Research Update: VF Corp. Downgraded To'BB' From 'BBB-' On Weak Metrics; Outlook Stable

U.S.-based VF Corp.'s second-quarter 2025 (ended Sept. 30, 2024) weak earnings indicate that its portfolio of brands remains challenged and are still declining. We revised our forecast to reflect our expectations for lower demand and the sale of Supreme. As a result, we estimate leverage will remain well above 4.5x in fiscal 2025. We revised downward our view of VF's competitive advantage due to ongoing revenue declines at its top four brands and weaker profit margins. We lowered our issuer credit rating from investment-grade to 'BB' from 'BBB-' and our short-term and commercial paper ratings to 'B' from 'A-3'. We assigned '3' recovery ratings to the company's unsecured notes indicating our expectation of meaningful (50-70%, rounded estimate 55%) recovery in

...- U.S.-based VF Corp.'s second-quarter 2025 (ended Sept. 30, 2024) weak earnings indicate that its portfolio of brands remains challenged and are still declining. - We revised our forecast to reflect our expectations for lower demand and the sale of Supreme. As a result, we estimate leverage will remain well above 4.5x in fiscal 2025. - We revised downward our view of VF's competitive advantage due to ongoing revenue declines at its top four brands and weaker profit margins. - We lowered our issuer credit rating from investment-grade to '##' from '###-' and our short-term and commercial paper ratings to 'B' from 'A-3'. - We assigned '3' recovery ratings to the company's unsecured notes indicating our expectation of meaningful (50-70%, rounded estimate 55%) recovery in the event of a payment default. - We revised the outlook to stable. The stable outlook reflects our forecast for leverage reduction towards 4x over the next 12 months....

Research Update