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What changed in V F CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of V F CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+533 added−516 removedSource: 10-K (2024-05-23) vs 10-K (2022-05-26)

Top changes in V F CORP's 2024 10-K

533 paragraphs added · 516 removed · 358 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

99 edited+13 added−23 removed29 unchanged
Biggest changeThese hubs are responsible for managing the procurement of product, supplier oversight, product quality assurance, sustainability within the supply chain, responsible sourcing and transportation and shipping functions. In addition, our hubs leverage proprietary knowledge and technology to enable certain contractors to more effectively control costs and improve labor efficiency.
Biggest changeThese contractors are engaged through VF's sourcing hub in Singapore (with satellite offices across Asia), and to a lesser extent, VF's sourcing hubs in Panama and Switzerland. These hubs are responsible for managing the procurement of product, supplier oversight, product quality assurance, sustainability within the supply chain, responsible sourcing and transportation and shipping functions.
Most of these partnership stores are located in Europe and in Asia, and are concentrated amongst the Timberland ® , The North Face ® , Vans ® , Dickies ® , Kipling ® and Napapijri ® brands.
Most of these partnership stores are located in Europe and in Asia, and are concentrated amongst The North Face ® , Timberland ® , Vans ® , Kipling ® , Dickies ® and Napapijri ® brands.
Working capital typically increases early in the calendar year as inventory builds to support peak shipping periods and then moderates later in the year as those inventories are sold and accounts receivable are collected.
Working capital typically increases early in the calendar year as inventory builds to support peak shipping periods and then moderates later in the calendar year as those inventories are sold and accounts receivable are collected.
These outlet stores carry merchandise that is specifically designed for sale in our outlet stores and serve an important role in our overall inventory management and profitability by allowing VF to sell a significant portion of excess, discontinued and out-of-season products at better prices than otherwise available from outside parties, while maintaining the integrity of our brands.
These outlet stores carry merchandise that is specifically designed for sale in our outlet stores and serve an important role in our overall inventory management and profitability by also allowing VF to sell a significant portion of excess, discontinued and out-of-season products at better prices than otherwise available from outside parties, while maintaining the integrity of our brands.
We believe there is a strategic opportunity for growth in our Work segment in both existing and future markets, and in all channels and geographies. We expect growth will be driven by an increased presence in the retail workwear market, additional work-inspired lifestyle product offerings and by continuing to innovate products that address workers’ desires for increased comfort and performance.
We believe there is a strategic opportunity for growth in our Work segment in both existing and future markets, and in all channels and geographies. We expect growth will be driven by an increased presence in the retail workwear market, work-inspired lifestyle product offerings and by continuing to innovate products that address workers’ desires for increased comfort and performance.
We define wellbeing as not only physical health, but also emotional, social, financial and career wellbeing. We offer a comprehensive and competitive benefits program to our full-time associates that is designed to provide choices and flexibility to meet their needs now and in the future.
We define wellbeing as not only physical health, but also mental, emotional, social, financial and career wellbeing. We offer a comprehensive and competitive benefits program to our full-time associates that is designed to provide choices and flexibility to meet their needs now and in the future.
These functions are performed by employees located in our global supply chain organization and our branded business units across the globe. VF’s centralized global supply chain organization is responsible for procuring and delivering products to support our brands and businesses. VF is highly skilled in managing the complexities associated with our global supply chain .
These functions are performed by employees located in our global supply chain organization and our branded business units across the globe. VF’s centralized global supply chain organization is responsible for procuring and delivering products to support our brands and businesses. VF is skilled in managing the complexities associated with our global supply chain.
VF's science-based targets include the following: • Reduce absolute Scope 1 and 2 GHG emissions 55% by 2030 from a 2017 baseline; and • Reduce absolute Scope 3 GHG emissions from purchased goods and services and upstream transportation 30% by 2030 from a 2017 baseline.
VF's science-based targets include the following: • Reduce absolute Scope 1 and 2 GHG emissions 55% by 2030 from a Fiscal 2017 baseline; and • Reduce absolute Scope 3 GHG emissions from purchased goods and services and upstream transportation 30% by 2030 from a Fiscal 2017 baseline.
The Timberland ® brand offers outdoor, adventure-inspired lifestyle footwear, apparel and accessories that combine performance benefits and versatile styling for men, women and children. We sell Timberland ® products globally through chain, department and specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 200 VF-operated stores, on websites with strategic digital partners and online at www.timberland.com.
The Timberland ® brand offers outdoor, adventure-inspired lifestyle footwear, apparel and accessories that combine performance benefits and versatile styling for men, women and children. We sell Timberland ® products globally through chain, department and specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 155 VF-operated stores, on websites with strategic digital partners and online at www.timberland.com.
Dickies ® products are available globally through mass merchants, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 20 VF-operated stores, on websites with strategic digital partners and online at www.dickies.com. The Timberland PRO ® brand offers work and work-inspired products that provide comfort, durability and performance.
Dickies ® products are available globally through mass merchants, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 15 VF-operated stores, on websites with strategic digital partners and online at www.dickies.com. The Timberland PRO ® brand offers work and work-inspired products that provide comfort, durability and performance.
VF Corporation Fiscal 2022 Form 10-K 1 Table of Contents The following table summarizes VF’s brands by reportable segment: REPORTABLE SEGMENT BRANDS PRIMARY PRODUCTS Outdoor The North Face ® High performance outdoor apparel, footwear, equipment, accessories Timberland ® Outdoor-adventure inspired lifestyle footwear, apparel, accessories Smartwool ® Performance merino wool and other natural fibers-based apparel and accessories Icebreaker ® High performance apparel and accessories based on natural fibers Altra ® Performance-based footwear Active Vans ® Youth culture/action sports-inspired footwear, apparel, accessories Supreme ® Streetwear apparel, footwear, accessories Napapijri ® Premium outdoor-inspired apparel, footwear, accessories Kipling ® Handbags, luggage, backpacks, totes, accessories Eastpak ® Backpacks, luggage JanSport ® Backpacks, luggage Work Dickies ® Work and work-inspired lifestyle apparel and footwear Timberland PRO ® Protective work footwear, work and work-inspired lifestyle apparel Financial information regarding VF’s reportable segments is included in Note 20 to the consolidated financial statements.
VF Corporation Fiscal 2024 Form 10-K 1 Table of Contents The following table summarizes VF’s brands by reportable segment: REPORTABLE SEGMENT BRANDS PRIMARY PRODUCTS Outdoor The North Face ® High performance outdoor apparel, footwear, equipment, accessories Timberland ® Outdoor, adventure-inspired lifestyle footwear, apparel, accessories Smartwool ® Performance merino wool and other natural fibers-based apparel and accessories Altra ® Performance-based footwear Icebreaker ® High performance apparel and accessories based on natural fibers Active Vans ® Youth culture/action sports-inspired footwear, apparel, accessories Supreme ® Streetwear apparel, footwear, accessories Kipling ® Handbags, luggage, backpacks, totes, accessories Napapijri ® Premium outdoor-inspired apparel, footwear, accessories Eastpak ® Backpacks, luggage JanSport ® Backpacks, luggage Work Dickies ® Work and work-inspired lifestyle apparel and footwear Timberland PRO ® Protective work footwear, work and work-inspired lifestyle apparel Financial information regarding VF’s reportable segments is included in Note 21 to the consolidated financial statements.
We believe that having an engaged, diverse and committed workforce not only enhances our business performance but also our culture.
We believe that having an engaged, diverse, inclusive and committed workforce enhances not only our business performance but also our culture.
Licensing ar rangements relate to a broad range of VF brands and are for fixed terms of generally 3 to 5 years, with conditional renewal options, outside of certain licensing arrangements for the Dickies ® brand that have longer terms.
Licensing arrangements relate to a broad range of VF brands and are for fixed terms of generally 3 to 5 years, with conditional renewal options, outside of certain licensing arrangements for the Dickies ® brand that have longer terms.
These Committees provide recommendations to the Board and are part of the broader framework that guides how VF attracts, develops, and retains a workforce that aligns with VF’s values and supports its business strategies and performance objectives.
These Committees provide recommendations to the Board and are part of the broader framework that guides how VF acquires, develops, and retains a workforce that aligns with VF’s values and supports its business strategies and performance objectives.
In total, we operate 25 owned or leased distribution centers primarily in the U.S., but also in the Czech Republic, United Kingdom, the Netherlands, China, Canada, Mexico, Belgium, Israel, Japan and France. SEASONALITY VF’s quarterly operating results vary due to the seasonality of our individual brands, and are historically stronger in the second half of the calendar year.
In total, we operate 21 owned or leased distribution centers primarily in the U.S., but also in the Czech Republic, Belgium, United Kingdom, the Netherlands, China, Canada, Mexico, Israel and Japan. SEASONALITY VF’s quarterly operating results vary due to the seasonality of our individual brands, and are historically stronger in the second half of the calendar year.
DIRECT-TO-CONSUMER OPERATIONS Our direct-to-consumer business includes VF-operated retail stores, brand e-commerce sites, concession retail locations and other digital platforms. Direct-to-consumer revenues were 46% of total VF revenues in Fiscal 2022. Our full-price ret ail stores allow us to display a brand’s full line of products with fixtures and imagery that support the brand’s positioning and promise to consumers.
DIRECT-TO-CONSUMER OPERATIONS Our direct-to-consumer business includes VF-operated retail stores, brand e-commerce sites, concession retail locations and other digital platforms. Direct-to-consumer revenues were 47% of total VF revenues in Fiscal 2024. Our full-price ret ail stores allow us to display a brand’s full line of products with fixtures and imagery that support the brand’s positioning and promise to consumers.
These actions are consistent and aligned with VF’s IDEA Statement, committing to equal opportunity for all employees and candidates. At the end of Fiscal 2022, approximately 18% of our U.S. director and above workforce voluntarily self-identified as BIPOC.
These actions are consistent and aligned with VF’s IDEA Statement, committing to equal opportunity for all employees and candidates. At the end of Fiscal 2024, approximately 18% of our U.S. director and above workforce self-identified as BIPOC.
Backlog The dollar amount of VF’s order backlog as of any date is not indicative of actual future shipments and, accordingly, is not material to an understanding of the business taken as a whole. 8 VF Corporation Fiscal 2022 Form 10-K Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of VF Corporation as of May 26, 2022.
Backlog The dollar amount of VF’s order backlog as of any date is not indicative of actual future shipments and, accordingly, is not material to an understanding of the business taken as a whole. 8 VF Corporation Fiscal 2024 Form 10-K Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of VF Corporation as of May 23, 2024.
Timberland PRO ® products are available through specialty stores, chain stores, independent distributors, on websites with strategic digital partners and online at www.timberland.com. Timberland PRO ® products are also available in most U.S. VF-operated Timberland ® stores.
Timberland PRO ® products are available primarily in North America, through specialty stores, chain stores, independent distributors, on websites with strategic digital partners and online at www.timberland.com. Timberland PRO ® products are also available in most U.S. VF-operated Timberland ® stores.
The North Face ® products are marketed globally, primarily through specialty outdoor and premium sporting goods stores, department stores, independent distributors, independently-operated partnership stores, concession retail stores, over 200 VF-operated stores, on websites with strategic digital partners and online at www.thenorthface.com.
The North Face ® products are marketed globally, primarily through specialty outdoor and premium sporting goods stores, department stores, independent distributors, independently-operated partnership stores, concession retail stores, approximately 260 VF-operated stores, on websites with strategic digital partners and online at www.thenorthface.com.
The Talent and Compensation Committee works with management on executive compensation and compensation risks, and regularly reviews our progress on company-wide HCM priorities, including inclusion and diversity, benefits, wellbeing, culture, succession and talent development strategies. VF’s Audit Committee monitors current and emerging risks, including HCM risks, and VF’s health and safety program.
The Talent and Compensation Committee works with management on executive compensation and compensation risks, and regularly reviews our progress on company-wide HCM priorities, including diversity, equity and inclusion, benefits, wellbeing, succession planning and talent development strategies. VF’s Audit Committee monitors current and emerging enterprise risks, including HCM risks, and VF’s health and safety program.
VF-operated full-price stores generally provide gross margins that are well above VF averages. In addition, VF operates outlet stores in both premium outlet malls and more traditional value-based locations.
VF-operated full-price stores generally provide gross margins that are well above other channels. In addition, VF operates outlet stores in both premium outlet malls and more traditional value-based locations.
Our global direct-to-consumer operations included 1,322 stores at the end of Fiscal 2022. We operate retail store locations for the following brands: Vans ® , The North Face ® , Timberland ® , Kipling ® , Dickies ® , Icebreaker ® , Napapijri ® and Supreme ® .
Our global direct-to-consumer operations included 1,185 stores at the end of Fiscal 2024. We operate retail store locations for the following brands: Vans ® , The North Face ® , Timberland ® , Kipling ® , Icebreaker ® , Napapijri ® , Supreme ® and Dickies ® .
This variation results primarily from the seasonal influences on revenues of our Outdoor segment, where revenues are historically weighted towards the second and third fiscal quarters.
This variation results primarily from the seasonal influences on revenues of our Outdoor segment, where revenues are hi storically weighted towards the second and third fiscal quarters.
After VF’s 2022 Annual Meeting of Shareholders, VF intends to file with the New York Stock Exchange (“NYSE”) the certification regarding VF’s compliance with the NYSE’s corporate governance listing standards as required by NYSE Rule 303A.12. Last year, VF filed this certification with the NYSE on August 16, 2021. VF Corporation Fiscal 2022 Form 10-K 9 Table of Contents
After VF’s 2024 Annual Meeting of Shareholders, VF intends to file with the New York Stock Exchange (“NYSE”) the certification regarding VF’s compliance with the NYSE’s corporate governance listing standards as required by NYSE Rule 303A.12. Last year, VF filed this certification with the NYSE on August 4, 2023. VF Corporation Fiscal 2024 Form 10-K 9 Table of Contents
He served as President — VF EMEA from April 2017 until December 2017, Coalition President — Jeanswear, Sportswear and Contemporary International from January 2013 until November 2017, President — Sportswear and Contemporary EMEA from February 2009 until December 2012 and President — Sportswear and Packs from August 2006 until January 2009. Mr. Guerrini joined VF in 2006. Bryan H.
He served as President — VF EMEA from April 2017 until December 2017, Coalition President — Jeanswear, Sportswear and Contemporary International from January 2013 until November 2017, President — Sportswear and Contemporary EMEA from February 2009 until December 2012 and President — Sportswear and Packs from August 2006 until January 2009. Mr. Guerrini joined VF in 2006. Brent E.
In addition, VF’s Executive Leadership Team is regularly engaged in the development and management of key talent systems, guiding our culture, employee value proposition and talent development programs. The sections that follow provide further background on our associate base, as well as examples of our key programs and initiatives that are focused on the achievement of our objectives.
In addition, VF’s Global Leadership Team is regularly engaged in the development and management of key talent systems, guiding our culture and talent development programs. The sections that follow provide further background on our associate base, as well as examples of our key programs and initiatives that are focused on the achievement of our objectives.
VF is a member of the Paradigm for Parity coalition, which has pledged to promote organizational gender parity globally in leadership roles by 2030. At the end of Fiscal 2022, approximately 53% of the overall VF workforce and approximately 42% of director and above roles voluntarily self-identified as women.
VF is a member of the Paradigm for Parity coalition, which has pledged to promote organizational gender parity globally in leadership roles by 2030. At the end of Fiscal 2024, approximately 53% of the overall VF workforce and approximately 43% of director and above roles self-identified as women.
Royalty income was $66.6 million in Fiscal 2022 (less than 1% of total revenues), primarily from the Dickies ® , Vans ® and Timberland ® brands. SOURCING AND DISTRIBUTION Product design and innovation, including fit, fabric, finish and quality, are important elements across our businesses.
Royalty income was $67.1 million in Fiscal 2024 (less than 1% of total revenues), primarily from the Dickies ® , Vans ® and Timberland ® brands. SOURCING AND DISTRIBUTION Product design and innovation, including fit, fabric, finish and quality, are important elements across our businesses.
Associate Base VF had approximately 35,000 employees at the end of Fiscal 2022. Of VF’s total employees, approximately 58% were full-time and approximately 58% were located in the U.S. In international markets, certain employees are covered by trade-sponsored or governmental bargaining arrangements. Employee relations are considered to be good.
Associate Base VF had approximately 30,000 employees at the end of Fiscal 2024. Of VF’s total employees, approximately 60% were full-time and approximately 55% were located in the U.S. In international markets, certain employees are covered by trade-sponsored or governmental bargaining arrangements. Employee relations are considered to be good.
