V.F. Corp Prepares for Q1 Earnings Amid Vans Restructuring Challenges

V.F. Corporation’s Upcoming Earnings Report: Key Insights

V.F. Corporation (VFC) is expected to report a year-over-year decline in both revenue and net income when it releases its first-quarter fiscal 2026 earnings on July 30, before the market opens. According to the Zacks Consensus Estimate, the company is projected to generate $1.7 billion in quarterly revenues, representing an 11.2% decrease compared to the same period last year. The estimated loss per share stands at 34 cents, which is wider than the 33 cents reported in the previous year’s quarter. Notably, the earnings estimate has remained relatively stable over the past 30 days.

The company’s recent performance has shown some positive surprises. In the last reported quarter, V.F. Corp delivered an earnings surprise of 13.3%, and over the trailing four quarters, the average earnings surprise was 36.9%. However, for the upcoming first-quarter results, the outlook appears more challenging.

Factors Impacting V.F. Corporation’s Performance

Several factors are expected to pressure V.F. Corporation’s financial results in the first quarter of fiscal 2026. Management has guided for a revenue decline of 3-5% on a constant currency basis, citing ongoing challenges from strategic reset actions at Vans and weak consumer traffic. The first quarter is typically the smallest quarter for the company, but it is disproportionately affected by Vans’ performance. Any further deterioration in the brand’s momentum could significantly impact consolidated results.

Vans continues to be a drag on top-line performance, with management indicating that first-quarter trends will mirror the 20% decline seen in the fourth quarter of fiscal 2025. The fiscal first quarter will reflect the full impact of earlier store closures, exits from value channels, and distressed inventory reductions—part of a broader plan to clean up the marketplace and reset the brand for profitable growth. While these actions aim to build a stronger foundation, they are expected to distort year-over-year comparisons through at least the first half of fiscal 2026. Management does not anticipate a visible improvement in Vans’ financial performance until the back-to-school or holiday season.

In addition to these challenges, foreign exchange is expected to have a modest unfavorable impact on the first-quarter results. Despite these headwinds, V.F. Corporation remains focused on its transformation goals under the Reinvent strategy, including cost structure optimization, improved brand focus, and balance sheet deleveraging. Although the company did not provide full-year guidance for fiscal 2026, it reiterated expectations for operating margin expansion despite macroeconomic and brand-specific challenges.

Positive Outlook on Gross Margins

On the positive side, V.F. Corporation is expected to maintain a strong gross margin, driven by lower input costs, fewer promotions, and an improved inventory mix. These tailwinds helped deliver a 560 basis-point gross margin improvement in the fourth quarter of fiscal 2025, and they are likely to carry into the first quarter of fiscal 2026. However, operating leverage remains limited. VFC expects an operating loss of $110 to $125 million for the first quarter of fiscal 2026. SG&A expenses are forecasted to remain flat or slightly down year over year, with cost savings from the Reinvent program offsetting investments in product development and marketing.

Valuation and Market Performance

V.F. Corporation stock is currently trading at a premium valuation relative to the industry. Based on the forward 12-month price-to-earnings ratio, the stock is valued at 13.87X, compared to 11.49X for the Textile – Apparel industry. Over the past three months, VFC’s shares have gained 8.2%, outperforming the industry’s 1.1% growth.

According to the Zacks model, V.F. Corp does not have a clear path to an earnings beat this time around. The company has an Earnings ESP of -15.00% and carries a Zacks Rank of 3. This combination does not increase the likelihood of an earnings beat, unlike stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) paired with a positive Earnings ESP.

Other Stocks to Watch

While V.F. Corporation faces challenges, other companies may offer better opportunities. For example:

• Ralph Lauren (RL): RL has an Earnings ESP of +1.02% and a Zacks Rank of 2. It is expected to see a top-line increase, with revenues projected to rise 8.7% year over year.
• Planet Fitness (PLNT): PLNT has an Earnings ESP of +1.48% and a Zacks Rank of 2. The company is expected to report growth in both revenue and earnings.
• Royal Caribbean Cruises (RCL): RCL has an Earnings ESP of +0.72% and a Zacks Rank of 3. It is expected to see significant growth in both revenue and earnings.

These companies are among those identified by the Zacks model as having the right combination of factors to potentially beat earnings estimates.