Some investors may be worried about all things retail, especially considering questions about consumer strength here in the U.S., but VF
VF's net income increased 5% to $207.2 million, or $1.84 per share. Total revenue increased 15% to $2.07 billion, and income from continuing operations increased 13% to $1.86 per share.
The consumer goods company had more good news to impart -- it increased its guidance for the fourth quarter and for the year. For 2007, EPS will be up 13% and revenue will be up by 15%. It also increased its dividend by 5.5% to $0.58 per share.
The good news doesn't stop there -- VF has generated $73.5 million in free cash flow, and last year at this time, it was in the red. However, in an interesting aside, although VF has reduced its long-term debt, its short-term borrowings grew to $1.05 billion. The company says its debt-to-capital ratio for the year will approximate last year's levels.
VF's initiatives seem to be working, making it a consumer-oriented company that can capitalize on many trends -- domestic and international, discount and high-end brands -- and supply its merchandise to other retailers through its retail stores. Its brands not only include discount names like Lee and Wrangler that are available at places like Wal-Mart
It has also made some strategic acquisitions recently, like high-end denim company Seven for All Mankind, which competes with companies like True Religion
VF is doing a fine job of providing stewardship to a number of brands, compared with rival consumer goods company Liz Claiborne
That's right, VF's PEG ratio of 1.57 doesn't come across as cheap, but then again, ponder the likelihood that the company's long-term growth will beat expectations, given recent success. Plus, it does have a nice dividend. Although I'd like to wait for some temporary setback to discount its shares, it's a solid stock for the watch list.
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