- Full year fiscal 2021 revenue from continuing operations
decreased 12 percent (down 14 percent in constant dollars) to $9.2
billion; excluding acquisitions, adjusted revenue decreased 13
percent (down 15 percent in constant dollars);
- Full year fiscal 2021 Active segment revenue decreased 15
percent (down 17 percent in constant dollars) including a 15
percent (16 percent in constant dollars) decrease in Vans®
brand revenue and a 3 percentage point revenue growth
contribution from acquisitions; Outdoor segment revenue decreased
11 percent (down 13 percent in constant dollars) including a 9
percent (11 percent in constant dollars) decrease in The North
Face® brand revenue; Work segment revenue increased 7
percent (up 6 percent in constant dollars) including a 9 percent (7
percent in constant dollars) increase in Dickies® brand
revenue;
- Full year fiscal 2021 International revenue decreased 7
percent (down 11 percent in constant dollars) including a 1
percentage point revenue growth contribution from acquisitions;
Greater China revenue increased 24 percent (up 20 percent in
constant dollars);
- Full year fiscal 2021 Direct-to-Consumer revenue decreased 5
percent (down 7 percent in constant dollars) including a 3
percentage point revenue growth contribution from acquisitions;
Digital revenue increased 67 percent (up 64 percent in constant
dollars) including a 9 percentage point revenue growth contribution
from acquisitions;
- Full year fiscal 2021 gross margin from continuing
operations decreased 260 basis points to 52.7 percent; on an
adjusted basis, gross margin decreased 220 basis points to 53.3
percent, including a 10 basis point positive impact from
acquisitions;
- Full year fiscal 2021 operating income from continuing
operations was $608 million. Adjusted operating income from
continuing operations decreased 45 percent (down 47 percent in
constant dollars) to $742 million, including a $34 million
contribution from acquisitions;
- Full year fiscal 2021 earnings per share from continuing
operations was $0.91. Adjusted earnings per share from continuing
operations decreased 51 percent (down 54 percent in constant
dollars) to $1.31 including a $0.06 per share contribution from
acquisitions;
- Full year fiscal 2021 cash flow provided by operating
activities from continuing operations was approximately $1.2
billion; free cash flow from continuing operations was
approximately $1.0 billion; In fiscal 2021 the company returned
approximately $760 million to shareholders through
dividends;
- Full year fiscal 2022 revenue is expected to approximate
$11.8 billion, reflecting growth of approximately 28 percent,
including an approximate $600 million contribution from the
Supreme® brand; and,
- Full year fiscal 2022 adjusted earnings per share is
expected to approximate $3.05, including an approximate $0.25
contribution from the Supreme® brand.
VF Corporation (NYSE: VFC) today reported financial results for
its fourth quarter and full year ended April 3, 2021. All per share
amounts are presented on a diluted basis. This release refers to
“reported” and “constant dollar” amounts, terms that are described
under the heading “Constant Currency - Excluding the Impact of
Foreign Currency.” Unless otherwise noted, “reported” and “constant
dollar” amounts are the same. This release also refers to
“continuing” and “discontinued” operations amounts, which are
concepts described under the heading “Discontinued Operations -
Occupational Workwear Business.” 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 “Adjusted Amounts - Excluding Transaction and Deal Related
Expenses and Costs Related to Specified Strategic Business
Decisions.” Unless otherwise noted, “reported” and “adjusted”
amounts are the same.
“I could not be more pleased with how our organization navigated
fiscal 2021," said Steve Rendle, Chairman, President and Chief
Executive Officer. "Early in the year we took important actions to
protect our people and the enterprise, while maintaining
investments to drive our transformation and accelerate organic
growth. At the same time, we took bold, forward-looking actions to
spark additional growth and value creation. As a result, we are
exiting this year in a position of strength with broad based
momentum across the portfolio."
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 “constant dollar”
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.
Discontinued Operations - Occupational Workwear
Business
On January 21, 2020, VF announced its decision to explore the
divestiture of its Occupational Workwear business. The Occupational
Workwear business is comprised primarily of the following brands
and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®,
Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The
business also includes a license for certain Dickies® occupational
workwear products that have historically been sold through the
business-to-business channel.
As of March 28, 2020, the Occupational Workwear business met the
held-for-sale and discontinued operations accounting criteria,
which continued to be met as of April 3, 2021. 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. In late April
2021, VF entered into a definitive agreement to sell its
Occupational Workwear business.
Adjusted Amounts - Excluding Transaction and Deal Related
Expenses and Costs Related to Specified Strategic Business
Decisions
The adjusted amounts in this release exclude transaction and
deal related expenses associated primarily with the acquisition and
integration of the Supreme® brand. Total transaction and deal
related expenses were approximately $12 million in the fourth
quarter of fiscal 2021 and $19 million in fiscal 2021.
The adjusted amounts in this release exclude costs related to
VF's business model transformation, a transformation initiative for
our Asia-Pacific regional operations, certain cost optimization
activities and other charges indirectly related to the strategic
review of the Occupational Workwear business and costs related to
strategic business decisions in South America. Total costs were
approximately $38 million in the fourth quarter of fiscal 2021 and
$115 million in fiscal 2021. Adjusted amounts for fiscal 2021 also
exclude approximately $42 million of noncash non-operating expenses
related to the release of certain currency translation amounts
associated with the wind down activities in South America.
