UPDATE 1-Higher-margin brands boost North Face owner VF Corp's profit
* Third-quarter adjusted earnings $3.91/share vs est $3.78
* Revenue rises 5 pct to $3.27 bln vs est $3.34 bln
* Says expects FY gross margin to rise about 150 basis points to 48 pct
* VF Corp increases quarterly dividend by 21 pct
Oct 21 (Reuters) - VF Corp, maker of The North Face clothes and Vans shoes, reported better-than-expected quarterly profit as strong sales in its higher-margin outdoor and action sports brands boosted gross margins.
Sales in the outdoor and action sports business rose 6.5 percent to $1.97 billion in the third quarter. The business sells outerwear, sportswear, equipment and footwear under brands such as The North Face, Timberland, Vans and JanSport.
VF Corp said it expected full-year gross margins to rise by about 150 basis points to 48 percent.
In the third quarter ended Sept. 28, gross margin improved 90 basis points to 47.6 percent, helped by the company's shift towards higher-margin businesses and lower product costs.
VF Corp also increased its quarterly dividend by 21 percent from the previous quarter to $1.05 per share.
The company said its board approved a four-for-one split of its share, payable in the form of a stock dividend.
Net income rose to $433.8 million, or $3.89 per share, from $381.3 million, or $3.42 per share a year earlier.
On an adjusted basis, VF Corp earned $3.91 per share in the third quarter. Analysts were expecting $3.78 per share, according to Thomson Reuters I/B/E/S.
Sales at the company, which is known also for the Wrangler and Lee denimwear brands, rose 5 percent to $3.27 billion, but were slightly below market estimates of $3.34 billion.
Shares of the Greensboro, North Carolina-based company closed at $204.30 on the New York Stock Exchange on Friday. The stock has risen about 35 percent this year to Friday's close.