VF Corporation Reports Third Quarter Fiscal 2024 Results and Announces Strategic Portfolio Review
Q3'FY24 Financial and Operating Highlights
-
Revenue down 16% (down 17% in constant dollars) to
$3.0 billion - The quarter was negatively impacted by a shift in timing of wholesale deliveries, which was most pronounced for The North Face® and the EMEA region
-
Loss per share
$(0.11) versus Q3'FY23 earnings per share$1.31 ; adjusted earnings per share$0.57 versus Q3'FY23 adjusted earnings per share$1.12 -
The North Face® down 10% (down 11% in constant dollars); in the first nine months of FY'24 revenue is up 4% (up 3% in constant dollars)
-
APAC region up 26% (up 28% in constant dollars), including
Greater China up 31% (up 32% in constant dollars)
-
APAC region up 26% (up 28% in constant dollars), including
- Vans® down 28% (down 29% in constant dollars), inclusive of deliberate actions taken to right-size inventories in the Wholesale channel
-
Americas region down 24% (down 25% in constant dollars) -
International business down 5% (down 8% in constant dollars)
-
APAC region up 2% (up 3% in constant dollars), including
Greater China up 5% (up 7% in constant dollars) - EMEA region revenue down 7% (down 12% in constant dollars)
-
APAC region up 2% (up 3% in constant dollars), including
- Inventories at the end of Q3'FY24 down 17% relative to last year
-
Net debt at the end of Q3'FY24 reduced by approximately
$640 million relative to last year
Reinvent
During the quarter, the company continued to execute the Reinvent transformation program, which aims to enhance focus on brand-building and to improve operating performance. The initial four priorities of Reinvent are to improve
Strategic Portfolio Review
Consistent with the goals of Reinvent, VF has initiated an in-depth strategic review of the brand assets within the portfolio, in alignment with the Board of Directors, to ensure the company owns the brands that it believes create the greatest long-term value.
FY24 Outlook
The company reaffirmed its free cash flow guidance for FY24 of approximately
Summary Revenue Information (Unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended December |
|
Nine Months Ended December |
||||||||||||||||||||
(Dollars in millions) |
|
2023 |
|
2022 |
|
% Change |
|
% Change (constant currency) |
|
2023 |
|
2022 |
|
% Change |
|
% Change (constant currency) |
||||||||
Brand: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Vans® |
|
$ |
668.2 |
|
$ |
926.9 |
|
(28 |
)% |
|
(29 |
)% |
|
$ |
2,154.5 |
|
$ |
2,825.9 |
|
(24 |
)% |
|
(25 |
)% |
The North Face® |
|
|
1,192.1 |
|
|
1,321.2 |
|
(10 |
)% |
|
(11 |
)% |
|
|
2,859.0 |
|
|
2,753.2 |
|
4 |
% |
|
3 |
% |
Timberland® |
|
|
473.0 |
|
|
595.5 |
|
(21 |
)% |
|
(22 |
)% |
|
|
1,215.5 |
|
|
1,389.1 |
|
(13 |
)% |
|
(14 |
)% |
Dickies® |
|
|
147.9 |
|
|
177.0 |
|
(16 |
)% |
|
(17 |
)% |
|
|
456.0 |
|
|
533.7 |
|
(15 |
)% |
|
(15 |
)% |
Other Brands |
|
|
479.1 |
|
|
510.1 |
|
(6 |
)% |
|
(7 |
)% |
|
|
1,395.9 |
|
|
1,371.0 |
|
2 |
% |
|
1 |
% |
VF Revenue |
|
$ |
2,960.3 |
|
$ |
3,530.7 |
|
(16 |
)% |
|
(17 |
)% |
|
$ |
8,080.9 |
|
$ |
8,872.9 |
|
(9 |
)% |
|
(10 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
1,586.4 |
|
$ |
2,093.9 |
|
(24 |
)% |
|
(25 |
)% |
|
$ |
4,338.7 |
|
$ |
5,233.1 |
|
(17 |
)% |
|
(17 |
)% |
EMEA |
|
|
912.3 |
|
|
983.3 |
|
(7 |
)% |
|
(12 |
)% |
|
|
2,558.7 |
|
|
2,510.4 |
|
2 |
% |
|
(3 |
)% |
APAC |
|
|
461.6 |
|
|
453.4 |
|
2 |
% |
|
3 |
% |
|
|
1,183.5 |
|
|
1,129.3 |
|
5 |
% |
|
8 |
% |
VF Revenue |
|
$ |
2,960.3 |
|
$ |
3,530.7 |
|
(16 |
)% |
|
(17 |
)% |
|
$ |
8,080.9 |
|
$ |
8,872.9 |
|
(9 |
)% |
|
(10 |
)% |
International |
|
$ |
1,546.2 |
|
$ |
1,629.3 |
|
(5 |
)% |
|
(8 |
)% |
|
$ |
4,229.6 |
|
$ |
4,132.7 |
|
2 |
% |
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
DTC |
|
$ |
1,786.2 |
|
$ |
1,937.4 |
|
(8 |
)% |
|
(9 |
)% |
|
$ |
3,871.4 |
|
$ |
