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V.F. Corp. Q1 Earnings Miss Estimates as Vans Wholesale Weighs
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Key Takeaways
VFC posted a wider Q1 loss as revenues fell 5.2%, with Vans wholesale weakness weighing on results.
Direct-to-consumer sales rose 2%, while wholesale revenues declined 10% and gross margin expanded.
VFC raised its FY27 revenue outlook to 2% growth or better, expecting Vans to improve in the second half.
V.F. Corporation (VFC - Free Report) posted first-quarter fiscal 2027 results, wherein the top and bottom lines missed the Zacks Consensus Estimate and declined year over year.
The company reported an adjusted loss of 27 cents per share for first-quarter fiscal 2027, wider than the year-ago loss of 25 cents. The figure also lagged the Zacks Consensus Estimate of a 22-cent loss by 22.7%.
V.F. Corporation Price, Consensus and EPS Surprise
Revenues declined 5.2% year over year to $1.669 billion and missed the consensus mark of $1.674 billion by 0.3%. Excluding Dickies, revenues rose 1% on a reported basis, supported by growth at The North Face, Timberland and Altra.
V.F. Corp.’s first-quarter fiscal 2027 performance reflected continued strength at The North Face, Timberland and Altra, along with sustained growth in the global direct-to-consumer business. Vans remained under pressure as weakness in global wholesale more than offset improving trends in the Americas’ direct-to-consumer channel. Gross margin expanded, while the company continued to reduce net debt and strengthen its balance sheet. Management also raised its full-year revenue outlook, citing better visibility into the remainder of fiscal 2027 and expectations for a meaningful improvement in Vans’ wholesale trends during the second half.
V.F. Corp.’s Q1 Revenue Details
On a regional basis, revenues in the Americas declined 4% year over year on a reported basis. EMEA revenues fell 7% as reported and 9% in constant currency. APAC revenues decreased 3% on a reported basis and 6% in constant currency. Overall, international revenues declined 4% year over year as reported and 7% in constant currency.
Channel-wise, wholesale revenues fell 10% on a reported basis. Direct-to-consumer revenues were up 2% year over year on a reported basis and 1% on a constant-currency basis. Our model estimated the wholesale revenues to fall 5.2% and direct-to-consumer revenues to decline 3.4% year over year.
Revenues in the Outdoor segment improved 5% year over year on a reported basis (up 4% on a constant-currency basis) to $857 million. In the Active segment, revenues of $667 million declined 5% year over year on a reported basis and 6% on a constant-currency basis. Revenues in the All Other segment fell 42% year over year on a reported basis (down 42% on a constant-currency basis) to $145 million.
VF Corp.’s Gross Margin Expands
The company’s reported gross margin increased 100 basis points year over year to 54.9%. Adjusted gross margin excluding Dickies improved 10 basis points to 54.9%, indicating modest underlying progress after removing the divested brand’s prior-year contribution.
Reported selling, general and administrative expenses were $1 billion, representing 59.9% of revenues. Adjusted expenses were $1.012 billion, or 60.6% of revenues.
Financial Details of VFC
V.F. Corp. ended the fiscal first quarter with cash and cash equivalents of $670 million, long-term debt of $3 billion and shareholders’ equity of $1.76 billion. Net debt was down $1.1 billion from the year-ago period.
What to Expect From VFC in FY27?
VFC raised its fiscal 2027 revenue outlook to growth of 2% or better in constant currency from the prior guidance of 1-2%. The projection reflects expected growth at The North Face, Timberland and Altra, partly offset by a mid-single-digit decline at Vans, with Vans’ second-half revenues expected to improve to a decline of 2% or better year over year.
The company maintained its adjusted operating margin forecast of approximately 8%, supported by a higher adjusted gross margin and a lower adjusted SG&A rate. Free cash flow is still expected to be flat to higher than fiscal 2026’s $405 million, aided by year-over-year growth in operating cash flow. VFC anticipates ending fiscal 2027 with a leverage ratio of roughly 2.6x to 2.9x.
The Zacks Rank #4 (Sell) company's shares have lost 3.6% in the past three months against the industry’s 10.7% growth.
Image Source: Zacks Investment Research
Key Consumer Discretionary Picks
Duluth Holdings Inc. (DLTH - Free Report) sells casual wear, workwear, outdoor apparel, and accessories for men and women in the United States. It offers shirts, pants, shorts, underwear, outerwear, footwear, accessories and hard goods. At present, DLTH sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for current fiscal-year sales and earnings implies a decline of 9.6% and 267%, respectively, from the year-ago reported figures. DLTH delivered a trailing four-quarter earnings surprise of 107.5%, on average.
Revolve Group, Inc. (RVLV - Free Report) operates as an online fashion retailer for millennial and generation z consumers in the United States and internationally. It currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Revolve Group’s current fiscal-year sales implies growth of 11.1% from the year-ago figures. RVLV delivered a trailing four-quarter average earnings surprise of 52.1%.
Vince Holding Corp. (VNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, VNCE carries a Zacks Rank of 2.
The Zacks Consensus Estimate for current fiscal-year sales implies growth of 10.6%, while the same for earnings implies a 28.9% decline from the year-ago reported figures. VNCE has delivered a trailing four-quarter earnings surprise of 635.7%, on average.
