That growth would require annual revenue gains of 8 to 10% annually. And while it says it will achieve 6 to 7% of that growth organically, acquisitions will also add 2 to 3%. The company says its "key growth drivers" will be international expansion, expected to increase 13% annually--and its direct-to-consumer business, which is expected to rise 18% annually, and eventually account for 22% of revenues. For this year, the company says it expects its revenues to rise by 9%.
"We're bullish about our prospects for 2008, despite the sharp downturn in investor sentiment surrounding many consumer-focused sectors," the company says.
VF has a reputation for being "very realistic and very conservative when giving guidance," says Brad Stephens, an analyst who follows the company for Morgan Keegan. And despite investor concerns about the sector, "consumers are still buying things like Ugg boots and iPods--stronger brands are doing well. And some of VF's brands--7 For All Mankind, the North Face, Vans--still have some growth.
"Even the businesses that are likely to have trouble showing growth next year are things like denim, which are its steady-eddie staple. So while it may not grow, it won't see substantial deterioration, like some other apparel companies might."
In addition to its jeanswear division, which includes Wrangler, Lee and Rustler, VF's outdoor division includes The North Face, JanSport, Eastpak, Vans and Reef, and its sportswear lines includes Nautica. The company launched a new contemporary clothing division last year, with the acquisition of lucy activewear and 7 For All Mankind.