4,082.6 |
|
(5 |
)% |
|
(6 |
)% |
Wholesale (a) |
|
|
1,174.1 |
|
|
1,593.3 |
|
(26 |
)% |
|
(28 |
)% |
|
|
4,209.5 |
|
|
4,790.3 |
|
(12 |
)% |
|
(14 |
)% |
VF Revenue |
|
$ |
2,960.3 |
|
$ |
3,530.7 |
|
(16 |
)% |
|
(17 |
)% |
|
$ |
8,080.9 |
|
$ |
8,872.9 |
|
(9 |
)% |
|
(10 |
)% |
All references to the periods ended |
||||||||||||||||||||||||
Note: Amounts may not sum due to rounding |
||||||||||||||||||||||||
(a) Royalty revenues are included in the wholesale channel for all periods. |
Q3'FY24 Income Statement Review
-
Revenue
$3.0 billion , down 16% (down 17% in constant dollars) -
Gross margin 55.1%, up 20 basis points; adjusted gross margin 55.3%, up 40 basis points
- Adjusted gross margin tailwinds of approximately 175 basis points from favorable mix, partially offset by headwinds of approximately 135 basis points of unfavorable rate impact, largely driven by transactional foreign exchange rates
-
Operating margin (1.1)%, down 1,570 basis points; adjusted operating margin 9.3%, down 560 basis points
- Adjusted operating margin contraction driven by 610 basis points of deleverage, partially offset by 40 basis points of favorable constant currency gross margin impact and 10 basis points of translational foreign currency exchange rate benefits
-
Loss per share
$(0.11) versus Q3'FY23 earnings per share$1.31 ; adjusted earnings per share$0.57 versus Q3'FY23 adjusted earnings per share$1.12
Balance Sheet Highlights
-
Inventories decreased by
$333 million during Q3’FY24, down 17% relative to last year -
Net debt at the end of Q3'FY24 reduced by approximately
$640 million relative to last year
Shareholder Returns
-
Return of
$35 million to shareholders through cash dividends in Q3'FY24 -
VF’s Board of Directors declared a quarterly dividend of
$0.09 per share. This dividend will be payable onMarch 20, 2024 , to shareholders of record at the close of business onMarch 11, 2024 . Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.
Webcast Information
VF will host its third quarter fiscal 2024 conference call beginning at
About VF
Founded in 1899,
Financial Presentation Disclosure
All per share amounts are presented on a diluted basis. This release refers to “reported” and “constant dollar” amounts, terms that are described under the heading below “Constant Currency - Excluding the Impact of Foreign Currency.” Unless otherwise noted, “reported” and “constant dollar” amounts are the same. This release also refers to “adjusted” amounts, a term that is described under the heading below “Adjusted Amounts - Excluding Reinvent, Noncash Impairment Charges, Tax and Legal Items, and Transaction and Deal Related Activities.” Unless otherwise noted, “reported” and “adjusted” amounts are the same.
Constant Currency - Excluding the Impact of Foreign Currency
This release refers to “reported” amounts in accordance with
Adjusted Amounts - Excluding Reinvent, Noncash Impairment Charges, Tax and Legal Items, and Transaction and Deal Related Activities
The adjusted amounts in this release exclude costs related to Reinvent, VF's transformation program. Costs related to Reinvent were approximately
The adjusted amounts in this release exclude noncash goodwill impairment charges related to the Timberland®and Dickies® reporting units of approximately
The adjusted amounts in this release exclude the impact to tax expense resulting from the decision by the
The adjusted amounts in this release exclude legal settlement gains of approximately
The adjusted amounts in this release exclude transaction and deal related activities associated with the review of strategic alternatives for the Global Packs business, consisting of the Kipling®, Eastpak® and
Combined, the above items negatively impacted earnings per share by
Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors. The company also provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results.
