Vans, which has been a challenging segment for the company, showed signs of improvement with an 11% decline compared to its previous 21% decline. Credit: Shutterstock.

VF Corp president and CEO Bracken Darrell highlighted the Q2 results (ending 28 September 2024) as meeting expectations with progress made on the company’s “Reinvent priorities.” Following the completion of the Supreme divestiture on 1 October 2024, VF Corp successfully paid down its $1bn term loan due December 2024.

The company’s flagship brand, The North Face, saw a 3% revenue decline, following a particularly strong performance in the same quarter last year, when it posted 19% growth.

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Vans, which has been a challenging segment for the company, showed signs of improvement with an 11% decline, significantly better than the 21% drop recorded in Q1.

Timberland was down 3% in the quarter versus its Q1 drop of 9% due to strong growth in premium boots. And rounding out the company’s top four brands, Dickies was down 11% in Q2, an improvement from Q1’s decline of 14% and the third sequential quarter of improvement.

Chief financial officer Paul Aaron Vogel explained in the company’s earnings call that “Greater China continued its strong momentum, but this was offset by ongoing Americas pressure.”

VF Corp saw sequential improvement in both global DTC and wholesale in China and the country’s strength alongside The North Face, helped push the APAC region up by 5%.

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The Americas was down 9% in Q2 compared to 13% in Q1. In EMEA, the company was down 5% in the quarter, but Vogel was keen to add that September marked the region’s biggest month ever, despite wholesale trends weighing on its performance.

Highlights from VF Corp Q2 results

  • Operating income was down to $2.4bn compared to 2.5bn in 2023
  • Net income was $52m compared to -$450m in the same period last year
  • Gross margin 52.2%, up 120 basis points from last year
  • Operating margin 9.9%, down 210 basis points versus last year and adjusted operating margin down 60 basis points versus last year to 11.4%.

VF Corp’s financial outlook

For Q3 FY25 VF expects revenue in the range of $2.7bn to $2.75bn, down 1% to 3% year-over-year in reported dollars, including an expected negative FX impact of approximately 100 basis points. Adjusted operating income is expected to fall in the range of $170m to $200m.

On its earnings call, Darrell said the company would provide “a deeper look at what our game plans are” at its investor day presentation on 30 October.

He continued: “Looking ahead, we feel good about where we’re heading in Q3. We expect to drive further sequential improvement that builds on the progress we’ve made in the last few quarters.”

In August Darrell was keen to quell concerns after the company reported a 9% slide in revenue to $1.9bn, saying the rate of decline was moderating.