VF Corp is channeling proceeds from recent brand divestments toward debt reduction, as S&P Global maintains its BB rating and a stable outlook. While The North Face and Timberland continue to perform well, Vans’ weakness is expected to weigh on full-year revenues.
VF Corp is using proceeds from its recent asset sales, including Supreme and the soon-to-be-divested Dickies workwear brand, to reduce debt and strengthen its balance sheet. The company’s adjusted leverage ratio fell to 4.3x at the end of FY25, compared to 5.1x a year earlier, with further improvements expected once the Dickies sale is finalized later this year.
S&P Global maintained VF’s BB issuer credit rating and B short-term and commercial paper ratings, with a stable outlook, noting that the company’s ongoing restructuring program “Reinvent” has helped stabilize profitability after several challenging quarters.
Modest decline in VF’s full-year revenues expected
Once the $600 million sale of Dickies to Bluestar Alliance closes, VF plans to use the proceeds primarily to repay $539.6 million outstanding on its 4.125 percent notes due in March 2026.
However, S&P cautioned that continued weakness at Vans is likely to cause a modest decline in VF’s full-year revenues, more than offsetting gains from The North Face and Timberland, both of which continue to show solid performance across key markets.
This news brief is based on reporting from SGI Europe’s sister publication in the US, Sporting Goods Intelligence (SGI News).