These principles, consistent with international labor standards, are a set of strict standards covering legal and ethical business practices, worker age, work hours, health and safety conditions, environmental standards and compliance with local laws and regulations. 4 VF Corporation Fiscal 2022 Form 10-K Table of Contents VF, through its contractor monitoring program, audits the activities of the independent businesses and contractors that produce VF products at locations across the globe.
These principles, consistent with international labor standards, are a set of strict standards covering legal and ethical business practices, worker age, work hours, health and safety conditions, environmental standards and compliance with local laws and regulations. VF, through its contractor monitoring program, audits the activities of the independent businesses and contractors that produce VF products at locations across the globe.
We consider the talent and capabilities of our people as essential to our business strategy and execution, and, as such, put in place strategies to attract, develop and retain highly diverse talent with the skills and passion to build our brands for our consumers around the globe.
We consider the talent and capabilities of our people as essential to our business strategy and execution. As such, we put in place strategies to acquire, develop and retain diverse talent with the skills and passion to build our brands with innovative products and experiences for our consumers around the globe.
Corporation and its consolidated subsidiaries. All references to "Fiscal 2022" relate to VF's current fiscal year which ran from April 4, 2021 through April 2, 2022. Unless otherwise noted, all discussion below, including amounts and percentages for all periods, reflect the results of operations and financial condition of VF’s continuing operations.
Corporation and its consolidated subsidiaries. All references to "Fiscal 2024" relate to VF's current fiscal year which ran from April 2, 2023 through March 30, 2024. Unless otherwise noted, all discussion below, including amounts and percentages for all periods, reflect the results of operations and financial condition of VF’s continuing operations.
Vans ® products are available globally through chain stores, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, more than 700 VF-operated stores, on websites with strategic digital partners and online at www.vans.com. Supreme ® is a leading streetwear brand that offers apparel, accessories and footwear.
Vans ® products are available globally through chain stores, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retai l stores, approximately 660 VF-operated stores, on websites with strategic digital partners and online at www.vans.com. Supreme ® is a leading streetwear brand that offers apparel, accessories and footwear.
ADVERTISING, CUSTOMER SUPPORT AND COMMUNITY OUTREACH During Fiscal 2022, our advertising and promotion expense was $840.6 million, representing 7% of total revenues. We advertise in consumer and trade publications and through digital initiatives, including social media and mobile platforms on the Internet.
ADVERTISING, CUSTOMER SUPPORT AND COMMUNITY OUTREACH During Fiscal 2024, our advertising and promotion expense was $835.8 million, representing 8% of total revenues. We advertise in consumer and trade publications and through digital initiatives, including social media and mobile platforms on the Internet.
Key drivers of long-term growth in our Outdoor segment are expected to be a focus on product innovation, extension of our brands into new product categories, growth in our direct-to-consumer business including our digital presence, expansion of wholesale channel partnerships, geographical diversification and development, as well as the potential for the acquisition of additional brands. 2 VF Corporation Fiscal 2022 Form 10-K Table of Contents ACTIVE SEGMENT Our Active segment is a group of activity-based lifestyle brands.
Key drivers of long-term growth in our Outdoor segment are expected to be a continued focus on product innovation, extension of our brands into new product categories, profitable growth in our direct-to-consumer business including our digital presence, expansion of wholesale channel partnerships, and geographical diversification and development. 2 VF Corporation Fiscal 2024 Form 10-K Table of Contents ACTIVE SEGMENT Our Active segment is a group of activity-based lifestyle brands.
Additional information is included under the caption “Election of Directors” in VF’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held July 26, 2022 (“2022 Proxy Statement”) that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended April 2, 2022, which information is incorporated herein by reference.
Additional information is included under the caption “Election of Directors” in VF’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held July 23, 2024 (“2024 Proxy Statement”) that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference.
In addition to our direct-to-consumer operations, independent parties own and operate approximately 2,700 partnership stores. These are primarily mono-brand retail locations selling VF products that have the appearance of VF-operated stores.
In addition to our direct-to-consumer operations, independent parties own and operate approximately 2,400 partnership stores. Sales to these partners are reported in our wholesale channel. These are primarily mono-brand retail locations selling VF products that have the appearance of VF-operated stores.
The Governance and Corporate Responsibility Committee is responsible for conducting Board succession planning and the selection of nominees to the Board, and reviews VF’s Code of Business Conduct and VF’s sustainability policies, goals and programs.
The Governance and Corporate Responsibility Committee is responsible for conducting Board succession planning and overseeing the selection of nominees to the Board, and reviews the Company's Code of Business Conduct as well as its sustainability policies, goals and programs.
To provide diversified products across multiple channels of distribution in different geographic areas, we rely on our global sourcing of finished goods from independent contractors. We utilize state-of-the-art supply chain technologies for inventory replenishment that enable us to effectively and efficiently match our assortment of products to consumer demand.
To provide diversified products across multiple channels of distribution in different geographic areas, we rely on our global sourcing of finished goods from independent contractors. Our diversified supply chain utilizes leading technologies for inventory replenishment that enable us to match our assortment of products to consumer demand.
Our Human Capital Management ("HCM") practices are designed to promote inclusion, diversity and equity; provide development opportunities for associates across the organization; offer competitive rewards and benefits; and sponsor programs that support wellbeing in an engaging work environment built on enduring guiding principles and longstanding values.
Our Human Capital Management ("HCM") practices are designed to promote belonging; provide development opportunities for associates across the organization; offer competitive rewards for performance achievements and benefits; and sponsor programs that support wellbeing in an engaging work environment built on our longstanding values.
Kipling ® branded handbags, luggage, backpacks, totes and accessories are sold globally through department, specialty and luggage stores, independently-operated partnership stores, independent distributors, concession retail stores, approximately 40 VF-operated stores, on websites with strategic digital partners and online at www.kipling.com.
Supreme ® products are available globally through approximately 15 VF-operated stores, select partner retail stores and online at www.supremenewyork.com. Kipling ® branded handbags, luggage, backpacks, totes and accessories are sold globally through department, specialty and luggage stores, independently-operated partnership stores, independent distributors, concession retail stores, approximately 35 VF-operated stores, on websites with strategic digital partners and online at www.kipling.com.
Revenues from the direct-to-consumer business represented 46% of VF’s total Fiscal 2022 revenues. In addition to selling directly into international markets, many of our brands also sell products through licensees, agents and distributors. In Fiscal 2022, VF derived 57% of its revenues from the Americas, 29% from Europe and 14% from Asia-Pacific.
Revenues from the direct-to-consumer business represented 47% of VF’s total Fiscal 2024 revenues. In addition to selling directly into international markets, many of our brands also sell products through licensees, agents and distributors. In Fiscal 2024, VF derived 52% of its revenues from the Americas, 33% from Europe and 15% from Asia-Pacific.
Altra ® is a performance-based footwear brand primarily in the road and trail running categories. Altra ® products are sold globally through premium outdoor and specialty stores, independent distributors, on websites with strategic digital partners and online at www.altrarunning.com.
Altra ® is a performance-based footwear brand primarily in the road and trail running categories. Altra ® products are sold globally through premium outdoor and specialty stores, independent distributors, on websites with strategic digital partners and online at www.altrarunning.com. The Icebreaker ® brand specializes in performance apparel and accessories based on natural fibers, including merino wool and plant-based fibers.
Key drivers of long-term growth in our Active segment are expected to be our continued focus on product innovation, extension of our brands into new product categories, growth of our direct-to-consumer business including our digital presence, expansion of wholesale channel partnerships, geographical diversification and development, as well as the potential for the acquisition of additional brands.
Key drivers of long-term growth in our Active segment are expected to be our continued focus on product innovation, extension of our brands into new product categories, profitable growth of our direct-to-consumer business including our digital presence, enhancement of wholesale channel partnerships, and geographical diversification and development.
Approximately 57% of our stores are located in the Americas (50% in the U.S.), 26% in Europe and 17% in Asia-Pacific. Additionally, we sell certain of our branded products through approximately 900 concession retail stores located principally in VF Corporation Fiscal 2022 Form 10-K 3 Table of Contents Europe and Asi a.
Approximately 65% of our stores are located in the Americas (57% in the U.S.), 25% in Europe and 10% in Asia-Pacific. Additionally, we sell certain of our branded products through VF Corporation Fiscal 2024 Form 10-K 3 Table of Contents approximately 840 concession retail stores located principally in Europe and Asia.
Updates on enterprise risks, and progress towards associated targets, are provided to the Audit Committee of the Board of Directors quarterly.
Updates on enterprise risks are provided to the Audit Committee of the Board of Directors quarterly.
VF aims to remove barriers to uplifting women and has added and expanded resources to support women in the workplace, including career advancement workshops, community building activities through our Employee Resource Groups (“ERGs”), and a suite of benefits designed to promote wellbeing and provide support for parents and families, including paid parental leave.
VF has added and expanded resources to support women in the workplace, including career advancement workshops, community building activities through our Employee Resource Groups (“ERGs”), and a suite of benefits designed to promote wellbeing and provide support for parents and families, including paid parental leave. Our dedication to inclusion and diversity is further reflected in programs sponsored by our ERGs.
These include health and welfare programs, retirement programs, paid parental leave, reproductive and adoption assistance, paid time off, tuition reimbursement, product discounts, fitness facilities or programs, childcare and educational resources and various on-site services, employee assistance program, and regular wellbeing programming, as VF Corporation Fiscal 2022 Form 10-K 7 Table of Contents culturally appropriate throughout the geographies in which we operate.
These include health and welfare programs, retirement programs, paid parental leave, reproductive and adoption assistance, paid time off, tuition reimbursement, product discounts, fitness facilities or programs, childcare and educational resources and various on-site services, employee assistance program, and regular wellbeing programming, as culturally appropriate throughout the geographies in which we operate. Associate safety rests at the heart of our decisions.
We utilize a range of tools and programs including diverse candidate slates, talent reviews, performance coaching and development, succession planning, access to volunteering opportunities, IDEA training and hundreds of online learning modules that are available to all associates.
We utilize a range of tools and programs including diverse candidate slates, talent reviews, performance coaching, mentorship and development, succession planning, access to volunteering opportunities, IDEA training and hundreds of online leadership development learning modules that are available to all associates. Associate Wellbeing and Safety VF endeavors to support the diverse wellbeing needs of our associates and their families.
This purpose, combined with a laser focus on performance and delivering on our commitments, allows us to offer a unique value proposition to our associates – a place where you can do well and do good at the same time.
We are guided by our values and our purpose. Together with a laser focus on performance and delivering on our commitments, we are able to offer a unique value proposition to our associates – a place where you can do well and do good at the same time.
Results are evaluated, shared with associates and used to guide management focus and attention. Recent actions have included our Workplace Next initiative, which is focused on 1) driving flexibility for associates where they work, 2) creating engaging work environments that bring associates together to collaborate and innovate, and 3) equipping leaders to manage in a complex, hybrid environment.
Results are evaluated, shared with associates and used to guide management focus and attention. Recent actions have included 1) adopting a flexible approach to where associates work, 2) creating engaging work environments that bring associates together to collaborate and innovate, and 3) equipping leaders to manage in a complex, hybrid environment.
We own a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage and accessories categories. Our largest brands are Vans ® , The North Face ® , Timberland ® and Dickies ® .
VF is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. We own a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage and accessories categories. Our largest brands are The North Face ® , Vans ® , Timberland ® and Dickies ® .
Associate safety rests at the heart of our decisions. Nothing is more fundamental than providing people with an environment where they feel safe, secure and supported. Our mission is simple: Foster a culture of safety that enables a workplace free of hazards and sends every employee home safely. Our goal is zero workplace injuries within our operations.
Nothing is more fundamental than providing people with an environment VF Corporation Fiscal 2024 Form 10-K 7 Table of Contents where they feel safe, secure and supported. Our mission is simple: Foster a culture of safety that enables a workplace free of hazards and sends every employee home safely. Our goal is zero workplace injuries within our operations.
The Timberland ® brand has a strong heritage of volunteerism, including the Path of Service™ program that offers full-time employees paid time off to serve their local communities through global service events such as Earth Day in the spring and "Serv-a-palooza" in the fall.
The Timberland ® brand has a strong heritage of volunteerism, including the Path of Service™ program, which offers employees paid time off to serve their local communities through global service events such as Earth Day in the spring and "Serv-a-palooza" in the fall. Since its inception in 1992, Timberland employees have served more than 1.4 million hours.
VF also conducts periodic pulse check surveys for interim feedback on specific topics such as ethics and compliance, safety, communications, and related topics. Talent Management Talent Management includes the acquisition, development, skilling and upskilling, and deployment of our talent.
VF also conducts periodic pulse check surveys for interim feedback on a variety of topics. Talent Management Talent Management includes the acquisition, development, skilling and upskilling, and deployment of our talent.
This variation results primarily from the seasonal influences on revenues of our Outdoor segment, where 12% of the segment's revenues occurred in the first fiscal quarter compared to 36% in the third fiscal quarter of Fisca l 2022.
This variation results primarily from the seasonal influences on revenues of our Outdoor segment, where 15% of the segment's revenues occurred in the first fiscal quarter compared to 31% in the second fiscal quarter of Fiscal 2024.
McNeill , 60, has been Vice President — Controller and Chief Accounting Officer since April 2015. He served as Controller and Supply Chain Chief Financial Officer of VF International from January 2012 until March 2015 and Controller of VF International from May 2010 until December 2011. Mr. McNeill joined VF in 1993. Stephen M.
He served as Controller and Supply Chain Chief Financial Officer of VF International from January 2012 until March 2015 and Controller of VF International from May 2010 until December 2011. Mr. McNeill joined VF in 1993. Nicole Otto , 53, has been Global Brand President, The North Face ® since June 2022.
Our Board of Directors and its Committees provide governance and oversight on a broad range of VF’s human capital management efforts. The Board’s oversight includes review of CEO and executive officer performance, compensation and succession planning and inclusion, and diversity and belonging 6 VF Corporation Fiscal 2022 Form 10-K Table of Contents programs and initiatives.
Our Board of Directors and its Committees provide governance and oversight on a broad range of VF’s HCM efforts. The Board’s oversight includes review of CEO and executive officer performance, compensation and succession planning and belonging programs and initiatives.
VF's chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. Global brands have been combined into reportable segments based on similar economic characteristics and qualitative factors. The reportable segments for financial reporting purposes have been identified as: Outdoor, Active and Work.
Global brands have been combined into reportable segments based on similar economic characteristics and qualitative factors. The reportable segments for financial reporting purposes have been identified as: Outdoor, Active and Work.
Sales to the five largest customers amounted to approximately 10% of total revenues in Fiscal 2022. Sales to VF’s largest customer totaled approximately 2% of total revenues in Fiscal 2022.
Sales to VF’s largest customer totaled approximately 2% of total revenues in Fiscal 2024.
We strive to provide an environment that allows our associates to bring their authentic selves to work every day, and we’re determined to foster a workplace that is free of discrimination and harassment, and promotes allyship, advocacy and belonging. Our Global Inclusion, Diversity and Equity Council sets global goals and strategic direction in alignment with VF’s global IDEA strategy.
We strive to provide an environment that allows our associates to bring their unique selves to work every day, and we’re determined to foster a workplace that is free of discrimination and harassment, and promotes allyship, advocacy and belonging.
Products are sold in department and specialty stores, independently-operated partnership stores, concession retail stores, independent distributors, 25 VF-operated stores, on websites with strategic digital partners and online at www.napapijri.com.
Icebreaker ® products are sold globally through specialty outdoor and premium sporting goods stores, concession retail stores, independent distributors, approximately 25 VF-operated stores, on websites with strategic digital partners and online at www.icebreaker.com.
Our dedication to inclusion and diversity is further reflected in programs sponsored by our ERGs. Our ERGs enhance our culture of belonging by creating a safe space for learning and dialogue for underrepresented groups, establishing a sense of community among associates and providing platforms to collect and share insights to support business imperatives.
Our ERGs enhance our culture of belonging by creating a safe space for learning and dialogue for underrepresented groups, establishing a sense of community among associates and providing platforms to collect and share insights to support business imperatives. We currently have various ERGs for women, BIPOC, Veterans and LGBTQ+ communities.
VF is currently on course with its internal milestones, tracking progress towards these targets and goals. Additional information regarding VF’s sustainability and responsibility strategy and actions can be found within our latest Made for Change report within our “Responsibility” page on www.vfc.com.