Combined, the above items negatively impacted earnings per share
by $0.11 during the fourth quarter of fiscal 2021 and $0.40 during
fiscal 2021. All adjusted amounts referenced herein exclude the
effects of these amounts.
Free cash flow represents cash flow from operating activities,
less capital expenditures.
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.
COVID-19 Outbreak Update
As the global impact of COVID-19 continues, VF remains first and
foremost focused on a people-first approach that prioritizes the
health and well-being of its employees, customers, trade partners
and consumers around the world. To help mitigate the spread of
COVID-19 and in response to public health advisories and
governmental actions and regulations, VF has modified its business
practices, including the temporary closing of offices and retail
stores, instituting travel bans and restrictions and implementing
health and safety measures including social distancing and
quarantines.
The majority of VF's supply chain is currently operational.
Suppliers are complying with local public health advisories and
governmental restrictions which has resulted in isolated product
delays. VF is working with its suppliers to minimize disruption.
VF's distribution centers are operational in accordance with local
government guidelines while maintaining enhanced health and safety
protocols.
In North America, approximately 15 percent of stores were closed
at the end of the third quarter. The majority of the closures were
Vans® stores, predominantly based in California. In addition, other
stores were operating with reduced capacity. Since that time, most
stores have re-opened, including all VF-owned stores in California,
with less than 5 percent of stores closed at the end of the fourth
quarter. Currently less than 5 percent of stores remain closed.
In the EMEA region, approximately 50 percent of stores were
closed at the end of the third quarter. Since that time additional
stores have been re-closed, with approximately 60 percent of stores
closed at the end of the fourth quarter. Some stores in the EMEA
region have re-opened since the end of the quarter and currently
approximately 20 percent of stores are closed.
Nearly all of VF's owned retail stores in the APAC region,
including Mainland China, were open during the quarter and remain
open.
VF is continuing to monitor the COVID-19 outbreak globally and
will comply with guidance from government entities and public
health authorities to prioritize the health and well-being of its
employees, customers, trade partners and consumers. As COVID-19
uncertainty continues, VF expects ongoing disruption to its
business operations.
Fourth Quarter Fiscal 2021 Income Statement Review
- Revenue increased 23 percent (up 19 percent in constant
dollars) to $2.6 billion. Excluding the impact of acquisitions,
revenue increased 16 percent (up 12 percent in constant dollars)
driven by VF's largest brands, e-commerce growth and an increase in
the APAC region, which experienced a significant negative impact
from COVID-19 in the prior year period. The fourth quarter of
fiscal 2021 also included an extra week when compared to the fiscal
2020 period due to VF's 53-week fiscal 2021.
- Gross margin decreased 100 basis points to 52.1 percent,
primarily driven by elevated promotional activity to clear excess
inventory and the timing of net foreign currency transaction
activity. On an adjusted basis, gross margin decreased 120 basis
points, including a 60 basis point positive impact from
acquisitions, to 52.7 percent.
- Operating income on a reported basis was $122 million.
On an adjusted basis, operating income increased 98 percent to $173
million, including a $34 million contribution from acquisitions.
Operating margin on a reported basis increased to 4.7
percent. Adjusted operating margin increased 260 basis points,
including a 100 basis point positive impact from acquisitions, to
6.7 percent.
- Earnings per share was $0.16 on a reported basis. On an
adjusted basis, earnings per share increased 169 percent (up 150
percent in constant dollars) to $0.27, including a $0.06
contribution from acquisitions.
Full Year Fiscal 2021 Income Statement Review
- Revenue decreased 12 percent (down 14 percent in
constant dollars) to $9.2 billion. On an adjusted basis, excluding
the impact of acquisitions, revenue decreased 13 percent (down 15
percent in constant dollars), driven by store closures and lower
consumer demand as a result of the COVID-19 outbreak and related
government actions and regulations. The fourth quarter of fiscal
2021 also included an extra week when compared to the fiscal 2020
period due to VF's 53-week fiscal 2021.
- Gross margin decreased 260 basis points to 52.7 percent,
primarily driven by elevated promotional activity to clear excess
inventory and the timing of net foreign currency transaction
activity, partially offset by favorable mix shift toward higher
margin businesses. On an adjusted basis, gross margin decreased 220
basis points, including a 10 basis point positive impact from
acquisitions, to 53.3 percent.
- Operating income on a reported basis was $608 million.
On an adjusted basis, operating income decreased 45 percent (down
47 percent in constant dollars) to $742 million, including a $34
million contribution from acquisitions. Operating margin on
a reported basis decreased 220 basis points to 6.6 percent.
Adjusted operating margin decreased 480 basis points, including a
20 basis point positive impact from acquisitions, to 8.0
percent.
- Earnings per share was $0.91 on a reported basis. On an
adjusted basis, earnings per share decreased 51 percent (down 54
percent in constant dollars) to $1.31, including a $0.06
contribution from acquisitions.
Balance Sheet Highlights
Inventories were down 18 percent compared with the same period
last year. In fiscal 2021, VF returned approximately $760 million
of cash to shareholders through dividends. Cash flow provided by
operating activities from continuing operations was approximately
$1.2 billion in fiscal 2021 and free cash flow from continuing
operations was approximately $1.0 billion. VF ended fiscal 2021
with approximately $1.45 billion of cash and short-term investments
in addition to more than $2.2 billion remaining under VF's
revolving credit facility. As part of the company's liquidity
preservation actions during the ongoing COVID-19 outbreak, the
company has suspended its share repurchase program and did not
repurchase any shares in fiscal 2021. VF has $2.8 billion remaining
under its current share repurchase authorization.
Full Year Fiscal 2022 Outlook
VF’s outlook for full year fiscal 2022 is on an adjusted
continuing operations basis unless otherwise noted and includes the
following:
- Revenue is expected to approximate $11.8 billion,
reflecting growth of approximately 28 percent, including an
approximate $600 million contribution from the Supreme® brand. By
segment, revenue for Outdoor is expected to increase between
23 percent and 25 percent; revenue for Active is expected to
increase between 34 percent and 36 percent; and, revenue for
Work is expected to increase between 10 percent and 12
percent.
- International revenue is expected to increase between 25
percent and 27 percent. By geographic region, in the EMEA region,
revenue is expected to increase between 29 percent and 31 percent.
In the Asia Pacific region, revenue is expected to increase between
18 percent and 20 percent. And, in the Americas (non-U.S.) region,
revenue is expected to increase between 28 percent and 30
percent.
- Direct-to-consumer revenue is expected to increase
between 38 percent and 40 percent, including Digital revenue
growth of between 29 percent and 31 percent.
- Adjusted gross margin is expected to exceed 56.0
percent, which represents an estimated increase of more than 270
basis points.
- Adjusted operating margin is expected to approximate
12.8 percent, which represents an estimated increase of
approximately 480 basis points.
- Adjusted earnings per share is expected to approximate
$3.05, including an approximate $0.25 contribution from the
Supreme® brand.
- Adjusted cash flow from operations is expected to exceed
$1.0 billion.
- Other full year assumptions include an effective tax
rate of approximately 15 percent and capital
expenditures of approximately $350 million.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.49
per share, payable on June 21, 2021, to shareholders of record on
June 10, 2021. Subject to approval by its Board of Directors, VF
intends to continue to pay its regularly scheduled dividend and is
not currently contemplating the suspension of its dividend.
Webcast Information
VF will host its fourth quarter fiscal 2021 conference call
beginning at 8:30 a.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.
Presentation
A presentation on fourth quarter fiscal 2021 results will be
available at ir.vfc.com beginning at approximately 7:30 a.m.
Eastern Time today and will be archived at the same location.
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 Vans®, The North Face®, 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.
Forward-looking Statements
Certain statements included in this release are "forward-looking
statements" within the meaning of the federal securities laws.
Forward-looking statements are made based on our expectations and
beliefs concerning future events impacting VF and therefore involve
several risks and uncertainties. You can identify these statements
by the fact that they use words such as “will,” “anticipate,”
“estimate,” “expect,” “should,” and “may” and other words and terms
of similar meaning or use of future dates, however, the absence of
these words or similar expressions does not mean that a statement
is not forward-looking. All statements regarding VF’s plans,
objectives, projections and expectations relating to VF’s
operations or financial performance, and assumptions related
thereto are forward-looking statements. We caution that
forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied in
the forward-looking statements. VF undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. Potential risks and uncertainties that could
cause the actual results of operations or financial condition of VF
to differ materially from those expressed or implied by
forward-looking statements include, but are not limited to: risks
arising from the widespread outbreak of an illness or any other
communicable disease, or any other public health crisis, including
the coronavirus (COVID-19) global pandemic; the level of consumer
demand for apparel, footwear and accessories; disruption to VF’s
distribution system; the financial strength of VF’s customers;
fluctuations in the price, availability and quality of raw
materials and contracted 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; intense competition from online retailers and
other direct-to-consumer business risks; manufacturing and product
innovation; increasing pressure on margins; VF’s ability to
implement its business strategy; VF’s ability to grow its
