VF Corp (VFC), the parent company behind popular brands like Vans and The North Face, reported strong second-quarter financial results that exceeded analysts’ expectations, sending its shares soaring after the market closed on Monday.
Strong Revenue and Earnings Performance
The company announced revenue of $2.8 billion for the quarter, surpassing the consensus estimate of $2.7 billion. VF Corp also reported earnings of 60 cents per share, outperforming the anticipated 37 cents per share. Despite the positive results, total revenue was down 6% year-over-year. This decline was attributed to a 3% drop in The North Face revenues and an 11% decrease in Vans’ sales.
Regional Performance
Geographically, the company saw a 10% decline in revenues from the Americas and a 2% drop in international revenues during the quarter. VF Corp also noted that it reduced its inventory levels by 13% compared to the previous year’s quarter.
Debt Reduction and Reinvent Priorities
VF Corp highlighted its commitment to financial stability by reducing its debt by $446 million during the quarter, bringing its net debt to $5.7 billion at the end of the period. The company is also making progress on its “Reinvent” priorities, a strategy aimed at driving efficiency and profitability. VF Corp is on track to achieve its previously announced target of $300 million in savings by the end of fiscal year 2025.
Outlook and Dividend Increase
Looking ahead, VF Corp expects third-quarter revenue to fall within the range of $2.7 billion to $2.75 billion. This projection is slightly below analyst estimates of $2.96 billion. The company anticipates third-quarter adjusted operating income of $170 million to $200 million and projects full-year free cash flow from continuing operations of approximately $425 million. The company’s board declared a dividend of 9 cents per share, payable on December 18 to shareholders of record as of December 10.
Share Price Surge
The strong financial performance and positive outlook sent VFC shares soaring. In after-hours trading on Monday, VF Corp’s stock price jumped over 16.85%, reaching $19.90 per share at the time of publication. The company’s management team discussed the quarter in detail during a conference call that began at 4:30 p.m. ET.
VF Corp’s positive earnings report and the subsequent stock price surge demonstrate the company’s resilience and ability to navigate a challenging economic environment. The company’s focus on its key brands, inventory management, and debt reduction strategy has positioned it for continued growth in the future.
