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VF

V F CORP (VFC)·Q2 2026 Earnings Summary

Executive Summary

  • Q2’26 delivered above plan: revenue $2.80B (+2% YoY; −1% C$) and adjusted operating income $330M; both exceeded guidance, supported by stronger back‑to‑school demand and early wholesale orders .
  • Results beat Wall Street consensus: EPS $0.52 vs $0.42 estimate; revenue $2.80B vs $2.73B; EBITDA $386M vs $360M; operating income also materially topped company guidance; these beats were driven by brand momentum at The North Face and Timberland and lower‑than‑expected SG&A .
  • Guidance: Q3’26 revenue down 1–3% C$ and adjusted OI $275–$305M; FY’26 directional outlook reiterated (free cash flow, operating income, and operating cash flow up YoY), with tariff headwinds peaking in Q3 and price actions offset beginning in Q4 .
  • Balance sheet: net debt down $1.5B (−21%) YoY; pending sale of Dickies for $600M (closed Nov 12) accelerates deleveraging and supports focus on core brands; dividend declared $0.09/share .

What Went Well and What Went Wrong

What Went Well

  • The North Face and Timberland grew +6% and +7% YoY (both +4% C$), with broad‑based strength across DTC and wholesale; Timberland Americas +11% YoY on strong back‑to‑school and 6" boot demand .
  • Operating performance beat: adjusted OI $330M vs guidance $260–$290M, with adjusted operating margin up 40 bps YoY to 11.8%; SG&A slightly lower than expected despite higher marketing .
  • CEO tone positive on turnaround: “It was a good quarter… Operating income was $330 million, well above our guidance… Net debt… down 27% excluding lease liabilities” .

What Went Wrong

  • Vans declined 11% C$ YoY (reported −9%); underlying decline high single digits after value channel rationalization and store closures; recovery to be gradual with impacts dissipating by Q4 .
  • APAC turned modestly negative (−2% C$), with China stabilizing after a long run; management expects a period of flattening before future growth resumes .
  • Tariffs to compress gross margin in Q3 before price offsets in Q4; management expects full mitigation by FY’27; Q3 tax expense approximately double prior year .

Financial Results

Consolidated P&L (reported unless noted; adjusted where specified)

MetricQ2 2025 (oldest)Q1 2026Q2 2026 (newest)
Revenue ($USD Billions)$2.758 $1.761 $2.803
Constant Currency Rev Growth vs LY—−2% −1%
Gross Margin %52.2% 54.1% (adj) 52.2%
Operating Income ($USD Millions)$273.9 $(86.6) $312.6
Operating Margin %9.9% −4.9% 11.2%
Adjusted Operating Income ($USD Millions)$315.2 $(55.8) $330.1
Adjusted Operating Margin %11.4% −3.2% 11.8%
Diluted EPS (GAAP)$0.52 $(0.30) $0.48
Adjusted Diluted EPS$0.60 $(0.24) $0.52
Net Interest Expense ($USD Millions)$42.7 $41.1 $46.2
Effective Tax Rate12.2% (approx from $28.0M/$230.6M) 8.0% 29%

Notes: Adjusted excludes “Reinvent” and Dickies transaction-related costs; Q2’26 adjusted EPS impact +$0.03 from exclusions .

Segment/Brand Revenue (Q2’26)

Brand/SegmentRevenue ($USD Millions)YoY %C$ YoY %
The North Face$1,157.1+6% +4%
Vans$606.9−9% −11%
Timberland$506.4+7% +4%
Other Brands (Dickies, Altra, Smartwool, Icebreaker, Napapijri)$532.3+2% −1%
Outdoor Segment$1,663.5+6% +4%
Active Segment$760.8−8% −10%
Total$2,802.7+2% −1%

Geography/Channel (Q2’26)

CategoryRevenue/Change
Americas−1% YoY; −1% C$
EMEA+6% YoY; flat C$
APAC−2% YoY; −2% C$
DTC−1% YoY; −2% C$
Wholesale+3% YoY; flat C$
VF‑operated Stores1,105 (vs 1,160 LY)

KPIs

KPIQ2’25Q2’26
Net Debt ($B)$7.2 $5.7 (−$1.5B, −21% YoY)
Net Debt excl Lease Liabilities ($B)—$4.2 (−$1.5B, −27% YoY)
Inventories (ex Dickies)—−4% YoY (−5% C$)
Dividend per Share$0.09 $0.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Revenue (C$ vs LY)Q2’26(4%) to (2%) (1%) actual Beat
Adjusted Operating Income ($M)Q2’26$260–$290 $330 actual Beat
Revenue (C$ vs LY)Q3’26N/A(3%) to (1%) New
Adjusted Operating Income ($M)Q3’26N/A$275–$305 New
Gross Margin (adj)Q3’26N/ADown vs LY (tariff impact; lower discounts partially offset) New
SG&A (adj, C$)Q3’26N/ABroadly flat vs LY New
Free Cash FlowFY’26Up vs LY (FY’25 $313M) Up vs LY (includes tariffs; includes Dickies impact in reported FCF) Maintained
Adjusted Operating IncomeFY’26Up vs LY Up vs LY Maintained
Operating Cash FlowFY’26Up vs LY Up vs LY Maintained
DividendNext Payment$0.09/quarter $0.09 payable Dec 18, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1’26)Current Period (Q2’26)Trend
Tariffs & PricingAnnualized tariffs $250–$270M; ~50% hits FY’26; net −$60–$70M GP impact in FY’26; full mitigation expected FY’27 Q3 GM down vs LY from tariffs; pricing offsets begin Q4; full mitigation still expected by FY’27 Headwind near‑term; mitigation on track
Vans TurnaroundUnderlying decline high single digits; value channel resets; store closures; new product pipeline (Super Low Pro, OTW); Warped Tour engagement −11% C$; improvement in non‑icons; women’s icons; digital traffic up; SZA Artistic Director; value channel impact wanes by Q4 Gradual improvement
Promotional DisciplineBetter markdown management; GM up 200 bps in Q1 Lower discounts a tailwind in Q2; will remain favorable; surgical pricing actions Improving structurally
APAC/ChinaAPAC +4% in Q1; caution on wholesale conservatism APAC −2%; China stabilizing after long run; focus shifting to Americas opportunity Stabilizing
Balance Sheet/DeleveragingLeverage trending lower; new $1.5B ABL revolver for flexibility Net debt −$1.5B YoY; Dickies $600M proceeds to reduce debt; medium‑term leverage ≤2.5x by FY’28 Accelerating deleveraging
Brand Momentum (TNF/Timberland)TNF +5% with double‑digit footwear; Timberland +9%; premiumization opportunity TNF +6% (all regions); Timberland +7% (Americas +11%); strong back‑to‑school; social‑first marketing Sustained growth

