VF Announces Record Fourth Quarter and Year and Declares Dividend

VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, today announced record results for the fourth quarter and full year 2007. All per share amounts are presented on a diluted basis and, unless otherwise noted, reflect continuing operations.

Fourth quarter revenues rose 22% to a record $1,955.2 million, compared with $1,598.8 million in the fourth quarter of 2006, driven by 12% organic growth and 10% growth from our 2007 acquisitions, including, most recently, Seven For All Mankind and lucy activewear. Income from continuing operations in the current quarter increased 16% to a record $164.0 million, compared with $141.4 million in the prior year’s quarter. Income in the quarter reflects two unusual items: a $12.0 million ($.11 per share) benefit from a favorable tax resolution, substantially offset by $13.3 million ($.09 per share) in special spending initiatives, more than half of which were related to our Jeanswear business, to enhance future growth and profitability. Last year’s fourth quarter results also included a favorable tax resolution and unusual expenses of $16.9 million ($.15 per share) and $14.7 million ($.12 per share), respectively, which resulted in a net benefit to earnings per share of $.03.

Earnings per share from continuing operations rose 18% in the fourth quarter, to a record $1.46 from $1.24 last year. Earnings per share were $.06 higher than our prior guidance, due to stronger than anticipated revenues and the net benefit of the above unusual items, which, due to their nature, were not included in our prior guidance.

For the full year 2007, revenues increased 16% to $7,219.4 million from $6,215.8 million in 2006, with healthy growth across most of our businesses. Organic growth in 2007 was 10%, with 6% growth from acquisitions. Income from continuing operations rose 15%, to $613.2 million from $535.1 million, while earnings per share from continuing operations increased 14% to $5.41 from $4.73. Reflecting the net effect of discontinued operations, net income was $591.6 million, equal to $5.22 per share.

“2007 marked our fifth consecutive year of record results, with revenues topping the $7 billion mark for the first time in our company's history. Our coalitions’ performance, particularly given the economic difficulties faced in the last quarter of the year, is an extraordinary achievement,” said Eric Wiseman, President and Chief Executive Officer. “These results point clearly to the strength and diversity of our business model and give us confidence that we can continue the momentum and deliver another record year in 2008.”

Fourth Quarter Business Review

Outdoor

Our Outdoor coalition had another outstanding quarter, with total revenues up 32%. Domestic revenues grew 34% in the quarter while international revenues rose 28%. The North Face®, Vans®, Kipling®, Eastpak®and Napapijri® brands each posted double-digit revenue gains in the quarter. The acquisition of the Eagle Creek® brand of adventure travel gear added $7 million to revenues in the quarter. Operating income rose 43%, with operating margins rising to 15.9%.

Jeanswear

Our Jeanswear coalition, which includes our Wrangler®, Lee® and Riders® brands, posted a 3% gain in revenues during the quarter. Our international jeans business rose 13%, including a substantial contribution from foreign currency translation. Domestic revenues were about flat and we were especially pleased with the performance of our mass market business, where revenues rose 5% in the quarter. Jeanswear operating income rose 13% with margins above prior year levels. Operating results in the 2007 quarter include $8 million in expenses to realign our sales and marketing efforts and rationalize our distribution infrastructure, primarily in our international Jeanswear business. Operating results in the prior year’s quarter also included charges, totaling $14 million.

Sportswear

Total revenues of our Sportswear coalition, which includes our Nautica® and John Varvatos® brands as well as the Kipling® brand in North America, increased 6% in the quarter. Each brand achieved higher revenues, with growth in our Kipling® and John Varvatos® brands both exceeding 35% in the quarter as we continue to expand these businesses in the U.S. Operating income and margins declined sharply in the quarter, primarily due to high levels of promotional activity that impacted our Nautica® brand, particularly in our retail outlet stores.

Contemporary Brands

Our new Contemporary Brands coalition, which consists of the 7 For All Mankind®and lucy® brands, added $110 million to fourth quarter revenues and $20 million to operating income. The 7 For All Mankind® brand experienced strong double-digit revenue growth, ahead of our initial expectations for the brand.

Imagewear

Total revenues of our Imagewear coalition rose 21% in the quarter. Both our Image and Activewear businesses achieved organic growth in the quarter, and the acquisition of Majestic Athletic added $40 million to revenues. Imagewear operating income rose 6% in the quarter. As anticipated, operating margins were lower in the quarter, reflecting the Majestic acquisition.