VF is currently on course with its internal milestones, tracking progress towards these targets and goals. Additional information regarding VF’s strategy and actions can be found within our latest Environmental & Social Responsibility report within our “Responsibility” page on www.vfc.com. Also included on that webpage are downloads of our Sustainability Accounting Standards Board ("SASB") and Global Reporting Initiative ("GRI") indices.
Additional information about VF’s Code of Business Conduct, Global Compliance Principles, Terms of Engagement and Environmental Compliance Guidelines, along with a Global Compliance Report, is available on the VF website at www.vfc.com.
We maintain an ongoing audit program to ensure compliance with these requirements by using dedicated internal staff and externally contracted firms. Additional information about VF’s Code of Business Conduct, Global Compliance Principles, Terms of Engagement and Environmental Compliance Guidelines, along with a Global Compliance Report, is available on the VF website at www.vfc.com.
We will continue to manage our supply chain from a global perspective and adjust as needed to changes in the global production environment. Independent contractors generally own the raw materials and ship finished, ready-for-sale products to VF. These contractors are engaged through VF sourcing hubs in Singapore (with satellite offices across Asia) and Panama.
The use of contracted production with different geographic regions and cost structures, provides a flexible approach to product sourcing. We will continue to manage our supply chain from a global perspective and adjust as needed to changes in the global production environment. Independent contractors generally own the raw materials and ship finished, ready-for-sale products to VF.
The executive officers are generally elected annually and serve at the pleasure of the Board of Directors. None of the VF Corporation executive officers have any family relationship with one another or with any of the directors of VF Corporation. Steven E.
The executive officers are generally elected annually and serve at the pleasure of the Board of Directors. None of the VF Corporation executive officers have any family relationship with one another or with any of the directors of VF Corporation. Bracken Darrell , 61, has been President and Chief Executive Officer since July 2023. Prior to joining VF, Mr.
Our Council to Advance Racial Equity (“CARE”) oversees our commitments on actions that promote: increasing Black, Indigenous and People of Color (“BIPOC”) representation at the director and above population in the U.S.; diverse candidate slates; pay equity; leader compensation tied to successful implementation of our IDEA strategy; mentorship and sponsorship of BIPOC employees and members of the community; and elevating our commitment to education, listening and learning.
Our Global Leadership Team sets global goals and strategic direction in alignment with VF’s global IDEA strategy, including oversight of the aspirational goals established in 2021 by our Council to Advance Racial Equity (“CARE”) to promote: enhancing inclusivity by increasing Black, Indigenous and People of Color (“BIPOC”) representation at the director and above population in the U.S.; diverse candidate slates; pay equity; mentorship and sponsorship programs inclusive of BIPOC employees and members of the community; and elevating our commitment to education, listening and learning.
VF’s Chairman, President and Chief Executive Officer, as well as the Company's Executive Leadership Team and Board of Directors are responsible for the oversight of VF’s sustainability and responsibility strategies and targets. Progress updates are presented to the Governance and Corporate Responsibility Committee of the Board of Directors on a biannual cadence.
VF’s President and Chief Executive Officer, as we ll as the Company's Global Leadership Team and Board of Directors are responsible for the oversight of VF’s sustainability and responsibility strategies and targets.
Many of VF’s brands have long histories and enjoy strong recognition within their respective consumer segments. Intellectual Property Trademarks, trade names, patents and domain names, as well as related logos, designs and graphics, provide substantial value in the development and marketing of VF’s products, and are important to our continued success.
Intellectual Property Trademarks, trade names, patents and domain names, as well as related logos, designs and graphics, provide substantial value in the development and marketing of VF’s products, and are important to our continued success. We have registered this intellectual property in the U.S. and in other countries where our products are manufactured and/or sold.
HUMAN CAPITAL MANAGEMENT As a purpose-led, performance-driven company, VF leverages the strength of our business and the capabilities of our people to drive profitable growth and create value for shareholders and stakeholders. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet.
HUMAN CAPITAL MANAGEMENT As a performance-driven company that is committed to its values and having a positive impact on people and the planet, VF aspires to leverage the size and scale of our business and the capabilities of our people to drive profitable and sustainable growth and create value for shareholders and stakeholders.
Initiatives to promote overall alignment with our performance, purpose, guiding principles, and strategy are therefore important and include internal communications and education about our programs, townhalls across various parts of our business, and a listening strategy that engages associates in providing input and feedback on a variety of topics.
Initiatives to promote overall alignment with our performance, purpose, values, and strategy are therefore important and include internal communications and education about our business initiatives through regular 6 VF Corporation Fiscal 2024 Form 10-K Table of Contents townhalls with executive management across our business, and a listening strategy that engages associates and encourages them to provide input and feedback on a variety of topics.
Other planet- and product-related goals include the following: • Utilize 100% renewable energy across our owned-and-operated facilities by Fiscal 2026, to be primarily achieved through off-site renewable energy investments, including renewable energy credits. • Source 50% of our polyester from recycled materials by Fiscal 2026. • Eliminate all non-essential, single-use plastics from VF direct operations and sponsored events by Fiscal 2024.
Other planet- and product-related goals include the following: • Utilize 100% renewable energy across our owned-and-operated facilities by Fiscal 2026, to be primarily achieved through on-site renewable energy projects, and off-site renewable energy investments, including renewable energy credits. • Source 50% of our polyester from recycled materials by Fiscal 2026. • Key packaging materials will be reduced and originate from sustainable sources, and processes redesigned enabling packaging reuse or recyclability, by Fiscal 2031.
Other critical components of our sustainability strategy include reducing greenhouse gas ("GHG") emissions, renewable energy use, responsible sourcing of materials, reducing waste and implementing green buildings across both our operations and supply chain.
VF prioritizes sustainable materials, circularity, and sustainable packaging to drive scalable change by working to reduce our environmental impact. Other critical components of our environmental sustainability strategy include reducing greenhouse gas ("GHG") emissions, increasing responsible sourcing of materials, reducing waste, implementing green building design, increasing renewable energy use and improving operational efficiency across both our direct operations and supply chain.
The loss of any one supplier or contractor would not have a significant adverse effect on our business. Product is shipped from our independent suppliers to distribution centers around the world. In some instances, product is shipped directly to our customers. Most distribution centers are operated by VF, and most support more than one brand.
Product is shipped from our independent suppliers to distribution centers around the world. In some instances, product is shipped directly to our customers. Most distribution centers are operated by VF, and most support more than one brand. Our largest distribution centers by region are located in Ontario, California, Prague, Czech Republic and Kunshan, China.
Mr. Bailey joined VF in 2004. Martino Scabbia Guerrini , 57, has been Executive Vice President, and President EMEA and Emerging Brands since March 2022. He served as Executive Vice President and Group President — EMEA from January 2018 until March 2022.
Puckett joined VF in 2001. Martino Scabbia Guerrini , 59, has been Executive Vice President, Chief Commercial Officer and President, Emerging Brands since October 2023. He served as Executive Vice President, and President, EMEA and Emerging Brands from March 2022 until October 2023, with additional responsibilities as President, APAC since November 2022 until October 2023.
We have a responsibility to protect and lift-up all who work across our operations and supply chain. Planet • The well-being of people and the planet are inextricably connected. Through our sustainability efforts, we are taking bold action on climate change to protect the planet for generations to come.
They form a global community of movement makers who constantly strive to do better and have a positive impact on society and our planet. We have a responsibility to protect and lift-up all who work across our operations and supply chain. Planet • The well-being of people and the planet are inextricably connected.
On a quarterly basis in Fiscal 2022, revenues ranged from a low of 19% of full year revenues in the first fiscal quarter to a high of 31% in the third fiscal quarter, while operating margin was 9% in the first fiscal quarter and 19% in the third fiscal quarter.
On a quarterly basis in Fiscal 2024, revenues ranged from a low of 20% of full year revenues in the first fiscal quarter to a high of 29% in the second fiscal quarter, with corresponding operating margins of (0.4)% in the first fiscal quarter and 12.0% in the second fiscal quarter.
In addition to sponsorships and activities that directly benefit our products and brands, VF and its associates actively support our communities and various charities. For example, The North Face ® brand has committed to programs that encourage and enable outdoor participation, such as The North Face Explore Fund™ program.
In addition to sponsorships and activities that directly benefit our products and brands, VF and its associates actively support our communities and various charities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example: • We may have difficulty completing acquisitions or dispositions to reshape our portfolio, and we may not be able to successfully integrate a newly acquired business or achieve the expected growth, cost savings or synergies from such integration, or it may disrupt our current business. • We may not be able to transform our model to be more consumer- and retail-centric. • We may not be able to transform our model to be more digitally focused. • We may not be able to expand our market share with winning customers, or our wholesale customers may encounter financial difficulties and thus reduce their purchases of VF products. • We may not be able to successfully distort investments to Asia or meet evolving consumer needs to unlock growth opportunities for our brands or expand in other geographies. • We may not be able to effectively deploy resources and allocate capital towards investments in new and organic businesses and capabilities in order to drive strategic objectives. • We may not be able to achieve the expected results from our supply chain initiatives and establish and maintain effective supply chain systems, data, and capabilities, infrastructure, and the sourcing strategy necessary to optimally meet current and future business needs. • We may have difficulty recruiting, developing or retaining qualified employees. • We may not be able to achieve our direct-to-consumer expansion goals, including in e-commerce or other new channels, manage our growth effectively, successfully integrate the planned new stores into our operations, operate our new, remodeled and expanded stores profitably, adapt our business model or develop relationships with consumers for e-commerce or other new channels. • We may not be able to offset rising commodity or conversion costs in our product costs with pricing actions or efficiency improvements.
Biggest changeFor example: • We may not be able to streamline and right-size our cost base. • We may not be able to strengthen our balance sheet while reducing leverage. • We may not be able to successfully implement our new operating model with the establishment of a global commercial organization, or identify and capture efficiencies in our new operating model. • We may not be able to successfully support our global brands through the new operating model. • We may not be able to successfully generate savin gs to invest in brand building and product innovation, or effectively deploy such savings towards investments in our brands and product innovation. • We may not be able to achieve the expected results from our supply chain initiatives and establish and maintain effective supply chain systems, data, and capabilities, infrastructure, and the sourcing strategy necessary to optimally meet current and future business needs, including direct-to-consumer needs. • We may have difficulty recruiting, developing or retaining qualified employees. • We may not be able to achieve our direct-to-consumer expansion goals, including in e-commerce or other new channels, manage our growth effectively, successfully integrate the planned new stores into our operations, operate our new, remodeled and expanded stores profitably, adapt our business model or develop relationships with consumers for e-commerce or other new channels. • We may not be able to offset rising commodity or conversion costs in our product costs with pricing actions or efficiency improvements. • We may have difficulty completing divestitures to reshape our portfolio, and we may not be able to achieve the expected benefits from such divestitures, or it may disrupt our current business.
Further impacts of the conflict could include macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, heightened cybersecurity threats, harm to employee health and safety, reputational harm, increase in counterfeiting and intellectual property activity, nationalization of our assets, and additional costs associated with compliance with sanctions and other regulations and risks associated with failure to comply with the same.
Further impacts of the conflict could include macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, heightened cybersecurity threats, harm to employee health and safety, reputational harm, increase in counterfeiting and intellectual property infringement activity, nationalization of our assets, and additional costs associated with compliance with sanctions and other regulations and risks associated with failure to comply with the same.
In addition, unilateral actions in the U.S. or other countries, including changes to or the repeal of laws recognizing trademark or other intellectual property rights, such as the Russian government's recent announcements that it would not protect intellectual property rights, including patent rights and rights that could block parallel imports of gray market goods, as a result of the sanctions imposed on Russia in connection with the Russia-Ukraine conflict, could have an impact on VF’s ability to enforce those rights.
In addition, unilateral actions in the U.S. or other countries, including changes to or the repeal of laws recognizing trademark or other intellectual property rights, such as the Russian government's announcements that it would not protect intellectual property rights, including patent rights and rights that could block parallel imports of gray market goods, as a result of the sanctions imposed on Russia in connection with the Russia-Ukraine conflict, could have an impact on VF’s ability to enforce those rights.
If VF or one of our independent contractors violates labor or other laws, implements labor or other business practices or takes other actions that are generally regarded as unethical, it could result in unwanted or negative media attention, jeopardize our reputation and potentially lead to various adverse consumer actions, including boycotts that may reduce demand for VF’s merchandise.
If VF or one of our independent contractors violates labor or other laws, implements improper labor or other business practices or takes other actions that are generally regarded as unethical, it could result in unwanted or negative media attention, jeopardize our reputation and potentially lead to various adverse consumer actions, including boycotts that may reduce demand for VF’s merchandise.
VF may not be able to manage its brands within and across channels sufficiently, which could have a material adverse effect on VF’s business, financial condition and results of operations. The retail industry has experienced financial difficulty that could adversely affect VF's business. Recently there have been consolidations, reorganizations, restructurings, bankruptcies and ownership changes in the retail industry.
VF may not be able to manage its brands within and across channels sufficiently, which could have a material adverse effect on VF’s business, financial condition and results of operations. The retail industry has experienced financial difficulty that could adversely affect VF's business. There have been consolidations, reorganizations, restructurings, bankruptcies and ownership changes in the retail industry.
Unfavorable impacts from returns on plan assets, decreases in discount rates, changes in plan demographics or revisions in the applicable laws or regulations could materially change the timing and amount of pension funding requirements, which could reduce cash available for VF’s business. VF’s operating performance also may be negatively impacted by the amount of expense recorded for its pension plans.
Unfavorable impacts from returns on plan assets, changes in discount rates, changes in plan demographics or revisions in the applicable laws or regulations could materially change the timing and amount of pension funding requirements, which could reduce cash available for VF’s business. VF’s operating performance also may be negatively impacted by the amount of expense recorded for its pension plans.
VF’s net sales depend on the volume of traffic to its stores and the availability of suitable lease space. A significant portion of our revenues are direct-to-consumer sales through VF-operated stores. In order to generate customer traffic, we locate many of our stores in prominent locations within successful retail shopping centers or in fashionable shopping districts.
VF’s net sales depend on the volume of traffic to its stores and the availability of suitable lease space. A significant portion of our revenues are direct-to-consumer sales through VF-operated stores. In order to generate consumer traffic, we locate many of our stores in prominent locations within successful retail shopping centers or in fashionable shopping districts.
Damage to VF’s reputation or loss of consumer confidence for any of these or other reasons could have a material adverse effect on VF’s results of operations, financial condition and cash flows, as well as require additional resources to rebuild VF’s reputation. Our international operations are also subject to compliance with the U.S.
Damage to VF’s reputation or loss of consumer confidence for any of these or other reasons could have a material adverse effect on VF’s results of operations, financial condition and cash flows, as well as require additional resources to rebuild VF’s reputation. Our operations are also subject to compliance with the U.S.
VF’s international businesses operate in functional currencies other than the U.S. dollar. Changes in currency exchange rates affect the U.S. dollar value of the foreign currency-denominated amounts at which VF’s international businesses purchase products, incur costs or sell products. In addition, for VF’s U.S.-based businesses, the majority of products are sourced from independent contractors located in foreign countries.
Many of VF’s international businesses operate in functional currencies other than the U.S. dollar. Changes in currency exchange rates affect the U.S. dollar value of the foreign currency-denominated amounts at which VF’s international businesses purchase products, incur costs or sell products. In addition, for VF’s U.S.-based businesses, the majority of products are sourced from independent contractors located in foreign countries.
The apparel industry is subject to significant pricing pressure caused by many factors, including intense competition, consolidation in the retail industry, rising commodity and conversion costs, inflation, rising freight costs, rising labor costs, pressure from retailers to reduce the costs of products, changes in consumer demand and shifts to online shopping and purchasing.
The apparel and footwear industry is subject to significant pricing pressure caused by many factors, including intense competition, consolidation in the retail industry, rising commodity and conversion costs, inflation, rising freight costs, rising labor costs, pressure from retailers to reduce the costs of products, changes in consumer demand and shifts to online shopping and purchasing.
A future impairment charge for goodwill or intangible assets could have a material effect on our consolidated financial position or results of operations. Fluctuations in wage rates and the price, availability and quality of raw materials and finished goods could increase costs.
Any future impairment charge for goodwill or intangible assets could have a material effect on our consolidated financial position or results of operations . Fluctuations in wage rates and the price, availability and quality of raw materials and finished goods could increase costs.
These include the burdens of complying with U.S. and international laws and regulations, and unexpected changes in regulatory requirements. Changes in regulatory, geopolitical policies and other factors may adversely affect VF’s business or may require us to modify our current business practices.
These include the burdens of complying with U.S. and international laws and regulations, and changes in regulatory requirements. Changes in regulatory, geopolitical policies and other factors may adversely affect VF’s business or may require us to modify our current business practices.
In addition, geographic distances may make integration of acquired businesses more difficult. We may not be successful in overcoming these risks or any other problems encountered in connection with any acquisitions.
In addition, geographic distances may make integration of acquired businesses more difficult. We may not be successful in overcoming these risks or any other problems encountered in connection with any acquisitions or divestitures.
Competition for experienced and well-qualified personnel is intense and we may not be successful in attracting, developing, and retaining such personnel, which could impact VF’s ability to remain competitive.
Competition for experienced, well-qualified and diverse personnel is intense and we may not be successful in attracting, developing, and retaining such personnel, which could impact VF’s ability to remain competitive.
In addition, many countries in the European Union ("EU") and around the globe have adopted and/or proposed changes to current tax laws. Further, organizations such as the Organisation for Economic Co-operation and Development ("OECD") have published action plans that, if adopted by countries where we do business, could increase our tax obligations and compliance costs in these countries.
In addition, many countries in the EU and around the globe have adopted and/or proposed changes to current tax laws. Further, organizations such as the Organisation for Economic Co-operation and Development ("OECD") have published action plans that, if adopted by countries where we do business, could increase our tax obligations and compliance costs in these countries.
Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders, and other stakeholders, including non-governmental organizations, employees, and consumers, have focused increasingly on the environmental, social and governance ("ESG") and related sustainability practices of companies. These parties have placed increased importance on the implications of the social cost of their investments and/or have higher expectations of corporate conduct.
Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders, and other stakeholders, including non-governmental organizations, employees, and consumers, have focused increasingly on social and environmental and related sustainability practices of companies. These parties have placed increased importance on the implications of the social cost of their investments and/or have higher expectations of corporate conduct.
The apparel and footwear industries are highly competitive, and VF’s success depends on its ability to gauge consumer preferences and product trends, and to respond to constantly changing markets. VF competes with numerous apparel and footwear brands and manufacturers. Competition is generally based upon brand name recognition, price, design, product quality, selection, service and purchasing convenience.
The apparel and footwear industries are highly competitive, and VF’s success depends on its ability to gauge consumer preferences and product trends, and to respond to constantly changing markets. VF competes with numerous apparel and footwear brands and manufacturers. Competition is generally based upon brand name recognition, the price, design, quality, innovation and selection of product, service and purchasing convenience.
Risks specific to VF’s e-commerce business also include (i) diversion of sales from VF stores or wholesale customers, (ii) difficulty in recreating the in-store experience through direct channels, (iii) liability for online content, (iv) changing patterns of consumer behavior, and (v) intense competition from online retailers.
Risks specific to VF’s e-commerce business also include (i) diversion of sales from VF stores or wholesale customers, (ii) difficulty in recreating the in-store experience through direct channels, (iii) liability for online content, (iv) changing patterns of consumer behavior, (v) intense competition from online retailers, and (vi) online fraud.
The United Kingdom and the European Union subsequently reached a provisional post-Brexit Trade and Cooperation Agreement that contains new rules governing the relationship between the United Kingdom and Europe, including with respect to trade, travel and immigration. Brexit could adversely affect European and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets.
The United Kingdom and the EU subsequently reached a provisional post-Brexit Trade and Cooperation Agreement that contains new rules governing the relationship between the United Kingdom and Europe, including with respect to trade, travel and immigration. Brexit could adversely affect European and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets.
Also, our failure, or perceived failure, to manage reputational threats and meet stakeholder expectations or shifting consumer preferences with respect to socially responsible activities and products and packaging and sustainability commitments and regulations could negatively impact our brand, image, reputation, credibility, employee retention, and the willingness of our customers and suppliers to do business with us.
Also, our failure, or perceived failure, to manage reputational threats and meet stakeholder expectations or shifting consumer and customer preferences with respect to environmentally or socially responsible activities and products and packaging and sustainability commitments and regulations could negatively impact our brand, image, reputation, credibility, employee retention, and the willingness of our customers and suppliers to do business with us.
For example, the cost and availability of the materials that are used in our products, such as oil-related commodity prices and other raw materials, such as cotton, dyes and chemical and other costs, such as fuel, energy and utility costs, can fluctuate significantly as a result of inflation in addition to many other factors, including general economic conditions and demand, crop yields, energy prices, weather patterns, public health issues (such as the COVID-19 pandemic) and speculation in the commodities markets.
For example, the cost and availability of the materials that are used in our products, such as oil-related commodity prices and other raw materials, such as cotton, dyes and chemical and other costs, such as fuel, energy and utility costs, can fluctuate significantly as a result of inflation in addition to many other factors, including general economic conditions and demand, crop yields, energy prices, weather patterns, water supply quality and availability, public health issues (such as the COVID-19 pandemic) and speculation in the commodities markets.
In addition, although we audit our third-party material suppliers and contracted manufacturing facilities and set strict compliance standards, actions by a third-party supplier or manufacturer that fail to comply could result in such third-party supplier failing to manufacture products that consistently meet our quality standards or engaging in unfavorable labor practices or providing unfavorable working conditions that negatively impact worker health, safety and wellness.
In addition, although we audit our third-party material suppliers and contracted manufacturing facilities and set strict compliance standards, actions by a third-party supplier or manufacturer that fail to comply could result in such third-party supplier failing to manufacture products that consistently meet our quality standards, violating human rights, engaging in unfavorable labor practices or providing unfavorable working conditions that negatively impact worker health, safety and wellness.
VF’s business and operations could be materially and adversely affected if it fails to create systems of monitoring, prevention, response, crisis management, continuity and recovery to mitigate natural or man-made economic, political or environmental disruptions.
VF’s business and operations could be materially and adversely affected if it fails to create systems of monitoring, prevention, response, crisis management, continuity and recovery to mitigate natural or man-made economic, public health, political or environmental disruptions.
In addition, as a result of recent security breaches at a number of prominent retailers, the media and public scrutiny of information security and privacy has become more intense and the regulatory environment has become increasingly uncertain, rigorous and complex.
In addition, as a result of recent security breaches at a number of prominent retailers and other companies, media and public scrutiny of information security and privacy has become more intense and the regulatory environment has become increasingly uncertain, rigorous and complex.
VF currently has obligations under its defined benefit pension plans. The funded status of the pension plans is dependent on many factors, including returns on investment assets and the discount rates used to determine pension obligations.
VF currently has obligations under its defined benefit pension plans. The funded status of the pension plans is dependent on many factors, including returns on invested assets and the discount rates used to determine pension obligations.
This could have a material adverse effect on VF’s results of operations, liquidity and financial condition. VF’s business is exposed to the risks of foreign currency exchange rate fluctuations. VF’s hedging strategies may not be effective in mitigating those risks. A growing percentage of VF’s total revenues (approximately 48% in Fiscal 2022) is derived from markets outside the U.S.
This could have a material adverse effect on VF’s results of operations, liquidity and financial condition. VF’s business is exposed to the risks of foreign currency exchange rate fluctuations. VF’s hedging strategies may not be effective in mitigating those risks. A growing percentage of VF’s total revenues (approximately 54% in Fiscal 2024) is derived from markets outside the U.S.
Moreover, failure to provide effective digital (including omnichannel) capabilities and information technology infrastructure could result in an inability to meet current and future business needs and a resulting loss of brand competitiveness, leading to loss of revenue and market share and decreased business agility.
Moreover, failure to provide effective digital (including omni-channel) capabilities and information technology infrastructure could result in an inability to meet current and future business needs and a resulting loss of brand competitiveness, leading to loss of revenue and market share and decreased business agility.
If our employment proposition is not perceived as favorable compared to other companies, it could negatively impact our ability to attract and retain our employees.
If our employment proposition is not perceived as favorable compared to other companies, it could negatively impact our ability to acquire and retain our employees.
In addition, while we do not control their business practices, we require third-party suppliers to operate in compliance with applicable laws, rules and regulations regarding working conditions, safety, employment practices and environmental compliance. The costs of products purchased by VF from independent contractors could increase due to the costs of compliance by those contractors.
In addition, while we do not control their business practices, we require third-party suppliers to operate in compliance with applicable laws, rules and regulations regarding working conditions, safety, employment practices, the environment and other areas. The costs of products purchased by VF from independent contractors could increase due to the costs of compliance by those contractors.
VF and its customers could suffer harm if valuable business data, or employee, customer and other confidential and proprietary information were corrupted, lost or accessed or misappropriated by third parties due to a security failure in VF’s systems or due to one of our third-party service providers or our employees.
VF and its consumers and customers could suffer harm if valuable business data, or employee, consumer, customer and other confidential and proprietary information were corrupted, lost, accessed or misappropriated by third parties due to a cyber-attack, a security failure in VF’s systems, or due to one of our third-party service providers or our employees.
A decision by any of VF’s major customers to significantly decrease the volume of products purchased from VF could substantially reduce revenues and have a material adverse effect on VF’s financial condition and results of operations. Talent management, employee retention and experience are important factors in VF’s success.
A decision by any of VF’s major customers to significantly decrease the volume of products purchased from VF could substantially reduce revenues and have a material adverse effect on VF’s financial condition and results of operations. Talent acquisition, management, engagement and retention are important factors in VF’s success.
Risks include, but are not limited to, (i) U.S. or international resellers purchasing merchandise and reselling it overseas outside VF’s control, (ii) failure or interruption of the systems that operate the stores and websites, and their related support systems, including due to computer viruses, theft of customer information, privacy concerns, telecommunication failures, electronic break-ins and similar disruptions, technical malfunctions, and natural disasters or other causes (iii) credit card fraud, (iv) risks related to VF’s direct-to-consumer distribution centers and processes, and (v) shift in consumer preferences away from retail stores.
Risks include, but are not limited to, (i) U.S. or international resellers purchasing merchandise and reselling it outside VF’s control, (ii) failure or interruption of the systems that operate the stores and websites, and their related support systems, including due to computer viruses, theft of consumer information, privacy concerns, telecommunication failures, electronic break-ins and similar disruptions, technical malfunctions, and natural disasters or other causes, (iii) retail and credit card fraud and theft, (iv) risks related to VF’s direct-to-consumer distribution centers and processes, (v) shift in consumer preferences away from retail stores, and (vi) loss of inventory due to damage, theft (including from organized retail crime), and other causes.
A lthough VF generally has significant control over its licensees’ products and advertising, we rely on our licensees for, among other things, operational and financial controls over their businesses.
Although VF generally has significant control over its licensees’ products and advertising, we rely on our licensees for, among other things, operational and financial controls over their businesses.
For example, it could: • require VF to dedicate a substantial portion of its cash flow from operations to repaying its indebtedness, which would reduce the availability of its cash flow to fund working capital requirements, capital expenditures, future acquisitions, dividends, repurchase VF’s common stock and for other general corporate purposes; • limit VF’s flexibility in planning for or reacting to general adverse economic conditions or changes in its business and the industries in which it operates; VF Corporation Fiscal 2022 Form 10-K 19 Table of Contents • place VF at a competitive disadvantage compared to its competitors that have less indebtedness outstanding; and • negatively affect VF's credit ratings and limit, along with the financial and other restrictive covenants in VF’s debt documents and its ability to borrow additional funds.
For example, they could: • require VF to dedicate a substantial portion of its cash flow from operations to repaying its indebtedness, which would reduce the availability of its cash flow to fund working capital requirements, capital expenditures, future acquisitions, dividends, repurchase VF’s common stock and for other general corporate purposes; • limit VF’s flexibility in planning for or reacting to general adverse economic conditions or changes in its business and the industries in which it operates; • place VF at a competitive disadvantage compared to its competitors that have less indebtedness outstanding; and • negatively affect VF's credit ratings and limit, along with the financial and other restrictive covenants in VF’s debt documents and its ability to borrow additional funds.
Failure to create an agile and efficient operating model and organizational structure or to effectively define, prioritize, and align on clear achievable and appropriately resourced strategic priorities could result in an inability to remain competitive in a rapidly changing marketplace and lead to increase in costs, inefficient resource allocation, reduced productivity, organizational confusion, and reduced employee morale.
Failure to create an agile and efficient operating model and organizational structure, beginning with VF's global commercial organization, or to effectively define, prioritize, and align on clear achievable and appropriately resourced strategic priorities could result in an inability to remain competitive in a rapidly changing marketplace and lead to increase in costs, inefficient resource allocation, reduced productivity, organizational confusion, and reduced employee morale.
If our ESG practices do not meet investor or other stakeholder expectations and standards, including related to climate change, sustainability, and human rights, and do not meet related regulations and expectations for increased transparency, which continue to evolve, our brands, reputation and employee retention may be negatively impacted.
If our environmental, social and governance practices do not meet investor or other stakeholder expectations and standards, including related to climate change, sustainability, social impact, and human rights, and do not meet related regulations and expectations for increased transparency, which continue to evolve, our brands, reputation and employee retention may be negatively impacted.
Our reputation and brand image also could be damaged as a result of our support of, association with or lack of support or disapproval of certain social causes, as well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
Our reputation and brand image also could be damaged as a result of our support of, association with or lack of support or disapproval of certain political or social issues or catastrophic events, as well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
While we may announce voluntary ESG targets, we may not be able to meet such targets in the manner or on such a timeline as initially contemplated, including, but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.
While we may announce voluntary environmental, social and governance targets, we may not be able to meet such targets in the manner or on such a timeline as initially contemplated, including, but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.
Our ability to obtain financing on favorable terms, if needed, could be adversely affected by geopolitical risk and volatility in the capital markets. Any disruption in the capital markets could limit the availability of funds or the ability or willingness of financial institutions to extend capital in the future.
Our ability to obtain financing on favorable terms, if needed, could be adversely affected by geopolitical risk and volatility in the capital markets, including interest rate risks. Any disruption in the capital markets could limit the availability of funds or the ability or willingness of financial institutions to extend capital to VF in the future.
Any of the following could impact our ability to source or deliver VF products, or our cost of sourcing or delivering products and, as a result, our profitability: • political or labor instability in countries where VF’s contractors and suppliers are located; • changes in local economic conditions in countries where VF’s contractors and suppliers are located; • public health issues, such as the COVID-19 pandemic, have resulted in (or could continue to result in) closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; • political or military conflict could cause a delay in the transportation of products to VF and an increase in transportation costs; • disruption at ports of entry, could cause delays in product availability and increase transportation times and costs; • heightened terrorism security concerns could subject imported or exported goods to additional, more frequent or lengthier inspections, leading to delays in deliveries or impoundment of goods for extended periods; • decreased scrutiny by customs officials for counterfeit goods, leading to more counterfeit goods and reduced sales of VF products, increased costs for VF’s anti-counterfeiting measures and damage to the reputation of its brands; • disruptions at manufacturing or distribution facilities or in shipping and transportation locations caused by natural and man-made disasters; • imposition of regulations and quotas relating to imports and our ability to adjust timely to changes in trade regulations could limit our ability to source products in cost-effective countries that have the required labor and expertise; • imposition of duties, taxes and other charges on imports; and • imposition or the repeal of laws that affect intellectual property rights.
Any of the following could impact our ability to source or deliver VF products, or our cost of sourcing or delivering products and, as a result, our profitability: • political or labor instability in countries where VF’s contractors and suppliers are located; • inflationary pressures or changes in local economic conditions in countries where VF’s contractors and suppliers are located; • public health issues, such as the COVID-19 pandemic, have resulted in (or could continue to result in) closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; • political or military conflict could cause a delay in the transportation of products to VF and an increase in transportation costs; 14 VF Corporation Fiscal 2024 Form 10-K Table of Contents • disruption at ports of entry, could cause delays in product availability and increase transportation times and costs; • heightened terrorism security concerns could subject imported or exported goods to additional, more frequent or lengthier inspections, leading to delays in deliveries or impoundment of goods for extended periods; • increased risk of detention by customs officials of raw materials or goods used by our suppliers in the manufacture of certain of our products, and increased risk of detention of our products; • decreased scrutiny by customs officials for counterfeit goods, leading to more counterfeit goods and reduced sales of VF products, increased costs for VF’s anti-counterfeiting measures and damage to the reputation of its brands; • disruptions at manufacturing or distribution facilities or in shipping and transportation locations caused by natural and man-made disasters (including potential effects from climate change); • imposition of regulations and quotas relating to imports and our ability to adjust timely to changes in trade regulations could limit our ability to source products in cost-effective countries that have the required labor and expertise; • imposition of duties, taxes and other charges on imports; and • imposition or the repeal of laws that affect intellectual property rights.
In addition, while we maintain cyber insurance policies, those existing insurance policies may not adequately protect VF from all of the adverse effects and damages that could be caused by a security breach.
