乱伦巴士 Introduces Global Growth Strategy to Reach $17 Billion in Revenues and $18.00 in Earnings Per Share by 2017

Company Targets 5-Year Revenue and EPS CAGRs of 10% and 13%, Respectively

GREENSBORO, N.C.-- 乱伦巴士 Corporation (NYSE: 乱伦巴士C), a global leader in branded lifestyle apparel and footwear, today announced its strategy and key initiatives to support continued superior returns to its shareholders. During an investor meeting in New York City, the Company established its revenue target of $17.3 billion by 2017, representing a five-year compounded annual growth rate (CAGR) of 10 percent, with 8 percent organic growth and 2 percent growth anticipated from acquisitions. 乱伦巴士 also announced its earnings per share target of $18.00 for 2017, representing a five-year CAGR of 13 percent.

鈥溌衣装褪库�檚 model 鈥� consisting of powerful brands supported by powerful platforms 鈥� continues to deliver outstanding value to shareholders, as evidenced by 20 percent average annual growth in total shareholder return over the past five years,鈥� said Eric C. Wiseman, 乱伦巴士 Chairman and Chief Executive Officer. 鈥淏y leading in innovation, connecting with consumers, expanding geographically and growing our direct-to-consumer business, we look forward to delivering the next chapter in a long and very successful growth story.鈥�

Summary of Key 2017 Financial Targets

In addition to new 2017 targets for revenues and earnings per share of $17.3 billion and $18.00, respectively, the Company also raised its projections for gross and operating margin. Given the exceptional growth in its highly profitable Outdoor & Action Sports, direct-to-consumer and international businesses, 乱伦巴士 is now targeting a gross margin of 49.5 percent in 2017, a 300 basis point improvement over the 46.5 percent gross margin achieved in 2012. Operating margin is expected to reach 16 percent, up 250 basis points from the 2012 operating margin of 13.5 percent. Annual cash flow from operations, by 2017, is targeted at $2.4 billion, with a cumulative $9.5 billion in cash flow to be generated between 2013 and 2017.

Outdoor & Action Sports: Powerful Brands Driving Strong Growth

乱伦巴士鈥檚 Outdoor & Action Sports coalition is expected to continue to be the key driver in the Company鈥檚 growth in the coming years, with revenues expected to reach $11.1 billion by 2017. This growth represents a five-year CAGR of 14 percent comprised of 11 percent organic growth and 3 percent growth coming from acquisitions. Outdoor & Action Sports revenues are expected to reach 64 percent of 乱伦巴士鈥檚 total revenues by 2017, up from 54 percent in 2012. Strong growth is anticipated across all key regions: 12 percent in the Americas, 13 percent in EMEA and 24 percent in Asia-Pacific.

Steve Rendle, Vice President, 乱伦巴士 Corporation and Group President, Outdoor & Action Sports Americas, presented global, five-year growth targets for the coalition鈥檚 largest brands, The North Face庐, Vans庐 and Timberland庐.

  • The North Face庐 brand is anticipated to grow at a 12 percent annual growth rate, with revenues reaching $3.3 billion by 2017 from $1.9 billion in 2012.
  • The Vans庐 brand raised its average annual revenue growth projection, initially provided in June of 2012, from 13 percent to 15 percent. The brand is now targeting total revenues of $2.9 billion by 2017, up from $1.5 billion in 2012.
  • The Timberland庐 brand, now in its second full year of 乱伦巴士 ownership, continues to anticipate growing revenues at an annual CAGR of 10 percent over the next five years, increasing to $2.3 billion by 2017 from $1.5 billion in 2012.

