Core Viewpoint - VF Corp's stock declined by 12.2% following its third-quarter guidance, despite a strong second-quarter performance that exceeded Wall Street's expectations [1][4]. Financial Performance - For the three months ended September 27, VF reported a net income of $189.8 million, or 48 cents per diluted share, an increase from $52.2 million, or 13 cents, in the same period last year [2]. - Revenue rose by 1.6% to $2.80 billion, compared to $2.76 billion in the previous year, while Wall Street expected adjusted diluted EPS of 42 cents on revenue of $2.73 billion [2]. Brand Performance - Revenue by brand showed mixed results: The North Face increased by 6% to $1.16 billion, Vans decreased by 9% to $606.9 million, Timberland grew by 7% to $506.4 million, and other brands collectively rose by 2% to $532.3 million [3]. Third-Quarter Guidance - VF's third-quarter revenue is forecasted to decline by 1% to 3%, with Wall Street's consensus expecting adjusted diluted EPS of 55 cents on revenue of $2.87 billion [4]. - In comparison, VF's adjusted diluted EPS for the three months ended December 28, 2024, was 62 cents on revenue of $2.8 billion [4]. Analyst Insights - Analyst Janine Stichter highlighted concerns regarding Vans' stagnant performance, despite some positive indicators from back-to-school sales [5]. - Stichter noted that third-quarter profit guidance was below consensus due to anticipated tariff impacts of $60 million to $70 million in the second half [5]. - Dana Telsey described VF's second-quarter report as "solid," with the outdoor segment growing by 4%, while the active business remains under pressure due to the ongoing Vans turnaround [6].

Core Insights - V.F. Corporation (VFC) reported second-quarter fiscal 2026 results with a sales and earnings beat, although earnings fell year over year while revenues increased [1][9] - The company is progressing with its Reinvent program, aiming for cost savings and improved operating profitability [1][12] Financial Performance - Adjusted earnings per share were 52 cents, exceeding the Zacks Consensus Estimate of 42 cents, but down from 60 cents a year earlier [2][9] - Net revenues reached $2.80 billion, a 2% increase year over year, surpassing the consensus estimate of $2.73 billion [2][9] - The adjusted gross margin remained flat year over year at 52.2% [2] Revenue Breakdown - Revenues in the Americas fell 1% year over year, while EMEA revenues increased by 6% on a reported basis [3] - APAC revenues decreased by 2% on both reported and constant-currency bases [3] - Wholesale revenues rose 3% on a reported basis, while direct-to-consumer revenues declined by 1% year over year [4] Segment Performance - The Outdoor segment saw a 6% year-over-year revenue increase to $1,663 million, while the Active segment's revenues declined by 8% to $760.8 million [6] - The All-Other segment reported a 3% revenue gain year over year to $378.5 million [6] Financial Position - VFC ended the fiscal second quarter with cash and cash equivalents of $419.1 million and long-term debt of $3.54 billion [7] - The company announced a quarterly dividend of nine cents per share, payable on December 18, 2025 [7] Reinvent Program - In the first half of fiscal 2026, VFC spent $46.3 million on its Reinvent transformation program, primarily for severance and consulting costs [8] - The program has led to a net tax benefit of $10.3 million and total restructuring charges of $211.7 million [10] Future Outlook - For Q3 fiscal 2026, VFC expects revenues to decline by 1-3% in constant currency compared to the prior year [11] - Adjusted operating income is projected to be between $275 million and $305 million, with a likely decrease in adjusted gross margin year over year [11] - For fiscal 2026, VFC anticipates increases in adjusted operating income and operating cash flow, reflecting ongoing progress under the Reinvent program [12]

Financial Performance - Total revenues for the three months ended September 2025 were $2,802,706, an increase of 1.6% compared to $2,757,948 in September 2024[11]. - Operating income for the three months ended September 2025 was $312,620, up 14.1% from $273,903 in the same period last year[11]. - Net income for the three months ended September 2025 was $189,765, compared to a net income of $52,178 in September 2024, representing a significant increase[11]. - Comprehensive income for the three months ended September 2025 was $203,148, compared to $35,225 in the same period last year[14]. - Net income for the six months ended September 2025 was $73,357,000, a significant improvement compared to a net loss of $206,708,000 in the same period of 2024[17]. - Income from continuing operations, net of tax, increased to $73,357,000 from $50,482,000 year-over-year[17]. - Earnings per share for continuing operations were $0.49 for the three