VF Corporation Reports Fourth Quarter Revenue and Earnings and Exceeds FY24 Cash Flow Expectations
"In Q4, we made progress advancing our Reinvent transformation program. We closed the fiscal year with further inventory reductions helping us deliver
Q4’FY24 Financial Review
-
Revenue
$2.4 billion , down 13%- The North Face® down 5%, brand DTC up 6% (up 7% in constant dollars), with ongoing US wholesale weakness
- Vans® down 26% (down 27% in constant dollars), largely consistent with the prior quarter and includes the additional impact from deliberate actions to further right-size inventories in the wholesale channel
-
Reported and adjusted gross margin48.4%, down 120 basis points
- Adjusted gross margin benefits of 180 basis points from favorable mix were more than offset by 300 basis points of unfavorable rate, largely from the impact of reset actions and ongoing promotional activity as well as negative transactional foreign currency impacts
-
Operating margin (15.0)%, down 910 basis points; adjusted operating margin (2.1)%, down 770 basis points
- Adjusted operating margin reflects 650 basis points of deleverage and 120 basis points of unfavorable adjusted gross margin
-
Generated gross cost savings through Reinvent of approximately
$40 million and incurred approximately$55 million of related charges in Q4'FY24 -
Earnings (loss) per share (EPS)
$(1.08) vs. Q4'FY23$(0.55) ; Adjusted EPS$(0.32) vs. Q4'FY23$0.17
FY24 Financial Review
-
Revenue
$10.5 billion , down 10% (down 11% in constant dollars) -
Gross margin 52.0%, down 50 basis points; adjusted gross margin 52.1%, down 50 basis points
- Adjusted gross margin benefits of 90 basis points from favorable mix were more than offset by 140 basis points of unfavorable rate, which included 100 basis points of negative transactional foreign currency impacts
-
Operating margin (0.3)%, down 310 basis points; adjusted operating margin 5.6%, down 420 basis points
- Adjusted operating margin reflects 370 basis points of deleverage and 50 basis points of unfavorable adjusted gross margin
-
Generated gross cost savings through Reinvent of approximately
$80 million and incurred approximately$105 million of related charges in FY24 -
Earnings (loss) per share (EPS)
$(2.49) vs. FY23$0.31 ; Adjusted EPS$0.74 vs. FY23$2.10
Balance Sheet and Cash Flow Review
-
Inventories decreased by
$382 million during Q4'FY24, down 23% versus the prior year -
Generated operating cash flow of
$1.015 billion for the fiscal year, with free cash flow of$804 million -
Net debt at the end of Q4'FY24 was
$5.3 billion , down by approximately$540 million relative to last year
FY25 Outlook
-
Free cash flow plus the benefit of non-core asset sales is expected to generate approximately
$600 million
Summary Revenue Information (Unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended March |
|
Twelve Months Ended March |
||||||||||||||||||||
(Dollars in millions) |
|
2024 |
|
2023 |
|
% Change |
|
% Change (constant currency) |
|
2024 |
|
2023 |
|
% Change |
|
% Change (constant currency) |
||||||||
Brand: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
The North Face® |
|
$ |
814.3 |
|
$ |
859.5 |
|
(5 |
)% |
|
(5 |
)% |
|
$ |
3,673.3 |
|
$ |
3,612.7 |
|
2 |
% |
|
1 |
% |
Vans® |
|
|
631.2 |
|
|
857.0 |
|
(26 |
)% |
|
(27 |
)% |
|
|
2,785.7 |
|
|
3,682.9 |
|
(24 |
)% |
|
(25 |
)% |
Timberland® |
|
|
341.5 |
|
|
395.6 |
|
(14 |
)% |
|
(14 |
)% |
|
|
1,556.9 |
|
|
1,784.7 |
|
(13 |
)% |
|
(14 |
)% |
Dickies® |
|
|
162.4 |
|
|
191.5 |
|
(15 |
)% |
|
(15 |
)% |
|
|
618.4 |
|
|
725.2 |
|
(15 |
)% |
|
(15 |
)% |
Other Brands |
|
|
424.4 |
|
|
436.0 |
|
(3 |
)% |
|
(2 |
)% |
|
|
1,820.3 |
|
|
1,807.0 |
|
1 |
% |
|
0 |
% |
VF Revenue |
|
$ |
2,373.8 |
|
$ |
2,739.6 |
|
(13 |
)% |
|
(13 |
)% |
|
$ |
10,454.7 |
|
$ |
11,612.5 |
|
(10 |
)% |
|
(11 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
1,126.2 |
|
$ |
1,449.6 |
|
(22 |
)% |
|
(23 |
)% |
|
$ |
5,464.9 |
|
$ |
6,682.7 |
|
(18 |
)% |
|
(19 |
)% |
EMEA |
|
|
869.9 |
|
|
901.3 |
|
(3 |
)% |
|
(5 |
)% |
|
|
3,428.6 |
|
|
3,411.7 |
|
0 |
% |
|
(4 |
)% |
APAC |
|
|
377.7 |
|
|
388.7 |
|
(3 |
)% |
|
2 |
% |
|
|
1,561.2 |
|
|
1,518.1 |
|
3 |
% |
|
7 |
% |
VF Revenue |
|
$ |
2,373.8 |
|
$ |
2,739.6 |
|
(13 |
)% |
|
(13 |
)% |
|
$ |
10,454.7 |
|
$ |
11,612.5 |
|
(10 |
)% |
|
(11 |
)% |
International |
|
|
1,382.0 |
|
|
1,436.4 |
|
(4 |
)% |
|
(4 |
)% |
|
|
5,611.6 |
|
|
5,569.1 |
|
1 |
% |
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
DTC |
|
$ |
1,093.8 |
|
$ |
1,148.8 |
|
(5 |
)% |
|
(4 |
)% |
|
$ |
4,965.1 |
|
$ |
5,231.4 |
|
(5 |
)% |
|
(6 |
)% |
Wholesale (a) |
|
|
1,280.1 |
|
|
1,590.8 |
|
(20 |
)% |
|
(20 |
)% |
|
|
5,489.5 |
|
|
6,381.1 |
|
(14 |
)% |
|
(15 |
)% |
VF Revenue |
|
$ |
2,373.8 |
|
$ |
2,739.6 |
|
(13 |
)% |
|
(13 |
)% |
|
$ |
10,454.7 |
|
$ |
11,612.5 |
|
(10 |
)% |
|
(11 |
)% |
All references to periods ended |
||||||||||||||||||||||||
Note: Amounts may not sum due to rounding |
||||||||||||||||||||||||
(a) Royalty revenues are included in the wholesale channel for all periods. |
Shareholder Returns
-
Returns of
$35 million and$303 million to shareholders through cash dividends in Q4'FY24 and full year FY24, respectively. -
VF’s Board of Directors declared a quarterly dividend of
$0.09 per share. This dividend will be payable onJune 20, 2024 , to shareholders of record at the close of business onJune 10, 2024 . Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.
Webcast Information
VF will host its fourth 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” or “constant currency” amounts, terms that are described under the heading below “Constant Currency - Excluding the Impact of Foreign Currency.” Unless otherwise noted, “reported” and “constant dollar” or “constant currency” 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, Transaction and Deal Related Activities and Other.” 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, Transaction and Deal Related Activities and Other
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 Icebreaker® 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 and other primarily 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. VF defines free cash flow as cash flow from operations less capital expenditures and software purchases and defines net debt as short and long-term borrowings less cash and cash equivalents.