international, direct-to-consumer and digital businesses; VF's
ability to transform its model to be more consumer-minded,
retail-centric and hyper-digital; retail industry changes and
challenges; VF's ability to create and maintain an agile and
efficient operating model and organizational structure; VF’s and
its vendors’ ability to maintain the strength and security of
information technology systems; the risk that VF’s facilities and
systems and those of our third-party service providers may be
vulnerable to and unable to anticipate or detect data security
breaches and data or financial loss; VF’s ability to properly
collect, use, manage and secure business, consumer and employee
data and comply with privacy and security regulations; foreign
currency fluctuations; stability of VF’s and 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; continuity of members of VF’s
management; VF's ability to recruit, develop or retain qualified
employees; 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 and integrate acquisitions, including the recently
acquired Supreme® brand; business resiliency in response to natural
or man-made economic, political or environmental disruptions;
changes in tax laws and liabilities; legal, regulatory, political
and economic risks and changes to laws and regulations; adverse or
unexpected weather conditions; VF's indebtedness and its ability to
obtain financing on favorable terms, if needed, could prevent VF
from fulfilling its financial obligations; climate change and
increased focus on sustainability issues; and risks associated with
the spin-off of our Jeanswear business completed on May 22, 2019,
including the risk that VF will not realize all of the expected
benefits of the spin-off; the risk that the spin-off will not be
tax-free for U.S. federal income tax purposes; and the risk that
there will be a loss of synergies from separating the businesses
that could negatively impact the balance sheet, profit margins or
earnings of VF. 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
March
Twelve Months Ended
March
2021
2020
2021
2020
Net revenues
$
2,582,672
$
2,102,421
$
9,238,830
$
10,488,556
Costs and operating expenses
Cost of goods sold
1,236,399
986,266
4,370,780
4,690,520
Selling, general and administrative
expenses
1,211,250
1,049,693
4,240,058
4,547,008
Impairment of goodwill and intangible
assets
12,530
323,223
20,361
323,223
Total costs and operating expenses
2,460,179
2,359,182
8,631,199
9,560,751
Operating income (loss)
122,493
(256,761
)
607,631
927,805
Interest, net
(35,844
)
(22,869
)
(126,500
)
(72,175
)
Loss on debt extinguishment
—
(59,772
)
—
(59,772
)
Other income (expense), net
2,400
(50,289
)
(24,659
)
(68,650
)
Income (loss) from continuing
operations before income taxes
89,049
(389,691
)
456,472
727,208
Income tax expense
27,306
93,395
101,566
98,062
Income (loss) from continuing
operations
61,743
(483,086
)
354,906
629,146
Income (loss) from discontinued
operations, net of tax
27,777
(690
)
52,963
50,303
Net income (loss)
$
89,520
$
(483,776
)
$
407,869
$
679,449
Earnings (loss) per common share -
basic (a)
Continuing operations
$
0.16
$
(1.23
)
$
0.91
$
1.59
Discontinued operations
0.07
—
0.14
0.13
Total earnings (loss) per common share
- basic
$
0.23
$
(1.24
)
$
1.05
$
1.72
Earnings (loss) per common share -
diluted (a)
Continuing operations
$
0.16
$
(1.22
)
$
0.91
$
1.57
Discontinued operations
0.07
—
0.14
0.13
Total earnings (loss) per common share
- diluted
$
0.23
$
(1.22
)
$
1.04
$
1.70
Weighted average shares
outstanding
Basic
390,747
391,227
389,655
395,411
Diluted
393,575
395,248
392,121
399,936
Cash dividends per common share
$
0.49
$
0.48
$
1.94
$
1.90
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 periods ended March 2021 relate to the 14-week and
53-week fiscal periods ended April 3, 2021 and all references to
periods ended March 2020 relate to the 13-week and 52-week fiscal
periods ended March 28, 2020.
(a) Amounts have been calculated using
unrounded numbers.
VF CORPORATION
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands)
March
March
2021
2020
ASSETS
Current assets
Cash and equivalents
$
815,750
$
1,369,028
Accounts receivable, net
1,298,020
1,308,051
Inventories
1,061,839
1,293,912
Short-term investments
598,806
—
Other current assets
423,877
444,886
Current assets of discontinued
operations
587,578
611,139
Total current assets
4,785,870
5,027,016
Property, plant and equipment,
net
975,876
954,406
Goodwill and intangible assets,
net
5,454,972
3,010,564
Operating lease right-of-use
assets
1,474,434
1,273,514
Other assets
1,062,877
867,751
Total assets
$
13,754,029
$
11,133,251
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Short-term borrowings
$
11,061
$
1,228,812
Current portion of long-term debt
1,023
1,018
Accounts payable
463,208
407,021
Accrued liabilities
1,609,928
1,260,252
Current liabilities of discontinued
operations
125,257
126,781
Total current liabilities
2,210,477
3,023,884
Long-term debt
5,709,149
2,608,269
Operating lease liabilities
1,236,461
1,020,651
Other liabilities
1,541,778
1,123,113
Total liabilities
10,697,865
7,775,917
Stockholders' equity
3,056,164
3,357,334
Total liabilities and stockholders'
equity
$
13,754,029
$
11,133,251
VF CORPORATION
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(In thousands)