months ended September 2025, compared to $0.52 in September 2024[11]. - Income from continuing operations for the three months ended September 2025 was $189.8 million ($0.48 per diluted share), compared to $202.5 million ($0.52 per diluted share) in the 2024 period[155]. Assets and Liabilities - Total current assets as of September 2025 were $5,118,868, an increase from $3,786,098 in March 2025[9]. - Total liabilities increased to $9,166,269 as of September 2025, compared to $7,890,177 in March 2025[9]. - The company’s total assets were $10,644,124 as of September 2025, down from $12,219,638 in September 2024[9]. - Total inventories as of September 2025 were $1.855 billion, a decrease from $2.083 billion in September 2024[62]. - The balance of common stock shares increased to 390,712,620 as of September 2025, up from 389,283,419 in September 2024[24]. - Working capital increased to $1,360.1 million as of September 2025, compared to $1,088.2 million in March 2025[184]. - The net debt to total capital ratio was 79.4% as of September 2025, an increase from 76.8% in March 2025[185]. Cash Flow and Expenditures - Cash used by operating activities for continuing operations was $(372,468,000), compared to $(301,823,000) in the prior year, indicating increased cash outflow[17]. - Total cash, cash equivalents, and restricted cash at the end of the period was $435,504,000, down from $514,630,000 at the end of September 2024[20]. - Cash and cash equivalents decreased to $419,115 as of September 2025 from $492,164 in September 2024[9]. - The company paid cash dividends of $(70,312,000) during the period, slightly up from $(70,048,000) in the prior year[17]. - The Company paid cash dividends of $0.09 and $0.18 per share during the three and six months ended September 2025, respectively, and declared a cash dividend of $0.09 per share for Q3 Fiscal 2026[204]. Segment Performance - Wholesale revenues for the Outdoor segment reached $1.21 billion for the three months ended September 2025, compared to $1.14 billion in the same period of 2024, reflecting a growth of 6.0%[47]. - Direct-to-consumer revenues for the Active segment were $376.8 million for the three months ended September 2025, a decrease from $413.7 million in the same period of 2024[47]. - The Americas generated $1.34 billion in total revenues for the three months ended September 2025, compared to $1.36 billion in the same period of 2024, indicating a slight decline[47]. - Outdoor segment revenues increased to $1,663,479,000 in September 2025 from $1,566,722,000 in September 2024, reflecting a growth of 6.2%[103][104]. - Active segment revenues decreased to $760,750,000 in September 2025 from $824,536,000 in September 2024, a decline of 7.8%[103][104]. - Segment profit for the Outdoor segment was $300,740,000 for the three months ended September 2025, up from $278,138,000 in the same period of 2024, an increase of 8.2%[103][104]. Accounting and Compliance - The company is evaluating the impact of new accounting standards on its disclosures, including those related to income taxes and expense disaggregation[40][41]. - The ABL Credit Facility includes a financial covenant requiring a Fixed Charge Coverage Ratio of at least 1.00 to 1.00, applicable only if Global Excess Availability falls below $100.0 million[74]. - The Company has chosen accounting policies that accurately report operating results and financial position in conformity with generally accepted accounting principles[207]. - Significant accounting policies are summarized in Note 1 to the consolidated financial statements included in the Fiscal 2025 Form 10-K[207]. - There have been no material changes in the Company's accounting policies from those disclosed in the Fiscal 2025 Form 10-K[207]. Restructuring and Transformation - VF introduced the Reinvent transformation program, with 74% of total charges related to severance and employee-related benefits, totaling $49.9 million in cash payments during the six months ended September 2025[125]. - VF's restructuring charges related to Reinvent for the six months ended September 2025 totaled $21.6 million, with cumulative charges since inception amounting to $211.7 million[126]. - The company entered into a definitive agreement to sell the Dickies brand business for $600.0 million in cash on September 15, 2025[137]. Market and Economic Conditions - VF expects to recognize $51.2 million of fixed consideration related to future minimum guarantees under licensing agreements through March 2031[44]. - Approximately 85% of products purchased for sale in the U.S. are sourced through Southeast Asia and Central and South America, with less than 2% sourced from China[138]. - The company expects gross margin to be negatively impacted (though not materially) throughout the second half of Fiscal 2026 due to the implementation of tariffs[140].

Core Insights - V.F. Corporation (VFC) reported revenue of $2.8 billion for the quarter ended September 2025, reflecting a year-over-year increase of 1.6% and surpassing the Zacks Consensus Estimate of $2.73 billion by 2.72% [1] - The company's earnings per share (EPS) was $0.52, down from $0.60 in the same quarter last year, but exceeded the consensus EPS estimate of $0.42 by 23.81% [1] Revenue Performance - Geographic Revenue: - Americas: $1.34 billion, slightly above the estimate of $1.32 billion, with a year-over-year decline of 0.9% [4] - Europe: $1.07 billion, exceeding the estimate of $1.03 billion, with a year-over-year increase of 6.3% [4] - Asia-Pacific: $386.6 million, below the estimate of $391.07 million, with a year-over-year decline of 1.5% [4] - Revenue by Segment: - Outdoor: $1.66 billion, above the estimate of $1.63 billion, with a year-over-year increase of 0.3% [4] - Active: $760.75 million, exceeding the estimate of $737.22 million, but showing a significant year-over-year decline of 13.5% [4] - Direct-To-Consumer: $909.9 million, slightly above the estimate of $903.04 million, with a year-over-year decline of 0.6% [4] Brand Performance - Revenue by Brand: - The North Face: $1.16 billion, surpassing the estimate of $1.13 billion, with a year-over-year increase of 6% [4] - Vans: $606.9 million, exceeding the estimate of $595.57 million, but reflecting a year-over-year decline of 9.1% [4] - Timberland: $506.4 million, above the estimate of $500.99 million, with a year-over-year increase of 6.5% [4] Market Performance - V.F. shares have returned +15% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1: Earnings Performance - V.F. reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.60 per share a year ago, representing an earnings surprise of +23.81% [1] - The company posted revenues of $2.8 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.72%, compared to revenues of $2.76 billion a year ago [2] Group 2: Stock Performance and Outlook - V.F. shares have declined approximately 22.6% since the beginning of the year, contrasting with the S&P 500's gain of 16.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.56 on revenues of $2.88 billion, and for the current fiscal year, it is $0.74 on revenues of $9.57 billion [7] Group 3: Industry Context - The Textile - Apparel industry, to which V.F. belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Total revenue increased by 2% in reported dollars but decreased by 1% in constant dollars, showing an improving trend compared to the previous quarter [6][19] - Operating income reached $330 million, exceeding guidance of $260 to $290 million [6][19] - Net debt, excluding lease liabilities, decreased by $1.5 billion year-over-year, a reduction of 27% [6][23] - Adjusted earnings per share was $0.52, down from $0.60 in the same quarter last year [22] Business Line Data and Key Metrics Changes - The North Face revenue grew by 4%, with growth in both wholesale and direct-to-consumer channels [8][19] - Timberland also saw a 4% revenue increase, driven by strong demand in the Americas [10][19] - Altra experienced significant growth, with revenue up over 35% year-over-year [12] - Vans revenue declined by 11%, impacted by channel rationalization actions [19][33] Market Data and Key Metrics Changes - The Americas region revenue decreased by 1%, EMEA was flat, and APAC saw a 2% decline [19] - Direct-to-consumer sales were down 2%, while wholesale remained flat [20] Company Strategy and Development Direction - The company is focused on returning to growth and has made progress in its turnaround strategy [5][26] - Plans to divest the Dickies brand for $600 million to pay down debt and focus on core brands [7][17] - Emphasis on product innovation and marketing strategies to drive brand engagement and growth across all brands [9][10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging and unpredictable global environment but expressed confidence in the company's strategy and execution capabilities [5][26] - The company expects Q3 revenue to decline by 1% to 3% in constant dollars, with a focus on the upcoming holiday season [23][24] - Management remains optimistic about the consumer's resilience despite macroeconomic uncertainties [68] Other Important Information - The company is on track to achieve medium-term targets of $500 to $600 million in operating income expansion by fiscal 2028 and a leverage ratio of 