Executive Summary

Q4 FY2025 revenue was $2.144B, down 3% constant currency and 5% reported; adjusted operating income was $22M, above guidance, with gross margin up 560 bps to 53.4% on cost tailwinds and lower promotions .
Versus consensus: EPS beat by ~$0.01 (actual -$0.13 vs -$0.14*), EBITDA beat ($76.7M vs $62.0M*), while revenue was a modest miss ($2.144B vs $2.171B*) .
Vans declined 20% (reported) on deliberate channel rationalization and soft DTC traffic; The North Face and Timberland grew 4% and 13% in Q4, respectively, offsetting some pressure .
Management guided Q1 FY2026 revenue down 3–5% (C$), adjusted operating loss of $110–$125M, gross margin up vs LY; interest ~$40M, ETR 13–14% .
Catalysts: structural margin improvement and adjusted OI beat vs guidance; watch execution on the Vans reset and tariff mitigation plans (unmitigated annual cost ~$150M), which management expects to fully offset .

What Went Well and What Went Wrong

What Went Well

Adjusted operating income beat guidance, driven by 560 bps gross margin expansion to 53.4% from lower material costs, reduced discounting, and higher-quality inventory (“We exceeded our Q4'25 operating income guidance… Gross margin improved 560 basis points”) .
Brand performance was solid outside Vans: The North Face revenue up 4% in Q4 with DTC +9% and double-digit growth in Americas/EMEA; Timberland up 13% with lower discounts and higher margins .
Balance sheet progress: net debt down $1.8B YoY, leverage to 4.1x (down one full turn), inventories down 4% YoY; dividend maintained at $0.09 .

What Went Wrong

Vans revenue declined 20% reported in Q4 (soft DTC traffic; deliberate actions in China, value door closures, distressed sales reduction); DTC down 3%, Americas and EMEA declined 5% and 2%, respectively .
FY’25 free cash flow + asset sale proceeds of $401M missed the $440M guidance due to a timing prepayment; pure FCF was $313M .
Segment-level pressure in Active (includes Vans) with Q4 segment revenues down 18% and segment loss of $32.2M; Dickies down 14% in Q4 .

Financial Results

Quarterly Trend vs Prior Periods

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Billions)	$2.758	$2.834	$2.144
Gross Margin % (GAAP)	52.2%	56.3%	53.3%
Operating Margin % (GAAP)	9.9%	8.0%	-3.4%
EPS (GAAP, continuing ops, $)	$0.52	$0.43	-$0.39
Adjusted Operating Margin %	11.4%	11.4%	1.0%
Adjusted EPS ($)	$0.60	$0.62	-$0.13

Q4 FY2025 Actual vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	Outcome
Revenue ($USD Billions)	$2.171*	$2.144	Miss
Primary EPS ($)	-$0.140*	-$0.13	Beat
EBITDA ($USD Millions)	$62.0*	$76.7	Beat
# of Estimates (Revenue / EPS)	20 / 21*	—	—

Values retrieved from S&P Global.*

Segment and Brand Breakdown (Q4 FY2025)

Segment / Brand	Revenue ($USD Millions)	YoY % (Reported)	YoY % (Constant Currency)
Outdoor (Segment)	$1,276.3	+5%	+7%
Active (Segment)	$645.3	-18%	-16%
Work (Segment)	$222.2	-8%	-7%
The North Face	$834.5	+2%	+4%
Vans	$492.6	-22%	-20%
Timberland	$376.0	+10%	+13%
Dickies	$139.3	-14%	-13%
Other Brands	$301.5	+1%	+3%

Regions and Channels (Q4 FY2025)

Category	Revenue ($USD Millions)	YoY % (Reported)	YoY % (Constant Currency)
Americas	$995.2	-6%	-5%
EMEA	$812.3	-4%	-2%
APAC	$336.2	0%	+2%
DTC	$920.8	-5%	-3%
Wholesale	$1,223.0	-4%	-2%

KPIs and Balance Sheet

KPI	Q3 2025	Q4 2025
Net Debt ($USD Billions)	$4.676	$4.937
Inventories ($USD Billions)	$1.795	$1.627
DTC Store Count (Total)	1,160	1,127
Dividend per share ($)	$0.09	$0.09
FY Free Cash Flow ($USD Billions)	—	$0.313

