$4.43
$32.83
bear $4.43
base $13.22
bull $32.83
margin of safety $7.00
market price* $16.85
V.F. Corporation owns The North Face, Vans and Timberland, plus smaller outdoor brands (Smartwool, Icebreaker, Altra, Napapijri). In the year ended March 2026 (fiscal 2026) revenue was $9.6 billion: The North Face $4.0 billion (up 8%), Vans $2.15 billion (down 8.5%, after several years of decline), and Timberland $1.74 billion (up 8%). About 56% of sales are outside the United States, with Europe the largest region. The company has spent seven years reshaping itself: the jeans business was spun off as Kontoor in 2019, workwear was sold in 2021, Supreme was bought for $2.1 billion in December 2020 and sold for $1.5 billion in 2024, and Dickies was sold for $600 million in November 2025. Since October 2023 a turnaround and cost program called Reinvent has been under way; its restructuring actions were substantially complete by mid-2025. How we measure earnings. We start from operating cash flow, strip out swings in inventories, receivables and payables, charge stock compensation as a real cost, and deduct capital spending including software. Store lease payments are treated as an ongoing operating cost. On that basis owner earnings per share were: FY2019 $2.15, FY2020 $2.50, FY2021 $1.00 (pandemic), FY2022 $2.48, FY2023 $2.12, FY2024 $0.34, FY2025 $0.53, FY2026 $1.19. Several judgements matter. The $875.7 million paid to the IRS in FY2023 on the long-running Timberland tax case, and the $921 million write-off of that tax receivable in FY2024, are one-time and kept out of the run-rate. The $127 million gain on the Dickies sale is excluded. In FY2026 VF received $125.4 million in cash when surplus assets of its terminated U.S. pension plan reverted to the company, less $25.1 million of excise tax; that is a one-time conversion of an asset into cash, not earnings, so we removed it. FY2026 also benefited by $71 million from refunds of tariffs that the Supreme Court struck down in February 2026; new tariffs were imposed under other authorities immediately afterward, so we do not carry that benefit forward. Before paying its lenders, the business generated about $615 million in FY2026, against $369 million in FY2025, $309 million in FY2024, $961 million in FY2023 and $1.1 billion in FY2022. We use the middle of those five years, $615 million, as the starting level: it spans both the peak and the trough of the current brand set. From it we subtract things we can name: about $56 million after tax for the tariff refund that will not recur, about $10 million for Dickies' contribution, and about $40 million over two years for continued Vans erosion (the segment that holds Vans already saw profit fall from $134 million to $103 million in FY2026). That leaves roughly $509 million a year. Cash flow before interest rose 66% in FY2026; our first forecast year is about 8% lower than FY2026, so we are not extrapolating the recovery. No growth is credited in the base case. The North Face's long record of growth depends on consumer demand rather than anything contracted, and management's goal of $500-600 million of added operating income by FY2028 is a target, not a result, so both are left out. The end of Reinvent restructuring payments (about $69 million of cash in FY2026) is also not credited, which partly offsets the cautious Vans and tariff assumptions. What the company owes. VF has $3.52 billion of bonds: $500 million at 2.80% due April 2027, euro notes of about $574 million at 0.25% due 2028, $573 million at 4.25% due 2029, $750 million at 2.95% due 2030, about $570 million at 0.625% due 2032, and smaller 6.00% (2033) and 6.45% (2037) issues. Against that sit $824 million of cash, of which we treat about $424 million as surplus to operating needs, and about $112 million of tariff refunds still to be collected after amounts owed to suppliers. Nothing is drawn on its $977 million asset-backed credit line. Its debt is rated BB by S&P and Ba2 by Moody's (Moody's outlook negative). Much of the debt carries very low fixed coupons until 2028-2032, which is worth something to shareholders, but replacement debt will cost more. About $466 million of supplier payables run through a bank-financed supply-chain program that relies on VF's credit standing. Base case (median). About $568 million in FY2027, including a one-time $44 million benefit from tariff refunds already sitting in inventory, then about $509 million a year through FY2036. After that we let cash flow fade 1% a year, reflecting VF's own record of brands that lose relevance (the Supreme write-downs, the steep fall in Vans, repeated impairment charges on acquired brands) while its core brands, each with decades of history, keep earning. Maturing bonds are refinanced at about 6.5%. The business is worth about $8.1 billion ($20.34 per share), it owes about $2.8 billion net ($7.13 per share), leaving about $13.22 per share. Bear case (10th percentile). Vans keeps shrinking at its FY2026 pace for four more years; replacement tariffs cost about $100 million a year after tax and cannot be passed on; and a consumer downturn of the depth VF has already lived through twice hits in FY2029-30. In the pandemic year (FY2021) cash flow before interest fell 55%, and in the FY2024 Vans and inventory crisis it fell 68%; here it drops to about $228 million and $270 million, then recovers only to about $360 million a year (near the FY2025 level) and fades 3% a year after FY2036. The 2027-2029 maturities are refinanced in a downgraded state at about 8.5%. Even at the trough, cash flow covers an interest bill of roughly $200 million, and cash plus the credit line can retire the April 2027 notes, so this case does not require issuing shares. The business is worth about $5.0 billion ($12.64 per share), it owes about $3.25 billion ($8.21 per share), leaving about $4.43 per share. Bull case (90th percentile). Reinvent delivers about half of the remaining gap to management's FY2028 profit goal (about $160 million after tax), The North Face keeps compounding at its long-run pace (adding about $27 million a year), Vans stops declining now, and tariffs are mostly priced through. Cash flow before interest reaches about $762 million in FY2028 and about $978 million by FY2036, then holds flat. The business is worth about $15.7 billion ($39.68 per share), it owes about $2.7 billion ($6.86 per share), leaving about $32.83 per share. Our previous analysis was built on a different basis, so its figures are not comparable. Margin-of-safety price. How sure are we of the earnings level? Not very. Cash flow before interest has ranged from $309 million to $1.1 billion in five years, and FY2026 is the first year after a three-year reset; part of its improvement came from lower charges and a tariff refund rather than stronger selling, and Vans is still shrinking. The worst plausible outcome is a recession arriving while Vans is still falling, followed by a further downgrade that pulls the supplier-finance program and forces working-capital outflows while the 2028-2030 bonds come due. The structure survives that: there is no large maturity before April 2027, the credit line is undrawn, the brands are real assets with long histories, and there is no controlling owner. But in that world the shares are worth roughly $4-5. The things we are most likely to be wrong about are the Vans floor, the cost of tariffs, and whether FY2026's margin gains (gross margin up 1.3 points to 54.8%) hold. If the steady level settles near $450 million instead of $509 million, the shares are worth about $11; if Vans keeps falling for years, closer to the bear case. The price assumes a three-to-five-year holding period, and the $0.36 a year dividend is about 5% of the margin-of-safety price over that period. From $7, over a three-year holding period, the base case implies roughly 30% a year and the bear case implies a loss of roughly 9% a year; at $9 the base case only just meets the 20% requirement while the bear-case loss deepens to about 16% a year, which is too thin a margin for a business with this range of outcomes. The margin-of-safety price is $7. What would make this wrong: Vans finding a floor at around $2 billion of revenue with improving profit would push value toward the bull case; a recession combined with a further downgrade, or tariffs that cannot be priced through, would push it toward the bear case.