VF Corporation Reports Q3 Fiscal 2025 Results with $2.83 Billion Revenue and Operating Income Recovery

VF Corporation reported its financial results for the third quarter of fiscal 2025, revealing a net revenue of $2.83 billion, a 2% increase from $2.78 billion in the same period last year. The company achieved an operating income of $225.8 million, a significant recovery from an operating loss of $91.2 million in the prior year. The improved profitability was attributed to a 170 basis point increase in gross margin, which rose to 56.3%, driven by lower product costs and reduced promotional activities.

The company experienced notable changes in its revenue streams across its segments. The Outdoor segment saw a 6% increase in revenue to $1.85 billion, while the Active segment's revenue decreased by 6% to $766.3 million. The Work segment also reported a decline, with revenues falling 3% to $216.5 million. The decrease in the Active and Work segments was partially offset by an 8% increase in wholesale revenues, although direct-to-consumer revenues fell by 3%. International revenues increased by 1%, with the Americas region showing a slight growth of 1% as well.

Strategically, VF Corporation completed the sale of its Supreme brand to EssilorLuxottica for $1.5 billion on October 1, 2024. The sale resulted in an estimated after-tax loss of $127.5 million, which has been reported under discontinued operations. The proceeds from the sale were utilized to prepay $1 billion of long-term debt and to reduce commercial paper borrowings. Additionally, the company has initiated a transformation program called "Reinvent," aimed at enhancing brand focus and improving operational efficiency, with an estimated restructuring cost of $190 million to $210 million.

Operationally, VF Corporation's total assets decreased to $10.55 billion as of December 2024, down from $12.62 billion a year earlier. The company reported a significant reduction in inventories, which fell to $1.79 billion, reflecting efforts to manage elevated inventory levels. The employee headcount remained stable, with 389.6 million shares of common stock outstanding. The company’s liquidity position improved, with cash and equivalents increasing to $1.37 billion, bolstered by cash flows from operations despite a decrease in cash provided by operating activities compared to the previous year.

Looking ahead, VF Corporation anticipates continued challenges in the retail environment but remains focused on executing its strategic initiatives to drive growth and profitability. The company aims to leverage the proceeds from the Supreme sale to strengthen its balance sheet and reduce leverage, while also investing in its core brands to enhance market share and operational performance.