* Q3 EPS $1.94 vs Street's $1.95
* Q3 revenue down 5 percent
* Sees 2009 EPS $4.85 to $5.00
* Increases quarterly dividend by 2 percent
* Shares fall 7 percent
(Adds executive quotes, detail on estimates, dividend,
By Alexandria Sage
SAN FRANCISCO, Oct 26 VF Corp (VFC.N), home to
such apparel brands as the North Face, Vans, Wrangler and Lee,
posted earnings that missed Wall Street estimates by a penny on
Monday, and shares fell 7 percent.
Although the manufacturer raised the low end of its 2009
profit range, it said consumer spending would remain
"We don't believe the global economy is out of the woods
just yet," said Chief Executive Eric Wiseman during a call.
In the past, VF has held that it is more insulated from the
global downturn than competitors given its broad base of brands
and categories from jeans to outerwear.
The manufacturer said net profit in VF's third quarter fell
to $217.9 million, or $1.94 per share, from $233.9 million, or
$2.10 per share, a year earlier.
On the same basis analysts, on average, had been expecting
earnings of $1.95 per share, according to Thomson Reuters
Higher pension costs and foreign currency exchange rates
cut into profit, the company said.
Excluding those items, and accounting for a year-ago
charge, VF said its earnings per share would have increased by
The company also increased its quarterly dividend by 2
percent to 60 cents per share.
CAUTION ON OUTLOOK
Revenue fell 5 percent to $2.09 billion. Despite the
overall revenue decline driven by weakness in Europe, the
company cited improving trends in its jeans business, with
revenues down 7 percent in the quarter compared with a 12
percent decline in the second quarter.
VF said that its operating margins in its sportswear unit
rose 400 basis points, helped by improvement in its
underperforming Nautica wholesale business.
The company said it now believes 2009 earnings per share
will range between $4.85 and $5.00, with revenue down about 6
In July it gave a range of $4.70 to $5.00 per share with
revenue expected to fall between 5 percent and 7 percent.
Asked by an analyst why the company did not raise the high
end of its profit outlook, VF Chief Financial Officer Bob
Shearer said caution prevailed.
"As we look at the holiday season ... there's still a fair
level of uncertainty relative to overall consumer spending,
unemployment, all of those factors. So we are trying to take a
cautious approach," said Shearer.
VF said the fourth-quarter would see more favorable foreign
currency translation rates that would spur stronger revenue
Fourth-quarter earnings per share would be "up sharply over
2008 levels," said VF, helped by the direct-to-consumer
business, operating efficiencies and the lack of restructuring
charges that hurt profit in the year-ago period.
Shares of the company fell to $73 in after-hours trade
after closing at $78.49 on the New York Stock Exchange.
(Reporting by Alexandria Sage; Editing by Steve Orlofsky and