Vf Stock Earnings Reports

V.F. reported a solid Q1 FY26 that beat guidance despite macro noise. Revenue was $1.8B (flat reported, -2% constant dollars); adjusted operating loss was ~$56M, about $50M better than the high end of guidance. Brand performance was mixed: The North Face grew ~5%, Timberland grew ~9%, Vans declined ~15% (about 40% of that decline tied to deliberate channel rationalization). Management emphasized an ongoing multi-year transformation: >$300M of cost reductions already realized, plus $500M–$600M of additional net operating income opportunity from product/marketing/process improvements, and medium-term targets of 55% gross margin and 45% SG&A-to-sales by FY28. Inventories improved in quality, inventory days are down, and net debt is down ~20% year-over-year. Tariffs remain a key near-term headwind: management now estimates incremental annualized tariffs of $250M–$270M total, with ~50% flowing through FY26 and an expected FY26 gross profit hit of $60M–$70M before mitigations; they expect to fully mitigate anticipated tariffs in FY27 through sourcing, pricing and other actions. Guidance: Q2 revenue down 2% to 4% (constant dollars); Q2 operating income $260M–$290M; Q2 gross margin broadly flat; interest ~$50M; tax rate 30%–33%. Free cash flow and operating cash flow are expected to be up year-over-year for FY26 (excluding noncore asset sales). Management is pursuing an asset-backed loan to replace the revolver to increase flexibility and reduce covenants, and continues to target reduced leverage (2.5x by FY28). Management signaled confidence in returning the company to growth as the transformation and new product/marketing initiatives (notably at Vans and North Face) gain traction.