VF Corporation reported results for the fourth quarter and full year 2002. All per share amounts are presented on a diluted basis.

Commenting on the results, Mackey J. McDonald, chairman and chief executive officer, said: “2002 was by no means an easy year, but our management team executed our plan extremely well and surpassed many of the targets we set for ourselves. We substantially improved our profitability, gained market share in key categories and achieved our long-term return on capital goal of 17%. Were approaching 2003 with confidence in the strength of our brands and with momentum in sales. Were looking forward to a year of renewed growth in most of our businesses and record earnings per share. Armed with a cash position of nearly $500 million and a low level of debt, we clearly have the flexibility to pursue new avenues for growth.”

Fourth quarter sales rose 6% to $1,310.6 million from $1,233.7 million in the prior year’s quarter. Excluding net restructuring charges in both periods, income increased to $84.4 million in 2002 from $56.0 million in 2001, with earnings per share increasing 55% to $0.76 from $0.49. Net restructuring charges, as detailed in the table below, impacted earnings per share by $0.13 and $0.80 in the 2002 and 2001 periods, respectively. Including the charges, the Company reported income in 2002 of $70.3 million, equal to $0.63 per share compared with a net loss of $32.7 million, or $0.31 per share, in the prior year’s fourth quarter.

For the full year 2002, sales were $5,083.5 million, compared with $5,220.4 million in 2001. Excluding net restructuring charges in both periods, income rose to $380.9 million in 2002 from $306.0 million in 2001, with earnings per share rising 27% to $3.38 from $2.66. Net restructuring charges impacted earnings per share by $0.14 and $0.77 in 2002 and 2001, respectively. Accordingly, income from continuing operations in 2002 was $364.4 million, equal to $3.24 per share, versus income of $217.3 million, or $1.89 per share in 2001.

Including results of discontinued operations and reflecting the change in accounting policy for goodwill, the Company reported a net loss in 2002 of $154.5 million, equal to $1.38 per share compared with net income of $137.8 million or $1.19 per share in the prior year.

Nearly every VF business improved its profitability in 2002, as the Company has realized substantial benefits from the successful completion of its Strategic Repositioning Program. Domestic Jeanswear profits increased in both the fourth quarter and full year, primarily as a result of more cost effective sourcing from overseas locations. Sales rose 4% in the fourth quarter, but declined 4% for the year. European Jeanswear margins also improved, due in large part to the success of new, fashionable products from the Lee brand. European Jeanswear sales increased 5% in the fourth quarter and 8% in 2002; adjusting for currency effects, sales decreased 3% in the quarter and increased 4% for the full year.

Reflecting an improved mix of sales and new product initiatives, margins in the Company’s Outdoor business rose by two percentage points in 2002. Sales in the Company’s Outdoor businesses rose 17% in the fourth quarter and 3% in 2002. An increase of 22% in first quality sales of The North Face brand products and an 11% increase in international Outdoor sales in 2002 were partially offset by lower domestic sales of JanSport and Eastpak brand daypacks.

Profitability also improved in the Company’s domestic Intimates business, as the Company completed the integration of its Bestform and Vanity Fair Intimates units. Domestic Intimate apparel sales were flat in the fourth quarter while full year sales were down 4%.

Imagewear profitability improved significantly during the year. The Company’s Workwear business returned to historical levels of profitability and margins expanded in the Company’s Licensed Sports Apparel unit. Imagewear sales rose 10% in the fourth quarter and declined 3% in 2002. Sales in the Company’s Licensed Sports Apparel unit grew strongly in 2002, driven by the rollout of new, licensed apparel products for the National Football League.

Overall, gross margins improved three full percentage points in 2002, to 36.0% from 32.9%, due primarily to lower cost sourcing and improved capacity utilization. Operating margins increased to 12.2% from 8.7%. Excluding net restructuring charges in both 2002 and 2001, operating margins increased to 12.8% from 11.1%. One of the Company’s goals in 2002 was to reinvest some of the savings realized from its Strategic Repositioning Program back into its core brands. During the year, the Company increased advertising spending 11%.

The Company’s financial position continues to be exceptionally strong. Cash flow from operations was $646 million; at the end of the year the Company had $496 million in cash and $664 million in debt. During the year, the Company reduced total debt by $318 million, resulting in a net debt-to-total capital ratio at year-end of 9.2%. The Company continues to aggressively manage working capital and reduced inventories by more than $35 million, or 4%, in 2002.