View the Zacks #1 Rank List
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V.F. Corp. Q1 Earnings Miss Estimates as Vans Wholesale Weighs
Key Takeaways
V.F. Corporation (VFC - Free Report) posted first-quarter fiscal 2027 results, wherein the top and bottom lines missed the Zacks Consensus Estimate and declined year over year.
The company reported an adjusted loss of 27 cents per share for first-quarter fiscal 2027, wider than the year-ago loss of 25 cents. The figure also lagged the Zacks Consensus Estimate of a 22-cent loss by 22.7%.
V.F. Corporation Price, Consensus and EPS Surprise
V.F. Corporation price-consensus-eps-surprise-chart | V.F. Corporation Quote
Revenues declined 5.2% year over year to $1.669 billion and missed the consensus mark of $1.674 billion by 0.3%. Excluding Dickies, revenues rose 1% on a reported basis, supported by growth at The North Face, Timberland and Altra.
V.F. Corp.’s first-quarter fiscal 2027 performance reflected continued strength at The North Face, Timberland and Altra, along with sustained growth in the global direct-to-consumer business. Vans remained under pressure as weakness in global wholesale more than offset improving trends in the Americas’ direct-to-consumer channel. Gross margin expanded, while the company continued to reduce net debt and strengthen its balance sheet. Management also raised its full-year revenue outlook, citing better visibility into the remainder of fiscal 2027 and expectations for a meaningful improvement in Vans’ wholesale trends during the second half.
V.F. Corp.’s Q1 Revenue Details
On a regional basis, revenues in the Americas declined 4% year over year on a reported basis. EMEA revenues fell 7% as reported and 9% in constant currency. APAC revenues decreased 3% on a reported basis and 6% in constant currency. Overall, international revenues declined 4% year over year as reported and 7% in constant currency.
Channel-wise, wholesale revenues fell 10% on a reported basis. Direct-to-consumer revenues were up 2% year over year on a reported basis and 1% on a constant-currency basis. Our model estimated the wholesale revenues to fall 5.2% and direct-to-consumer revenues to decline 3.4% year over year.
Revenues in the Outdoor segment improved 5% year over year on a reported basis (up 4% on a constant-currency basis) to $857 million. In the Active segment, revenues of $667 million declined 5% year over year on a reported basis and 6% on a constant-currency basis. Revenues in the All Other segment fell 42% year over year on a reported basis (down 42% on a constant-currency basis) to $145 million.
VF Corp.’s Gross Margin Expands
The company’s reported gross margin increased 100 basis points year over year to 54.9%. Adjusted gross margin excluding Dickies improved 10 basis points to 54.9%, indicating modest underlying progress after removing the divested brand’s prior-year contribution.
Reported selling, general and administrative expenses were $1 billion, representing 59.9% of revenues. Adjusted expenses were $1.012 billion, or 60.6% of revenues.
Financial Details of VFC
V.F. Corp. ended the fiscal first quarter with cash and cash equivalents of $670 million, long-term debt of $3 billion and shareholders’ equity of $1.76 billion. Net debt was down $1.1 billion from the year-ago period.
What to Expect From VFC in FY27?
VFC raised its fiscal 2027 revenue outlook to growth of 2% or better in constant currency from the prior guidance of 1-2%. The projection reflects expected growth at The North Face, Timberland and Altra, partly offset by a mid-single-digit decline at Vans, with Vans’ second-half revenues expected to improve to a decline of 2% or better year over year.
The company maintained its adjusted operating margin forecast of approximately 8%, supported by a higher adjusted gross margin and a lower adjusted SG&A rate. Free cash flow is still expected to be flat to higher than fiscal 2026’s $405 million, aided by year-over-year growth in operating cash flow. VFC anticipates ending fiscal 2027 with a leverage ratio of roughly 2.6x to 2.9x.
The Zacks Rank #4 (Sell) company's shares have lost 3.6% in the past three months against the industry’s 10.7% growth.
Image Source: Zacks Investment Research
Key Consumer Discretionary Picks
Duluth Holdings Inc. (DLTH - Free Report) sells casual wear, workwear, outdoor apparel, and accessories for men and women in the United States. It offers shirts, pants, shorts, underwear, outerwear, footwear, accessories and hard goods. At present, DLTH sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for current fiscal-year sales and earnings implies a decline of 9.6% and 267%, respectively, from the year-ago reported figures. DLTH delivered a trailing four-quarter earnings surprise of 107.5%, on average.
Revolve Group, Inc. (RVLV - Free Report) operates as an online fashion retailer for millennial and generation z consumers in the United States and internationally. It currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Revolve Group’s current fiscal-year sales implies growth of 11.1% from the year-ago figures. RVLV delivered a trailing four-quarter average earnings surprise of 52.1%.
Vince Holding Corp. (VNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, VNCE carries a Zacks Rank of 2.
The Zacks Consensus Estimate for current fiscal-year sales implies growth of 10.6%, while the same for earnings implies a 28.9% decline from the year-ago reported figures. VNCE has delivered a trailing four-quarter earnings surprise of 635.7%, on average.