Forward-looking Statements
Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” "believe," “estimate,” “expect,” “should,” and “may” and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding VF’s plans, objectives, projections and expectations relating to VF’s operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. VF undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: the level of consumer demand for apparel and footwear; disruption to VF’s distribution system; changes in global economic conditions and the financial strength of VF’s customers, including as a result of current inflationary pressures; fluctuations in the price, availability and quality of raw materials and finished products; disruption and volatility in the global capital and credit markets; VF’s response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; VF's ability to maintain the image, health and equity of its brands; intense competition from online retailers and other direct-to-consumer business risks; third-party manufacturing and product innovation; increasing pressure on margins; VF’s ability to grow its international, direct-to-consumer and digital businesses; VF’s ability to find and amplify consumer tailwinds, build brands on multiple growth horizons and leverage platforms for speed to scale and efficiency; retail industry changes and challenges; VF’s ability to execute its transformation and other business strategies, such as the Reinvent transformation program, including cost reduction and productivity initiatives and the update and maintenance of an agile and efficient operating model and organizational structure; any inability of VF or third parties on which we rely, to maintain the strength and security of information technology systems; the fact that VF’s facilities and systems, and those of third parties on which we rely, are frequent targets of cyber-attacks of varying levels of severity, and may be vulnerable to such attacks, and any inability or failure by us or such third parties to anticipate or detect data or information security breaches or other cyber-attacks, including the cyber incident that was reported by VF in
Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
|
|
Three Months Ended December |
|
Nine Months Ended December |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net revenues |
|
$ |
2,960,283 |
|
|
$ |
3,530,667 |
|
|
$ |
8,080,858 |
|
|
$ |
8,872,862 |
|
Costs and operating expenses |
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
|
1,327,871 |
|
|
|
1,593,048 |
|
|
|
3,792,168 |
|
|
|
4,134,207 |
|
Selling, general and administrative expenses |
|
|
1,407,548 |
|
|
|
1,421,586 |
|
|
|
3,709,891 |
|
|
|
3,828,157 |
|
Impairment of goodwill and intangible assets |
|
|
257,096 |
|
|
|
— |
|
|
|
257,096 |
|
|
|
421,922 |
|
Total costs and operating expenses |
|
|
2,992,515 |
|
|
|
3,014,634 |
|
|
|
7,759,155 |
|
|
|
8,384,286 |
|
Operating income (loss) |
|
|
(32,232 |
) |
|
|
516,033 |
|
|
|
321,703 |
|
|
|
488,576 |
|
Interest expense, net |
|
|
(63,338 |
) |
|
|
(50,230 |
) |
|
|
(168,701 |
) |
|
|
(115,395 |
) |
Other income (expense), net |
|
|
30,029 |
|
|
|
(9,901 |
) |
|
|
22,952 |
|
|
|
(113,895 |
) |
Income (loss) before income taxes |
|
|
(65,541 |
) |
|
|
455,902 |
|
|
|
175,954 |
|
|
|
259,286 |
|
Income tax expense (benefit) |
|
|
(23,089 |
) |
|
|
(51,966 |
) |
|
|
726,528 |
|
|
|
(74,190 |
) |
Net income (loss) |
|
$ |
(42,452 |
) |
|
$ |
507,868 |
|
|
$ |
(550,574 |
) |
|
$ |
333,476 |
|
Earnings (loss) per common share (a) |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.11 |
) |
|
$ |
1.31 |
|
|
$ |
(1.42 |
) |
|
$ |
0.86 |
|
Diluted |
|
$ |
(0.11 |
) |
|
$ |
1.31 |
|
|
$ |
(1.42 |
) |
|
$ |
0.86 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
388,383 |
|
|
|
387,739 |
|
|
|
388,294 |
|
|
|
387,663 |
|
Diluted |
|
|
388,383 |
|
|
|
388,192 |
|
|
|
388,294 |
|
