Citing difficult retail conditions, VF Corporation revised its expectations for earnings and sales for the quarter ending July 5, 2003.
Previously, the Company had indicated that earnings per share were expected to be flat to down 5% from the prior year’s second quarter, excluding the effect of restructuring actions taken in the 2002 period. The Company now believes that second quarter earnings per share could decline by approximately 20 to 25%. Sales could be down 5 to 7%, instead of flat.
In the second quarter of 2002, the Company reported income from continuing operations of $.79 per share, which included a $.03 per share benefit from restructuring actions, and sales of $1,160.3 million.
VF Chairman and Chief Executive Officer Mackey J. McDonald indicated that slow retail traffic due to weak economic conditions and aggressive moves by its retail customers to control inventories have impacted sales across most of VF’s businesses. “Our second quarter basically reflects external factors that are affecting most retailers and suppliers across most product categories and channels of distribution,” he said. “Fortunately, our brands remain very healthy, and they are continuing to outperform our competitors at retail. Inventory control remains a priority for us, and we have taken the appropriate actions to keep our inventories in line.”
The Company also noted that it was still pursuing options for its Playwear business and could have a decision by the end of the second quarter. The guidance above relating to second quarter earnings excludes any impact that may result from a possible sale or disposition of this business.
At the present time the Company is not revising its expectations for sales and earnings in the second half of 2003. Management will provide an update to its outlook for the full year when it releases second quarter results next month.
