The great outdoors is living up to its name. VF Corp. reported third quarter profits rose 6.8% to $3.54 billion from $3.3 billion in 2013—mainly due to its booming outdoor and action sports divisions. Led by Timberland, Vans and The North Face, the company’s outdoor and action sportswear coalition, notched double-digit increases in revenues with sales up 10.6% to $2.18 billion in the Americas, Europe and Asia Pacific regions.
In particular, Timberland, which VF acquired in 2011, proved to be the diamond in the rough and tumble sector, with revenues up 15 percent in the third quarter. Globally, the brand achieved 18 percent growth in wholesale and a 6 percent increase in its direct-to-consumer business. Vans, feeling the effects of the ongoing slip-on sneaker trend, reported strong growth across all regions with revenues up 12 percent, while revenues for The North Face rose 9 percent.
Challenging consumer trends in women’s contemporary apparel and premium denim caused a 5 percent dip in VF’s contemporary apparel profits, however its jeanswear segment saw modest growth of 0.4% to $750.4 million. The company said it continues to expect fourth quarter revenue comparisons for its Lee and Wrangler brands to be the strongest of the year with mid-to-high single-digit percentage increases.
“Our third quarter results validate our growth strategy and demonstrate our ability to manage our powerful portfolio in ways that ensure we deliver solid results,” VF chairman, president and CEO Eric Wiseman said. “Led by another outstanding performance from our outdoor and action sports coalition, we delivered strong growth in revenue and earnings. We are squarely on track to deliver another record year for VF and our shareholders.”
Following the better than expected results, VF raised its guidance for the year by $0.02 to $3.08 a share, representing a 14 percent increase over 2013. Looking forward, total revenue for 2014 is expected to reach $12.3 billion. VF’s outdoor and action sports revenues are forecast to grow by 13 percent for the full year 2014, with Timberland’s revenues continuing to strengthen to 13 percent, compared to the previously anticipated 12 percent expectation.
And in its next growth move, expect to see VF stick with what it knows best. In a recent interview with TheStreet.com about acquisitions, VF Corp. senior vice president and CFO Robert Shearer said, “Most of our hunting is done in the outdoor and action sports space, it’s where we have a lot of experience, and we’ve had a lot of success.”