|
|
388,357 |
|
Cash dividends per common share |
|
$ |
0.09 |
|
|
$ |
0.51 |
|
|
$ |
0.69 |
|
|
$ |
1.51 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basis of presentation of condensed consolidated financial statements: VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to |
||||||||||||||||
(a) Amounts have been calculated using unrounded numbers. |
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
|||||||||
|
|
December |
|
March |
|
December |
|||
|
|
2023 |
|
2023 |
|
2022 |
|||
ASSETS |
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|||
Cash and equivalents |
|
$ |
988,006 |
|
$ |
814,887 |
|
$ |
571,347 |
Accounts receivable, net |
|
|
1,314,139 |
|
|
1,610,295 |
|
|
1,564,957 |
Inventories |
|
|
2,148,219 |
|
|
2,292,790 |
|
|
2,591,915 |
Other current assets |
|
|
485,562 |
|
|
434,737 |
|
|
515,763 |
Total current assets |
|
|
4,935,926 |
|
|
5,152,709 |
|
|
5,243,982 |
Property, plant and equipment, net |
|
|
913,384 |
|
|
942,440 |
|
|
932,663 |
|
|
|
4,360,383 |
|
|
4,621,234 |
|
|
4,932,913 |
Operating lease right-of-use assets |
|
|
1,314,306 |
|
|
1,372,182 |
|
|
1,293,041 |
Other assets |
|
|
1,092,475 |
|
|
1,901,923 |
|
|
1,910,698 |
Total assets |
|
$ |
12,616,474 |
|
$ |
13,990,488 |
|
$ |
14,313,297 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|
|||
Short-term borrowings |
|
$ |
452,286 |
|
$ |
11,491 |
|
$ |
901,668 |
Current portion of long-term debt |
|
|
1,000,596 |
|
|
924,305 |
|
|
910,616 |
Accounts payable |
|
|
974,844 |
|
|
936,319 |
|
|
906,340 |
Accrued liabilities |
|
|
1,569,557 |
|
|
1,673,651 |
|
|
1,827,610 |
Total current liabilities |
|
|
3,997,283 |
|
|
3,545,766 |
|
|
4,546,234 |
Long-term debt |
|
|
4,755,252 |
|
|
5,711,014 |
|
|
4,617,441 |
Operating lease liabilities |
|
|
1,133,749 |
|
|
1,171,941 |
|
|
1,068,744 |
Other liabilities |
|
|
620,997 |
|
|
651,054 |
|
|
761,246 |
Total liabilities |
|
|
10,507,281 |
|
|
11,079,775 |
|
|
10,993,665 |
Stockholders' equity |
|
|
2,109,193 |
|
|
2,910,713 |
|
|
3,319,632 |
Total liabilities and stockholders' equity |
|
$ |
12,616,474 |
|
$ |
13,990,488 |
|
$ |
14,313,297 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
||||||||
|
|
Nine Months Ended December |
||||||
|
|
2023 |
|
2022 |
||||
Operating activities |
|
|
|
|
||||
Net income (loss) |
|
$ |
(550,574 |
) |
|
$ |
333,476 |
|
Impairment of goodwill and intangible assets |
|
|
257,096 |
|
|
|
421,922 |
|
Depreciation and amortization |
|
|
231,493 |
|
|
|
192,174 |
|
Reduction in the carrying amount of right-of-use assets |
|
|
283,002 |
|
|
|
280,845 |
|
Write-off of income tax receivables and interest |
|
|
921,409 |
|
|
|
— |
|
Other adjustments, including changes in operating assets and liabilities |
|
|
(36,679 |
) |
|
|
(2,061,889 |
) |
Cash provided (used) by operating activities |
|
|
1,105,747 |
|
|
|
(833,472 |
) |
Investing activities |
|
|
|
|
||||
Capital expenditures |
|
|
(119,662 |
) |
|
|
(130,214 |
) |
Software purchases |
|
|
(52,855 |
) |
|
|
(75,460 |
) |
Other, net |
|
|
(19,477 |
) |
|
|
(1,159 |
) |
Cash used by investing activities |
|
|
(191,994 |
) |
|
|
(206,833 |
) |
Financing activities |
|
|
|
|
||||
Contingent consideration payment |
|
|
— |
|
|
|
(56,976 |
) |
Net increase (decrease) from short-term borrowings and long-term debt |
|
|
(465,008 |
) |
|
|
1,064,601 |
|
Cash dividends paid |
|
|
(268,155 |
) |
|
|
(586,335 |
) |
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings |
|
|
(2,603 |
) |
|
|
(2,571 |
) |
Cash provided (used) by financing activities |
|
|
(735,766 |
) |
|
|
418,719 |
|
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash |
|
|
(4,984 |
) |
|
|
(82,512 |
) |
Net change in cash, cash equivalents and restricted cash |
|
|
173,003 |
|
|
|
(704,098 |
) |
Cash, cash equivalents and restricted cash – beginning of year |
|
|
816,319 |
|
|
|
1,277,082 |
|
Cash, cash equivalents and restricted cash – end of period |
