Source: The North Face

VF Corp (NYSE: VFC) fell by more than 5% on Friday after investors felt disappointed by the company's earnings report. But performance is still sound, and the stock is fairly valued when compared against peers like Ralph Lauren (NYSE: RL) and PVH (NYSE: PVH). Is the VF fall a buying opportunity? 

The numbers
Revenues during the fourth quarter of 2013 increased by 8% to $3.3 billion. The action and sports business was particularly strong with a 12% increase in revenues thanks to healthy sales growth coming from brands like The North Face, Vans, and Timberland.

The jeans-wear segment, on the other hand, was quite weak, with sales flat versus the previous year as rising Wrangler sales were neutralized by lower sales of Lee products.

Profit margins were on the rise as the company is increasing its focus on more profitable brands and keeping its costs at bay. Gross margin improved 80 basis points to 48.2%, versus 47.4% in the same period of 2012, and adjusted operating margin increased to 15.5% of sales, versus 15.1% in the same quarter of the prior year.

Adjusted earnings per share increased 6% to $0.82 per share, which was below the $0.84 per share forecast on average by Wall Street analysts. Management is expecting revenue growth of between 7% and 8% for 2014, and earnings per share are expected to grow in the range of 11% to 13% to between $3.00 and $3.05 per share for the year.

Wall Street analysts are forecasting $3.09 per share in earnings for 2014, so guidance was below expectations. But VF is known for regularly providing conservative guidance figures, so there is a considerable chance that the actual numbers for 2014 could be above such guidance.

Weaker than expected growth is no reason to panic, especially considering that many companies in the apparel business are reporting uninspiring performance due to a challenging industry environment over the last months.

Besides, management still managed to generate growing profit margins in spite of highly promotional conditions for the business, and that's an important sign of competitive strength and brand differentiation.

Fair valuation
When compared against other companies in the industry like Ralph Lauren and PVH, VF looks reasonably valued. The company trades in line with Ralph Lauren and considerably cheaper than PVH as judged by P/E ratios. When it comes to dividends, VF has the highest yield in the group.

Data Source: FinViz

Ralph Lauren's results for the quarter ended in December were not much different to those of VFC. The company reported a 9% increase in sales and a growth rate of 11% in earnings per share. For its fiscal 2014 year, Ralph Lauren is forecasting sales growth of 7%.

PVH reported strong revenue growth for the company's fiscal third quarter ended in November. Sales grew 36% year over year to $2.26 billion, but the acquisition of Warnaco -- purchased in early 2013 -- provided $503 million in acquired revenue during the quarter.

Besides, on Jan. 10 the company reduced its sales guidance for its fiscal fourth quarter and full year 2013. Revenues on a non-GAAP basis are now expected to be $8.22 billion versus a previous guidance of $8.24 billion, and sales guidance for the quarter was reduced from $2.08 billion to $2.06 billion. 

PVH could justify its premium over VF based on a higher growth rates, even if acquisitions are responsible for a big chunk of that growth and the recently reduced sales guidance is not the kind of news investors like to receive. Compared to Ralph Lauren, both companies are delivering similar financial performance, and their valuations are quite in line, too.

All in all, VF looks reasonably valued in comparison to peers when considering both valuation ratios and financial performance.

Long-term dividend growth
In the dividend growth department, VF is quite an extraordinary company for its industry. The company has raised dividend payments during the last 41 consecutive years, and it has returned nearly $5 billion to shareholders via dividends and share buybacks over the last decade.

This is quite unusual for a company in the apparel business, and a sign of fundamental strength as well as management commitment to rewarding investors with growing capital distributions over time.

Besides, dividend growth seems to be far from over for the company considering that VF announced a big increase of 21% in distributions in October 2013. 

Bottom line
The recent earnings miss is no reason to stay away from VF; on the contrary, it could even become a buying opportunity for investors if the stock keeps falling. The company trades at a fair valuation when compared to industry peers, and it has an extraordinary track record of dividend growth over the years. VF could dress up your portfolio with solid returns over the long term.

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Andrés Cardenal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.