This article first appeared in our sister publication Shop Eat Surf Outdoor
When it comes to revenue and marketplace might, the Vans of today remains a far cry from the Vans of just a few years ago. Vans’ annual revenue for fiscal 2025 ending March 31 fell 16% in reported currency to $2.3 billion, parent company VF Corp. reported in its latest earnings update on March 21.
To put in perspective just how much business Vans has lost, just two years ago Vans revenue in the Americas alone was larger — $2.4 billion — than its total revenue this year. And three years ago, Vans annual revenue totaled $4.2 billion, according to analysts.
“Vans’ business historically was based on five iconic franchises, and they had a lot of momentum that drove it to $4.2 billion,” said Mitch Kummetz, a senior analyst at Seaport Research Partners who has covered Vans for more than 25 years. “It’s kind of easy to get complacent and feed into it and before you know it, it’s an unhealthy part of your business (because it’s so large), then trends cycle, and a big part of your business is down. Nike is going through the same thing now.”
As Vans business has declined, it has gone through multiple rounds of layoffs, including most recently in April when 82 jobs were eliminated.
Rough Q4 as Vans Resets
Vans became the main topic during VF’s earnings call on March 22 after going backwards in Q4, with revenue declining 20% in constant currency, a significant fall from the 8% drop in the third quarter.
VF CEO Bracken Darrell sought to reassure analysts that the Vans turnaround was progressing, but that the progress would not be linear. Vans, he said, is making strategic moves now that will help return the company to healthy growth in the future, including reducing distressed sales, closing margin-eroding wholesale accounts and reducing sales to value stores.
“Sixty percent of the decline this quarter is a direct effect of deliberately reduced revenue to eliminate unprofitable or unproductive business,” he said, adding that about 25% of that also is due to closing wholesale accounts and reducing channel inventory in China.
Low Brand Heat Equals Low DTC Traffic
About 40% of Vans decline in the quarter came from DTC, and Darrell attributed the drop to soft traffic and lack of brand heat. Vans has “aggressively” reduced its DTC stores by 8%, VF executives said, and now has an owned global store count of 700.
To improve traffic, Vans need to create products that people want to stop by and check out, and it needs to create stronger marketing programs as well, Darrell said.
VF CEO ‘Confident as Ever’ in Vans Turnaround
Darrell spent a lot of time on the earnings call outlining the reasons why he believes the Vans turnaround will eventually happen:
- New Vans Brand President Sun Choe is building a strong team, including a new head of merchandising, with other hires on the way. “She’s a magnet for talent,” Darrell said;
- Choe is a “product person through and through, and product is the most important thing we can do on the Vans brand.” Lots of new products are on the way, he said;
- The limited rollout of the new Super Low Pro sold out of the top two styles almost immediately;
- In Vans’ key wholesale accounts that have the best product assortment, sales are up double digits; and
- Due to reduced sales to value stores, cutting distressed sales and closing unprofitable Vans stores, Vans gross margins are up significantly year over year.
“To be clear, turnarounds can look non-linear from a numerical standpoint, and this quarter is an illustration of that,” Darrell told analysts on the call. “However, we are methodically advancing all our initiatives. The actions we are taking to drive improved performance and progress in our turnaround are moving forward in a clear, linear manner.”
Kummetz said the timing of the key pieces of the Vans turnaround is important, and the new team appears to be making the right moves. For example, VF has said Choe’s influence on product will start to be felt somewhat for back to school, increasing more for holiday and even more in Spring ’26. So it makes sense to clean up inventory and distribution now, that way when fresh product hits stores, the turnaround can take hold, Kummetz said.
Kummetz does see reasons for optimism, including a slight shift in athletic trends overall to a more low-profile silhouette, which could lead to a reshuffling in the brands that are relevant. “The fact that the Vans Super Low Pro sold out in a few colors is really encouraging,” he said. “It may signal that Vans could be better positioned for renewed relevance.”
However, since the 20% Q4 decline was a significant reversal from third quarter results, VF stock had a pretty significant sell off on March 21, declining 16% to $12.15, in a sign the market may be questioning Vans’ turnaround prospects.
Tiffany Montgomery can be reached at tiffany@shop-eat-surf-outdoor.com.