JPMorgan Analysts Place VF Corp on Negative Catalyst Watch

Investing.com — JPMorgan has placed VF Corp (NYSE:VFC) on its Negative Catalyst Watch ahead of the company's Q2 FY25 earnings report scheduled for October 28 and its Investor Day on October 30.

In a note, analysts expressed concerns regarding VF Corp's financial outlook, stating, "We cut our FY26 EPS to $0.65 (35% below Consensus)," according to the bank.

JPMorgan also lowered its 2Q EPS estimate to $0.36, which is slightly below the Street's forecast of $0.37.

The bank anticipates an 8% year-over-year decline in VFC's revenues, although management's guidance suggests a 'sequential' improvement relative to the 10% revenue drop in Q1 (excluding Supreme).

However, key brands like Vans are facing challenges. "We model Vans revenues down 18% in constant currency (vs. 1Q's -21% and below the Street's -15%), in line with management's guidance for continued sequential improvement," wrote JPMorgan.

Challenges extend to VF Corp's outdoor brand, The North Face, where wholesale softness is likely to further drag results.

The bank stated, "Further, our work indicates continued wholesale challenges at The North Face, with management citing retailer reluctance to manage inventory risk following a warmer start to Fall/Winter last year. Globally, we see ongoing traffic headwinds across the portfolio (notably Vans and The North Face) which weigh on DTC revenues."

Looking beyond the second quarter, analysts caution about more downside risks. "We cut our 2H25 EPS by 35% below consensus to $0.29 (below Street's $0.45), based on a 2.1% decline in revenues (below Street's +1.9%), 2H gross margin expansion of +90bps Y/Y (below Street's +120bps Y/Y), and SG&A leverage remaining flat Y/Y (versus Street SG&A leverage of ~160bps)."

JPMorgan is cautious about the company’s ability to improve margins, pointing to potential markdowns and subdued growth.

With concerns about underperforming brands, market challenges, and margin pressure, JPMorgan maintains a long-term Neutral rating on VF Corp, setting a price target of $16 for December 2025.