(Reuters) - Apparel maker VF Corp (VFC.N) raised its full-year revenue and profit forecast on Friday, as demand for its high-margin, popular Vans sneakers continues to boost sales, sending the company’s shares up as much as 15 percent.
Vans has had a surge in demand in the last two years as VF cut inventory and launched new sneakers, including a line decorated with satin brocade, to appeal to fashion conscious millennials.
The brand’s popularity highlights how shoe makers have benefited from “sneaker culture” growing around the globe that has given them the luxury of being able to charge high prices for new and retro styles.
Nike Inc (NKE.N) saw its Jordan brand return to growth in its last reported quarter, while Skechers USA Inc (SKX.N) was boosted by the resurgence of the chunky shoe trend among fashion-conscious consumers.
However, VF’s Chief Financial Officer Scott Roe expects Vans, which saw a 25 percent jump in revenue during the holiday quarter, to grow at a low double-digit rate in fiscal 2020.
“At some point, the laws of gravity do re-establish themselves,” Roe said.
The company raised its full-year adjusted earnings forecast to $3.73 per share from a prior estimate of $3.65. VF also increased its full-year revenue forecast by $100 million to $13.8 billion.
Analysts on average were expecting full-year earnings of $3.68 per share on revenue of $13.76 billion, according to IBES data from Refinitiv.
Net revenue, also boosted by growth at the company’s North Face and Timberland brands, rose nearly 8 percent to $3.94 billion, beating Wall Street estimates of $3.87 billion.
On an adjusted basis, the company earned $1.31 per share, in the third quarter ended Dec. 29, beating analysts’ expectations of $1.10.
VF said last year that it plans to spin off the unit which houses brands like Lee and Wrangler. Revenue at the unit fell 5 percent in the reported quarter.
The company’s shares have fallen over 17 percent in the last 3 months and were last trading at $81.50 on Friday.
Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta