VF Corporation — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Reported revenue for Q2'27 was $2,695.1 million, a 4% decrease year-over-year (LY), or +1% on a constant currency basis excluding Dickies, exceeding guidance of flat constant currency growth.
• Reported operating income was $367.9 million with an operating margin of 13.7%, an increase of 250 basis points versus the prior year.
• Adjusted operating income excluding Dickies was $364 million, significantly above the guidance of approximately $315 million; adjusted operating margin excluding Dickies was 13.5%, up 170 basis points year-over-year.
• Gross margin was 55.4%, up 320 basis points year-over-year; adjusted gross margin excluding Dickies was 55.4%, up 290 basis points year-over-year.
• Net debt decreased by $1.1 billion (20%) year-over-year; net debt excluding lease liabilities decreased by $1.1 billion (26%) year-over-year.
• Net inventories increased 7% year-over-year to support demand in the second half of the fiscal year.
• For the six months ended September 2026, revenue was $4,364.5 million (down 4% reported, down 5% constant currency).
• Six-month operating income was $284.8 million; adjusted operating income excluding Dickies was $269.2 million.
• Six-month gross margin was 55.2%.
• Diluted earnings per share for Q2'27 were $0.71 (GAAP) and $0.70 (Adjusted); for the six months, diluted EPS were $0.47 (GAAP) and $0.43 (Adjusted).

Guidance and Future Outlook:

• VF reaffirmed its full-year Fiscal 2027 guidance.
• Full-year revenue guidance is set at +2% or better constant currency versus the prior year.
• Full-year adjusted operating margin guidance is approximately 8%.
• Normalized free cash flow guidance is flat to up versus the prior year of $405 million; actual free cash flow is expected to be $515 million or higher.
• Full-year ending leverage ratio guidance is 2.6x to 2.9x.
• Management expects wholesale orders to improve in the second half of Fiscal 2027.

Business Segments and Product Lines:

• The North Face® revenue grew 4% year-over-year in Q2'27.
• Timberland® revenue grew 4% year-over-year in Q2'27, driven by strength in the Americas.
• Altra® grew more than 40% in Q2'27.
• Vans® revenue declined 9.8% year-over-year in Q2'27; however, global Direct-to-Consumer (DTC) returned to growth for the first time in nearly five years.
• Americas region revenue was down 2% reported but up 5% constant currency excluding Dickies.
• EMEA region revenue declined 6% reported (5% constant currency).
• APAC region revenue declined 7% reported (10% constant currency).
• Global DTC revenue grew 1% year-over-year (3% constant currency excluding Dickies).
• Wholesale revenue declined 6% year-over-year.
• Outdoor segment revenue grew 4% year-over-year in Q2'27.
• Active segment revenue declined 8% year-over-year in Q2'27.
• "All Other" category (including Dickies through sale date, Altra, Smartwool, Napapijri, Icebreaker) revenue declined 31% year-over-year.

Market and Competitive Landscape:

• The company attributes growth in key brands to bold product design, innovation, and brand storytelling resonating with consumers.
• The Americas region remains strong with sustained growth across channels.
• Global DTC growth for Vans marks a turnaround after a period of decline.
• Strong orders from wholesale partners provide confidence for a second-half improvement in the Vans business.

Risks and Challenges:

• Vans brand revenue continues to face headwinds with a 9.8% decline in Q2'27, though DTC growth signals a recovery.
• International regions (EMEA, APAC) experienced revenue declines in Q2'27.
• The company faces risks related to consumer demand, global economic conditions, inflationary pressures, raw material availability, tariffs, and geopolitical conflicts.
• Risks include potential disruption to distribution systems, cyberattacks, and the ability to execute the "Reinvent" transformation program.
• The sale of Dickies did not qualify for discontinued operations presentation, and results were included in continuing operations through the date of sale (September 15, 2025).

Management Commentary and Tone:

• Bracken Darrell, President and CEO, stated the company drove strong results ahead of guidance across key metrics due to great product and solid execution.
• Management expressed confidence that the plan to reignite Vans is working, citing global DTC growth and strong wholesale orders.
• The tone was confident regarding the delivery of sustainable and profitable growth on the path to achieving full-year guidance and medium-term targets.
• Management highlighted that the upside potential in the business is becoming more evident.

Other Key Points:

• The Board of Directors authorized a quarterly dividend of $0.09 per share, payable on December 17, 2026, to shareholders of record on December 10, 2026.
• VF completed the sale of the Dickies® brand business to Bluestar Alliance LLC on November 12, 2025.
• Fiscal 2027 contains 53 weeks, with the additional week occurring in the fourth quarter.
• Adjusted amounts exclude costs related to the "Reinvent" transformation program (approximately $4 million in Q2'27) and a pension premium refund of approximately $3 million in Q2'27.
• Total restructuring charges related to Reinvent were $193.8 million, substantially completed by the end of Q1'26.
• A consulting firm contract for the transformation journey includes contingent fees tied to stock price increases through June 2027, with total fees potentially up to $146.0 million.