stockrowLatest quarter
VF reported Q2 FY2027 revenue of $2.7 billion, down from $2.8 billion a year earlier. Revenue exceeded the consensus by 0.07%, while adjusted earnings per share of $0.70 beat the $0.54 consensus estimate.
The filing said the revenue decline included a 5% unfavorable impact from the sale of Dickies. Outdoor revenue grew 4%, with The North Face and Timberland each up 4%; Active revenue fell 8%, including a 10% decline at Vans. VF also reported a 6% decline in wholesale revenue and a 1% increase in direct-to-consumer revenue.
Gross margin rose to 55.4% from 52.2%, which the filing attributed partly to the Dickies sale, favorable currency effects, pricing and lower product costs. Diluted earnings per share increased to $0.71 from $0.48; the filing cited higher Outdoor profitability, lower interest expense and a lower tax rate among the drivers. VF’s quarterly free cash flow was −$206.8 million, compared with −$261.9 million a year earlier.
| Q2 FY2027 | Q2 FY2026 | Change | |
|---|---|---|---|
| Revenue | $2.7 billion | $2.8 billion | −3.84% |
| Diluted EPS | $0.71 | $0.48 | 48.7% |
| Gross margin | 55.4% | 52.2% | 3.2 percentage points |
| Operating margin | 13.7% | 11.2% | 2.5 percentage points |
| Free cash flow | −$206.8 million | −$261.9 million | — |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.70 | $0.54 | Beat by 29.6% |
| Revenue | $2.7 billion | $2.7 billion | In line |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Bracken Darrell said Vans’ global direct-to-consumer business grew for the first time in almost five years, with continued growth in the Americas and improved performance in Europe, the Middle East and Africa. He said VF tests new products in small batches online and with selected partners before expanding them into stores and, later, wholesale.
CFO Abhishek Dalmia said Vans’ wholesale performance softened from the preceding quarter, partly because retailers were reducing inventory. Asked about the expected recovery, Darrell said VF had visibility into orders and expected the wholesale change to have a greater effect in the fourth quarter. He declined to give exact order-book numbers, saying, “We’re looking at the firm order”.
Dalmia said The North Face benefited from earlier wholesale demand and execution in Americas direct-to-consumer, while Timberland’s growth in the Americas was partly offset by international declines. Darrell said Altra grew more than 40% in the quarter across every region and channel.
On margins, Dalmia attributed part of the expansion to lower product costs, planning and targeted price increases, with foreign exchange providing the balance. He said tariffs had a minimal net impact in the quarter and that tariff refunds would have no net impact on fiscal 2027 gross margins.
Dalmia said VF shifted some spending from the second quarter into the third and was investing in consumer experience, marketing, product design and innovation. He also said inventory rose deliberately to support sales in the second half, and that managing inventory would remain a priority in fiscal 2028 and beyond.
Guidance
VF narrowed its FY2027 growth outlook for The North Face and Timberland to mid-single digits for each brand. It previously expected growth roughly in line with each brand’s prior-year rate, plus or minus 1 point or 2. CFO Abhishek Dalmia also lowered the expected full-year effective tax rate to the high 20s from the low 30s, citing the resolution of historical tax matters.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Free cash flow, Actual | FY2027 | $515.0 million | — | New |
| Free cash flow, Normalized | FY2027 | $405.0 million | — | New |
| Operating margin, non-GAAP | FY2027 | 8.00% | 8.00% | Held |
| Operating margin, non-GAAP | FY2029 | 10.0% | 10.0% | Held |
| Gross margin, non-GAAP | Q3 FY2027 | V.F. expects gross margin to increase in Q3 FY2027, but by less than 180 basis points. | Q2 FY2027: V.F. expects Q2 FY2027 gross margin to rise year over year. | — |
| Revenue growth, Vans, non Gaap | Q3 FY2027 | −4.00% | — | New |
| Revenue growth, Timberland, non Gaap | Q3 FY2027 | 4.00% | — | New |
| Revenue growth, North Face, non Gaap | Q3 FY2027 | 4.00% | — | New |
| Operating income, non-GAAP | Q3 FY2027 | $390.0 million | — | New |
| Revenue growth, non-GAAP | Q3 FY2027 | 3.00% | — | New |
| Free cash flow, non-GAAP | FY2027 | $515.0 million | — | New |
| Free cash flow, Normalized, non Gaap | FY2027 | $405.0 million | — | New |
| Tax rate, non-GAAP | FY2027 | V.F. expects its effective tax rate to be in the high 20s in FY2027. | V.F. expects its FY2027 tax rate to be in the low 30s. | — |
| Gross margin, non-GAAP | FY2027 | V.F. expects gross margin to expand in FY2027. | V.F. expects FY2027 gross margin to improve. | — |
| Revenue, Altra Footwear, non Gaap | FY2027 | V.F. expects Altra footwear revenue to grow in FY2027, fully offsetting the decline in Vans footwear. | — | — |
| Revenue, Vans, non Gaap | FY2027 | V.F. expects Vans revenue to decline by mid-single digits in FY2027. | — | — |
| Revenue, North Face, non Gaap | FY2027 | V.F. expects North Face revenue to grow by mid-single digits in FY2027. | — | — |
| Revenue growth, non-GAAP | FY2027 | 2.00% | 2.00% | Held |
| Debt, Non Gaap, leverage Ratio | FY2028 | 2.5× | — | — |
| Operating margin, Non Gaap, exit Run Rate | FY2028 | 10.0% | — | New |
| Revenue, Non Gaap, altra | FY2027 | V.F. expects another year of strong growth for Altra in FY2027. | — | — |
| Revenue, Non Gaap, vans | FY2027 | V.F. expects Vans revenue to decline by mid-single digits in FY2027. | — | — |
| Revenue, Non Gaap, the North Face | FY2027 | V.F. expects The North Face’s FY2027 revenue growth to be roughly in line with its prior-year growth rate. | — | — |
| Debt, Non Gaap, leverage Ratio | FY2027 | 2.6×–2.9× | — | — |
| Free cash flow, non-GAAP | FY2027 | V.F. expects FY2027 free cash flow to be flat or higher year over year. | — | — |