Shares of VF Corp. (NYSE: VFC) jumped 14% on Friday after reporting strong growth in its Vans brand and boosting its outlook for the fiscal year - but the government shutdown could delay the spinoff of its struggling denim brands.
"VF's third quarter results were fueled by strong growth in our largest brands and balanced growth across the core dimensions of our portfolio," Steve Rendle, the Company's chairman, President and Chief Executive Officer, said in a statement.
VF Corp’s strongest growth in the quarter ended Dec. 29 came from Vans, which saw revenue climb 25% during the quarter, and The North Face, with revenue increasing by 14%.
The only brands that saw revenue declines belonged to VF’s denim brands, Lee and Wrangler. The Company said it now expects revenue for jeans, which also includes its Rock & Republic brand, to drop by 3% for the year, widening its previous forecast of a 1% to 2% decline.
In August, the Company announced plans to spin them off into a separate company. But Chief Financial Officer Scott Roe told analysts on the quarterly conference call that the government shutdown could delay the spinoff of Kontoor Brands, the name for the new company. VF Corp was hoping to complete the spinoff in March, and it filed the paperwork with the Securities and Exchange Commission to do so in mid-December.
The Company reported that it is increasing its outlook for its current fiscal year, which ends in March. It now expects revenue for the fiscal 2019 to reach at least USD 13.8 Billion, up from a prior estimate of at least USD 13.7 Billion. VF Corp raised its earnings per share forecast to USD 3.73, from an earlier estimate of USD 3.65 per share.
The apparel Company earned USD 1.31 per share during its third quarter, excluding expenses and losses related to acquisitions and divestitures. It beat Refinitiv estimates of USD 1.10 per share by 21 cents.
VF Corp also reported USD 3.94 Billion in revenue, beating Wall Street estimates of USD 3.87 Billion. Rendle told analysts on the quarterly conference call that this was the Company's strongest quarter in two years.