|
$ |
989,322 |
|
|
$ |
572,984 |
|
Supplemental Financial Information Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||
|
|
Three Months Ended December |
|
% Change |
|
% Change Constant Currency (a) |
||||||
|
|
2023 |
|
2022 |
|
|
||||||
Segment revenues |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
1,738,579 |
|
|
$ |
2,003,045 |
|
|
(13)% |
|
(15)% |
Active |
|
|
999,396 |
|
|
|
1,258,682 |
|
|
(21)% |
|
(22)% |
Work |
|
|
222,308 |
|
|
|
268,940 |
|
|
(17)% |
|
(18)% |
Total segment revenues |
|
$ |
2,960,283 |
|
|
$ |
3,530,667 |
|
|
(16)% |
|
(17)% |
Segment profit (loss) |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
304,741 |
|
|
$ |
457,027 |
|
|
|
|
|
Active (b) |
|
|
94,020 |
|
|
|
146,885 |
|
|
|
|
|
Work |
|
|
(1,864 |
) |
|
|
18,487 |
|
|
|
|
|
Other (c) |
|
|
— |
|
|
|
(134 |
) |
|
|
|
|
Total segment profit |
|
|
396,897 |
|
|
|
622,265 |
|
|
|
|
|
Impairment of goodwill |
|
|
(257,096 |
) |
|
|
— |
|
|
|
|
|
Corporate and other expenses |
|
|
(142,004 |
) |
|
|
(116,133 |
) |
|
|
|
|
Interest expense, net |
|
|
(63,338 |
) |
|
|
(50,230 |
) |
|
|
|
|
Income (loss) before income taxes |
|
$ |
(65,541 |
) |
|
$ |
455,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(a) Refer to constant currency definition on the following pages. |
||||||||||||
(b) Includes legal settlement gains of |
||||||||||||
(c) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. |
Supplemental Financial Information Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||
|
|
Nine Months Ended December |
|
% Change |
|
% Change Constant Currency (a) |
||||||
|
|
2023 |
|
2022 |
|
|
||||||
Segment revenues |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
4,281,955 |
|
|
$ |
4,326,997 |
|
|
(1)% |
|
(2)% |
Active |
|
|
3,147,692 |
|
|
|
3,772,737 |
|
|
(17)% |
|
(18)% |
Work |
|
|
651,211 |
|
|
|
772,980 |
|
|
(16)% |
|
(16)% |
Other (b) |
|
|
— |
|
|
|
148 |
|
|
* |
|
* |
Total segment revenues |
|
$ |
8,080,858 |
|
|
$ |
8,872,862 |
|
|
(9)% |
|
(10)% |
Segment profit (loss) |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
557,830 |
|
|
$ |
670,615 |
|
|
|
|
|
Active (c) |
|
|
351,772 |
|
|
|
541,171 |
|
|
|
|
|
Work |
|
|
13,482 |
|
|
|
92,989 |
|
|
|
|
|
Other (b) |
|
|
— |
|
|
|
(516 |
) |
|
|
|
|
Total segment profit |
|
|
923,084 |
|
|
|
1,304,259 |
|
|
|
|
|
Impairment of goodwill and intangible assets |
|
|
(257,096 |
) |
|
|
(421,922 |
) |
|
|
|
|
Corporate and other expenses |
|
|
(321,333 |
) |
|
|
(507,656 |
) |
|
|
|
|
Interest expense, net |
|
|
(168,701 |
) |
|
|
(115,395 |
) |
|
|
|
|
Income before income taxes |
|
$ |
175,954 |
|
|
$ |
259,286 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(a) Refer to constant currency definition on the following pages. |
||||||||||||
(b) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. |
||||||||||||
(c) Includes legal settlement gains of |
||||||||||||
* Calculation not meaningful |
Supplemental Financial Information Reportable Segment Information – Constant Currency Basis (Unaudited) (In thousands) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
As Reported |
|
Adjust for Foreign |
|
|
||||||
|
|
under GAAP |
|
Currency Exchange |
|
Constant Currency |
||||||
Segment revenues |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
1,738,579 |
|
|
$ |
(28,554 |
) |
|
$ |
1,710,025 |
|
Active |
|
|
999,396 |
|
|
|
(15,054 |
) |
|
|
984,342 |
|
Work |
|
|
222,308 |
|
|
|
(1,072 |
) |
|
|
221,236 |
|
Total segment revenues |
|
$ |
2,960,283 |
|
|
$ |
(44,680 |
) |
|
$ |
2,915,603 |
|
Segment profit (loss) |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
304,741 |
|
|
$ |
(6,737 |
) |
|
$ |
298,004 |
|
Active |
|
|
94,020 |
|
|
|
(1,554 |
) |
|
|
92,466 |
|
Work |
|
|
(1,864 |
) |
|
|
(215 |
) |
|
|
(2,079 |
) |
Total segment profit |
|
|
396,897 |
|
|
|
(8,506 |
) |
|
|
388,391 |
|
Impairment of goodwill |
