V.F. (VFC) Q2 2027 earnings summary

Executive summary

• Q2 FY27 revenue was $2.695B, down 4% reported and up 1% constant currency excluding Dickies; adjusted operating income was $364M, above guidance.

• Gross margin expanded and diluted EPS rose to $0.71 from $0.48; Outdoor gains, lower net interest expense and a lower tax rate supported earnings.

• Growth reached 75% of the portfolio by revenue, led by The North Face, Timberland and Altra; Vans remained in decline as its DTC turnaround advanced.

Financial highlights

• Reported GAAP operating income was $367.9M versus $312.6M; adjusted operating income excluding Dickies was $364M, nearly $50M above guidance.

• GAAP gross margin was 55.4%, up 320 bps; adjusted gross margin excluding Dickies was 55.4%, up 290 bps, including ~180 bps from structural improvement and 110 bps from FX.

• SG&A dollars rose ~4% YoY, including investment in DTC, marketing, product design and innovation; some Q2 spending shifted to Q3.

• Reported diluted EPS was $0.71 versus $0.48; adjusted EPS was $0.70 versus $0.49. Net interest expense was $24M, below the prior ~$30M indication.

• H1 operating cash outflow narrowed to $214.0M from $372.5M; net inventories ended Q2 up 7% YoY to support H2 demand.

Outlook and guidance

• FY27 revenue guidance remains +2% or better constant currency, excluding Dickies from the comparison period; adjusted operating margin guidance remains ~8%.

• The North Face and Timberland are each expected to grow mid-single digits in FY27; Vans is expected to decline mid-single digits, with H2 decline of 2% or better.

• Q3 revenue growth is expected at ~3% or better and operating income at $390M or better, including ~$25M of SG&A shifted from Q2; The North Face and Timberland each +4% or better, Vans down 4% or better.

• FY27 normalized free cash flow is expected flat to up versus FY26's $405M baseline; actual free cash flow is expected at $515M or better, including ~$110M net tariff refunds.

• Year-end FY27 leverage is expected at 2.6x–2.9x; medium-term targets remain leverage of 2.5x or better by FY28 and operating margin of 10% or better in FY29.