V F CORP
For the period ended Jun 29, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 29, 2024 · Filed Aug 7, 2024
VFC$20.35+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-30; filed 2024-02-07.
0000103379-24-000003
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-29; filed 2024-08-07.
0000103379-24-000018
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 187 previous paragraphs and 170 current paragraphs.
49 unchanged; 72 reworded; 43 added; 55 removed; 11 previous and 6 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
Supreme Divestiture
Current report
On July 16, 2024, VF entered into a definitive Stock and Asset Purchase Agreement (the "Purchase Agreement") to sell the Supreme® brand business to EssilorLuxottica S.A. for an aggregate base purchase price of $1.5 billion in cash, subject to customary adjustments for cash, indebtedness, working capital and transaction expenses as more fully set forth in the Purchase Agreement.
Current report
The divestiture of the Supreme® brand business is expected to meet the "held-for-sale" criteria in the second quarter of Fiscal 2025, and VF has determined that the sale represents a strategic shift that will have a significant effect on VF's operations. As such, the results of operations, including any expected loss recognized, and related cash flows will be reclassified to discontinued operations on the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, for all periods presented beginning in the second quarter of Fiscal 2025. In addition, the assets and liabilities will be presented separately on the Consolidated Balance Sheets for both current and prior periods beginning in the second quarter of Fiscal 2025.
Current report
•Appoint new Vans® president: Sun Choe was appointed the new Global Brand President of Vans® effective late July 2024.
Current report
SUMMARY OF THE FIRST QUARTER OF FISCAL 2025
Current report
•Revenues were down 9% to $1.9 billion compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current report
•Outdoor segment revenues decreased 5% to $790.2 million compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current report
•Active segment revenues decreased 12% to $942.1 million compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current report
•Work segment revenues decreased 8% to $175.0 million compared to the three months ended June 2023.
Current report
23 VF Corporation Q1 FY25 Form 10-Q
Current report
•Wholesale revenues were down 8% compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current report
•Direct-to-consumer revenues were down 10% compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current report
•Revenues in the Americas region decreased 12% compared to the three months ended June 2023.
Current report
•Gross margin decreased 80 basis points to 52.0% compared to the three months ended June 2023, primarily drivenby higher promotional activity.
Current report
•Net loss per share was $(0.67) compared to $(0.15) in the 2023 period. The increase in net loss per share was primarily driven by the Supreme reporting unit goodwill and intangible asset impairment charges, which totaled$145.0 million on a pre-tax basis increasing diluted net loss per share by $0.30, and lower profitability across all segments during thethree months ended June 2024.
Current report
regions, with the most significant declines in the Americas region.
Current report
Gross margin decreased 80 basis points in the three months ended June 2024 compared to the 2023 period. The decrease was primarily driven by higher promotional activity.
Current report
Net interest expense increased $6.0 million during the three months ended June 2024 compared to the 2023 period. The increase in net interest expense in the three months ended June 2024 was primarily due to increased levels of short-term commercial paper borrowings at higher rates and a decrease in interest income due to lower international investment rates, partially offset by lower interest on long-term debt due to the repayment of €850.0 million ($907.1 million) of long-term notes
Current report
Other income (expense), net decreased $1.6 million during the three months ended June 2024 compared to the 2023 period. Thedecrease in the three months ended June 2024 was primarily due to a$3.3 million pension settlement charge in the three months ended June 2023, which resulted from lump-sum payments of retirement benefits in the supplemental defined benefit pension plan.
Current report
The effective income tax rate for the three months ended June 2024 was 13.0% compared to 7.8% in the 2023 period. The three months ended June 2024 included a net discrete tax expense of $7.1 million, which was comprised prima rily of a$3.6 million net tax expense related to unrecognized tax benefits and interest and a$4.3 million tax expense related to stock compensation. Excluding the $7.1 million netdiscrete tax expense in the 2024
Current report
VF's reportable segments are: Outdoor, Active and Work. The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit. Segment profit comprises the operating income (loss) and other income (expense), net line items of each segment.
Current report
25 VF Corporation Q1 FY25 Form 10-Q
Current report
months ended June 2024, including a 1% unfavorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 25% in the three months ended June 2024 compared to the 2023 period, including a 4% unfavorable impact from foreign currency. Revenue in the Americas region decreased 4% in the three months ended June 2024.
Current report
Operating margin decreased in the three months ended June 2024 compared to the 2023 period, primarily reflecting lower leverage of operating expenses due to decreased revenues.
Current report
Operating margin decreased in the three months ended June 2024 compared to the 2023 period, primarily reflecting lower leverage of operating expenses due to decreased revenues.
Current report
The increase in corporate and other expenses was primarily due to Reinvent charges and higher compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent in thethree months ended June 2024.
Current report
Revenues in the Europe region decreased 5% in the three months ended June 2024. In the Asia-Pacific region, revenues decreased 3% in the three months ended June 2024. Foreign currencyhad an unfavorable impact of 5% on Asia-Pacific revenues in the three months ended June 2024. Revenues in
Current report
Greater China remained flat in the three months ended June 2024, inclu ding a 4% unfavorable impact from foreign currency. Revenues in the Americas (non-U.S.) region decreased 6% inthe three months ended June 2024, including a 1% favorable impact from foreign currency.
Current report
International revenues were 51% and 49% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Current report
Direct-to-consumer revenues decreased 10% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.
