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V.F. Corporation VFC reported a narrower-than-expected loss per share in first-quarter fiscal 2026 results, with a sales beat. While earnings improved year over year, revenues dipped. Nevertheless, the company is on track with its Reinvent program and expects to deliver on its cost-saving target. The Reinvent program and VFC’s actions to boost operating profitability appear encouraging.
V.F. Corp beat expectations in first-quarter 2026, with revenues roughly flat year over year (-2% in constant currency) and stronger bottom-line performance. The North Face and Timberland continued their momentum, while Altra delivered strong growth. Vans faced pressure due to channel rationalization as part of its reset strategy.
The company reported an adjusted loss per share of 24 cents compared with the Zacks Consensus Estimate of a loss of 35 cents. It posted a loss of 33 cents a share in the year-earlier quarter.
V.F. Corporation price-consensus-eps-surprise-chart | V.F. Corporation Quote
Net revenues of $1.76 billion came in line year over year and surpassed the consensus estimate of $1.69 billion.
The adjusted gross margin expanded 290 basis points (bps) to 54.1%, driven by higher quality inventory, lower discounts and FX.
On a regional basis, revenues in the Americas fell 4% year over year on a reported basis and 3% on a constant-currency basis. In the EMEA region, revenues were up 4% on a reported basis and down 2% on a constant-currency basis. Revenues in the APAC region were up 4% on a reported basis and up 4% on a constant-currency basis. The company’s international revenues grew 2% year over year on a reported basis and were down 1% on a constant-currency basis.
Channel-wise, wholesale revenues rose 1% on a reported basis. Direct-to-consumer revenues were down 3% year over year on a reported basis and 4% on a constant-currency basis. Our model estimated the wholesale and direct-to-consumer revenues to fall 8.1% and 7.1%, respectively, year over year.
In the first quarter of fiscal 2026, V.F. Corp realigned its reportable segments into two main categories: Outdoor and Active. Operating segments not meeting disclosure thresholds are now grouped under an "All Other" category.
Based on reporting segments, revenues in the Outdoor segment improved 8% year over year on a reported basis and 6% on a constant-currency basis to $812.5 billion. In the Active segment, revenues of $699.7 million declined 10% year over year on a reported basis and 11% on a constant-currency basis. Revenues in the All-Other segment gained 4% year over year on a reported basis and 3% on a constant-currency basis to $248.5 million.
V.F. Corp ended the fiscal first quarter with cash and cash equivalents of $642.4 million, long-term debt of $3.56 billion and shareholders’ equity of $1.29 billion. Net debt was down $1.4 billion from the year-ago period.
The company’s board has announced a quarterly dividend of 9 cents per share, payable Sept. 18, 2025, to its shareholders of record as of Sept. 10.
In the three months ended June 2025, VFC spent $30.8 million on its Reinvent transformation program. These costs mainly covered employee severance, benefits and consulting fees. The contract also includes contingent fees based on VFC’s stock price performance through June 2027. So far, $8 million of expenses related to this contract have been recorded in the quarter.
The program led to a net tax benefit of $6.8 million in the quarter. VFC has incurred a total of $207.6 million in restructuring charges under Reinvent, with most actions completed by the end of the first quarter of fiscal 2026. The consulting contract could cost up to $141 million, including $75 million tied to stock price gains. Per-share loss impacts were calculated using 390 million weighted average shares.
For the second quarter of fiscal 2026, VFC expects revenues to decline by 2% to 4% in constant currency compared to the prior year. Adjusted operating income is projected to range between $260 million and $290 million.
For the full fiscal 2026, VFC anticipates an increase in both adjusted operating income and operating cash flow compared to the previous year. Free cash flow is also expected to rise, even after factoring in known and anticipated tariff impacts. These projections reflect the company’s ongoing progress under its Reinvent transformation program, focused on cost reduction, margin improvement and strategic brand repositioning to drive long-term growth.
In fiscal 2026, VFC expects strong performance from its key growth brands. The North Face, Timberland and Altra continued to show solid momentum in the first quarter and are projected to drive revenue growth throughout the year. These brands benefit from strong consumer demand, innovation and category strength. In contrast, Vans remains a recovery brand, with sales down 14% in the first quarter due to ongoing channel rationalization. While short-term challenges persist, VFC is focused on stabilizing and repositioning Vans for long-term, sustainable growth.
The Zacks Rank #3 (Hold) company's shares have gained 14.2% in the past three months compared with the industry’s 0.1% growth.
We have highlighted three better-ranked stocks, namely adidas AG ADDYY, Revolve Group, Inc. RVLV and Duluth Holdings DLTH.
adidas is a leading brand in the sporting goods market with strong positions in footwear, apparel and hardware. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for adidas’ current fiscal-year sales and EPS indicates growth of 16.5% and 90.4%, respectively, from the year-ago period’s reported figures. ADDYY has a trailing four-quarter negative earnings surprise of 48%, on average.
Revolve Group operates as an online fashion retailer for millennial and Generation Z consumers in the United States and internationally. RVLV currently carries a Zacks Rank #2. RVLV has a trailing four-quarter earnings surprise of 63.4%, on average.
The Zacks Consensus Estimate for Revolve Group’s current financial year’s sales growth of 5.4% and earnings implies a decline of 40.6% from the year-ago reported numbers.
Duluth Holdings provides casual wear, workwear and accessories for men and women. The company currently carries a Zacks Rank #2. Duluth Holdings has a trailing four-quarter negative earnings surprise of 21%, on average.
The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates growth of 18.3% from the year-ago figure.
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This article originally published on Zacks Investment Research (zacks.com).
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