The parent company of The North Face, Vans, Timberland and Altra reported a return to revenue growth in its third-quarter results, as TNF and Timberland revenue grew, offsetting declines at still-challenged Vans.
VF Corp. reported a 1% increase in reported revenue to $2.88 billion (a 2% increase in constant currency). Excluding Dickies, which VF completed the sale of during the quarter ended Dec. 27, revenue increased 4% (2% in constant dollars).
This performance beat the company’s guidance, which had anticipated a decline of 1% to 3% in constant dollars. The better-than-expected results were driven largely by a stronger-than-expected holiday season and stronger results from the Americas across both DTC, especially ecommerce, and wholesale, according to VF CEO Bracken Darrell and CFO Paul Vogel on Wednesday’s earnings call.
“We had one of our strongest performances in the Americas in over three years, up 6% (in constant currency) driven by growth in both DTC and wholesale,” Darrell said on the call. “As you’ll remember, fixing the U.S. has been a top priority of our turnaround.”
In EMEA, revenue increased 4% (a 3% decrease in constant currency). In APAC, revenue decreased 6% (or 4% in constant currency).
By brand:
- The North Face revenue increased 8% (or 5% in constant currency).
- Vans revenue decreased 8% (or 10% in constant currency).
- Timberland revenue increased 8% (or 5% in constant currency).
- Altra revenue increased in the double digits.
Profitability also saw a boost. Adjusted operating income reached $341 million (excluding Dickies), surpassing the guidance range of $275 million to $305 million. Gross margins expanded by 30 bps during the quarter and debt was reduced by nearly $600 million.
DTC and Americas Growth
For the first time in a couple of years, global DTC revenue (stores plus online) inflected to positive territory, growing 4% (3% constant currency excluding Dickies).
Digital sales increased 12% excluding Dickies (10% constant currency). Darrell highlighted that the digital traffic trends improved, particularly in the Americas and EMEA.
Companywide, wholesale remained relatively flat, down 1% globally. The Americas region saw growth across both DTC and wholesale channels. This helped drive the Americas region to its strongest performance in more than three years, up 6% excluding Dickies.
Outlook
For the fourth quarter of fiscal 2026, the company expects revenue to be flat to up 2% in constant currency. This outlook implies full-year revenue growth (excluding Dickies and Supreme) for the first time since fiscal 2023.
VF Corp. anticipates:
- Gross margin of 54.5% or better, edging closer to the FY28 target of 55%.
- Operating margin of at least 6.5%, an improvement over the previous year.
- Leverage at or below 3.5x, showing progress in deleveraging the balance sheet.
The company is navigating headwinds, including the impact of tariffs, but plans to mitigate these through pricing actions and ongoing sourcing savings.
“I’m going to, at some point soon, stop calling us a turnaround at VF, because it will no longer be,” Darrell said. “It’s about growth.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
