VF Corporation (NYSE: VFC) today reported financial results for
its second quarter (Q2'FY25) ended September 28, 2024, and the
Company's Board of Directors authorized a quarterly per share
dividend of $0.09.
Bracken Darrell, President and CEO, said: "Our results in
the quarter met our expectations and reflect a sequential and
broad-based improvement in year-on-year trends. At the same time,
we made further progress on our four Reinvent priorities and we are
on track to reach our previously announced $300 million savings
target by the end of FY25. Following the completion of the Supreme
divestiture on October 1, 2024, we delivered on our commitment to
pay down VF’s $1 billion term loan due December 2024. Our Americas
regional platform is fully operational and showing promising signs,
while the performance at Vans is improving. In summary, we advanced
our turnaround plan towards a return to growth and strong,
sustainable value creation at VF."
Q2'FY25 Income Statement Review
- Results demonstrated broad-based year-over-year sequential
improvement relative to Q1'FY25, with all key metrics in line with,
or above the company's expectations
- Revenue $2.8 billion, down 6% vs. last year, an improvement vs.
Q1'FY25 down 10%
- The North Face® down 3% (down 4% in constant dollars) as
expected. This compares against a strong Q2'FY24 of up 19% (up 17%
in constant dollars)
- Vans® down 11% vs. last year, relative to Q1'FY25 down 21% vs.
last year
- Gross margin 52.2%, up 120 basis points vs. last year
- Operating margin 9.9%, down 210 basis points vs. last year;
adjusted operating margin down 60 basis points vs. last year to
11.4%
- Earnings (loss) per share (EPS) $0.52 vs. Q2'FY24 $(1.16);
adjusted EPS $0.60 vs. Q2'FY24 $0.63
Balance Sheet Review
- Q2'FY25 ending inventories down 13% relative to the prior
year
- Net debt at the end of Q2'FY25 was $5.7 billion, down by
approximately $446 million relative to last year. Shortly after the
fiscal quarter end, VF received $1.475 billion of net proceeds
following the close of the Supreme sale, allowing VF to further
reduce net debt.
Financial Outlook
- For Q3'FY25 VF expects the following on a continuing operations
basis:
- Revenue in the range of $2.7 billion to $2.75 billion, down 1%
to down 3% year-over-year in reported dollars, inclusive of an
expected negative FX impact of approximately 100 basis points
- Adjusted operating income in the range of $170 million to $200
million (Q3'FY24: $218 million)
- For FY25 VF expects free cash flow from continuing operations
plus proceeds from non-core physical asset sales of approximately
$425 million, with core fundamentals in line with previous
guidance. Relative to the original full year guidance of $600
million, the change reflects the sale of Supreme and additional
reinvestment initiatives in the second half of FY25, which are
partially offset by the greater than anticipated proceeds for
non-core physical asset sales.
Summary Revenue
Information
(Unaudited)
Three Months Ended
September
Six Months Ended
September
(Dollars in millions)
2024
2023
% Change
% Change
(constant
currency)
2024
2023
% Change
% Change
(constant
currency)
Brand:
The North Face®
$
1,091.4
$
1,128.8
(3
)%
(4
)%
$
1,615.6
$
1,667.0
(3
)%
(3
)%
Vans®
667.4
748.8
(11
)%
(11
)%
1,249.3
1,486.3
(16
)%
(16
)%
Timberland®
475.3
488.6
(3
)%
(3
)%
704.8
742.5
(5
)%
(5
)%
Dickies®
152.4
171.4
(11
)%
(11
)%
269.2
308.1
(13
)%
(12
)%
Other Brands
371.4
382.4
(3
)%
(3
)%
688.2
684.3
1
%
0
%
VF Revenue
$
2,757.9
$
2,920.1
(6
)%
(6
)%
$
4,527.0
$
4,888.2
(7
)%
(7
)%
Region:
Americas
$
1,355.9
$
1,506.1
(10
)%
(9
)%
$
2,331.6
$
2,624.9
(11
)%
(11
)%
EMEA
1,009.6
1,042.8
(3
)%
(5
)%
1,541.9
1,607.1
(4
)%
(5
)%
APAC
392.5
371.3
6
%
5
%
653.6
656.3
0
%
1
%
VF Revenue
$
2,757.9
$
2,920.1
(6
)%
(6
)%
$
4,527.0
$
4,888.2
(7
)%
(7
)%
International
$
1,572.5
$
1,605.0
(2
)%
(3
)%
$
2,482.2
$
2,578.4
(4
)%
(4
)%
Channel:
DTC
$
914.9
$
997.5
(8
)%
(8
)%
$
1,655.9
$
1,852.8
(11
)%
(10
)%
Wholesale (a)
1,843.0
1,922.7
(4
)%
(5
)%
2,871.1
3,035.4
(5
)%
(6
)%
VF Revenue
$
2,757.9
$
2,920.1
(6
)%
(6
)%
$
4,527.0
$
4,888.2
(7
)%
(7
)%
All references to the periods ended
September 2024 relate to the 13-week and 26-week fiscal periods
ended September 28, 2024 and all references to the periods ended
September 2023 relate to the 13-week and 26-week fiscal periods
ended September 30, 2023.
