Shares of VF Corp jumped 14 percent in trading 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 CEO, said in a statement.
VF Corp’s strongest growth in the quarter that ended Dec. 29. came from Vans, which saw revenue climb 25 percent during the quarter, and The North Face, with revenue increasing by 14 percent.
The only brands that saw revenue declines belonged to VF Corp’s denim brands, Lee and Wrangler. The company said that it now expects revenue for jeans, which also includes its Rock & Republic brand, to drop by 3 percent for the year, widening its previous forecast of a 1 to 2 percent decline.
In August, the company announced plans to spin them off into a separate public company. But CFO 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.
It is unclear how a delay in the spinoff could impact VF Corp’s performance in the next fiscal year.
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 $13.8 billion, up from a prior estimate of at least $13.7 billion. VF Corp raised its earnings per share forecast to $3.73, from an earlier estimate of $3.65 per share.
The apparel company earned $1.31 per share during its third quarter, excluding expenses and losses related to acquisitions and divestitures. It beat Refinitiv estimates of $1.10 per share by 21 cents.
VF Corp also reported $3.94 billion in revenue, beating Wall Street estimates of $3.87 billion.
Rendle told analysts on the quarterly conference call that this was the company’s strongest quarter in two years.