Twelve Months Ended
March
2021
2020
Operating activities
Net income
$
407,869
$
679,449
Income from discontinued operations, net
of tax
52,963
50,303
Income from continuing operations, net of
tax
354,906
629,146
Impairment of goodwill and intangible
assets
20,361
323,223
Depreciation and amortization
269,081
267,619
Reduction in the carrying amount of
right-of-use assets
427,594
392,707
Other adjustments
161,312
(812,249
)
Cash provided by operating activities -
continuing operations
1,233,254
800,446
Cash provided by operating activities -
discontinued operations
79,971
74,081
Cash provided by operating activities
1,313,225
874,527
Investing activities
Business acquisitions, net of cash
received
(2,009,151
)
—
Purchases of short-term investments
(800,000
)
—
Proceeds from maturities of short-term
investments
200,000
—
Capital expenditures
(198,658
)
(288,189
)
Software purchases
(75,542
)
(45,647
)
Other, net
(8,634
)
48,529
Cash used by investing activities -
continuing operations
(2,891,985
)
(285,307
)
Cash used by investing activities -
discontinued operations
(3,633
)
(16,740
)
Cash used by investing activities
(2,895,618
)
(302,047
)
Financing activities
Net increase from short-term borrowings
and long-term debt
1,755,224
996,864
Share repurchases
—
(1,000,007
)
Cash dividends paid
(756,784
)
(748,663
)
Cash received from Kontoor Brands, net of
cash transferred of $126.8 million
—
906,148
Proceeds from issuance of Common Stock,
net of payments for tax withholdings
54,438
155,390
Cash provided by financing activities
1,052,878
309,732
Effect of foreign currency rate changes
on cash, cash equivalents and restricted cash
(30,603
)
(27,476
)
Net change in cash, cash equivalents
and restricted cash
(560,118
)
854,736
Cash, cash equivalents and restricted
cash – beginning of year
1,411,323
556,587
Cash, cash equivalents and restricted
cash – end of period
$
851,205
$
1,411,323
VF CORPORATION
Supplemental Financial
Information
Reportable Segment
Information
(Unaudited)
(In thousands)
Three Months Ended
March
% Change
% Change Constant Currency
(a)
% Change Organic (b)
% Change Constant Currency and
Organic (a) (b)
2021
2020
Segment revenues
Outdoor
$
1,060,923
$
848,291
25%
20%
25%
20%
Active
1,262,217
1,034,205
22%
19%
8%
5%
Work
259,517
211,593
23%
20%
23%
20%
Other (c)
15
8,332
*
*
*
*
Total segment revenues
$
2,582,672
$
2,102,421
23%
19%
16%
12%
Segment profit (loss)
Outdoor
$
58,681
$
(9,018
)
Active
180,835
154,581
Work
13,469
(1,746
)
Other (c)
3,912
(4,450
)
Total segment profit
256,897
139,367
Impairment of goodwill and
indefinite-lived intangible assets
(12,400
)
(323,223
)
Corporate and other expenses
(119,604
)
(123,194
)
Interest, net
(35,844
)
(22,869
)
Loss on debt extinguishment
—
(59,772
)
Income (loss) from continuing
operations before income taxes
$
89,049
$
(389,691
)
(a) Refer to constant currency definition
on the following pages.
(b) Excludes acquisition representing the
operating results of Supreme for the three months ended March 2021.
Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months
Ended March 2021" page for additional information.
(c) Other is included for purposes of
reconciliation of revenues and profit, but it is not considered a
reportable segment. Includes results primarily related to the sale
of non-VF products.
* Calculation not meaningful
VF CORPORATION
Supplemental Financial
Information
Reportable Segment
Information
(Unaudited)
(In thousands)
Twelve Months Ended
March
% Change
% Change Constant Currency
(a)
% Change Adjusted (b)
% Change Constant Currency and
Adjusted (a) (b)
% Change Adjusted Organic (b)
(c)
% Change Constant Currency and
Adjusted Organic (a) (b) (c)
2021
2020
Segment revenues
Outdoor
$
4,127,601
$
4,643,956
(11)%
(13)%
(11)%
(13)%
(11)%
(13)%
Active
4,160,856
4,919,427
(15)%
(17)%
(15)%
(17)%
(18)%
(20)%
Work
945,680
886,419
7%
6%
7%
6%
7%
6%
Other (d)
4,693
38,754
*
*
*
*
*
*
Total segment revenues
$
9,238,830
$
10,488,556
(12)%
(14)%
(12)%
(13)%
(13)%
(15)%
Segment profit (loss)
Outdoor
$
342,212
$
516,089
Active
648,467
1,136,821
Work
27,141
50,383
Other (d)
(5,410
)
(6,485
)
Total segment profit
1,012,410
1,696,808
Impairment of goodwill and
indefinite-lived intangible assets (e)
(12,400
)
(323,223
)
Corporate and other expenses
(417,038
)
(514,430
)
Interest, net
(126,500
)
(72,175
)
Loss on debt extinguishment
—
(59,772
)
Income from continuing operations
before income taxes
$
456,472
$
727,208
(a) Refer to constant currency definition
on the following pages.
(b) Excludes the operating results of
jeanswear wind down activities in South America after the
separation of Kontoor Brands for the twelve months ended March
2020. Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months
Ended March 2020" page for additional information.
(c) Excludes acquisition representing the
operating results of Supreme for the three months ended March 2021.
Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months
Ended March 2021" page for additional information.
(d) Other is included for purposes of
reconciliation of revenues and profit, but it is not considered a
reportable segment. Includes results primarily related to the sale
of non-VF products.
(e) Excludes $8.0 million of impairment
charges related to definite-lived intangible assets, which are
primarily recorded in the Work segment.
