V.F. 2026 Q1 Earnings Improved Net Income by 55%

V.F.(VFC) reported its fiscal 2026 Q1 earnings on Jul 30th, 2025. The company achieved a notable improvement in net income, reducing losses by 55% compared to the same period last year. Despite a slight revenue decline of 0.5%, the company managed to narrow its losses significantly, showcasing effective cost management. V.F.'s guidance for Q2 anticipates a slight revenue decline but expects operating income to increase year-over-year. This performance aligns with the company's strategic initiatives aimed at achieving sustainable growth and reducing leverage.

Revenue

V.F. Corporation experienced a slight revenue decline of 0.5% in fiscal Q1 2026, totaling $1.76 billion compared to $1.77 billion in the previous year. The Outdoor segment contributed $812.47 million, while the Active segment generated $699.69 million. The remaining revenue came from the All Other segment, amounting to $248.51 million. These figures collectively accounted for the total segment revenues reported.

Earnings/Net Income

V.F. narrowed its EPS losses to $0.30 per share in 2026 Q1 from $0.67 per share in 2025 Q1, marking a 55.2% improvement. The net loss was reduced to $116.41 million, down from $258.89 million in the previous year, showing a 55% improvement. Despite ongoing challenges, the EPS shows a positive trend.

Post Earnings Price Action Review

The strategy of purchasing V.F. (VFC) shares following a quarter-over-quarter revenue decline on the earnings release date and holding them for 30 days resulted in significant underperformance. This approach yielded a return of -70.61%, starkly contrasting with a benchmark return of 87.61%. The excess return was -158.22%, with a compound annual growth rate (CAGR) of -21.85% over the three-year period, indicating substantial losses. Furthermore, the strategy experienced a maximum drawdown of 0.00%, suggesting that shares were not sold during the market's lowest point. This lack of timely management could lead to further losses if not addressed appropriately.

CEO Commentary

Bracken P. Darrell, President and CEO, highlighted that V.F. Corporation delivered a solid start to fiscal Q1 2026, achieving revenues of $1.76 billion and reducing losses significantly. He emphasized the transformation within the company, stating, "We are transforming... improved our top line trend to negative 2% in constant dollars." The CEO pointed to growth opportunities across brands, particularly focusing on Vans, North Face, and Timberland, and expressed confidence in their ability to return Vans to growth. Darrell concluded with an optimistic outlook on their strategic initiatives, asserting, "We're all here to grow," and reaffirming the commitment to a sustainable growth model.

Guidance

The company expects Q2 revenues to decline by 2% to 4% on a constant dollar basis, with operating income projected between $260 million and $290 million. For the fiscal year, V.F. anticipates operating income to be up year-over-year, despite a negative net impact of $60 million to $70 million from tariffs. Additionally, free cash flow is expected to increase compared to the prior year, and the company remains on track to reduce leverage below the target of 2.5x by fiscal 2028.

Additional News

In recent weeks, V.F. Corporation announced ongoing investigations related to its fiscal performance, particularly concerning missed expectations for the fourth quarter of fiscal 2025. On July 18, 2025, the company disclosed this investigation, aiming to address discrepancies and improve transparency. Additionally, VF Corporation declared a quarterly dividend of $0.09 per share, payable on March 20, 2025, to shareholders of record at the close of business on March 10, 2025. This decision underscores the company’s commitment to providing shareholder value amidst challenging market conditions. Furthermore, VF’s management continues to focus on strategic initiatives, including potential mergers and acquisitions, to enhance its competitive position and drive future growth.