false2022Q100001033794/21.7500001033792021-04-042021-07-030000103379us-gaap:CommonStockMember2021-04-042021-07-030000103379vfc:FixedRateZeroPointSixTwoFivePercentageNotesDueSeptemberTwoThousandTwentyThreeMember2021-04-042021-07-030000103379vfc:FixedRateZeroPointTwoFivePercentageNotesDueTwoThousandTwentyEightMemberMember2021-04-042021-07-030000103379vfc:FixedRateZeroPointSixTwoFivePercentageNotesDueTwoThousandThirtyTwoMemberMember2021-04-042021-07-03xbrli:shares00001033792021-07-31iso4217:USD00001033792021-07-0300001033792021-04-0300001033792020-06-27iso4217:USDxbrli:shares00001033792020-03-292020-06-2700001033792020-03-280000103379us-gaap:CommonStockMember2021-04-030000103379us-gaap:AdditionalPaidInCapitalMember2021-04-030000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-030000103379us-gaap:RetainedEarningsMember2021-04-030000103379us-gaap:RetainedEarningsMember2021-04-042021-07-030000103379us-gaap:AdditionalPaidInCapitalMember2021-04-042021-07-030000103379us-gaap:CommonStockMember2021-04-042021-07-030000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-042021-07-030000103379us-gaap:CommonStockMember2021-07-030000103379us-gaap:AdditionalPaidInCapitalMember2021-07-030000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-030000103379us-gaap:RetainedEarningsMember2021-07-030000103379us-gaap:CommonStockMember2020-03-280000103379us-gaap:AdditionalPaidInCapitalMember2020-03-280000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-280000103379us-gaap:RetainedEarningsMember2020-03-280000103379us-gaap:RetainedEarningsMember2020-03-292020-06-270000103379us-gaap:AdditionalPaidInCapitalMember2020-03-292020-06-270000103379us-gaap:CommonStockMember2020-03-292020-06-270000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-292020-06-270000103379us-gaap:CommonStockMember2020-06-270000103379us-gaap:AdditionalPaidInCapitalMember2020-06-270000103379us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-270000103379us-gaap:RetainedEarningsMember2020-06-2700001033792021-07-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:OutdoorMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:ActiveMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:WorkMember2021-04-042021-07-030000103379us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379us-gaap:SalesChannelThroughIntermediaryMember2021-04-042021-07-030000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:OutdoorMember2021-04-042021-07-030000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:ActiveMember2021-04-042021-07-030000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:WorkMember2021-04-042021-07-030000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379us-gaap:SalesChannelDirectlyToConsumerMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMembervfc:OutdoorMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:ActiveMemberus-gaap:RoyaltyMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMembervfc:WorkMember2021-04-042021-07-030000103379us-gaap:RoyaltyMemberus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379us-gaap:RoyaltyMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:ActiveMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:WorkMember2021-04-042021-07-030000103379us-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379country:USus-gaap:OperatingSegmentsMembervfc:OutdoorMember2021-04-042021-07-030000103379country:USus-gaap:OperatingSegmentsMembervfc:ActiveMember2021-04-042021-07-030000103379country:USus-gaap:OperatingSegmentsMembervfc:WorkMember2021-04-042021-07-030000103379country:USus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379country:US2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMembersrt:EuropeMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembersrt:EuropeMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:WorkMembersrt:EuropeMember2021-04-042021-07-030000103379srt:EuropeMemberus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379srt:EuropeMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembersrt:AsiaPacificMembervfc:OutdoorMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembersrt:AsiaPacificMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembersrt:AsiaPacificMembervfc:WorkMember2021-04-042021-07-030000103379srt:AsiaPacificMemberus-gaap:MaterialReconcilingItemsMember2021-04-042021-07-030000103379srt:AsiaPacificMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMembervfc:AmericasNonUSMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembervfc:AmericasNonUSMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMembervfc:WorkMembervfc:AmericasNonUSMember2021-04-042021-07-030000103379us-gaap:MaterialReconcilingItemsMembervfc:AmericasNonUSMember2021-04-042021-07-030000103379vfc:AmericasNonUSMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:OutdoorMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:ActiveMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelThroughIntermediaryMembervfc:WorkMember2020-03-292020-06-270000103379us-gaap:SalesChannelThroughIntermediaryMemberus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379us-gaap:SalesChannelThroughIntermediaryMember2020-03-292020-06-270000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:OutdoorMember2020-03-292020-06-270000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:ActiveMember2020-03-292020-06-270000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:OperatingSegmentsMembervfc:WorkMember2020-03-292020-06-270000103379us-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379us-gaap:SalesChannelDirectlyToConsumerMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMembervfc:OutdoorMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:ActiveMemberus-gaap:RoyaltyMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMembervfc:WorkMember2020-03-292020-06-270000103379us-gaap:RoyaltyMemberus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379us-gaap:RoyaltyMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:ActiveMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:WorkMember2020-03-292020-06-270000103