Current report
Revenues from VF-operated retail stores decreased 14% during the three months ended June 2024, includinga 1% unfavorable impact from foreign currency. There were 1,175 VF-operated retail stores at June 2024 compared to 1,250 at June 2023.
Current report
Wholesale revenues were 54% and 53% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Current report
•Decrease in accounts receivable — primarily due to the seasonality of the business and the timing of collections.
Current report
•Increase in inventories — primarily due to the seasonality of the business.
Current report
•Increase in the current portion of long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025.
Current report
•Increase in accounts payable— primarily due to the timing of payments to vendors and seasonality of inventory purchases.
Current report
•Decrease in long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025.
Current report
•Increase in other currents assets— primarily due to higher prepaid income taxes.
Current report
•Decrease in property, plant and equipment, net— primarily due to asset disposals and write-downs.
Current report
•Increase in the current portion of long-term debt— due to the reclassification of $750.0 million of long-term notes due in April 2025 and the reclassification of $1.0 billion of long-term debt due in December 2024 related to our delayed draw Term Loan ("DDTL"), partially offset by the repayment of €850.0 million ($907.1 million) of long-term notes in September 2023.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (55)
Previous report
Cybersecurity Incident
Previous report
On December 13, 2023, VF detected unauthorized occurrences on a portion of its information technology ("IT") systems. Upon detecting the unauthorized occurrences, VF began taking steps to contain, assess and remediate the incident, including beginning an investigation with leading external cybersecurity experts, activating its incident response plan, and shutting down some systems. As a result of these and other measures, and while VF’s investigation and remediation efforts remain ongoing, VF believes the threat actor was ejected from VF’s IT systems on December 15, 2023. The threat actor disrupted VF’s business operations by encrypting some IT systems, and stole data from VF, including personal data. After VF shut down some of its systems, VF experienced disruption to certain of its operations, including interrupted replenishment of retail store inventory and delayed order fulfillment which had impacts such as the cancellation by customers and consumers of some product orders, reduced demand on certain of its brands’ e-commerce sites, and delay of some wholesale shipments. While VF is still experiencing minor residual impacts from the cyber incident, VF has resumed retail store inventory replenishment and product order fulfillment, and is caught up on fulfilling orders that were delayed as a result of the cyber incident. VF has substantially restored the IT systems and data that were impacted by the cyber incident, but continues to work through minor operational impacts.
Previous report
While the investigation remains ongoing, VF believes that the material impact or reasonably likely material impact on VF is limited to the material impacts on VF’s business operations discussed above, which are no longer ongoing at this time. VF also believes the impacts of the cyber incident are not material and are not reasonably likely to be material to its financial condition and results of operations.
Previous report
VF will be seeking reimbursement of costs, expenses and losses stemming from the cyber incident by submitting claims to VF’s cybersecurity insurers. The timing and amount of any such reimbursements are not known at this time.
Previous report
•Appoint new Vans® president: The Global Brand President of Vans® has stepped down from the position and has transitioned to lead Reinvent and the project teams driving the work. A search for a new brand president is ongoing with VF's CEO serving in the role on an interim basis.
Previous report
Dividend Update
Previous report
On October 24, 2023, the Board of Directors declared a quarterly dividend of $0.09 per share that was paid during the third quarter of Fiscal 2024, which represented a 70% reduction when
Previous report
Impact of Global Events and Uncertainties
Previous report
Though not expected to have a significant impact in the current year, the coronavirus ("COVID-19") pandemic resulted in
Previous report
temporary closures of VF-operated retail stores in Fiscal 2023, most notably in the Asia-Pacific region, which impacted revenues in the region for the nine months ended December 2022. The ongoing conflict between Russia and Ukraine and the conflict in the Middle East continue to cause disruption in the regions and unknown impacts to the global economy; however, we currently do not expect significant disruption to our business.
Previous report
For additional information, see the risk factors discussed in Part I, "Item 1A. Risk Factors" in the Fiscal 2023 Form 10-K.
Previous report
SUMMARY OF THE THIRD QUARTER OF FISCAL 2024
Previous report
•Revenues were down 16% to $3.0 billion compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.
Previous report
•Outdoor segment revenues decreased 13% to $1.7 billion compared to the three months ended December 2022, including a 2% favorable impact from foreign currency.
Previous report
•Active segment revenues decreased 21% to $1.0 billion compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.
Previous report
•Work segment revenues decreased 17% to $222.3 million compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.
Previous report
•Wholesale revenues were down 26% compared to the three months ended December 2022, including a 2% favorable impact from foreign currency.
Previous report
•Direct-to-consumer revenues were down 8% over the 2022 period, including a 1% favorable impact from foreign currency. E-commerce revenues decreased 13% in the current period, including a 1% favorable impact from foreign currency. Direct-to-consumer revenues accounted for 60% of VF's net revenues for the three months ended December 2023.
Previous report
•Revenues in the Americas region decreased 24% compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.
Previous report
•Gross margin increased 20 basis points to 55.1% compared to the three months ended December 2022, primarily driven by favorable mix, partially offset by unfavorable foreign currency impacts.
Previous report
•Earnings (loss) per share was $(0.11) compared to $1.31 in the 2022 period. The decrease was primarily driven by lower profitability across all segments, goodwill impairment charges related to the Timberland and Dickies reporting units and Reinvent charges during the three months ended December 2023, partially offset by legal settlement gains in the quarter. The three months ended December 2022 included a $0.24 discrete tax benefit in the quarter.