* Calculation not meaningful
VF CORPORATION
Supplemental Financial
Information
Reportable Segment Information
– Constant Currency Basis
(Unaudited)
(In thousands)
Three Months Ended March
2021
As Reported
Adjust for Foreign
under GAAP
Currency Exchange
Constant Currency
Segment revenues
Outdoor
$
1,060,923
$
(46,364
)
$
1,014,559
Active
1,262,217
(33,837
)
1,228,380
Work
259,517
(5,534
)
253,983
Other
15
(4
)
11
Total segment revenues
$
2,582,672
$
(85,739
)
$
2,496,933
Segment profit (loss)
Outdoor
$
58,681
$
(4,849
)
$
53,832
Active
180,835
(4,437
)
176,398
Work
13,469
(747
)
12,722
Other
3,912
1,143
5,055
Total segment profit
256,897
(8,890
)
248,007
Impairment of indefinite-lived
intangible assets
(12,400
)
—
(12,400
)
Corporate and other expenses
(119,604
)
470
(119,134
)
Interest, net
(35,844
)
—
(35,844
)
Income from continuing operations
before income taxes
$
89,049
$
(8,420
)
$
80,629
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)
Twelve Months Ended March
2021
As Reported
Adjust for Foreign
under GAAP
Currency Exchange
Constant Currency
Segment revenues
Outdoor
$
4,127,601
$
(101,172
)
$
4,026,429
Active
4,160,856
(61,734
)
4,099,122
Work
945,680
(8,701
)
936,979
Other
4,693
692
5,385
Total segment revenues
$
9,238,830
$
(170,915
)
$
9,067,915
Segment profit (loss)
Outdoor
$
342,212
$
(17,895
)
$
324,317
Active
648,467
(11,149
)
637,318
Work
27,141
(798
)
26,343
Other
(5,410
)
(1,914
)
(7,324
)
Total segment profit
1,012,410
(31,756
)
980,654
Impairment of indefinite-lived
intangible assets
(12,400
)
—
(12,400
)
Corporate and other expenses
(417,038
)
553
(416,485
)
Interest, net
(126,500
)
—
(126,500
)
Income from continuing operations
before income taxes
$
456,472
$
(31,203
)
$
425,269
Diluted earnings per share
growth
(42
)
%
(5
)
%
(47
)
%
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 Twelve Months Ended March
2021
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended March 2021
As Reported under GAAP
Transaction and Deal Related
Costs (a)
Specified Strategic Business
Decisions (b)
Adjusted
Contribution from Acquisition
(c)
Adjusted Organic
Revenues
$
2,582,672
$
—
$
—
$
2,582,672
$
(141,978
)
$
2,440,694
Gross profit
1,346,273
3,419
12,542
1,362,234
(90,125
)
1,272,109
Percent
52.1
%
52.7
%
52.1
%
Operating income
122,493
11,845
38,304
172,642
(34,465
)
138,177
Percent
4.7
%
6.7
%
5.7
%
Diluted earnings per share from
continuing operations (d)
0.16
0.02
0.09
0.27
(0.06
)
0.21
Twelve Months Ended March 2021
As Reported under GAAP
Transaction and Deal Related
Costs (a)
Specified Strategic Business
Decisions (b)
Adjusted
Contribution from Acquisition
(c)
Adjusted Organic
Revenues
$
9,238,830
$
—
$
—
$
9,238,830
$
(141,978
)
$
9,096,852
Gross profit
4,868,050
3,829
55,141
4,927,020
(90,125
)
4,836,895
Percent
52.7
%
53.3
%
53.2
%
Operating income
607,631
18,977
115,167
741,775
(34,465
)
707,310
Percent
6.6
%
8.0
%
7.8
%
Diluted earnings per share from
continuing operations (d)
0.91
0.04
0.36
1.31
(0.06
)
1.24
(a) Transaction and deal related costs
include expenses associated with the acquisition and integration of
Supreme Holdings, Inc. ("Supreme") of $11.8 million and $18.4
million for the three and twelve months ended March 2021,
respectively. Transaction and deal related costs also include
expenses associated with the anticipated sale of the Occupational
Workwear business of $0.5 million, that did not meet the criteria
for discontinued operations, for the twelve months ended March
2021. The transaction and deal related costs resulted in a net tax
benefit of $3.0 million and $4.7 million in the three and twelve
months ended March 2021, respectively.
(b) Specified strategic business decisions
for the three and twelve months ended March 2021 include costs
related to VF's business model transformation of $21.6 million in
the three and twelve months ended March 2021, related primarily to
asset impairments, restructuring and other costs. Specified
strategic business decisions also include costs related to a
transformation initiative for our Asia-Pacific regional operations
of $3.7 million and $24.0 million in the three and twelve months
ended March 2021, respectively. Specified strategic business
decisions also include cost optimization activities and other
charges indirectly related to the strategic review of the
Occupational Workwear business, which totaled $13.0 million and
$65.3 million during the three and twelve months ended March 2021,
respectively. The costs also include wind down activities in South
America after the separation of Kontoor Brands, and costs related
to specified strategic business decisions to cease operations in
Argentina and planned business model changes in certain other
countries in South America, which totaled $4.0 million for the
twelve months ended March 2021. The twelve months ended March 2021
also include a $42.4 million noncash charge recorded in the 'Other
income (expense), net' line related to the release of certain
currency translation amounts associated with the wind down
activities in South America. The specified strategic business
decisions resulted in a net tax benefit of $2.8 million and $14.5
million in the three and twelve months ended March 2021,
respectively.
(c) The contribution from acquisition
represents the operating results of Supreme for the three months
ended March 2021. The results exclude transaction and deal related
costs.
(d) Amounts shown in the table have been
calculated using unrounded numbers. The diluted earnings per share
impacts were calculated using 393,575,000 and 392,121,000 weighted
average common shares for the three and twelve months ended March
2021, respectively.
