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VF Announces Record Second Quarter Sales and Earnings Per Share, and Declares Dividend

Commented Mackey J. McDonald, chairman and chief executive officer, "This was a terrific quarter on all accounts, with growth coming from both our core businesses as well as newly acquired brands. We now have more diversification in our business mix, more brands with strong growth potential and more opportunities to invest in our future."

Second quarter sales rose 12% to $1,269.5 million from $1,134.7 million in the prior year's second quarter, with growth in most of the Company's core businesses. Net income increased 20% to $90.1 million from $74.9 million, with earnings per share rising 18% to $.80 from $.68. As anticipated, earnings include a benefit of $10.4 million ($.06 per share) related to disposition of the Company's Playwear business.

The acquisition of Nautica contributed $115 million to sales and as expected was dilutive to earnings per share by $.04. The acquisitions of the Vans®, Napapijri® and Kipling® brands added $11 million to sales in the quarter and $.01 to earnings per share.

For the first six months of 2004, sales increased 13% to $2,702.2 million from $2,384.8 million. Net income rose 16% to $194.0 million from $167.0 million, with earnings per share rising 15% to $1.73 from $1.51.


In terms of the third quarter, we currently expect a sales increase of 20 to 25% and an increase in earnings per share of approximately 10%. Included in this guidance is the negative impact from the Company's Playwear business of $.06 per share, primarily driven by the recognition of certain costs related to the disposition of the business. Fourth quarter sales should rise 5 to 8% and earnings per share should be about flat with prior year results. The Company noted that results in the fourth quarter of 2003 included a favorable tax settlement, which benefited earnings by $.07 per share.

"We have tremendous momentum, which is giving us the opportunity to make investments that will fuel our future growth while still enabling us to deliver strong bottom line results to our shareholders," said Mr. McDonald. He indicated that the Company is boosting its marketing spending, investing in new resources in such areas as strategic planning and leadership development, and establishing a new customer team organization. VF is also exploring new ways to maximize the efficiency of its supply chain to more fully leverage its global capabilities across all business units and improve profitability. "This is an exciting time for our company - not only are we exceeding our growth targets, we are putting in place the foundation for consistent, sustainable growth in coming years," he said.


The Board of Directors declared a regular quarterly cash dividend of $.26 per share, payable on September 20, 2004 to shareholders of record as of the close of business on September 10, 2004.
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