Does VF Corp. have a third-quarter problem?
Investors think so. VF’s second quarter bested Wall Street’s consensus estimates, but shares of VF on Tuesday were down after the shoe and apparel giant posted earnings results. By late afternoon, shares of VF were down more than 10 percent to $14.90.
For the three months ended Sept. 27, VF posted net income of $189.8 million, or 48 cents a diluted share, up from net income of $52.2 million, or 13 cents, in the same year-ago period. Revenue rose 1.6 percent to $2.80 billion from $2.76 billion. Wall Street was expecting adjusted diluted earnings per share, or EPS, of 42 cents on revenue of $2.73 billion.
By brand, revenue for The North Face rose 6 percent to $1.16 billion, Vans was down 9 percent to $606.9 million, Timberland was up 7 percent to $506.4 million, and for VF’s other brands — Altra, Icebreaker, Napapijri, Packs and Smartwool — it was up 2 percent to $532.3 million.
Investors reacted to VF’s third-quarter guidance, where revenues were forecasted down 1 to down 3 percent. Wall Street’s consensus for the third quarter calls for adjusted diluted EPS of 55 cents on revenue of $2.87 billion. In comparison, VF for the three months ended Dec. 28, 2024, posted adjusted diluted EPS of 62 cents on revenue of $2.8 billion.
According to BTIG analyst Janine Stichter, the problem was the “relatively unchanged underlying trend for Vans.” Management noted some encouraging signs, including a better-than-expected back-to-school performance, but questions remain over how much longer the turnaround strategy would need to take hold. Stichter noted that third-quarter profit was guided below consensus due to tariff headwinds of $60 million to $70 million in the second half.
“Even in light of recent challenges at Vans, we believe VFC’s stable of brands is solid, and we like the diversification efforts afforded by a portfolio strategy,” Stichter said. “While we view Vans more as a brand in need of reinvigoration than a complete overhaul, we expect this to be a lengthy process, especially in light of the lead times to impact product, a challenged macro, tariff headwinds, and the need to clean up distribution.”
Dana Telsey, chief investment officer at Telsey Advisory Group, described VF’s second-quarter report as “solid.” The outdoor segment saw 4 percent growth, while the active business is still under pressure as the “Vans turnaround remains a work-in-progress,” she said.
VF president and CEO Bracken P. Darrell told investors in a conference call that the company made progress on its turnaround in a difficult climate.
He said that for The North Face brand, all three regions — Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia-Pacific) — grew compared with year-ago levels, as well as wholesale and direct-to-consumer. Performance apparel drove momentum in core styles, while transitional outerwear was strong and footwear continued to gain traction, growing by double digits in every region.
Timberland also saw growth across both wholesale and DTC. The CEO said demand for the 6-inch premium boot represents only about “20 percent of our global revenue,” indicating that there’s opportunity for growth, whether “through colors, materials, innovations, collaborations and more,” while VF grows the brand “across other footwear and apparel categories.”
He said the recently launched Timberland 25, a lightweight version of the boot, “has been resonating well in its early weeks in our stores.” And Darrell added that the brand’s growing business around boat shoes also saw sales growth in all regions, noting plans to “diversify the product lineup and give the brand more versatility of fire power during the warmer seasons.”
As for Vans, Darrell said: “I told you that Sun’s impact on product could be visible in the back-to-school period, and it is. Product newness across footwear is drawing in new consumers, particularly women, but also youth and kids.” Michelle “Sun” Choe joined Vans as global brand president in July 2024.
The brand made waves this fall with the Valentino Garavani x Vans collaboration, which took the latter’s Authentic silhouette and reimagined it under the direction of Valentino‘s current creative director, Alessandro Michele. Darrell said newness in the Old Skool franchise drove higher sales of women’s styles. The CEO said more newness is on the way heading into holiday and spring 2026.
The company also said in September that it was selling Dickies to Blue Star Alliance for $600 million. VF will use the proceeds to pay down debt.
