VF Corp Shares Drop 18.3% as Vans Sales Fall 8% Despite Raised Outlook

Q: Why did VF Corp's stock plunge 18% despite beating earnings expectations and raising its full-year outlook?

VF Corp’s stock plunged because investors focused less on the headline beat and more on the weak, still-uneven recovery at Vans, the company’s most important problem brand. VF did report a smaller-than-expected quarterly loss, better revenue than analysts had modeled, improved gross margin, and a slightly higher full-year revenue outlook. But those positives were overshadowed by an 8% sales drop at Vans. Gains in Vans’ direct-to-consumer business, especially in the Americas, were not enough to offset continued weakness in wholesale, which remains critical to a broader turnaround. That mattered because the market was looking for clearer proof that Vans had turned a corner. Instead, the quarter suggested progress in some channels but continued volatility overall. Needham analyst Tom Nikic summed up the reaction as “two steps forward, two steps back,” reflecting frustration that VF’s recovery is still heavily dependent on a brand that has not yet stabilized. There was also some mixed messaging beneath the headline results. While VF beat its own guidance and raised revenue expectations, some reports noted adjusted earnings still missed certain Wall Street estimates. That reinforced the view that operational improvement is real but not yet consistent enough to justify a higher valuation. In short, investors sold the stock because VF’s broader turnaround story still hinges on Vans, and the quarter did not provide the level of steady, convincing improvement the market wanted to see.

2 articles · Updated · WWD · Jul 29

VF Corp stock slid 18.3% to $14.90 after first-quarter results showed persistent weakness at Vans, overshadowing a full-year outlook increase and better-than-expected revenue.
Revenue fell 5% to $2.2 billion, beating forecasts for a 6.8% decline, while adjusted operating loss excluding Dickies was $95 million versus VF's $100 million forecast and net loss narrowed to $119.3 million.
Vans revenue dropped 8% as wholesale declines outweighed direct-to-consumer gains in the Americas, reinforcing investor doubts that the brand's turnaround is taking hold.
CEO Bracken Darrell said Vans should improve in the fiscal second half, citing stronger U.S. DTC and e-commerce trends plus better visibility into wholesale partners' plans.
VF now expects full-year revenue growth of 2% or better, up from 1% to 2%, as COO Abhishek Dalmia also takes over as CFO from Paul Vogel.