2.5 times or below [25][26] - Free cash flow through Q2 was negative $453 million, consistent with expectations due to seasonal working capital needs [22] Q&A Session Summary Question: Path back to growth for Vans - Management indicated that increasing product newness and improved marketing strategies are key to returning Vans to growth, with expectations for better performance in upcoming quarters [31][33] Question: Gross margins and cost discipline - Management noted that gross margins were impacted by FX and lower promotions, but overall cost discipline initiatives are on track [39][42] Question: Promotional recapture and pricing strategies - Management confirmed that they are operating in a lower promotional environment and are strategically planning pricing actions for the holiday season [47][49] Question: Health of The North Face brand - Management expressed confidence in The North Face's brand health and market share opportunities, emphasizing the importance of product execution [98][100] Question: Ongoing debt deleveraging - Management is focused on achieving a leverage ratio of 2.5 times by 2028 through operational improvements and divestitures [122]

Financial Data and Key Metrics Changes - Total revenue increased by 2% in reported dollars but decreased by 1% in constant dollars, showing an improving trend compared to the previous quarter [6][19] - Operating income reached $330 million, exceeding guidance of $260 million - $290 million [6][19] - Net debt, excluding lease liabilities, decreased by $1.5 billion year-over-year, representing a 27% reduction [6][23] - Adjusted earnings per share was $0.52, down from $0.60 in the same quarter last year [22] Business Line Data and Key Metrics Changes - The North Face revenue grew by 4%, with growth in both wholesale and direct-to-consumer channels [8][19] - Timberland also saw a 4% revenue increase, driven by strong demand in the Americas [10][19] - Altra experienced significant growth, with revenue up over 35% year-over-year [12] - Vans revenue declined by 11%, impacted by channel rationalization actions [14][19] Market Data and Key Metrics Changes - The Americas region revenue was down 1%, EMEA was flat, and APAC decreased by 2% [19] - Direct-to-consumer sales were down 2%, while wholesale remained flat [20] Company Strategy and Development Direction - The company is focused on returning to growth and has made progress in its turnaround strategy, with 65% of its business by revenue growing [6][7] - Plans to divest the Dickies brand for $600 million to pay down debt and focus on core brands [8][17] - Emphasis on product innovation and marketing strategies to drive brand engagement and growth across all brands [9][10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain global environment but expressed confidence in the company's strategy and ability to execute [5][26] - The company expects Q3 revenue to decline by 1% to 3% in constant dollars, but remains optimistic about the holiday season [23][26] - Management highlighted the importance of maintaining a lower promotional environment while preparing for price increases in Q4 [46][48] Other Important Information - Free cash flow through Q2 was -$453 million, consistent with expectations due to seasonal working capital needs [22] - The company is on track to achieve medium-term targets of $500 million - $600 million in operating income expansion by fiscal 2028 [25] Q&A Session Summary Question: Path back to growth for Vans - Management indicated that increasing new product offerings and enhancing marketing strategies are key to returning Vans to growth, with expectations of improved performance as new products are introduced [30][32] Question: Gross margins and cost discipline - Management noted that gross margins were impacted by FX and lower promotions, but overall cost discipline initiatives are on track [38][41] Question: Promotional recapture and pricing plans - Management confirmed that they are well on track with promotional recapture and expect to operate in a lower promotional environment moving forward [46][48] Question: Performance in Asia - Management acknowledged a stabilizing period in APAC, particularly in China, but remains optimistic about growth opportunities in other regions [57][60] Question: Debt deleveraging strategy - Management expressed confidence in achieving a leverage ratio of 2.5 times or below by 2028, focusing on fundamental improvements and growing EBITDA [121]

Financial Data and Key Metrics Changes - Total revenue increased by 2% in reported dollars but decreased by 1% in constant dollars, showing an improving trend compared to the previous quarter [5][18] - Operating income reached $330 million, exceeding the guidance range of $260 to $290 million [5][18] - Net debt, excluding lease liabilities, decreased by $1.5 billion year-over-year, representing a 27% reduction [5][21] - Adjusted earnings per share was $0.52, down from $0.60 in the same quarter last year [20] Business Line Data and Key Metrics Changes - The North Face revenue grew by 4%, with growth in both wholesale and direct-to-consumer channels [6][18] - Timberland also saw a 4% revenue increase, driven by strong demand in the Americas [9][18] - Altra experienced significant growth, with revenue up over 35% compared to last year [11] - Vans revenue declined by 11%, attributed to channel rationalization actions [12][18] Market Data and Key Metrics Changes - The Americas region saw a 1% revenue decline, while EMEA was flat and APAC decreased by 2% [18] - Direct-to-consumer sales were down 2%, while wholesale remained flat [19] Company Strategy and Development Direction - The company is focused on returning to growth and has made progress in its turnaround strategy, with 65% of its business by revenue now growing [5][24] - Plans to sell the Dickies brand were announced, with a sale price of $600 million, aimed at reducing debt and focusing on core brands [6][16] - The company is committed to improving brand performance and expanding market share, particularly in underdeveloped regions like the Americas [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain global environment but expressed confidence in the company's strategy and ability to execute [25] - The company expects Q3 revenue to decline by 1% to 3% on a constant dollar basis, with a focus on the upcoming holiday season [21][25] - There is optimism about the potential for growth in the Americas and the overall global profile of the company [50] Other Important Information - The company is working towards medium-term targets of $500 to $600 million in operating income expansion by fiscal 2028 and a leverage ratio of 2.5 times or below [24] - Free cash flow through Q2 was negative $453 million, consistent with expectations due to seasonal working capital needs [20] Q&A Session Summary Question: Can you discuss the path back to growth for Vans? - Management indicated that increasing new product offerings and enhancing marketing strategies are key to returning Vans to growth, with expectations for improved performance in upcoming quarters [28][31] Question: Can you provide more details on gross margins? - Gross margins were impacted by foreign exchange and lower promotions, with expectations for continued improvement as pricing actions take effect in Q4 [35][43] Question: What are the initial signs from retailers regarding holiday orders? - Management noted it is too early to assess retailer behavior for the holiday season but expressed optimism based on product readiness and planning [55] Question: How is the company addressing tariffs and pricing? - The company plans to implement pricing actions in Q4 to offset tariffs, with expectations to mitigate the impact by fiscal 2027 [79][80] Question: What is the outlook for debt deleveraging? - Management is confident in achieving debt reduction targets through operational improvements and the sale of non-core assets, with a focus on growing EBITDA [92][93]

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分组1 - V.F. reported quarterly earnings of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.6 per share a year ago, resulting in an earnings surprise of +21.43% [1] - The company achieved revenues of $2.8 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.72%, although this is a slight decrease from year-ago revenues of $2.76 billion [2] - V.F. has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has underperformed the market, losing about 22.6% since the beginning of the year compared to the S&P 500's gain of 16.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.56 on revenues of $2.88 billion, and for the current fiscal year, it is $0.74 on revenues of $9.57 billion [7] - The Zacks Industry Rank indicates that the Textile - Apparel sector is currently in the bottom 13% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8]