Management Commentary

  • “It was a good quarter. We delivered on our commitments… Operating income was $330 million, well above our guidance range… Net debt, excluding lease liabilities, was down $1.5 billion versus last year” — Bracken Darrell, CEO .
  • “Q2 revenue is $2.8 billion… a little bit better than our guidance… Adjusted operating margin… 11.8%, up 40 basis points year over year” — Paul Vogel, CFO .
  • “Timberland revenue was up 4%… Americas was up double digits… demand for the 6‑inch premium boot remains very strong” — CEO .
  • “We announced the pending sale of Dickies for $600 million… we’ll use the proceeds to pay down debt…” — CEO ; sale closed Nov 12 .

Q&A Highlights

  • Vans trajectory: underlying revenues down high single digits after removing value channel impacts; expect similar pace in Q3; value channel drag largely gone by Q4 .
  • Gross margin puts/takes: FX was a modest negative in Q2; promotional recapture a positive; Q3 tariffs compress GM before price offsets in Q4 .
  • APAC outlook: China entering a stabilization period after strong growth; emphasis on underpenetrated Americas opportunity (e.g., Timberland distribution) .
  • Doors/wholesale timing: own stores down ~5% (mostly Vans); early wholesale demand pulled into September added ~50–60 bps to Q2 revenue .
  • Deleveraging: Dickies sale speeds path; fundamentals and working capital improvements continue; medium‑term leverage target ≤2.5x by FY’28 affirmed .

Estimates Context

MetricQ2 2026 Consensus*Q2 2026 Actual
Primary EPS (USD)$0.425*$0.52
Revenue ($USD)$2,732,981,650*$2,802,706,000
EBITDA ($USD)$359,873,280*$385,793,000
MetricQ1 2026 Consensus*Q1 2026 Actual
Primary EPS (USD)−$0.338*−$0.24 (adj)
Revenue ($USD)$1,700,812,170*$1,760,666,000
EBITDA ($USD)−$46,638,340*−$5,106,000

Values retrieved from S&P Global.*

Interpretation: Broad beats on Q2 EPS, revenue, and EBITDA; magnitude of beats likely to drive estimate revisions higher, particularly for Q3 operating income despite tariff headwinds .

Key Takeaways for Investors

  • Quality beat: revenue and adjusted OI exceeded guidance and consensus; margin expansion continues despite FX and pre‑pricing tariff setup in Q3 .
  • Brand divergence persists: TNF/Timberland momentum offsets Vans reset; Vans improvement is tangible (newness, women’s, digital traffic), but recovery will be multi‑quarter with cleaner channel by Q4 .
  • Near‑term margin watch: expect Q3 gross margin compression from tariffs; look to Q4 for visible pricing offsets; management reiterates full mitigation by FY’27 .
  • Balance sheet catalyst: $600M Dickies proceeds (closed Nov 12) plus free‑cash‑flow improvement should further reduce leverage and interest expense; dividend steady .
  • Trading setup: Q3 guide embeds tariff headwinds; upside risk if promotional tailwinds persist and Vans flow‑through improves; downside risk from APAC softness and tariff elasticity .
  • Estimate trajectory: Expect upward revisions to Q3 OI and FY’26 OI/FCF glide path after Q2 beats; monitor consensus for Vans and TNF seasonality heading into holiday .
  • Medium‑term thesis: Reinvent initiatives, markdown management, and product creation support a 55% GM target and ≤2.5x leverage by FY’28; focus remains on profitable growth across core brands .
References:  
Press release and 8‑K exhibits: **[103379_0000103379-25-000058_q22026exhibit991final.htm:5]** **[103379_0000103379-25-000058_q22026exhibit991final.htm:11]** **[103379_0000103379-25-000058_q22026exhibit991final.htm:14]** **[103379_0000103379-25-000058_q22026exhibit991final.htm:18]** **[103379_9f6efe8d596b452b9492fb0aef7b56c5_0]** **[103379_9f6efe8d596b452b9492fb0aef7b56c5_1]**.  
Earnings call transcript: **[0000103379_2207720_1]** **[0000103379_2207720_4]** **[0000103379_2207720_5]** **[0000103379_2207720_6]** **[0000103379_2207720_7]** **[0000103379_2207720_8]** **[0000103379_2207720_11]** **[0000103379_2207720_12]**.  
Prior quarter materials: **[103379_e141d371fc0c4eb88730268caa46945c_0]** **[103379_e141d371fc0c4eb88730268caa46945c_7]** **[0000103379_2294320_5]** **[0000103379_2294320_6]**.  
Dickies sale completion: **[103379_93c0af01037e440ca304d64b0a3aea6a_0]**.