V F CORP
For the period ended Sep 28, 2024. Filed Oct 30, 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.
Sep 28, 2024 · Filed Oct 30, 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 2024-06-29; filed 2024-08-07.
0000103379-24-000018
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-10-30.
0000103379-24-000030
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 170 previous paragraphs and 172 current paragraphs.
54 unchanged; 75 reworded; 35 added; 33 removed; 8 previous and 8 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 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 (35)
Current report
EssilorLuxottica S.A. to sell the Supreme® brand business ("Supreme"). On October 1, 2024, VF completed the sale of Supreme. During the three months ended September 2024, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria. Accordingly, beginning in the second quarter of Fiscal 2025, VF has reported the results of Supreme and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively. In addition, interest expense and the related interest rate swap impact for the delayed draw Term Loan ("DDTL") were reallocated to discontinued operations due to the requirement within the DDTL Agreement, as amended, that the DDTL be prepaid upon the receipt of the net cash proceeds from the sale of Supreme. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. These changes have been applied to all periods presented.
Current report
Unless otherwise noted, amounts, percentages and discussion for all periods included below reflect the results of operations and financial condition from VF’s continuing operations.
Current report
Asnoted above, VF completed the sale of Supreme on October 1, 2024. VF received proceeds of $1.5 billion, subject to post closing adjustments, and recognized an after-tax estimated loss on sale of Supreme of $124.8 million, which is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations for the three and six months ended September 2024. VF used a portion of the net cash proceeds to prepay $1.0 billion of the DDTL on October 4, 2024, pursuant to the terms of the DDTL Agreement, as amended, which required repayment within ten business days of VF’s receipt of the net cash proceeds from the sale of Supreme.
Current report
During the second quarter of Fiscal 2025, the Company initiated the next phase of Reinvent, which is focused on a return to growth and improvements to profitability. In doing so, the Company initiated a set of transformational workstreams focused on revenue growth, margin expansion and selling, general and administrative expense contraction.
Current report
SUMMARY OF THE SECOND QUARTER OF FISCAL 2025
Current report
•Revenues were down 6% to $2.8 billion compared to the three months ended September 2023.
Current report
•Outdoor segment revenues decreased 3% to $1.7 billion compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.
Current report
•Active segment revenues decreased 9% to $879.8 million compared to the three months ended September 2023.
Current report
•Wholesale revenues were down 4% compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.
Current report
•International revenues decreased 2% compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.
Current report
•Earnings (loss) per share was$0.52 compared to $(1.16) in the 2023 period. The three months ended September 2023 included increased tax expense due to the unfavorable decision in the Timberland tax case, which negatively impacted earnings per share by $1.72. The three months ended September 2024 included Reinvent charges and lower profitability in the Outdoor and Active segments.
Current report
Selling, general and administrative expe nses as a percentage of total revenues increased 330 and 360 basis points during the three and six months ended September 2024, respectively, compared to the 2023 periods. Selling, general and administrative expenses increased $27.3 million and decreased $2.3 million in the three and six months ended September 2024,
Current report
Segment Profit:
Current report
Global revenues for Outdoor decreased 4% in thesix months ended September 2024 compared to the 2023 period. Revenues in the Americas region decreased 10%. Revenues in the Europe region decreased 3%, including a 1% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 15%, including a 22% increase in Greater China with a 1% unfavorable impact from foreign currency.
Current report
Global revenues for the Timberland® brand decreased 3% and 7% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% favorable impact from foreign currency in the three months ended September 2024. Revenues in the Europe region decreased 3% and 7% in the three and six months ended September 2024, respectively, including a 2% and 1% favorable impact from foreign currency in the respective periods. Revenuein the Americas region decreased 6% and 5%, respectively, in the three and six months ended September 2024, including a 1% unfavorable impact from foreign currency in the three months ended September 2024. Revenues in the Asia-Pacific region increased 3% and decreased 8% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the six months ended September 2024
Current report
VF Corporation Q2 FY25 Form 10-Q 32
Current report
Global revenues for Active decreased 9% in the three months ended September 2024 compared to the 2023 period. Revenues in the Americas region decreased 8%, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region decreased 8% including a 1% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 20%, including a 30% decrease in Greater China with a 1% favorable impact from foreign currency.