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 consumers and 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, including through investment in brand building and product innovation; intense competition from online retailers and other direct-to-consumer business risks; increasing pressure on margins; retail industry changes and challenges; VF's ability to execute our Reinvent transformation program and other business priorities, including measures to streamline and right-size our cost base and strengthen the balance sheet while reducing leverage; VF’s ability to successfully establish a global commercial organization, and identify and capture efficiencies in our business model; 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, and may in the future 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 March |
|
Twelve Months Ended March |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net revenues |
|
$ |
2,373,809 |
|
|
$ |
2,739,613 |
|
|
$ |
10,454,667 |
|
|
$ |
11,612,475 |
|
Costs and operating expenses |
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
|
1,225,277 |
|
|
|
1,381,589 |
|
|
|
5,017,445 |
|
|
|
5,515,796 |
|
Selling, general and administrative expenses |
|
|
1,253,827 |
|
|
|
1,205,820 |
|
|
|
4,963,718 |
|
|
|
5,033,977 |
|
Impairment of goodwill and intangible assets |
|
|
250,470 |
|
|
|
313,087 |
|
|
|
507,566 |
|
|
|
735,009 |
|
Total costs and operating expenses |
|
|
2,729,574 |
|
|
|
2,900,496 |
|
|
|
10,488,729 |
|
|
|
11,284,782 |
|
Operating income (loss) |
|
|
(355,765 |
) |
|
|
(160,883 |
) |
|
|
(34,062 |
) |
|
|
327,693 |
|
Interest expense, net |
|
|
(54,707 |
) |
|
|
(49,237 |
) |
|
|
(223,408 |
) |
|
|
(164,632 |
) |
Other income (expense), net |
|
|
833 |
|
|
|
(5,879 |
) |
|
|
23,785 |
|
|
|
(119,774 |
) |
Income (loss) before income taxes |
|
|
(409,639 |
) |
|
|
(215,999 |
) |
|
|
(233,685 |
) |
|
|
43,287 |
|
Income tax expense (benefit) |
|
|
8,669 |
|
|
|
(1,107 |
) |
|
|
735,197 |
|
|
|
(75,297 |
) |
Net income (loss) |
|
$ |
(418,308 |
) |
|
$ |
(214,892 |
) |
|
$ |
(968,882 |
) |
|
$ |
118,584 |
|
Earnings (loss) per common share (a) |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(1.08 |
) |
|
$ |
(0.55 |
) |
|
$ |
(2.49 |
) |
|
$ |
0.31 |
|
Diluted |
|
$ |
(1.08 |
) |
|
$ |
(0.55 |
) |
|
$ |
(2.49 |
) |
|
$ |
0.31 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
388,559 |
|
|
|
388,062 |
|
|
|
388,360 |
|
|
|
387,763 |
|
Diluted |
|
|
388,559 |
|
|
|
388,062 |
|
|
|
388,360 |
|
|
|
388,370 |
|
Cash dividends per common share |
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.78 |
|
|
$ |
1.81 |
|
|
||||||||||||||||
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) |
||||||
|
|
March |
|
March |
||
|
|
2024 |
|
2023 |
||
ASSETS |
|
|
|
|
||
Current assets |
|
|
|
|
||
Cash and equivalents |
|
$ |
674,605 |
|
$ |
814,887 |
Accounts receivable, net |
|
|
1,273,965 |
|
|
1,610,295 |
Inventories |
|
|
1,766,366 |
|
|
2,292,790 |
Other current assets |
|
|
512,011 |
|
|
434,737 |
Total current assets |
|
|
4,226,947 |
|
|
5,152,709 |
Property, plant and equipment, net |
|
|
823,886 |
|
|
942,440 |
|
|
|
4,088,896 |
|
|
4,621,234 |
Operating lease right-of-use assets |
|
|
1,330,361 |
|
|
1,372,182 |
Other assets |
|
|
1,142,873 |
|
|
1,901,923 |
Total assets |
|
$ |
11,612,963 |
|
$ |
13,990,488 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||
Current liabilities |
|
|
|
|
||
Short-term borrowings |
|
$ |
263,938 |
|
$ |
11,491 |
Current portion of long-term debt |
|
|
1,000,721 |
|
|
924,305 |
Accounts payable |
|
|
817,128 |
|
|
936,319 |
Accrued liabilities |
|
|
1,375,192 |
|
|
1,673,651 |
Total current liabilities |
|
|
3,456,979 |
|
|
3,545,766 |
Long-term debt |
|
|
4,702,284 |
|
|
5,711,014 |
Operating lease liabilities |
|
|
1,156,858 |
|
|
1,171,941 |
Other liabilities |
|
|
638,477 |
|
|
651,054 |
Total liabilities |
|
|
9,954,598 |
|
|
11,079,775 |
Stockholders' equity |
|
|
1,658,365 |
|
|
2,910,713 |
Total liabilities and stockholders' equity |
|
$ |
11,612,963 |
|
$ |
13,990,488 |
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
||||||||
|
|
Twelve Months Ended March |
||||||
|
|
2024 |
|
2023 |
||||
Operating activities |
|
|
|
|
||||
Net income (loss) |
|
$ |
(968,882 |
) |
|
$ |
118,584 |
|
Impairment of goodwill and intangible assets |
|
|
507,566 |
|
|
|
735,009 |
|
Depreciation and amortization |
|
|
319,204 |
|
|
|
262,324 |
|
Reduction in the carrying amount of right-of-use assets |
|
|
394,426 |
|
|
|
383,199 |
|
Write-off of income tax receivables and interest |
|
|
921,409 |
|
|
|
— |
|
Other adjustments, including changes in operating assets and liabilities |
|
|
(159,142 |
) |
|
|
(2,154,911 |
) |
Cash provided (used) by operating activities |
|
|
1,014,581 |
|
|
|
(655,795 |
) |
Investing activities |
|
|
|
|
||||
Proceeds from sale of assets |
|
|
26,615 |
|
|
|
99,499 |
|
Capital expenditures |
|
|
(145,818 |
) |
|
|
(165,925 |
) |
Software purchases |
|
|
(65,167 |
) |
|
|
(95,326 |
) |
Other, net |
|
|
12,112 |
|
|
|
(26,301 |
) |
Cash used by investing activities |
|
|
(172,258 |
) |
|
|
(188,053 |
) |
Financing activities |
|
|
|
|
||||
Contingent consideration payment |
|
|
— |
|
|
|
(56,976 |
) |
Net increase (decrease) from short-term borrowings and long-term debt |
|
|
(653,629 |
) |
|
|
1,226,522 |
|
Cash dividends paid |
|
|
(303,140 |
) |
|
|
(702,846 |
) |
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings |
|
|
(2,846 |
) |
|
|
(2,794 |
) |
Cash provided (used) by financing activities |
|
|
(959,615 |
) |
|
|
463,906 |
|
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash |
|
|
(22,069 |
) |
|
|
(80,822 |
) |
Net change in cash, cash equivalents and restricted cash |
|
|
(139,361 |
) |
|
|
(460,764 |
) |
Cash, cash equivalents and restricted cash – beginning of year |
|
|
816,318 |
|
|
|
1,277,082 |
|
Cash, cash equivalents and restricted cash – end of year |
|
$ |
676,957 |
|
|
$ |
816,318 |
|
Supplemental Financial Information Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||
|
|
Three Months Ended March |
|
% Change |
|
% Change Constant Currency (a) |
||||||
|
|
2024 |
|
2023 |
|
|
||||||
Segment revenues |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
1,219,444 |
|
|
$ |
1,320,529 |
|
|
(8)% |
|
(8)% |
Active |
|
|
914,037 |
|
|
|
1,131,885 |
|
|
(19)% |
|
(19)% |
Work |
|
|
240,328 |
|
|
|
287,199 |
|
|
(16)% |
|
(16)% |
Total segment revenues |
|
$ |
2,373,809 |
|
|
$ |
2,739,613 |
|
|
(13)% |
|
(13)% |
Segment profit (loss) |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
44,878 |
|
|
$ |
114,816 |
|
|
|
|
|
Active |
|
|
476 |
|
|
|
113,520 |
|
|
|
|
|
Work |
|
|
4,165 |
|
|
|
28,168 |
|
|
|
|
|
Other (b) |
|
|
— |
|
|
|
(20 |
) |
|
|
|
|
Total segment profit |
|
|
49,519 |
|
|
|
256,484 |
|
|
|
|
|
Impairment of goodwill and intangible assets |
|
|
(250,470 |
) |
|
|
(313,087 |
) |
|
|
|
|
Corporate and other expenses |
|
|
(153,981 |
) |
|
|
(110,159 |
) |
|
|
|
|
Interest expense, net |
|
|
(54,707 |
) |
|
|
(49,237 |
) |
|
|
|
|
Loss before income taxes |
|
$ |
(409,639 |
) |
|
$ |
(215,999 |
) |
|
|
|
|
|
||||||||||||
(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. |
Supplemental Financial Information Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||
|
|
Twelve Months Ended March |
|
% Change |
|
% Change Constant Currency (a) |
||||||
|
|
2024 |
|
2023 |
|
|
||||||
Segment revenues |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
5,501,399 |
|
|
$ |
5,647,526 |
|
|
(3)% |
|
(4)% |
Active |
|
|
4,061,729 |
|
|
|
4,904,622 |
|
|
(17)% |
|
(18)% |
Work |
|
|
891,539 |
|
|
|
1,060,179 |
|
|
(16)% |
|
(16)% |
Other (b) |
|
|
— |
|
|
|
148 |
|
|
* |
|
* |
Total segment revenues |
|
$ |
10,454,667 |
|
|
$ |
11,612,475 |
|
|
(10)% |
|
(11)% |
Segment profit (loss) |
|
|
|
|
|
|
|
|
||||
Outdoor |
|
$ |
602,708 |
|
|
$ |
785,431 |
|
|
|
|
|
Active (c) |
|
|
352,248 |
|
|
|
654,691 |
|
|
|
|
|
Work |
|
|
17,647 |
|
|
|
121,157 |
|
|
|
|
|
Other (b) |
|
|
— |
|
|
|
(536 |
) |
|
|
|
|
Total segment profit |
|
|
972,603 |
|
|
|
1,560,743 |
|
|
|
|
|
Impairment of goodwill and intangible assets |
|
|
(507,566 |
) |
|
|
(735,009 |
) |
|
|
|
|
Corporate and other expenses |
|
|
(475,314 |
) |
|
|
(617,815 |
) |
|
|
|
|
Interest expense, net |
|
|
(223,408 |
) |
|
|
(164,632 |
) |
|
|
|
|
Income (loss) before income taxes |
|
$ |
(233,685 |
) |
|
$ |
43,287 |
|
|
|
|
|
|
||||||||||||
(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 |
|
$ |
1,219,444 |
|
|
$ |
(634 |
) |
|
$ |
1,218,810 |
|
Active |
|
|
914,037 |
|
|
|
(1,381 |
) |
|
|
912,656 |
|
Work |
|
|
240,328 |
|
|
|
156 |
|
|
|
240,484 |
|
Total segment revenues |
|
$ |
2,373,809 |
|
|
$ |
(1,859 |
) |
|
$ |
2,371,950 |
|
Segment profit |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
44,878 |
|
|
$ |
33 |
|
|
$ |
44,911 |
|
Active |
|
|
476 |
|
|
|
(1,098 |
) |
|
|
(622 |
) |
Work |
|
|
4,165 |
|
|
|
(701 |
) |
|
|
3,464 |
|
Total segment profit |
|
|
49,519 |
|
|
|
(1,766 |
) |
|
|
47,753 |
|
Impairment of goodwill |
|
|
(250,470 |
) |
|
|
— |
|
|
|
(250,470 |
) |
Corporate and other expenses |
|
|
(153,981 |
) |
|
|
(401 |
) |
|
|
(154,382 |
) |
Interest expense, net |
|
|
(54,707 |
) |
|
|
— |
|
|
|
(54,707 |
) |
Loss before income taxes |
|
$ |
(409,639 |
) |
|
$ |
(2,167 |
) |
|
$ |
(411,806 |
) |
Diluted earnings (loss) per share growth |
|
|
(94 |
)% |
|
|
(1 |
)% |
|
|
(95 |
)% |
|
||||||||||||
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) |
||||||||||||
|
|
Twelve Months Ended |
||||||||||
|
|
As Reported |
|
Adjust for Foreign |
|
|
||||||
|
|
under GAAP |
|
Currency Exchange |
|
Constant Currency |
||||||
Segment revenues |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
5,501,399 |
|
|
$ |
(62,600 |
) |
|
$ |
5,438,799 |
|
Active |
|
|
4,061,729 |
|
|
|
(43,697 |
) |
|
|
4,018,032 |
|
Work |
|
|
891,539 |
|
|
|
(1,220 |
) |
|
|
890,319 |
|
Total segment revenues |
|
$ |
10,454,667 |
|
|
$ |
(107,517 |
) |
|
$ |
10,347,150 |
|
Segment profit |
|
|
|
|
|
|
||||||
Outdoor |
|
$ |
602,708 |
|
|
$ |
(12,949 |
) |
|
$ |
589,759 |
|
Active |
|
|
352,248 |
|
|
|
(8,725 |
) |
|
|
343,523 |
|
Work |
|
|
17,647 |
|
|
|
(1,474 |
) |
|
|
16,173 |
|
Total segment profit |
|
|
972,603 |
|
|
|
(23,148 |
) |
|
|
949,455 |
|
Impairment of goodwill |
|
|
(507,566 |
) |
|
|
— |
|
|
|
(507,566 |
) |
Corporate and other expenses |
|
|
(475,314 |
) |
|
|
(475 |
) |
|
|
(475,789 |
) |
Interest expense, net |
|
|
(223,408 |
) |
|
|
— |
|
|
|
(223,408 |
) |
Loss before income taxes |
|
$ |
(233,685 |
) |
|
$ |
(23,623 |
) |
|
$ |
(257,308 |
) |
|
||||||||||||
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 Twelve 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 and Other (d) |
|
Adjusted |
||||||||
Revenues |
|
$ |
2,373,809 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
2,373,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
|
1,148,532 |
|
|
|
347 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,148,879 |
|
Percent |
|
|
48.4 |
% |
|
|
|
|
|
|
|
|
|
|
48.4 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss |
|
|
(355,765 |
) |
|
|
54,517 |
|
|
250,470 |
|
|
— |
|
|
22 |
|
|
(50,756 |
) |
Percent |
|
|
(15.0 |
)% |
|
|
|
|
|
|
|
|
|
|
(2.1 |
)% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted loss per share (e) |
|
|
(1.08 |
) |
|
|
0.12 |
|
|
0.64 |
|
|
— |
|
|
— |
|
|
(0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Twelve Months Ended |
|
As Reported under GAAP |
|
Reinvent (a) |
|
Impairment Charges (b) |
|
Tax & Legal Items (c) |
|
Transaction and Deal Related Activities and Other (d) |
|
Adjusted |
||||||||
Revenues |
|
$ |
10,454,667 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
10,454,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
5,437,222 |
|
|
|
4,591 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,441,813 |
|
Percent |
|
|
52.0 |
% |
|
|
|
|
|
|
|
|
|
|
52.1 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
(34,062 |
) |
|
|
105,386 |
|
|
507,566 |
|
|
— |
|
2,471 |
|
|
581,361 |
|
|
Percent |
|
|
(0.3 |
)% |
|
|
|
|
|
|
|
|
|
|
5.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share (e) |
|
|
(2.49 |
) |
|
|
0.21 |
|
|
1.28 |
|
|
1.74 |
|
|
— |
|
|
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a) Costs related to Reinvent, VF's transformation program, were |
||||||||||||||||||||
(b) VF recognized noncash goodwill impairment charges related to the Timberland and Icebreaker 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 and other primarily 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 388,559,000 and 388,360,000 weighted average common shares for the three and twelve 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, transaction and deal related activities and other. 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 Twelve 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) |
|
Impairments and Pension Settlement Charge (c) |
|
Tax Item (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
2,739,613 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
2,739,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
1,358,024 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,358,024 |
|
Percent |
|
|
49.6 |
% |
|
|
|
|
|
|
|
|
|
|
49.6 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
|
|
(160,883 |
) |
|
|
— |
|
|
— |
|
|
313,087 |
|
|
— |
|
|
|
152,204 |
|
Percent |
|
|
(5.9 |
)% |
|
|
|
|
|
|
|
|
|
|
5.6 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings (loss) per share (e) |
|
|
(0.55 |
) |
|
|
— |
|
|
— |
|
|
0.72 |
|
|
— |
|
|
|
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Twelve Months Ended |
|
As Reported under GAAP |
|
Transaction and Deal Related Activities (a) |
|
Specified Strategic Business Decisions (b) |
|
Impairments and Pension Settlement Charge (c) |
|
Tax Item (d) |
|
Adjusted |
|||||||||
Revenues |
|
$ |
11,612,475 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
