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Outdoor and sportswear boost earnings 13.8% at VF

VF Corporation, owner of brands including Timberland, Vans, Lee, The North Face, has reported a 13.8% rise in net income to $433.8m (£268.4m) for the three months to September 28.

Turnover rose 4.7% to $3.3bn (£2.04bn) up from $3.15bn (£1.95bn) in 2012. During the quarter the company paid off $400m (£247.5) in debt associated with the Timberland acquisition in 2011.

The strongest performing sector was the outdoor and sportswear division, which saw sales rise 6% to $2bn (£1.23bn) and operating profit increase by 29.7% to $24m (£14.9m), while denim sales were up 4% to $747m (£462m) while profits were up 20.5% to $158.3m (£98.1m).

Sales in VF’s contemporary division, which includes 7 For All Mankind, Kipling and Ella Moss, were up 1% to $105m (£65m), although profits fell by 29.6% to $9.5m (£5.9m).

Gross margin improved 90 basis points to 47.6%, compared with 46.7% in the same period of 2012.

Overall revenues in Europe rose 7% with growth recorded by Vans, Wrangler, 7 For All Mankind, Eastpak, Lee, Kipling, Napapijri, and SmartWool brands.

Revenues are still expected to approximate $11.5bn (£7.1bn) in 2013. Full-year gross margin is now expected to approach 48%, up approximately 150 basis points over 2012’s results.

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