V F Q3 2026 VF Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 VF Corp Earnings Call
Call.
After today's prepared remarks, we will host a question and answer session.
If you would like to ask a question, please, raise your hand.
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I will now hand the conference over to algra Perry vice president of investor relations. Please go ahead.
Hello everyone! Welcome to VF. Corporation third quarter, fiscal 2026 conference. Call on today's call. We will make forward-looking statements
These statements are based on current expectations.
And our subject to uncertainties, that could cause actual results to differ materially these uncertainties.
Our detailed and documents filed regularly with the SEC.
Unless we say otherwise amounts that bracket and Paul refer to on today's call are all on an adjusted constant dollar continuing operations and excluding Dickie's basis which we've defined in the presentation that was posted this morning on our investor relations website.
We use those as lead numbers in our discussion as we believe, they more accurately represent the true operational performance and underlying results of our business.
We may also refer to reported amounts which are in accordance with us, gaap.
Reconciliations of gaap measures to adjusted amounts are found in the supplemental Financial tables, which are included in the presentation, where we identify and qualify all excluded items and provide Management's view of why this information is useful to investors.
Joining me on today's call are VFS president and chief executive officer, Brack, and Daryl and EVP and Chief Financial Officer. Paul Vogel
Following our prepared, remarks will open the call for your questions. I'll now hand over to Bracken.
Thank you so much, Allegra.
Before I get into anything else, I can't help, but talk about Alex honold.
Over the weekend Alex set a record for the biggest Urban free solo climate history. Climb in the 1667 ft skyscraper Taipei 101.
Alex has been an athlete of the North Face for over 20 years.
He's and he's 1 of the many, super impressive, and brave human beings. We work with as we develop products and marketing.
You might remember just last quarter, we highlighted the Jim Morrison completed, the first ski Descent of the North Face of Mount Everest.
That was captured by another athlete of ours, Jimmy chin and will be released as a feature film later this year and Jim's backstory is simply incredible.
Our athletes continue to push the boundaries, wearing the North Face product.
And we continue to push the boundaries of our results. So let me get into the third quarter.
We had a strong third quarter. I'm incredibly proud of the team and I'd like to thank all of our employees for their Relentless, hard work and dedication.
Importantly, our business improved in Q3 relative to the last quarter returning to growth during our Peak holiday quarter.
In Q3 total revenues up 2% exceeding. Our own expectations.
Over 75% of our business was up by revenue and excluding bands and Dickies revenues up 5% versus last year.
On a global basis at DTC returned to growth up. 3% driven by the US particularly in digital.
We also had 1 of our strongest performances in the Americas and over 3 years up 6% driven by growth in both DTC and wholesale.
As you'll remember, fixing the US has been a top priority of our turnaround.
Our Revenue performance also helped Drive stronger than anticipated operating income.
Of 341 million.
Reported, net debt. Excluding lease liabilities
Was down almost $600 million versus last year or down almost 20%.
To summarize we had a very strong, Q3 growing Revenue expanding margins and reducing debt. Exactly. As we said we do
Let's talk through some of our highlights from Our Brands where we continue to see continued progress, progress, the board.
Starting with the North Face which delivered strong growth during the peak season with Revenue up 5%.
Both t DTC and wholesale were up globally and a, particularly proud of the fact that we grew 15% in the Americas.
The North Face is generating broad-based. Growth across categories.
In the quarter, all product categories were up versus last year with strength and performance, apparel, and Footwear, which was up double digits. Again, this quarter,
Last quarter, we talked about the expanded product offering of 7 Series.
That is also performing strongly with double digit growth in all regions.
Well into elevated products and elevated fabrication, let me give you an example.
Our leather collection. I have the jacket right in front of me with a with a leather jacket priced at $1,100. Sold out in less than 24 hours.
The brand was again recognized for design and Innovation through multiple Awards, including the top outdoor brand in America in times of the world's best brands of 2025 list.
You might remember, we also won past companies, 2025 Innovation, by Design award Times best Innovations of 2025, and the Popular Science. 50 greatest inventions are Innovations of 2025.
In addition, to elevating our product offering, we also continue to advance on another key strategic priority to to enhance our distribution.
During the quarter, we opened our largest global flagship store in New York on 5th Avenue.
Which represents how we're reimagining physical retail for the brand.
The store is delivered strong results in its initial weeks of trading.
We continue to refine and Advance our marketing tactics.
Our social first marketing approach is driving brand heat while broadening reach and Q3 marked our strongest social first performance today.
and that was before, Alex's climb
During the quarter, we launched the second installment of our collaboration with skims.
Which also delivered strong results.
As you can see, lots of great developments at The North Face.
Moving into on the Timberland. This is another brand with great momentum. Brand revenue is up 5% in Q3 with global growth across both wholesale and DCC.
Americans had another strong quarter up 9%.
From our product perspective, the 6-inch premium boot was a key driver behind the brand strong momentum.
Bracken Darrell: That is also performing strongly, with double-digit growth in all regions. We're making inroads as well into elevated products and elevated fabrication. Let me give you an example. Our Leather Collection, I have the jacket right in front of me, with a leather jacket priced at $1,100, sold out in less than 24 hours. The brand was again recognized for design and innovation through multiple awards, including the top outdoor brand in America in TIME's The World's Best Brands of 2025 list. You might remember we also won Fast Company's 2025 Innovation by Design award, TIME's Best Innovations of 2025, and the Popular Science 50 Greatest Inventions or Innovations of 2025. In addition to elevating our product offering, we also continue to advance on another key strategic priority to enhance our distribution.
Bracken Darrell: That is also performing strongly, with double-digit growth in all regions. We're making inroads as well into elevated products and elevated fabrication. Let me give you an example. Our leather collection, I have the jacket right in front of me, with a leather jacket priced at $1,100, sold out in less than 24 hours. The brand was again recognized for design and innovation through multiple awards, including the top outdoor brand in America in TIME's The World's Best Brands of 2025 list. You might remember we also won Fast Company's 2025 Innovation by Design award, TIME's Best Inventions of 2025, and the Popular Science 50 Greatest Inventions or Innovations of 2025. In addition to elevating our product offering, we also continue to advance on another key strategic priority to enhance our distribution.
And were innovating this core. I innovating against this core icon while also continuing to develop products across other categories. The boat shoe continues to grow strongly up double digits in all regions and we're developing the Brand's product lineup, including new transitional styles for the warmer seasons.
We're making inroads as well into elevated products and elevated fabrication. So let me give you an example.
Timberland has incredible energy and we're amplifying that Brand's cultural relevancy and reach through social first marketing as well.
Our leather collection I have the jacket right in front of me with a with a leather jacket priced at $1100 sold out in less than 24 hours.
Building on the last quarter's Trends. Search engine search interests continues to grow in the US and kemia markets.
The brand was again recognized for design and innovation through multiple awards, including the top outdoor brand in America in times, the world's best brands of 2025 list.
The brand consistently shows up in key cultural moments and is embraced by celebrities everywhere.
Courtside to the red carpet.
As you could probably tell, I couldn't be more excited about Timberland's growth opportunity over the long term more to come.
You might remember we also won fast company's 2025 innovation by design Award Times' Best innovations of 2025, and the popular science 50 greatest inventions, our innovations of 2025.
Moving on to Ultra.
It's clearly a smaller brand of day than our top 3. But I have to tell you, I love the Brand's energy and distinctive products.
The potential here is large and probably underappreciated.
In addition to elevating our product offering we also continue to advance on another key strategic priority to enhance our distribution.
The the brand delivered another quarter of extremely strong growth of 23% versus last year.
Bracken Darrell: During the quarter, we opened our largest global flagship store in New York on Fifth Avenue, which represents how we're reimagining physical retail for the brand. The store has delivered strong results in its initial weeks of trading. We continue to refine and advance our marketing tactics. Our social-first marketing approach is driving brand heat while broadening reach, and Q3 marked our strongest social-first performance to date, and that was before Alex's climb. During the quarter, we launched the second installment of our collaboration with Skims, which also delivered strong results. As you can see, lots of great developments at The North Face. Moving on to Timberland. This is another brand with great momentum. Brand revenue was up 5% in Q3, with global growth across both wholesale and DTC. Americas had another strong quarter, up 9%.
During the quarter, we opened our largest global flagship store in New York on Fifth Avenue, which represents how we're reimagining physical retail for the brand. The store has delivered strong results in its initial weeks of trading. We continue to refine and advance our marketing tactics. Our social-first marketing approach is driving brand heat while broadening reach, and Q3 marked our strongest social-first performance to date, and that was before Alex's climb. During the quarter, we launched the second installment of our collaboration with SKIMS, which also delivered strong results. As you can see, lots of great developments at The North Face. Moving on to Timberland. This is another brand with great momentum. Brand revenue was up 5% in Q3, with global growth across both wholesale and DTC. Americas had another strong quarter, up 9%.
During the quarter, we opened our largest global flagship store in New York on fifth Avenue.
Prix key franchise in both Trail and Road running. Continue to drive growth and refueling this growth with more and more innovation.
Which represents how we're re imagining physical retail for the brand.
New products are delivering, including via and temp 6.
The stores delivered strong results in its initial weeks of trading.
We're investing strongly in marketing given the very high Roi.
We continue to refine and advance our marketing tactics.
We're well on track to exceed 250 million in revenue for Ultra in fiscal 26.
Our social first marketing approach is driving brand heat, while broadening reach and Q3 marked our strongest social first performance to date.
With the addressable Market is large and growing.
And that was before Alex's climb.
During the quarter, we launched the second installment of our collaboration with Skims.
Which also delivered strong results.
Now let's turn to Vans. We continue to make progress here and we're seeing green shoots in line. With our expectation revenue is down, 10% similar to the last quarter. You already know that we're focused on executing the key commercial moments as we continue to refresh and upgrade the product lineup.
As you can see lots of great developments at the north face.
Moving into other timberland. This is another brand with great momentum brand revenue was up 5% in Q3 with global growth across both wholesale and DTC.
This strategy is starting to deliver in fact Global digital Revenue grew in the quarter, grew in the quarter led by the Americas.
In terms of product newness.
Americans had another strong quarter up 9%.
Bracken Darrell: From a product perspective, the Six-Inch Premium Boot was a key driver behind the brand's strong momentum, and we're innovating against this core icon, while also continuing to develop products across other categories. The Boat Shoe continues to grow strongly, up double digits in all regions, and we're developing the brand's product lineup, including new transitional styles for the warmer seasons. Timberland has incredible energy, and we're amplifying that brand's cultural relevancy and reach through social-first marketing as well. Building on last quarter's trends, search interest continues to grow in the US and key EMEA markets. The brand consistently shows up in key cultural moments and is embraced by celebrities everywhere, from courtside to the red carpet. As you can probably tell, I couldn't be more excited about Timberland's growth opportunity over the long term. More to come. Moving on to Altra.
From a product perspective, the Six-Inch Premium Boot was a key driver behind the brand's strong momentum, and we're innovating this core, innovating against this core icon, while also continuing to develop products across other categories. The boat shoe continues to grow strongly, up double digits in all regions, and we're developing the brand's product lineup, including new transitional styles for the warmer seasons. Timberland has incredible energy, and we're amplifying that brand's cultural relevancy and reach through social-first marketing as well. Building on last quarter's trends, and search interest continues to grow in the US and key EMEA markets. The brand consistently shows up in key cultural moments and is embraced by celebrities everywhere, from courtside to the red carpet. As you can probably tell, I couldn't be more excited about Timberland's growth opportunity over the long term. More to come. Moving on to Altra.
From a product perspective, the six inch premium boot was a key driver behind the brand's strong momentum.
And we're innovating this core innovating against this core I can while also continuing to develop products across other categories. The boat shoe continues to grow strongly up double digits in all regions and we are developing the brand's product lineup, including new transitional styles for the warmer seasons.
Or in terms of product new products delivered growth. Again, this quarter with consistently strong Trends, delivered by the super low Pro, the skate loafer, which I'm wearing right now, and the cross path, XC where we continue to innovate with design, colors and materials.
Elevation Innovation and newness are also increasingly visible and having an impact across our icons.
Timberland has incredible energy and we're amplifying that brands cultural relevancy and reach through social first marketing as well building.
The authentic and the slip-on are delivering improving Trends but benefiting from a rising interest among the high fashion brands and skate inspired shoes.
The K-pop demon Hunters collaboration launched in early December. Just a few months after the movie, hit the screens
Building on last quarter's trends search engine and search interest continues to grow in the U S and <unk> markets the.
In this 1, we showed how fast we can bring a product to Market.
The brand consistently shows up in key cultural moments is embraced by celebrities everywhere from court side to the Red carpet.
We went from idea to store shelf in 10 weeks.
We're working on product, creation is free to cross our portfolio. Now for 2027
As you can probably tell I couldnt be more excited about timberlands growth opportunity over the long term more to come.
Turning the marketing, our shift in strategy is visible.
Moving onto Altra.
Bracken Darrell: It's clearly a smaller brand today than our top three, but I have to tell you, I love the brand's energy and distinctive products. The potential here is large and probably underappreciated. The brand delivered another quarter of extremely strong growth, up 23% versus last year. Key franchises in both trail and road running continue to drive growth, and we're fueling this growth with more and more innovation. New products are delivering, including Via and Timp 6. We're investing strongly in marketing, given the very high ROI. We're well on track to exceed $250 million in revenue for Altra in fiscal 2026, but the addressable market is large and growing. Now, let's turn to Vans. We continue to make progress here, and we're seeing green shoots. In line with our expectation, revenue is down 10%, similar to last quarter.
It's clearly a smaller brand today than our top three, but I have to tell you, I love the brand's energy and distinctive products. The potential here is large and probably underappreciated. The brand delivered another quarter of extremely strong growth, up 23% versus last year. Key franchises in both trail and road running continue to drive growth, and we're fueling this growth with more and more innovation. New products are delivering, including Via and Timp 6. We're investing strongly in marketing, given the very high ROI. We're well on track to exceed $250 million in revenue for Altra in fiscal 2026, but the addressable market is large and growing. Now, let's turn to Vans. We continue to make progress here, and we're seeing green shoots. In line with our expectation, revenue is down 10%, similar to last quarter.
Our holiday campaign meet the Vans, featured, lifestyle product, and drove online energy, during the gift giving holiday period.
It's clearly a smaller brand today and our top three but I have to tell you I love the brands energy and distinctive products.
The potential here is large and probably underappreciated.
The brand delivered another quarter of extremely strong growth up 23% versus last year.
First time in over 4 years, led by the Americas.
Key franchises in both trail and road running continued to drive growth and we're fueling this growth with more and more innovation.
We are excited about the influence, we see as well, like we'll see later later this year from siza in her role as artistic director.
New products are delivering including via and tip six.
We're investing strongly in marketing given the very high ROI.
We're well on track to exceed $250 million in revenue for ultra in fiscal 'twenty six.
Just last week says, it was in Paris at Paris Fashion Week, seated, in the front row at Louis Vuitton. And Dior fashion shows wearing bespoke Vans Old Skool, and authentic Bejeweled, with gemstones, by new york-based, jewelry, designer Rachel goatley
We'll see more of siza and her artistic vision for the brand of the coming months.
But the addressable market is large and growing.
In summary, Vans continues to make progress.
Now, let's turn to vans, we continue to make progress here and we're seeing green shoots in line with our expectations revenue was down 10% similar to last quarter you already know that we're focused on executing the key commercial moments as we continue to refresh and upgrade the product lineup.
Bracken Darrell: You already know that we're focused on executing the key commercial moments as we continue to refresh and upgrade the product lineup. This strategy is starting to deliver. In fact, global digital revenue grew in the quarter, grew in the quarter, led by the Americas. In terms of product newness or in terms of product, new products delivered growth again this quarter, with consistently strong trends delivered by the Super Lowpro, the Skate Loafer, which I'm wearing right now, and the Crosspath XC, where we continue to innovate with design, colors, and materials. Elevation, innovation, and newness are also increasingly visible and having an impact across our icons. The Authentic and the Slip-On are delivering improving trends, benefiting from a rising interest among the high-fashion brands in skate-inspired shoes.