|
|
(257,096 |
) |
|
|
— |
|
|
|
(257,096 |
) |
Corporate and other expenses |
|
|
(142,004 |
) |
|
|
156 |
|
|
|
(141,848 |
) |
Interest expense, net |
|
|
(63,338 |
) |
|
|
— |
|
|
|
(63,338 |
) |
Loss before income taxes |
|
$ |
(65,541 |
) |
|
$ |
(8,350 |
) |
|
$ |
(73,891 |
) |
Diluted earnings (loss) per share growth |
|
|
(108 |
)% |
|
|
(2 |
)% |
|
|
(110 |
)% |
|
|
|
|
|
|
|
||||||
Constant Currency Financial Information |
||||||||||||
VF is a global company that reports financial information in |
||||||||||||
To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the |
||||||||||||
These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. |
Supplemental Financial Information Reportable Segment Information – Constant Currency Basis (Unaudited) (In thousands) |
||||||||||||
|
|
Nine Months Ended |
||||||||||
|
|
As Reported |
|
Adjust for Foreign |
|
|
||||||
|
|
under GAAP |
|
Currency Exchange |
|
Constant Currency |
||||||
Segment revenues |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
4,281,955 |
|
|
$ |
(61,966 |
) |
|
$ |
4,219,989 |
|
Active |
|
|
3,147,692 |
|
|
|
(42,316 |
) |
|
|
3,105,376 |
|
Work |
|
|
651,211 |
|
|
|
(1,376 |
) |
|
|
649,835 |
|
Total segment revenues |
|
$ |
8,080,858 |
|
|
$ |
(105,658 |
) |
|
$ |
7,975,200 |
|
Segment profit |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
557,830 |
|
|
$ |
(12,982 |
) |
|
$ |
544,848 |
|
Active |
|
|
351,772 |
|
|
|
(7,627 |
) |
|
|
344,145 |
|
Work |
|
|
13,482 |
|
|
|
(773 |
) |
|
|
12,709 |
|
Total segment profit |
|
|
923,084 |
|
|
|
(21,382 |
) |
|
|
901,702 |
|
Impairment of goodwill |
|
|
(257,096 |
) |
|
|
— |
|
|
|
(257,096 |
) |
Corporate and other expenses |
|
|
(321,333 |
) |
|
|
(74 |
) |
|
|
(321,407 |
) |
Interest expense, net |
|
|
(168,701 |
) |
|
|
— |
|
|
|
(168,701 |
) |
Income before income taxes |
|
$ |
175,954 |
|
|
$ |
(21,456 |
) |
|
$ |
154,498 |
|
Diluted earnings (loss) per share growth |
|
|
(265 |
)% |
|
|
(6 |
)% |
|
|
(271 |
)% |
|
|
|
|
|
|
|
||||||
Constant Currency Financial Information |
||||||||||||
VF is a global company that reports financial information in |
||||||||||||
To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the |
||||||||||||
These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. |
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Nine Months Ended (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||||||||
Three Months Ended |
|
As Reported under GAAP |
|
|
Reinvent (a) |
|
Impairment Charges (b) |
|
Tax & Legal Items (c) |
|
Transaction and Deal Related Activities (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
2,960,283 |
|
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
2,960,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
1,632,412 |
|
|
|
|
4,244 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
1,636,656 |
|
Percent |
|
|
55.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
55.3 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
|
|
(32,232 |
) |
|
|
|
50,869 |
|
|
257,096 |
|
|
— |
|
|
|
1,003 |
|
|
276,736 |
|
Percent |
|
|
(1.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
9.3 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings (loss) per share (e) |
|
|
(0.11 |
) |
|
|
|
0.10 |
|
|
0.64 |
|
|
(0.06 |
) |
|
|
— |
|
|
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended |
|
As Reported under GAAP |
|
|
Reinvent (a) |
|
Impairment Charges (b) |
|
Tax & Legal Items (c) |
|
Transaction and Deal Related Activities (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
8,080,858 |
|
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
8,080,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
4,288,690 |
|
|
|
|
4,244 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
4,292,934 |
|
Percent |
|
|
53.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
53.1 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income |