In addition, while we maintain cyber insurance policies, those existing insurance policies may not adequately protect VF from all of the adverse effects and damages that could be caused by a security breach, including the incident reported by VF in December 2023.
Decreased consumer spending could result in reduced demand for our products, reduced orders from customers for our products, order cancellations, lower revenues, higher discounts, increased inventories and lower gross margins. The uncertain state of the global economy continues to impact businesses around the world, most acutely in emerging markets and developing economies.
Decreased consumer spending could result in reduced demand for our products, reduced orders from customers for our products, order cancellations, lower revenues, higher discounts, increased inventories and lower gross margins. The uncertain state of the global economy continues to impact businesses around the world.
VF is subject to data and information security and privacy risks that could negatively affect its business operations, results of operations or reputation. In the normal course of business, we often collect, retain and transmit certain sensitive and confidential customer information, including credit card information and employee information, over public networks.
VF is subject to data and information security and privacy risks that could negatively affect its business operations, results of operations or reputation. In the normal course of business, we collect, retain and transmit certain sensitive and confidential consumer information, including payment information, and employee information, over public networks.
VF’s ability to compete within the apparel and footwear industries depends on our ability to: • anticipate and respond to changing consumer preferences and product trends in a timely manner; • develop attractive, innovative and high quality products that meet consumer needs; • maintain strong brand recognition; • price products appropriately; • provide best-in-class marketing support and intelligence and optimize and react to available consumer data; • ensure product availability and optimize supply chain efficiencies; • obtain sufficient retail store space and effectively present our products at retail; • produce or procure quality products on a consistent basis; and • adapt to a more digitally driven consumer landscape.
VF’s ability to compete within the apparel and footwear industries depends on our ability to: • anticipate and respond to changing consumer preferences and product trends in a timely manner; • develop attractive and innovative products that meet changing consumer needs, consistent with consumer trends and demands; • maintain strong brand recognition; • price products appropriately; • provide best-in-class marketing support and intelligence and optimize and react to available consumer data; • ensure product availability and optimize supply chain efficiencies; • obtain sufficient retail store space and effectively present our products at retail; • produce or procure quality products on a consistent basis; and • adapt to a more digitally driven consumer landscape, including the effective re-creation of the in-store experience through digital channels.
Sales to VF’s ten largest customers were approximately 17% of total revenues in Fiscal 2022, with our largest customer accounting for approximately 2% of revenues. Sales to our customers are generally on a purchase or der basis and not subject to long-term agreements.
Sales to VF’s ten largest customers were approximately 14% o f total revenues in Fiscal 2024, with our largest customer accounting for approximately 2% of revenues. Sales to our customers are generally on a purchase or der basis and not subject to long-term agreements.
Bringing or defending any such claim, regardless of merit, and whether successful or unsuccessful, could be expensive and time-consuming and have a negative effect on VF's business, reputation, results of operations and financial condition. If VF encounters problems with its distribution system, VF’s ability to deliver its products to the market could be adversely affected.
Bringing or defending any such claim, regardless of merit, and whether successful or unsuccessful, could be expensive and time-consuming and have a negative effect on VF's business, reputation, results of operations and financial condition. 16 VF Corporation Fiscal 2024 Form 10-K Table of Contents If VF encounters problems with its distribution system, VF’s ability to deliver its products to the market could be adversely affected.
Further, the global economy periodically experiences recessionary conditions with rising unemployment, reduced availability of credit, increased savings rates and declines in real estate and securities values. These recessionary conditions, including as a result of the COVID-19 pandemic, could have a negative impact on retail sales of apparel, footwear and other consumer products.
Further, the global economy periodically experiences recessionary conditions with rising unemployment, rising inflation and interest rates, reduced availability of credit, increased savings rates and declines in real estate and securities values. These recessionary conditions could have a negative impact on retail sales of apparel, footwear and other consumer products.
VF is subject to the risk that its licensees may not generate expected sales or maintain the value of VF’s brands. During Fiscal 2022, $66.6 million of VF’s revenues were derived from licensing royalties.
VF is subject to the risk that its licensees may not generate expected sales or maintain the value of VF’s brands. During Fiscal 2024, $67.1 million of VF’s revenues were derived from licensing royalties.
Business resiliency is important to VF’s success because there are a variety of risks generally associated with doing business on a global basis that may involve natural or man-made economic, political or environmental disruptions.
Business resiliency is important to VF’s success because there are a variety of risks generally associated with doing business on a global basis that may involve natural or man-made economic, public health (including the COVID-19 pandemic), political or environmental disruptions.
If these developments occur, our inability to shift sales to other customers or to collect on VF’s trade accounts receivable could have a material adverse effect on VF’s financial condition and results of operations. VF’s profitability may decline as a result of increasing pressure on margins.
If 10 VF Corporation Fiscal 2024 Form 10-K Table of Contents these developments occur, our inability to shift sales to other customers or to collect on VF’s trade accounts receivable could have a material adverse effect on VF’s financial condition and results of operations. VF’s profitability may decline as a result of increasing pressure on margins.
Moreover, if our associates or vendors, intentionally or inadvertently, misuse consumer data or are not transparent with consumers about how we use their data, our brands, reputation and relationships with consumers could be damaged. There are risks associated with VF’s acquisitions and portfolio management.
Moreover, if our associates or vendors, intentionally or inadvertently, misuse consumer data or are not transparent with consumers about how we use their data, our brands, reputation and relationships with consumers could be damaged.
Our business has been, and could continue to be, impacted by the effects of the COVID-19 pandemic in countries and territories where we operate and our employees, suppliers, third-party service providers, consumers or customers are located.
For example, the COVID-19 pandemic has and could continue to materially and adversely affect our business, financial condition and results of operation. Our business has been, and could continue to be, impacted by the effects of the COVID-19 pandemic in countries and territories where we operate and where our employees, suppliers, third-party service providers, consumers or customers are located.
Such changes have the potential to adversely impact the U.S. economy or certain sectors thereof, our industry and the global demand for our products, and as a result, could have a 16 VF Corporation Fiscal 2022 Form 10-K Table of Contents material adverse effect on our business, financial condition and results of operations.
Such changes have the potential to adversely impact the U.S. economy or certain sectors thereof, our industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial condition and results of operations.
The spin-off of Kontoor Brands, Inc. could result in substantial tax liability to us and our shareholders. We received opinions of tax advisors substantially to the effect that, for U.S. Federal income tax purposes, the May 22, 2019 spin-off of our Jeans business, Kontoor Brands, Inc.
VF Corporation Fiscal 2024 Form 10-K 21 Table of Contents The spin-off of Kontoor Brands, Inc. could result in substantial tax liability to us and our shareholders. We received opinions of tax advisors substantially to the effect that, for U.S. Federal income tax purposes, the May 22, 2019 spin-off of our Jeans business, Kontoor Brands, Inc.
The success of VF’s business depends on consumer spending on apparel and footwear, and there are a number of factors that influence consumer spending, including actual and perceived economic conditions, disposable consumer income, interest rates, consumer credit availability, inflationary pressures (such as current inflation related to global supply chain disruptions), unemployment, stock market performance, weather conditions and natural disasters, energy prices, public health issues (including the COVID-19 pandemic), geopolitical instability (such as the current conflict between Russia and Ukraine and related economic and other retaliatory measures taken by the United States, European Union and others), consumer discretionary spending patterns and tax rates in the international, national, regional and local markets where VF’s products are sold.
The success of VF’s business depends on consumer spending on apparel and footwear, and there are a number of factors that influence consumer spending, including actual and perceived economic conditions, disposable consumer income, interest rates, consumer credit availability, inflationary pressures, recessions or economic slowdowns, unemployment, stock market performance, weather conditions and natural disasters (including potential effects from climate change), energy prices, public health issues (including the coronavirus (COVID-19) pandemic), geopolitical instability (such as the current conflict between Russia and Ukraine and related economic and other retaliatory measures taken by the United States, European Union ("EU") and others, the current tensions between the U.S. and China, and the current conflict in the Middle East), consumer discretionary spending patterns and tax rates in the international, national, regional and local markets where VF’s products are sold.
It is possible that we could have an impairment charge for goodwill or trademark and trade name intangible assets in future periods if (i) overall economic conditions in Fiscal 2023 or future years vary from our current assumptions, (ii) business conditions or our strategies for a specific business unit change from our current assumptions (including changes in discount rates), (iii) investors require higher rates of return on equity investments in the marketplace, or (iv) enterprise values of comparable publicly traded companies, or of actual sales transactions of comparable companies, were to decline, resulting in lower comparable multiples of revenues and earnings before interest, taxes, depreciation and amortization and, accordingly, lower implied values of goodwill and intangible 18 VF Corporation Fiscal 2022 Form 10-K Table of Contents assets.
It is possible that we could have another impairment charge for goodwill or trademark and trade name intangible assets in future periods if (i) the businesses do not perform as projected, (ii) overall economic conditions in Fiscal 2025 or future years vary from our current assumptions (including changes in discount rates and foreign currency exchange rates), (iii) business conditions or our strategies for a specific business unit change from our current assumptions, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or of actual sales transactions of comparable companies, were to decline, resulting in lower comparable multiples of revenues and earnings before interest, taxes, depreciation and amortization and, accordingly, lower implied values of goodwill and intangible assets.
If we are unable to retain, attract, and motivate talented employees with the appropriate skill sets, or if changes to our organizational structure, operating results, or business model adversely affect morale or retention, we may not achieve our objectives and our results of operations could be adversely impacted.
If we are unable to retain, acquire, and engage talented employees with the appropriate skill sets, or if changes to our organizational structure, operating results, or business model adversely affect morale or retention, we may not achieve our objectives, our relationships with our customers, consumers or other third parties may be disrupted, and our results of operations could be adversely impacted.
We may be adversely affected by weather conditions. Our business is adversely affected by unseasonable weather conditions. A significant portion of the sales of our products is dependent in part on the weather and is likely to decline in years in which weather conditions do not favor the use of these products.
A significant portion of the sales of our products is dependent in part on the weather and is likely to decline in years in which weather conditions do not favor the use of these products.
Our business is subject to comprehensive national, state and local laws and regulations on a wide range of environmental, VF Corporation Fiscal 2022 Form 10-K 17 Table of Contents climate change, consumer protection, employment, privacy, safety and other matters. VF could be adversely affected by costs of compliance with or violations of those laws and regulations.
Our business is subject to comprehensive national, state and local laws and regulations on a wide range of matters such as environmental, climate change, consumer protection, social, employment, privacy, safety and other matters. VF could be adversely affected by costs of compliance with or violations of those laws and regulations.
Changes to U.S. or international trade policy, tariff and import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations.
VF Corporation Fiscal 2024 Form 10-K 17 Table of Contents Changes to U.S. or international trade policy, tariff and import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations.
Such noncompliance could expose VF to claims for damages, financial penalties and reputational harm, any of which could have a material adverse effect in our business and operations. A significant portion of VF’s revenues and gross profit is derived from a small number of large customers.
Such noncompliance could expose VF to claims for damages, financial penalties, delay or inability to clear goods through customs authorities, operational disruptions and reputational harm, any of which could have a material adverse effect on our business and operations. A significant portion of VF’s revenues and gross profit is derived from a small number of large customers.
Failure by VF or its third-party suppliers to comply with such laws and regulations, as well as with ethical, social, product, safety, labor and environmental standards, or related political considerations, could result in interruption of finished goods shipments to VF, extensive remediation efforts, cancellation of orders by customers and termination of relationships.
Failure by VF or its third-party suppliers to comply with such laws and regulations, as well as with ethical, social, product, safety, labor and environmental standards, or related political considerations, could result in a material adverse effect on our financial condition, results of operations or cash flows, including resulting in interruption of finished goods shipments to VF, extensive remediation efforts, cancellation of orders by customers and termination of relationships.
VF Corporation Fiscal 2022 Form 10-K 11 Table of Contents BUSINESS AND OPERATIONAL RISKS VF’s business and the success of its products could be harmed if VF is unable to maintain the images of its brands. VF’s success to date has been due in large part to the growth of its brands’ images and VF’s customers’ connection to its brands.
BUSINESS AND OPERATIONAL RISKS VF’s business and the success of its products could be harmed if VF is unable to maintain the images of its brands. VF’s success to date has been due in large part to the growth of its brands’ images and VF’s consumers’ connection to its brands.
Climate change is occurring around the world and may impact our business in numerous ways. Failure to monitor, adapt, build resilience, and develop solutions against the physical and transitional impacts from climate change may lead to revenue loss, market share loss, business interruptions, and rising costs.
Failure to monitor, adapt, build resilience, and develop solutions against the physical and transitional impacts from climate change may lead to revenue loss, market share loss, business interruptions, physical damage to our facilities, and rising costs.
These developments could result in a reduction in the number of stores that carry VF’s products, an increase in ownership concentration within the retail industry, an increase in credit exposure to VF or an increase in leverage by VF’s customers over their suppliers.
In addition, consumers have continued to transition away from traditional wholesale retailers to large online retailers. These developments could result in a reduction in the number of stores that carry VF’s products, an increase in ownership concentration within the retail industry, an increase in credit exposure to VF or an increase in leverage by VF’s customers over their suppliers.
Increased frequency and severity of extreme weather events (storms and floods) could cause increased incidence of disruption to the production and distribution of our products and an adverse impact on consumer demand and spending.
Increased frequency and severity of extreme weather events (such as storms and floods) could cause increased incidence of disruption to the production and distribution of our products, increased costs for our business, including maintenance, repair, utilities and insurance costs, and an adverse impact on consumer demand and spending.
As of April 2, 2022, VF had approximately $5.4 billion of debt outstanding. V F’s debt and interest payment requirements could have important consequences on its business, financial condition and results of operations.
As of March 30, 2024, VF had approximately $6.0 billion of debt outstanding. V F’s debt and interest payment requirements could have important consequences on its business, financial condition and results of operations.
These changes could impact VF’s opportunities in the market and increase VF’s reliance on a smaller number of large customers. In the future, retailers are likely to further consolidate, undergo restructurings or reorganizations or bankruptcies, realign their affiliations or reposition their stores’ target markets. In addition, consumers have continued to transition away from traditional wholesale retailers to large online retailers.
These events individually, and together, could have a material, adverse effect on VF's business. These changes could impact VF’s opportunities in the market and increase VF’s reliance on a smaller number of large customers. In the future, retailers are likely to further consolidate, undergo restructurings or reorganizations or bankruptcies, realign their affiliations or reposition their stores’ target markets.
There is a significant concern by consumers and employees over the security of personal information collected, retained or transmitted over the Internet, identity theft and user privacy. Data and information security breaches are increasingly sophisticated, and can be difficult to detect for long periods of time.
There is a significant concern by consumers and employees over the security of personal information, identity 12 VF Corporation Fiscal 2024 Form 10-K Table of Contents theft and user privacy. Data and information security breaches are increasingly sophisticated, and can be difficult to detect for long periods of time.
In addition, employees may intentionally or inadvertently cause data security breaches that result in the unauthorized release of personal or confidential information.
Employees may intentionally or inadvertently cause cybersecurity breaches that result in the unauthorized access to our systems or the unauthorized release of personal or confidential information.
Counterfeiting of VF’s products or infringement on its intellectual property rights could diminish the value of our brands and adversely affect VF’s revenues.
VF’s trademarks, trade names, patents, trade secrets and other intellectual property are important to VF’s success. Counterfeiting of VF’s products or infringement on its intellectual property rights could diminish the value of our brands and adversely affect VF’s revenues.
We are also dependent on information technology, including the Internet, for our direct-to-consumer sales, including our e-commerce operations and retail business credit card transaction authorization.
Our ability to effectively manage and operate our business depends significantly on information technology systems. We rely heavily on information technology to track sales and inventory and manage our supply chain. We are also dependent on information technology, including the Internet, for our direct-to-consumer sales, including our e-commerce operations and retail business credit card transaction authorization.
VF sells merchandise direct to consumer through VF-operated stores and e-commerce sites. Its direct-to-consumer business is subject to numerous risks that could have a material adverse effect on its results.
VF Corporation Fiscal 2024 Form 10-K 15 Table of Contents VF’s direct-to-consumer business includes risks that could have an adverse effect on its results of operations. VF sells merchandise direct to consumer through VF-operated stores and e-commerce sites. Its direct-to-consumer business is subject to numerous risks that could have a material adverse effect on its results.
It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
It is possible that stakeholders may oppose our environmental, social and governance practices or disagree with them. It is also possible that stakeholders may not be satisfied with our environmental, social and governance practices or the speed of their adoption.