Non-GAAP Financial Information
The financial information above has been
presented on a GAAP basis, on an adjusted basis, which excludes the
impact of transaction and deal related costs and activity related
to specified strategic business decisions, and on an adjusted
organic basis, which excludes the operating results of Supreme (for
the three months ended March 2021). Contribution from acquisition
also excludes transaction and deal related costs. These adjusted
presentations are 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 Twelve Months Ended March
2020
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended March 2020
As Reported under GAAP
Transaction and Deal Related
Costs (a)
Relocation and Specified
Strategic Business Decisions (b)
Goodwill Impairment Charge
(c)
Pension Settlement Charge,
Impact of Debt Extinguishment and Impact of Tax Acts (d)
Adjusted
Revenues
$
2,102,421
$
—
$
—
$
—
$
—
$
2,102,421
Gross profit
1,116,155
—
17,375
—
—
1,133,530
Percent
53.1
%
53.9
%
Operating income (loss)
(256,761
)
86
20,608
323,223
—
87,156
Percent
(12.2
)
%
4.1
%
Diluted earnings (loss) per share from
continuing operations (e)
(1.22
)
—
0.17
0.82
0.33
0.10
Twelve Months Ended March 2020
As Reported under GAAP
Transaction and Deal Related
Costs (a)
Relocation and Specified
Strategic Business Decisions (b)
Goodwill Impairment Charge
(c)
Pension Settlement Charge,
Impact of Debt Extinguishment and Impact of Tax Acts (d)
Adjusted
Revenues
$
10,488,556
$
—
$
(14,252
)
$
—
$
—
$
10,474,304
Gross profit
5,798,036
(630
)
15,593
—
—
5,812,999
Percent
55.3
%
55.5
%
Operating income
927,805
22,403
71,701
323,223
—
1,345,132
Percent
8.8
%
12.8
%
Diluted earnings per share from
continuing operations (e)
1.57
0.07
0.27
0.81
(0.04
)
2.68
(a) Transaction and deal related costs
include acquisition, integration and other costs related to the
acquisitions of the Icebreaker® and Altra® brands, which totaled
$12.8 million for the twelve months ended March 2020. The costs
also include separation and related expenses associated with the
spin-off of the Jeans business of $9.5 million, that did not meet
the criteria for discontinued operations, for the twelve months
ended March 2020. The transaction and deal related costs also
include separation and related expenses associated with the
anticipated sale of the Occupational Workwear business of $0.1
million, that did not meet the criteria for discontinued
operations, for the three and twelve months ended March 2020. The
transaction and deal related costs resulted in a net tax benefit of
$5.8 million in the twelve months ended March 2020. Additionally,
the twelve months ended March 2020 include an adjustment to tax
expense of $10.2 million associated with the loss on sale for the
divestiture of the Reef® brand.
(b) Relocation and specified strategic
business decisions include costs associated with the relocation of
VF’s global headquarters and certain brands to Denver, Colorado,
which totaled $41.5 million for the twelve months ended March 2020.
This activity includes a gain of approximately $11 million on the
sale of certain office real estate and related assets in connection
with the relocation, which was recorded in the three months ended
June 2019. The activity also includes the operating results of
jeanswear wind down activities in South America post the separation
of Kontoor Brands and costs related to specified strategic business
decisions to cease operations in Argentina and planned business
model changes in certain other countries in South America, which
totaled $3.3 million and $12.9 million for the three and twelve
months ended March 2020, respectively. The costs also include $17.3
million during the three and twelve months ended March 2020 for
cost optimization activity indirectly related to the strategic
review of the Occupational Workwear business. The three and twelve
months ended March 2020 also included a $48.3 million noncash
charge recorded in the 'Other income (expense), net' line related
to the release of certain currency translation amounts associated
with the wind down activities in South America. The relocation and
specified strategic business decisions costs resulted in a net tax
expense of $0.2 million and a net tax benefit of $11.1 million for
the three and twelve months ended March 2020, respectively.
(c) VF recognized a noncash goodwill
impairment charge related to the Timberland reporting unit of
$323.2 million during the three and twelve months ended March 2020.
The impairment charge resulted in a net tax benefit of $0.3 million
for the three and twelve months ended March 2020.
(d) A pension settlement charge of $22.9
million was recorded in the 'Other income (expense), net' line item
as a result of actions taken to reduce risk, volatility and the
liability associated with VF's U.S. pension plan. The pension
settlement charge resulted in a net tax benefit of $5.8 million in
the twelve months ended March 2020 and negatively impacted diluted
earnings per share by $0.04 in the twelve months ended March
2020.
VF recognized a total impact of debt
extinguishment of $68.2 million, $59.8 million of which was
recorded in the 'Loss on debt extinguishment' line item and $8.4
million was recorded in the 'Interest, net' line item in the three
and twelve months ended March 2020. The $68.2 million was a result
of the premiums, amortization and fees associated with cash tender
offers for VF's outstanding 2033 and 2037 notes and the full
redemption of VF's outstanding 2021 notes. The total impact of debt
extinguishment resulted in a net tax benefit of $11.2 million in
the three and twelve months ended March 2020 and negatively
impacted diluted earnings per share by $0.14 in the three and
twelve months ended March 2020.
On May 19, 2019, Switzerland voted to
approve the Federal Act on Tax Reform and AHV Financing ("Swiss Tax
Act"). The Swiss Tax Act was enacted during the twelve months ended
March 2020, the transitional impact of which resulted in a net tax
expense of $70.8 million and a net tax benefit of $93.6 million for
the three and twelve months ended March 2020, respectively. The
Swiss Tax Act negatively impacted diluted earnings per share by
$0.18 in the three months ended March 2020 and positively impacted
diluted earnings per share by $0.23 in the twelve months ended
March 2020.
