VF Corp. falls despite beating second quarter estimates

Investing.com -- VF Corporation (NYSE: VFC) reported second-quarter results that exceeded analyst expectations, though shares fell 2.9% premarket following the announcement.

The apparel company posted adjusted earnings per share of $0.70, beating the analyst consensus of $0.53 by $0.17. Revenue reached $2.7 billion, surpassing the $2.66 billion estimate and representing a 4% decline YoY on a reported basis.

Excluding the divested Dickies brand, revenue rose 1% YoY in constant currency, matching the company's guidance. Adjusted operating income of $364 million significantly exceeded guidance of approximately $315 million.

The North Face continued its momentum with 4% revenue growth YoY, while Timberland also grew 4%. Altra surged more than 40%. However, Vans declined 9.8% YoY, though the company noted global direct-to-consumer sales returned to growth for the first time in nearly five years. The Americas region remained strong, down 2% on a reported basis but up 5% in constant currency excluding Dickies.

"We drove strong results in the second quarter, ahead of guidance across key metrics, as a result of great product and solid execution," said Bracken Darrell, President and CEO. "Our plan to reignite Vans is working – global DTC is growing again for the first time in almost five years, and strong orders from Wholesale partners continue to give us confidence of a second half improvement."

Gross margin expanded 320 basis points to 55.4%, while adjusted operating margin improved 170 basis points to 13.5% excluding Dickies. Net debt decreased $1.1 billion, or 20%, compared to the prior year.

VF reaffirmed its fiscal 2027 guidance, projecting revenue growth of 2% or better in constant currency and adjusted operating margin of approximately 8%. The company expects normalized free cash flow to be flat to up versus the prior year's $405 million.

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