VF Corporation reported first quarter sales rose 9% to $1.56 billion from $1.43 billion in the year-ago quarter. Net income increased 18% to $122.9 million from $103.9 million, with earnings per share rising 15% to $1.07 from 93 cents per share.

First quarter 2004 results included $34 million in sales from the Company's Playwear business, which was sold in mid-2004. The acquisitions of the Vans®, Napapijri®, Kipling® and Holoubek businesses added $156 million to sales in the 2005 quarter and 10 cents to earnings per share.

Outdoor

The Outdoor businesses continued to grow rapidly in the quarter. Combined sales of the Outdoor businesses, which include The North Face®, Vans®, JanSport®, Eastpak®, Napapijri® and Kipling® brands, jumped 127% in the quarter to $282 million from $125 million.

Total sales of The North Face® brand rose 18% in the quarter. Fall bookings for the brand are up 27% in the U.S. and 19% in Europe. Packs sales also rose in the quarter. The Vans®, Napapijri® and Kipling® brands continue to perform very well and contributed $141 million to Outdoor sales in the quarter. Operating income rose in line with sales, with margins stable.

Imagewear

The Imagewear coalition reported an 8% sales increase in the quarter, to $187 million from $173 million. The coalition enjoyed a strong increase in sales of licensed sports apparel, due primarily to the January 2005 acquisition of the business of Holoubek, a licensee of the Harley-Davidson Motor Company, Inc. Occupational apparel sales were flat in the quarter. Operating income and margins rose sharply, reflecting lower product costs in both the owned and sourced operations.

Sportswear

Sales of the Sportswear businesses, which include the Nautica® and John Varvatos® brands as well as Kipling® brand sales in North America, rose 7% in the quarter, to $152 million from $142 million. Operating income and margins nearly doubled. VFC saw improved profitability in all Nautica businesses due to lower markdowns and returns, particularly in the men's sportswear business, lower inventory levels, a decline in operating expenses and savings from restructuring actions taken in 2004.

Jeanswear

Total Jeanswear sales, which include the Lee®, Wrangler®, Riders®, Rustler®, H.I.S®, Maverick® and Old Axe® brands, were $707 million versus $708 million in last year's first quarter. Sales increased across most international markets, due primarily to favorable currency translation, offset by slightly lower domestic jeans sales. Jeanswear margins remained at healthy levels, although operating income dipped 3% in the quarter.

Intimate Apparel

Sales in the Intimate Apparel business, which includes the Vanity Fair®, Vassarette®, Lily of France®, Bestform® and Curvation® brands and the Private Brands business, declined 9% in the quarter, to $227 million from $249 million. VFC noted previously that 2004 results benefited from a large new product launch with a private label specialty store customer, which will result in difficult sales and profit comparisons throughout 2005. The decline in operating income and margins primarily reflects the lower sales and resulting impact on capacity and overhead absorption.

Gross margins increased by nearly three full percentage points in the quarter, to 41.5% from 38.7%. Over half of this increase resulted from the inclusion of the higher margin acquisitions as well as growth in the higher margin businesses, with the remainder relating to operational improvements in most of the core businesses. Operating margins reached 12.7% in the quarter, up from 12.0% in the prior year period.

VFC ended the quarter with $366 million in cash. Inventories were up 13%, with $55 million of the total increase of $114 million due to 2004 and 2005 acquisitions. Debt as a percent of total capital was 27.6% at the end of the quarter, or 19.5% net of cash. The increase in the current portion of long term-debt reflects $400 million of long-term debt due to be repaid in 2005.

Outlook

“We have the sights firmly set on delivering another record year in both sales and earnings. Our management team is focused and energized on maintaining the momentum behind the growth plan. We continue to search for additional growth brands to add to the portfolio while at the same time investing behind the core brands to keep them strong and healthy,” concluded Mackey J. McDonald, chairman and chief executive officer.

For the full year, VFC continues to expect sales growth of 6-8%, excluding any additional acquisitions. VF Corp. recently completed the acquisition of the Reef® brand of premium surf-inspired footwear, which they indicated should contribute $45 million to 2005 sales. The Jeanswear, Imagewear and Sportswear businesses remain on track to deliver low- to mid-single-digit growth, while Intimate Apparel sales could be flat to down slightly in 2005. S

Sales growth in the Outdoor business could exceed 30% this year. Second quarter sales should rise by 10% to 12% over the prior year's second quarter. Sales in the second half of the year should be up approximately 5%, recognizing that all of the 2004 acquisitions occurred prior to the second half of that year.

VF also continues to expect that earnings per share will rise by at least 8% in 2005. This reflects the expectation that second quarter EPS could decline approximately 10%, followed by an increase of more than 10% in the second half of the year. Second quarter EPS in 2004 included a net benefit of $.04 per share related to the exit of the Playwear business. The decrease in the 2005 second quarter also reflects the seasonal nature of the recent acquisitions, investment spending to support the growth plans and the continued difficult comparisons within the Intimates business.

Based on the SEC's recent announcement that the implementation date of a rule change related to expensing stock options would be delayed, VFC expect no impact from stock option expense in 2005.

VFC continues to anticipate another strong year of cash flow from operations of approximately $550 million in 2005. During the quarter VFC repurchased one million shares of common stock and expect to repurchase a total of two million shares this year to offset the dilution resulting from the exercise of stock options.

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


                                        Three Months Ended March
                                    ---------------------------------
                                          2005                2004
                                    -------------         -----------


Net Sales                           $1,563,643          $1,432,669

Costs and Operating Expenses
   Cost of goods sold                  914,424             878,393
   Marketing, administrative
      and general expenses             463,672             394,957
   Royalty income and other            (13,349)            (13,240)
                                  -------------         -----------
                                     1,364,747           1,260,110
                                  -------------         -----------

Operating Income                       198,896             172,559

Other Income (Expense)
   Interest, net                       (15,658)            (16,781)
   Miscellaneous, net                      119               1,607
                                  -------------         -----------
                                       (15,539)            (15,174)
                                  -------------         -----------

Income Before Income Taxes             183,357             157,385

Income Taxes                            60,489              53,511
                                  -------------         -----------

Net Income                            $122,868            $103,874
                                  =============         ===========

Earnings Per Common Share
   Basic                                 $1.10               $0.95
   Diluted                                1.07                0.93