If global economic and financial market conditions do not improve, adverse economic trends or other factors could negatively impact the level of consumer spending, which could have a material adverse impact on VF. The coronavirus (COVID-19) pandemic has and could continue to materially and adversely affect our business, financial condition and results of operations.
If global economic and financial market conditions do not improve, adverse economic trends or other factors could negatively impact the level of consumer spending, which could have a material adverse impact on VF.
Some of VF’s brands, such as Vans ® , The North Face ® , Timberland ® , Dickies ® and Supreme ® enjoy significant worldwide consumer recognition, and the higher pricing of certain of the brands' products creates additional risk of counterfeiting and infringement. VF’s trademarks, trade names, patents, trade secrets and other intellectual property are important to VF’s success.
Some of VF’s brands, such as The North Face ® , Vans ® , Ti mberland ® , Dickies ® and Supreme ® enjoy significant worldwide consumer recognition, and the higher pricing of certain of the brands' products creates additional risk of counterfeiting and infringement.
Most of our operations have reopened, but there continues to be uncertainty around the extent to which operations may be closed again or experience operational restrictions if and where there is a resurgence in COVID-19 or new variants of the virus emerge, and the duration and severity of any related restrictions.
Our operations may be closed again or experience operational restrictions if and where there is a resurgence in COVID-19 or new variants of the virus emerge.
More specifically, the OECD has released rules to address tax challenges arising from the digitalization of the economy. The ultimate outcome of these rules that are enacted into law in each country may result in a material financial impact to VF.
The ultimate outcome of these rules that are enacted into law in each country may result in a material financial impact to VF.
It could require significant expenditures to remediate any such failure or breach, severely damage our reputation, confidence in our e-commerce platforms and our relationships with customers and employees, result in business disruption, unwanted and negative media attention and lost sales, and expose us to risks of litigation, liability and increased scrutiny from regulatory entities.
Any such breach, including, without limitation, the incident reported by VF in December 2023, has and could require significant expenditures to remediate; could cause damage to our reputation, to confidence in our e-commerce platforms and to our relationships with customers, consumers, employees and third parties on whom we rely; has and could result in business disruption, negative media attention and lost sales; and could expose us to risks of litigation, liability and increased scrutiny from regulatory entities.
This disruption or volatility could adversely affect our liquidity and funding resources or significantly increase our cost of capital. An inability to access capital and credit markets may have an adverse effect on our business, results of operations, financial condition and cash flows.
An inability to access capital and credit markets may have an adverse effect on our business, results of operations, financial condition and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also own or lease brand headquarters facilities throughout the world. VF owns a 236,000 square foot facility in Appleton, Wisconsin that serves as a shared service center for certain brands in North America. We own a 180,000 square foot facility in Greensboro, North Carolina that serves as a corporate shared service center.
Biggest changeIn add ition, we lease facilities in Stabio, Switzerland and lease offices in Shanghai, China, which serve as our European and Asia-Pacific regional headquarters, respectively. We also own or lease brand headquarter facilities throughout the world. VF owns a 236,000 square foot facility in Appleton, Wisconsin that serves as a shared service center for certain brands in North America.
We operate 1,322 retail stores across the Americas, Europe and Asia-Pacific regions. Retail stores are generally leased under operating leases and include renewal options. We believe all facilities and machinery and equipment are in good condition and are suitable for VF’s needs.
In addition to the principal properties described above, we lease many offices worldwide for sales and administrative purposes. We operate 1,185 retail stores across the Americas, Europe and Asia-Pacific regions. Retail stores are generally leased under operating leases and include renewal options. We believe all facilities and machinery and equipment are in good condition and are suitable for VF’s needs.
ITEM 2. PROPERTIES. The following is a summary of VF Corporation’s principal owned and leased properties as of April 2, 2022. VF’s global headquarters are located in a 285,000 square foot, leased facility in Denver, Colorado. In addition, we own facilities in Stabio, Switzerland and lease offices in Shanghai, China, which serve as our European and Asia-Pacific regional headquarters, respectively.
ITEM 2. PROPERTIES. The following is a summary of VF Corporation’s principal owned and leased properties as of March 30, 2024. VF’s global headquarters are located in a 285,000 square foot, leased facility in Denver, Colorado.
We own and lease shared service facilities in Antwerp, Belgium; Kuala Lumpur, Malaysia and Dalian, China that support our European and Asia-Pacific operations. Our sourcing hubs are located in Singapore and Panama City, Panama. Our largest distribution centers by region are located in Visalia, California, Prague, Czech Republic and Shanghai, China.
We own a 180,000 square foot facility in Greensboro, North Carolina that serves as a corporate shared service center. We own and lease shared service facilities in Antwerp, Belgium; Kuala Lumpur, Malaysia and Dalian, China that support our European and Asia-Pacific operations. Our sourcing hubs are located in Singapore, Panama City, Panama, and Stabio, Switzerland.
In total, we operate 25 owned or leased distribution centers primarily in the U.S., but also in the Czech Republic, United Kingdom, the Netherlands, China, Canada, Mexico, Belgium, Israel, Japan and France. In addition to the principal properties described above, we lease many offices worldwide for sales and administrative purposes.
Our largest distribution centers by region are located in Ontario, California, Prague, Czech Republic and Kunshan, China. In total, we o perate 21 owned or leased distribution centers primarily in the U.S., but also in the Czech Republic, Belgium, United Kingdom, the Netherlands, China, Canada, Mexico, Israel and Japan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeVF believes that this threshold is reasonably designed to result in disclosure of any such proceedings that are material to VF’s business or financial condition. Applying this threshold, there are no such proceedings to disclose for this period.
Biggest changeVF believes that this threshold is reasonably designed to result in disclosure of any such proceedings that are material to VF’s business or financial condition. Applying this threshold, there are no such proceedings to disclose for this period. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 24 VF Corporation Fiscal 2024 Form 10-K Table of Contents PART II
ITEM 3. LEGAL PROCEEDINGS. Other than the IRS dispute in the U.S. Tax Court discussed in Note 21 — Commitments and Contingencies, there are no pending material legal proceedings, other than ordinary, routine litigation incidental to the business, to which VF or any of its subsidiaries is a party or to which any of their property is the subject.
ITEM 3. LEGAL PROCEEDINGS. There are no pending material legal proceedings, other than ordinary, routine litigation incidental to the business, to which VF or any of its subsidiaries is a party or to which any of their property is the subject.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF VF COMMON STOCK, S&P 500 INDEX AND S&P 1500 APPAREL INDEX VF Common Stock closing price on April 2, 2022 was $56.54 Company / Index Base Period 12/31/16 12/30/17 3/30/19 3/28/20 4/3/21 4/2/22 VF Corporation $ 100.00 $ 142.75 $ 172.63 $ 124.81 $ 176.14 $ 129.00 S&P 500 Index 100.00 121.83 132.39 121.06 194.83 223.43 S&P 1500 Apparel, Accessories & Luxury Goods 100.00 119.36 120.97 63.87 125.90 106.30 22 VF Corporation Fiscal 2022 Form 10-K Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES: The following table sets forth VF’s repurchases of our Common Stock during the fiscal quarter ended April 2, 2022 under the share repurchase program authorized by VF’s Board of Directors in 2017.
Biggest changeCOMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF VF COMMON STOCK, S&P 500 INDEX AND S&P 1500 APPAREL INDEX VF Common Stock closing price on March 30, 2024 w as $15.34 Company / Index Base Period 3/30/19 3/28/20 4/3/21 4/2/22 4/1/23 3/30/24 VF Corporation $ 100.00 $ 72.30 $ 102.03 $ 74.73 $ 31.91 $ 22.28 S&P 500 Index 100.00 91.45 147.16 168.77 155.20 201.57 S&P 1500 Apparel, Accessories & Luxury Goods 100.00 52.80 104.08 87.88 69.28 67.69 VF Corporation Fiscal 2024 Form 10-K 25 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES: The following table sets forth VF’s repurchases of our Common Stock during the fiscal quarter ended March 30, 2024 under the share repurchase program authorized by VF’s Board of Directors in 2017.
PERFORMANCE GRAPH: The following graph compares the cumulative total shareholder return on VF Common Stock with that of the Standard & Poor’s (“S&P”) 500 Index and the S&P 1500 Apparel, Accessories & Luxury Goods Subindustry Index (“S&P 1500 Apparel Index”) for Fiscal 2017 through Fiscal 2022.
PERFORMANCE GRAPH: The following graph compares the cumulative total shareholder return on VF Common Stock with that of the Standard & Poor’s (“S&P”) 500 Index and the S&P 1500 Apparel, Accessories & Luxury Goods Subindustry Index (“S&P 1500 Apparel Index”) for Fiscal 2020 through Fiscal 2024.
The graph assumes that $100 was invested at the end of Fiscal 2016 in each of VF Common Stock, the S&P 500 Index and the S&P 1500 Apparel Index, and that all dividends were reinvested. The graph plots the respective values on the last trading day of Fiscal 2016 through Fiscal 2022.
The graph assumes that $100 was invested at the end of Fiscal 2019 in each of VF Common Stock, the S&P 500 Index and the S&P 1500 Apparel Index, and that all dividends were reinvested. The graph plots the respective values on the last trading day of Fiscal 2019 through Fiscal 2024.
The S&P 1500 Apparel Index at the end of Fiscal 2022 consisted of Capri Holdings Limited, Carter’s, Inc., Columbia Sportswear Company, Fossil, Inc., G-III Apparel Group, Ltd., Hanesbrands Inc., Kontoor Brands, Inc., Movado Group, Inc., Oxford Industries, Inc., PVH Corp., Ralph Lauren Corporation, Tapestry, Inc., Under Armour, Inc., Vera Bradley, Inc. and VF Corporation.
The S&P 1500 Apparel Index at the end of Fiscal 2024 consisted of Capri Holdings Limited, Carter’s, Inc., Columbia Sportswear Company, G-III Apparel Group, Ltd., Hanesbrands Inc., Kontoor Brands, Inc., Lululemon Athletica Inc., Movado Group, Inc., Oxford Industries, Inc., PVH Corp., Ralph Lauren Corporation, Tapestry, Inc., Under Armour, Inc. and VF Corporation.
ITEM 5. MARKET FOR VF’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. VF’s Common Stock is listed on the New York Stock Exchange under the symbol “VFC”. As of April 30, 2022 there were 2,854 shareholders of record.
ITEM 5. MARKET FOR VF’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. VF’s Common Stock is listed on the New York Stock Exchange under the symbol “VFC”. As of April 27, 2024 there were 2,607 shareholders of record.
Fiscal Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Dollar Value of Shares that May Yet be Purchased Under the Program January 2, 2022 — January 29, 2022 — $ — — $ 2,536,975,459 January 30, 2022 — February 26, 2022 775,371 64.49 775,371 2,486,971,057 February 27, 2022 — April 2, 2022 — — — 2,486,971,057 Total 775,371 775,371 ITEM 6. [RESERVED] Not applicable.
Fiscal Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Dollar Value of Shares that May Yet be Purchased Under the Program December 31, 2023 — January 27, 2024 — $ — — $ 2,486,971,057 January 28, 2024 — February 24, 2024 — — — 2,486,971,057 February 25, 2024 — March 30, 2024 — — — 2,486,971,057 Total — — ITEM 6. [RESERVED] Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeANALYSIS OF FINANCIAL CONDITION Balance Sheets The following discussion refers to significant changes in balances for continuing operations at March 2022 compared to March 2021: • Increase in accounts receivable — primarily due to higher wholesale shipments driven by recovery from the negative impact of COVID-19 on the comparative period. • Increase in inventories — primarily due to recovery from the negative impact of COVID-19 on the comparative period. • Decrease in short-term investments — due to the sale of short-term investments. • Increase in short-term borrowings — due to an increase in commercial paper borrowings. • Increase in the current portion of long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022. • Increase in accrued liabilities — primarily due to an increase in accrued income taxes resulting from the reclassification of a portion of the accrual for unrecognized tax benefits and certain deferred income taxes from other liabilities due to the timing of expected settlement and payment, and the reclassification of the contingent consideration liability associated with the Supreme acquisition from other liabilities. • Decrease in long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022 and the early redemption of $500.0 million of long-term notes in December 2021. • Decrease in other liabilities — primarily due to lower deferred income taxes and a decrease in the accrual for unrecognized tax benefits resulting from the reclassification of certain amounts to accrued liabilities, and the reclassification of the contingent consideration liability associated with the Supreme acquisition to accrued liabilities. 32 VF Corporation Fiscal 2022 Form 10-K Table of Contents Liquidity and Cash Flows We consider the following to be measures of our liquidity and capital resources: (Dollars in millions) March 2022 March 2021 Working capital $1,272.7 $2,113.1 Current ratio 1.4 to 1 2.0 to 1 Net debt to total capital 61.0% 68.2% The decrease in the current ratio at March 2022 compared to March 2021 was primarily due to a net increase in current liabilities driven by a higher current portion of long-term debt, higher short-term borrowings and higher accrued liabilities, as discussed in the "Balance Sheets" section above.
Biggest changeVF Corporation Fiscal 2024 Form 10-K 33 Table of Contents Liquidity and Cash Flows We consider the following to be measures of our liquidity and capital resources: (Dollars in millions) March 2024 March 2023 Working capital $770.0 $1,606.9 Current ratio 1.2 to 1 1.5 to 1 Net debt to total capital 80.3% 71.6% The decrease in working capital and the current ratio at March 2024 compared to March 2023 was primarily due to a net decrease in current assets driven by lower accounts receivable and inventories for the periods compared, as discussed in the "Balance Sheets" section above.
The royalty rate is selected based on consideration of (i) royalty rates included in active license agreements, if applicable, (ii) royalty rates received by market participants in the apparel industry, and (iii) the current performance of the reporting unit. If the estimated fair value of the trademark intangible asset exceeds its carrying value, there is no impairment charge.
The royalty rate is selected based on consideration of (i) royalty rates included in active license agreements, if applicable, (ii) royalty rates received by market participants in the apparel and footwear industry, and (iii) the current performance of the reporting unit. If the estimated fair value of the trademark intangible asset exceeds its carrying value, there is no impairment charge.
A future impairment charge for goodwill or indefinite-lived intangible assets could have a material effect on VF’s consolidated financial position and results of operations. Income Taxes As a global company, VF is subject to income taxes and files income tax returns in over 100 U.S. and foreign jurisdictions each year.
A future impairment charge of goodwill or indefinite-lived intangible assets could have a material effect on VF’s consolidated financial position and results of operations. Income Taxes As a global company, VF is subject to income taxes and files income tax returns in over 100 U.S. and foreign jurisdictions each year.
If the forecasted pre-tax undiscounted cash flows to be generated by the asset are not expected to be adequate to recover the asset’s carrying value, a fair value analysis must be performed, and an impairment charge is recorded if there is an excess of the asset’s carrying value over its estimated fair value.
If the forecasted pre-tax undiscounted cash flows to be generated by the asset are not expected to be adequate to recover the asset’s carrying value, a fair value analysis is performed, and an impairment charge is recorded if there is an excess of the asset’s carrying value over its estimated fair value.
If management believes that VF will not be able to generate sufficient taxable income or capital gains to offset losses during the carryforward periods, VF records valuation allowances to reduce those deferred tax assets to amounts expected to be ultimately realized.
If management believes that VF will not be able to generate sufficient taxable income or capital gains to offset losses or credits during the carryforward periods, VF records valuation allowances to reduce those deferred tax assets to amounts expected to be ultimately realized.
Additionally, direct-to-consumer sales are typically highest in the fourth quarter of the calendar year . VF's additional sources of liquidity include available borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.
Additionally, direct-to-consumer sales are highest in the fourth quarter of the calendar year. VF's additional sources of liquidity include available borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.
Realization of deferred tax assets related to operating loss and capital loss carryforwards is dependent on future taxable income in specific jurisdictions, the amount and timing of which are uncertain, and on possible changes in tax laws.
Realization of deferred tax assets related to operating loss, credit and capital loss carryforwards is dependent on future taxable income in specific jurisdictions, the amount and timing of which are uncertain, and on possible changes in tax laws.
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 as net debt plus stockholders’ equity.
For the ratio of net debt to total capital above, 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 as net debt plus stockholders’ equity.
If the estimated fair value of the trademark is less than its carrying value, an impairment charge would be recognized for the difference. Goodwill is quantitatively evaluated for possible impairment by comparing the estimated fair value of a reporting unit to its carrying value. Reporting units are businesses with discrete financial information that is available and reviewed by management.
