VF Corp surpasses $10 billion sales mark
today Feb 19, 2013
It is a milestone for the American company — VF Corp has surpassed the symbolic threshold of 10 billion dollars in sales, even flirting more and more with the number 11. The performance is a result of its policy of acquisitions. Timberland was the most recent purchase, and a pretty important one at that. In 2012, VF saw its sales jump 15% to $ 10.9 billion or about 8.1 billion euros.
The Timberland acquisition in 2011 alone accounted for 907 million dollars in additional sales, or more than half of the growth. But VF is managing pretty well. All divisions are up for the fourth quarter, with the exception of the Contemporary Brands division, down mainly due to the sale of John Varvatos.
From October to December, Outdoor & Action Sports sales increased by 6% to $1.7 billion. The North Face and Vans each rose 4 and 21%. However, the just-acquired Timberland is down -4% because of poor performances reported for America and Europe.
The Jeanswear division (Lee and Wrangler) increased 4% at constant exchange rates, with Europe again being at fault for the modest rise. Sportswear (Nautica, Kipling) sales spiked 15%.
International sales, which account for 37% of the Group's business, rose 7% to 11% in Asia, 10% in America and 5% in Europe. “We are confident that we are the best positioned group in the industry,” said Eric Wiseman, the head of VF.
For the fourth quarter, the gross margin increased from 45.2% in 2011 to 47.4% for this year. Operating income increased 28% to $457 million. And net income grew by 32% to $344 million.
For the full year, the gross margin was 46.5% versus 45.8% in 2011, revenues grew by 17% to $1.5 million and net income grew by 18% to $1.1 million.
For 2013, management expects sales to increase by about 6% to reach $11.5 billion. Only the Outdoor & Action Sports division is expected to grow in the double digits.
VF expects international sales to increase 10%, positioning it to reach 38% of total turnover. In spite of the economic downturn in Europe, the company even predicts sales growth for the region, but in the single digits.
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