VF Corp Announces Dickies Sale, Shares Decline Amid Debt Reduction Strategy

VF Corp Divests Dickies Brand for $600 Million

VF Corporation (NYSE:VFC), the global apparel and footwear company behind brands such as Vans, The North Face, and Timberland, announced an agreement to sell its Dickies workwear brand to Bluestar Alliance for $600 million in cash. Following the announcement, shares of VFC experienced a 2.9% decline in morning trading.

Transaction Details and Strategic Context

The transaction, anticipated to conclude by the end of 2025, is a significant component of VF Corp's ongoing "Reinvent" strategy. VF Corp initially acquired Dickies in 2017 for $820 million. However, the century-old workwear brand has encountered significant operational challenges and declining revenues in recent years. After a 19% revenue jump to $837.7 million in fiscal 2022, Dickies' sales slid 12% year-over-year to $542.1 million for the fiscal year ended March 29, 2025, contributing approximately 6% of VF Corp's total revenue.

Bracken Darrell, VF Corp's CEO, articulated the strategic imperative behind the sale, stating, "This transaction will enable us to bring our net debt level down and will be accretive to our growth on a pro-forma basis." The proceeds from the sale are earmarked for reducing VF Corp's liabilities, which stood at $8.8 billion as of June 2025. This divestiture follows other recent asset sales, including Supreme in 2024 and Eagle Creek in 2021, as the company sharpens its focus on its higher-performing labels.

Market Reaction and Debt Management

Despite VF Corp's positive framing of the divestiture as a move to reduce debt and enhance financial flexibility, the market reacted with skepticism, as evidenced by the stock's decline. This sentiment suggests investors may harbor concerns regarding the immediate impact of the sale or the company's broader financial trajectory.

VF Corp's debt levels remain a focal point for analysts. The company had already lowered its net debt by $1.4 billion, or 20%, compared to the prior year, yet its net debt is still projected to remain above $4 billion even after the Dickies sale. Management has prioritized debt reduction, aiming to achieve a net leverage ratio below 2.5x by fiscal year 2028. The $600 million cash infusion is expected to aid in addressing upcoming debt maturities, notably EUR500 million notes due in March 2026.

Analyst Commentary and Outlook

Analysts have offered varied perspectives on VF Corp's strategic maneuvers. Williams Trading reiterated a "Sell" rating on the stock following the announcement, reflecting persistent concerns, while Telsey Advisory Group maintained a "Market Perform" rating. In contrast, Baird upgraded VF Corp to "Outperform" in 2025, citing improved brand performance and favorable cost trends, indicating a divergence in expert opinion regarding the long-term efficacy of the company's turnaround efforts.

VF Corp's shares have demonstrated significant volatility, experiencing 31 moves greater than 5% over the past year. The stock is down 33.8% since the beginning of the year, trading at $14.25 per share, which is 47.1% below its 52-week high of $26.93 observed in January 2025. This performance underscores the challenges the company faces in regaining investor confidence.

Looking ahead, investors will closely monitor VF Corp's progress in debt reduction, its ability to achieve its leverage targets, and the continued turnaround efforts for Vans. The company has guided for 2Q26 revenue to decline by 4%-2% on an FX-neutral basis, with gross margin expected to remain approximately flat at around 52.2%. The successful execution of its portfolio optimization strategy and the revitalization of its core brands will be crucial for VF Corp's future financial health and stock performance.