If the estimated fair value of the trademark is less than its carrying value, an impairment charge is recognized for the difference. Goodwill is quantitatively evaluated for possible impairment by comparing the estimated fair value of a reporting unit to its carrying value. Reporting units are businesses with discrete financial information that is available and reviewed by management.
If management’s assessment of these qualitative factors indicates that it is more likely than not that the fair value of the intangible asset or reporting unit is more than its carrying value, then no further testing is required. Otherwise, the intangible asset or reporting unit must be quantitatively tested for impairment.
If management’s assessment of these qualitative factors indicates that it is more likely than not that the fair value of the intangible asset or reporting unit is more than its carrying value, then no further testing is required. Otherwise, the intangible asset or reporting unit is quantitatively tested for impairment.
This use of financial instruments allows management to reduce the overall exposure to risks from exchange rate fluctuations on VF’s cash flows and earnings, since gains and losses on these contracts will offset losses and gains on the transactions being hedged.
This use of financial instruments allows management to reduce the overall exposure to risks from exchange rate fluctuations on VF’s cash flows and earnings, since gains and losses on these contracts will offset a portion of losses and gains on the transactions being hedged.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. OVERVIEW VF Corporation (together with its subsidiaries, collectively known as “VF” or the "Company”) is a global leader in the design, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products. VF’s diverse portfolio meets consumer needs across a broad spectrum of activities and lifestyles.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. OVERVIEW VF Corporation (together with its subsidiaries, collectively known as “VF” or the "Company”) is a global leader in the design, procurement, marketing and distribution of branded lifestyle apparel, footwear and accessories. VF’s diverse portfolio meets consumer needs across a broad spectrum of activities and lifestyles.
Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and other component of accumulated OCI as an offset to the foreign currency translation adjustments on the hedged investments.
Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses on the debt are deferred in the foreign currency translation and other component of accumulated OCL as an offset to the foreign currency translation adjustments on the hedged investments.
These costs are (i) impairment of goodwill and indefinite-lived intangible assets, which is excluded from segment profit because these costs are not part of the ongoing operations of the respective businesses, (ii) interest expense, net, and loss on debt extinguishment which are excluded from segment profit because substantially all financing costs are managed at the corporate office and are not under the control of segment management, and (iii) corporate and other expenses, which are excluded from segment profit to the extent they are not allocated to the segments.
These costs are (i) impairment of goodwill and indefinite-lived intangible assets, which is excluded from segment profit because these costs are not part of the ongoing operations of the respective businesses, (ii) corporate and other expenses, which are excluded from segment profit to the extent they are not allocated to the segments, and (iii) interest expense, net, which is excluded from segment profit because substantially all financing costs are managed at the corporate office and are not under the control of segment management.
VF monitors net foreign currency market exposures and enters into derivative foreign currency contracts to hedge the effects of exchange rate fluctuations for a significant portion of forecasted 36 VF Corporation Fiscal 2022 Form 10-K Table of Contents foreign currency cash flows or specific foreign currency transactions (relating to cross-currency inventory purchases, product sales, operating costs and intercompany royalty payments).
VF monitors net foreign currency market exposures and enters into derivative foreign currency contracts to hedge the effects of exchange rate fluctuations for a significant portion of forecasted foreign currency cash flows or specific foreign currency transactions (relating to cross-currency inventory purchases, VF Corporation Fiscal 2024 Form 10-K 37 Table of Contents product sales, operating costs and intercompany royalty payments).
Note: Amounts may not sum due to rounding. 28 VF Corporation Fiscal 2022 Form 10-K Table of Contents The following sections discuss the changes in revenues and profitability by segment. For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.
Note: Amounts may not sum due to rounding. 30 VF Corporation Fiscal 2024 Form 10-K Table of Contents The following sections discuss the changes in revenues and profitability by segment. For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.
Forecasts of individual reporting unit cash flows involve management’s estimates and assumptions regarding: • Annual cash flows, on a debt-free basis, arising from future revenues and profitability, changes in working capital, capital spending and income taxes for at least a 10-year forecast period. • A terminal growth rate for years beyond the forecast period.
Forecasts of individual reporting unit cash flows involve management’s estimates and assumptions regarding: • Annual cash flows, on a debt-free basis, arising from future revenues and profitability, changes in working capital, capital spending and income taxes for a forecast period. • A terminal growth rate for years beyond the forecast period.
Foreign currency exchange rate risks VF is a global enterprise subject to the risk of foreign currency fluctuations. Approximately 48% of VF’s revenues in the year ended March 2022 were generated in international markets. Most of VF’s foreign businesses operate in functional currencies other than the U.S. dollar.
Foreign currency exchange rate risks VF is a global enterprise subject to the risk of foreign currency fluctuations. Approximately 54% of VF’s revenues in the year ended March 2024 were generated in international markets. Most of VF’s foreign businesses operate in functional currencies other than the U.S. dollar.
Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated.
Any amounts deferred in accumulated OCL will remain until the hedged investment is sold or substantially liquidated.
The following discussion and analysis focuses on our financial results for the years ended March 2022 and 2021 and year-to-year comparisons between these years. A discussion of our results of operations for the year ended March 2021 compared to the year ended March 2020 is included in Part II, Item 7.
The following discussion and analysis focuses on our financial results for the years ended March 2024 and 2023 and year-to-year comparisons between these years. A discussion of our results of operations for the year ended March 2023 compared to the year ended March 2022 is included in Part II, Item 7.
These fluctuations are primarily due to differences in the amount of settlement charges recorded in the respective periods. The changes are also impacted by varying amounts of actuarial gains and losses that are deferred and amortized to future years’ expense.
These fluctuations are primarily due to differences in the amount of settlement charges recorded in the respective periods. The changes are also impacted by varying amounts of actuarial gains and losses that are deferred and amortized to future years’ pension cost (income).
This obligation excludes the amount included in accounts payable at March 2022 related to inventory purchases.
This obligation excludes the amount included in accounts payable at March 2024 related to inventory purchases.
VF invests in a portfolio of securities that substantially mirrors the participants’ investment selections. The increases and decreases in deferred compensation liabilities are substantially offset by corresponding increases and decreases in the market value of VF’s investments, resulting in an insignificant net exposure to operating results and financial position.
VF invests in a portfolio of securities and variable life insurance contracts that substantially mirror the participants’ investment selections. The increases and decreases in deferred compensation liabilities are substantially offset by corresponding increases and decreases in the market value of VF’s investments, resulting in an insignificant net exposure to operating results and financial position.
The market multiples used in the valuation are based on the relative strengths and weaknesses of the reporting unit compared to the selected guideline companies. Under the similar transactions method, valuation multiples are calculated utilizing actual transaction prices and revenue/EBITDA data from target companies deemed similar to the reporting unit.
The market multiples used in the valuation are based on the relative strengths and weaknesses of the reporting unit compared to the selected guideline companies. Under the similar transactions method, valuation multiples are calculated utilizing actual transaction prices and revenue/EBITDA data from target companies deemed similar to the reporting unit. Management typically assigns more weight to the income-based valuation method.
Impairment of goodwill and indefinite-lived intangible assets, net interest expense and loss on debt extinguishment are discussed in the “Consolidated Statements of Operations” section, and corporate and other expenses are discussed below.
Impairment of goodwill and indefinite-lived intangible assets and net interest expense are discussed in the “Consolidated Statements of Operations” section, and corporate and other expenses are discussed below.
VF had other financial commitments and contingent obligations at the end of Fiscal 2022 that are not included in the above table but may require the use of funds under certain circumstances: • $110.2 million of surety bonds, custom bonds, standby letters of credit and international bank guarantees are not included in the table above because they represent contingent guarantees of performance under self-insurance and other programs and would only be drawn upon if VF were to fail to meet its other obligations. • Purchase orders for goods or services in the ordinary course of business are not included in the above table because they represent authorizations to purchase rather than binding commitments. • As previously reported, VF petitioned the U.S.
VF had other financial commitments at the end of Fiscal 2024 that are not included in the above table but may require the use of funds under certain circumstances: • $106.3 million of surety bonds, custom bonds, standby letters of credit and international bank guarantees are not included in the table above because they represent contingent guarantees of performance under self-insurance and other programs and would only be drawn upon if VF were to fail to meet its other obligations. • Purchase orders for goods or services in the ordinary course of business are not included in the above table because they represent authorizations to purchase rather than binding commitments.
VF also typically utilizes third-party valuation VF Corporation Fiscal 2022 Form 10-K 37 Table of Contents specialists to assist management in the determination of the fair value of assets acquired and liabilities assumed.
VF also utilizes third-party valuation specialists to assist management in the determination of the fair value of 38 VF Corporation Fiscal 2024 Form 10-K Table of Contents assets acquired and liabilities assumed.
However, if the estimated fair value of the reporting unit is less than its carrying value, VF calculates the impairment loss as the difference between the carrying value of the reporting unit and the estimated fair value.
However, if the estimated fair value of the reporting unit is less than its carrying value, VF calculates the impairment loss as the difference between the carrying value of the reporting unit and the estimated fair value, limited to the amount of reporting unit goodwill.
Under the more-likely-than-not standard, VF does not currently anticipate any material impact on earnings from the ultimate resolution of income tax uncertainties. There are no accruals for general or unknown tax expenses. As previously reported, VF petitioned the U.S.
Under the more-likely-than-not standard, VF does not currently anticipate any material impact on earnings from the ultimate resolution of income tax uncertainties. There are no accruals for general or unknown tax expenses.
Based on the average amount of variable rate borrowings and cash equivalents during Fiscal 2022, the effect of a hypothetical 1% increase in interest rates would be an increase in reported net income of approximately $8.1 million and a hypothetical 1% decrease in interest rates would be a decrease in reported net income of approximately $8.3 million.
Based on the average amount of variable rate borrowings and cash equivalents during Fiscal 2024, the effect of a hypothetical 1% increase in interest rates would be a decrease in reported net income of approximately $6.9 million and a hypothetical 1% decrease in interest rates would be an increase in reported net income of approximately $6.9 million.
VF’s reported earnings are subject to risks due to the volatility of its pension cost (income), which has ranged in recent years from cost of $23.6 million in the year ended March 2020 to income of $7.3 million in the year ended March 2022.
VF’s reported earnings are subject to risks due to the volatility of its pension cost (income), which has ranged in recent years from cost of $101.9 million in the year ended March 2023 to income of $7.3 million in the year ended March 2022.
Management regularly assesses and manages exposures to these risks through operating and financing activities and, when appropriate, by (i) taking advantage of natural hedges within VF, (ii) purchasing insurance from commercial carriers, or (iii) using derivative financial instruments.
Risk Management VF is exposed to risks in the ordinary course of business. Management regularly assesses and manages exposures to these risks through operating and financing activities and, when appropriate, by (i) taking advantage of natural hedges within VF, (ii) purchasing insurance from commercial carriers, or (iii) using derivative financial instruments.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of o ur Annual Report on Form 10-K for the year ended April 3, 2021 , filed with the SEC on May 27, 2021, and is incorporated by reference into this Form 10-K. All per share amounts are presented on a diluted basis.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended April 1, 2023 , filed with the SEC on May 25, 2023, and is incorporated by reference into this Form 10-K. All per share amounts are presented on a diluted basis.
Other This category includes (i) costs of corporate programs or corporate-managed decisions that are not allocated to the segments, (ii) costs of registering, maintaining and enforcing certain of VF’s trademarks, and (iii) miscellaneous consolidated VF Corporation Fiscal 2022 Form 10-K 31 Table of Contents activities, the most significant of which is related to VF’s centrally-managed U.S. defined benefit pension plans.
Other This category includes (i) costs of corporate programs or corporate-managed decisions that are not allocated to the segments, (ii) costs of registering, maintaining and enforcing certain of VF’s trademarks, and (iii) miscellaneous consolidated activities, the most significant of which is related to VF’s centrally-managed U.S. defined benefit pension plans.
We own a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage and accessories categories. Our products are marketed to consumers through our wholesale channel, primarily in specialty stores, national chains, mass merchants, department stores, independently-operated partnership stores and with strategic digital partners.
VF is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. We own a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage and accessories categories. Our products are marketed to consumers through our wholesale channel, primarily in specialty stores, national chains, mass merchants, department stores, independently-operated partnership stores and with strategic digital partners.
If the pre-tax undiscounted cash flows of the asset or asset group are less than its carrying value, the 38 VF Corporation Fiscal 2022 Form 10-K Table of Contents estimated fair value of the asset or asset group is calculated considering what a market participant would pay to lease the asset for its highest and best use, and an impairment charge is recognized for the difference between the estimated fair value of the asset or asset group and its carrying value.
If the pre-tax undiscounted cash flows of the asset or asset group are less than its carrying value, the estimated fair value of the asset or asset group is calculated considering what a market participant would pay to lease the asset for its highest and best use, and an impairment charge is recognized for the difference between the estimated fair value of the asset or asset group and its carrying value.
All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers. References to the year ended March 2022 foreign currency amounts below reflect the changes in foreign exchange rates from the year ended March 2021 and their impact on translating foreign currencies into U.S. dollars.
All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers. References to the year ended March 2024 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the year ended March 2023 when translating foreign currencies into U.S. dollars.
The U.S. dollar value of net investments in foreign subsidiaries fluctuates with changes in the underlying functional currencies. In February 2020, VF issued €1.0 billion of euro-denominated fixed-rate notes and in September 2016, VF issued €850.0 million of euro-denominated fixed-rate notes. These notes have been designated as net investment hedges of VF’s investment in certain foreign operations.
The U.S. dollar value of net investments in foreign subsidiaries fluctuates with changes in the underlying functional currencies. In March 2023 and February 2020, VF issued €1.0 billion of euro-denominated fixed-rate notes. These notes, along with VF's euro commercial paper borrowings, have been designated as net investment hedges of VF’s investment in certain foreign operations.
In addition, the Global Credit Facility supports VF’s U.S. commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including acquisitions and share repurchases. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.
The Global Credit Facility supports VF’s global commercial paper program for short-term, seasonal working capital requirements and general corporate purposes. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.
Cash and equivalents risks VF had $1.3 billion of cash and equivalents at the end of Fiscal 2022. Management continually monitors the credit ratings of the financial institutions with whom VF conducts business and geopolitical risks that may impact countries where VF has cash balances. Management also monitors the credit quality of cash equivalents.
Management continually monitors the credit ratings of the financial institutions with whom VF conducts business and geopolitical risks that may impact countries where VF has cash balances. Management also monitors the credit quality of cash equivalents.
When deemed reasonably certain, the renewal and termination options are included in the determination of lease term. VF’s policy is to review property, plant and equipment, definite-lived intangible assets and operating lease right-of-use assets for potential impairment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable.
VF’s policy is to review property, plant and equipment, definite-lived intangible assets and operating lease right-of-use assets for potential impairment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable.
(2) Operating leases represent required lease payments during the noncancelable lease term. Variable payments for occupancy-related costs, real estate taxes, insurance and contingent rent are not included above. (3) Interest payment obligations represent required interest payments on long-term debt.
(1) Long-term debt consists of required undiscounted principal payments on long-term debt and finance lease obligations. (2) Operating leases represent required undiscounted lease payments during the noncancelable lease term. Variable payments for occupancy-related costs, real estate taxes, insurance and contingent rent are not included above.
The U.S. qualified and supplemental defined benefit plans were closed to new entrants at the end of 2004 and all future benefit accruals were frozen as of December 31, 2018. During the year ended March 2020, VF offered former employees in the U.S. qualified plan a lump-sum option to receive a distribution of their deferred vested benefits.
VF has taken a series of steps to manage the risk and volatility in the pension plans and their impact on the financial statements, including the following: • The U.S. qualified and supplemental defined benefit plans were closed to new entrants at the end of 2004 and all future benefit accruals were frozen as of December 31, 2018. • During the year ended March 2020, VF offered former employees in the U.S. qualified plan a lump-sum option to receive a distribution of their deferred vested benefits.
For cash flow hedging contracts outstanding at the end of Fiscal 2022, a hypothetical 10% decrease and 10% increase in foreign currency exchange rates compared to rates at the end of Fiscal 2022, would result in an increase in the unrealized net gain of approximately $7.4 million and a decrease in the unrealized net gain of approximately $5.8 million, respectively.
For cash flow hedging contracts outstanding at the end of Fiscal 2024, a hypothetical 10% decrease and 10% increase in foreign currency exchange rates compared to rates at the end of Fiscal 2024, would result in a decrease in the unrealized net loss of approximately $61.8 million and an increase in the unrealized net loss of approximately $50.3 million, respectively.
Other Reporting Units - Qualitative Impairment Analysis For all other reporting units, VF elected to perform a qualitative assessment during the annual goodwill and indefinite-lived intangible asset impairment testing to determine whether it was more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired.
For the remaining reporting units and indefinite-lived trademark intangible assets, VF elected to perform a qualitative analysis during the annual goodwill and indefinite-lived intangible asset impairment testing, as of the beginning of the fourth quarter of Fiscal 2024, to determine whether it was more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired.
A discount rate considers the risk-free rate of return on long-term treasury securities, the risk premium associated with investing in equity securities of comparable companies, the beta obtained from comparable companies and the cost of debt for investment grade issuers. In addition, the discount rate may consider any company-specific risk in achieving the prospective financial information.
A discount rate considers the risk-free rate of return on long-term treasury securities, the risk premium associated with investing in equity securities of comparable companies, the beta obtained from comparable companies and the cost of debt for investment grade issuers.
There can be no assurance that the estimates and assumptions used in our goodwill and indefinite-lived intangible asset impairment testing will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic conditions in Fiscal 2023 or future years vary from current assumptions (including changes 40 VF Corporation Fiscal 2022 Form 10-K Table of Contents in discount rates), (iii) business conditions or strategies for a specific reporting unit change from current assumptions, including loss of major customers, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and EBITDA.
There can be no assurance the estimates and assumptions, particularly our long-term financial projections, used in our goodwill and indefinite-lived intangible asset impairment testing will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic conditions in Fiscal 2025 or future years vary from current assumptions (including changes in discount rates, royalty rates and foreign currency exchange rates), (iii) business conditions or strategies change from current assumptions, including loss of major customers or channels, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and EBITDA.
Defined benefit pension plan risks At the end of Fiscal 2022, VF’s defined benefit pension plans were overfunded by a net total of $85.7 million.
Defined benefit pension plan risks At the end of Fiscal 2024, VF’s defined benefit pension plans were overfunded by a net total of $89.9 million.
Costs to develop new software and related applications are generally not allocated to the segments. Corporate Headquarters’ Costs Headquarters’ costs include compensation and benefits of corporate management and staff, legal and professional fees, and general and administrative expenses that have not been allocated to the segments.
Costs to develop new software and related applications are generally not allocated to the segments. Corporate Headquarters’ Costs Headquarters’ costs include compensation and benefits of corporate management and staff, legal and professional fees, 32 VF Corporation Fiscal 2024 Form 10-K Table of Contents and general and administrative expenses that have not been allocated to the segments.
In Fiscal 2023, amounts due to suppliers who voluntarily participate in the SCF program will be included in the accounts payable line item in VF's Consolidated Balance Sheets and all payments made under the SCF program will be reflected in cash flows from operating activities in VF's Consolidated Statements of Cash Flows.
All amounts due to suppliers that are eligible to participate in the SCF program are included in the accounts payable line item in VF's Consolidated Balance Sheets and VF payments made under the SCF program are reflected in cash flows from operating activities in VF's Consolidated Statements of Cash Flows.
An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset to its carrying value. Fair value of an indefinite-lived trademark is based on an income approach using the relief-from-royalty method.
An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of VF Corporation Fiscal 2024 Form 10-K 39 Table of Contents the asset to its carrying value. Fair value of an indefinite-lived trademark is based on an income approach using the relief-from-royalty method.
VF has $55.7 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were $5.5 million at March 2022. Borrowings under these arrangements had a weighted average interest rate of 26.0% at March 2022.
VF has $81.2 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were $13.9 million at March 2024. Borrowings under these arrangements had a weighted average interest rate of 51.6% at March 2024.
The reported values of assets and liabilities in these foreign businesses are subject to fluctuations in foreign currency exchange rates. For net advances to and investments in VF’s foreign businesses that are considered to be long-term, the impact of changes in foreign currency exchange rates on those long-term advances is deferred as a component of accumulated OCI in stockholders’ equity.
For net advances to and investments in VF’s foreign businesses that are considered to be long-term, the impact of changes in foreign currency exchange rates on those long-term advances is deferred as a component of accumulated other comprehensive loss ("OCL") in stockholders’ equity.
Tax Court (the “Court”) to resolve an Internal Revenue Service ("IRS") dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011. While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years.
As previously reported, VF petitioned the U.S. Tax Court (the “Tax Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011. While the IRS argued that all such income should have been immediately included in 2011, VF reported periodic income inclusions in subsequent tax years.
VF allocates the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill. Contingent consideration, if any, is included within the purchase price and is recognized at its fair value on the acquisition date.
All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. VF allocates the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill.
Supply Chain Financing Program During the three months ended December 2021, VF began offering a voluntary supply chain finance ("SCF") program that enables certain suppliers of inventory to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier.
Supply Chain Financing Program VF facilitates a voluntary supply chain finance ("SCF") program that enables a significant portion of our inventory suppliers to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier.
Management evaluates these estimates and assumptions on an ongoing basis. Because VF’s business cycle is relatively short (i.e., from the date that inventory is received until that inventory is sold and the trade receivable is collected), actual results related to most estimates are known within a few months after any balance sheet date.
Because VF’s business cycle is relatively short (i.e., from the date inventory is purchased until that inventory is sold and payment is collected), actual results related to most estimates are known within a few months after any balance sheet date.
We have included an Other category in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Included in this Other category are results primarily related to the sale of non-VF products and sourcing activities related to transition services.
We have included an Other category in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit.
Total outstanding interest-bearing debt averaged $5.6 billion and $5.8 billion for Fiscal 2022 and Fiscal 2021, respectively, with short-term borrowings representing 1.1% and 4.2% of average debt outstanding for the respective years. The weighted average interest rate on outstanding debt was 2.1% in both Fiscal 2022 and Fiscal 2021.
T otal outstanding interest-bearing debt averaged $6.7 billion and $6.2 billion for Fiscal 2024 and Fiscal 2023, respectively, with short-term borrowings representing 5.8% and 16.8% of average debt outstanding for the respective years. The weighted average interest rate on outstanding debt was 3.5% in Fiscal 2024 and 2.6% in Fiscal 2023.
Other income (expense), net primarily consists of components of net periodic pension cost (excluding the service cost component), foreign currency gains and losses and other non-operating gains and losses. Other income (expense) netted to $26.2 million and $(24.7) million in Fiscal 2022 and Fiscal 2021, re spectively.
Other income (expense), net primarily consists of components of net periodic pension cost (excluding the service cost component), certain foreign currency and hedging gains and losses and other non-operating gains and losses. Other income (expense) netted to $23.8 million and $(119.8) million in Fiscal 2024 and Fiscal 2023, re spectively.
The overfunded status includes a $93.6 million liability related to our U.S. unfunded supplemental defined benefit plan, $20.5 million of net liabilities related to our non-U.S. defined benefit plans, and a $199.8 million net asset related to our U.S. qualified defined benefit plan.
The overfunded status includes a $54.0 million liability related to our U.S. unfunded supplemental defined benefit plan, $30.4 million of net liabilities related to our non-U.S. defined benefit plans, and a $174.3 million net asset related to our U.S. qualified defined benefit plan.
The assumptions that impact actuarial gains and losses include the rate of return on investments held by the pension plans, the discount rate used to value participant liabilities and demographic characteristics of the participants. VF has taken a series of steps to manage the risk and volatility in the pension plans and their impact on the financial statements.
The assumptions that impact actuarial gains and losses include the rate of return on investments held by the pension plans, the discount rate used to value participant liabilities and demographic characteristics of the participants.
VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions.
VF may request an unlimited number of one-year extensions so long as each extension does not cause the remaining life of the Global 34 VF Corporation Fiscal 2024 Form 10-K Table of Contents Credit Facility to exceed five years, subject to stated terms and conditions; however, granting of any extension is at the discretion of the lenders.
Refer to Note 20 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income before income taxes.
Segment profit comprises the operating income and other income (expense), net line items of each segment. Refer to Note 21 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income before income taxes.
As of March 2022, VF had $679.0 million of gross deferred income tax assets related to operating loss and capital loss carryforwards, and $608.5 million of valuation allowances against those assets.
As of March 2024, VF had $711.1 million of gross deferred income tax assets related to operating loss, credit and capital loss carryforwards, and $435.3 million of valuation allowances against those assets.
The following table presents the percentage relationship to net revenues for components of the Consolidated Statements of Operations: Year Ended March 2022 2021 Gross margin (net revenues less cost of goods sold) 54.5 % 52.7 % Selling, general and administrative expenses 40.7 45.9 Impairment of goodwill and intangible assets — 0.2 Operating margin 13.8 % 6.6 % Year Ended March 2022 Compared to Year Ended March 2021 Gross margin increased 180 basis points to 54.5% in Fiscal 2022 compared to 52.7% in Fiscal 2021.
The following table presents the percentage relationship to net revenues for components of the Consolidated Statements of Operations: Year Ended March 2024 2023 Gross margin (net revenues less cost of goods sold) 52.0 % 52.5 % Selling, general and administrative expenses 47.4 43.4 Impairment of goodwill and intangible assets 4.9 6.3 Operating margin (0.3) % 2.8 % 28 VF Corporation Fiscal 2024 Form 10-K Table of Contents Year Ended March 2024 Compared to Year Ended March 2023 Gross margin decreased 50 basis points to 52.0% in Fiscal 2024 compared to 52.5% in Fiscal 2023.
As a result of the above, income from continuing operations in Fiscal 2022 was $1.2 billion ($3.10 per diluted share), compared to $354.9 million ($0.91 per diluted share) in Fiscal 2021. Refer to additional discussion in the “Information by Reportable Segment” section below. Information by Reportable Segment VF's reportable segments are: Outdoor, Active and Work.
As a result of the above, net income (loss) in Fiscal 2024 was $(968.9) million ($(2.49) per diluted share), compared to $118.6 million ($0.31 per diluted share) in Fiscal 2023. Refer to additional discussion in the “Information by Reportable Segment” section below. Information by Reportable Segment VF's reportable segments are: Outdoor, Active and Work.
Under the market-based fair value methodology, judgment is required in evaluating market multiples and recent transactions. Management believes that the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of VF’s reporting units.
Management believes that the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of VF’s reporting units.
VF’s income tax returns are regularly examined by federal, state and foreign tax authorities, and those audits may result in proposed adjustments. VF has reviewed all issues raised upon examination, as well as any exposure for issues that may be raised in future examinations. VF has evaluated these potential issues under the “more-likely-than-not” standard of the accounting literature.
VF has reviewed all issues raised upon examination, as well as any exposure for issues that may be raised in future examinations. VF has evaluated these potential issues under the “more-likely-than-not” standard of the accounting literature.
Based on the range of estimated fair values developed from the income and market-based methods, VF determines the estimated fair value for the reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, the goodwill is not impaired and no further review is required.
If the estimated fair value of the reporting unit exceeds its carrying value, the goodwill is not impaired and no further review is required.
The change of control provision applies to all notes, except for the 2033 notes. Dividends Cash dividends totaled $1.98 per share in Fiscal 2022 compared to $1.94 in Fiscal 2021. The dividend payout ratio was 56.0% of diluted earnings per share in Fiscal 2022 compared to 186.5% in Fiscal 2021.
The change of control provision applies to all notes, except for the notes due in 2033. Dividends Cash dividends totaled $0.78 per share in Fiscal 2024 compared to $1.81 in Fiscal 2023. The dividend payout ratio was (31.3)% of diluted earnings (loss) per share in Fiscal 2024 compared to 592.8% in Fiscal 2023.
Supreme Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2022, management performed a quantitative impairment analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset.
During the fourth quarter of Fiscal 2023 , in connection with its ann ual impairment testing, VF performed a quantitative analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset.
All references to the years ended March 2022 ("Fiscal 2022"), March 2021 ("Fiscal 2021") and March 2020 ("Fiscal 2020") relate to the 52-week fiscal year ended April 2, 2022, the 53-week fiscal year ended April 3, 2021 and the 52-week fiscal year ended March 28, 2020, respectively.
All references to the years ended March 2024 ("Fiscal 2024"), March 2023 ("Fiscal 2023") and March 2022 ("Fiscal 2022") relate to the 52-week fiscal years ended March 30, 2024, April 1, 2023, and April 2, 2022, respectively.
During 2017 and 2018, VF Europe BVBA was assessed and paid €35.0 million tax and interest, which was recorded as an income tax receivable based on the expected success of the requests for annulment. During 2019, the General Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment.
During 2017 and 2018, VF Europe BVBA was assessed and paid €35.0 million tax and interest, which was recorded as an income tax receivable and was included in the other current assets line item in VF's Consolidated Balance Sheets, based on the expected success of the requests for annulment.
VF Corporation Fiscal 2022 Form 10-K 25 Table of Contents ANALYSIS OF RESULTS OF OPERATIONS Consolidated Statements of Operations The following table presents a summary of the changes in net revenues for the year ended March 2022 compared to the year ended March 2021: (In millions) Year Ended March Net revenues — 2021 $ 9,238.8 Organic 2,098.7 Acquisition 438.5 Impact of foreign currency 65.8 Net revenues — 2022 $ 11,841.8 Year Ended March 2022 Compared to Year Ended March 2021 VF reported a 28% increase in revenues in Fiscal 2022 compared to Fiscal 2021, including a 1% favorable impact from foreign currency.
ANALYSIS OF RESULTS OF OPERATIONS Consolidated Statements of Operations The following table presents a summary of the changes in net revenues for the year ended March 2024 compared to the year ended March 2023: (In millions) Year Ended March Net revenues — 2023 $ 11,612.5 Organic (1,265.3) Impact of foreign currency 107.5 Net revenues — 2024 $ 10,454.7 Year Ended March 2024 Compared to Year Ended March 2023 VF reported a 10% decrease in revenues in Fiscal 2024 compared to Fiscal 2023, including a 1% favorable impact from foreign currency .
Year Ended March (In millions) 2022 2021 Impairment of indefinite-lived intangible assets $ — $ 12.4 Interest expense, net and loss on debt extinguishment 135.1 126.5 Corporate and other expenses 309.8 417.0 Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses.
Year Ended March (In millions) 2024 2023 Percent Change Impairment of goodwill and intangible assets $ 507.6 $ 735.0 (30.9) % Corporate and other expenses 475.3 617.8 (23.1) % Interest expense, net 223.4 164.6 35.7 % Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses.
Management’s Use of Estimates and Assumptions Management made its estimates based on information available as of the date of our assessments, using assumptions we believe market participants would use in performing an independent valuation of the business. It is possible that VF’s conclusions regarding impairment of goodwill or indefinite-lived intangible assets in any reporting unit could change in future periods.
Management’s Use of Estimates and Assumptions Management made its estimates based on information available as of the date of our assessments, using assumptions we believe market participants would use in performing an independent valuation of the business.
If applicable, performance in recent years was compared to forecasts included in prior valuations. Based on the results of the qualitative assessment, VF concluded it was more likely than not the carrying values of the goodwill and indefinite-lived trademark intangible assets were less than their fair values, and that further quantitative testing was not necessary.
Based on the results of the qualitative assessment, VF concluded it was more likely than not the carrying values of the goodwill and indefinite-lived trademark intangible assets were less than their fair values, and that further quantitative testing was not necessary. Refer to Notes 9 and 24 to the consolidated financial statements for additional discussion on Fiscal 2024 impairment testing.
Outdoor Year Ended March (Dollars in millions) 2022 2021 Percent Change Segment revenues $ 5,327.6 $ 4,127.6 29.1 % Segment profit 795.5 342.2 132.5 % Operating margin 14.9 % 8.3 % The Outdoor segment includes the following brands: The North Face ® , Timberland ® , Smartwool ® , Icebreaker ® and Altra ® .
Outdoor Year Ended March (Dollars in millions) 2024 2023 Percent Change Segment revenues $ 5,501.4 $ 5,647.5 (2.6) % Segment profit 602.7 785.4 (23.3) % Operating margin 11.0 % 13.9 % The Outdoor segment includes the following brands: The North Face ® , Timberland ® , Smartwool ® , Altra ® and Icebreaker ® .
The increase in the year ended March 2022 was partially offset by a 4% decrease in the Asia-Pacific region, including a 3% favorable impact from foreign currency, primarily due to the negative impact of COVID-19 resurgence in Fiscal 2022. Global direct-to-consumer revenues for Active increased 43% in Fiscal 2022, including a 1% favorable impact from foreign currency.
Revenues in the Europe region increased 1% in the year ended March 2024, including a 4% favorable impact from foreign currency. Global direct-to-consumer revenues for Outdoor increased 3% in Fiscal 2024. Th e increase was primarily due to The North Face ® brand in the Asia-Pacific and Europe regions.

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