Current report
Global direct-to-consumer revenues for Active decreased 18% and 21% in the three and six months ended September 2024, respectively, compared to the 2023 periods. The decreases were primarily driven by declines in the Americas region, which decreased 19% and 23% in the three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency inthe three months ended September 2024. Global wholesale revenues increased 1%in the three months ended September 2024. The increase was primarily due to a 16% increase in the Americas region in the three months ended September 2024, including a 1% unfavorable impact from foreign currency. The current year increase is in part the result of the deliberate actions taken to right-size inventories in the Americas wholesale channel in the second half of Fiscal 2024. Wholesale revenues in the Asia-Pacific region decreased 5% in the three months ended September 2024. Wholesale revenues in the Europe region decreased 8% in the three months ended September 2024, including a 2% favorable impact from foreign currency. Global wholesale revenues decreased 2%in the six months ended September 2024. The decrease was due to declines in the Europe and Asia-Pacific regions. Wholesale revenues in the Europe region decreased 4% in the six months ended September 2024, including a 1% favorable impact from foreign currency. Wholesale revenues in the Asia-Pacific region decreased 12% in the six months ended September 2024, including a 1% unfavorable impact from foreign currency. Wholesale revenues in the Americas region increased 2% in the six months ended September 2024, including a 1% unfavorable impact from foreign currency.
Current report
Global Work revenues decreased 8% in thesix months ended September 2024 compared to the 2023 period. Revenues in the Americas region decreased 8%, including a 1% unfavorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 25%, including a 2% unfavorable impact from foreign currency. Revenues in the Europe region remained flat.
Current report
33 VF Corporation Q2 FY25 Form 10-Q
Current report
in the respective periods, primarily due to broad-based weakness in Greater China. Revenues in the Europe region increased 2% and remained flat in the three and six months ended September 2024, respectively, including a 1% favorable impact from foreign currency in the three months ended September 2024.
Current report
Operating margin increased in both the three and six months ended September 2024 compared to the 2023 periods, reflecting higher gross margin, primarily driven by lower inventory reserves.
Current report
Revenues in the Europe region decreased 3% and 4% in the three and six months ended September 2024, respectively, including a 2% and 1% favorable impact from foreign currency in the respective periods. Revenues in the Americas (non-U.S.) region decreased 11% and 9% in the three and six months ended September 2024, respectively, including a 5% and 3% unfavorable impact from foreign currency in the respective periods. In the Asia-Pacific region, revenues increased 6% and
Current report
remained flat in the three and six months ended September 2024, respectively. Foreign currency had a favorable impact of 1% and an unfavorable impact of 1% on Asia-Pacific revenues in the three and six months ended September 2024, respectively. Revenues in Greater China increased 10% and 5% in the three and six months ended September 2024, respectively, including a 1% favorable and 1% unfavorable impact from foreign currency in the respective periods.
Current report
Direct-to-consumer revenues decreased 8% and 11% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the in thesix months ended September 2024.
Current report
Direct-to-consumer revenues were 33% and 34% of total revenues in the three-month periods ended September 2024 and 2023, respectively, and 37% and 38% of total revenues in the six-month periods ended September 2024 and 2023, respectively.
Current report
VF Corporation Q2 FY25 Form 10-Q 34
Current report
Wholesale revenues were 67% and 66% of total revenues in the three-month periods ended September 2024 and 2023, respectively, and 63% and 62% of total revenues in the six-month periods ended September 2024 and 2023, respectively.
Current report
•Increase in accrued liabilities— primarily due to higher accrued compensation and the timing of payments for other accruals.
Current report
Cash Used by Operating Activities
Current report
will be focused on reducing leverage and reinvesting a portion of cost savings to drive profitable and sustainable growth.
Current report
VF Corporation Q2 FY25 Form 10-Q 36 from the sale of Supreme, pursuant to the terms of the DDTL Agreement, as amended.
Current report
•Contractual obligations and commercial commitments at the end of Fiscal 2024 included approximately $93.7 million of inventory obligations related to Supreme, which is now classified as discontinued operations.
Current report
•VF entered into a contract with a consulting firm during the three months ended September 2024. Fees related to this contract could be up to $135.0 million, which includes $60.0 million of fixed fees and $75.0 million of contingent fees tied to increases in VF's stock price through June 2027. The total fair value of the contingent fees was $30.7 million as of September 2024.
Current report
37 VF Corporation Q2 FY25 Form 10-Q
Removed paragraphs (33)
Previous 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.
Previous report
SUMMARY OF THE FIRST QUARTER OF FISCAL 2025
Previous 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.
Previous 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.
Previous 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.
Previous report
23 VF Corporation Q1 FY25 Form 10-Q
Previous report
•Direct-to-consumer revenues were down 10% compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Previous report
•International revenues decreased 5% compared to the three months ended June 2023, including a 2% unfavorable impact from foreign currency.
Previous report
•Revenues in the Americas region decreased 12% compared to the three months ended June 2023.
Previous 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.
Previous report
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.
Previous report
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 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.
Previous report
Segment Profit (Loss):
Previous report
25 VF Corporation Q1 FY25 Form 10-Q
Previous report
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 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.
Previous report
VF Corporation Q1 FY25 Form 10-Q 26
Previous report
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 report
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 report
27 VF Corporation Q1 FY25 Form 10-Q
Previous 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
Previous 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.
Previous report
International revenues were 51% and 49% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Previous 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.
Previous report
Direct-to-consumer revenues were 46% and 47% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Previous report
•Decrease in accrued liabilities— primarily due to a decrease in returns allowances and lower accrued income taxes.
Previous report
•Increase in other currents assets— primarily due to higher prepaid income taxes.
Previous report
•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").
Previous report
•Decrease in accrued liabilities— primarily due to lower accrued income taxes.
Previous report
Cash Provided by Operating Activities
Previous report
credit rating outlook by both S&P and Moody's at the end of June 2024 was 'negative'.
Previous report
VF’s credit agency ratings allow for access to additional liquidity at competitive rates. Further downgrades to VF's ratings would negatively impact borrowing costs.
Reworded paragraphs (75)
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 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.
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 second quarter of Fiscal 2025. For presentation purposes herein, all references to periods ended September 2024 and September 2023 relate to the fiscal periods ended on September 28, 2024 and September 30, 2023, respectively. References to March 2024 relate to information as of March 30, 2024.
Previous 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.
Current wording
All per share amounts are presented on a diluted basis and all percentages shown in the tables below and the following discussion have been calculated using unrounded numbers. References to the three and six months ended September 2024 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and six months ended September 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
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 wording
On July 16, 2024, VF entered into a definitive Stock and Asset Purchase Agreement (the "Purchase Agreement") with
Previous 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.
Current wording
•Establish global commercial organization, inclusive of an Americas region: VF changed the operating model with the 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
•Sharpen brand presidents' focus on sustainable growth: A direct consequence and intent of the operating model change, which is particularly critical at this stage for the Vans® brand, enables brand presidents to direct greater focus and attention to long-term brand-building, product innovation and growth strategies.
Current wording
•Sharpen brand presidents' focus on sustainable growth: A direct consequence and intent of the operating model change, which is particularly critical at this stage for the
Previous 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.
Current wording
•Optimize cost structure to improve operating efficiency and profitability: Actions have been implemented in a large-scale cost reduction program, which is expected to deliver $300 million in annual 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. VF will use the proceeds from the sale of the Supreme® brand business to pay down upcoming debt maturities.
Current wording
•Reduce debt and leverage: In addition to improving operating performance, VF is committed to deleveraging the balance sheet. VF used a portion of the proceeds from the sale of Supreme to prepay the DDTL and the remaining proceeds will be applied to upcoming debt maturities.
Previous 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.
Current wording
Reinvent restructuring charges in thethree and six months ended September 2024 were $11.8 million and $25.4 million, respectively, and cumulative charges were $134.1 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
•Work segment revenues decreased 8% to $175.0 million compared to the three months ended June 2023.
Current wording
•Work segment revenues decreased 8% to $219.5 million compared to the three months ended September 2023.
Previous wording
•Wholesale revenues were down 8% compared to the three months ended June 2023, including a 1% unfavorable impact from foreign currency.
Current wording
•Direct-to-consumer revenues were down 8% compared to the three months ended September 2023.
Previous wording
•Gross margin decreased 80 basis points to 52.0% compared to the three months ended June 2023, primarily drivenby higher promotional activity.
Current wording
•Gross margin increased 120 basis points to 52.2% compared to the three months ended September 2023, primarily driven by lower product costs.
Previous 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:
Current wording
The following table presents a summary of the changes in net revenues for the three and six months ended September 2024 from the comparable periods in 2023:
Previous 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
Current wording
VF reported a 6% and 7% decrease in revenues for the three and six months ended September 2024, respectively, compared to the 2023 periods. The revenue decrease in both the three and six months ended September 2024 was driven by declines across all segments. The revenue decrease in both the three and six months ended September 2024 was also due to declines across
Previous wording
regions, with the most significant declines in the Americas region.
Current wording
the Americas and Europe regions, with the most significant declines in the Americas region.
Previous wording
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 wording
Gross margin increased 120 and 30 basis points in the three and six months ended September 2024, respectively, compared to the 2023 periods. Theincrease in both periods was primarily driven by lower product costs.
Previous 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.
Current wording
resp ectively, compared to the 2023 periods. The increase in the three months ended September 2024 was primarily due to Reinvent charges and higher compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent and lower information technology costs and distribution expenses. The decrease in the six months ended September 2024 was primarily due to cost savings from Reinvent, lower distribution expenses and information technology costs and a gain recognized from a sale leaseback transaction, partially offset by Reinvent charges and higher
Previous wording
29 VF Corporation Q1 FY25 Form 10-Q
Current wording
29 VF Corporation Q2 FY25 Form 10-Q compensation costs, including performance-based compensation.
Previous wording
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 wording
Net interest expense increased $1.6 million and $6.9 million during the three and six months ended September 2024, respectively, compared to the 2023 periods. The increase in net interest expense in both the three and six months ended September 2024 was primarily due to changes in international rates and increased levels of short-term commercial paper borrowings at higher 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 in September 2023. Total outstanding debt averaged $6.2 billion in the six months ended September 2024 and $6.9 billion in the same period in 2023, with weighted average interest rates of 2.7% and 2.3% inthe six months ended September 2024 and 2023, respectively.
Previous wording
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 wording
The effective income tax rate for the six months ended September 2024 was 22.5% compared to 316.1%in the 2023 period. The six months ended September 2024 included a net discrete tax benefit of $5.8 million, which was comprised primarily of a$9.5 million net tax benefit related to unrecognized tax benefits and interest and a$5.3 million tax expense related to stock compensation. Excluding the $5.8 million net discrete
Previous 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.
Current wording
tax benefit in the 2024 period, the effective income tax rate would have been 31.4%. The six months ended September 2023 included a net discrete tax expense of $703.3 million, primarily related to the tax effects of decisions in the Timberland tax case and Belgium excess profits ruling. Excluding the $703.3 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 20.8%. Without discrete items, the effective income tax rate for the six months ended September 2024 increased by 10.6% compared with the 2023 period primarily due to disproportionate year-to-date losses in jurisdictions with no tax benefit, as well as the jurisdictional mix of earnings.
Previous 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.
Current wording
As a result of the above, income (loss) from continuing operations in the three months ended September 2024 was $202.5 million ($0.52 per diluted share) compared to $(451.6) million ($(1.16) per diluted share) in the 2023 period, and income (loss) from continuing operations in the six months ended September 2024 was $50.5 million ($0.13 per diluted share) compared to $(514.6) million ($(1.33) per diluted share) in the 2023 period. Refer to additional discussion in the “Information by Reportable Segment” section below.