11,612,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
|
|
6,096,679 |
|
|
|
— |
|
|
9,946 |
|
|
— |
|
|
— |
|
|
|
6,106,625 |
|
Percent |
|
|
52.5 |
% |
|
|
|
|
|
|
|
|
|
|
52.6 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income |
|
|
327,693 |
|
|
|
331 |
|
|
72,031 |
|
|
735,009 |
|
|
— |
|
|
|
1,135,064 |
|
Percent |
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
9.8 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share (e) |
|
|
0.31 |
|
|
|
— |
|
|
0.15 |
|
|
1.89 |
|
|
(0.24 |
) |
|
|
2.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(a) Transaction and deal related activities include 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 benefit of |
|||||||||||||||||||||
(d) Tax item includes a |
|||||||||||||||||||||
(e) Amounts shown in the table have been calculated using unrounded numbers. The GAAP diluted earnings per share was calculated using 388,062,000 and 388,370,000 weighted average common shares for the three and twelve 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, impairments, 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 |
|
Twelve Months Ended |
||||||||||||
Top 4 Brand Revenue Growth |
|
|
|
EMEA |
|
APAC |
|
Global |
|
|
|
EMEA |
|
APAC |
|
Global |
The North Face® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(15)% |
|
(1)% |
|
10% |
|
(5)% |
|
(10)% |
|
9% |
|
27% |
|
2% |
% change constant currency* |
|
(15)% |
|
(3)% |
|
15% |
|
(5)% |
|
(10)% |
|
5% |
|
31% |
|
1% |
Vans® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(31)% |
|
(13)% |
|
(31)% |
|
(26)% |
|
(28)% |
|
(13)% |
|
(24)% |
|
(24)% |
% change constant currency* |
|
(32)% |
|
(15)% |
|
(28)% |
|
(27)% |
|
(29)% |
|
(16)% |
|
(22)% |
|
(25)% |
Timberland® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(32)% |
|
4% |
|
7% |
|
(14)% |
|
(27)% |
|
1% |
|
7% |
|
(13)% |
% change constant currency* |
|
(33)% |
|
2% |
|
12% |
|
(14)% |
|
(27)% |
|
(3)% |
|
10% |
|
(14)% |
Dickies® |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% change |
|
(17)% |
|
(4)% |
|
(26)% |
|
(15)% |
|
(15)% |
|
6% |
|
(35)% |
|
(15)% |
% change constant currency* |
|
(17)% |
|
(6)% |
|
(21)% |
|
(15)% |
|
(15)% |
|
1% |
|
(32)% |
|
(15)% |
*Refer to constant currency definition on previous pages. |
|
|
|
|
|
|
|
|
Supplemental Financial Information Geographic and Channel Revenue Information (Unaudited) |
||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
% Change |
|
% Change Constant Currency* |
|
% Change |
|
% Change Constant Currency* |
Geographic Revenue Growth |
|
|
|
|
|
|
|
|
|
|
(22)% |
|
(23)% |
|
(18)% |
|
(19)% |
EMEA |
|
(3)% |
|
(5)% |
|
0% |
|
(4)% |
APAC |
|
(3)% |
|
2% |
|
3% |
|
7% |
|
|
5% |
|
10% |
|
9% |
|
13% |
International |
|
(4)% |
|
(4)% |
|
1% |
|
(1)% |
Global |
|
(13)% |
|
(13)% |
|
(10)% |
|
(11)% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
% Change |
|
% Change Constant Currency* |
|
% Change |
|
% Change Constant Currency* |
Channel Revenue Growth |
|
|
|
|
|
|
|
|
Wholesale (a) |
|
(20)% |
|
(20)% |
|
(14)% |
|
(15)% |
Direct-to-consumer |
|
(5)% |
|
(4)% |
|
(5)% |
|
(6)% |
Digital |
|
(4)% |
|
(4)% |
|
(8)% |
|
(8)% |
|
|
As of March |
|
|
|
|
||
|
|
2024 |
|
2023 |
|
|
|
|
DTC Store Count |
|
|
|
|
|
|
|
|
Total |
|
1,185 |
|
1,265 |
|
|
|
|
|
||||||||
*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/20240522140979/en/
Investor Contact:
ir@vfc.com
Media Contact:
corporate_communications@vfc.com
Source: