Updated at 5:39 p.m. ET on July 30
VF Corp. chief executive officer Bracken Darrell is not yet ready to declare victory and say the active giant has turned around.
But there is a sense, two years into his tenure, that Darrell and the company — parent to Vans, The North Face and Timberland — is ready to get back to the fun part of growing the business after a long painful retrenchment.
“This is what it’s all about,” Darrell told WWD in an interview. “This is what I came for, the next act is what I’m here for. The first act has been what was required to get there.”
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A whirlwind of change hit VF during that first act. Darrell swapped out most of the company’s management, putting Sun Choe in charge of Vans, Caroline Brown in the lead at The North Face along with many other changes. He also set up a global go-to market approach that each business can use to get their brand magic to customers. And the company’s debt load is coming down.
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First-quarter results showed — not growth yet — but a kind of stabilization.
Overall sales for the three months ended June 28 were flat at $1.8 billion. The North Face rose 6 percent to $557.4 million and Timberland was up 11 percent to $255.1 million. Vans continued to shrink, with sales down 14 percent to $498 million, but that was attributed to “channel rationalization actions” needed to fix the business.
Adjusted operating losses tallied $56 million — much better than the $110 million to $125 million in losses the company forecast. Net losses totaled $116.4 million.
Investors liked what they saw and the beleaguered stock jumped as much as 24 percent on Wednesday before traders seemed to content themselves with quick profits and VF shares settled to a gain of 2.6 percent to $12.72.
Tom Nikic, an analyst at Needham & Co., summed up the quarter with a research note that led off with: “Green Shoots at Vans, With Solid Trends Elsewhere.”
“While there’s still work to be done at Vans, and tariffs will impact the P&L, there is a growing sense that numbers have bottomed, and there could be a lot of ‘torque’ in the P&L when Vans starts growing again,” he said.
VF’s shares are down more than 23 percent over the past year, and way below their all-time high of more than $100, but Darrell said the company is doing what it needs to bounce back.
“Two things are weighing on VF from just a stock standpoint,” the CEO said. “One of them is the debt and the other one is Vans. When is it going to turn around or is it ever going to turn around?
“We really feel strongly about it. We have a really clear plan. We’re going to bring the leverage down below 2.5-times [earnings before interest, taxes, depreciation and amortization] in ‘28,” he said.
“On Vans, we’re super excited. Turnarounds take time, but we’ve got a fantastic team. We’re seeing some really interesting stuff at the very top end of the market, which is where trends start. And we’ve got some good products that are in development.”
Vans’ Warp Tour has also been drawing big crowds and ginning up excitement.
“The key to a Vans turnaround — and then getting a really strong growth — is footwear,” Darrell said. “There is an opportunity to grow apparel beyond that, but I don’t want to get ahead of ourselves publicly.”
The North Face also has more potential in apparel.
“North Face is a unique brand,” Darrell said. “I would say it probably has more in common with Nike than any other brand I can think of. It’s very much a performance brand. It has a performance pedigree. It actually grew out of being an equipment company. On the other hand, people love to wear it in New York, in the subway, in the streets. It’s got enough panache that it can play in the performance lifestyle area in a big way. And I’d say we’re still scratching the surface on that.”
VF not only still has lots of moving parts with turnarounds, brand evolutions and repositionings happening everywhere, it is also operating in an ever-more complicated market that’s been shaken up by U.S. President Donald Trump’s trade war tariffs.
After efforts to cut down on higher import costs, VF expects its gross profits will take a $60 million to $70 million hit from new tariffs this year and that the company will be able to fully mitigate anticipated tariffs next year.
But Darrell takes all of that in stride.
“As long as the tariffs fairly affect us broadly and equally affect all of us, it is what it is,” he said, referring to the industry at large. “It’s like the weather. It’s like the macro economy. I’m not going to sit and complain about that either.”
Instead, he’s focused squarely on something VF hasn’t had in a while, growth.
“Our expectation is we’re going to grow,” Darrell said. “That’s all we’re here for. Everything leading up to this is making sure that growth is profitable, it’s sustainable and is attractive and something we can be excited about.
“My ambition is not just to grow. I want Timberland to get well beyond mid single digits to double-digit growth for many years, because it can, I want Timberland to go through a long strong growth curve. And I certainly want Vans to be there. And then Dickies too. We have a lot of strong growth potential.”
Now, it’s just a matter of realizing that potential.