Previous report
partially offset by overall growth in the Asia-Pacific region in both the three and nine months ended December 2023. The Asia-Pacific region was negatively impacted by COVID-19 resurgence in Mainland China in the nine months ended December 2022.
Previous report
Gross margin increased 20 basis points and decreased 30 basis points in the three and nine months ended December 2023, respectively, compared to the 2022 periods. The increase in the three months ended December 2023 was primarily driven by favorable mix, partially offset by unfavorable foreign currency impacts. The decrease in the nine months ended December 2023 was primarily driven by unfavorable foreign currency impacts, partially offset by favorable mix.
Previous report
VF recorded goodwill impairment charges of $195.3 million and $61.8 million related to the Timberland and Dickies reporting units, respectively, in the three and nine months ended December 2023. During the third quarter of Fiscal 2024, due to continued weakness and downturn in the financial results, combined with expectations of a slower recovery, the Company determined that a triggering event had occurred requiring impairment testing of the Timberland and Dickies reporting unit goodwill and indefinite-lived trademark intangible assets. The goodwill impairment related to the reduction in financial projections for both reporting units.
Previous report
Net interest expense increased $13.1 million and $53.3 million during the three and nine months ended December 2023, respectively, compared to the 2022 periods. The increase in net
Previous report
Other income (expense), net decreased $39.9 million and $136.8 million during the three and nine months ended December 2023, respectively, compared to the 2022 periods. The decrease in the three months ended December 2023 was primarily due to legal settlement gains of $29.1 million and lower foreign currency losses compared to the 2022 period. The decrease in the nine months ended December 2023 was primarily due to the above-mentioned benefits during the fiscal third quarter and a $91.8 million pension settlement charge recorded in the 2022 period, which resulted from the purchase of a group annuity contract and transfer of a portion of the assets and liabilities associated with the U.S. qualified defined benefit pension plan to an insurance company.
Previous report
VF's reportable segments are: Outdoor, Active and Work. We have included an Other category in the tables below for purposes of reconciliation of revenues and profit (loss), but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services.
Previous report
Global revenues for Outdoor decreased 1% in the nine months ended December 2023 compared to 2022, including a 1% favorable impact from foreign currency. Revenues in the Americas region decreased 13%. Revenues in the Asia-Pacific region increased 25%, including a 4% unfavorable impact from foreign currency and a 29% increase in Greater China, including an 5% unfavorable impact from foreign currency. Revenues in the Europe region increased 8%, including a 5% favorable impact from foreign currency.
Previous report
Global revenues for the Timberland® brand decreased 21% and 11% in the three and nine months ended December 2023, respectively, compared to the 2022 periods. This includes a 2% favorable impact from foreign currency in both periods. The overall declines were most significantly impacted by a 34% and 29% decrease in the Americas region for the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in both periods. Revenues in the Europe region decreased 11% and increased 1% in the three and nine months ended December 2023, respectively, including a 5% and 6% favorable impact from foreign currency in the respective periods. Revenues in the Asia-Pacific region decreased 1% and increased 6% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% and 4% unfavorable impact from foreign currency in the respective periods.
Previous report
December 2023, respectively, including a 2% unfavorable impact from foreign currency in the nine months ended December 2023.
Previous report
Global direct-to-consumer revenues for Active decreased 14% and 12% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in the three months ended December 2023. The decreases were primarily driven by declines in the Americas region, which decreased 18% and 17% in the three and nine months ended December 2023, respectively. Global wholesale revenues decreased 34% and 23% in the three and nine months ended December 2023, respectively, including a 2% favorable impact from foreign currency in both periods. The decreases were primarily due to a 44% and 31% decrease in the Americas region in the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in both periods. Wholesale revenues in the Europe region decreased 25% and 14% in the three and nine months ended December 2023, respectively, including a 4% favorable impact from foreign currency in both periods. Wholesale revenues in the Asia-Pacific region decreased 19% and 23% in the three and nine months ended December 2023, respectively, and included a 1% unfavorable impact from foreign currency in the nine months ended December 2023.
Previous report
Operating margin decreased in the three and nine months ended December 2023 compared to the 2022 periods, reflecting lower leverage of operating expenses due to decreased revenues. The decrease in the three and nine months ended December 2023 was partially offset by legal settlement gains of $29.1 million. The decrease in the three months ended December 2023 was partially offset by higher gross margin, primarily driven by favorable mix and unfavorable foreign currency impacts.
Previous report
VF Corporation Q3 FY24 Form 10-Q 32
Previous report
Operating margin decreased in the three and nine months ended December 2023 compared to the 2022 periods, reflecting lower gross margin resulting from increased inventory reserves and higher material costs, and lower leverage of operating expenses due to decreased revenues. The decreases were partially offset by price increases and favorable mix.
Previous report
primarily due to Reinvent charges and project-related costs of $50.9 million. The decrease in the nine months ended December 2023 was due to a $91.8 million pension settlement charge recorded in the first quarter of Fiscal 2023 and lower compensation and administrative costs in Fiscal 2024.
