VF Corp's Turnaround: Vans Soars as Strategies Pay Off

VF Corp's turnaround plan is showing tangible results, with the company's shares surging 22% following the release of its second-quarter fiscal 2025 results. The strong performance was driven by a sequential and broad-based improvement in year-on-year trends, particularly at the Vans brand. This article explores the key factors contributing to Vans' resurgence and VF Corp's overall turnaround.

VF Corp's appointment of Sun Choe as global brand president for Vans has been instrumental in the brand's turnaround. Choe's leadership has focused on reinvigorating the brand's identity, innovating product lines, and enhancing the customer experience. The strategic shift has resulted in improved sales and customer engagement, with Vans' revenue rising 9% in China on a constant currency basis, compared to a 4% increase in the year-ago period.

The sale of VF Corp's streetwear brand Supreme has also played a significant role in Vans' recent growth. The divestment allowed VF Corp to pay down $1 billion of its term loan and focus on its core brands, including Vans. The divestment has freed up resources for Vans, enabling the brand to invest in new product lines and marketing initiatives.

Inventory clearance initiatives and promotions have helped VF Corp improve its margins and profitability. The company's gross margin expanded 120 basis points to 52.2% in the second quarter, driven by increased promotions and discounts. The improved margins have contributed to VF Corp's adjusted earnings per share of $0.60, surpassing analysts' estimates of $0.37.

VF Corp's focus on direct-to-consumer business and leaner inventory has also contributed to Vans' growth in China, Americas, and EMEA. The company's direct-to-consumer revenue rose 8% in the second quarter, while wholesale revenue decreased 4%. The shift in distribution channels has allowed Vans to engage more directly with customers, enhancing the brand's appeal and profitability.

In conclusion, VF Corp's turnaround plan is yielding positive results, with Vans leading the charge. The appointment of Sun Choe, the sale of Supreme, inventory clearance initiatives, and a focus on direct-to-consumer business have all contributed to Vans' resurgence. As VF Corp continues to execute its turnaround plan, investors can expect to see further improvements in the company's financial performance.