Note: Amounts may not sum due to
rounding
(a) Royalty revenues are included in the
wholesale channel for all periods.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.09
per share. This dividend will be payable on December 18, 2024, to
shareholders of record at the close of business on December 10,
2024. Subject to approval by its Board of Directors, VF intends to
continue to pay quarterly dividends.
Webcast Information
VF will host its second quarter fiscal 2025 conference call
beginning at 4:30 p.m. Eastern Time today. The conference call will
be broadcast live via the Internet, accessible at ir.vfc.com. For
those unable to listen to the live broadcast, an archived version
will be available at the same location.
VF will host its FY25 Investor Day, the first of a two-part
investor event, on October 30, 2024. The event will be broadcast
live on the Internet, accessible at vfc.com/investor-day-2024
beginning at approximately 10:00am until 12:00pm ET on October 30,
2024. An archived version will be available at the same location
following the event.
About VF
Founded in 1899, VF Corporation is one of the world’s largest
apparel, footwear and accessories companies connecting people to
the lifestyles, activities and experiences they cherish most
through a family of iconic outdoor, active and workwear brands
including The North Face®, Vans®, Timberland® and Dickies®. Our
purpose is to power movements of sustainable and active lifestyles
for the betterment of people and our planet. We connect this
purpose with a relentless drive to succeed to create value for all
stakeholders and use our company as a force for good. For more
information, please visit vfc.com.
Financial Presentation Disclosure
All per share amounts are presented on a diluted basis. This
release refers to “reported” and “constant dollar” or “constant
currency” amounts, terms that are described under the heading below
“Constant Currency - Excluding the Impact of Foreign Currency.”
Unless otherwise noted, “reported” and “constant dollar” or
“constant currency” amounts are the same. This release also refers
to “continuing” and “discontinued” operations amounts, which are
concepts described under the heading “Discontinued Operations -
Supreme.” Unless otherwise noted, results presented are based on
continuing operations. This release also refers to “adjusted”
amounts, a term that is described under the heading below “Adjusted
Amounts - Excluding Reinvent and Transaction and Deal Related
Activities.” Unless otherwise noted, “reported” and “adjusted”
amounts are the same.
Discontinued Operations - Supreme
On July 16, 2024, VF entered into a definitive Stock and Asset
Purchase Agreement with EssilorLuxottica S.A. to sell the Supreme®
brand business (“Supreme”). On October 1, 2024, VF completed the
sale of Supreme. Accordingly, the company has reported the related
held-for-sale assets and liabilities as assets and liabilities of
discontinued operations and included the operating results and cash
flows of the business in discontinued operations for all periods
presented.
Constant Currency - Excluding the Impact of Foreign
Currency
This release refers to “reported” amounts in accordance with
U.S. generally accepted accounting principles (“GAAP”), which
include translation and transactional impacts from foreign currency
exchange rates. This release also refers to both “constant dollar”
and “constant currency” amounts, which exclude the impact of
translating foreign currencies into U.S. dollars. Reconciliations
of GAAP measures to constant currency amounts are presented in the
supplemental financial information included with this release,
which identifies and quantifies all excluded items, and provides
management’s view of why this information is useful to
investors.
Adjusted Amounts - Excluding Reinvent and Transaction and
Deal Related Activities
The adjusted amounts in this release exclude costs related to
Reinvent, VF's transformation program. Costs, including
restructuring charges and project-related costs, were approximately
$41 million in the second quarter of fiscal 2025 and $59 million in
the first six months of fiscal 2025.
The adjusted amounts in this release exclude transaction and
deal related activities associated with the review of strategic
alternatives for the Global Packs business, consisting of the
Kipling®, Eastpak® and JanSport® brands. Total transaction and deal
related activities include costs of approximately $0.5 million in
the first six months of fiscal 2025.
