with $258 million, or $2.28 a share, a year earlier.
Excluding expenses from the company's September 2011 Timberland acquisition and a gain on the sale of John Varvatos Enterprises Inc, the profit came in at $3.07 a share. Analysts on average were expecting $3.03, according to Thomson Reuters I/B/E/S.
Revenue rose 4 percent to $3.0 billion.
Analysts say VF's diverse portfolio of brands helps the company do well in global markets. International revenue increased 7 percent in the fourth quarter, led by an 11 percent increase in Asia.
(Reporting by Nivedita Bhattacharjee in Chicago; Editing by Gerald E. McCormick and Lisa Von Ahn)
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