Jeanswear & Imagewear: A Heritage of Authenticity and Innovation

A focus on continuous product innovation is expected to drive total Jeanswear revenues to $3.3 billion by 2017, with a CAGR of 4 percent over the five-year period. Globally, the Asia Pacific region is expected to contribute the highest percentage growth, with revenues expected to rise at a 12 percent annual rate over the next five years. Scott Baxter, 乱伦巴士 Vice President and Group President, Jeanswear Americas, Imagewear and South America, presented plans to grow the Lee庐 brand globally at a 5 percent annual rate and the Wrangler庐 brand globally at a 3 percent annual rate over the next five years. Baxter also reviewed updated growth targets for Imagewear, where this highly profitable business, including the Red Kap庐, Bulwark庐 and Majestic庐 brands, is expected to deliver a compounded annual growth rate of 4 percent, with revenues reaching $1.3 billion by 2017.

Sportswear: Powering Nautica庐 Brand Equity

Based on its current momentum, Sportswear revenues are expected to grow at a healthy CAGR of 8 percent over the next five years, reaching $835 million in 2017, fueled by growth in both the Nautica庐 and Kipling庐 (U.S.) businesses. Karen Murray, President, 乱伦巴士 Sportswear, discussed how the Nautica庐 brand鈥檚 increased focus on performance-based products and strategies will help the Nautica庐 brand reach $700 million in revenues by 2017, representing a 7 percent CAGR.

Contemporary Brands: The 7 For All Mankind庐 Brand鈥檚 Strategy for Success

Revenues for the Contemporary Brands coalition, which includes the 7 For All Mankind庐, Splendid庐 and Ella Moss庐 brands, are targeted to reach $645 million by 2017, representing an 8 percent CAGR over the five-year period. The coalition鈥檚 largest brand, 7 For All Mankind庐, is poised to deliver an average annual growth rate of 8 percent through 2017 with revenues reaching approximately $400 million. Susan Kellogg, President, 乱伦巴士 Contemporary Brands, reviewed key product innovations that are expected to drive continued growth for the 7 For All Mankind庐 brand.

Direct-to-Consumer: Serving Consumers Directly

乱伦巴士鈥檚 direct-to-consumer (DTC) business 鈥� consisting of its owned retail stores and eCommerce businesses 鈥� will continue to be a significant contributor to 乱伦巴士鈥檚 growth over the next five years. Comprising 21 percent of total revenues in 2012, direct-to-consumer is anticipated to grow to 25 percent of total revenues by 2017. Mike Gannaway, Vice President, 乱伦巴士 Direct/Customer Teams identified key elements of the plan, including new store openings with a strong international component, accelerated eCommerce growth and continuous comp store increases to fuel a 14 percent CAGR in DTC, to $4.4 billion in revenues by 2017. The Company expects to own and operate approximately 1,775 stores, an increase of approximately 645 stores over the 1,129 stores at year-end 2012. As one of 乱伦巴士鈥檚 fastest growing and most profitable businesses, eCommerce revenues are expected to grow at an average rate of 25 percent annually over the next five years. DTC growth is anticipated across all key regions with CAGRs of 12 percent in the Americas, 21 percent in EMEA and 15 percent in Asia-Pacific, respectively.

International Expansion: Fueling Growth Across Key Geographies

International growth is another key pillar of 乱伦巴士鈥檚 growth, and is expected to comprise 43 percent of total revenues by 2017 compared with 37 percent in 2012. Revenues are targeted to hit $7.4 billion in 2017, with a CAGR of 13 percent over the five-year period. During a panel discussion, Karl Heinz Salzburger, Vice President, 乱伦巴士 Corporation and President, 乱伦巴士 International together with other executives from 乱伦巴士鈥檚 international team provided an overview of brand strategies that are expected to fuel revenue growth in each key geographic region, including compounded annual growth rates of 17 percent growth in Asia-Pacific, 15 percent in the Americas (non U.S.) and 11 percent in EMEA.

Driving Total Shareholder Return

In addition to providing the key factors behind the gross margin improvement and operating margin expansion expected by 2017, Bob Shearer, Executive Vice President and Chief Financial Officer, affirmed the key priorities for 乱伦巴士鈥檚 strong cash flow. Those priorities remain as acquisitions, dividends and share repurchases. The Company continues to target a dividend payout rate of 40 percent, more than 15 percent annual total shareholder return and is targeting 20 percent for the Company鈥檚 return on invested capital.