Combined, the above items negatively impacted earnings per share
by $0.08 during the second quarter of fiscal 2025 and $0.11 during
the first six months of fiscal 2025. All adjusted amounts
referenced herein exclude the effects of these amounts.
Reconciliations of measures calculated in accordance with GAAP
to adjusted amounts are presented in the supplemental financial
information included with this release, which identifies and
quantifies all excluded items, and provides management’s view of
why this information is useful to investors. The company also
provides guidance on a non-GAAP basis as we cannot predict certain
elements which are included in reported GAAP results. VF defines
free cash flow as cash flow from operations less capital
expenditures and software purchases and defines net debt as short
and long term borrowings less cash and cash equivalents.
Forward-looking Statements
Certain statements included in this release are "forward-looking
statements" within the meaning of the federal securities laws.
Forward-looking statements are made based on VF's expectations and
beliefs concerning future events impacting VF and therefore involve
several risks and uncertainties. You can identify these statements
by the fact that they use words such as “will,” “anticipate,”
"believe," “estimate,” “expect,” “should,” and “may” and other
words and terms of similar meaning or use of future dates, however,
the absence of these words or similar expressions does not mean
that a statement is not forward-looking. All statements regarding
VF’s plans, objectives, projections and expectations relating to
VF’s operations or financial performance, and assumptions related
thereto are forward-looking statements. VF cautions that
forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied in
the forward-looking statements. VF undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. Potential risks and uncertainties that could
cause the actual results of operations or financial condition of VF
to differ materially from those expressed or implied by
forward-looking statements include, but are not limited to: the
level of consumer demand for apparel and footwear; disruption to
VF’s distribution system; changes in global economic conditions and
the financial strength of VF’s consumers and customers, including
as a result of current inflationary pressures; fluctuations in the
price, availability and quality of raw materials and finished
products; disruption and volatility in the global capital and
credit markets; VF’s response to changing fashion trends, evolving
consumer preferences and changing patterns of consumer behavior;
VF's ability to maintain the image, health and equity of its
brands, including through investment in brand building and product
innovation; intense competition from online retailers and other
direct-to-consumer business risks; increasing pressure on margins;
retail industry changes and challenges; VF's ability to execute its
Reinvent transformation program and other business priorities,
including measures to streamline and right-size its cost base and
strengthen the balance sheet while reducing leverage; VF’s ability
to successfully establish a global commercial organization, and
identify and capture efficiencies in its business model; any
inability of VF or third parties on which it relies, to maintain
the strength and security of information technology systems; the
fact that VF’s facilities and systems, and those of third parties
on which we rely, are frequent targets of cyber-attacks of varying
levels of severity, and may in the future be vulnerable to such
attacks, and any inability or failure by VF or such third parties
to anticipate or detect data or information security breaches or
other cyber-attacks, including the cyber incident that was reported
by VF in December 2023, could result in data or financial loss,
reputational harm, business disruption, damage to our relationships
with customers, consumers, employees and third parties on which it
relies, litigation, regulatory investigations, enforcement actions
or other negative impacts; any inability by VF or third parties on
which it relies to properly collect, use, manage and secure
business, consumer and employee data and comply with privacy and
security regulations; VF’s ability to adopt new technologies,
including artificial intelligence, in a competitive and responsible
manner; foreign currency fluctuations; stability of VF's vendors'
manufacturing facilities and VF's ability to establish and maintain
effective supply chain capabilities; continued use by VF’s
suppliers of ethical business practices; VF’s ability to accurately
forecast demand for products; actions of activist and other
shareholders; VF's ability to recruit, develop or retain key
executive or employee talent or successfully transition executives;
continuity of members of VF’s management; changes in the
availability and cost of labor; VF’s ability to protect trademarks
and other intellectual property rights; possible goodwill and other
asset impairment; maintenance by VF’s licensees and distributors of
the value of VF’s brands; VF’s ability to execute acquisitions and
dispositions, integrate acquisitions and manage its brand
portfolio; VF's ability to realize benefits from the completed sale
of the Supreme® brand business; business resiliency in response to
natural or man-made economic, public health, cyber, political or
environmental disruptions; changes in tax laws and additional tax
liabilities; legal, regulatory, political, economic, and
geopolitical risks, including those related to the current
conflicts in Ukraine and the Middle East and tensions between the
U.S. and China; changes to laws and regulations; adverse or
unexpected weather conditions, including any potential effects from
climate change; VF's indebtedness and its ability to obtain
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
communicable disease, or any other public health crisis; and tax
risks 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 SEC, including VF’s Annual Report on
Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed
or furnished with the SEC.
