VFCorp (NYSE:VFC) has sold branded apparel and related goods for more than a century. It has grown into a global firm with product and geographic location, and is currently seeing a nice recovery in its sales and profits following the global recession. Going forward, it would be nice to see more robust growth trends.
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Third-Quarter Sales Review
VFC's sales grew 7% to $2.2 billion. The outdoor and actions segment accounted for nearly half of total sales and grew 14% as sales reached a record, and flagship brands including North Face and Vans saw double-digit top-line increases. The next largest segment is jeanswear, which includes the Wrangler and Lee jeans brands and reported a very modest 1% sales improvement.

Imagewear, which sells licensed merchandise from parties such as Major League Baseball, experienced close to a 10% increase. Smaller segments including sportswear and contemporary brands, which includes 7 For All Mankind jeans and the Ella Moss brand, logged a 13.5% decrease and 1% growth, respectively. Sportswear took a temporary hit from a shift of Nautica brand shipments into the fourth quarter, but said sales to wholesale partners, such as department-store giant Macy's (NYSE:M), jumped 20%.

Profit Recap and Outlook
Total segment operating profit improved 12.3% to $417.8 million. Only the sportswear unit saw a profit decline due to the sales shift and higher marketing expenses. Profits jumped 21% in the outdoor segment, 6% in jeanswear and a big 68% jump in Imagewear as the unit gained market share.

Including corporate expenses, total company operating income grew 11.5% to $354.5 million. Net income increased the same amount and reached $243.3 million, or $2.22 per diluted share. This came in ahead of analyst projections.

For the full year, VFCorp expects sales will rise a little more than 5% to about $7.6 billion. It upped its earnings guidance and now expects between $6.25 and $6.30 in per-share earnings. (For related reading, see Can Earnings Guidance Accurately Predict The Future?)

Full Recovery?
In addition to the positive sales and earnings trends, management increased the dividend for the 38th consecutive year. VFC's operations have nearly fully recovered from a global recession and stand a chance of exceeding 2008 revenue of just over $7.6 billion.

In other words, VFCorp's wide array of brands and businesses is seeing a recovery after a difficult stretch. Longer term, the firm has a more uneven track record of rapid growth. Over the past decade, sales and earnings have increased in the low single digits on average each year.

Bottom Line
The company could continue to rely on bolt-on acquisitions to boost organic growth trends and could be interested in snapping up True Religion Apparel (Nasdaq:TRLG), Carter's Inc (NYSE:CRI) or even Columbia Sportswear (Nasdaq:COLM). The shares are still reasonably valued at a forward P/E of below 14 and sport a decent current dividend yield of 2.7%. Overall, though, it would be nice to see better visibility on the growth front going forward.

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Tickers in this Article: VFC, M, CRI, COLM, TRGL

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