Greensboro, NC—Thanks to its acquisition of Timberland, VF Corp. reported Thursday that its fourth quarter earnings rose 34% on better-than-expected sales.
For the quarter ended Dec. 31, the company posted a net profit of $257.3 million, or $2.28 a share, surging ahead of the $54.2 million, or 49 cents a share, in the year ago period. Excluding one time items and acquisition costs, earnings rose to $2.32 a share from $1.78 a year ago.
Revenue increased 37% to $2.91 billion, with its Timberland business adding some $549 million to its results. Sales at the outdoor and action-sports division, which also includes The North Face, jumped 81% to $1.62 billion, reflecting organic growth of 19% as well as the Timberland addition.
‘Transformative Acquisition of Timberland’
Gross margin narrowed to 45.2% from 46.6%, reflecting the impact of higher products cost
Analysts’ average estimate expected VF to post earnings of $2.30 a share on sales of $2.9 billion.
VF, which is also parent to Lee, Vans and Jansport, said its earnings improved despite the rise in cotton and production costs. For its $2.3 billion purchase of Timberland, VF reported that Timberland accounted for $713 million of the total $7.7 billion in revenue and 60 cents of the $7.98 earnings a share.
“The power of the VF portfolio — diversified, global and growing — has never been more evident,” said Eric Wiseman, chairman/ceo. “In 2011 we achieved record revenues, record earnings and record cash flow, and we completed the transformational acquisition of Timberland. The successful execution of our key international and direct-to-consumer growth drivers has delivered healthy organic growth, strong profitability and consistent return for our shareholders this year, and we look forward to building on this momentum in 2012 and beyond.”
For its full fiscal year, earnings surged 27% to $8.20 a share, ahead of analysts’ average estimate for $8.18. On a reported basis, earnings were $7.98 a share compared with $5.18 a share registered in 2010.
Looking ahead, the company predicted earnings of $9.30 a share on 15% revenue growth this year, just under analysts’ average estimate for $9.53 a share on a 19% increase in sales. VF said it expects higher pension expenses and foreign currency effects to affect its fiscal 2012 earnings.