VF CORPORATION
Condensed Consolidated
Statements of Operations
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
September
Six Months Ended
September
2024
2023
2024
2023
Net revenues
$
2,757,948
$
2,920,123
$
4,527,008
$
4,888,186
Costs and operating expenses
Cost of goods sold
1,317,391
1,430,194
2,180,773
2,369,828
Selling, general and administrative
expenses
1,166,654
1,139,390
2,195,352
2,197,668
Total costs and operating expenses
2,484,045
2,569,584
4,376,125
4,567,496
Operating income
273,903
350,539
150,883
320,690
Interest expense, net
(42,688
)
(41,111
)
(83,635
)
(76,687
)
Other income (expense), net
(660
)
(2,183
)
(2,146
)
(5,826
)
Income from continuing operations
before income taxes
230,555
307,245
65,102
238,177
Income tax expense
28,046
758,887
14,620
752,794
Income (loss) from continuing
operations
202,509
(451,642
)
50,482
(514,617
)
Income (loss) from discontinued
operations, net of tax
(150,331
)
945
(257,190
)
6,495
Net income (loss)
$
52,178
$
(450,697
)
$
(206,708
)
$
(508,122
)
Earnings (loss) per common share -
basic (a)
Continuing operations
$
0.52
$
(1.16
)
$
0.13
$
(1.33
)
Discontinued operations
(0.39
)
—
(0.66
)
0.02
Total earnings (loss) per common share
- basic
$
0.13
$
(1.16
)
$
(0.53
)
$
(1.31
)
Earnings (loss) per common share -
diluted (a)
Continuing operations
$
0.52
$
(1.16
)
$
0.13
$
(1.33
)
Discontinued operations
(0.38
)
—
(0.66
)
0.02
Total earnings (loss) per common share
- diluted
$
0.13
$
(1.16
)
$
(0.53
)
$
(1.31
)
Weighted average shares
outstanding
Basic
389,044
388,338
388,892
388,249
Diluted
390,945
388,338
390,198
388,249
Cash dividends per common share
$
0.09
$
0.30
$
0.18
$
0.60
Basis of presentation of condensed
consolidated financial statements: VF operates and reports
using a 52/53 week fiscal year ending on the Saturday closest to
March 31 of each year. For presentation purposes herein, all
references to the periods ended September 2024 relate to the
13-week and 26-week fiscal periods ended September 28, 2024, and
all references to periods ended September 2023 relate to the
13-week and 26-week fiscal periods ended September 30, 2023.
References to March 2024 relate to information as of March 30,
2024.
(a) Amounts have been calculated using
unrounded numbers.
VF CORPORATION
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands)
September
March
September
2024
2024
2023
ASSETS
Current assets
Cash and equivalents
$
492,164
$
656,376
$
484,825
Accounts receivable, net
1,820,197
1,263,329
1,881,531
Inventories
2,082,918
1,697,823
2,405,291
Other current assets
472,595
493,194
358,124
Current assets of discontinued
operations
1,590,984
116,225
113,791
Total current assets
6,458,858
4,226,947
5,243,562
Property, plant and equipment,
net
755,802
788,992
885,882
Goodwill and intangible assets,
net
2,426,628
2,421,838
2,924,664
Operating lease right-of-use
assets
1,313,030
1,255,074
1,248,524
Other assets
1,265,320
1,210,470
1,143,728
Other assets of discontinued
operations
—
1,709,642
1,695,992
Total assets
$
12,219,638
$
11,612,963
$
13,142,352
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Short-term borrowings
$
463,200
$
263,938
$
1,023,276
Current portion of long-term debt
1,750,097
1,000,721
966
Accounts payable
1,134,637
788,477
961,667
Accrued liabilities
1,486,706
1,323,982
1,486,757
Current liabilities of discontinued
operations
147,791
79,861
72,167
Total current liabilities
4,982,431
3,456,979
3,544,833
Long-term debt
4,028,549
4,702,284
5,656,725
Operating lease liabilities
1,136,605
1,087,304
1,066,933
Other liabilities
665,686
636,090
598,409
Other liabilities of discontinued
operations
—
71,941
65,407
Total liabilities
10,813,271
9,954,598
10,932,307
Stockholders' equity
1,406,367
1,658,365
2,210,045
Total liabilities and stockholders'
equity
$
12,219,638
$
11,612,963
$
13,142,352
VF CORPORATION
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
September
2024
2023
Operating activities
Net loss
$
(206,708
)
$
(508,122
)
Income (loss) from discontinued
operations, net of tax
