VF Corporation (VFC) shares slipped Wednesday even after the apparel company reported better-than-expected quarterly results and projected another year of growth. Investors, however, were more focused on management's warning that tariffs and higher oil prices could squeeze margins in the second half of fiscal 2027.
VF Corporation Finally Grows Again After Three Years of Pain
MarketDash
VF Corporation (VFC) stock slips despite earnings beat as Vans weakness, tariff risks and oil cost pressures cloud outlook.
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Quarter In Detail
VF reported fourth-quarter adjusted earnings of break-even per share, topping analyst estimates for a loss of 1 cent per share. Quarterly revenue rose 1% year over year to $2.17 billion, exceeding Wall Street expectations of $2.13 billion.
Revenue excluding the Dickies business increased 4%, or 1% in constant currency. The company sold Dickies during the third quarter of fiscal 2026.
Fiscal 2026 gross margin expanded 130 basis points year over year to 54.8%. Operating income increased to $577 million, while operating margin improved 280 basis points to 6%.
"For the first time in three years, we returned to a full year of growth and expect to keep growing in FY'27," CEO Bracken Darrell said.
The North Face brand posted 12% year-over-year growth, while Timberland revenue increased 8%.
Despite returning to overall revenue growth, investors remained concerned about ongoing weakness at Vans, where quarterly revenue declined 1%, or 5% in constant currency.
VF additionally reported a $31 million non-cash goodwill impairment charge tied to its Napapijri business, which pressured GAAP results.
Free cash flow for fiscal 2026 rose by more than $90 million year over year to $405 million.
Outlook
VF expects fiscal 2027 revenue to grow 1% to 2% in constant currency. The company forecast adjusted operating margin growth of about 8%.
During the quarterly conference call, management said it remains on track to achieve a 10% operating margin exit rate by fiscal 2028.
Executives cautioned that higher tariffs and oil prices could pressure margins in the back half of fiscal 2027.
The company also said Vans showed improving momentum in the Americas direct-to-consumer business, supported by new product launches and stronger marketing execution.
VF expects fiscal 2027 free cash flow to remain flat to higher despite increased investments in stores and marketing.
VF Stock Performance
VFC Price Action: VF Corporation shares were down 4.69% at $15.95 at the time of publication on Wednesday, according to market data.
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