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VF Corporation announces results and Nautica plans

VF Corporation, the world’s largest apparel company, announced results for the second quarter and first half of 2003. Income from continuing operations was $74.9 million versus $88.5 million in the 2002 period. Excluding unusual items in the second quarter of 2002, income from continuing operations declined 13% in 2003 from $86.6 million in the prior year period. All per share amounts are presented on a diluted basis. Sales in the quarter fell 2% to $1,134.7 million versus $1,160.3 million in the prior year’s quarter. For the first six months of 2003, earnings from continuing operations rose 4% to $1.51 per share from $1.45 per share.

Prior year earnings per share included a net benefit of $.02 per share from unusual items. Sales rose slightly to $2,384.8 million compared with the $2,372.5 million reported in the 2002 period. Income from continuing operations was $167.0 million versus $165.5 million reported a year ago. Foreign currency translation favorably impacted both sales and earnings in the quarter. Excluding foreign currency effects, sales were down 5% from the prior year period.

Commented Mackey J McDonald, chairman and chief executive officer, “Our sales and earnings performance in the quarter was better than we had anticipated, due in part to earlier than planned load-ins of new programs. We remain confident in the strength of our brands and businesses, despite a retail environment that continues to be less than robust.” “We are very excited about our recently announced plans to acquire Nautica,” continued Mr. McDonald. On July 7, the company announced that it had signed a definitive merger agreement to acquire Nautica Enterprises, Inc for a total consideration of approximately $585.6 million. “The transaction will add a solid lifestyle brand to our growing portfolio, give us new capabilities in sportswear and boost our presence in the jeanswear category. We also see opportunities to improve profitability and to capture additional growth.”