Previous wording
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 wording
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 and other income (expense), net line items of each segment.
Previous 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.
Current 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 profitto income from continuing operations before income taxes.
Previous 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:
Current wording
The following tables present a summary of the changes in segment revenuesand profit in the three and six months ended September 2024 from the comparable periods in 2023 and revenues by region for our Top 4 brands for the three and six months ended September 2024 and 2023:
Previous wording
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 wording
VF Corporation Q2 FY25 Form 10-Q 30
Previous 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.
Current wording
Global revenues for Outdoor decreased 3% in the three months ended September 2024 compared to the 2023 period, including a 1% favorable impact from foreign currency. Revenues in the Americas region decreased 12%, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region decreased 1%, including a 2% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 16%, including a 1% favorable impact from foreign currency and a 22% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan), including a 1% favorable impact from foreign currency.
Previous 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.
Current wording
Global revenues for The North Face® brand decreased 3% in both the three and six months ended September 2024 compared to the 2023 periods, including a 1% favorable impact from foreign currency in the three months ended September 2024. The decrease in both the three and six months ended September 2024 was driven by a decline in the Americas region, which decreased 14% and 13% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in both periods. Revenues in the Europe region remained flat and decreased 2% in the three and six months ended September 2024, respectively, including a 2% favorable impact from foreign currency in both periods. Revenues in the Asia-Pacific region increased 20% and 23% in the three and six months ended September 2024, respectively, including a 1% favorable and a 1% unfavorable impact from foreign currency in the respective periods.
Previous 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.
Current wording
Global direct-to-consumer revenues for Outdoor increased 4% and 3% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% favorable and a 1% unfavorable impact from foreign currency in the respective periods. The increases were primarily due to The North Face® brand in the Europe and Asia-Pacific regions. Global wholesale revenues decreased 6% and 7% in the three and six months ended September 2024, respectively, compared to the 2023 periods. The decreases were primarily driven by declines in The North Face® brand in the Americas and Europe regions.
Previous 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.
Current wording
Operating margin remained flat and decreased in the three and six months ended September 2024, respectively, compared to the 2023 periods. The decrease in the six months ended September 2024 reflected increased direct-to-consumer expenses, partially offset by higher gross margin, primarily driven by lower product costs.
Previous wording
The Active segment includes the following brands: Vans®, Supreme®, Kipling®, Napapijri®, Eastpak® and JanSport®.
Current wording
The Active segment includes the following brands: Vans®, Kipling®, Napapijri®, Eastpak® and JanSport®.
Previous 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.
Current wording
Global revenues for Active decreased 12% in the six months ended September 2024 compared to the 2023 period. Revenues in the Americas region decreased 13%. Revenues in the Asia-Pacific region decreased 23%, including a 1% unfavorable impact from foreign currency, and a 32% decrease in Greater China, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region decreased 6% in the six months ended September 2024 compared to the 2023 period.
Previous 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.
Current wording
Vans® brand global reve nues decreased 11% and 16% in the three and six months ended September 2024, respectively, compared to the 2023 periods. The overall declines were most significantly impacted by a 10% and 18% decrease in the Americas region for the three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in both periods. Revenues in the Asia-Pacific region decreased 27% and 28% in the three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in both periods. Revenues in the Europe region decreased 7% and 5% in the three and six months ended September 2024, respectively, including a 1% favorable impact from foreign currency in both periods.
Previous wording
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 wording
Operating margin decreased in both the three and six months ended September 2024 compared to the 2023 periods, primarily reflecting lower leverage of operating expenses due to decreased revenues.
Previous 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.
Current wording
Global Work revenues decreased 8% in the three months ended September 2024 compared to the 2023 period. Revenues in the Americas region decreased 9%. Revenues in the Asia-Pacific region decreased 16%, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region increased 2%, including a 1% favorable impact from foreign currency.
Previous 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.
Current wording
Dickies® brand global revenues decreased 11% and 13% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in thesix months ended September 2024. The declines in the three and six months ended September 2024 were primarily driven by a decrease in the Americas regionof 14% in both periods, reflecting lower inventory replenishment and weakness with certain key U.S. wholesale customer accounts. The declines were also attributed to a decrease in the Asia-Pacific region of 16% and 25% in the three and six months ended September 2024, respectively, including a 1% and 2% unfavorable impact from foreign currency
Previous wording
Reconciliation of Segment Profit to Loss Before Income Taxes
Current wording
Reconciliation of Segment Profit to Income From Continuing Operations Before Income Taxes
Previous 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.
Current wording
There are two types of costs necessary to reconcile total segment profit to consolidated income from continuing operations before income taxes. These costs are (i) corporate and other expenses, discussed below, and (ii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.
Previous wording
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 wording
The increase in corporate and other expenses for both the three and six months ended September 2024 was primarily due to Reinvent charges and compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent.
Previous 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.
Current wording
International revenues decreased 2% and 4% in the three and six months ended September 2024, respectively, compared to the 2023 periods. Foreign currency had a favorable impact of 1% on international revenues in the three months ended September 2024.
Previous wording
Wholesale revenues were 54% and 53% of total revenues in the three-month periods ended June 2024 and 2023, respectively.
Current wording
International revenues were 57% and 55% of total revenues in the three-month periods ended September 2024 and 2023, respectively, and 55% and 53% of total revenues in thesix-month periods ended September 2024 and 2023, respectively.
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Current report — wording carried from elsewhere
Refer to Note 4 to VF’s consolidated financial statements for additional information on discontinued operations.
Current report — wording carried from elsewhere
Vans® brand, enables brand presidents to direct greater focus and attention to long-term brand-building, product innovation and growth strategies.
Current report — wording carried from elsewhere
•Revenues in the Americas region decreased 10% compared to the three months ended September 2023, including a 1% unfavorable impact from foreign currency.
Current report — wording carried from elsewhere
•Decrease in short-term borrowings — primarily due to a decrease in commercial paper borrowings.
Current report — wording carried from elsewhere
35 VF Corporation Q2 FY25 Form 10-Q compared to September 2023 was driven by a decrease in stockholders' equity, partially offset by a decrease in net debt for the periods compared. The decrease in stockholders' equity was primarily driven by the net loss for the period and payments of dividends. The decrease in net debt at September 2024 compared to September 2023 was driven by lower short-term borrowings, as discussed in the "Consolidated Balance Sheet" section above.
Current report — wording carried from elsewhere
At the end of September 2024, VF’s long-term debt ratings were ‘BBB-’ by Standard & Poor’s ("S&P") Global Ratings and ‘Ba1' by Moody’s Investors Service ("Moody's"), and U.S. commercial
Current report — wording carried from elsewhere
VF Corporation Q2 FY25 Form 10-Q 38 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 communicable disease, or any other public health crisis; and tax risks
Current report — wording carried from elsewhere
associated with the spin-off of the 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.
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All per share amounts are presented on a diluted basis and all percentages shown in the tables below and the following discussion have been calculated using unrounded numbers.
Previous report — wording carried elsewhere
•Establish global commercial organization, inclusive of an Americas region: VF changed the operating model with the
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Global direct-to-consumer revenues for Active decreased 16% in the three months ended June 2024 compared to the 2023 period,
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
•Decrease in accounts receivable — primarily due to lower wholesale shipments.
Previous report — wording carried elsewhere
For the ratio of net debt to total capital, net debt is defined as short-term and long-term borrowings, in addition to operating lease liabilities, net of unrestricted cash. Total capital is defined
Previous report — wording carried elsewhere
VF relies on its ability to generate cash flows to finance its ongoing operations. In addition, VF has significant liquidity from its available cash balances and credit facilities. VF maintains a $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”) that expires in November 2026. VF may