VF Posts $364 Million Adjusted Operating Income Against A $315 Million Forecast, Holds Full-Year Outlook
The owner of The North Face, Vans and Timberland saw Vans revenue fall 9.8% while the other two brands each grew 4%.
VF, which owns The North Face, Vans and Timberland, said Wednesday that adjusted operating income excluding Dickies reached $364 million in its second quarter, well above its own guidance of about $315 million. The company also reaffirmed its full-year outlook and declared a quarterly dividend of $0.09 per share.
Revenue down, margins up
Reported revenue fell 4% to $2.7 billion, the company said in its earnings release, reflecting the sale of Dickies, which VF completed on November 12, 2025. Excluding Dickies, revenue rose 1%, ahead of guidance of roughly flat in constant dollars.
Gross margin was 55.4%, up 320 basis points (3.2 percentage points) from a year earlier. Reported operating income was $368 million, a 13.7% margin, up 250 basis points; the adjusted margin excluding Dickies was 13.5%, up 170 basis points. Diluted earnings per share were $0.71, against $0.48 a year earlier.
Net debt fell $1.1 billion, or 20%, from a year ago. Net inventories rose 7%, which the company said supports demand in the second half.
Vans still shrinking, Altra surging
VF is a portfolio of outdoor and active apparel and footwear brands that sells through wholesale partners and its own stores and websites. Direct-to-consumer made up 44% of fiscal 2026 revenue, according to its annual report.
The North Face and Timberland each grew 4%. Vans revenue fell 9.8%, though its global direct-to-consumer sales grew for the first time in almost five years, CEO Bracken Darrell said. "Our plan to reignite Vans is working," he said, adding that strong wholesale orders give the company confidence of a second-half improvement. Altra grew more than 40%, he said.
By region, Americas revenue fell 2% as reported but rose 5% in constant dollars excluding Dickies.
Guidance holds, dividend declared
VF reaffirmed fiscal 2027 guidance: revenue growth of 2% or better in constant dollars, adjusted operating margin of about 8%, and year-end leverage of 2.6x to 2.9x. It expects actual free cash flow of $515 million or higher.
The $0.09 dividend is payable December 17 to shareholders of record on December 10. Management holds its earnings call at about 8:00 a.m. ET Wednesday.
Vans is the test: VF is betting that wholesale orders turn the brand around in the second half of fiscal 2027.