On December 22, 2017, the U.S. government
enacted comprehensive tax legislation commonly referred to as the
Tax Cuts and Jobs Act ("U.S. Tax Act"). Transitional impacts were
recorded during the three and twelve months ended March 2020,
resulting in a net tax expense of $3.3 million. The U.S. Tax Act
negatively impacted diluted earnings per share by $0.01 in the
three and twelve months ended March 2020.
(e) Amounts shown in the table have been
calculated using unrounded numbers. The diluted earnings per share
impacts were calculated using 395,248,000 and 399,936,000 weighted
average common shares for the three and twelve months ended March
2020, 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 costs, activity related
to relocation and specified strategic business decisions, the
goodwill impairment charge, the pension settlement charges, the
impact of debt extinguishment and the transitional impacts of Tax
Acts. 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 March
2021
Twelve Months Ended March
2021
Top 4 Brand Revenue Growth
Americas
EMEA
APAC
Global
Americas
EMEA
APAC
Global
Vans®
% change
14%
3%
32%
13%
(21)%
(11)%
11%
(15)%
% change constant currency*
13%
(4)%
24%
10%
(21)%
(15)%
8%
(16)%
The North Face®
% change
13%
29%
104%
28%
(20)%
5%
22%
(9)%
% change constant currency*
12%
19%
93%
23%
(20)%
0%
17%
(11)%
Timberland®
% change
21%
11%
65%
25%
(18)%
(18)%
4%
(14)%
% change constant currency*
21%
2%
57%
19%
(18)%
(22)%
0%
(17)%
Dickies®
% change
9%
5%
120%
22%
4%
(2)%
36%
9%
% change constant currency*
9%
(3)%
107%
19%
4%
(6)%
31%
7%
*Refer to constant currency definition on
previous pages.
VF CORPORATION
Supplemental Financial
Information
Geographic and Channel Revenue
Information
(Unaudited)
Three Months Ended March
2021
% Change
% Change Constant
Currency*
% Change Organic(a)
% Change Constant Currency and
Organic*(a)
Geographic
Revenue Growth
U.S.
25%
25%
16%
16%
EMEA
11%
2%
8%
(1)%
APAC
71%
62%
58%
49%
Greater China
81%
70%
81%
70%
Americas (non-U.S.)
(15)%
(19)%
(15)%
(19)%
International
21%
13%
16%
8%
Global
23%
19%
16%
12%
Twelve Months Ended March
2021
% Change
% Change Constant
Currency*
% Change Adjusted(b)
% Change Constant Currency and
Adjusted*(b)
% Change Adjusted
Organic(a)(b)
% Change Constant Currency and
Adjusted Organic*(a)(b)
Geographic
Revenue Growth
U.S.
(16)%
(16)%
(16)%
(16)%
(18)%
(18)%
EMEA
(10)%
(15)%
(10)%
(15)%
(11)%
(16)%
APAC
13%
10%
13%
10%
10%
7%
Greater China
24%
20%
24%
20%
24%
20%
Americas (non-U.S.)
(34)%
(34)%
(33)%
(32)%
(33)%
(32)%
International
(7)%
(11)%
(7)%
(11)%
(8)%
(12)%
Global
(12)%
(14)%
(12)%
(13)%
(13)%
(15)%
Three Months Ended March
2021
% Change
% Change Constant
Currency*
% Change Organic(a)
% Change Constant Currency and
Organic*(a)
Channel Revenue
Growth
Wholesale (c)
14%
10%
14%
10%
Direct-to-consumer
36%
32%
19%
15%
Digital
106%
99%
65%
58%
Twelve Months Ended March
2021
% Change
% Change Constant
Currency*
% Change Adjusted(b)
% Change Constant Currency and
Adjusted*(b)
% Change Adjusted
Organic(a)(b)
% Change Constant Currency and
Adjusted Organic*(a)(b)
Channel Revenue
Growth
Wholesale (c)
(17)%
(18)%
(16)%
(18)%
(16)%
(18)%
Direct-to-consumer
(5)%
(7)%
(5)%
(7)%
(8)%
(10)%
Digital
67%
64%
67%
64%
58%
55%
As of March
2021
2020
DTC Store
Count
Total
1,374
1,379
*Refer to constant currency definition on
previous pages.
(a) Excludes acquisition representing the
operating results of Supreme for the three months ended March 2021.
Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP Measures to Non-GAAP Measures - Three and Twelve Months
Ended March 2021" page for additional information.
(b) Excludes the operating results of
jeanswear wind down activities in South America post the separation
of Kontoor Brands for the twelve months ended March 2020. Refer to
Non-GAAP financial information on "Reconciliation of Select GAAP
Measures to Non-GAAP Measures - Three and Twelve Months Ended March
2020" page for additional information.
(c) Royalty revenues are included in the
wholesale channel for all periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210521005058/en/
VF Corporation Joe Alkire,
720-778-4051 Vice President, Corporate Development, Investor
Relations and Treasury or Craig Hodges, 720-778-4116 Vice
President, Corporate Affairs
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