VF Corp said it expects fourth-quarter revenue to come in above analysts' estimates, building on a stronger-than-anticipated holiday quarter. Still, the apparel and footwear group saw its shares fall roughly 7% after management signaled that tariffs are "just starting to hit" its business and that mitigation efforts will not fully offset a material profit impact in the year ahead.
The company, best known as the parent of Vans and other lifestyle brands, sources about 85% of the goods it sells in the U.S. from factories in Southeast Asia and Central and South America. Management outlined a series of steps intended to blunt tariff pressure, including accelerating production and shipments into distribution channels, collaborating with suppliers on cost reductions and implementing selective price increases.
Those measures, however, are not expected to negate the cost shock entirely. VF Corp said it anticipates an approximate $100 million hit to profit in fiscal 2026 tied to the tariff environment. "Tariffs are just starting to hit us. We’ve talked about our ability to mitigate those tariffs within fiscal 2027 and nothing’s changed on that at all," CFO Paul Vogel said on an earnings call.
Despite the tariff caution, VF highlighted a robust holiday-quarter performance driven by new product collections. The company reported that The North Face and Timberland each achieved 8% growth across the Americas as well as in Europe and Asia, contributing to the stronger top-line outcome.
At the same time, VF continues to address underperformance within its portfolio. Vans posted an 8% decline in sales during the quarter and remains the focus of an ongoing turnaround effort. In addition, the company has been simplifying operations, including shedding lower-performing units such as Dickies last year.
Analyst Sky Canaves of Emarketer summarized the Vans situation, noting: "Vans is still grappling for a turnaround, particularly in the key U.S. market, there’s little indication of a return to growth in sales or store traffic in sight." The remark underscores the challenge of reviving the brand amid slower traffic and sales trends in its primary market.
On reported results, VF posted third-quarter revenue of $2.88 billion, topping the analysts' average estimate of $2.76 billion as compiled by LSEG. On a per-share basis, and excluding one-time items plus contributions from the Dickies brand, adjusted earnings were 58 cents, ahead of the 45-cent consensus.
Looking forward, VF expects fourth-quarter revenue to be flat to up 2% versus year-ago levels, a projection that contrasts with analysts' consensus which had anticipated a 2.6% decline. The firm’s guidance and the earnings beat highlight resilience in consumer demand for several of its core brands even as cost pressures rise.
Implications
The company’s mix of positive top-line momentum at key brands and a clear warning about tariff-driven profit pressure presents a nuanced picture for investors. Operational moves to accelerate shipments and trim supplier costs may reduce near-term margin erosion, but management’s explicit $100 million profit impact estimate for fiscal 2026 signals a notable headwind to profitability that market participants will monitor closely.