"Above all, it is our ability to consistently execute on well-defined goals and strategies that will enable us to continue to drive success in the years ahead."
Eric C. Wiseman, Chairman, President & CEO
Today, VF is the world's largest apparel company. And we believe we're just getting started. Based on the results we've achieved over the past several years, we're confident that our strategy for growth - our Growth Plan - will continue to succeed.
Launched in 2004, our Growth Plan began the process of transforming VF into a global lifestyle apparel company. The Plan identified six Growth Drivers crucial to our success. These Drivers ensure a balanced approach to growth across multiple fronts, from acquisitions to international expansion to increased direct-to-consumer businesses.
The Plan also called for significantly increasing the share of revenues of our lifestyle businesses — Outdoor and Action Sports, Sportswear and Contemporary Brands — up to 60% of total revenues. A robust acquisition program, combined with strong organic growth, has enabled us to show steady progress against this goal. At the same time, our heritage businesses — Jeanswear and Imagewear — will continue to be important revenue and profit centers.
In January 2008, we updated our Growth Plan to reflect our confidence in our future. We established a new long-term revenue growth target of 8-10% fueled by both organic growth and acquisitions, an earnings per share growth target of 10-11% and a dividend payout of 40% of earnings. We also communicated our goal of achieving an operating margin of 15%. International growth and expansion in our direct-to-consumer businesses are key drivers of our Growth Plan. We expect that by 2012 international revenues will comprise a third of total revenues, while our direct-to-consumer business will account for 22% of total revenues and we aim to hit $11 billion in total revenues.
Even though the global recesssion had made our business challenging, we will remain focused on the biggest drivers of profitable growth combined with expert execution.
Our structure is one of the keys to our success. We refer to our lifestyle and heritage businesses as "coalitions." Each of our brands is managed from within our coalitions: Outdoor and Action Sports, Jeanswear, Sportswear, Contemporary Brands and Imagewear. This structure enables us to leverage our size, scale and global expertise across each coalition, while ensuring that each brand is expertly managed by leaders who are deeply connected to their brands. And our open, collaborative culture enables us to share best practices across coalitions, benefiting the company as a whole.
Taken together, these elements - Growth Drivers, coalitions, and an increasing emphasis on our lifestyle businesses - will be the keys to our growth and success in the future.
