VF Corp’s Q2 results drew a negative market reaction, with management highlighting ongoing operational transformation and persistent challenges in its Vans brand as key factors. CEO Bracken Darrell emphasized that while the company made progress on cost reduction and organizational restructuring, “turnarounds, by definition, start with declines.” The North Face and Timberland brands posted growth, but Vans’ continued decline weighed on sentiment. Management acknowledged that deliberate channel rationalization actions and slow traffic in key markets affected performance, noting the company remains focused on restoring growth across its portfolio.
Is now the time to buy VFC? Find out in our full research report (it’s free).
VF Corp (VFC) Q2 CY2025 Highlights:
- Revenue: $1.76 billion vs analyst estimates of $1.7 billion (flat year on year, 3.6% beat)
- Adjusted EPS: -$0.24 vs analyst estimates of -$0.34 (29.1% beat)
- Adjusted EBITDA: $8.54 million vs analyst estimates of -$46.64 million (0.5% margin, significant beat)
- Revenue Guidance for Q3 CY2025 is $2.68 billion at the midpoint, below analyst estimates of $2.73 billion
- Operating Margin: -4.9%, up from -7% in the same quarter last year
- Constant Currency Revenue fell 2% year on year (-8% in the same quarter last year)
- Market Capitalization: $4.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From VF Corp’s Q2 Earnings Call
- Adrienne Yih (Barclays) asked about the Warped Tour’s impact on Vans’ brand engagement and expected business benefits. CEO Bracken Darrell described the event as a “huge fan fest,” noting strong social media traction and merchandise sales, but acknowledged the near-term business impact is modest.
- Lorraine Hutchinson (Bank of America) inquired about gross margin opportunities across brands. CEO Bracken Darrell and CFO Paul Vogel highlighted premiumization, improved product creation, and markdown management as key levers, with Darrell stating, “If you get gross margin right, everything else flows.”
- Jay Sole (UBS) questioned the expected volume impact from price increases to offset tariffs. Darrell said, “Nobody really knows,” but projected volume declines would likely be proportional to price hikes, given industry-wide tariff effects.
- Michael Binetti (Evercore) sought clarity on North Face Americas’ seasonal performance and the pace of Vans’ recovery in Europe versus the U.S. Darrell emphasized that brand turnarounds are proceeding at similar paces in both regions, with early successes in key city stores.
- Brooke Roach (Goldman Sachs) asked about wholesale partners’ inventory appetite amid macro uncertainty. Darrell acknowledged hesitancy among partners but reiterated confidence in planned innovation and marketing to drive future demand.
Catalysts in Upcoming Quarters
In the coming quarters, our team will closely monitor (1) the pace and effectiveness of tariff mitigation actions and their impact on gross margins, (2) tangible progress in Vans’ product pipeline and store performance, and (3) the sustainability of growth trends at The North Face and Timberland. Execution on marketing and inventory strategies, as well as further updates on portfolio segmentation, will also serve as key signposts for VF Corp’s turnaround trajectory.
VF Corp currently trades at $11.94, down from $12.43 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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