Previous report
33 VF Corporation Q3 FY24 Form 10-Q
Previous report
Revenues in the Europe region decreased 7% and increased 2% in the three and nine months ended December 2023, respectively, including a 5% favorable impact from foreign currency in both periods. In the Asia-Pacific region, revenues increased 2% and 5% in the three and nine months ended December 2023, respectively. Foreign currency had an
Previous report
unfavorable impact of 1% and 3% on Asia-Pacific revenues in the three and nine months ended December 2023, respectively. Revenues in Greater China increased 5% and 10% in the three and nine months ended December 2023, respectively, including a 2% and 4% unfavorable impact from foreign currency in the respective periods. The nine months ended December 2022 was negatively impacted by COVID-19 resurgence in Mainland China.
Previous report
Direct-to-consumer revenues decreased 8% and 5% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in both periods.
Previous report
Revenues from VF-operated retail stores decreased 4% during the three and nine months ended December 2023, including a
Showing the first 40 of 55 passages. Open the source sections for the rest.
Reworded paragraphs (72)
Previous wording
VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from April 2, 2023 through March 30, 2024 ("Fiscal 2024"). Accordingly, this Form 10-Q presents our third quarter of Fiscal 2024. For presentation purposes herein, all references to periods ended December 2023 and December 2022 relate to the fiscal periods ended on December 30, 2023 and December 31, 2022, respectively. References to March 2023 relate to information as of April 1, 2023.
Current wording
VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from March 31, 2024 through March 29, 2025 ("Fiscal 2025"). Accordingly, this Form 10-Q presents our first quarter of Fiscal 2025. For presentation purposes herein, all references to periods ended June 2024 and June 2023 relate to the fiscal periods ended on June 29, 2024 and July 1, 2023, respectively. References to March 2024 relate to information as of March 30, 2024.
Previous wording
References to the three and nine months ended December 2023 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and nine months ended December 2022 when translating foreign currencies into U.S. dollars. VF’s most significant foreign currency exposure relates to business conducted in euro-based countries. Additionally, VF conducts business in other developed and emerging markets around the world with exposure to foreign currencies other than the euro.
Current wording
References to the three months ended June 2024 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three months ended June 2023 when translating foreign currencies into U.S. dollars. VF’s most significant foreign currency exposure relates to business conducted in euro-based countries. Additionally, VF conducts business in other developed and emerging markets around the world with exposure to foreign currencies other than the euro.
Previous wording
The first announced steps in this transformation, which cover the following priorities: improve North America results, deliver the Vans® turnaround, reduce costs and strengthen the balance sheet, are as follows:
Current wording
On October 30, 2023, VF introduced Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential. The first announced steps in this transformation, which cover the following priorities: improve North America results, deliver the Vans® turnaround, reduce costs and strengthen the balance sheet, are as follows:
Previous wording
•Establish global commercial organization, inclusive of an Americas region: Change the operating model with the establishment of a global commercial structure. This includes the creation of an Americas regional platform, modeled on the Company's successful operations in the Europe and Asia-Pacific regions. With this change, VF has created the role of Chief Commercial Officer, with responsibility for go-to-market execution globally.
Current wording
establishment of a global commercial structure. This included the creation of an Americas regional platform, modeled on the Company's successful operations in the Europe and Asia-Pacific regions. With this change, VF created the role of Chief Commercial Officer, with responsibility for go-to-market execution globally.
Previous wording
•Optimize cost structure to improve operating efficiency and profitability: Implement a large-scale cost reduction program, which is expected to deliver $300 million in fixed cost savings, by removing spend in non-strategic areas of the business, and simplifying and right-sizing VF's structure.
Current wording
•Optimize cost structure to improve operating efficiency and profitability: Actions have been implemented in a large-scale cost reduction program, which remains in process, and is expected to deliver $300 million in fixed cost savings, by removing spend in non-strategic areas of the business, and simplifying and right-sizing VF's structure.
Previous wording
•Reduce debt and leverage: In addition to improving operating performance, VF is committed to deleveraging the balance sheet.
Current wording
•Reduce debt and leverage: In addition to improving operating performance, VF is committed to deleveraging the balance sheet. VF will use the proceeds from the sale of the Supreme® brand business to pay down upcoming debt maturities.
Previous wording
Reinvent charges and project-related costs in the third quarter of Fiscal 2024 were $50.9 million, which primarily included costs associated with severance and employee-related benefits and certain non-cash asset write-downs.
Current wording
Reinvent restructuring charges in the first quarter of Fiscal 2025 were $13.6 million and cumulative charges were $122.3 million since the inception of the program, which primarily included costs associated with severance and employee-related benefits and the impact of asset impairments and write-downs.
Previous wording
•International revenues decreased 5% compared to the three months ended December 2022, including a 3% favorable impact from foreign currency. Revenues in Europe decreased 7%, including a 5% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 2%, including a 1% unfavorable impact from foreign currency. International revenues represented 52% of VF's net revenues for the three months ended December 2023.
Current wording
•International revenues decreased 5% compared to the three months ended June 2023, including a 2% unfavorable impact from foreign currency.
Previous wording
The following table presents a summary of the changes in net revenues for the three and nine months ended December 2023 from the comparable periods in 2022:
Current wording
The following table presents a summary of the changes in net revenues for the three months ended June 2024 from the comparable period in 2023:
Previous wording
VF reported a 16% and 9% decrease in revenues for the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in both periods. The revenue decrease in the three months ended December 2023 was driven by declines across all segments. The revenue decrease in the nine months ended December 2023 was primarily due to declines in the Active and Work segments. The revenue decrease in both periods was
Current wording
VF reported a 9% decrease inrevenues for the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. The revenue decrease in the three months ended June 2024 was driven by declines across all segments. The revenue decrease in the three months ended June 2024 was also due to declines across all
Previous wording
The following table presents the percentage relationships to net revenues for components of the Consolidated Statements of Operations:
Current wording
The following table presents the percentage relationship to net revenues for components of the Consolidated Statements of Operations:
Previous wording
Selling, general and administrative expenses as a percentage of total revenues increased 720 and 280 basis points during the three and nine months ended December 2023, respectively, compared to the 2022 periods. Selling, general and administrative expenses decreased $14.0 million and $118.3 million in the three and nine months ended December 2023, respectively, compared to the 2022 periods. The decrease in the three months ended December 2023 was primarily due to lower distribution and advertising expenses, partially offset by Reinvent charges. The decrease in the nine months ended December 2023 was due to lower compensation and administrative costs, direct-to-consumer expenses and distribution costs, partially offset by higher information technology costs.
Current wording
Selling, general and administrative expe nses as a percentage of total revenues increased 380 basis points during the three months ended June 2024 compared to the 2023 period, reflecting lower leverage of operating expenses due to decreased revenues. Selling, general and administrative expenses decreased $23.5 million inthe three months ended June 2024 compared to the 2023 period. The decrease was primarily due to cost savings from Reinvent, lower distribution expenses and again recognized from a sale leaseback transaction, partially offset by Reinvent charges and higher compensation costs, including performance-based compensation.
Previous wording
VF recorded goodwill and intangible asset impairment charges of $229.0 million and $192.9 million, respectively, in the nine months ended December 2022 related to the Supreme reporting unit. During the second quarter of Fiscal 2023, due to continued increases in the federal funds rate and strengthening of the U.S. dollar relative to other currencies, the Company determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. The impairment related to an increase in the market-based discount rates used in the valuation and the negative impact of foreign currency exchange rate changes on financial projections.
Current wording
During the three months ended June 2024, VF determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwilland indefinite-lived trademark intangible asset. VF's assessment gave consideration to the ongoing negotiations to sell the Supreme reporting unit. The goodwill impairment charge related to the estimates of fair value subsequently confirmed by the transaction price in the Purchase Agreement signed July 16, 2024, and the indefinite-lived trademark intangible asset impairment charge related to an increase in the market-based discount rate applied.
Previous wording
interest expense in both the three and nine months ended December 2023 was primarily due to additional borrowings on long-term debt at higher rates, partially offset by lower short-term commercial paper borrowings and higher investment rates. Total outstanding debt averaged $6.8 billion in the nine months ended December 2023 and $6.5 billion in the same period in 2022, with weighted average interest rates of 3.4% and 2.3% in the nine months ended December 2023 and 2022, respectively.
Current wording
VF Corporation Q1 FY25 Form 10-Q 24 in September 2023. Total outstanding debt averaged $6.1 billion in the three months ended June 2024 and $6.8 billion in the same period in 2023, with weighted average interest rates of 3.7% and 3.1% in the three months ended June 2024 and 2023, respectively.
Previous wording
The effective income tax rate for the nine months ended December 2023 was 412.9% compared to (28.6)% in the 2022 period. The nine months ended December 2023 included a net discrete tax expense of $693.6 million, primarily related to the tax effects of decisions in the Timberland tax case and Belgium excess profits ruling. Refer to Note 13 to VF's consolidated financial statements for additional information. Excluding the $693.6 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 18.7%. The nine months ended December 2022 included a net discrete tax benefit of $98.8 million, which primarily related to the Internal Revenue Service ("IRS") examinations for tax year 2017 and short-tax year 2018 resulting in a $94.9 million favorable adjustment to VF's transition tax liability under the Tax Cuts and Jobs Act. Excluding the $98.8 million net discrete tax benefit in the 2022 period, the effective income tax rate would have been 9.5%. Without discrete items, the effective income tax rate for the nine months ended December 2023 increased by 9.2% compared with the 2022 period primarily due to the jurisdictional mix of earnings and losses.
Current wording
period, the effective income tax rate would have been 15.4%. The three months ended June 2023 included a net discrete tax expense of $0.2 million, which was comprised primarily of a $4.7 million net tax expense related to unrecognized tax benefits and interest, a $3.1 million tax expense related to stock compensation and a $7.5 million net tax benefit for interest on income tax receivables. Excluding the $0.2 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 8.2%. Without discrete items, the effective income tax rate for the three months ended June 2024 increased by 7.2% comp ared with the 2023 period primarily due to the jurisdictional mix of earnings and year-to-date losses generated in the current year, including non-deductible goodwill impairment.
Previous wording
As a result of the above, net income (loss) in the three months ended December 2023 was $(42.5) million ($(0.11) per diluted share) compared to $507.9 million ($1.31 per diluted share) in the 2022 period, and net income (loss) in the nine months ended December 2023 was $(550.6) million ($(1.42) per diluted share) compared to $333.5 million ($0.86 per diluted share) in the 2022 period. Refer to additional discussion in the “Information by Reportable Segment” section below.
Current wording
As a result of the above, net loss in the three months ended June 2024 was $(258.9) million ($(0.67) per diluted share) compared to net loss of $(57.4) million ($(0.15) per diluted share) in the 2023 period. Refer to additional discussion in the “Information by Reportable Segment” section below.
Previous wording
Refer to Note 14 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income (loss) before income taxes.
Current wording
Refer to Note 13 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit toloss before income taxes.