(257,190
)
6,495
Income (loss) from continuing operations,
net of tax
50,482
(514,617
)
Depreciation and amortization
126,396
136,936
Reduction in the carrying amount of
right-of-use assets
179,206
183,335
Write-off of income tax receivables and
interest
—
921,409
Other adjustments, including changes in
operating assets and liabilities
(657,907
)
(787,783
)
Cash used by operating activities -
continuing operations
(301,823
)
(60,720
)
Cash provided by operating activities -
discontinued operations
20,052
41,459
Cash used by operating activities
(281,771
)
(19,261
)
Investing activities
Proceeds from sale of assets
76,683
281
Capital expenditures
(45,953
)
(93,833
)
Software purchases
(25,727
)
(41,150
)
Other, net
(21,424
)
(11,026
)
Cash used by investing activities -
continuing operations
(16,421
)
(145,728
)
Cash used by investing activities -
discontinued operations
(4,413
)
(4,003
)
Cash used by investing activities
(20,834
)
(149,731
)
Financing activities
Net increase from short-term borrowings
and long-term debt
198,711
109,663
Cash dividends paid
(70,048
)
(233,172
)
Proceeds from issuance of Common Stock,
net of payments for tax withholdings
(2,689
)
(2,392
)
Cash provided (used) by financing
activities
125,974
(125,901
)
Effect of foreign currency rate changes
on cash, cash equivalents and restricted cash
14,304
(21,190
)
Net change in cash, cash equivalents
and restricted cash
(162,327
)
(316,083
)
Cash, cash equivalents and restricted
cash – beginning of year
676,957
816,319
Cash, cash equivalents and restricted
cash – end of period
$
514,630
$
500,236
VF CORPORATION
Supplemental Financial
Information
Reportable Segment
Information
(Unaudited)
Three Months Ended
September
% Change
% Change
Constant
Currency (a)
2024
2023
Segment revenues
Outdoor
$
1,658,672
$
1,713,679
(3)%
(4)%
Active
879,767
968,171
(9)%
(9)%
Work
219,509
238,273
(8)%
(8)%
Total segment revenues
$
2,757,948
$
2,920,123
(6)%
(6)%
Segment profit
Outdoor
$
287,414
$
296,750
Active
103,659
121,189
Work
20,408
8,515
Total segment profit
411,481
426,454
Corporate and other expenses
(138,238
)
(78,098
)
Interest expense, net
(42,688
)
(41,111
)
Income from continuing operations
before income taxes
$
230,555
$
307,245
(a) Refer to constant currency definition
on the following pages.
VF CORPORATION
Supplemental Financial
Information
Reportable Segment
Information
(Unaudited)
(In thousands)
Six Months Ended
September
% Change
% Change
Constant
Currency (a)
2024
2023
Segment revenues
Outdoor
$
2,448,871
$
2,543,376
(4)%
(4)%
Active
1,683,665
1,915,907
(12)%
(12)%
Work
394,472
428,903
(8)%
(8)%
Total segment revenues
$
4,527,008
$
4,888,186
(7)%
(7)%
Segment profit
Outdoor
$
203,999
$
253,089
Active
172,759
222,324
Work
25,736
15,346
Total segment profit
402,494
490,759
Corporate and other expenses
(253,757
)
(175,895
)
Interest expense, net
(83,635
)
(76,687
)
Income from continuing operations
before income taxes
$
65,102
$
238,177
(a) Refer to constant currency definition
on the following pages.
VF CORPORATION
Supplemental Financial
Information
Reportable Segment Information
– Constant Currency Basis
(Unaudited)
(In thousands)
Three Months Ended September
2024
As Reported
Adjust for Foreign
under GAAP
Currency Exchange
Constant Currency
Segment revenues
Outdoor
$
1,658,672
$
(10,924
)
$
1,647,748
Active
879,767
(576
)
879,191
Work
219,509
(44
)
219,465
Total segment revenues
$
2,757,948
$
(11,544
)
$
2,746,404
Segment profit
Outdoor
$
287,414
$
(4,332
)
$
283,082
Active
103,659
(681
)
102,978
Work
20,408
(51
)
20,357
Total segment profit
411,481
(5,064
)
406,417
Corporate and other expenses
(138,238
)
(103
)
(138,341
)
Interest expense, net
(42,688
)
—
(42,688
)
Income from continuing operations
before income taxes
$
230,555
$
(5,167
)
$
225,388
Diluted earnings per share growth from
continuing operations
145
%
(1
)%
144
%
Constant Currency Financial
Information
VF is a global company that reports
financial information in U.S. dollars in accordance with GAAP.
Foreign currency exchange rate fluctuations affect the amounts
reported by VF from translating its foreign revenues and expenses
into U.S. dollars. These rate fluctuations can have a significant
effect on reported operating results. As a supplement to our
reported operating results, we present constant currency financial
information, which is a non-GAAP financial measure that excludes
the impact of translating foreign currencies into U.S. dollars. We
use constant currency information to provide a framework to assess
how our business performed excluding the effects of changes in the
rates used to calculate foreign currency translation. Management
believes this information is useful to investors to facilitate
comparison of operating results and better identify trends in our
businesses.
To calculate foreign currency translation
on a constant currency basis, operating results for the current
year period for entities reporting in currencies other than the
U.S. dollar are translated into U.S. dollars at the average
exchange rates in effect during the comparable period of the prior
year (rather than the actual exchange rates in effect during the
current year period).
These constant currency performance
measures should be viewed in addition to, and not in lieu of or
superior to, our operating performance measures calculated in
accordance with GAAP. The constant currency information presented
may not be comparable to similarly titled measures reported by
other companies.
VF CORPORATION
Supplemental Financial
Information
Reportable Segment Information
– Constant Currency Basis
(Unaudited)
(In thousands)
Six Months Ended September
2024
As Reported
Adjust for Foreign
under GAAP
Currency Exchange
Constant Currency
Segment revenues
Outdoor
$
2,448,871
$
(4,236
)
$
2,444,635
Active
1,683,665
2,966
1,686,631
Work
394,472
839
395,311
Total segment revenues
$
4,527,008
$
(431
)
$
4,526,577
Segment profit
Outdoor
$
203,999
$
(3,544
)
$
200,455
Active
172,759
(462
)
172,297
Work
25,736
(81
)
25,655
Total segment profit
402,494
(4,087
)
398,407
Corporate and other expenses
(253,757
)
(814
)
(254,571
)
Interest expense, net
(83,635
)
—
(83,635
)
Income from continuing operations
before income taxes
$
65,102
$
(4,901
)
$
60,201
Diluted earnings per share growth from
continuing operations
110
%
(1
)%
109
%
Constant Currency Financial
Information
VF is a global company that reports
financial information in U.S. dollars in accordance with GAAP.
Foreign currency exchange rate fluctuations affect the amounts
reported by VF from translating its foreign revenues and expenses
into U.S. dollars. These rate fluctuations can have a significant
effect on reported operating results. As a supplement to our
reported operating results, we present constant currency financial
information, which is a non-GAAP financial measure that excludes
the impact of translating foreign currencies into U.S. dollars. We
use constant currency information to provide a framework to assess
how our business performed excluding the effects of changes in the
rates used to calculate foreign currency translation. Management
believes this information is useful to investors to facilitate
comparison of operating results and better identify trends in our
businesses.
To calculate foreign currency translation
on a constant currency basis, operating results for the current
year period for entities reporting in currencies other than the
U.S. dollar are translated into U.S. dollars at the average
exchange rates in effect during the comparable period of the prior
year (rather than the actual exchange rates in effect during the
current year period).
These constant currency performance
measures should be viewed in addition to, and not in lieu of or
superior to, our operating performance measures calculated in
accordance with GAAP. The constant currency information presented
may not be comparable to similarly titled measures reported by
other companies.