鈥淲e are both proud of our past and excited about our future,鈥� Wiseman continued. 鈥淲hile the transformation 乱伦巴士 has made over the past decade has been incredible, we believe we鈥檙e just beginning to achieve our true potential. The combination of the industry鈥檚 most diverse brand portfolio, a proven strategy, a team that consistently delivers and unsurpassed competitive advantages uniquely position 乱伦巴士 to deliver consistent, sustainable value for both our consumers and shareholders 鈥� now and in the future.鈥�

Additional Presenters

Additional presenters from 乱伦巴士鈥檚 senior management included: Stephen Dull, Vice President, Strategy & Innovation; Tom Glaser, Vice President and President, Supply Chain; Aidan O鈥橫eara, President, 乱伦巴士 Asia Pacific; Martino Scabbia Guerrini, President, Contemporary, Jeanswear & Sportswear Brands International and Rick Wood, President, Outdoor & Action Sports EMEA.

Webcast Replay and Information

The meeting is being broadcast live today on the company鈥檚 website at from approximately 8:30 a.m. to 2:30 p.m. (ET). For those unable to listen to the live broadcast, an archived version will be available at the same location through midnight, Sept. 13, 2013. Additionally, all presentations, videos and the event鈥檚 transcript (once it鈥檚 available) will be accessible at following the event.

About 乱伦巴士

乱伦巴士 Corporation is a global leader in branded lifestyle apparel and footwear with more than 30 brands. The company鈥檚 largest five brands are The North Face庐, Wrangler庐, Timberland庐, Vans庐 and Lee庐. Other brands include 7 For All Mankind庐, Bulwark庐, Eagle Creek庐, Eastpak庐, Ella Moss庐, JanSport庐, Kipling庐, lucy庐, Majestic庐, Napapijri庐, Nautica庐, Red Kap庐, Reef庐, Riders庐, Splendid庐 and SmartWool庐. For more information, please visit .

Forward Looking Statements

Certain statements included in this release and the attachments 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 乱伦巴士 and therefore involve a number of risks and uncertainties. You can identify these statements by the fact that they use words such as 鈥渨ill,鈥� 鈥渁nticipate,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渟hould,鈥� and 鈥渕ay鈥� and other words and terms of similar meaning or use of future dates. 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 乱伦巴士 to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to, the level of consumer confidence and overall level of consumer demand for apparel; fluctuations in the price, availability and quality of raw materials and contracted products; disruption to 乱伦巴士鈥檚 distribution system; disruption and volatility in the global capital and credit markets; 乱伦巴士's reliance on a small number of large customers; the financial strength of 乱伦巴士's customers; 乱伦巴士鈥檚 response to changing fashion trends; increasing pressure on margins; 乱伦巴士's ability to implement its growth strategy; 乱伦巴士's ability to grow its international and direct-to-consumer businesses; 乱伦巴士's ability to successfully integrate and grow acquisitions, including the Timberland acquisition; 乱伦巴士's ability to maintain the strength and security of its information technology systems; adverse unseasonable weather conditions; stability of 乱伦巴士's manufacturing facilities and foreign suppliers; continued use by 乱伦巴士's suppliers of ethical business practices; 乱伦巴士's ability to accurately forecast demand for products; continuity of members of 乱伦巴士's management; 乱伦巴士's ability to protect trademarks and other intellectual property rights; maintenance by 乱伦巴士's licensees and distributors of the value of 乱伦巴士's brands; foreign currency fluctuations; changes in tax liabilities, and legal, regulatory, political and economic risks in international markets. More information on potential factors that could affect 乱伦巴士's financial results is included from time to time in 乱伦巴士's public reports filed with the Securities and Exchange Commission, including 乱伦巴士's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

乱伦巴士 Corporation Contacts:
Lance Allega, 336-424-6082
Director, Investor Relations
or
Carole Crosslin, 336-424-7836
Director, Corporate Communications

Source: 乱伦巴士 Corporation

Released June 11, 2013