|
|
321,703 |
|
|
|
|
50,869 |
|
|
257,096 |
|
|
— |
|
|
|
2,449 |
|
|
632,117 |
|
Percent |
|
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
7.8 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings (loss) per share (e) |
|
|
(1.42 |
) |
|
|
|
0.10 |
|
|
0.64 |
|
|
1.73 |
|
|
|
— |
|
|
1.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(a) Costs related to Reinvent, VF's transformation program, were |
||||||||||||||||||||||
(b) VF recognized noncash goodwill impairment charges related to the Timberland and Dickies reporting units of |
||||||||||||||||||||||
(c) Tax items include the impact to tax expense resulting from the decision by the
Legal items include legal settlement gains of |
||||||||||||||||||||||
(d) Transaction and deal related activities reflect activities associated with the review of strategic alternatives for the Global Packs business, consisting of the Kipling®, Eastpak® and |
||||||||||||||||||||||
(e) Amounts shown in the table have been calculated using unrounded numbers. The GAAP diluted earnings per share was calculated using 388,383,000 and 388,294,000 weighted average common shares for the three and nine months ended |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Financial Information |
||||||||||||||||||||||
The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of Reinvent, impairment charges, certain tax and legal items and transaction and deal related activities. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding VF's underlying business trends and the performance of VF's ongoing operations and are useful for period-over-period comparisons of such operations. |
||||||||||||||||||||||
Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, VF's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies. |
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Nine Months Ended (Unaudited) (In thousands, except per share amounts) |
|||||||||||||||||||||
Three Months Ended |
|
As Reported under GAAP |
|
Transaction and Deal Related Activities (a) |
|
Specified Strategic Business Decisions (b) |
|
Impairment and Pension Settlement Charge (c) |
|
Tax Item (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
3,530,667 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
3,530,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
1,937,619 |
|
|
|
— |
|
|
1,582 |
|
|
— |
|
|
— |
|
|
|
1,939,201 |
|
Percent |
|
|
54.9 |
% |
|
|
|
|
|
|
|
|
|
|
54.9 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income |
|
|
516,033 |
|
|
|
— |
|
|
10,609 |
|
|
— |
|
|
— |
|
|
|
526,642 |
|
Percent |
|
|
14.6 |
% |
|
|
|
|
|
|
|
|
|
|
14.9 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share (e) |
|
|
1.31 |
|
|
|
— |
|
|
0.02 |
|
|
0.03 |
|
|
(0.24 |
) |
|
|
1.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended |
|
As Reported under GAAP |
|
Transaction and Deal Related Activities(a) |
|
Specified Strategic Business Decisions (b) |
|
Impairment and Pension Settlement Charge (c) |
|
Tax Item (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
8,872,862 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
8,872,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
4,738,655 |
|
|
|
— |
|
|
9,946 |
|
|
— |
|
|
— |
|
|
|
4,748,601 |
|
Percent |
|
|
53.4 |
% |
|
|
|
|
|
|
|
|
|
|
53.5 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income |
|
|
488,576 |
|
|
|
331 |
|
|
72,031 |
|
|
421,922 |
|
|
— |
|
|
|
982,860 |
|
Percent |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
11.1 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share (e) |
|
|
0.86 |
|
|
|
— |
|
|
0.15 |
|
|
1.17 |
|
|
(0.24 |
) |
|
|
1.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(a) Transaction and deal related activities reflect activities associated with the acquisition of |
|||||||||||||||||||||
(b) Specified strategic business decisions include costs related to VF's business model transformation of |