VF CORPORATION
Supplemental Financial
Information
Reconciliation of Select GAAP
Measures to Non-GAAP Measures - Three and Six Months Ended
September 2024
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended September
2024
As Reported
under GAAP
Reinvent (a)
Transaction and
Deal Related
Activities (b)
Adjusted
Revenues
$
2,757,948
$
—
$
—
$
2,757,948
Gross profit
1,440,557
—
—
1,440,557
Percent
52.2
%
52.2
%
Operating income
273,903
41,279
—
315,182
Percent
9.9
%
11.4
%
Diluted earnings per share from
continuing operations (c)
0.52
0.08
—
0.60
Six Months Ended September 2024
As Reported
under GAAP
Reinvent (a)
Transaction and
Deal Related
Activities (b)
Adjusted
Revenues
$
4,527,008
$
—
$
—
$
4,527,008
Gross profit
2,346,235
412
—
2,346,647
Percent
51.8
%
51.8
%
Operating income
150,883
59,128
490
210,501
Percent
3.3
%
4.6
%
Diluted earnings per share from
continuing operations (c)
0.13
0.11
—
0.24
(a) Costs related to Reinvent, VF's
transformation program, including restructuring charges and
project-related costs, were $41.3 million and $59.1 million in the
three and six months ended September 2024, respectively. These
costs related primarily to severance and employee-related benefits
and expenses related to the engagement of a consulting firm to
support VF's transformation journey. VF entered into a contract
with a consulting firm during the three months ended September
2024, with services under the contract expected to be substantially
complete by the third quarter of Fiscal 2026. In addition to
payment for services, the contract includes contingent fees tied to
increases in VF's stock price through June 2027. Expenses related
to the contract, including contingent fees, were $28.1 million and
$31.1 million in the three and six months ended September 2024,
respectively. Reinvent resulted in a net tax benefit of $10.5
million and $14.7 million in the three and six months ended
September 2024, respectively.
The Company currently estimates that it
will incur approximately $190.0 million to $210.0 million in
restructuring charges in connection with Reinvent, and that
substantially all actions will be completed by the end of Fiscal
2025. Cumulative restructuring charges incurred through Q2 of
Fiscal 2025 were approximately $134.1 million. Total fees
associated with the contract with the consulting firm could be up
to $135.0 million, with $75.0 million of the fees contingent on
increases to VF’s stock price through June 2027.
(b) Transaction and deal related
activities reflect activities associated with the review of
strategic alternatives for the Global Packs business, consisting of
the Kipling®, Eastpak® and JanSport® brands,
which totaled $0.5 million for the six months ended September 2024.
The transaction and deal related activities resulted in a net tax
benefit of $0.1 million in the six months ended September 2024.
(c) Amounts shown in the table have been
calculated using unrounded numbers. The diluted earnings per share
impacts were calculated using 390,945,000 and 390,198,000 weighted
average common shares for the three and six months ended September
2024, respectively.
Non-GAAP Financial Information
The financial information above has been
presented on a GAAP basis and on an adjusted basis, which excludes
the impact of Reinvent and transaction and deal related activities.
The adjusted presentation provides non-GAAP measures. Management
believes these measures provide investors with useful supplemental
information regarding VF's underlying business trends and the
performance of VF's ongoing operations and are useful for
period-over-period comparisons of such operations.
Management uses the above financial
measures internally in its budgeting and review process and, in
some cases, as a factor in determining compensation. While
management believes that these non-GAAP financial measures are
useful in evaluating the business, this information should be
considered as supplemental in nature and should be viewed in
addition to, and not in lieu of or superior to, VF's operating
performance measures calculated in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly titled measures presented by other companies.
VF CORPORATION
Supplemental Financial
Information
Reconciliation of Select GAAP
Measures to Non-GAAP Measures - Three and Six Months Ended
September 2023
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended September
2023
As Reported
under GAAP
Transaction and
Deal Related
Activities (a)
Tax Items (b)
Adjusted
Revenues
$
2,920,123
$
—
$
—
$
2,920,123
Gross profit
1,489,929
—
—
1,489,929
Percent
51.0
%
51.0
%
Operating income
350,539
328
—
350,867
Percent
12.0
%
12.0
%
Diluted earnings (loss) per share from
continuing operations (c)
(1.16
)
—
1.79
0.63
Six Months Ended September 2023
As Reported
under GAAP
Transaction and
Deal Related
Activities (a)
Tax Items (b)
Adjusted
Revenues
$
4,888,186
$
—
$
—
$
4,888,186
Gross profit
2,518,358
—
—
2,518,358
Percent
51.5
%
51.5
%
Operating income
320,690
1,446
—
322,136
Percent
6.6
%
6.6
%
Diluted earnings (loss) per share from
continuing operations (c)
(1.33
)
—
1.79
0.47
(a) Transaction and deal related
activities reflect activities associated with the review of
strategic alternatives for the Global Packs business, consisting of
the Kipling®, Eastpak® and JanSport® brands,
which totaled $0.3 million and $1.4 million for the three and six
months ended September 2023, respectively. The transaction and deal
related activities resulted in a net tax benefit of $0.1 million
and $0.4 million in the three and six months ended September 2023,
respectively.
