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 and advancing the turnaround plan toward growth and value creation.

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

• Completion of the Supreme divestiture post-quarter enabled $1 billion term loan repayment and further net debt reduction.

• Progress continued on the Reinvent transformation program, targeting $300 million in annual savings by FY25 end.

• Net income from continuing operations was $202.5 million ($0.52 per diluted share), compared to a loss of $451.6 million in the prior year.

Financial highlights

• Q2 FY25 revenue was $2.76–$2.8 billion, down 6% year-over-year, improving from a 10% decline in Q1.

• Gross margin rose 120 basis points to 52.2%, driven by lower product costs.

• 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; adjusted EPS was $0.60, down from $0.63 last year.

• Inventories decreased 13% year-over-year to $2.1 billion at quarter end.

Outlook and guidance

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

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

• FY25 free cash flow plus proceeds from non-core asset sales expected at ~$425 million.

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

• Focus remains on returning to growth, margin expansion, and SG&A contraction through the Reinvent program.