|||||||||||||||||||||
(c) VF recognized noncash impairment charges related to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset of
A noncash pension settlement charge of
The impairment and pension settlement charges resulted in a net tax expense of |
|||||||||||||||||||||
(d) Tax item includes a |
|||||||||||||||||||||
(e) Amounts shown in the table have been calculated using unrounded numbers. The diluted earnings per share was calculated using 388,192,000 and 388,357,000 weighted average common shares for the three and nine months ended |
|||||||||||||||||||||
|
|||||||||||||||||||||
Non-GAAP Financial Information |
|||||||||||||||||||||
The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of transaction and deal related activities, activity related to specified strategic business decisions, impairment, a pension settlement charge and a tax item. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding VF's underlying business trends and the performance of VF's ongoing operations and are useful for period-over-period comparisons of such operations. |
|||||||||||||||||||||
Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, VF's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies. |
Supplemental Financial Information Top 4 Brand Revenue Information (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
Top 4 Brand Revenue Growth |
|
|
|
EMEA |
|
APAC |
|
Global |
|
|
|
EMEA |
|
APAC |
|
Global |
Vans® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(31)% |
|
(19)% |
|
(27)% |
|
(28)% |
|
(27)% |
|
(13)% |
|
(22)% |
|
(24)% |
% change constant currency* |
|
(31)% |
|
(23)% |
|
(27)% |
|
(29)% |
|
(28)% |
|
(17)% |
|
(20)% |
|
(25)% |
The North Face® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(24)% |
|
0% |
|
26% |
|
(10)% |
|
(9)% |
|
13% |
|
34% |
|
4% |
% change constant currency* |
|
(24)% |
|
(5)% |
|
28% |
|
(11)% |
|
(9)% |
|
8% |
|
38% |
|
3% |
Timberland® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(30)% |
|
(11)% |
|
(1)% |
|
(21)% |
|
(25)% |
|
1% |
|
6% |
|
(13)% |
% change constant currency* |
|
(30)% |
|
(16)% |
|
1% |
|
(22)% |
|
(26)% |
|
(5)% |
|
10% |
|
(14)% |
Dickies® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(11)% |
|
(15)% |
|
(45)% |
|
(16)% |
|
(14)% |
|
11% |
|
(38)% |
|
(15)% |
% change constant currency* |
|
(11)% |
|
(19)% |
|
(45)% |
|
(17)% |
|
(14)% |
|
5% |
|
(36)% |
|
(15)% |
*Refer to constant currency definition on previous pages. |
Supplemental Financial Information Geographic and Channel Revenue Information (Unaudited) |
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
% Change |
|
% Change Constant Currency* |
|
% Change |
|
% Change Constant Currency* |
Geographic Revenue Growth |
|
|
|
|
|
|
|
|
|
|
(24)% |
|
(25)% |
|
(17)% |
|
(17)% |
EMEA |
|
(7)% |
|
(12)% |
|
2% |
|
(3)% |
APAC |
|
2% |
|
3% |
|
5% |
|
8% |
|
|
5% |
|
7% |
|
10% |
|
14% |
International |
|
(5)% |
|
(8)% |
|
2% |
|
0% |
Global |
|
(16)% |
|
(17)% |
|
(9)% |
|
(10)% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
% Change |
|
% Change Constant Currency* |
|
% Change |
|
% Change Constant Currency* |
Channel Revenue Growth |
|
|
|
|
|
|
|
|
Wholesale (a) |
|
(26)% |
|
(28)% |
|
(12)% |
|
(14)% |
Direct-to-consumer |
|
(8)% |
|
(9)% |
|
(5)% |
|
(6)% |
Digital |
|
(13)% |
|
(14)% |
|
(9)% |
|
(9)% |
|
|
|
|
|
|
|
|
|
|
|
As of December |
|
|
|
|
||
|
|
2023 |
|
2022 |
|
|
|
|
DTC Store Count |
|
|
|
|
|
|
|
|
Total |
|
1,271 |
|
1,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
*Refer to constant currency definition on previous pages. |
||||||||
(a) Royalty revenues are included in the wholesale channel for all periods. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240206366136/en/
Investor Contact:
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Media Contact:
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