Previous wording
The following tables present a summary of the changes in segment revenues and profit (loss) in the three and nine months ended December 2023 from the comparable periods in 2022 and revenues by region for our top 4 brands for the three and nine months ended December 2023 and 2022:
Current wording
The following tables present a summary of the changes in segment revenues and profit (loss) in the three months ended June 2024 from the comparable period in 2023 and revenues by region for our Top 4 brands for the three months ended June 2024 and 2023:
Previous wording
Global revenues for Outdoor decreased 13% in the three months ended December 2023 compared to 2022, including a 2% favorable impact from foreign currency. Revenues in the Americas region decreased 26%. Revenues in the Europe region decreased 3%, including a 5% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 18%, including a 2% unfavorable impact from foreign currency and a 22% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan), including a 2% unfavorable impact from foreign currency.
Current wording
Global revenues for Outdoor decreased 5% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. Revenues in the Americas region decreased 8%. Revenues in the Europe region decreased 8%. Revenues in the Asia-Pacific region increased 11%, including a 4% unfavorable impact from foreign currency and a 24% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan), including a 4% unfavorable impact from foreign currency.
Previous wording
Global revenues for The North Face® brand decreased 10% and increased 4% in the three and nine months ended December 2023, respectively, compared to the 2022 periods. This includes a 1% favorable impact from foreign currency in both periods. The decrease in the three months ended December 2023 was driven by a decline in the Americas region, which decreased 24% compared to the 2022 period. Revenues in the Asia-Pacific region increased 26% in the three months ended December 2023, including a 2% unfavorable impact from foreign currency. Revenues in the Europe region were flat in the three months ended December 2023, including a 5% favorable impact from foreign currency. The increase in the nine months ended December 2023 was driven by growth in the Asia-Pacific and Europe regions. Revenues in the Asia-Pacific region increased 34% in the nine months ended December 2023, including a 4% unfavorable impact from foreign currency. Revenues in the Europe region increased 13% in the nine months ended December 2023, including a 5% favorable impact from foreign currency. Revenues in the Americas region decreased 9% in the nine months ended December 2023.
Current wording
Global revenues for The North Face® brand decreased 3% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. The decrease in the three months ended June 2024 was driven by a decline in the Americas region, which decreased 10% compared to the 2023 period. Revenues in the Europe region decreased 6% in the three months ended June 2024. Revenues in the Asia-Pacific region increased 30% in the three months ended June 2024, including a 5% unfavorable impact from foreign currency.
Previous wording
Global Work revenues decreased 16% in the nine months ended December 2023 compared to the 2022 period. Revenues in the Americas region decreased 16%. Revenues in the Asia-Pacific region decreased 38%, including a 2% unfavorable impact from foreign currency. Revenues in the Europe region increased 11%, including a 6% favorable impact from foreign currency.
Current wording
Global revenues for the Timberland® brand decreased 14% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region decreased 16% in the three
Previous wording
Global direct-to-consumer revenues for Outdoor decreased 2% and increased 3% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% and 1% favorable impact from foreign currency in the respective periods. The decrease in the three months ended December 2023 was primarily due to declines in the Americas region. The increase in the nine months ended December 2023 was primarily due to The North Face® brand in the Europe and Asia-Pacific regions. Global wholesale revenues decreased 25% and 4% in the three and nine months ended December 2023, respectively, compared to the 2022 periods. The decrease includes a 1% and 2% favorable impact from foreign currency in the three and nine months ended December 2023, respectively. The decrease in both periods was primarily driven by declines in the Americas region.
Current wording
Global direct-to-consumer revenues for Outdoor increased 3% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. The increase was primarily due to The North Face® brand in the Europe and Asia-Pacific regions. Global wholesale revenues decreased 10% in the three months ended June 2024 compared to the 2023 period. The decrease includes a 1% unfavorable impact from foreign currency. The decrease was primarily driven by declines in the Americas and Europe regions across The North Face® and Timberland® brands.
Previous wording
Operating margin decreased in both the three and nine months ended December 2023 compared to the 2022 periods, reflecting increased direct-to-consumer expenses and higher information technology costs. The decreases in both periods were partially offset by higher gross margin, primarily driven by favorable mix and unfavorable foreign currency impacts. The decrease in the three months ended December 2023 also reflects lower leverage of operating expenses due to decreased revenues.
Current wording
Operating margin decreased in the three months ended June 2024 compared to the 2023 period, reflecting increased direct-to-consumer expenses and lower gross margin, primarily driven by higher promotional activity, partially offset by favorable pricing and mix.
Previous wording
VF Corporation Q3 FY24 Form 10-Q 26 compared to the dividend of $0.30 per share paid in the second quarter of Fiscal 2024. The decrease in the dividend was an action taken to strengthen the Company's financial position by reducing debt. Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends. On January 23, 2024, the Board of Directors declared a quarterly dividend of $0.09 per share to be paid during the fourth quarter of Fiscal 2024.
Current wording
VF Corporation Q1 FY25 Form 10-Q 26
Previous wording
Global revenues for Active decreased 17% in the nine months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency. Revenues in the Americas region decreased 22%. Revenues in the Europe region decreased 8%, including a 4% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 11%, including a 3% unfavorable impact from foreign currency, and a 15% decrease in Greater China, including a 3% unfavorable impact from foreign currency.