You already know that we're focused on executing the key commercial moments as we continue to refresh and upgrade the product lineup. This strategy is starting to deliver. In fact, global digital revenue grew in the quarter, grew in the quarter, led by the Americas. In terms of product newness, or in terms of product, new products delivered growth again this quarter, with consistently strong trends delivered by the Super Low Pro, the Skate Loafer, which I'm wearing right now, and the CrossPath XC, where we continue to innovate with design, colors, and materials. Elevation, innovation, and newness are also increasingly visible and having an impact across our icons. The Authentic and the Slip-On are delivering improving trends, benefiting from a rising interest among the high-fashion brands in skate-inspired shoes.
I'd like to share a plan transition. Now, within our Global Leadership team, our chief commercial officer Martino gabbia create agrini is stepping down from his role.
Martina will continue to support the company's adviser to me to ensure a smooth transition.
This strategy is starting to deliver in fact global digital revenue grew in the quarter grew in the quarter led by the Americas at.
In terms of product newness are in.
In terms of product new products delivered growth again, this quarter with consistently strong trends delivered by the Super low pro skate loafer, which I'm wearing right now and across Bath Z where we.
Brent Hyder will assume the role of Chief commercial officer. In addition to the continuing role, his continuing role as president for the Americas a role. He's held since last spring with strong results.
<unk> to innovate with design colors and materials.
I want to sincerely thank Martina for his 20 years about standing contributions to the company, Martino's energy, passion and deep focus on design and consumer-led brands have left an enduring impact on our business. And on me,
Elevation innovation and newness are also increasingly visible and having an impact across our icons the authentic and the slip on are delivering improving trends.
I'm confident this leadership. Team comprised of best-in-class talent will enable us to fulfill vf's significant growth opportunities ahead.
Benefiting from a rising interest among the high fashion brands and skate inspired shoes.
To, to conclude we have momentum.
Bracken Darrell: The K-Pop Demon Hunters collaboration launched in early December, just a few months after the movie hit the screens. In this one, we showed how fast we can bring a product to market. We went from idea to store shelf in 10 weeks. We're working on product creations across our portfolio now for 2027. Turning to marketing, our shift in strategy is visible. Our holiday campaign, Meet the Vans, featured lifestyle product and drove online energy during the gift-giving holiday period. Our digital traffic trends improved in the Americas and in EMEA, which led to growth in our global e-commerce sales for the first time in over 4 years, led by the Americas. We are excited about the influence we see as well. We'll see later this year from SZA, in her role as artistic director.
The K-pop Demon Hunters collaboration launched in early December, just a few months after the movie hit the screens. In this one, we showed how fast we can bring a product to market. We went from idea to store shelf in 10 weeks. We're working on product creations free to cross our portfolio now for 2027. Turning to marketing, our shift in strategy is visible. Our holiday campaign, Meet the Vans, featured lifestyle product and drove online energy during the gift-giving holiday period. Our digital traffic trends improved in the Americas and in EMEA, which led to growth in our global e-commerce sales for the first time in over 4 years, led by the Americas. We are excited about the influence we see as well. We'll see later, later this year from SZA, in her role as artistic director.
The K pop Demon Hunter is collaboration launched in early December just a few months after the movie hit the screens.
And now we've gone positive for the first time in a while, we're on track to deliver our targets. I'll now hand it over to Paul who will dive in deeper into the numbers Paul.
And this one we showed how fast we can bring a product to market. We went from idea to store shelf in 10 weeks, where we.
Great, thank you, Bracken.
Working on product creation spread across our portfolio now for 2027.
Before I go into details of Q3 actuals and Q4 guidance. Let me give you the punch line for help fiscal 26 is shaping up.
Annual revenue will be flat to up this year versus last year.
Turning to marketing our shift in strategy is visible our holiday campaign meet demands featured lifestyle product and drove online energy during the gift giving holiday period.
Gross margin will be at 54.5% or better within Striking Distance of our fiscal year. 28 Target of 55%
Our digital traffic trends improved in the Americas, and anemia, which led to growth in our global E. Commerce sales for the first time in over four years led by the Americas.
operating margin will be 6.5% or better.
Operating in free, cash flow will be up first last year.
Leverage will be 3.5 times or lower down from 4.1 times at the end of fiscal 2025.
We are excited about the influence we see as well.
We will see later later this year from citizen in her role as artistic director.
Bracken Darrell: Just last week, SZA was in Paris at Paris Fashion Week, seated in the front row at Louis Vuitton and Dior fashion shows, wearing bespoke Vans, old school and authentic, bejeweled with gemstones by New York-based jewelry designer, Rachel Goatley. We'll see more of SZA and her artistic vision for the brand in the coming months. In summary, Vans continues to make progress. I'd like to share a planned transition now within our global leadership team. Our Chief Commercial Officer, Martino Scabbia Guerrini, is stepping down from his role. Martino will continue to support the company as an advisor to me to ensure a smooth transition. Brent Hyder will assume the role of Chief Commercial Officer, in addition to the continuing role, his continuing role as President for the Americas, a role he's held since last spring, with strong results.
Just last week, SZA was in Paris at Paris Fashion Week, seated in the front row at Louis Vuitton and Dior fashion shows, wearing bespoke Vans, old school, and authentic, bejeweled with gemstones by New York-based jewelry designer, Rachel Gootie. We'll see more of SZA and her artistic vision for the brand in the coming months. In summary, Vans continues to make progress. I'd like to share a planned transition now within our global leadership team. Our Chief Commercial Officer, Martino Scabbia Guerrini, is stepping down from his role. Martino will continue to support the company as an advisor to me to ensure a smooth transition. Brent Hyder will assume the role of Chief Commercial Officer, in addition to the continuing role, his continuing role as President for the Americas, a role he's held since last spring, with strong results.
Just last week as it was in Paris at Paris fashion week seated in the front row at Louis Vuitton of your fashion shows worrying bespoke vans old school and authentic bejewelled with Gem stones by New York based jewelry designer Rachel Goatley.
So now it's turning to Q3 we delivered strong results with revenue of 2% and nicely ahead of our guidance. Our operating profit was also better than planned as Bracken said, we had a good holiday selling period to cross our key brands.
Q3 Revenue was 2.8 billion of 2% year on year, on a constant dollar basis above our guidance of down, 1 to down, 3%.
We will see more of a scissor Andrew artistic vision for the brand in the coming months.
In summary, vans continues to make progress.
The better than expected performance was primarily due to Stronger results from the Americas across both DTC, especially Ecom and wholesale.
I'd like to share a planned transitioned out within our global leadership team, our Chief commercial Officer Martino <unk>.
by brand the north base group 5% led by growth in both DTC and wholesale with particularly strong results in the America's region up, 15%
<unk> is stepping down from his role Martina will continue to support the company as an advisor to me to ensure a smooth transition.
As anticipated, Apex was down 3% and in Mia was down 2%.
Brent Hydro will assume the role of Chief Commercial Officer. In addition to the continuing role his continuing role as president for the Americas a role. He has held since last spring with strong results.
Fans Revenue in the quarter was down, 10% broadly in line with last quarter and in line with expectations and finally Timberland had another good quarter with continued to momentum with revenue of 5%, reflecting growth across all channels and in the Americas in Amia while APAC was down.
Bracken Darrell: I want to sincerely thank Martino for his 20 years of outstanding contributions to the company. Martino's energy, passion, and deep focus on design and consumer-led brands have left an enduring impact on our business and on me. I'm confident this leadership team, comprised of best-in-class talent, will enable us to fulfill VF's significant growth opportunities ahead. To conclude, we have momentum, and now we've gone positive for the first time in a while. We're on track to deliver our targets. I'll now hand it over to Paul, who will dive in deeper into the numbers. Paul?
I want to sincerely thank Martino for his 20 years of outstanding contributions to the company. Martino's energy, passion, and deep focus on design and consumer-led brands have left an enduring impact on our business and on me. I'm confident this leadership team, comprised of best-in-class talent, will enable us to fulfill VF's significant growth opportunities ahead. To conclude, we have momentum, and now we've gone positive for the first time in a while. We're on track to deliver our targets. I'll now hand it over to Paul, who will dive in deeper into the numbers. Paul?
Want to sincerely. Thank Martina for his 20 years of outstanding contributions to the company Martino his energy passion and deep focus on design and consumer led brands left an enduring impact on our business and on me.
By region the Americas region. Had a strong performance up 6% while the international regions performed as expected with the Mia region down 3%, in APAC, down 4.
I'm confident this leadership team comprised of best in class talent will enable us to fulfill DFS significant growth opportunities ahead.
And lastly by Channel. DTC was up 3%, our first positive quarter in a couple of years driven by strong e-com performance. While also was down 1%, although growing in the America's region.
So to conclude we have momentum.
And now we've gone positive for the first time in a while we're on track to deliver our targets I'll now hand, it over to Paul who will dive deeper into the numbers Paul.
Our adjusted gross margin was up 10 basis points for us. Last year as mix and sourcing savings resulted in lower product costs and offset the impact from tariffs.
Paul Vogel: Great. Thank you, Bracken. Before I go into the details of Q3 actuals and Q4 guidance, let me give you the punchline for how fiscal 2026 is shaping up. Annual revenue will be flat to up this year versus last year. Gross margin will be at 54.5% or better, within striking distance of our fiscal year 2028 target of 55%. Operating margin will be 6.5% or better. Operating and free cash flow will be up versus last year. Leverage will be 3.5x or lower, down from 4.1x at the end of fiscal 2025. So now turning to Q3. We delivered strong results with revenue up 2% and nicely ahead of our guidance. Our operating profit was also better than planned. As Bracken said, we had a good holiday selling period across our key brands.
Paul Vogel: Great. Thank you, Bracken. Before I go into the details of Q3 actuals and Q4 guidance, let me give you the punchline for how fiscal 2026 is shaping up. Annual revenue will be flat to up this year versus last year. Gross margin will be at 54.5% or better, within striking distance of our fiscal year 2028 target of 55%. Operating margin will be 6.5% or better. Operating and free cash flow will be up versus last year. Leverage will be 3.5 times or lower, down from 4.1 times at the end of fiscal 2025. So now turning to Q3. We delivered strong results with revenue up 2% and nicely ahead of our guidance. Our operating profit was also better than planned. As Bracken said, we had a good holiday selling period across our key brands.
Great. Thank you backing.
Before I go into the details of Q3, actuals and Q4 guidance. Let me give you the punch line for how fiscal 'twenty six is shaping up.
As expected, we had the first meaningful impact of tariff flow through the gross margin in the third quarter. The unmitigated impact was approximately 40 million, and as a reminder pricing actions were only implemented in Q4 and did not have an effect in Q3
Annual revenue will be flat to up this year versus last year.
our sgna rate, leveraged 20 basis points, as we continue to realize cost savings across the business.
Gross margin will be at 54, 5% or better within striking distance of our fiscal year 2008 target of 55%.
Sgna expenses in constant dollars is up 1% due to increased marketing efforts and higher variable costs associated with higher Revenue within the quarter.
Operating margin will be six 5% or better.
Our adjusted operating margin for the quarter was 12.1% up, 30 basis, points year-over-year.
Operating and free cash level of the upfront last year.
Leverage will be three five times or lower down from four one times at the end of fiscal 2025.
That interest expense of 35 million was a little better than expected and Below last year.
So now I'll turn to Q3, we delivered strong results with revenue up 2% and nicely ahead of our guidance. Our operating profit was also better than planned as Bracken said, we had a good holiday selling period across our key brands.
Tax was 81 million or a rate of approximately 26%. Also better than our guidance due to slightly different geographical mix in the quarter.
And finally, adjusting earnings per share was 58 cents for 61 cents in Q3 of last year.
Now, moving on to our balance sheet.
Paul Vogel: Q3 revenue was $2.8 billion, up 2% year-over-year on a constant dollar basis, above our guidance of down 1% to 3%. The better-than-expected performance was primarily due to stronger results from the Americas across both DTC, especially e-com, and wholesale. By brand, The North Face grew 5%, led by growth in both DTC and wholesale, with particularly strong results in the Americas region, up 15%. As anticipated, APAC was down 3%, and EMEA was down 2%. Vans revenue in the quarter was down 10%, broadly in line with last quarter and in line with expectations. Finally, Timberland had another good quarter with continued momentum, with revenue up 5%, reflecting growth across all channels and in the Americas and EMEA, while APAC was down.
Q3 revenue was $2.8 billion, up 2% year-over-year on a constant dollar basis, above our guidance of down 1% to down 3%. The better-than-expected performance was primarily due to stronger results from the Americas across both DTC, especially e-com, and wholesale. By brand, The North Face grew 5%, led by growth in both DTC and wholesale, with particularly strong results in the Americas region, up 15%. As anticipated, APAC was down 3%, and EMEA was down 2%. Vans revenue in the quarter was down 10%, broadly in line with last quarter and in line with expectations. Finally, Timberland had another good quarter with continued momentum, with revenue up 5%, reflecting growth across all channels and in the Americas and EMEA, while APAC was down.
Q3 revenue was $2 8 billion up 2% year on year on a constant dollar basis above our guidance of down one to down 3%.
Inventories were down 4% in the constant dollar a year on year.
The better than expected performance was primarily due to stronger results from the Americas across both DTC, especially E com and wholesale.
By brand the North face grew 5% led by growth in both DTC and wholesale with particularly strong results in the Americas region up 15% as anticipated APAC was down 3% and EMEA was down 2%.
Where we expected to be.
Reported net debt. Including lease liabilities was down approximately 500 million versus last year or down 11%
<unk> revenue in the quarter was down 10% broadly in line with last quarter and inline with expectations and finally timberland had another good quarter with continued momentum with revenue up 5%, reflecting growth across all channels in any Americas and EMEA, while APAC was down.
in addition earlier this month and post the end of the quarter, we announced in February we will be prepaying the March 2026 Euro, 500 million notes,
Turning to the outlook for the fourth quarter.
Paul Vogel: By region, the Americas region had a strong performance, up 6%, while the international regions performed as expected, with the EMEA region down 3% and APAC down 4%. Lastly, by channel, DTC was up 3%, our first positive quarter in a couple of years, driven by strong e-com performance, while wholesale was down 1%, although growing in the Americas region. Our adjusted gross margin was up 10 basis points versus last year, as mix and sourcing savings resulted in lower product costs and offset the impact from tariffs. As expected, we had the first meaningful impact of tariff flow through the gross margin in the third quarter. The unmitigated impact was approximately $40 million, and as a reminder, pricing actions were only implemented in Q4 and did not have an effect in Q3.
By region, the Americas region had a strong performance, up 6%, while the international regions performed as expected, with the EMEA region down 3% and APAC down 4%. Lastly, by channel, DTC was up 3%, our first positive quarter in a couple of years, driven by strong e-com performance, while wholesale was down 1%, although growing in the Americas region. Our adjusted gross margin was up 10 basis points versus last year, as mix and sourcing savings resulted in lower product costs and offset the impact from tariffs. As expected, we had the first meaningful impact of tariff flow through the gross margin in the third quarter. The unmitigated impact was approximately $40 million, and as a reminder, pricing actions were only implemented in Q4 and did not have an effect in Q3.
By region, the Americas region had a strong performance up 6%, while international regions performed as expected with EMEA region down, 3% and APAC down four.
We expect Q4 Revenue to be flat top 2% on a constant dollar basis. We expect a positive FX benefit of about 5% on the top line,
And lastly by channel DTC was up 3% our first positive quarter in a couple of years driven by strong E. Com performance, while wholesale is down 1%, although growing in the Americas region.
The North Face is expected to be broadly in line with Q3 growth. We will see slower growth at Timberland as we discussed last quarter and we expect Vance to decline, roughly mid single digits.
Moving down the p&l. We expect Q4 adjusted operating income to be in the range of 10 to 30 million
Our adjusted gross margin was up 10 basis points versus last year as Nixon sourcing savings resulted in lower product costs and offset the impact from tariffs.
Our gross margin will be flat to slay, the up versus last year, as the impacts from Paris, are expected to be offset by initial pricing actions, and ongoing sourcing savings.
