VF Corporation (NYSE:VFC) shares climbed more than 10% in premarket trading on Wednesday after the owner of Vans and The North Face reported fourth-quarter results that exceeded expectations and reinstated its annual financial guidance, reflecting increasing confidence in the company’s turnaround efforts.
The apparel group posted adjusted earnings per share of $0.06, outperforming analyst forecasts that had projected a loss of $0.01 per share. Revenue reached $2.17 billion, rising 1% from a year earlier and coming in above consensus estimates of $2.13 billion.
Revenue growth strengthens after Dickies divestment
Excluding the Dickies business, which was sold to Bluestar Alliance LLC during the third quarter for approximately $600 million, revenue increased 8% year over year, or 3% on a constant-currency basis.
That performance exceeded the company’s own guidance range of flat to 2% constant-currency growth and represented its strongest growth rate in three years on that basis.
The North Face delivered particularly strong results, with revenue rising 12% year over year, or 7% in constant currency. Growth was especially robust in the Americas, where sales advanced 17%.
Meanwhile, Timberland reported revenue growth of 8% on a reported basis, or 2% in constant currency.
“For the first time in three years, we returned to a full year of growth and expect to keep growing in FY’27,” said CEO Bracken Darrell in a statement. “We also significantly expanded margins and reduced our leverage ratio by a full turn vs. LY. In the fourth quarter, we delivered our strongest revenue performance since I joined VF.”
Vans remains under pressure despite signs of improvement
Vans continued to face challenges, with revenue down 1% on a reported basis and 5% in constant currency.
However, the brand returned to growth within its direct-to-consumer business in the Americas, a closely monitored indicator for investors tracking the recovery of the label.
Across the wider Americas region, revenue increased 2% year over year, or 10% in constant currency excluding Dickies, marking the strongest regional growth since the first quarter of fiscal 2023.
Adjusted operating income excluding Dickies reached $54 million, comfortably above the company’s guidance range of between $10 million and $30 million.
Company reinstates fiscal 2027 guidance
Looking ahead, V.F. Corp forecast constant-currency revenue growth of 1% to 2% for fiscal 2027.
The company also projected an adjusted operating margin of approximately 8% and said free cash flow is expected to remain flat or improve compared with the $405 million generated last year.