VF’s international and direct-to-consumer businesses continue to be strong contributors to our performance. Our international business continues to expand rapidly, with revenues up 30% in the quarter. International revenues accounted for 28% of our total revenues in 2007, up from 26% in 2006. We continue to grow our retail revenues, which increased 22% in the quarter. Retail revenues of our Vans®, The North Face®, Kipling®, Napapijri®and John Varvatos® brands each grew by more than 25%.

"Our international business is expanding rapidly and will continue to account for an increasing percentage of our revenue base, making us less vulnerable to adverse economic conditions in the U.S.," Wiseman said.

Strong cash flow and a healthy balance sheet are hallmarks of VF and provide us with the flexibility to make acquisitions, repurchase shares and invest in our businesses. In 2007, cash flow from operations hit an all-time record of $834 million, well above our prior guidance of $625 million. During the year, we repurchased 4.1 million shares. Inventories rose proportionately to the increase in revenues, with the increase before considering the impact of acquisitions well below the organic growth rate in revenues in the quarter. We ended 2007 with $322 million in cash and a debt-to-total capital ratio of 26.4%.

Outlook

As previously announced on January 9, we are looking forward to another record year in 2008. Revenues are expected to rise 9%, with organic growth in all our coalitions. Outdoor revenues should grow at a mid-teen percentage rate, with mid single-digit revenue growth in Imagewear and slightly lower growth in both Sportswear and Jeanswear. We continue to be excited about the growth prospects for our Contemporary Brands coalition, where revenues are expected to exceed $415 million in 2008.

Earnings per share from continuing operations should increase 10% in 2008, driven by top line growth and margin expansion, particularly in our Outdoor and Jeanswear coalitions. Sportswear margins are expected to remain relatively stable with 2007 levels, reflecting investments in marketing, eCommerce and retail store expansion. We’re looking forward to another strong year of cash flow from operations, which could exceed $700 million.

We also are looking forward to record performance in the first quarter. We expect an 8-10% increase in both revenues and earnings per share, driven by our Outdoor, Imagewear and Contemporary Brands coalitions.

Dividend Declared

The Board of Directors declared a cash dividend of $.58 per share, payable on March 19, 2008 to shareholders of record as of the close of business on March 9, 2008.

Cautionary Statement on Forward-looking Statements

Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements in this release include VF's reliance on a small number of large customers; the financial strength of VF's customers; changing fashion trends and consumer demand; increasing pressure on margins; VF's ability to implement its growth strategy; VF's ability to grow its international and direct-to-consumer businesses; VF's ability to successfully integrate and grow acquisitions; VF's ability to maintain the strength and security of its information technology systems; stability of VF's manufacturing facilities and foreign suppliers; continued use by VF's suppliers of ethical business practices; VF's ability to accurately forecast demand for products; continuity of members of VF's management; VF's ability to protect trademarks and other intellectual property rights; maintenance by VF's licensees and distributors of the value of VF's brands; the overall level of consumer spending; general economic conditions and other factors affecting consumer confidence; fluctuations in the price, availability and quality of raw materials and contracted products; foreign currency fluctuations; and legal, regulatory, political and economic risks in international markets. More information on potential factors that could affect VF's financial results is included from time to time in VF's public reports filed with the Securities and Exchange Commission, including VF's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

About VF

VF Corporation is a global leader in lifestyle apparel with a diverse portfolio of jeanswear, outdoor, imagewear, sportswear and contemporary apparel brands. Its principal brands include Wrangler®, Lee®, Riders®, The North Face®, Vans®, Reef®, Eagle Creek®, Eastpak®, JanSport®, Napapijri®, Nautica®, Kipling®, John Varvatos®, 7 For All Mankind®, lucy®, Majestic® and Red Kap®.

VF Corporation's press releases, annual report and other information can be accessed through the Company's home page, www.vfc.com.

Webcast Information

VF will hold its fourth quarter conference call and webcast today at 4:30 p.m. ET. Interested parties should call 1-888-208-1730 domestic, or 1-913-312-0853 international, to access the call. You may also access this call via the Internet at www.vfc.com.A replay will be available through February 12th and can be accessed by dialing 1-888-203-1112 domestic, and 1-719-457-0820 international. The pass code is 4987720. A replay also can be accessed at the Company’s web site at www.vfc.com.

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