VF Corp 4Q26 Immediate Call Postmortem
Bracken explicitly communicated these takeaways: Return to growth in FY26 and expect to keep growing in FY27. Seeing tangible signs of momentum at Vans, led by Americas DTC. On track to reach FY28 targets. 70% of business is growing, up from 43% in FY24.
Guidance implies a hockey stick of expansion for FY28 to reach 10% goal, but reality here (given conservatism) is the upside probably more likely to be spread over both years given conservatism. Honestly who cares if they slightly miss the goal as long as Vans returns to growth (unfortunately still debatable)? Poser’s question about the 53rd week in FY27 made me realize that FY28 is going to face a difficult compare as well.
Ike was all over the 10% goal in Q&A. They “always” meant an exit runrate of 10% in FY28, not the EBIT margin for the entire year. FY29 will be 10% if not better. They “tried to communicate this several quarters ago”. Thanked Ike for asking the question as “hoped it would come up”. Come on guys, you should have proactively and explicitly said something if you thought there was confusion.
Now five consecutive double digit growth quarters for The North Face footwear. So many ways they can grow this brand: category growth, market share, new categories, and premium elevation.
Timberland still being driven by 6’’ boot but good results from the boat shoe. Resetting apparel proposition this fall.
Altra up 45% (says 50% in presentation) with double digit growth across all regions and all channels. Seeing outside growth in search interest, traffic, and new customer acquisition.
For Vans, most excited about progress in Americas DTC. Americas was up 5% with strength in DTC which is sequential progress from 3Q when only ecommerce grew (up 4%). Pearlized drops having great response, the Authentic was up 80%, and slip ons returned to growth. Ugh, they expect a MSD decline for Vans this year - need to unpack why it doesn’t get any better from the 5% decline in 4Q. I guess we got our answer in Q&A as there was a pull forward of demand in Q4 from Q1 but combined they will be about the same (2 pts each quarter but was in 4Q guide). Why didn’t a sell sider follow up on this?
Abhishek (COO) joined call but talked largely in broad strokes with few micro KPIs. We did get that Vans pulled forward products planned for fall 2026 and delivered them in less than six months, which was 1/3 normal cycle time. Poser got him to say they chased and got the Super Low Pro back on the floor in 77 days.
Binetti asked about Vans sell through at wholesale. Sell through is not as strong as DTC. DTC is harbinger of what is going to come as products in DTC are coming to wholesale later. Intentionally being “cagey” about telling us timing.
The 7% EBIT margin in FY26 is a “good clean margin”. If tariffs get put back in place it would make a difficult compare in Q4.
Lorraine – please fix your phone. Seems to have asked a good question about Vans turnaround strategies. Marketing of Vans has changed where used to be a lot of skateboarding and now it’s more the California lifestyle. Have broadened media buys so even reaching older people like Bracken who love Vans – must admit Bracken just looks like he is a cool guy...
*These are our unabridged quick thoughts and notes from the call. We get them out as soon as possible after the call ends. Management has given some topics to dig deeper into and will circle back afterwards with much more in depth work on what was mentioned. You can find that work (and more on VF Corp and other retail/consumer research) at our website here: M Squared Capital
Originally posted on X and Substack.