VF Corp. snapped back strongly in its fiscal third quarter, although the company — parent to Supreme, Vans, The North Face and Timberland — did moderate its sales outlook for the full year.
The firm’s third-quarter net income increased 49.1 percent to $517.8 million, or $1.32 a diluted share, from $347.2 million, or 88 cents, a year ago. Adjusted earnings of $1.35 a share came in well ahead of the $1.21 analysts projected.
Revenues for the three months ended Jan. 1 were up 22 percent to $3.6 billion from $3 billion.
The North Face brand led the company on the top line with a 28 percent sales increase while Timberland was up 11 percent, Vans increased 8 percent and Dickies rose 8 percent.
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“We delivered strong double-digit top and bottom line results and returned about $500 million in cash to shareholders in the third quarter, all of which has been achieved amidst continuing macro headwinds,” said Steve Rendle, VF’s chairman, president and chief executive officer. “The broad-based momentum across our brands is testament to the resilience of our diversified portfolio model, which has enabled us to deliver a strong quarter and reaffirm our full-year earnings outlook in a challenging environment. I am confident that VF remains well-positioned for continued, profitable, long-term growth.”
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The company said it does not expect any “material deterioration” in operations due to COVID-19 and reaffirmed its annual earnings guidance, calling for adjusted profits of $3.20 with a 25 cent contribution from Supreme.
But the sales outlook for the year came down modestly, to $11.85 billion from the $12 billion projected in October.
In the grand scheme, a $15 million miss in such a large business is still something of a rounding error.
But Wall Street watches revenue outlooks closely for any signs of changes in trend, and the tweaks to the projections showed slower online growth than initially seen.
“Direct-to-consumer revenue is now expected to increase between 32 percent and 34 percent versus the previous expectation of 34 percent and 36 percent, including digital revenue growth of greater than 15 percent versus the previous expectation of about 20 percent,” VF said.
By category, the outdoor business is running ahead of plan, with sales seen up 26 percent to 28 percent instead of the 25 percent to 27 percent projected. But the active division, which includes Vans, is now seen rising by 31 percent to 33 percent instead of 35 percent to 37 percent.
The outlook on the Supreme brand, which is expected to produce sales of $600 million, did not change. And the work division, which includes Dickies, is still expected to see sales rise between 19 percent and 21 percent.
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