VF Corp Earnings Cheat Sheet: Shrinking Margins Snap Three Consecutive Quarters of Expanding, but Profit Rises

S&P 500 (NYSE:SPY) component VF Corporation (NYSE:VFC) reported net income above Wall Street’s expectations for the second quarter. VF Corporation is an apparel company that designs and manufactures or sources from independent contractors a variety of apparel and footwear for all ages.

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VF Earnings Cheat Sheet for the Second Quarter

Results: Net income for the clothing company rose to $129.6 million ($1.17 per share) vs. $110.8 million ($1 per share) in the same quarter a year earlier. This marks a rise of 16.9% from the year earlier quarter.

Revenue: Rose 15.4% to $1.84 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: VFC beat the mean analyst estimate of $1.03 per share. It beat the average revenue estimate of $1.74 billion.

Quoting Management: “With double-digit revenue growth in all coalitions, and in both our international and direct-to-consumer businesses, VF is firing on all cylinders,” said Eric Wiseman, Chairman and Chief Executive Officer. “Our marketing investments continue to fuel outstanding growth, our brands are gaining momentum – and we are confident that this momentum is sustainable.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 12 cents in the first quarter, by 14 cents in the fourth quarter of the last fiscal year, and by 11 cents in the third quarter of the last fiscal year.

Gross margin shrank 1.2 percentage points to 45.9%. The contraction appeared to be driven by increased costs, which rose 18.1% from the year earlier quarter while revenue rose 15.4%.

Revenue has risen the past four quarters. Revenue increased 11.9% to $1.96 billion in the first quarter. The figure rose 11% in the fourth quarter of the last fiscal year from the year earlier and climbed 6.6% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income rise in two straight quarters. In the first quarter, net income rose 22.7% from the year earlier.

Competitors to Watch: Gap (NYSE:GPS), Sears Holdings (NASDAQ:SHLD), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Urban Outfitters (NASDAQ:URBN), Abercrombie & Fitch (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), Aeropostale (NYSE:ARO), J.C. Penney (NYSE:JCP), Saks (NYSE:SKS), Macy’s (NYSE:M), Dillard’s (NYSE:DDS), Nordstrom (NYSE:JWN), True Religion Apparel, Inc. (NASDAQ:TRLG), Cherokee Inc. (NASDAQ:CHKE), and The Warnaco Group, Inc. (NYSE:WRC).

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(Source: Xignite Financials)