Core Insights - VF Corporation reported Q1 2026 results with revenue of $1.76 billion and a non-GAAP loss per share of ($0.24), both exceeding analyst expectations slightly [1][2] - The company demonstrated improvements in gross margin, which increased to 54.1% from 51.2% year-over-year, and reduced net debt to $5.3 billion, down 20% from the previous year [2][11] - Despite operational progress, overall sales remained flat year-over-year, with specific brands like Vans continuing to struggle [1][7] Financial Performance - Non-GAAP EPS was ($0.24), better than the consensus estimate of ($0.25) and improved from ($0.35) in Q1 2025 [2] - Revenue was $1.76 billion, slightly above the expected $1.75 billion, but down 0.6% from $1.77 billion in Q1 2025 [2] - Non-GAAP operating loss was ($56 million), significantly better than the internal estimate range of ($125 million) to ($110 million) [5] Brand Performance - The North Face saw a 6% revenue increase, with direct-to-consumer sales up 7% year-over-year [7] - Timberland's revenue rose 11%, particularly strong in the Americas [7] - Vans experienced a 14% revenue decline, attributed to ongoing channel rationalization and store closures [7][9] Strategic Focus - VF's strategy emphasizes cost control, supply chain efficiency, and strengthening core brands, with a focus on direct-to-consumer expansion and international growth [4] - The transformation program, "Reinvent," aims to boost profitability and cash flow, especially in response to Vans' performance [6][4] Geographic Performance - Sales in the Americas fell 4%, while Europe, the Middle East, and Africa saw a 4% revenue increase in dollar terms [10] - Asia-Pacific revenue grew 4%, with strong international results for The North Face and Timberland balancing the pressure from Vans in the U.S. [10] Future Outlook - For Q2 FY2026, management projects revenue contraction between 4% and 2% in constant currency terms [13] - Adjusted operating income is forecasted to be between $260 million and $290 million for Q2 FY2026, indicating potential sequential improvement [13] - The company aims for positive free cash flow and further debt reduction, while facing risks related to weak traffic in the direct-to-consumer channel and global trade policies [14]