The Company believes it has built a platform for strong, profitable growth for the years ahead. While the Company expects little improvement in market conditions in 2003, it believes its focus on continuous product innovation will result in higher sales for most of its businesses in 2003. At the same time, the Company’s aggressive focus on managing its cost structure should allow earnings per share to grow between 5% and 10% in 2003, despite significant increases in pension, healthcare and other costs. The Company achieved its long-term return on capital goal of 17% in 2002, and expects further improvement in 2003.

Specifically, the Company expects its Outdoor, International Jeanswear and Intimate Apparel businesses to post mid-single digit percentage gains in sales. Imagewear sales are expected to be flat, while Domestic Jeanswear sales are expected to decline approximately 3%, reflecting competitive challenges in the mass channel of distribution. Total sales for the Company are planned to rise approximately 1% in 2003.

As previously disclosed, due to the significant declines in the securities markets during 2002, the Company’s pension plan is currently in an underfunded position. As anticipated, the Company has recorded an additional pension liability in its year-end balance sheet of $177 million, which has resulted in an aftertax charge to Shareholders Equity of $127 million. This noncash charge does not impact the Company’s operating results or liquidity.

“We recognize the importance of retirement benefits for our associates and are committed to returning the plan to a fully funded status,” said Mr. McDonald. Toward this end, the Company made a $75 million contribution to its pension plan in February 2003. In addition, the Company estimates that pension expense will increase by $34 million in 2003, impacting earnings per share by $0.20. “This is a significant increase for us, but we have worked hard to find ways to offset the impact,” commented Mr. McDonald.

The Company also provided the following additional guidance for 2003:

    --  Reflecting the higher level of pension contribution noted
        above, cash flow from operations should approximate $400
        million.

    --  Continued progress is expected toward reaching the Company's
        long-term goal of a 14% operating margin. Operating margins
        should reach 13% in 2003, driven by additional improvements in
        gross margins.

    --  Net interest expense should decline approximately $10 million
        from 2002 levels.

    --  Capital expenditures could reach $100 million.

The Company expects a strong first quarter. Earnings are expected to rise approximately 10%, with sales expected to be up slightly.

The Board of Directors declared a regular quarterly cash dividend of $.25 per share, payable on March 20, 2003 to shareholders of record as of the close of business on March 10, 2003.

                            VF CORPORATION
                   Consolidated Statements of Income
               (In thousands, except per share amounts)


                           Three Months Ended          Year Ended
                            Jan. 4    Dec. 29       Jan. 4    Dec. 29
                             2003      2001/a        2003      2001/a
                         ---------  ---------   --------- ----------

Net Sales              $1,310,616  $1,233,726  $5,083,523  $5,220,417

Costs and Operating
 Expenses
  Cost of products sold   873,447     902,523   3,254,008   3,504,233
  Marketing,administrative
   and general expenses   325,180     342,664   1,229,902   1,247,000
  Other operating
   (income) expense, net   (4,420)      4,622     (22,311)     14,757
                       ----------- ----------- ----------- -----------
                        1,194,207   1,249,809   4,461,599   4,765,990
                       ----------- ----------- ----------- -----------

Operating Income          116,409     (16,083)    621,924     454,427

Other Income
 (Expense)
  Interest, net           (11,834)    (19,236)    (63,928)    (86,557)
  Miscellaneous, net        1,510       3,000       3,732       1,515
                       ----------- ----------- ----------- -----------
                          (10,324)    (16,236)    (60,196)    (85,042)
                       ----------- ----------- ----------- -----------

Income from
 Continuing
 Operations Before
  Income Taxes and
   Cumulative Effect
   of Change in
   Accounting Policy      106,085     (32,319)    561,728     369,385

Income Taxes               35,748         350     197,300     152,107
                       ----------- ----------- ----------- -----------

Income from
 Continuing
 Operations Before
  Cumulative Effect of
   Change in Accounting
   Policy                  70,337     (32,669)    364,428     217,278

Discontinued
 Operations, Net of
 Income Taxes               6,263     (79,928)      8,283     (79,448)

Cumulative Effect of
 Change in Accounting
  Policy for Goodwill           -           -    (527,254)          -
                       ----------- ----------- ----------- -----------

Net Income (Loss)         $76,600   $(112,597)  $(154,543)   $137,830