VFC Counts On Product Platform For 2013

VFC Counts On Product Platform For
Eric Wiseman

Management at VF Corp. is upbeat on its product pipeline, even as the firm approaches 2013 with some caution.

Speaking to Footwear News Friday, Steve Rendle, president of Outdoor and Action Sports Americas, said, “There is economic uncertainty in Europe primarily but also in other parts of the world. What gives us confidence is our product platform.”

He added, “We’re coaxing consumers with our marketing, but we’ve got to capture them with our product.”

Brands with momentum include Vans, The North Face and Timberland, which will relaunch apparel at retail this fall.

Rendle also said on a conference call with analysts that product is one key focus for 2013.

“We’re seeing and leading a change in consumer behavior toward more contemporary, athletic styles for the outdoor category,” he said, saying consumers were looking for lightweight, colorful, stylish multiuse apparel that doesn’t sacrifice performance. “This is exactly what you’ll see in our product lineup in 2013,” he added.

Another focus area is direct-to-consumer, which continues to be fueled by an omni-channel model. Third is marketing, with investments to be concentrated in-store and online through national and local media.

Analysts were mixed on the firm’s guidance for 2013.

Susquehanna Financial analyst Christopher Svezia said in a note, “Overall, trends remain solid for VFC and management is clearly navigating the business well through tough global macro conditions. But top-line trends are expected to slow somewhat moving into 2013 with guidance calling for 6 percent growth versus 8 percent last year.”

Citi Investment Research analyst Kate McShane was more optimistic, calling the firm’s 2013 guidance conservative in a note, particularly considering potential international growth and gross margin expansion.

Eric Wiseman, president, chairman and CEO of VFC, said to analysts on a conference call Friday, “Let me make one thing clear: VF is not 6 percent growth company. It’s a 10 percent growth company. In 2013 there are two extra factors weighing on our growth: First, a second unseasonably warm winter, which is affecting our largest brand, The North Face; and second, weak economic conditions in Europe, which accounts for 22 percent of VF revenues.”

He added, “We have no acquisitions baked into our plan this year.”

For the fourth quarter ended Dec. 29, VF earned a net income of $334.2 million, or $2.98 a diluted share, compared with $257.3 million, or $2.28, a year ago. Revenue rose 4.2 percent to $3.03 billion from $2.91 billion.

For the full year, net income totaled $1.09 billion, or $9.70 a share, an increase from $888.1 million, or $7.98. Revenues increased 15 percent to $10.9 billion.

For 2013, VF expects adjusted earnings per share to grow 11 percent to $10.70. Sales are expected to increase by about 6 percent to $11.5 billion.