VF Corp.'s first-quarter earnings climbed 7.2 percent, beating expectations and boosted by its Timberland acquisition last year as well as double-digit growth across all its coalitions. Bucking a trend of reductions by others, VF also lifted its 2012 profit forecast, citing its strong first quarter although it left its revenue outlook alone.

Excluding costs related to buying Timberland, earnings were reached $1.94 per share in the quarter, exceeding Wall Street's consensus estimate of $1.88 a share. Revenues grew 30.6 percent to $2.56 billion, exceeding the Street's average target of $2.44 billion. Organic revenue growth in the quarter was 12 percent, slightly stronger than anticipated due in part to earlier shipments and stronger sales of seasonal products.

All VF coalitions achieved solid revenue growth in the quarter, with the strongest increase in Outdoor & Action Sports, where total revenues rose 60.4 percent to $1.26 billion and organic growth was 15 percent. The addition of the Timberland and SmartWool brands contributed $356 million to the coalition's revenues. Operating income for the coalition rose 40.2 percent to $201.7 million, including earnings from Timberland of $17 million. Operating margin was 16.0 percent compared with 18.3 percent in the 2011 period, with a negative impact of 40 basis points from acquisition-related expenses. Excluding Timberland, operating income rose 28 percent and the coalition operating margin increased 200 basis points to 20.3 percent.

At North Face, global revenues increased 14 percent during the quarter or 15 percent currency-neutral, with double-digit growth in both the Americas and internationally. The North Face brand's direct-to-consumer revenues grew more than 20 percent.

On a conference call with analysts, Steve Rendle, group president, Outdoor & Actions Sports Americas, said that even though the balance of the winter selling season remained challenging and spring arrived earlier with warmer and drier conditions than normal, TNF saw “solid sell-through” of seasonal products across the majority of its regions and channels.” He added that TNF's global fall order book is up low double-digits to last year. He added, “While we're certainly not immune to overall market dynamics, we are confident that The North Face is the best positioned brand in the outdoor industry to manage through any environment.”

Going forward, Rendle said North Face is implementing a global product line rationalization program with a goal of reducing SKUs by 15 percent by fall 2013 to leverage “more focused offerings” around innovations such as its Flash-Dry technology as well as to better focus the brand's presentation at retail.  Other strategies to grow North Face include further connecting with consumers through “proven storytelling programs” and enhancing the retail experience at its own and wholesale accounts. TNF's international business,  which represents about one-third of global revenues, saw high-single-digit constant dollar growth in Europe and double digit growth continuing in Asia. Karl Heinz Salzburger, VF's group president, International, said retailers are being cautious and committing later of fall orders while adding that TNF continues to “gain market share and we'll keep a keen eye on market dynamics so we can react as needed to future changes.”

Vans' global revenues rose 25 percent or 27 percent currency-neutral. In the Americas, Vans revenues increased at a low-double-digit rate in constant dollars and remains positioned to reach its full-year goal of mid-teens growth. Vans direct-to-consumer revenues climbed 13 percent, including a nearly 40 percent increase in e-commerce. Seven Vans stores have opened so far this year, most on the East Coast of the U.S. Overseas, Vans achieved growth greater than 50 percent in Europe and high-teen revenue growth in Asia.

Timberland's revenues grew modestly during the quarter, with continued growth in the Timberland Earthkeepers collection and PRO Series. In North America revenues declined slightly due to unusually warm weather that dampened demand for Timberland's core winter boot business, as well as lower royalty income from the brand's formal apparel licensee, the license that was terminated last year. Timberland's international business, which makes up more than 50 percent of total sales, showed low-single-digit growth in Europe and strong double-digit growth in Asia on a constant dollar basis.

Rendle said VF recently placed a leader from its North Face apparel business in Europe at Timberland to head up its 2013's apparel relaunch. It's also evaluating Timberland's direct-to-consumer strategy and operating model and said VF is “making good progress in terms of rightsizing the cost structure as well as in specific initiatives designed to drive traffic, improve conversion and improve margins.”

Imagewear coalition revenues grew 12.4 percent in the quarter to $277.5 million, led by gains of 21 percent in its Image, or uniform, business. Licensed Sports revenues grew 3 percent, with particular strength in its women's and e-commerce businesses. First quarter operating income grew 16.3 percent to 42.9 million, with operating margin expanding to 15.5 percent from 15.0 percent in the prior year's quarter.

Among its other coalitions, Jeanswear's revenues rose 9.2 percent to $741.7 million but operating earnings were down 10.0 percent to $110.8 million. Sportswear coalition revenues were up 9.8 percent to $122.9 million reflecting increases in both Nautica and Kipling (U.S.) brand revenues; operating income surged 44.4 percent to $10.7 million. In the Contemporary Brands coalition, sales rose 13.4 percent to $126.9 million with growth across the 7 For All Mankind, Splendid, Ella Moss and John Varvatos brands; operating income improved 53.4 percent to $14.9 million.

Companywide International revenues increased 48 percent in constant dollars, with 33 percentage points of the growth attributable to Timberland. Organic revenue growth in Europe was 13 percent, driven by solid performance in the Vans and TNF brands. In Asia, organic revenue growth was 19 percent, with growth in Lee, TNF, Vans and Kipling.

Direct-to-consumer revenues increased 49 percent in the quarter, with 32 percentage points of the growth attributable to the Timberland acquisition. Direct-to-consumer revenues of TNF, Vans, 7 For All Mankind and Nautica brands each achieved double-digit growth in the period.

Inventories were up 28 percent in total from March 2011 levels but up only 7 percent excluding Timberland, with the majority of the increase resulting from higher product costs.

Based on strong first quarter results, adjusted earnings per share in 2012 are now expected to rise to approximately $9.45 per share, up 15 cents a share from the $9.30 per share guidance provided on February 16. The impact of a slightly stronger than anticipated U.S. dollar on foreign currency translation rates versus its February guidance benefitted first quarter earnings by 5 cents per share. Accordingly, the negative impact of foreign currency translation on full-year earnings per share is now expected to be 35 cents per share, versus the 41 cents per share anticipated in prior guidance. The expected earnings contribution from Timberland in 2012 remains at approximately $1.10 per share.

Revenue guidance for 2012 remains unchanged, with revenues expected to rise by approximately 15 percent (17 percent in constant dollars) to $10.9 billion, with Timberland accounting for approximately $1 billion of the growth. Excluding Timberland, revenues should rise by approximately 6 percent (8 percent in constant dollars).