V.F. Corp. Q2 Earnings & Revenues Beat, Reinvent Program on Track

V.F. Corporation VFC reported second-quarter fiscal 2026 results, with a sales and earnings beat. While earnings fell year over year, revenues increased. 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.

The company reported adjusted earnings per share of 52 cents, beating the Zacks Consensus Estimate of 42 cents. Earnings declined from 60 cents a share in the year-earlier quarter.

Net revenues of $2.80 billion grew 2% year over year and surpassed the consensus estimate of $2.73 billion. The adjusted gross margin was flat year over year at 52.2%.

VFC's shares have fallen more than 5% in the trading session. This might be owing to lower earnings results year over year and soft view for the third quarter.

V.F. Corp’s Revenue Details

On a regional basis, revenues in the Americas fell 1% year over year both on a reported basis and on a constant-currency basis. In the EMEA region, revenues were up 6% on a reported basis and flat at a constant-currency basis. Revenues in the APAC region were down 2% on both a reported basis and a constant-currency basis. The company’s international revenues grew 4% year over year on a reported basis and were flat on a constant-currency basis.

Channel-wise, wholesale revenues rose 3% on a reported basis. Direct-to-consumer revenues were down 1% year over year on a reported basis and 2% on a constant-currency basis. Our model estimated the wholesale revenues to fall 1.8% and direct-to-consumer revenues to rise 0.4% 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 6% year over year on a reported basis and 4% on a constant-currency basis to $1,663 million. In the Active segment, revenues of $760.8 million declined 8% year over year on a reported basis and 10% on a constant-currency basis. Revenues in the All-Other segment gained 3% year over year on a reported basis and 1% on a constant-currency basis to $378.5 million.

Financial Details of VFC

V.F. Corp. ended the fiscal second quarter with cash and cash equivalents of $419.1 million, long-term debt of $3.54 billion and shareholders’ equity of $1.48 billion. Net debt was down $1.5 billion from the year-ago period.

The company’s board has announced a quarterly dividend of nine cents per share, payable Dec. 18, 2025, to its shareholders of record as of Dec. 10.

Other Details

In the six months ended September 2025, VFC spent $46.3 million on its Reinvent transformation program. These costs mainly covered severance and employee-associated gains and costs with respect to the engagement of a consulting firm to boost VFC's transformation journey.

The program led to a net tax benefit of $10.3 million in the six months of fiscal 2026. VFC has spent $211.7 million in restructuring charges under Reinvent, with all the substantial efforts completed by the end of the first quarter of fiscal 2026.

What to Expect From VFC in Q3 & FY26?

The company is poised well going into the holiday season. For the third quarter of fiscal 2026, VFC expects revenues to decline 1-3% in constant currency compared with the prior year. Adjusted operating income is projected to range between $275 million and $305 million. Adjusted gross margin is likely to be down year over year, thanks to initial tariff impacts, somewhat offset by lower discounts. Adjusted SG&A dollars are likely to grow slightly, while the metric will be broadly flat on a constant-currency basis.

For fiscal 2026, VFC anticipates an increase in both adjusted operating income and operating cash flow compared with the previous year. Free cash flow is also expected to rise year over year, even after factoring in known and expected 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.

The Zacks Rank #4 (Sell) company's shares have gained 20.8% in the past three months against the industry’s 8.2% drop.

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This article originally published on Zacks Investment Research (zacks.com).

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