V F CORP
For the period ended Jun 29, 2024. Filed Aug 7, 2024.
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Jun 29, 2024 · Filed Aug 7, 2024
Contents
Restructuring
NOTE 17 —RESTRUCTURING
The Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities. A description of significant restructuring programs and other restructuring charges is provided below.
Reinvent
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 Company currently estimates it will incur approximately $140.0 million to $160.0 million in restructuring charges in connection with Reinvent, and that substantially all actions will be completed by the end of Fiscal 2025. Of the total estimated
charges, the Company anticipates that approximately 70% will relate to severance and employee-related benefits and the remainder will primarily relate to asset impairments and write-downs. Cash payments are generally expected to be paid within one year of charges incurred. During the three months ended June 2024, $12.3 million of cash payments related to the Reinvent charges were made.
The type of cost and respective location of restructuring charges related to Reinvent for the three months ended June 2024 and the cumulative charges recorded since the inception of Reinvent were as follows:
| (In thousands) · Three Months Ended June 2024 · Cumulative Charges | |||
|---|---|---|---|
| Type of Cost · Statement of Operations Location | |||
| Severance and employee-related benefits | Selling, general and administrative expenses | $11,141 | $75,963 |
| Severance and employee-related benefits | Cost of goods sold | 181 | 4,691 |
| Contract termination and other | Selling, general and administrative expenses | 737 | 737 |
| Contract termination and other | Cost of goods sold | 157 | 157 |
| Asset impairments and write-downs | Selling, general and administrative expenses | 500 | 39,886 |
| Accelerated depreciation | Selling, general and administrative expenses | 861 | 861 |
| Accelerated depreciation | Cost of goods sold | 17 | 17 |
| Total Reinvent Charges | $13,594 | $122,312 | |
All restructuring charges related to Reinvent recognized in the three months ended June 2024 as well as all the cumulative charges were reported within 'Corporate and other' expenses in Note 13, Reportable Segment Information.
Other Restructuring Charges
Other Restructuring Charges are related to various approved initiatives. The type of cost and respective location of Other Restructuring Charges for the three months ended June 2024 and 2023 were as follows:
| Three Months Ended June | |||
|---|---|---|---|
| (In thousands) · 2024 · 2023 | |||
| Type of Cost · Statement of Operations Location | |||
| Severance and employee-related benefits | Selling, general and administrative expenses | $— | $676 |
| Contract termination and other | Selling, general and administrative expenses | 437 | 19 |
| Total Other Restructuring Charges | $437 | $695 | |
Other Restructuring Charges by business segment were as follows:
| Three Months Ended June | ||
|---|---|---|
| (In thousands) | 2024 | 2023 |
| Outdoor | $— | $242 |
| Active | — | 434 |
| Work | — | — |
| Corporate and other | 437 | 19 |
| Total | $437 | $695 |
21 VF Corporation Q1 FY25 Form 10-Q
Consolidated Restructuring Charges
The activity in the restructuring accrual related to Reinvent and Other Restructuring Charges for the three-month period ended June 2024 was as follows:
| (In thousands) | Severance | Other | Total |
|---|---|---|---|
| Accrual at March 2024 | $60,331 | $345 | $60,676 |
| Charges | 11,322 | 894 | 12,216 |
| Cash payments and settlements | (13,527) | (897) | (14,424) |
| Adjustments to accruals | (180) | — | (180) |
| Impact of foreign currency | (15) | — | (15) |
| Accrual at June 2024 | $57,931 | $342 | $58,273 |
Of the $58.3 million total restructuring accrual at June 2024, $55.3 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining $3.0 million will be paid out beyond the next 12 months and thus is classified within other liabilities. The Company has not recognized any significant incremental costs related to the accruals for the year ended March 2024 or prior periods.
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