VF Corp. offered investors an update on its struggling Vans business by telling them turnarounds take time.
That’s what VF CEO Bracken Darrell told analysts Wednesday morning as the company reported results for its fiscal third quarter ended Dec. 28. Darrell sought to put forth the silver lining in Vans’ performance, pointing to the Costa Mesa company’s revenue decline as improved from the prior quarter.
Vans revenue was off 8 percent in constant currency to $607.6 million in the recently ended period. That compares with down 11 percent in the previous quarter. Declines were seen across its regions, with Asia-Pacific the most notable as revenue dropped 31 percent.
Still, Darrell was upbeat on progress.
“I feel very good about the steps we’re taking, but sustained turnarounds take time,” Darrell said.
The CEO pointed to the company’s Knu Skool style, which has become a go-to callout for executives during earnings calls, as an indication of the brand’s potential when it diversifies and focuses on product innovation.
The executive said there was “strong sell-out” of the company’s OTW collaborations for holiday. That included partnerships with Satoshi Nakamoto and HommeGirls. Additionally, Vans full-price channels in the U.S. did well over the holiday selling period, offering a bright spot not seen since February 2022.
“We are making progress and are more confident than ever of the brand’s growth potential,” Darrell said of steps taken across product, marketing, distribution and brand.
Tactics To Date
The company is saving specifics for an investor day later this year in which Global Brand President Sun Choe is expected to present more details. Even still, Darrell offered caution on forecasts.
“I’m going to keep the expectations low for Vans as long as possible because I want to give [Choe] plenty of room to operate,” he said. “She is a real operator. She is deep in the middle of stuff.”
Choe’s had some impact on back-to-school and holiday, but that’ll ramp further in 2026.
“It’s going to take time,” Darrell repeated.
Choe joined Vans in late July to helm the business. She brings to the company experience as the former chief product officer of Lululemon. Before that, she was chief global product merchant at Marc Jacobs and has also held senior roles at West Elm, Madewell and Urban Outfitters.
The upcoming investor day will offer a clearer look at Choe’s work on Vans.
Tactically, Darrell pointed to a cleanup that’s been in progress for Vans’ distribution channels, including closing 14 percent of its company-owned stores. It has also closed about 9 percent of stores in the U.S. wholesale channel.
Off-price accounts for about a third of Vans’ business. That’s down from a high of about half the overall revenue.
Darrell estimated the split would likely remain where it’s at for off-price but could decline over time.
“I’m not afraid of the value channel,” he said. “You could tend to think the value channel is just discount, discount, discount. Actually, the profitability of the value channel can be very good…. We want to be where our customers really want to shop and the value channel is definitely part of that.”
On Brand
Experimentation on the target consumer base for Vans appears to be the current philosophy.
Darrell declined to get into the details and deferred to Choe’s upcoming investor day presentation as the question was posed of consumer feedback to the brand’s attempts to broaden its relevance.
The company is rooted in skateboarding but is looking to resonate across action sports and an even larger customer base. With the action sports industry’s largest brands in consolidation mode, the landscape could offer Vans an in for growing market share.
“We are experimenting with what kind of demand creation, where we’re spending our money—especially during the holiday period—and we’re learning,” Darrell said.
The CEO added: “We’re in deep learning mode and action mode.”
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