Non-GAAP adjustments in Q4 FY2025 negatively impacted diluted EPS by $0.26 (Reinvent, impairment, transaction-related) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue YoY % (C$)	Q4 FY2025	(4%) to (6)%	(3)% (C$); reported (5)%	Beat vs low end
Adjusted Operating Income ($)	Q4 FY2025	$(30)M to $0M	$22M	Raised/Beat
Free Cash Flow + Asset Sales ($)	FY2025	$440M (raised from $425M)	$401M (FCF $313M + $88M asset sales)	Lower than guidance
Revenue YoY % (C$)	Q1 FY2026	—	(5%) to (3%)	New
Adjusted Operating Loss ($)	Q1 FY2026	—	$(125)M to $(110)M	New
Gross Margin	Q1 FY2026	—	Up vs LY	New
SG&A	Q1 FY2026	—	Flat to down vs LY	New
Interest Expense ($)	Q1 FY2026	—	~$40M	New
Effective Tax Rate	Q1 FY2026	—	13%–14%	New
Free Cash Flow ($)	FY2026	—	Up vs FY2025 FCF of $313M	New
Dividend	Ongoing	$0.09/qtr	$0.09/qtr declared 6/18/25 payable	Maintained

Tariffs: Unmitigated annual cost ~$150M with ~65% landing in FY’26 (mostly H2); management expects to fully offset via cost, sourcing relocations and pricing .

Earnings Call Themes & Trends

Topic	Q2 FY2025 (Oct)	Q3 FY2025 (Jan)	Q4 FY2025 (May)	Trend
Vans turnaround	“Performance at Vans is improving” amid Americas platform launch	Sequential improvement; reset actions cleaned marketplace	-20% reported; 60% decline due to deliberate actions; DTC traffic weak; timeline of actions fading by Q4 FY’26	Near-term pressure, structural reset continuing
Gross margin	120 bps YoY expansion; adjusted OI 11.4%	GM 56.3%; adjusted OI 11.4%	GM up 560 bps to 53.4% (adjusted); mix and lower promotions	Sustained improvement
Tariffs/macro	Not emphasized	Not emphasized	Unmitigated ~$150M; plan to fully offset; <2% China exposure for U.S. goods	New risk, proactive mitigation
Supply chain diversification	Supreme sale proceeds applied to debt; cost actions	Reinvent execution; inventory rightsizing	Asset-light, diversified sourcing (SEA + LatAm ~85% into U.S.); rapid response teams	Structural flexibility
Brand performance (TNF, Timberland)	TNF down 3% on tough comp; Timberland -3%	TNF +5%, Timberland +11%	TNF +4% (DTC +9%); Timberland +13%	Improving
Balance sheet & leverage	Net debt $5.7B at Q2; Supreme proceeds to reduce debt	Net debt down $1.9B YoY	Net debt down $1.8B YoY; leverage 4.1x; target 2.5x medium term	Deleveraging progress

Management Commentary

“We exceeded our Q4'25 operating income guidance… excluding Vans®, [revenue] was up versus last year, led by growth at The North Face® and Timberland®” .
“Gross margin improved 560 basis points versus last year from lower material costs, less distressed sales, less discounting and higher quality inventory” .
On Vans: “60% of the decline this quarter is a direct effect of deliberately reduced revenue… another 25% driven by reduced storefronts and channel inventory in China… 35%… closure of value doors, reduction of distressed sales, and closure of our own stores” .
Tariffs: “We have every confidence we will fully offset these costs and emerge stronger… asset-light model gives us flexibility… unmitigated annual impact approximately $150 million” .
Portfolio: “We’re happy with the portfolio… if there’s something that doesn’t belong… we’ll exit it, but there’s nothing significant” .

Q&A Highlights

Gross margin and FCF: Management expects continued margin improvement in FY’26; FCF of $313M excludes Supreme; operating cash flow and FCF to increase next year .
Vans reset timing: China channel actions peak in Q4 FY’25 and fade through FY’26; value door closures and store closures fade across Q1–Q3, gone by Q4 .
Debt and refinancing: Plan to address €500M March 2026 maturity via FCF and revolver; continued deleveraging expected .
CapEx and store optimization: Testing remodels; store count down ~8% YoY; flexibility to accelerate or pause based on ROI .
Dividend: Maintained at $0.09; focus remains on bringing leverage under 2.5x; no current change planned .

Estimates Context

Q4 FY2025: EPS beat consensus (-$0.13 vs -$0.14*), EBITDA beat ($76.7M vs $62.0M*), revenue slight miss ($2.144B vs $2.171B*) .
With sustained margin improvement and Vans resets suppressing top line, consensus models likely adjust toward higher gross margin and lower near-term Vans revenue/DTC traffic until marketing and product refreshes ramp in back-to-school/holiday .