Current wording
Global revenues for Active decreased 12% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. Revenues in the Americas region decreased 16%. Revenues in the Asia-Pacific region decreased 11%, including a 5% unfavorable impact from foreign currency, and a 27% decrease in Greater China, including a 2% unfavorable impact from foreign currency. Revenues in the Europe region decreased 3% including a 1% unfavorable impact from foreign currency.
Previous wording
Vans® brand global revenues decreased 28% and 24% in the three and nine months ended December 2023, respectively, compared to the 2022 periods. This includes a 1% favorable impact from foreign currency in both periods. The overall declines were most significantly impacted by a 31% and 27% decrease in the Americas region for the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in the nine months ended December 2023. Revenues in the Europe region decreased 19% and 13% in the three and nine months ended December 2023, respectively, including a 4% favorable impact from foreign currency in both periods. Revenues in the Asia-Pacific region decreased 27% and 22% in the three and nine months ended
Current wording
Vans® brand global reve nues decreased 21% in the three months ended June 2024 compared to the 2023 period. The overall decline was most significantly impacted by a 25% decrease in the Americas region for the three months ended June 2024. Revenues in the Asia-Pacific region decreased 29% in the three months ended June 2024, including a 2% unfavorable impact from foreign currency. Revenues in the Europe region decreased 3% in the three months ended June 2024.
Previous wording
Global revenues for Active decreased 21% in the three months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency. Revenues in the Americas region decreased 24%, including a 1% favorable impact from foreign currency. Revenues in the Europe region decreased 15%, including a 4% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 15%, including a 2% unfavorable impact from foreign currency, and a 24% decrease in Greater China, including a 1% unfavorable impact from foreign currency.
Current wording
including a 1% unfavorable impact from foreign currency. The decrease was primarily driven by a decline in the Americas region, which decreased 21% in the three months ended June 2024. Global wholesale revenues decreased 6%in the three months ended June 2024, includinga 1% unfavorable impact from foreign currency. The decrease was primarily due to a 7% decrease in the Americas region in the three months ended June 2024. Wholesale revenues in the Asia-Pacific region decreased 18% in the three months ended June 2024, and included a 2% unfavorable impact from foreign currency. Wholesale revenues in the Europe region increased 1% in the three months ended June 2024, including a 1% unfavorable impact from foreign currency.
Previous wording
Global Work revenues decreased 17% in the three months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency. Revenues in the Americas region decreased 14%. Revenues in the Asia-Pacific region decreased 45%. Revenues in the Europe region decreased 15%, including a 4% favorable impact from foreign currency.
Current wording
Global Work revenues decreased 8% in the three months ended June 2024 compared to the 2023 period. Revenues in the Americas region decreased 6%. Revenues in the Asia-Pacific region decreased 35%, including a 3% unfavorable impact from foreign currency. Revenues in the Europe region decreased 3%, including a 1% unfavorable impact from foreign currency.
Previous wording
Dickies® brand global revenues decreased 16% and 15% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1%favorable impact from foreign currency in the three months ended December 2023. The decline in both the three and nine months ended December 2023 was primarily driven by a decrease in the
Current wording
Dickies® brand global revenues decreased 15% in the three months ended June 2024 compared to the 2023 period, including a 1%unfavorable impact from foreign currency. The decline in the three months ended June 2024 was primarily driven by a decrease in the Americas region of 13%, reflecting lower
Previous wording
Americas region of 11% and 14% in the respective periods, reflecting lower inventory replenishment and weakness with certain key U.S. wholesale customer accounts. The decline in both periods was also attributed to decreases in the Asia-Pacific region of 45% and 38% in the three and nine months ended December 2023, respectively, including a 2% unfavorable impact from foreign currency in the nine months ended December 2023, primarily due to broad-based weakness in Greater China. Revenues in the Europe region decreased 15% and increased 11% in the three and nine months ended December 2023, respectively, including a 4% and 6% favorable impact from foreign currency in the respective periods.
Current wording
inventory replenishment and weakness with certain key U.S. wholesale customer accounts. The decline was also attributed to a decrease in the Asia-Pacific region of 35% in the three months ended June 2024, including a 3% unfavorable impact from foreign currency, primarily due to broad-based weakness in Greater China. Revenues in the Europe region decreased 3%in the three months ended June 2024, including a 1% unfavorable impact from foreign currency.
Previous wording
Reconciliation of Segment Profit to Income (Loss) Before Income Taxes
Current wording
Reconciliation of Segment Profit to Loss Before Income Taxes
Previous wording
There are three types of costs necessary to reconcile total segment profit to consolidated income (loss) before income taxes. These costs are (i) impairment of goodwill and intangible assets, which is excluded from segment profit because these costs are not part of the ongoing operations of the businesses, (ii) corporate and other expenses, discussed below, and (iii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.
Current wording
There are three types of costs necessary to reconcile total segment profit to consolidated loss before income taxes. These costs are (i) impairment of goodwill and indefinite-lived intangible assets, which was discussed in the “Consolidated Statements of Operations” section and is excluded from segment profit because these costs are not part of the ongoing operations of the respective businesses, (ii) corporate and other expenses, discussed below, and (iii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.
Previous wording
Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) certain information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses. The increase in corporate and other expenses for the three months ended December 2023 was
Current wording
Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses.
Previous wording
International revenues decreased 5% andincreased 2% in the three and nine months ended December 2023, respectively, compared to the 2022 periods. Foreign currency had a favorable impact of 3% and 2% on international revenues in the three and nine months ended December 2023, respectively.
