Company Reports

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. The North Face is a strong performer and VF’s largest brand (42% of fiscal 2026 sales), but we do not believe it is enough to provide a moat for VF. Meanwhile, Vans (22% of sales) has had four straight years of sales declines, Timberland (18%) has had minimal sales growth over the past decade, and VF’s other brands are too subscale to generate material sales or profits.

In its seasonally weak first quarter, VF's sales fell 5% but rose 1% if adjusted for the Dickies divestment. Adjusted gross margin increased 10 basis points to 54.9%, but adjusted operating margin fell 210 basis points to negative 5.7% on planned marketing investments.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. The North Face is a strong performer and VF’s largest brand (42% of fiscal 2026 sales), but we do not believe it is enough to provide a moat for VF. Meanwhile, Vans (22% of sales) has had four straight years of sales declines, Timberland (18%) has had minimal sales growth over the past decade, and VF’s other brands are too niche to generate material sales or profits.

Led by 11% growth in its outdoor segment, VF's sales rose 1% in the fourth quarter of fiscal 2026. Gross margin improved by about 3 percentage points to 56.4% from the Dickies sale, a tariff refund benefit, and better inventory management. Adjusted operating margin rose 150 basis points to 2.5%.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has performed well, but we do not believe it is enough to provide a moat for VF.

Excluding Dickies (disposed), VF's fiscal 2026 third-quarter sales grew 4% on an 8% increase from its outdoor segment (63% of total) and a 6% decrease from active (23%). The firm's gross margin rose 10 basis points to 57%, while its operating margin increased 30 basis points to 12.1%.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has been more consistent, but we do not believe this brand alone can provide a moat for the company.

VF posted 2% overall sales growth in fiscal 2026's second quarter as 6% growth in outdoor sales offset a 9% decline for Vans. VF's gross margin of 52.2% was unchanged, and its adjusted operating margin rose 40 basis points to 11.8% on cost-cutting efforts.

VF will sell Dickies to Bluestar Alliance for $600 million in cash, or 1.1 times fiscal 2025 sales of $542.1 million. Acquired for $820 million in 2017, Dickies had double-digit percentage sales declines in each of VF's last three fiscal years. The sale is expected to close by the end of December.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has been more consistent, but we do not believe this brand alone can provide a moat for the company.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has been more consistent, but we do not believe this brand alone can provide a moat for the company.

VF had flat sales in fiscal 2026's first quarter as Vans' 14% sales drop was offset by respective sales increases of 6% and 11% from The North Face and Timberland. The firm's adjusted gross margin rose 290 basis points to 54.1%, and its adjusted operating margin was negative 3.2%.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has been more consistent, but we do not believe it can provide a moat for the company by itself.

VF achieved 5% sales growth in its outdoor coalition (30% of total) in its (March-ended) fiscal 2025 fourth quarter, but total sales fell 5% as Vans' reset continues, and Dickies remained weak. Adjusted gross and operating margins improved 560 and 400 basis points, respectively, to 53.4% and 1%.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have had uneven results over the past couple of years. The North Face has been more consistent, but we do not believe it can provide a moat for the company by itself.

No-moat VF’s (December-ended) fiscal 2025 third-quarter results surpassed our expectations on solid sales from its outdoor brands and large margin gains. Overall, we think the report gives more evidence that CEO Bracken Darrell’s Reinvent plan is working despite Vans’ ongoing weakness. We expect to lift our $39 fair value estimate by a low-single-digit percentage and think shares remain undervalued even after rising more than 50% over the past year.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have experienced sales declines over the past few quarters. The North Face has been performing better, but we do not believe it can provide a moat for the company by itself.

Although each of no-moat VF's coalitions and key brands recorded sales declines in its fiscal 2025 second quarter, shares jumped 23% in Oct. 28, 2024, post-market trading as margins beat our estimates. The company has a long way to go under its Reinvent plan to lower costs, improve its balance sheet, stabilize the US business, and turn Vans around, but there are positive signs. We continue to rate its shares as very undervalued relative to our $39 per share fair value estimate, which we do not expect to change. Our expectation is that it can return to consistent sales growth and annual double-digit operating margins by fiscal 2027.

VF has built a portfolio of solid brands in multiple apparel categories, but we do not believe it has a competitive advantage. Vans and Timberland have been drivers of value historically, but both have experienced steep declines in sales over the past few quarters. The North Face has been performing better, but we do not believe it can provide a moat for the company by itself.

VF reported a loss in its fiscal 2025 first quarter, but its 9% sales decline was slightly better than our forecast for a 12% drop. The company has endured more than two years of turmoil and weak results, which prompted our recent change to a no-moat rating. Even so, we think there is real value in VF’s main brands, and that CEO Bracken Darrell’s “Reinvent” strategy shows promise. In the 12 months since Darrell joined the firm, VF has, among other moves, agreed to sell Supreme for $1.5 billion, replaced virtually all its senior leaders, and cut $300 million in costs with more to come. For fiscal 2025, VF held to its guidance of $600 million in free cash flow plus physical asset sales. Although this outlook excludes the Supreme disposition, we have already incorporated the anticipated reduction in sales and operating profit in our model. Thus, we do not expect to make any material change to our fair value estimate of $39 (reduced when we changed VF’s moat rating), leaving shares undervalued.