As expected we had the first meaningful impact of tariffs flow through the gross margin in the third quarter. The unmitigated impact is approximately $40 million and as a reminder, pricing actions were only implemented in Q4 and did not have an effect in Q3.
Sgna rate is expected to be flat to slightly down versus last year, due to cost-saving initiatives.
Paul Vogel: Our SG&A rate leveraged 20 basis points as we continued to realize cost savings across the business. SG&A expense in constant dollars was up 1% due to increased marketing efforts, and higher variable costs associated with higher revenue within the quarter. Our adjusted operating margin for the quarter was 12.1%, up 30 basis points year-over-year. Net interest expense of $35 million was a little better than expected and below last year. Tax was $81 million, or a rate of approximately 26%, also better than our guidance due to slightly different geographical mix in the quarter. And finally, adjusted earnings per share was $0.58 for $0.61 in Q3 of last year. Now moving on to our balance sheet. Inventories were down 4% in a constant dollar year-on-year.
Our SG&A rate leveraged 20 basis points as we continued to realize cost savings across the business. SG&A expense in constant dollars was up 1% due to increased marketing efforts and higher variable costs associated with higher revenue within the quarter. Our adjusted operating margin for the quarter was 12.1%, up 30 basis points year-over-year. Net interest expense of $35 million was a little better than expected and below last year. Tax was $81 million, or a rate of approximately 26%, also better than our guidance due to slightly different geographical mix in the quarter. And finally, adjusted earnings per share was $0.58 for $0.61 in Q3 of last year. Now moving on to our balance sheet. Inventories were down 4% in a constant dollar year-over-year.
Our SG&A rate leveraged 20 basis points as we continued to realize cost savings across the business.
And finally, we expect Q4 interests of approximately 30 million dollars. Our Q4 tax rate is based on an estimated full year effective, rate of 33 to 34%. And this is in line with my recent comments about the increasing Trend in our tax rate over the next 1 to 2 years and quarterly fluctuations as a result of the changes in global tax rates and in our Geographic mix
SG&A expenses in constant dollars was up 1% due to increased marketing efforts and higher variable costs associated with higher revenue within the quarter.
Let me now give a bit more detail on our progress in fiscal 26.
Our adjusted operating margin for the quarter was 12, 1% up 30 basis points year over year.
As I said, we expect Revenue to be flat to up for the full year. This will Mark the first year since fiscal 23, excluding digits and supreme in which revenue is stable or Groove versus the prior year.
Net interest expense of 35 million with a little better than expected and below last year tax was $81 million or rate of approximately 26% also better than our guidance due to slightly different geographical mix in the quarter.
We continue expect operating income to be up versus last year. Within that, we expect gross margin to be 54.5% or better reflecting reflecting progress. Made on various work streams and valve that the investor Day last year.
And finally adjusted earnings per share was 50 861 in Q3 of last year.
Now moving onto our balance sheet.
Inventories were down 4% in constant dollars year on year.
Paul Vogel: On a reported basis, free cash flow through Q3 was $513 million, in line with our expectations for the year and broadly flat to last year. Year to date, cash flow includes the payment of approximately $100 million of incremental tariffs. Overall, we are right where we expected to be. Reported net debt, including lease liabilities, was down approximately $500 million versus last year or down 11%. In addition, earlier this month and post the end of the quarter, we announced that in February, we will be prepaying the March 2026 EUR 500 million notes. Turning to the outlook for the fourth quarter. We expect Q4 revenue to be flat to up 2% on a constant dollar basis. We expect a positive FX benefit of about 5% on the top line.
On a reported basis, free cash flow through Q3 was $513 million, in line with our expectations for the year and broadly flat to last year. Year to date, cash flow includes the payment of approximately $100 million of incremental tariffs. Overall, we are right where we expected to be. Reported net debt, including lease liabilities, was down approximately $500 million versus last year or down 11%. In addition, earlier this month and post the end of the quarter, we announced that in February, we will be prepaying the March 2026 €500 million notes. Turning to the outlook for the fourth quarter. We expect Q4 revenue to be flat to up 2% on a constant dollar basis. We expect a positive FX benefit of about 5% on the top line.
On a reported basis free cash flow through Q3 was $513 million in line with our expectations for the year and broadly flat to last year year to date cash flow includes the payment of approximately $100 million of incremental tariffs overall, we're right where we expected today.
In addition, we anticipate operating margin to be at least 6.5% for the year up versus last year's comparable margin of 5.9%. Reflecting further progress made on streamlining costs while also purchasing investments in key strategic areas.
Reported net debt, including lease liabilities was down approximately $500 million versus last year or down 11% in.
On cash flow, we continue to expect expect both reported operating, cash flow and free cash flow to be up here on year. This includes over 100 million negative impact of tariffs and the negative impact from the sale of Dickies, which we estimate to be about 35 million.
In addition earlier this month and post the end of the quarter, we announced in February we will be prepaying. The March 2026 Euro $500 million notes.
Turning to the outlook for the fourth quarter.
We expect Q4 revenue to be flat to up 2% on a constant dollar basis, we expect a positive FX benefit of about 5% on the top line.
And finally, we expect to end the year with leverage at or below 3.5 times as we continue to make progress on our top, Financial priority to reduce debt and leverage. This is a nice improvement from where we entered the year at 4.1, times and continues. To put us on a path. To hit the goal of 2.5 times by year. End fiscal 28, as we outlined at our investor day. I'll now hand it back to the operator, to take your questions.
Paul Vogel: The North Face is expected to be broadly in line with Q3 growth. We will see slower growth at Timberland, as we discussed last quarter, and we expect Vans to decline roughly mid-single digits. Moving down the P&L, we expect Q4 adjusted operating income to be in the range of $10 to 30 million. Our gross margin will be flat to slightly up versus last year, as the impacts from tariffs are expected to be offset by initial pricing actions and ongoing sourcing savings. SG&A rate is expected to be flat to slightly down versus last year due to cost-saving initiatives. And finally, we expect Q4 interest of approximately $30 million.
The North Face is expected to be broadly in line with Q3 growth. We will see slower growth at Timberland, as we discussed last quarter, and we expect Vans to decline roughly mid-single digits. Moving down the P&L, we expect Q4 adjusted operating income to be in the range of $10 to 30 million. Our gross margin will be flat to slightly up versus last year, as the impacts from tariffs are expected to be offset by initial pricing actions and ongoing sourcing savings. SG&A rate is expected to be flat to slightly down versus last year due to cost-saving initiatives. Finally, we expect Q4 interest of approximately $30 million.
The north face is expected to be broadly in line with Q3 growth will see slower growth at timberland as we discussed last quarter, and we expect them to decline roughly mid single digits.
We will now begin the question and answer session. Please limit yourself to 1 question. If you would like to ask a question, please raise your hand now.
Moving down the P&L, we expect Q4 adjusted operating income to be in the range of $10 million to $30 million.
if you have dialed into today's call, please press star 9, to raise your hand and star, 6 to unmute
Our gross margin will be flat to slightly up versus last year as the impact from tariffs are expected to be offset by initial pricing actions and ongoing sourcing savings.
Please stand by while we compile the Q&A roster.
SG&A rate is expected to be flat to slightly down versus last year due to cost saving initiatives.
And finally, we expect Q4 interest of approximately $30 million. Our Q4 tax rate is based on an estimated full year effective rate of 33% to 34% and this is in line with my recent comments about the increasing trend in our tax rate over the next one to two years and quarterly fluctuations as a result of the changes in global tax rate and in our geographic mix.
Paul Vogel: Our Q4 tax rate is based on an estimated full-year effective rate of 33% to 34%, and this is in line with my recent comments about the increasing trend in our tax rate over the next 1 to 2 years and quarterly fluctuations as a result of the changes in global tax rates and in our geographic mix. Let me now give a bit more detail on our progress in fiscal 2026. As I said, we expect revenue to be flat to up for the full year. This will mark the first year since fiscal 2023, excluding Dickies and Supreme, in which revenue was stable or grew versus the prior year. We continue to expect operating income to be up versus last year.
Our Q4 tax rate is based on an estimated full-year effective rate of 33 to 34%, and this is in line with my recent comments about the increasing trend in our tax rate over the next 1 to 2 years and quarterly fluctuations as a result of the changes in global tax rates and in our geographic mix. Let me now give a bit more detail on our progress in fiscal 2026. As I said, we expect revenue to be flat to up for the full year. This will mark the first year since fiscal 2023, excluding Dickies and Supreme, in which revenue was stable or grew versus the prior year. We continue to expect operating income to be up versus last year.
Your first question comes from the line of Adrian ye with Barclays. Your line is open. Please go ahead great. Good morning. Um I think you can hear me. I think I unmuted properly. Um first of all, congratulations on the Milestone. Um, great to see a sales growing again.
Let me now give a bit more detail on our progress in fiscal 'twenty six.
As I said, we expect revenue to be flat to up for the full year. So mark the first year since fiscal 'twenty three excluding digging in Supreme in which revenue was stable or grew versus the prior year.
Continue to expect operating income to be up versus last year within that we expect gross margin to be 54, 5% or better reflecting reflecting progress made on various work streams and valid at the Investor Day last year. In addition, we anticipate operating margin to be at least six 5% for the year up versus last year's comparable margin of five 9% reflecting <unk>.
Paul Vogel: Within that, we expect gross margin to be 54.5% or better, reflecting progress made on various work streams unveiled at the Investor Day last year. In addition, we anticipate operating margin to be at least 6.5% for the year, up versus last year's comparable margin of 5.9%, reflecting further progress made on streamlining costs, while also prioritizing investments in key strategic areas. On cash flow, we continue to expect both reported operating cash flow and free cash flow to be up year-on-year. This includes over $100 million negative impact of tariffs and a negative impact from the sale of Dickies, which we estimate to be about $35 million....
Within that, we expect gross margin to be 54.5% or better, reflecting progress made on various work streams unveiled at the Investor Day last year. In addition, we anticipate operating margin to be at least 6.5% for the year, up versus last year's comparable margin of 5.9%, reflecting further progress made on streamlining costs, while also prioritizing investments in key strategic areas. On cash flow, we continue to expect both reported operating cash flow and free cash flow to be up year-over-year. This includes over $100 million negative impact of tariffs and a negative impact from the sale of Dickies, which we estimate to be about $35 million....
Other progress made on streamlining costs, while also prioritizing investments in key strategic areas.
Um brocken I guess the the big question for the year is kind of you know the price increases that are happening. Broadly not just kind of at your company but broadly across the space starting to come through potential consumer you know, demand erosion, um and obviously we got some consumer conference board metrics yesterday, some competing ones again sentiment versus uh consumer confidence. How are you thinking about the consumer? Uh, what metrics are you looking at to assess whether there is sort of, you know, a slowing and what is your kind of plan if we do see that the number 2 for Paul, if you can just talk about your clothes to your gross margin, as we just said, the FY 28 Target. How should we think about that in terms of potential upside to the margin? Um,
On cash flow, we continue to expect expect both reported operating cash flow and free cash flow to be up year on year. This includes over $100 million negative impact of tariffs and a negative impact from the sale of <unk>, which we estimate to be about $35 million.
Now that you're also gaining leverage on the sales. Thank you. Thank you, Adrian. And is it is very exciting to be positive again. And that's what we're here for. It's all about growth.
Paul Vogel: Finally, we expect to end the year with leverage at or below 3.5x, as we continue to make progress on our top financial priority to reduce debt and leverage. This is a nice improvement from where we entered the year at 4.1x, and continues to put us on a path to hit the goal of 2.5x by year-end fiscal 2028, as we outlined at our Investor Day. I'll now hand it back to the operator to take your questions.
And finally, we expect to end the year with leverage at or below 3.5 times, as we continue to make progress on our top financial priority to reduce debt and leverage. This is a nice improvement from where we entered the year at 4.1 times, and continues to put us on a path to hit the goal of 2.5 times by year-end fiscal 2028, as we outlined at our Investor Day. I'll now hand it back to the operator to take your questions.
And finally, we expect to end the year with leverage at or below three five times as we continue to make progress on our top financial priority to reduce debt and leverage. This is a nice improvement from where we entered the year at four one times and continues to put us on a path to hit the goal of two five times by year end fiscal 2008, as we outlined at our Investor Day, I will now hand, it back to the operator to take.
Your questions.
Uh, on the, in terms of the market and price increases and you know, all the the consumer sentiment discussions, we're all having. You know, I think it's the, the good news for us is we have so much under within our control, you know. I I I've never been in a position where I felt like we had as many many levers to pull to really Drive our business. So it's kind of the nature of a turnaround. We're in that sweet spot right now where we've just gone positive. We've got a lot of engines firing, a lot of green shoots in every direction. So I feel really confident even in a a really choppy environment that we're going to do well.
Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Adrienne Yih with Barclays. Your line is open. Please go ahead.
Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Adrienne Yee with Barclays. Your line is open. Please go ahead.
We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question. Please raise your hand now if you have dialed into todays call. Please press star nine to raise their hand and star six to Aneel. Please.
Standby, while we compile the Q&A roster.
Your first question comes from the line of Adrienne <unk> with Barclays. Your line is open. Please go ahead great. Good morning. Thank you for him I think IEA properly first of all congratulations on the milestone.
Adrienne Yih: Great. Good morning. I think you can hear me. I think I unmuted properly. First of all, congratulations on the milestone. Great to see sales growing again. Bracken, I guess the big question for the year is kind of, you know, the price increases that are happening broadly, not just kind of at your company, but broadly across the space, starting to come through potential consumer, you know, demand erosion. And obviously, we got some consumer Conference Board metrics yesterday, some competing ones against sentiment versus consumer confidence. How are you thinking about the consumer? What metrics are you looking at to assess whether there is sort of, you know, a slowing? And what is your kind of plan if we do see that?
Adrienne Yih: Great. Good morning. I think you can hear me. I think I unmuted properly. First of all, congratulations on the milestone. Great to see sales growing again. Bracken, I guess the, the big question for the year is kind of, you know, the price increases that are happening broadly, not just kind of at your company, but broadly across the space, starting to come through potential consumer, you know, demand erosion. And obviously, we got some consumer Conference Board metrics yesterday, some competing ones against sentiment versus consumer confidence. How are you thinking about the consumer? What metrics are you looking at to assess whether there is sort of, you know, a slowing? And what is your kind of plan if we do see that?
<unk> sales growing again.
Bracken.
It's great. They were sort of heading in that direction, I mean, obviously keep in mind tariffs are just starting to hit us. Um, we've talked about our ability to mitigate those tariffs within fiscal 27 and nothing's changed on that uh, on that at all. So um, I'd say a we feel good about where we are on gross margin, we've made great progress. Um, B, you know, 55% is obviously the the target but hopefully over time. We can do better than that. And see. Um, we feel like we're in a really good shape but obviously we got to make sure that we were able to manage the tyres. Um, the way we expect and we again we have no reason to uh uh to expect we won't. But again just something to keep out keep in mind for
The big question for the year and kind of.
The price increases that are happening broadly not just your company is up broadly across the space starting to come through potential consumer.
Great. Thank you very much. Thank you. Adrian, you sound kind of horseball. I know it's been a long day.
You are next question. Comes from the line of Tom Nikki with nem. Your line is open, please go ahead.
Demand erosion.
And obviously, we got.
Conference Board metrics, SG&A and competing once again central and first is that consumer confidence.
Are you thinking about the consumer.
Metrics are you looking at to assess whether there is sort of a slowing and what is your.
Plan, if we do see that stimulus for Paul If you can just talk about you are close to your gross margin I would suggest that the FY 'twenty eight target how should we think about that in terms of.
Adrienne Yih: Then number two, for Paul, if you can just talk about you're close to your gross margin, as you just said, the FY 28 target. How should we think about that in terms of potential upside to the margin, now that you're also gaining leverage on the sales? Thank you.
Then number two, for Paul, if you can just talk about, you're close to your gross margin, as you just said, the FY 28 target. How should we think about that in terms of potential upside to the margin, now that you're also gaining leverage on the sales? Thank you.
Upside to the margin.
Now that Youre also getting leverage on the sales. Thank you. Thank you Adrian and is it is very exciting to be positive again and that's what we.
