V.F. (VFC) Q2 2025 earnings summary

Executive summary

• Q2 FY25 results showed sequential and broad-based improvement in year-over-year trends, meeting or exceeding expectations, with all key metrics reflecting progress in cost savings, inventory normalization, and brand initiatives.

• Revenues declined 6% year-over-year to $2.8 billion, with decreases across all segments and regions.

• The Supreme divestiture was completed, enabling $1 billion term loan repayment and further net debt reduction.

• The Reinvent transformation program continued, targeting $300 million in annual cost savings by FY25 end, with $134 million in cumulative restructuring charges through Q2 FY25.

• Turnaround and transformation priorities included cost reduction, balance sheet strengthening, U.S. business improvement, and the Vans turnaround, all showing tangible progress.

Financial highlights

• Q2 FY25 revenue was $2.76 billion, down 6% year-over-year, improving from a 10% decline in Q1.

• Gross margin rose 120 basis points to 52.2%, driven by product cost tailwinds.

• Adjusted operating margin was 11.4%, down 60 basis points; reported operating margin was 9.9%, down 210 basis points.

• Diluted EPS from continuing operations was $0.52, with adjusted EPS at $0.60, both down from last year.

• Q2 ending inventories decreased 13% year-over-year; net debt at quarter-end was $5.7 billion, down $446 million.

Outlook and guidance

• Q3 FY25 revenue expected between $2.7–$2.75 billion, down 1% to 3% year-over-year, with a 100 bps negative FX impact.

• Q3 adjusted operating income projected at $170–$200 million; gross margin to improve year-over-year.

• FY25 free cash flow from continuing operations plus non-core asset sale proceeds expected at ~$425 million, reflecting the Supreme sale and reinvestment initiatives.

• SG&A to rise modestly in Q3 due to incentive compensation; tax rate expected in the low 20s%.