(b) Tax items include the impact to tax
expense resulting from the decision by the U.S. Court of Appeals
for the First Circuit on September 8, 2023 that upheld the U.S. Tax
Court’s decision in favor of the Internal Revenue Service regarding
the timing of income inclusion associated with VF’s acquisition of
The Timberland Company in September 2011. The net impact to tax
expense was an increase of approximately $670.3 million in the
three and six months ended September 2023, excluding the reversal
of accrued interest income, as a result of this decision. Tax items
also include the impact to tax expense resulting from the decision
by the General Court on September 20, 2023 that confirmed the
decision of the European Union that Belgium’s excess profit tax
regime amounted to illegal State aid. The net impact to tax expense
was an increase of approximately $26.1 million in the three and six
months ended September 2023, as a result of this ruling.
(c) Amounts shown in the table have been
calculated using unrounded numbers. The GAAP diluted loss per share
was calculated using 388,338,000 and 388,249,000 weighted average
common shares for the three and six months ended September 2023,
respectively. The adjusted diluted earnings per share impacts were
calculated using 389,487,000 and 389,181,000 weighted average
common shares for the three and six months ended September 2023,
respectively.
Non-GAAP Financial Information
The financial information above has been
presented on a GAAP basis and on an adjusted basis, which excludes
the impact of transaction and deal related activities and certain
tax items. The adjusted presentation provides non-GAAP measures.
Management believes these measures provide investors with useful
supplemental information regarding VF's underlying business trends
and the performance of VF's ongoing operations and are useful for
period-over-period comparisons of such operations.
Management uses the above financial
measures internally in its budgeting and review process and, in
some cases, as a factor in determining compensation. While
management believes that these non-GAAP financial measures are
useful in evaluating the business, this information should be
considered as supplemental in nature and should be viewed in
addition to, and not in lieu of or superior to, VF's operating
performance measures calculated in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly titled measures presented by other companies.
VF CORPORATION
Supplemental Financial
Information
Top 4 Brand Revenue
Information
(Unaudited)
Three Months Ended September
2024
Six Months Ended September
2024
Top 4 Brand Revenue Growth
Americas
EMEA
APAC
Global
Americas
EMEA
APAC
Global
The North Face®
% change
(14)%
0%
20%
(3)%
(13)%
(2)%
23%
(3)%
% change constant currency*
(13)%
(2)%
19%
(4)%
(12)%
(4)%
24%
(3)%
Vans®
% change
(10)%
(7)%
(27)%
(11)%
(18)%
(5)%
(28)%
(16)%
% change constant currency*
(9)%
(8)%
(26)%
(11)%
(17)%
(6)%
(27)%
(16)%
Timberland®
% change
(4)%
(3)%
3%
(3)%
(2)%
(7)%
(8)%
(5)%
% change constant currency*
(3)%
(5)%
3%
(3)%
(1)%
(8)%
(7)%
(5)%
Dickies®
% change
(14)%
2%
(16)%
(11)%
(14)%
0%
(25)%
(13)%
% change constant currency*
(14)%
1%
(15)%
(11)%
(14)%
0%
(23)%
(12)%
*Refer to constant currency definition on
previous pages.
VF CORPORATION
Supplemental Financial
Information
Geographic and Channel Revenue
Information
(Unaudited)
Three Months Ended September
2024
Six Months Ended September
2024
% Change
% Change
Constant
Currency*
% Change
% Change
Constant
Currency*
Geographic
Revenue Growth
Americas
(10)%
(9)%
(11)%
(11)%
EMEA
(3)%
(5)%
(4)%
(5)%
APAC
6%
5%
0%
1%
Greater China
10%
9%
5%
6%
International
(2)%
(3)%
(4)%
(4)%
Global
(6)%
(6)%
(7)%
(7)%
Three Months Ended September
2024
Six Months Ended September
2024
% Change
% Change
Constant
Currency*
% Change
% Change
Constant
Currency*
Channel Revenue
Growth
Wholesale (a)
(4)%
(5)%
(5)%
(6)%
Direct-to-consumer
(8)%
(8)%
(11)%
(10)%
Digital
(5)%
(5)%
(7)%
(7)%
As of September
2024
2023
DTC Store
Count
Total
1,160
1,235
*Refer to constant currency definition on
previous pages.
(a) Royalty revenues are included in the
wholesale channel for all periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241028757895/en/
Investor Contact: Allegra
Perry ir@vfc.com
Media Contact: Colin Wheeler
corporate_communications@vfc.com
VF (NYSE:VFC)
過去 株価チャート
から 10 2024 まで 11 2024
VF (NYSE:VFC)
過去 株価チャート
から 11 2023 まで 11 2024