Bracken Darrell: Thank you, Adrienne, and it is very exciting to be positive again, and that's what we're here for. It's all about growth. In terms of the market and price increases and, you know, all the consumer sentiment discussions we're all having, you know, I think it's... The good news for us is we have so much within our control. You know, I've never been in a position where I felt like we had as many, many levers to pull to really drive our business. So it's kind of the nature of a turnaround. We're in that sweet spot right now where we've just gone positive. We've got a lot of engines firing, a lot of green shoots in every direction. So I feel really confident, even in a really choppy environment, that we're going to do well.
Bracken Darrell: Thank you, Adrienne, and it is very exciting to be positive again, and that's what we're here for. It's all about growth. In terms of the market and price increases and, you know, all the consumer sentiment discussions we're all having, you know, I think it's... The good news for us is we have so much within our control. You know, I've never been in a position where I felt like we had as many levers to pull to really drive our business. So it's kind of the nature of a turnaround. We're in that sweet spot right now where we've just gone positive. We've got a lot of engines firing, a lot of green shoots in every direction. So I feel really confident, even in a really choppy environment, that we're going to do well.
Uh, Hey guys. Good morning and thanks for taking my question. Um, want to ask about vans. So the last couple quarters, you know, you kind of said that the underlying Trend was down high, single digits, excluding some of the deliberate. Uh, deliberate actions you took, uh, was that the case also in Q3. And then, you know, for Q4 you're guiding to, you know, down mid singles, which is, you know, kind of an improvement from there. So it was a kind of safe to assume that, you know, you're you're expecting some improvement in the underlying Vans Trend, I guess kind of beginning in in Q4 and you know hopefully thereafter.
We're here for it's all about growth.
Yeah, I mean, I think that's a pretty good assess pretty good description of what we see going on. You know, the uh,
On the in terms of the market and price increases in.
Although the consumer settlement discussions, we're all having I think the good news for US is we have so much under it within our control.
I've never been in a position where I felt like we had as many levers to pull to really drive our business. So it's kind of the nature of a turnaround we're in a sweet spot right now where we've just gone positive. We've got a lot of engine firing a lot of green shoots in every direction. So I feel really confident even in a.
A really choppy environment that we're going to do well.
Paul Vogel: Yeah, and then on the gross margin side, yeah, I mean, we are getting close to the 55%. I think all along, you know, our target was 55% or better, so, it's great that we're sort of heading in that direction. I mean, obviously, keep in mind, tariffs are just starting to hit us. We've talked about our ability to mitigate those tariffs within fiscal 2027, and nothing's changed on that, on that at all. So, I'd say, A, we feel good about where we are on gross margin, and we've made great progress. B, you know, 55% is obviously the target, but hopefully, over time, we can do better than that.
Paul Vogel: Yeah, and then on the gross margin side, yeah, I mean, we are getting close to the 55%. I think all along, you know, our target was 55% or better, so we're, it's great that we're sort of heading in that direction. I mean, obviously, keep in mind, tariffs are just starting to hit us. We've talked about our ability to mitigate those tariffs within fiscal 2027, and nothing's changed on that, on that at all. So, I'd say, A, we feel good about where we are on gross margin, and we've made great progress. B, you know, 55% is obviously the, the target, but hopefully, over time, we can do better than that.
And then on the gross margin side, yes, I mean, we are getting closer to 55% I think all along our target.
It was 55% or better so that's great there were sort of heading that direction. I mean, obviously keep in mind tariffs are just starting to hit us we've talked about our ability to mitigate those tariffs within fiscal 2007, and nothing's changed on that on that it also.
I'd say, we feel good about where we are on gross margin and we've made great progress.
The 55% is obviously the target, but hopefully over time, we can do better than that and see we feel like we're in really good shape, but obviously, we've got to make sure that we were able to manage the tires.
You know, we're we're finally lapping that quarter those that that year ago quarter, when we took a lot of strong actions and we feel really good about the steps we're taking, you know, I talked, I, I talked briefly in my introduction about some of the green shoes we're seeing. But, you know, I think it's the first time we saw Ecom growth and something like 19 quarters or something is a long time. We feel really good about that. We're excited about, uh, we saw traffic up in the US. We saw a lot of strength in the US in general. Um, you know, the the new products are are picking up steam, you know, super low Pro and the skate loafer, which I, I'm tempted to pull off my foot and show you because I bet a lot of you have not, okay, I'm going to do it, okay? A lot of you have not seen. This is such a cool product because it literally is a skate loafer. So I could almost go out and shoot around and play basketball on this thing. But it's a loafer and it looks good. So, you know, we we've got we. So we've got a lot of good things and even in the even in the the the icons which have been such a difficult uh, area for us for so many years, we're seeing
Paul Vogel: And C, we feel like we're in really good shape, but obviously, we've got to make sure that we're able to manage the tariffs the way we expect. And we, again, we have no reason to expect we won't, but again, just something to keep in mind for.
And C, we feel like we're in really good shape, but obviously, we've got to make sure that we're able to manage the tariffs the way we expect. And we, again, we have no reason to expect we won't, but again, just something to keep in mind for.
Some bright spots, you know, really innovating against those icons, you know, the authentic and the slip on both the we seem real Improvement Trends there.
The way, we expect and again, we have no reason to.
To expect we wont, but again just something to keep in mind for.
Adrienne Yih: Great. Thank you very much.
Adrienne Yih: Great. Thank you very much.
Okay. Thank you very much. Thank you either use OCA horsepower announced one day.
Bracken Darrell: Thank you, Adrienne. You sound kind of hoarse, Paul.
Bracken Darrell: Thank you, Adrienne. You sound kind of hoarse, Paul.
Paul Vogel: I know, it's been a long day.
Paul Vogel: I know, it's been a long day.
Operator: Your next question comes from the line of Tom Nikic with Needham. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Tom Nikic with Needham. Your line is open. Please go ahead.
Your next question comes from the line of Tom <unk> with Needham. Your line is open. Please go ahead.
Uh, even even in the old school. So overall I feel just very, very good about Vans, but we're going to be patient. We're not going to push it, we're not going to force anything. We're we're going to let this thing really play out as it should. I've learned 1 thing about turnarounds, you don't want to force a turnaround early. You want to let it develop and we are letting it develop
Tom Nikic: Hey, guys. Good morning, and thanks for taking my question. Wanted to ask about Vans. So the last couple of quarters, you know, you kind of said that the underlying trend was down high single digits, excluding some of the deliberate actions you took. Was that the case also in Q3? And then, you know, for Q4, you're guiding to, you know, down mid-singles, which is, you know, kind of an improvement from there. So is it kind of safe to assume that, you know, you're expecting some improvement in the underlying Vans trend, I guess, kind of beginning in Q4 and, you know, hopefully thereafter?
Tom Nikic: Hey, guys. Good morning, and thanks for taking my question. Wanted to ask about Vans. So the last couple of quarters, you know, you kind of said that the underlying trend was down high single digits, excluding some of the deliberate, deliberate actions you took. Was that the case also in Q3? And then, you know, for Q4, you're guiding to, you know, down mid-singles, which is, you know, kind of an improvement from there. So is it kind of safe to assume that, you know, you're expecting some improvement in the underlying Vans trend, I guess, kind of beginning in Q4 and, you know, hopefully thereafter?
Hey, guys. Good morning, and thanks for taking my question.
There. Yeah, you're right on the right on the numbers the uh,
Wanted to ask about the band so the last couple of quarters, you've kind of said that the underlying trend was down high single digits, excluding some of the deliberate.
<unk> action data.
Was that the case also in Q3, and then Q4, you're guiding to down mid singles, which is kind of an improvement from there. So it is a kind of safe to assume that you're expecting some improvement in the underlying vans trend I guess kind of beginning in Q4 and hopefully thereafter.
The reported, um, constant dollar was down 10% again on the, like, for like, it is kind of down high single digits in, in the same way, we talked about it, um, in, uh, uh, in quarters past. And so yeah, the underlying Trend kind of down high single digits. And obviously I got it to, uh, down mid single digits for uh, for Q4. Um, so there's some improvement there in the underlying Trend in Q4.
Sounds good. Thanks very much guys. Thank you very much. Thanks Tom.
Bracken Darrell: Yeah, I mean, I think that's a pretty good assessment, a pretty good description of what we see going on. You know, we're finally lapping that year ago quarter when we took a lot of strong actions, and we feel really good about the steps we're taking. You know, I talked briefly in my introduction about some of the green shoots we're seeing, but, you know, I think it's the first time we saw e-com growth in something like 19 quarters. It's a long time. We feel really good about that. We're excited about, we saw traffic up in the US. We saw a lot of strength in the US in general.
Bracken Darrell: Yeah, I mean, I think that's a pretty good description of what we see going on. You know, we're finally lapping that quarter, that year ago quarter when we took a lot of strong actions, and we feel really good about the steps we're taking. You know, I talked briefly in my introduction about some of the green shoots we're seeing, but you know, I think it's the first time we saw e-com growth in something like 19 quarters or something. It's a long time. We feel really good about that. We're excited about, we saw traffic up in the US. We saw a lot of strength in the US in general.
I think that's pretty good.
I'm waiting for an Alex Huntley. Question the first 1 gets the prize. Your next question comes from the line of Brooke roach with Goldman Sachs, your line is open. Please go ahead.
Good description of what we see going on.
We're finally lapping that quarter those the year ago quarter. When we took a lot of strong actions and we feel really good about the steps, we're taking I talked I talked briefly in my introduction about some of the green shoots we're seeing but I.
I think it's the first time, we saw E.
<unk> growth and stuff like 19 quarters or so there's a long time.
Good morning, and thank you for taking our questions, bracket, and Paul. I was hoping you could unpack the sequential acceleration that you thought tnf America's. This quarter, how much of the strength is repeatable, as you move into calendar 2026, how our inventory levels exiting this season and were there. Any 1-time Tailwind that may have benefited the trend this holiday season?
Feel really good about that we're excited about we saw traffic up in the U S. We saw a lot of strength in the U S in general.
Bracken Darrell: You know, the new products are picking up steam, you know, Super Lowpro and the Skate Loafer, which I'm tempted to pull off my foot and show you because I'll bet a lot of you have not... Okay, I'm going to do it. A lot of you have not seen. This is such a cool product because it literally is a Skate Loafer, so I could almost go out and shoot around and play basketball on this thing, but it's a loafer, and it looks good. So you know, we've got a lot of good things. And even in the icons, which have been such a difficult area for us for so many years, we're seeing some bright spots, you know, really innovating against those icons.
You know, the new products are picking up steam, you know, Super Lo-Pro and the Skate Loafer, which I'm tempted to pull off my foot and show you because I'll bet a lot of you have not... Okay, I'm going to do it. A lot of you have not seen. This is such a cool product because it literally is a skate loafer, so I could almost go out and shoot around and play basketball on this thing, but it's a loafer, and it looks good. So you know, we've got a lot of good things. And even in the icons, which have been such a difficult area for us for so many years, we're seeing some bright spots, you know, really innovating against those icons.
The new products or are picking up steam you know super low pro and escaped low for which I am tempted to pull off my first show you because a lot of you have not okay I'm going to do it.
Okay.
A lot of you have not seen this is such a cool product because it literally is escape oversaw I can almost go out shudra play basketball on this thing, but it's all over and it looks good.
No.
So we've got a lot of good things and even in the even in the icon, which have been such a difficult area for us for so many years were seeing some bright spots, you'll really innovating against those icons.
Bracken Darrell: You know, the Authentic and the Slip-On, both. We've seen real improvement trends there, even, even in the Old Skool. So overall, I feel just very, very good about Vans, but we're going to be patient. We're not going to push it. We're not going to force anything. We're, we're going to let this thing really play out as it should. We've learned one thing about turnarounds: You don't want to force a turnaround early. You want to let it develop, and we are letting it develop.
You know, the Authentic and the Slip-On, both—we've seen real improvement trends there, even in the Old Skool. So overall, I feel just very, very good about Vans, but we're going to be patient. We're not going to push it. We're not going to force anything. We're going to let this thing really play out as it should. We've learned one thing about turnarounds: You don't want to force a turnaround early. You want to let it develop, and we are letting it develop.
The authentic and the slip on bolt.
Real improvement trends there.
Even in the old school. So overall I feel very very good about brands, but we're going to be patient, we're not going to push it we're not going to force anything routes are going to let this thing really play out as it should have learned one thing about turnarounds you don't want to force a turnaround early you want to let it develop and we're letting it develop.
Paul Vogel: Just to be clear, yes, you're right on the numbers. The reported constant dollar was down 10%. Again, on the like-for-like, it is kind of down high single digits in the same way we talked about it in quarters past. So, yeah, the underlying trend, kind of down high single digits, and obviously, I got it to down mid-single digits for Q4. So there is some improvement there in the underlying trend in Q4.
Paul Vogel: And just to be clear, yes, you're right on the numbers. The reported constant dollar was down 10%. Again, on the like-for-like, it is kind of down high single digits in the same way we talked about it in quarters past. And so, yeah, the underlying trend, kind of down high single digits, and obviously, I got it to down mid-single digits for Q4. So there is some improvement there in the underlying trend in Q4.
And just.
Yes, you're right on right on your numbers.
The.
The reported constant dollar was down 10% again on the like for like it is kind of down high single digits in the same way we talked about it.
Stuff. But I don't see anything extraordinary about this quarter that makes it uh, an outlier. I really think this is the kind of uh we we should be able to deliver strong performance across the North Face over time. Yeah, on the inventory side, um dollars are up slightly. Um, that's just to support the strong sales. We've had but overall, um, immigrate days are down. Um, pretty much the board. So you know what else is really good?
In.
In quarters past and so yes, the underlying trend kind of down high single digits, and obviously you guided to.
Down mid single digits for for Q4. So there is some improvement there in the underlying trend in Q4.
Brooke is, uh, so many things aren't working well enough. Yet, you know, we have so many things we can do better, and that makes me even more optimistic about. I look at aipac, you know, I'm sure I'm going to get a question there.
Tom Nikic: All right. Sounds good. Thanks very much, guys.
Tom Nikic: All right. Sounds good. Thanks very much, guys.
Okay.
Thanks, very much guys. Thank you very much thanks, Tom.
Bracken Darrell: Thank you very much. Thanks, Tom. I'm waiting for an Alex Honnold question. The first one gets the prize.
Bracken Darrell: Thank you very much. Thanks, Tom.... I'm waiting for an Alex Honnold question. The first one gets the prize.
I'm waiting for and Alex level questions first one just surprise.
Operator: Your next question comes from the line of Brooke Roach with Goldman Sachs. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Brooke Roach with Goldman Sachs. Your line is open. Please go ahead.
Your next question comes from the line of Brooke Roach with Goldman Sachs. Your line is open. Please go ahead.
APAC, we're soft, you know. And we know we're going to be soft, we'll be soft to probably through most of the next year because we've really Consolidated games we've had such a long period of strong growth in APAC. We've really expanded our distribution where we ought to be. Now we need to get, we're we're missing some products. We really need to have there and get our marketing revved up even more. By the way, thank you Alex.
Brooke Roach: Good morning, and thank you for taking our questions. Bracken and Paul, I was hoping you could unpack the sequential acceleration that you saw at TNF Americas this quarter. How much of this strength is repeatable as you move into calendar 2026? How are inventory levels exiting the season? And were there any one-time tailwinds that may have benefited the trend this holiday season?
Brooke Roach: Good morning, and thank you for taking our questions. Bracken and Paul, I was hoping you could unpack the sequential acceleration that you saw at TNF Americas this quarter. How much of this strength is repeatable as you move into calendar 2026? How are inventory levels exiting the season? And were there any one-time tailwinds that may have benefited the trend this holiday season?
Good morning, and thank you for taking our questions back and Paul I was hoping you could unpack the sequential acceleration that you saw at TNF Americas this quarter, how much of the strength as repeatable as we move into calendar 2026, how are inventory levels exiting the season and were there any one time tailwind that may have benefited the trend this holiday season.
Um and you know and and then anemia emia is just a macro, kind of a macro slowdown. I mean we have a really good business and and optimistic for the North Face there, but I think in general, if you just look across our portfolio, we had a really good performance and we can do a lot better.
