NEW YORK (AP) -- Clothing giant VF Corp. reported a better-than-expected 20 percent increase in second-quarter net income on easing material costs and strong customer appetite for its outdoor and sportswear brands.
It boosted its full-year earnings forecast, and shares rose.
VF, whose brands include Wrangler, Nautica and The North Face, however, acknowledged a challenging economic backdrop.
"We've reached the halfway mark of the year, and are right on track to deliver another year of strong and very profitable growth to our shareholders," said Eric Wiseman, VF Corp.'s chairman and CEO in a statement. He noted that a diverse portfolio of brands has provided a competitive advantage as it navigates through an "increasingly uncertain economic environment."
The Greensboro, N.C.-based company posted net income of $155.3 million, or $1.40 per share, for the quarter. That compares with $129.4 million, or $1.17 per share, in the year-ago period.
Excluding expenses related to its acquisition last year of Timberland Co., the company earned $1.11 per share.
Revenue rose 16 percent to $2.12 billion in the quarter. That included $239 million from Timberland.
Analysts had expected 94 cents per share on revenue of $2.17 billion, according to FactSet.
VF said its strongest sales came in its outdoor and action sports division, where revenue climbed 45 percent. The unit includes The North Face jackets, Vans shoes, Smartwool socks and underwear, and Timberland clothing.
The company's growing international presence also propelled sales. Revenue from outside the U.S. rose 42 percent, mostly thanks to Timberland. Excluding Timberland, growth rose 16 percent in Europe and 20 percent in Asia. International revenue made up 33 percent of the quarter's total revenue, compared with 29 percent a year ago.
Gross margins rose to 46.1 percent from 45.9 percent as the impact of higher jeans wear product costs came down.
In a conference call with investors, Weisman acknowledged that in Europe, which is grappling with a financial crisis, "there is no doubt that conditions have weakened since last year."
"We're continuing to monitor conditions there very carefully," he added.
Based on the strong performance during the first half of the year, the company expects earnings per share for the full year to be $9.50, up from the original forecast of $9.45 per share. Analysts had expected $9.46 per share for the year, according to FactSet.
Shares rose more than 6 percent, or $9.39, to $151.20 in late morning trading. Shares have been trading over the past 52 weeks between $101.74 and $156.15.