Current wording
International revenues decreased 5% in the three months ended June 2024 compared to the 2023 period. Foreign currency had an unfavorable impact of 2% on international revenues in the three months ended June 2024.
Previous wording
VF's e-commerce business decreased 13% and 9% during the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in the three months ended December 2023. These results were primarily driven by declines in the e-commerce business in the Americas region.
Current wording
VF's e-commerce business decreased 5% during the three months ended June 2024, including a 1% unfavorable impact from foreign currency. The decrease was primarily driven by declines in the e-commerce business in the Americas region, which decreased 8% in the three months ended June 2024.
Previous wording
International revenues were 52% and 46% of total revenues in the three-month periods ended December 2023 and 2022, respectively, and 52% and 47% of total revenues in the nine-month periods ended December 2023 and 2022, respectively.
Current wording
Direct-to-consumer revenues were 46% and 47% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Previous wording
Wholesale revenues decreased 26% and 12% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% favorable impact from foreign currency in both periods. These results were primarily driven by declines in the wholesale business in the Americas region.
Current wording
Wholesale revenues decreased 8% in the three months ended June 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency. The decrease was primarily driven by declines in the wholesale business in the Americas region.
Previous wording
•Decrease in accrued liabilities— primarily due to a decrease in income taxes payable related to the Timberland tax case decision and lower accrued compensation.
Current wording
•Decrease in accrued liabilities— primarily due to a decrease in returns allowances and lower accrued income taxes.
Previous wording
•Decrease in goodwill— primarily due to $257.1 million in impairment charges related to the Timberland and Dickies reporting units recorded in the third quarter of Fiscal 2024 and a $165.1 million impairment charge related to the Supreme reporting unit recorded in the fourth quarter of Fiscal 2023.
Current wording
•Decrease in goodwill— primarily due to $507.6 million in impairment charges related to the Timberland, Dickies and Icebreaker reporting units recorded in the third and fourth quarters of Fiscal 2024 and a $94.0 million impairment charge related to the Supreme reporting unit recorded in the first quarter of Fiscal 2025.
Previous wording
•Decrease in other assets— primarily due to the write-off of the $875.7 million income tax receivable in the second quarter of Fiscal 2024 due to the unfavorable decision in the Timberland tax case related to 2011 taxes and interest disputed with the IRS.
Current wording
•Decrease in other assets — primarily due to the write-off of the $875.7 million income tax receivable in the second quarter of Fiscal 2024 due to the unfavorable decision in the Timberland tax case related to 2011 taxes and interest disputed with the Internal Revenue Service ("IRS").
Showing the first 40 of 72 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
•Establish global commercial organization, inclusive of an Americas region: VF changed the operating model with the
Current report — wording carried from elsewhere
VF recorded goodwill and intangible asset impairment charges of $94.0 million and $51.0 million, respectively, in the three months ended June 2024 related to the Supreme reporting unit.
Current report — wording carried from elsewhere
Global direct-to-consumer revenues for Active decreased 16% in the three months ended June 2024 compared to the 2023 period,
Current report — wording carried from elsewhere
•Decrease in accrued liabilities— primarily due to lower accrued income taxes.
Current report — wording carried from elsewhere
VF Corporation Q1 FY25 Form 10-Q 30 time by either VF or the banks. Total outstanding balances under these arrangements were $13.7 million at June 2024.
Current report — wording carried from elsewhere
credit rating outlook by both S&P and Moody's at the end of June 2024 was 'negative'.
Rearranged previous paragraphs (11)
Previous report — wording carried elsewhere
On October 30, 2023, VF introduced Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential.
Previous report — wording carried elsewhere
VF Corporation Q3 FY24 Form 10-Q 30
Previous report — wording carried elsewhere
•Decrease in goodwill — primarily due to $257.1 million in impairment charges related to the Timberland and Dickies reporting units recorded in the third quarter of Fiscal 2024.
Previous report — wording carried elsewhere
•Decrease in accounts receivable — primarily due to lower wholesale shipments.
Previous report — wording carried elsewhere
•Decrease in inventories— driven by VF reducing elevated inventory levels, primarily in core and replenishment products.
Previous report — wording carried elsewhere
•Decrease in other assets — primarily due to the write-off of the $875.7 million income tax receivable in the second quarter of Fiscal 2024 due to the unfavorable decision in the Timberland tax case related to 2011 taxes and interest disputed with the IRS.
Previous report — wording carried elsewhere
•Decrease in short-term borrowings — primarily due to a decrease in commercial paper borrowings.
Previous report — wording carried elsewhere
borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.
Previous report — wording carried elsewhere
to repurchase the notes at 101% of the aggregate principal amount, plus any accrued and unpaid interest, if required by the respective holders of the notes. The change of control provision applies to all notes, except for the notes due in 2033.
Previous report — wording carried elsewhere
VF Corporation Q3 FY24 Form 10-Q 38 financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations; VF's ability to pay and declare dividends or repurchase its stock in the future; climate change and increased focus on environmental, social and governance issues; VF's ability to execute on its sustainability strategy and achieve its sustainability-related goals and targets; risks arising from the widespread outbreak of an illness or any other
Previous report — wording carried elsewhere
communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; and tax risks associated with the spin-off of our Jeanswear business completed in 2019. More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the Securities and Exchange Commission, including VF’s Annual Report on Form 10-K.