Thanks so much. Thanks Brooke.
Bracken Darrell: I'm gonna let you talk about the inventories. What I'd say is, you know, I don't-- we're not really forecasting into 2027. What I would say is, the underlying business was very strong in the Americas, but I think it's more a reflection of the fact that we were just very weakly developed in the Americas. We have a lot of upside there. You know, compared to the other regions of the world, whether you look at average price or market share, we're just underdeveloped to what we could be, given this is our home market. You know, we've got so many places we can grow there, and you start-- you saw them this quarter, and you see them in the Americas. You've got-- we grew in our footwear business. We grew in e-com.
Bracken Darrell: I'm gonna let you talk about the inventories. What I'd say is, you know, I don't, we're not really forecasting into 2027. What I would say is, the underlying business was very strong in the Americas, but I think it's more a reflection of the fact that we were just very weakly developed in the Americas. We have a lot of upside there. You know, compared to the other regions of the world, whether you look at average price or market share, we're just underdeveloped to what we could be, given this is our home market. You know, we've got so many places we can grow there, and you saw them this quarter, and you see them in the Americas. We grew in our footwear business. We grew in e-com.
I'm going to let you talk about the inventory.
Yes, I don't we're not we're not really forecasting into 27, what I would say is the underlying business was very strong in the Americas, but I think it's more a reflection of the fact that we were just very weekly develop in the Americas, we have a lot of upside there compared to the other regions of the world and whether you look at average price or our market share, we're just underdeveloped or what we could.
B given this is our home market.
So many places we can grow there and you start you saw them this quarter and you see them in the Americas. We grew in our footwear business. We grew in E com.
Your next question comes from the line of Michael benetti, with evercore. Your line is open. Please go ahead. Hey guys, I'll add my, congrats to the, uh, the positive, uh, uh, inflection there. Um, did you I guess for Vans? Did you see the traffic in the US stores? Improved sequentially. I know you said it. It improved all the way to positive digitally are the stores. Following that Trend to a lag. So, we see some impact from the new products working in the physical stores, and then any, I'm curious any kind of, um, initial spot. You can give us to how the order books are building up for Vans for back to school.
Bracken Darrell: We really just grew across the. You know, we talked about elevated products we're launching. You know, so we've got just one after another levers we can pull, and they're all very, very visible in the Americas. Probably the strongest opportunity in the world right now is the Americas. So, I feel really good about what's happening there, and I'm not going to forecast into 2027, but I don't see anything extraordinary about this quarter that makes it an outlier. I really think this is the kind of we should be able to deliver strong performance across The North Face over time.
We really just grew across the... You know, we talked about elevated products we're launching. You know, so we've got just one after another thing that we really, levers we can pull, and they're all very, very visible in the Americas. Probably the strongest opportunity in the world right now is the Americas. So, I feel really good about the-- what's happening there, and I'm not going to forecast into 2027, but I don't see anything extraordinary about this quarter that makes it an outlier. I really think this is the kind of-- we should be able to deliver strong performance across The North Face over time.
We really just grew across the we've talked about elevated products. We're launching so we've got just one after another thing that we really levers, we can pull and they're all very very visible in the Americas, probably the strongest opportunity in the world right now is the Americas. So.
I feel really good about.
Whats happening there.
And our forecast into 'twenty, seven, but I don't see anything extraordinary about this quarter that makes it an outlier I really think this is the kind of we should be able to deliver strong performance across the north face overtime.
Paul Vogel: Yeah, on the inventory side, dollars are up slightly. That's just to support the strong sales we've had, but overall, inventory days are down, pretty much across the board, so.
Paul Vogel: Yeah, on the inventory side, dollars are up slightly. That's just to support the strong sales we've had, but overall, inventory days are down, pretty much across the board, so.
On the inventory side.
Or up slightly.
That's just to support the strong sales with Abbott overall inventory days are down pretty much across the board.
Bracken Darrell: You know what else is really good, Brooke, is so many things aren't working well enough yet. You know, we have so many things we can do better, and that makes me even more optimistic. If I look at APAC, you know, I'm sure I'm gonna get a question there. APAC were soft, you know, and we know we're gonna be soft. We'll be soft probably through most of next year because we've really consolidated gains. We've had such a long period of strong growth in APAC. We've really expanded our distribution. We're where we ought to be. Now we need to get we're missing some products we really need to have there and get our marketing revved up even more. By the way, thank you, Alex. And, you know, and then in EMEA, EMEA is just a macro, kind of a macro slowdown.
Bracken Darrell: You know what else is really good, Brooke, is so many things aren't working well enough yet. You know, we have so many things we can do better, and that makes me even more optimistic. If I look at APAC, you know, I'm sure I'm gonna get a question there. APAC were soft, you know, and we know we're gonna be soft. We'll be soft probably through most of next year because we've really consolidated gains. We've had such a long period of strong growth in APAC. We've really expanded our distribution. We're where we ought to be. Now we're missing some products we really need to have there and get our marketing revved up even more. By the way, thank you, Alex. And, you know, and then in EMEA, EMEA is just a macro kind of a macro slowdown.
What else is really good.
As so many things are working well enough yet you know we have so many things we can do better.
And that makes me even more optimistic if I look at APAC, you know I'm sure we're going to get a question there.
You know, we probably won't talk about the order books because we usually don't, but I'd say in terms of traffic and stores, know, we didn't see it in stores. I mean, it was just, you know, traffic. Physical traffic is much tougher to get rolling and it's, I think it's going to take us longer, but we're really excited about the traffic, we saw online. So I think we're just going to have to keep going. We're we continue to try to identify ways that we think we can start to bring the traffic up in our source. Um, and that is the that's kind of the the Holy Grail. We get that going, look out. But right now the, the traffic on the line is exciting to see. And uh, you know, I do think things like demon Hunters, you know? Like some of the some of the really specialized products were launching. We need to direct them more into our stores. First, you know, so that you really have to come to our stores. To see them because we've got some really cool things. They're kind of exclusive you know and look at demon Hunters. That was super oh we refilled that already and we've already sold a really strongly than a second running of that so we need to bring
Were soft.
And we know we're going to be soft will be soft probably through most of next year, because we've really consolidated games. We've got such a long period of strong growth in APAC, we've really expanded our distribution, where we ought to be now we need to get we're missing some products, we really need to have their get our marketing revved up even more by the way. Thank you Alex.
And then in EMEA EMEA was just a macro kind of a macro slowdown I mean, we have a really good business in EMEA and are optimistic for the north face there, but I think in general if you just look across our portfolio. We had a really good performance and we can do a lot better.
Bracken Darrell: I mean, we have a really good business in EMEA, and I'm optimistic for The North Face there. But I think in general, if you just look across our portfolio, we had a really good performance, and we can do a lot better.
I mean, we have a really good business in EMEA, and I'm optimistic for The North Face there. But I think in general, if you just look across our portfolio, we had a really good performance, and we can do a lot better.
We need to be bringing those more into our stores and making sure, uh, you know, our, our customers are aware. That's the place to buy them. We, we might have made it too easy to buy some of that stuff online. So, um, so anyway, so bottom line is now the traffic and Source wasn't up, wasn't up yet. But give us time, I think we'll get there. Yeah, I would just add that traffic is still down. We did see a slight Improvement sequentially from Q2 to Q3. Um, so traffic to brackets point, it's still down. We haven't yet seen positive traffic yet, but at least the trend is moving uh, in the right direction.
Okay. Thanks a lot guys. Thanks Michael.
Brooke Roach: Thanks so much.
Brooke Roach: Thanks so much.
Thanks, so much thanks Brook.
Bracken Darrell: Thanks, Brooke.
Bracken Darrell: Thanks, Brooke.
Operator: Your next question comes from the line of Michael Binetti with Evercore. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Michael Binetti with Evercore. Your line is open. Please go ahead.
Your next question comes from the line of Michael Binetti with Evercore. Your line is open. Please go ahead.
Michael Binetti: Hey, guys. My congrats to the positive inflection there. Did you... I guess for Vans, did you see the traffic in the US stores improve sequentially? I know you said it, it improved all the way to positive digitally. Are the stores following that trend to a lag? So do you see some impact from the new products working in the physical stores? And then, I'm curious, any kind of initial thought you can give us to how the order books are building up for Vans for back to school.
Michael Binetti: Hey, guys. My congrats to the positive inflection there. Did you... I guess for Vans, did you see the traffic in the US stores improve sequentially? I know you said it improved all the way to positive digitally. Are the stores following that trend to a lag? So do you see some impact from the new products working in the physical stores? And then, I'm curious, any kind of initial thought you can give us to how the order books are building up for Vans for back to school.
I'll add my congrats to the positive.
Inflection there.
Could you I guess for vans did you see the traffic in the U S stores improved sequentially I know you said it.
Improved all the way to positive digitally or the stores following that trend to a lag. So we see some impact from new products working in the physical stores and then Im curious any kind of.
Initial thoughts you can give us the order books are building up for vans for back to school.
Your next question comes from the line of Simeon. Seagull with Guggenheim. Your line is open. Please go ahead. Hey guys, this morning. Um, I was curious if you could help. How are you thinking about the broader? Just Aur versus unit Dynamic across the brands as you're seeing these inflections and then Bracken feels like you're uh starting to speak at least mention Ultra a little bit more than historically. Anything you can elaborate on the brand, the signals you're seeing there. Just to give you confidence that maybe this becomes a EFC pillar brand. If I'm reading the Easter eggs correctly, obviously early, but anyway to think about how you'd see sizing potential of that brand. And then just lastly, out of curiosity, what floor were you waving to Alex on as he did that?
Bracken Darrell: You know, we probably won't talk about the order books because we usually don't. But I'd say in terms of traffic in stores, no, we didn't see it in stores. I mean, it was just, you know, traffic. Physical traffic is much tougher to get rolling, and it's, I think it's gonna take us longer. But we're really excited about the traffic we saw online. So I think we're just gonna have to keep going. We continue to try to identify ways that we think we can start to bring the traffic up in our stores. And that is, that's kind of the holy grail. When we get that going, look out. But right now, the traffic online is exciting to see.
Bracken Darrell: You know, we probably won't talk about the order books because we usually don't. But I'd say in terms of traffic in stores, no, we didn't see it in stores. I mean, it was just, you know, traffic. Physical traffic is much tougher to get rolling, and it's, I think it's gonna take us longer. But we're really excited about the traffic we saw online. So I think we're just gonna have to keep going. We continue to try to identify ways that we think we can start to bring the traffic up in our stores. And that is - that's kind of the, the holy grail. When we get that going, look out. But right now, the, the traffic online is exciting to see.
We probably won't talk about the order books, because we usually do but I'd say in terms of traffic in stores no. We didn't see it in stores I mean, it was just <unk>.
Traffic at physical traffic is much tougher to get rolling in.
Take us longer.
We're really excited about the traffic we saw online. So I think we're just going to have to keep go in where we continue to try to identify ways that we think we can start to bring the traffic up in our stores.
And that is the that's kind of the Holy Grill, and we get that going look out, but right now the traffic and a lot of exciting to see.
Bracken Darrell: You know, I do think things like Demon Hunters, you know, like some of the, some of the really specialized products we're launching; we need to direct them more into our stores first, you know, so that you really have to come to our stores to see them, because we've got some really cool things that are kind of exclusive. You know, and look at Demon Hunters. That was super. But we refilled that already, and we've already sold really strongly in a second running of that. So we need to be bringing those more into our stores and making sure, you know, our customers are aware that's the place to buy them. We might have made it too easy to buy some of that stuff online.
You know, I do think things like Demon Hunters, you know, like some of the, some of the really specialized products we're launching, we need to direct them more into our stores first, you know, so that you really have to come to our stores to see them, because we've got some really cool things that are kind of exclusive. You know, and look at Demon Hunters. That was super. But we refilled that already, and we've already sold really strongly in a second running of that. So we need to be bringing those more into our stores and making sure, you know, our customers are aware that's the place to buy them. We might have made it too easy to buy some of that stuff online.
I do think things like demon hunters like some of the some of the really specialized products for lodging, we need to direct them more into our stores first so that you really have to come to our stores to see them because we've got some really cool things are kind of exclusive and you look at the even under that was superb, but we refilled that already and we've already sold.
Really strong in a second running of that so we need to we need to be bringing those more into our stores, making sure.
What's my prize retail? But I, I, um, so first of all, I'll try. Yeah. You do hear me talking about it? More. You, you can see me wearing it a lot more. I've become a raving fan both from a both because I love the business and also because I love the product. So I, um, I've also got a few things. I don't want to talk about just yet, but we'll bring him out a little bit later of other people, that are now wearing this product that you're going to be surprised at. Um, so we've got a lot of, uh, quiet momentum. And as I've said before, we're really holding the brand back. I mean, it could be growing faster. We're just not letting it go because we want to control the distribution. Make sure it's in the places, where it establishes a really strong pedigree, and awareness as a running brand, uh, and a running brand and not just on the trail, but also on the road. So I'm, I am excited about Ultra, I do think it's got, you know, I said it before, I think it's got a billion dollar plus potential and it's up to us to make that happen. I was, I was with the founder yesterday here in our Denver headquarters and he was, he said, to me, you know, he said he
Our our customers are aware of that's the place to buy them, we motivated to easy to buy some of this stuff online. So so anyway. So bottom line is no the traffic in stores wasn't it wasn't up yet, but give US time I think we will get there yes, I would just add that traffic is still down we did see a slight improvement sequentially from Q2 to Q3 to traffic.
Remember the day when I knew that business could hit, hit 500 million.
Bracken Darrell: So, anyway, bottom line is, no, the traffic in the stores wasn't up yet, but give us time. I think we'll get there.
So, anyway, bottom line is, no, the traffic in the stores wasn't up yet, but give us time. I think we'll get there.
Paul Vogel: Yeah, I would just add that traffic is still down. We did see a slight improvement sequentially from Q2 to Q3. So traffic, to Bracken's point, it's still down. We haven't yet seen positive traffic yet, but at least the trend is moving in the right direction.
Paul Vogel: Yeah, I would just add that traffic is still down. We did see a slight improvement sequentially from Q2 to Q3. So traffic, to Bracken's point, it's still down. We haven't yet seen positive traffic yet, but at least the trend is moving in the right direction.
At this point, it's still down we havent, yet seen positive JV, yet or at least the trend is moving in the right direction.
Michael Binetti: Okay. Thanks a lot, guys.
Michael Binetti: Okay. Thanks a lot, guys.
Okay. Thanks, a lot guys. Thanks, Michael.
Bracken Darrell: Thanks, Michael.
Bracken Darrell: Thanks, Michael.
Operator: Your next question comes from the line of Simeon Siegel with Guggenheim. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Simeon Siegel with Guggenheim. Your line is open. Please go ahead.
Your next question comes from the line of Simeon Siegel with Guggenheim. Your line is open. Please go ahead, hey, guys.
Simeon Siegel: Hey, guys. Morning. I was curious if you could help how you're thinking about the broader, just AUR versus unit dynamic across the brands as you're seeing these inflections. And then, Bracken, feels like you're starting to speak, at least mention Altra a little bit more than historically. Anything you can elaborate on the brand, the signals you're seeing there, just to give you confidence that maybe this becomes a VFC pillar brand, if I'm reading the Easter eggs correctly? Obviously early, but any way to think about how you'd see sizing potential of that brand. And then just lastly, out of curiosity, what floor were you waving to Alex on as he did that? What's my prize?
Simeon Siegel: Hey, guys. Morning. I was curious if you could help how you're thinking about the broader, just AUR versus unit dynamic across the brands as you're seeing these inflections. And then, Bracken, feels like you're starting to speak, at least mention Altra a little bit more than historically. Anything you can elaborate on the brand, the signals you're seeing there, just to give you confidence that maybe this becomes a VFC pillar brand, if I'm reading the Easter eggs correctly? Obviously early, but any way to think about how you'd see sizing potential of that brand. And then just lastly, out of curiosity, what floor were you waving to Alex on as he did that? What's my prize?
Good morning.
I was curious if you could help how are you thinking about the broader just AUR versus unit dynamic across the brands as Youre seeing these inflections and then bracken feels like you're starting to speak at least mentioned altera, a little bit more than historically anything you can elaborate on the brand the signals you're seeing there just to give you confidence that maybe this becomes a USD pillar brand if I'm reading the Easter eggs correctly, obviously early.
But any way to think about how you would see sizing potential of that brand and then just lastly out of curiosity, what floor, where you waiting to Alex on as he did that.
And I said, wow, you know, I remember the day, when I knew I could hit a billion. So so we're both living a little bit in the future. He was before, and I, we are now. But it's, you know, it's going to go over 250 this year probably 270 and um, I see a lot of potential beyond that you want to average the? Yeah, I mean, I can say across all the brands, not much change. I say, for vans, in particular, you're seeing a little bit of an uptick, in a, you are in the Americas, which is great. Um, and tnf um, Aur is up um, as this is Timberland so they're all up nothing. I would say too crazy. Um, but all up like, you know, moderately, you know, I I you know, I know you're joking about the uh, the floor I was on waving at Alex. I was, I was hiding under my couch, waving at Alex, while he was on TV and I was, I literally had it on the other room and I would walk in and watch it for a few seconds and I had to run back out of there. Uh, that was the most terrifying thing I've ever seen, but I I I talked to Alex uh, as when he flew back, you know, when he got back to Las Vegas and it's amazing how humble the guy is and
He's such a great reflection of.
Of what.
Bracken Darrell: It's the average unit retail, but I'll-- AUR versus unit retail average. So first of all, Altra, yeah, you do hear me talking about it more. You can see me wearing it a lot more. I've become a raving fan, both because I love the business and also because I love the product. So I, I've also got a few things I don't want to talk about just yet, but we'll bring them out a little bit later, of other people that are now wearing this product that you're going to be surprised at. So we've got a lot of quiet momentum, and as I've said before, we're really holding the brand back. I mean, it could be growing faster.
Bracken Darrell: It's the average unit retail, but AUR versus unit retail average. So first of all, Altra, yeah, you do hear me talking about it more. You can see me wearing it a lot more. I've become a raving fan, both because I love the business and also because I love the product. So I have also got a few things I don't want to talk about just yet, but we'll bring them out a little bit later, of other people that are now wearing this product that you're going to be surprised at. So we've got a lot of quiet momentum, and as I've said before, we're really holding the brand back. I mean, it could be growing faster.
What's my price.
Retail.
ER versus unit averages.
So first of all an ultra yes, you did hear me talking about it more you could see me wearing get a lot more.
Become Arabian fan both from a both because I love the business and also because I love the product so.
I've also got a few things I don't want to talk about just yet, but it will vary a little bit later of other people that are noteworthy in this product that you're going to be surprised.
Of of what it is to be uh, a great human being and a great athlete. And he reflects a, a really reflects what what? Unfortunately, you can't see every day which is we have a 100 or 200 people like a lot like Alex who are super courageous. They, they really, uh, love love love what they're doing. They really would and all and some of them do do it for almost free or free.
And um, and it's just exciting to be part of a business that has a little piece of that.
So we've got a lot of client momentum and as I've said before we're really holding the brand back I mean, it could be growing faster. We're just not letting it go because we want to control distribution make sure. It's in the places where it establishes a really strong pedigree and awareness as a running brand.
It's great. Thanks guys. Best luck for the year. Thanks again.
Bracken Darrell: We're just not letting it go because we want to control the distribution, make sure it's in the places where it establishes a really strong pedigree and awareness as a running brand, and a running brand, not just on the trail, but also on the road. So I am excited about Altra. I do think it's got, you know, I've said it before, I think it's got a $1 billion-plus potential, and it's up to us to make that happen. I was with the founder yesterday here in our Denver headquarters, and he said to me, you know, he said, "When we-" He said, "I remember the day when I knew that business could hit $500 million." And I said: Wow, you know, I remember the day when I knew it could hit $1 billion.
We're just not letting it go because we want to control the distribution, make sure it's in the places where it establishes a really strong pedigree and awareness as a running brand, and a running brand, not just on the trail, but also on the road. So I'm—I am excited about Altra. I do think it's got, you know, I, I've said it before, I think it's got a billion-dollar-plus potential, and it's up to us to make that happen. I was with the founder yesterday here in our Denver headquarters, and he said to me, you know, he said, "When we—" He said, "I remember the day when I knew that business could hit 500 million." And I said: Wow, you know, I remember the day when I knew it could hit 1 billion.
And are running better and not just on the trade overall so on the road. So I am excited about Altra I do think it's got a said before I think he's got $1 billion plus potential and it's up to us to make that happen.
The foundry yesterday here in our Denver headquarters and he was he said to me. He said he said when we you said I remember the day when I knew that business could hit $500 million.
Your next question comes from the line of Tracy. Kogan with Citi group. Your line is open, please go ahead. Hi thanks guys. I was hoping you could talk more about the drivers of the gross margin beat versus your expectations. Um, in this quarter wondering if you were able to mitigate more, I know you you mentioned Nicks and lower product costs but it was also wondering about promotions versus your expectations. And then if you could just talk about the drivers of your view for gross, margin to be up. Uh flat to up slightly in 4k. Thank you.
And I said, well you know I remember the day when I knew it could hit 1 billion. So we're both live in a little bit in the future. He was before we are now, but it's going to go over $2 50, this year probably to $70 million.
Bracken Darrell: So we're both living a little bit in the future. He was before, and we are now, but it's, you know, it's gonna go over $250 this year, probably $270, and I see a lot of potential beyond that. You wanna average the answer first?
So, we're both living a little bit in the future. He was before, and we are now, but it's, you know, it's gonna go over $250 this year, probably $270, and I see a lot of potential beyond that. You wanna average the answer first?
I see a lot of potential beyond that you want to add.
Paul Vogel: Yeah, I mean, I'd say across all the brands, not much change. I'd say for Vans in particular, you're seeing a little bit of an uptick in AUR in the Americas, which is great. And TNF, AUR is up, as is Timberland. So they're all up. Nothing, I would say, too crazy, but all up, like, you know, moderately.
Paul Vogel: Yeah, I mean, I'd say across all the brands, not much change. I'd say for Vans in particular, you're seeing a little bit of an uptick in AUR in the Americas, which is great. And TNF, AUR is up, as is Timberland. So they're all up. Nothing, I would say, too crazy, but all up, like, you know, moderately.
Yeah, so on the puts and takes on Gross margins. Um uh it's a little bit less promotion so the full price um was better. We did have a tariff impact which we did not mitigate um and we got a little bit of a a benefit on the sourcing side, so those are kind of the main components. Um,
Yes, I would say across all the brands not much changes for vans in particular, you're seeing a little bit of an uptick in AUR in the Americas, which is great.
in uh,
And TNF.
<unk> is up.
Timberland, so theyre all up nothing I would say too crazy, but all up.
On the gross margin side and then for um, Q4 kind of similar Trends. Um, we will have some pricing benefiting us, uh, to help mitigate some of the Tariff impacts in, uh, in Q4 that we didn't have in Q3,
Moderately.
Bracken Darrell: You know, yeah, I know you were joking about the what floor I was on, waving at Alex. I was hiding under my couch, waving at Alex while he was on TV, and I literally had it on in the other room, and I would walk in and watch it for a few seconds, and I had to run back out of there. That was the most terrifying thing I've ever seen. But I talked to Alex when he flew back, you know, when he got back to Las Vegas. And it's amazing how humble the guy is. And he's such a great reflection of what it is to be a great human being and a great athlete.
Bracken Darrell: You know, yeah, I know you were joking about the what floor I was on, waving at Alex. I was hiding under my couch, waving at Alex while he was on TV, and I was... I literally had it on in the other room, and I would walk in and watch it for a few seconds, and I had to run back out of there. That was the most terrifying thing I've ever seen. But I talked to Alex at when he flew back, you know, when he got back to Las Vegas. And it's amazing how humble the guy is. And he's such a great reflection of what it is to be a great human being and a great athlete.
I know you were joking about the floor hours on waiving of Alex.
Are you expecting lower promotion year-over-year, similar to 32.
Hiding under my Couch waving at Alex while he was on TV.
I literally had it all in the other room and I would walk in and watch it for a few seconds that I had to run back out of there.
Uh we don't really talk that much. I mean, maybe slightly we've been again, we've been getting a little bit better in that overall uh but I would say slightly but nothing really to to call out
Got it. Thank you.
That was the most terrifying thing I've ever seen but I I talked to Alex.
He flew back you know when you go back to Las Vegas, and it's amazing how humble the guy is and he's such a great reflection of.
Your next question comes from the line of Jonathan comp with beard. Your line is open. Please go ahead.
<unk> of what it has to be a great human being integrated athlete and he reflects.
Bracken Darrell: And he reflects - he really reflects what unfortunately you can't see every day, which is we have 100 or 200 people, like, a lot like Alex, who are super courageous. They really love, love, love what they're doing. They really would, and all - and some of them do it for almost free or free. And it's just exciting to be part of a business that has a little piece of that.
And he reflects what unfortunately you can't see every day, which is we have 100 or 200 people, like, a lot like Alex, who are super courageous. They really love, love, love what they're doing. They really would, and some of them do it for almost free or free. And it's just exciting to be part of a business that has a little piece of that.
It really reflects.
Unfortunately, you can't see everyday which is we have 100 or 200 people like a lot like Alex who are super courageous.
They really are.
Love Love Love, what they're doing they really would end and some of them do do it for almost for free.
And it's just excited to be part of our business that has a little piece of that.
Jay Sole: It's great. Thanks, guys. Best luck with the year.
Jay Sole: It's great. Thanks, guys. Best luck with the year.
Great. Thanks, guys best of luck for the year. Thanks Vivien.
Good morning. I'm surprised nobody uh suggested yet Alex? Do the next climb in the skate loafer just as a thought for go, cross brand initiative there. Um, but Bracken, if I could follow up, just in your view. What's it going to take to translate positive uh Global digital traffic for Vans into tonal growth? You always think forward here, or or better better, trajectory for total revenue, and then, and then Paul, if I could just follow up the medium-term targets, I think you've said, you know, you're not putting all the eggs in the basket for fiscal 2028. So can you just give any more flavor?
Bracken Darrell: Thanks, Vivian.
Bracken Darrell: Thanks, Vivian.
Yes.
How you see, you know, revenue and and the margin progression.
Operator: Your next question comes from the line of Tracy Kogan with Citigroup. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Tracy Kogan with Citigroup. Your line is open. Please go ahead.
Your next question comes from the line of Tracy Kogan with Citigroup. Your line is open. Please go ahead.
Playing out at a high level. Thank you.
Tracy Kogan: Hi. Thanks, guys. I was hoping you could talk more about the drivers of the gross margin beat versus your expectations in this quarter. I'm wondering if you were able to mitigate more. I know you, you mentioned mix and lower product costs, but was also wondering about promotions versus your expectations. And then, if you could just talk about the drivers of your view for gross margin to be up flat to up slightly in Q4. Thank you.
Tracy Kogan: Hi. Thanks, guys. I was hoping you could talk more about the drivers of the gross margin beat versus your expectations in this quarter. I'm wondering if you were able to mitigate more. I know you, you mentioned mix and lower product costs, but was also wondering about promotions versus your expectations. And then, if you could just talk about the drivers of your view for gross margin to be up, flat to up slightly in Q4. Thank you.
Hi, Thanks, guys I was hoping you can talk more about the drivers of the gross margin.
Versus our expectations.
In this quarter wondering if you were able to mitigate more I know you mentioned mix and lower product costs.
I was also wondering about promotions versus your expectations and then if you could just talk about the drivers of your view for gross margin to be up.
I'll take the first 2 and then, and then probably you take the money that it was directed at you. Um, so internal in terms of how, how's that translation of, this of finally, seeing some good traffic on bands? Going to eventually turn into growth on bands? You know, you know, I've, I've just so carefully avoided everything. When will the brand turn positive and I'll do it again. Uh, but I would say it is a very good sign. And I think we've got, we also have just a
Of, uh, there's a lot of good. Um,
That to up slightly in <unk>. Thank you.
Paul Vogel: Yeah. So on the puts and takes on gross margins, it's a little bit less promotion, so the full price was better. We did have a tariff impact, which we did not mitigate, and we got a little bit of a benefit on the sourcing side. So those are kind of the main components, on the gross margin side. And then for Q4, kind of similar trends, we will have some pricing benefiting us to help mitigate some of the tariff impacts in Q4 that we didn't have in Q3.
Paul Vogel: Yeah. So on the puts and takes on gross margins, it's a little bit less promotion, so the full price was better. We did have a tariff impact, which we did not mitigate, and we got a little bit of a benefit on the sourcing side. So those are kind of the main components in on the gross margin side. And then for Q4, kind of similar trends, we will have some pricing benefiting us to help mitigate some of the tariff impacts in in Q4 that we didn't have in Q3.
Yes, so on the puts and takes on gross margins.
It's a little bit less promotion so the full price.
It was better we did have a tariff impact, which we did not mitigate and we got a little bit of a benefit on the sourcing side. So those are kind of the main components.
<unk>.
In.
On the gross margin side and then four.
Q4 kind of similar trends, we will have some pricing benefiting us to help mitigate some of the tariff impact in Q.
Q4 that we didn't have in Q3.
Tracy Kogan: Are you expecting lower promotions year over year, similar to Q3?
Tracy Kogan: Are you expecting lower promotions year over year, similar to Q3?
Are you expecting lower promotions year over year similar to <unk>.
Paul Vogel: We don't really talk that much. I mean, maybe slightly. Again, we've been getting a little bit better in that overall, but I would say slightly, but nothing really to call out.
Paul Vogel: We don't really talk that much. I mean, maybe slightly. We've been getting a little bit better in that overall, but I would say slightly, but nothing really to call out.
We don't really talk that much I mean may be slightly we've been again, we've been getting a little bit better than that overall, but I would say slightly but nothing really to call out.
It's really very, very exciting. Um, I I think I'm I'm, I will call Alex when we hang up and talk to him about the skate loafer climb. It seems like a great idea.
Tracy Kogan: Got it. Thank you.
Tracy Kogan: Got it. Thank you.
Thank you.
Operator: Your next question comes from the line of Jonathan Komp with Baird. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Jonathan Komp with Baird. Your line is open. Please go ahead.
Your next question comes from the line of Jonathan Komp with Baird. Your line is open. Please go ahead.
Jonathan Komp: Yeah, good morning. I'm surprised nobody suggested yet Alex do the next climb in the Skate Loafer, just as a thought for, you know, cross-brand initiative there. But, Bracken, if I could follow up, just in your view, what's it gonna take to translate positive global digital traffic for Vans into total growth, you know, as you think forward here or, or better, better trajectory for total revenue? And then, Paul, if I could just follow up. The medium-term targets, I think you've said, you know, you're not putting all the eggs in the basket for fiscal 2028. So can you just give any more flavor, how you see your revenue and, and the margin progression playing out at a high level? Thank you.
Jonathan Komp: Yeah, good morning. I'm surprised nobody suggested yet Alex do the next climb in the Skate Loafer, just as a thought for, you know, cross-brand initiative there. But, Bracken, if I could follow up, just in your view, what's it gonna take to translate positive global digital traffic for Vans into total growth, you know, as you think forward here or, or better, better trajectory for total revenue? And then, Paul, if I could just follow up. The medium-term targets, I think you've said, you know, you're not putting all the eggs in the basket for fiscal 2028. So can you just give any more flavor, how you see your revenue and the margin progression playing out at a high level? Thank you.
Yes, good morning, I'm surprised nobody suggested yet Alex due the next climb in the skate low first just as a thought for cross brand initiatives there.
But.
Frankly, if I could follow up just in your view, what's it going to take to translate to positive.
Mobile digital traffic for bands into total growth.
Forward here or better better trajectory for total revenue and then Paul if I could just follow up the medium term targets I think you've said you're not putting all the eggs in the basket for fiscal 2028. So can you just give any more flavor.
How you see your revenue and the margin progression cleaned out at a high level. Thank you.
Bracken Darrell: I'll take the first two, and then, Paul, you can take the one that was directed at you. So in terms of how is that translation of finally seeing some good traffic on Vans gonna eventually turn into growth on Vans? You know I've just so carefully avoided ever saying when will the brand turn positive, and I'll do it again. But I would say it is a very good sign, and I think we also have just a lot of... There's a lot of good brand discussion now happening, you know, at the Tier Zero accounts.
Bracken Darrell: I'll take the first two, and then, Paul, you can take the one that was directed at you. So in terms of how is that translation of finally seeing some good traffic on Vans gonna eventually turn into growth on Vans? You know, I've just so carefully avoided ever saying when will the brand turn positive, and I'll do it again. But I would say it is a very good sign, and I think we also have just a lot of... There's a lot of good brand discussion now happening, you know, at the Tier Zero accounts.
I'll take the first two and then put them together.
Um, and so on the medium search targets. Um, yeah, I mean, if we still feel good about all those targets, so nothing changes from um the perspective of what we give you in terms of our goals where we where we get to. Um, so you think about the operating margin, right? We set up a 6 and a half percent or better this year. Um, exit, run rate, fiscal 208, 10%, so you can assume we're going to get some improvements in, uh, in 2017 and 2018 to get there. Um, so we still expect to get that, um, continue to pay down debt. So if you think about going from 4.1 to 3.5 times leverage, um, so so you can see there's a pretty clear path to go from 3.5 to 2.5. Just, if we stayed where we are, we obviously expect, um, our, um, operating income to do better on our operating cash flow to do better over time, which obviously helped on reducing that leverage. And so, we feel like we're in a really good place to hit that 2.5 times, uh, leverage, um, and our free cash flow. You know, was strong this year and this was strong in the face of, you know, a hundred million dollar, um, headwind from tariffs, to 35 million of their headwind. Um, from Dickies, um, excuse me. Um, and we also
Directly to you.
So internal in terms of how is that translation of this are finally seeing some good traffic is going to eventually turn into growth on vans.
Just so carefully avoided ever saying when will the brand turned positive and ill do it again.
But I would say it is a very good sign and I think we've got we also have just a lot of.
Spending about 333% more in capex right now year to date and so we're and we're able to do all that and still generate the free cash flow. We want to continue to pay down debt. So uh, we feel like we're we're in a really good place to hit those targets and as we get closer to, um, the end of the year, we'll, we'll give you more guidance and, and thoughts on, on tisco 27. You know what? I just throw out 1 thought on 1 thought on that, you know, you heard.
There's a lot of good.
Brand discussion now happening.
At the tier zero accounts, you know, we've really got strong interest in our in our very premium elevated product that we're launching ridge, which we're bringing down into our channels and into an overtime into the wholesale channel. So so I'm really I love the path that we're on it really does feel like the right kind of meaningful path.
Bracken Darrell: You know, we've really got strong interest in our very premium, elevated product that we're launching, which we're bringing down into our channels and into, and over time, into the wholesale channels, too. So I'm really. I love the path that we're on. It really does feel like the right kind of meaningful path. You know, when I talk to the team that's running the business, you could feel the enthusiasm they have for it. Now, they're admittedly living into the future. You know, we live a year out and two out, but that. But I feel really good about what they feel, you know? So it's really very, very exciting. I think I'm. I will call Alex when we hang up and talk to him about the Skate Loafer climb.
You know, we've really got strong interest in our very premium, elevated product that we're launching, which we're bringing down into our channels and into, and over time, into the wholesale channels, too. So I'm really. I love the path that we're on. It really does feel like the right kind of meaningful path. You know, when I talk to the team that's running the business, you could feel the enthusiasm they have for it. Now, they're admittedly living into the future. You know, we live a year out and two out, but that, but I feel really good about what they feel, you know? So it's really very, very exciting. I think I will call Alex when we hang up and talk to him about the skate loafer climb.
Talk to the team that's running the business you can feel the enthusiasm they have for it.
Admittedly living into the future you know, we love a year out and two out, but but but I feel really good about what they feel so it's really it's really very very exciting.
I think I will call Alex when we hang up and talk to them about the skate low for climate seems like a great idea.
Bracken Darrell: It seems like a great idea.
It seems like a great idea.
Paul Vogel: So in the medium-term targets, yeah, look, we still feel good about all those targets, so nothing changes from the perspective of what we've given you in terms of our goals, where we get to. So you think about the operating margin, where we said it'll be 6.5% or better this year. Exit run rate, fiscal 2028, 10%. So you can assume we're gonna have some improvements in 2027, 2028 to get there. So we still expect to get that. We continue to pay down debt. So if you think about, we went from 4.1 to 3.5 times leverage. So I'd say you can see there's a pretty clear path. You go from 3.5 to 2.5, just if we stayed where we are.
Paul Vogel: So in the medium-term targets, yeah, look, we still feel good about all those targets, so nothing changes from the perspective of what we've given you in terms of our goals, where we, where we get to. So you think about the operating margin, where we said it'll be 6.5% or better this year. Exit run rate, fiscal 2028, 10%. So you can assume we're gonna have some improvements in 2027, 2028 to get there. So we still expect to get that. We continue to pay down debt. So if you think about, we went from 4.1 to 3.5x leverage. So I'd say you can see there's a pretty clear path. You go from 3.5 to 2.5, just if we stayed where we are.
And so in the medium term targets.
Those of you who've been listening for a while you've heard both Paul and me independently, and, and practically as a as a duet say, how much we dislike debt. And it's, that's certainly not changed, which is my regressively Bringing Down the debt levels. But there's a big benefit to that, which is it's really forced us to not rely on m&a. And so we've really focused on organic growth and it's the reason why he saw us go positive as a quarter. It's that, that it it complete obsession with getting our businesses growing, and Our Brands growing the right way. So, systematically. I think, it's partly because there is that discipline of debt hanging out there that with we bring it down and we're bringing it down fast. Um, we don't have a lever that we're going to go try to pull on on uh m&a. We're going to grow these Brands. We have amazing Brands and some of the, some of the particularly impressive Brands. We have, we don't talk about very much. So we've got growth opportunities across the board.
Yes, I mean look we still feel good about all of these targets are nothing changes from the perspective of what we give you in terms of our goals, where we where we get to.
That's great. Thank you. Thank you.
So you think about the operating margin why we said it would be six 5% or better this year.
Your next question comes from the line of Anna and de with Piper Sandler. Your line is open. Please go ahead.
Exit run rate fiscal 2008% to 10%. So you can assume or any item improvements in in.
In 2007 to 28 to get there. So we still expect to get that continue to pay down debt. So if you think about went from four one to three five times leverage.
I'd say you can see there's a pretty clear path to go from three 5% to five just if we stayed where we are we obviously expect our.
Paul Vogel: We obviously expect our operating income to do better and our operating cash flow to do better over time, which will obviously help on reducing that leverage. And so we feel like we're in a really good place to hit that 2.5 times leverage. And our free cash flow, we know, was strong this year, and it's strong in the face of, you know, a $100 million headwind from tariffs, a $35 million headwind from Dickies. Excuse me. And we also are spending about 33 to 35% more in CapEx right now, year to date. And so we're able to do all that and still generate the free cash flow we want to continue to pay down debt. So we feel like we're in a really good place to hit those targets.
We obviously expect our operating income to do better and our operating cash flow to do better over time, which will obviously help on reducing that leverage. So we feel like we're in a really good place to hit that 2.5x leverage. And our free cash flow, we know, was strong this year, and it's strong in the face of, you know, a $100 million headwind from tariffs, a $35 million headwind from Dickies. And we also are spending about 33 to 35% more in CapEx right now, year to date. So we're able to do all that and still generate the free cash flow we want to continue to pay down debt. So we feel like we're in a really good place to hit those targets.
Operating income to do better on operating cash flow to do better over time, which obviously health on reducing that leverage and so we feel like we're in a really good place to hit that two five times leverage.
Hey guys, this is Noah on for Anna. Thanks so much for taking our questions, so, um, good to hear Vans expected down mid single digits for 42. Can you elaborate how we should think about DTC versus wholesale for the brand? And then anything, you know, by Gio going forward. Uh, and then as a follow-up on Northface you've mentioned premiumization as a focus, uh, as an opportunity for the brand. Uh, how do you think about that and why? Now,
And our free cash flow was strongest year and it was strong in the face of a $100 million.
Now is the right time to do. So, uh, how do you envision The North Face positioning versus some of the newer brands in the category? Thanks.
Headwind from tariffs of 35 million dollar headwind.
From Dickies.
Excuse me.
And we also are spending about 33, 35% more in Capex right now year to date and so we're and we're able to do all of that and still generate the free cash flow. We want to continue to pay down debt. So we feel like we're in a really good place to hit those targets and as we get closer to.
Paul Vogel: As we get closer to the end of the year, we'll give you more guidance and thoughts on fiscal 2027.
As we get closer to the end of the year, we'll give you more guidance and thoughts on fiscal 27.
The end of the year, we'll give you more guidance and thoughts on fiscal 'twenty seven.
Bracken Darrell: You know what? I'll just throw out one thought on debt. You know, you heard those of you who've been listening for a while, you've heard both Paul and me independently and practically as a duet say how much we dislike debt, and that's certainly not changed, which is why we're aggressively bringing down the debt levels. But there's a big benefit to debt, which is it's really forced us to not rely on M&A. And so we've really focused on organic growth, and it's the reason why you saw us go positive this quarter. It's that complete obsession with getting our businesses growing and our brands growing the right way, so systematically.
Bracken Darrell: You know what? I'll just throw out one thought on debt. You know, those of you who've been listening for a while, you've heard both Paul and me independently and practically as a duet say how much we dislike debt, and that's certainly not changed, which is why we're aggressively bringing down the debt levels. But there's a big benefit to debt, which is it's really forced us to not rely on M&A. And so we've really focused on organic growth, and it's the reason why you saw us go positive this quarter. It's that complete obsession with getting our businesses growing and our brands growing the right way, so systematically.
One thought.
Those of you have been listening for a while you've heard both Paul and me independently.
As a duet say how much we dislike debt and it's that's certainly not changed which is why we are aggressively bring down the debt levels, but there's a big benefit to that which is it's really forced us to not rely on M&A and so we've really focused on organic growth and it's the reason why you saw US go positive this quarter.
It complete obsession with getting our business is growing and our brands growing the right way to systematically I think it's partly because there is that discipline of debt hanging out there with we bring it down and we'll bring it down fast.
Yeah, on, uh, DTC versus wholesale. I, I probably, if you had to rank them, I'd say probably we'll see. Uh, first of all, if you ask me where, where am I focused on, focused on the Americas right now, it's 50% of the Vans of business, you know, if if, as, as the North American Market goes, Vans goes. So we're really focused there. So, and then within that, I would say, uh, yeah, DTC first, but, but even their Ecom first. So Ecom is the is the fastest lever we can pull, because the products can get there. Faster, they can be played well, we're getting better at Social marketing, which we could, we can bring, uh, consumers to our site. And, and so between good products and good marketing. I think you'll see the we're, we're really keeping our eye on DTC for Vans first, but particularly Ecom and the stores are harder, you know, so that's going to come. It's just going to come out with a little lag and then wholesale after that. Um, in terms of premiumization for, for Northface, you know why. Now, you know, it's kind of 1 of those things where there's just, it's such a great opportunity and I'll go back to the comment. I made a minute.
Bracken Darrell: I think it's partly because there is that discipline of debt hanging out there, that once we bring it down, and we're bringing it down fast, we don't have a lever that we're going to go try to pull on M&A. We're going to grow these brands. We have amazing brands, and some of the particularly impressive brands we have, we don't talk about very much. So we've got growth opportunities across the board.
Bracken Darrell: I think it's partly because there is that discipline of debt hanging out there, that once we bring it down, and we're bringing it down fast, we don't have a lever that we're going to go try to pull on, M&A. We're going to grow these brands. We have amazing brands, and some of the particularly impressive brands we have, we don't talk about very much. So we've got growth opportunities across the board.
We don't have a lever that we're going to try to pull in on M&A, we're going to grow. These brands, we have amazing brands and some of them some of them, particularly impressive brands. We have we don't talk about very much. So we've got growth opportunities across the board.
Ago, especially in North America. You know, we're not going to go, you know, start selling uh 50% of our business at 1100 but but we do have opportunities around the world in premiumization, you know, Summit Series. We don't talk about it that way. But some of the series is a very premium product lineup and it's very small today but it has a really good growth potential too as does uh, as does the the more lifestyle
Jay Sole: That's great. Thank you.
Jay Sole: That's great. Thank you.
That's great. Thank you. Thank you.
Bracken Darrell: Thank you.
Bracken Darrell: Thank you.
Operator: Your next question comes from the line of Anna Andreeva with Piper Sandler. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Anna Andreeva with Piper Sandler. Your line is open. Please go ahead.
Your next question comes from the line of Ana <unk> with Piper Sandler. Your line is open. Please go ahead.
Product like the, the leather pack that we talked about. So there's what why? Now because there's just such a good opportunity, you're not going to see us go crazy. We're we're we're we're not
[Analyst] (Piper Sandler): Hey, guys, this is Noah on for Anna. Thanks, so much for taking our question. So, good to hear Vans expected down, mid-single digits for Q4. Can you elaborate how we should think about DTC versus wholesale for the brand, and then anything, you know, by geo going forward? And then as a follow-up, on North Face, you've mentioned premiumization as a focus, as an opportunity for the brand. How do you think about that, and why now is the right time to do so? How do you envision the North Face positioning versus some of the newer brands in the category? Thanks.
[Analyst] (Piper Sandler): Hey, guys, this is Noah on for Anna. Thanks, so much for taking our question. So, good to hear Vans expected down, mid-single digits for Q4. Can you elaborate how we should think about DTC versus wholesale for the brand, and then anything, you know, by geo going forward? And then as a follow-up, on North Face, you've mentioned premiumization as a focus, as an opportunity for the brand. How do you think about that, and why now is the right time to do so? How do you envision the North Face positioning versus some of the newer brands in the category? Thanks.
Hey, guys. This is Noah on for Anna Thanks, So much for taking my question. So.
Good to hear then as expected down mid single digits for <unk> can you elaborate how we should think about DTC versus wholesale for the brand and then anything by Geo going forward.
Stationary change, that would be dangerous. In my view, we're going to do a systematically and carefully and well.
And then as a follow up on North face, you've mentioned premium amortization as a focus as an opportunity for the brand.
How do you think about that and why now is the right time to do so how do you envision the north sea is positioning versus some of the newer brands in the category.
Thank you Noah. Otherwise aka Anna
Your final question comes from the line of J. Soul with UBS. Your line is open. Please go ahead.
Bracken Darrell: Yeah. On DTC versus wholesale, I'd probably... If you had to rank them, I'd say probably we'll see—First of all, if you ask me where am I focused, I'm focused on the Americas right now. It's 50% of the Vans business. You know, if as the North American market goes, Vans goes. So we're really focused there. So, and then within that, I would say, yeah, DTC first, but even there, e-com first. So e-com is the fastest lever we can pull because the products can get there faster, they can be displayed well. We're getting better at social marketing, which is, we can bring consumers to our site.
Bracken Darrell: Yeah. On DTC versus wholesale, I'd probably... If you had to rank them, I'd say probably we'll see. First of all, if you ask me where am I focused, I'm focused on the Americas right now. It's 50% of the Vans business. You know, as the North American market goes, Vans goes. So we're really focused there. So, and then within that, I would say, yeah, DTC first, but even there, e-com first. So e-com is the fastest lever we can pull because the products can get there faster, they can be displayed well. We're getting better at social marketing, which is we can bring consumers to our site.
Yes.
BTC versus wholesale I, probably if you had to rank them I'd say, probably we'll see.
First of all if you ask me, where my focus on focus on the Americas right now, it's 50% of the vans business.
J. As a reminder. Please unmute yourself. If you have dialed into today's call, please, press star, 6 to unmute.
As the North American market goes vans goes so we're really focused there so and then within that I would say.
Hi, is that working?
Yes, I thought you were on the fourth floor. Do you love connection like Alex?
DTC first but even there e-commerce. So E. Com is the is the fastest lever we can pull because the products can get there faster they can be displayed well, we're getting better at social marketing, which we can bring.
Consumers to our site.
Bracken Darrell: So between good products and good marketing, I think you'll see the-- we're really keeping our eye on DTC for Vans first, but particularly e-com. And the stores are harder, you know, so that's going to come. It's just going to come with a little lag and then wholesale after that. In terms of premiumization for North Face, you know, why now? You know, it's kind of one of those things where there's just-- it's such a great opportunity. And I'll go back to the comment I made a minute ago, especially in North America. You know, we're not going to go, you know, start selling 50% of our business at $1,100. But we do have opportunities around the world in premiumization.
And so between good products and good marketing, I think you'll see the, we're really keeping our eye on DTC for Vans first, but particularly e-com. And the stores are harder, you know, so that's going to come. It's just going to come with a little lag and then wholesale after that. In terms of premiumization for North Face, you know, why now? You know, it's kind of one of those things where there's just, it's such a great opportunity. And I'll go back to the comment I made a minute ago, especially in North America. You know, we're not going to go, you know, start selling 50% of our business at $1,100. But we do have opportunities around the world in premiumization.
And so between good products and good marketing and I think youll see the we're really keeping our eye on DTC for brands first, but particularly E com and the stores are harder so thats going to Congress, which can come with a little lag in wholesale after that.
I don't think I would admit it to the fourth floor on that. I would have been done like half the floor up on that climb. But uh, uh, I I think that the question is about guidance that, you know, we're still doing uh, 1 quarter of time guidance. Uh how are you thinking about possibly giving full year guidance? What what needs to change for you to start giving a longer term Outlook? Thank you.
In terms of permutation for for North face.
Why now.
Kind of one of those things, where there's just it's such a great opportunities and I'll go back to the comment I made a minute ago, especially in North America.
Not going to go.
You know, I mean Jeff and I had a call because I'm afraid he's going to get an answer that. We we we agree with but we haven't decided whether we're, we're really agree with you. Um, look at the other day. Uh we we pulled guidance because I think you can guide when you have predictability and um and then we haven't put it back because gosh, it's really nice. Not to give a full year guys. I mean it's really comfortable. Um but we also know that investors like it.
So we're selling.
50% of our business and $1100, but but we do have opportunities around the world and premium innovation Summit series, We don't talk about it that way, but sort of a series of very premium product lineup and it's very small today, but it has a really good growth potential to as does <unk>.
Bracken Darrell: You know, Summit Series, we don't talk about it that way, but Summit Series is a very premium product lineup, and it's very small today, but it has a really good growth potential, too, as does the more lifestyle-oriented product, like the leather pack that we talked about. So why now? Because there's just such a good opportunity. You're not going to see us go crazy. We're not. We don't. I don't like jigsaw. You know, I don't like these ups and downs. I like systematic growth. So you'll see us systematically change that North Face offering to systematically see us premiumize. So don't expect a revolutionary change. That would be dangerous in my view. We're going to do it systematically and carefully and well. Thank you, Noah. Otherwise, AKA Anna.
You know, Summit Series, we don't talk about it that way, but Summit Series is a very premium product lineup, and it's very small today, but it has a really good growth potential, too, as does the more lifestyle-oriented product, like the leather pack that we talked about. So why now? Because there's just such a good opportunity. You're not going to see us go crazy. We're not... We don't-- I don't like jigsaw. You know, I don't like these ups and downs. I like systematic growth. So you'll see us systematically change that North Face offering to systematically see us premiumize. So don't expect a revolutionary change. That would be dangerous in my view. We're going to do it systematically and carefully and well. Thank you, Noah. Otherwise, AKA Anna.
and so we're we're seriously considering we're, we're going to think through it and um, we're waiting the pros and cons, you know, the it's it's a it's a really I think it's a really good thing in some ways and really a bad thing in other ways, you know, from a
The more lifestyle oriented product like.
The leather pack that we talked about so there is why now because there's just such a good opportunity youre not going to see us go crazy.
From some some viewpoints but we're we're thinking carefully through it and I promise you that we are not under underestimating that there's a lot of interest out there for it. So stay tuned.
We're not.
We don't I don't like Jigsaw.
These ups and downs like systematic growth so youll see a systematically change that northeast offering to systematically see us premium wise. So don't expect a revolutionary change that would be dangerous in my view, we're going to do it systematically and carefully and well.
Bracky maybe just to follow up on that. I mean, given that fourth quarter is coming up, I mean fourth quarter be a more important quarter to try to rein write try to reintroduce that kind of fully your guide or does it really not matter what quarter you're reporting.
um,
Thank you Noah otherwise okay.
Operator: Your final question comes from the line of Jay Sole with UBS. Your line is open. Please go ahead. Jay, as a reminder, please unmute yourself. If you have dialed into today's call, please press star six to unmute.
Operator: Your final question comes from the line of Jay Sole with UBS. Your line is open. Please go ahead. Jay, as a reminder, please unmute yourself. If you have dialed into today's call, please press star six to unmute.
Your final question comes from the line of Jay sole with UBS. Your line is open. Please go ahead.
Okay.
Okay.
Jay as a reminder, please on mute yourself, if you have dialed into todays call. Please press star sixth on mute.
Jay Sole: Hi, is that working?
Jay Sole: Hi, is that working?
Alright as Theyre working.
Bracken Darrell: You are working. Yes. I thought you were on the fourth floor, and you lost connection like Alex.
Bracken Darrell: You are working. Yes. I thought you were on the fourth floor, and you lost connection like Alex.
Yes, I thought you were on the fourth floor you'd lost connection like Alex.
Jay Sole: I don't think I would have made it to the fourth floor on that. I would have been down, like, half a floor up on that climb. But I think that the question is about guidance. You know, we're still doing the one quarter at a time guidance. How are we thinking about possibly giving full year guidance? What needs to change for you to start giving a longer-term outlook? Thank you.
Jay Sole: I don't think I would have made it to the fourth floor on that. I would have been down, like, half a floor up on that climb. But I think that the question is about guidance. You know, we're still doing the one quarter at a time guidance. How are we thinking about possibly giving full year guidance? What needs to change for you to start giving a longer-term outlook? Thank you.
I don't think I was admitted to the fourth floor on that would've been done my Capricorn up on that client.
yeah, I mean logically, if you were going to reintroduce a guy, you'd probably do it in a fourth quarter this year next year or something. So yeah, I think that makes a lot of sense that either the close of the quarter, you know, kind of that after you finish the year or something like that. Yeah, I would just add 1 Thing on guidance too, um, because I know this quarter, obviously, we exceeded expectations. Um, our our philosophy on guidance. In terms of whatever, we got hasn't really changed, right? We're always going to give ranges. Our goal is to stay at the top end of the range, you know, in a really good quarter. Um, they see the range but really at the top end of the range. And so, um, nothing has changed with that. So, I know, um, sometimes you have quarters, we are right in the range. Sometimes you have quarters when you you outperform, uh, we outperformed just organically, um, in this quarter, if you look at the outperformance. Uh, it was really all DTC. DTC is um, obviously a little bit less predictable than wholesale. Um, and so our guidance philosophy hasn't changed, um, we just had a really strong quarter and was really
I think that the.
<unk> is about guidance we're.
Led by DTC, which can always be a little bit more valuable uh in any quarter. So I just wanted to kind of reiterate sort of how we think about guidance.
We're still doing one quarter at a time guidance.
Are you thinking about possibly giving full year guidance.
The change for you to start giving a longer term outlook. Thank you.
Okay, thank you so much. Thank you, Jay. Oh, it sounds like this last question unless you have another 1 operator,
Bracken Darrell: You know, I'm going to jump in ahead of Paul because I'm afraid he's going to give an answer that we agree with, but we haven't decided whether we really agree with it yet. Look, at the end of the day, we pull guidance because I think you can guide when you have predictability. And then we haven't put it back because, gosh, it's really nice not to give full year guidance. It's, I mean, it's really comfortable, but we also know that investors like it. And so we're seriously considering. We're going to think through it, and we're weighing the pros and cons.
Bracken Darrell: You know, I'm going to jump in ahead of Paul because I'm afraid he's going to give an answer that we agree with, but we haven't decided whether we really agree with it yet. Look, at the end of the day, we pull guidance because I think you can guide when you have predictability. And then we haven't put it back because, gosh, it's really nice not to give full year guidance. It's, I mean, it's really comfortable, but we also know that investors like it. And so we're seriously considering. We're going to think through it, and we're weighing the pros and cons.
Jeff and I had a follow up kind of a pretty is giving you an answer that we agree with what we own.
We're really agree with you look at the end of the day, we pulled guidance because I think you could guide when you have predictability.
There are no further questions at this time. Okay, well, I'll, I'll bring this to a close, you know, we really we feel great about our progress, we feel great about the results, we deliver this quarter. There's so many things that we can do better, that's the best news.
And then we haven't put it back is gosh, it's really nice not to give full year ago.
It's really comfortable.
But we also know that investors like it.
So we're seriously considering we're going to think through it.
We are weighing the pros and cons.
Bracken Darrell: You know, it's a really good thing in some ways, and a really bad thing in other ways, you know, from some viewpoints. But we're thinking carefully through it, and I promise you that we are not underestimating that there's a lot of interest out there for it. So stay tuned.
You know, it's a really—I think it's a really good thing in some ways, and a really bad thing in other ways, you know, from some viewpoints. But we're thinking carefully through it, and I promise you that we are not underestimating that there's a lot of interest out there for it. So stay tuned.
Uh, we're we're really seeing great Improvement and we're and and we have so many more things to make better. So, um, I'm really excited about where we are, you know, this this I'm I'm going to at some point soon. I'm going to stop turning it. It's calling us to turn around to VF, um, because it it will no longer be. It's about growth.
It's a really I think it's a really good thing in some ways it really bad thing in other ways.
For him so some viewpoints, but we're thinking carefully through it.
I promise you that we are not under underestimating that theres a lot of interest out there for it so stay tuned.
And we're going to stay focused on really fulfilling this enormous potential. We have across each of Our Brands, all of our Brands, and creating exceptional shareholder value. So, thanks everyone. Stay tuned. We'll see you in a quarter.
Jay Sole: ... Bracken, maybe just to follow up on that. I mean, just given that Q4's coming up, I mean, would Q4 be a more important quarter to try to reintroduce that kind of full year guide, or does it really not matter what quarter you're reporting?
Jay Sole: ... Bracken, maybe just to follow up on that. I mean, just given that Q4's coming up, I mean, would Q4 be a more important quarter to try to reintroduce that kind of full-year guide, or does it really not matter what quarter you're reporting?
Brian maybe just to follow up on that I mean, given.
Includes today's call. Thank you for attending. You may now disconnect
Given that fourth quarter is coming up in the fourth quarter would be a more important quarter to try to reintegrate tried to introduce that kind of full year guide or does it really not matter what quarter you're reporting.
Bracken Darrell: Yeah, I mean, logically, if you were gonna reintroduce a guide, you'd probably do it in the Q4 this year or next year or something. So yeah, I think that makes a lot of sense. Either at the close of the quarter, you know, kind of after you finish the year or something like that.
<unk>.
Bracken Darrell: Yeah, I mean, logically, if you were gonna reintroduce a guide, you'd probably do it in Q4 this year or next year or something. So yeah, I think that makes a lot of sense. Either at the close of the quarter, you know, kind of after you finish the year or something like that.
Yes.
Logically if you were going to reintroduce a guy that you'd probably do it in the fourth quarter of this year or next year or something so yes, I think that makes lot of sense that either at the close of the quarter. You know kind of after you finished the year something like that yes, I would just add one thing on guidance too.
Paul Vogel: Yeah, I would just add one thing on guidance, too, because I know this quarter, obviously, we exceeded expectations. Our philosophy on guidance in terms of whatever we guide hasn't really changed, right? We're always going to give ranges. Our goal is to hit the top end of the range, you know, in a really good quarter, exceed the range, but really at the top end of the range. And so, nothing has changed with that. So I know, sometimes you have quarters where you're right in the range, sometimes you have quarters when you outperform. We outperformed just organically, in this quarter. If you look at the outperformance, it was really all DTC. DTC is, obviously, a little bit less predictable than wholesale. And so our guidance philosophy hasn't changed.
Paul Vogel: Yeah, I would just add one thing on guidance, too, because I know this quarter, obviously, we exceeded expectations. Our philosophy on guidance in terms of whatever we guide hasn't really changed, right? We're always going to give ranges. Our goal is to hit the top end of the range, you know, in a really good quarter, exceed the range, but really at the top end of the range. And so, nothing has changed with that. So I know, sometimes you have quarters where you're right in the range, sometimes you have quarters when you outperform. We outperformed just organically in this quarter. If you look at the outperformance, it was really all DTC. DTC is, obviously, a little bit less predictable than wholesale. And so our guidance philosophy hasn't changed.
I know this quarter, obviously, we exceeded expectations.
Our philosophy on guidance in terms of whatever we guide Hasnt really changed right. We're always going to give ranges. Our goal is to hit the top end of the range you're in a really good quarter exceed the range, but really the top end of the range and so nothing has changed with that so I know, sometimes you have quarters, where right in the range. Sometimes you have quarters. When you outperform we outperformed just organically in this quarter. If you look at the.
Outperformance it was really all DTC DTC is.
Obviously, a little less predictable than wholesale.
And so our guidance philosophy Hasnt changed we just had a really strong quarter and was really led by DTC, which can always be a little bit more valuable than any quarter. So I just wanted to kind of reiterate sort of how we think about guidance.
Paul Vogel: We just had a really strong quarter and was really led by DTC, which can always be a little bit more valuable in any quarter. So I just wanted to kind of reiterate sort of how we think about guidance.
We just had a really strong quarter and was really led by DTC, which can always be a little bit more valuable, in any quarter. So I just wanted to kind of reiterate sort of how we think about guidance.
Jay Sole: Okay. Thank you so much.
Jay Sole: Okay. Thank you so much.
Okay. Thank you so much thank you Jay.
Bracken Darrell: Thank you, Jay. Oh, it sounds like that's the last question, unless you have another one, operator.
Bracken Darrell: Thank you, Jay. Oh, it sounds like that's the last question, unless you have another one, operator.
It sounds like this last question unless you have another one operator.
Operator: There are no further questions at this time.
Operator: There are no further questions at this time.
There are no further questions at this time, okay, well I'll bring this to a close here we feel great about our progress we feel great about the results. We delivered this quarter theres. So many things that we can do better that's the best news.
Bracken Darrell: Okay. Well, I'll bring this to a close. You know, we really feel great about our progress. We feel great about the results we delivered this quarter. There's so many things that we can do better. That's the best news. We're really seeing great improvement, and we have so many more things to make better. So, I'm really excited about where we are. You know, this... I'm gonna, at some point soon, I'm gonna stop calling this a turnaround of VF, because it will no longer be. It's about growth. And we're gonna stay focused on really fulfilling this enormous potential we have across each of our brands, all of our brands, and creating exceptional shareholder value. So thanks, everyone. Stay tuned. We'll see you in a quarter.
Bracken Darrell: Okay. Well, I'll bring this to a close. You know, we feel great about our progress. We feel great about the results we delivered this quarter. There's so many things that we can do better. That's the best news. We're really seeing great improvement, and we have so many more things to make better. So, I'm really excited about where we are. You know, I'm gonna, at some point soon, I'm gonna stop calling this a turnaround of VF, because it will no longer be. It's about growth. And we're gonna stay focused on really fulfilling this enormous potential we have across each of our brands, all of our brands, and creating exceptional shareholder value. So thanks, everyone. Stay tuned. We'll see you in a quarter.
We're really seeing great improvement.
And we have so many more things to make better so.
I'm really excited about where we are.
I'm going to at some point soon most upturns, calling this a turnaround of V F.
Because it will no longer be it's about growth.
And we're going to stay focused on really fulfilling this enormous potential we have across each of our brands all of our brands and creating exceptional shareholder value. So thanks, everyone stay tuned we'll see you in a quarter.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
This concludes today's call. Thank you for attending you may now disconnect.
