VF(VFC) - 2026 Q2 - Quarterly Results

Revenue Performance - Q2'26 revenue reached $2.8 billion, representing a 2% increase year-over-year, or a decrease of 1% in constant currency[5] - The North Face® and Timberland® brands grew by 6% and 7% year-over-year, respectively, while Vans® revenue declined by 9%[5] - Revenues for the three months ended September 2025 were $2,802.7 million, representing a 1.6% increase from $2,757.9 million in the same period of 2024[29] - Total revenues for the six months ended September 2025 were $4,563.4 million, a 0.8% increase from $4,527.0 million in the same period of 2024[29] - The Outdoor segment generated revenues of $1,663.5 million for the three months ended September 2025, while the Active segment contributed $760.8 million[34] Profitability Metrics - Adjusted operating income was $330 million, significantly above the guidance of $260 million to $290 million, and up 5% year-over-year[5] - Operating margin improved to 11.2%, an increase of 130 basis points compared to the previous year[5] - Gross profit margin for the three months ended September 2025 was 52.2%, consistent with the previous year[29] - Operating income for the three months ended September 2025 was $330.1 million, up from $315.2 million in the same period of 2024, reflecting an increase in operating margin from 11.4% to 11.8%[29] - EPS for Q2'26 was $0.48, with adjusted EPS at $0.52, down from $0.60 in the prior year[5] - Diluted earnings per share from continuing operations for the three months ended September 2025 were $0.52, compared to $0.60 in the same period of 2024[29] Financial Health - Net debt decreased by $1.5 billion, or 21% year-over-year, indicating improved financial health[5] - The company announced the pending sale of Dickies® for $600 million, aimed at enhancing investment capacity[2] - The company declared a quarterly dividend of $0.09 per share, payable on December 18, 2025[7] Future Projections - Q3'26 revenue is projected to decline between 3% to 1% year-over-year[5] - FY'26 free cash flow is expected to increase compared to the previous year, including known tariff impacts[5] - The company expects the consulting contract related to the Reinvent program to be substantially complete by the third quarter of Fiscal 2026, with contingent fees tied to stock price increases through June 2027[24] Restructuring and Charges - Total restructuring charges related to the Reinvent program were $15.5 million for the three months ended September 2025, with a total of $211.7 million incurred to date[24] - Transaction and deal-related activities associated with the pending divestiture of Dickies totaled $2.0 million for the three and six months ended September 2025[25] Currency and Reporting - VF reports financial information in U.S. dollars in accordance with GAAP, with foreign currency exchange rate fluctuations significantly affecting reported operating results[40] - Constant currency financial information is presented as a non-GAAP measure to assess business performance excluding foreign currency translation effects[40] - Operating results for the current year are translated into U.S. dollars at the average exchange rates of the comparable prior year period for constant currency calculations[41] - Constant currency performance measures should be viewed in addition to GAAP operating performance measures, not as a substitute[42]