VF Corp. Stock Jumps on Earnings Beat. Turnaround Efforts Are Paying Off.

Vans sales fell 15% year over year this quarter. (Juan Naharro Gimenez/Getty Images)

VF Corp. stock was soaring Wednesday morning after the Vans’ parent company posted a better-than-feared first quarter.

VF, which also owns The North Face, Timberland, and Dickies, reported an adjusted loss of 24 cents a share for the quarter ended June, better than analysts’ projections for a loss of 34 cents per share, according to FactSet.

Revenue of $1.76 billion was also slightly ahead of estimates for $1.7 billion. Sales growth was flat compared with a year prior, reflecting ongoing turnaround efforts at the Vans brand, which saw a 15% annual decline in sales. Excluding Vans, total revenue was up 6% from last year, the company said, with The North Face up 5% and Timberland up 9%.

Shares opened as much as 20% higher Wednesday, and were up 11% at $13.77 in midmorning trading. The stock is down 35% this year.

VF also shared its outlook for the second quarter, saying it expects revenue to fall between 2% and 4% year over year, a steeper decline than the roughly 1% dip analysts were looking for. The company’s operating income guidance of $260 million to $290 million also disappointed, given that analysts had penciled in $321 million.

That said, investors were willing to overlook the weaker guidance in light of the company’s strong start to the fiscal year, reflecting the progress VF has made on the turnaround plan unveiled last year.

“The company appears to be making progress against its high-level framework shared last year,” wrote Dana Telsey, CEO of Telsey Advisory Group. “With limited visibility, VFC is continuing its trend of providing quarterly guidance.”

Telsey rates the stock Market Perform with a $14 price target.

On Wednesday, VF’s management team said the company had reduced over $300 million in costs and had improved operating income. The company also said that it expects free cash flow to be higher this fiscal year.

“We are well on our way to transforming VF and this quarter is another step in the right direction,” said CEO Bracken Darrell on a call with investors. “Our powerful portfolio brands and the sustainable growth model we’re creating will help us accelerate growth and improve margins.”

Tariffs, however, remain a challenge. VF expects the new levies will cost the company between $250 million and $270 million a year. Half of that total will affect the 2026 fiscal year, resulting in a $60 million to $70 million hit to gross profit this year.

Write to Sabrina Escobar at sabrina.escobar@barrons.com