Dive Brief:
- VF Corp. reported revenue of $2.8 billion in the second quarter of fiscal 2025, a 6% year-over-year decrease, according to a press release Monday.
- The company’s largest brands all saw decreased revenue for the period. Vans fell 11%, The North Face dropped 3%, Timberland fell 3%, and Dickies fell 11%.
- Despite these declines, VF shares jumped 23% in post-market trading on Monday, according to Morningstar Research Services.
Dive Insight:
In the release, VF CEO Bracken Darrell said the results were in-line with company expectations, “and reflect a sequential and broad-based improvement in year-on-year trends.”
Last year, VF launched a transformation program dubbed “Project Reinvent,” which aimed to bolster its brand building, execution and sales in North America.
The plan called for a turnaround of the Vans brand, which included naming a new president, Sun Choe, formerly of Lululemon. The company later announced it was considering selling off some of its assets, and eventually sold Supreme to EssilorLuxottica for $1.5 billion. That sale closed earlier this month.
“The company has a long way to go under its Reinvent plan to lower costs, improve its balance sheet, stabilize the U.S. business, and turn Vans around, but there are positive signs,” said David Swartz, senior equity analyst at Morningstar Research Services, in an analyst note.
VF used the money it received from the Supreme sale to pay down a $1 billion term loan due in December, Darrell said in the Q2 earnings report. Inventory in the quarter was down 13% year over year.
“As we pass the one year anniversary when we introduced you to the program, my confidence and excitement about the transformation taking place at VF only continues to grow,” Darrell said in an earnings call following the report.
VF’s Investor Day is Wednesday, Oct. 30, and Darrell said the company would share “a deeper look at what our game plans are” then.
The company also gave a financial outlook for its third quarter, something it has refrained from doing over the last few quarters. In Q3, it expects revenue in the range of $2.7 billion to $2.75 billion, which would represent a year-over-year decrease of between 1% and 3%. The company didn’t provide estimates for the full fiscal year.
Swartz said Morningstar expects VF can return to consistent sales growth and annual double-digit operating margins by its 2027 fiscal year.
