VF Corp. received largely favorable callouts from analysts following its sale of Dickies to Bluestar Alliance. The sale is expected to provide greater financial flexibility, enabling the company to focus on its core brands, The North Face and Vans.
VF agreed to sell Dickies to Blue Star Alliance, the owner of Palm Angels, Off-White, Scotch & Soda Amsterdam, Hurley, bebe, Brookstone, Tahari, kensie, Justice, Limited, and others, for $600 million in cash. The sale is expected to close by the end of 2025.
The sale of the Dickies business to Bluestar Alliance follows a steep decline in sales for the workwear and streetwear brand in recent years. Dickies recorded sales totaling $542.1 million in VF’s fiscal year ended March 31, 2025, down 35.2 percent from $837.2 million in VF’s FY22.
VF acquired Dickie’s, founded in 1922, for $820 million in 2017.
At Barclays, Adrienne Yih wrote in a note that she believes the sale of Dickies “sufficiently addresses” the upcoming maturity of €500 million in long-term notes due March 2026. At a price of $600 million, the all-cash consideration can pay down at least €500mn ($588 million) of the total long-term debt outstanding of $4.15 billion as of the end of the fiscal first quarter ended June 28. She also noted that VF’s debt leverage was 4.1x times FY25 adjusted EBITDA.
Barclays reiterated its “Overweight” rating, with a price target of $19, believing the sale enables management to optimize VF Corp.’s portfolio by focusing capital on its core projects, including The North Face and Vans. Yih believes VF is “on the path towards sustainable positive revenue growth and a multi-brand recovery over a multi-year horizon,” with Vans’ turnaround expected in calendar 2026.
“At Vans, we are beginning to see early green shoots in the Fall/Winter season as the beginning of Sun Choe’s influence on brand and product comes to market, but there is clearly more brand work to come in CY26,” wrote Yih in a note. “VFC remains on track with mid-term targets per its Reinvent strategy, and Timberland and TNF are maintaining their positive top-line momentum, while product innovation remains a work-in-progress to drive turns at Vans.”
Baird Equity Research’s Jonathan Komp said the move was not expected, especially given the recent move of Dickies’ team into Vans’ headquarters, but the brand has struggled in recent years. He noted that the prior management team’s goal for VF was to grow Dickies to over $1 billion. The brand did grow to $838 million in FY22, but sales declined at a 13.5 percent CAGR (compound annual growth rate) from FY22 to FY26 “amid deep brand reset following inventory de-stocking cycle, weak sell-through, and loss of core work customer in value channel.”
Komp wrote in a note, “We expect the transaction to be accretive to margin and growth rate (and minimally dilutive to EPS, or better if VFC can cut additional corporate costs) and to reduce pro-forma net leverage by >0.5X.”
The analyst also viewed the sale price favorably, especially since the transaction value of about 1.1X enterprise value/sales is near or slightly above the current level for VF’s remaining business, and Komp believes the company’s remaining portfolio is better positioned for growth. Komp said, “With VFC’s equity highly levered to any improvements in operating fundamentals and/or balance sheet de-leveraging, we expect the transaction to be supportive for the stock and our broader turnaround thesis entering calendar 2026.”
Komp reiterated his “Outperform” rating at a price target of $20.
Citi Research’s Paul Lejuez, who has a “Neutral” rating on VF at a price of $14, described the sale as a “good strategic and financial move.” He believes the decision to sell Dickies was “opportunistic” as opposed to being sold “out of “necessity,” such as VF’s 2024 sale of Supreme that was required to pay down debt. He said in a note, “Although sold for less than it was purchased for (VFC bought Dickies for $820MM in 2017), we view the sale as a positive as it will allow mgmt to focus on its other brands (particularly Vans), and the cash from the sale will be used to improve the balance sheet.”
Lejuez also noted that the sale reduces sales to the price-driven value segment, with Dickies a significant Walmart supplier. Lejuez also does not anticipate a significant earnings impact as the estimated savings on interest from debt repayment are likely similar to the estimated loss of Dickies’ operating earnings.
Stifel‘s Peter McGoldrick, in a note, described the sale as “favorable” as it allows VF to further pay down debt and increase balance sheet flexibility. He wrote, “We credit the company for taking measures to improve the health of its balance sheet.”
He also noted that the sale enables VF to sharpen its focus on its core brands, Vans and The North Face.
Nonetheless, Stifel downgraded VF’s stock to “Hold” from “Buy” and reduced the VFC price target from $16 to $15 on the same day news of the Dickies’ sale was reported. He said favorable trends at VF’s two big outdoor brands, The North Face and Timberland, are being overshadowed by the slow recovery at Vans.
McGoldrick wrote, “Vans remains the key swing factor, with improvement levered to increased variety, increases in non-value Americas channels, and premiumization. With evidence of market share loss, unfavorable footwear trends, and cleanup actions impacting FY26 baseline, we expect Vans rebases at $2.1bn revenue from which the normalized growth rate is uncertain.”
Williams Trading‘s Sam Poser reiterated his “Sell” rating on VF at a $10 price target following news of Dickies’ sale. He noted that while the sale of Supreme and Dickies supports deleveraging efforts, “net debt will likely remain above $4B for some time to come.”
However, Poser was particularly frustrated that VF’s press release did not provide information on Dickies 1Q26 revenue or the brand’s FY25 EBIT and EPS contribution. He further stated that the lack of disclosure of other details of VF’s operation makes it difficult to estimate whether VF’s turnaround is gaining traction. Poser wrote, “We understand that VFC is doing everything within regulatory parameters, but the lack of transparency, and the ‘trust us, we’ve turned around companies before’ demeanor no longer holds water (as if it ever did) in our book.”
Image courtesy VF Corp.
See below for additional coverage of the VF divesture of Dickies:
EXEC: VF CEO Talks Altra, TNF, Timberland, Vans and the Dickies Sale at Investor Conference