379us-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379country:USus-gaap:OperatingSegmentsMembervfc:OutdoorMember2020-03-292020-06-270000103379country:USus-gaap:OperatingSegmentsMembervfc:ActiveMember2020-03-292020-06-270000103379country:USus-gaap:OperatingSegmentsMembervfc:WorkMember2020-03-292020-06-270000103379country:USus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379country:US2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMembersrt:EuropeMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembersrt:EuropeMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:WorkMembersrt:EuropeMember2020-03-292020-06-270000103379srt:EuropeMemberus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379srt:EuropeMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembersrt:AsiaPacificMembervfc:OutdoorMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembersrt:AsiaPacificMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembersrt:AsiaPacificMembervfc:WorkMember2020-03-292020-06-270000103379srt:AsiaPacificMemberus-gaap:MaterialReconcilingItemsMember2020-03-292020-06-270000103379srt:AsiaPacificMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:OutdoorMembervfc:AmericasNonUSMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:ActiveMembervfc:AmericasNonUSMember2020-03-292020-06-270000103379us-gaap:OperatingSegmentsMembervfc:WorkMembervfc:AmericasNonUSMember2020-03-292020-06-270000103379us-gaap:MaterialReconcilingItemsMembervfc:AmericasNonUSMember2020-03-292020-06-270000103379vfc:AmericasNonUSMember2020-03-292020-06-27xbrli:pure0000103379vfc:SupremeMember2020-12-280000103379vfc:SupremeMember2020-12-282020-12-280000103379vfc:SupremeMemberus-gaap:OtherLiabilitiesMember2021-04-030000103379us-gaap:RestrictedStockMembervfc:SupremeMember2020-12-282020-12-280000103379us-gaap:RestrictedStockMembervfc:SupremeMember2020-12-280000103379vfc:SupremeMember2021-04-042021-07-030000103379us-gaap:SellingGeneralAndAdministrativeExpensesMembervfc:SupremeMember2020-03-292021-04-030000103379us-gaap:TrademarksMembervfc:SupremeMember2021-04-030000103379vfc:SupremeMember2020-03-292020-06-270000103379vfc:OccupationalWorkwearBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-06-282021-06-280000103379vfc:OccupationalWorkwearBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-04-042021-07-030000103379vfc:OccupationalWorkwearBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-03-292020-06-270000103379vfc:KontoorBrandsAndOccupationalWorkwearMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-03-292020-06-270000103379us-gaap:SegmentDiscontinuedOperationsMembervfc:OccupationalWorkwearBusinessMember2021-07-030000103379us-gaap:SegmentDiscontinuedOperationsMembervfc:OccupationalWorkwearBusinessMember2021-04-030000103379us-gaap:SegmentDiscontinuedOperationsMembervfc:KontoorBrandsAndOccupationalWorkwearMember2020-06-270000103379us-gaap:CustomerRelationshipsMember2021-04-042021-07-030000103379us-gaap:CustomerRelationshipsMember2021-07-030000103379us-gaap:CustomerRelationshipsMember2021-04-030000103379us-gaap:LicensingAgreementsMember2021-04-042021-07-030000103379us-gaap:LicensingAgreementsMember2021-07-030000103379us-gaap:LicensingAgreementsMember2021-04-030000103379us-gaap:OtherIntangibleAssetsMember2021-04-042021-07-030000103379us-gaap:OtherIntangibleAssetsMember2021-07-030000103379us-gaap:OtherIntangibleAssetsMember2021-04-030000103379vfc:OutdoorMember2021-04-030000103379vfc:ActiveMember2021-04-030000103379vfc:WorkMember2021-04-030000103379vfc:OutdoorMember2021-04-042021-07-030000103379vfc:ActiveMember2021-04-042021-07-030000103379vfc:WorkMember2021-04-042021-07-030000103379vfc:OutdoorMember2021-07-030000103379vfc:ActiveMember2021-07-030000103379vfc:WorkMember2021-07-030000103379us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2021-04-042021-07-030000103379us-gaap:AccumulatedTranslationAdjustmentMember2021-07-030000103379us-gaap:AccumulatedTranslationAdjustmentMember2021-04-030000103379us-gaap:AccumulatedTranslationAdjustmentMember2020-06-270000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-030000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-030000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-270000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-030000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-030000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-270000103379us-gaap:AccumulatedTranslationAdjustmentMember2021-04-042021-07-030000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-042021-07-030000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-042021-07-030000103379us-gaap:AccumulatedTranslationAdjustmentMember2020-03-280000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-280000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-280000103379us-gaap:AccumulatedTranslationAdjustmentMember2020-03-292020-06-270000103379us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-292020-06-270000103379us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedTranslationAdjustmentMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedTranslationAdjustmentMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:ForeignExchangeContractMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:ForeignExchangeContractMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-292020-06-270000103379us-gaap:InterestRateContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-042021-07-030000103379us-gaap:InterestRateContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-292020-06-270000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-04-042021-07-030000103379us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-03-292020-06-270000103379srt:MinimumMember2021-04-042021-07-030000103379srt:MaximumMember2021-04-042021-07-030000103379vfc:PerformanceBasedRestrictedStockUnitsMember2021-04-042021-07-030000103379vfc:PerformanceBasedRestrictedStockUnitsMembersrt:MinimumMember2021-07-030000103379vfc:PerformanceBasedRestrictedStockUnitsMembersrt:MaximumMember2021-07-030000103379vfc:PerformanceBasedRestrictedStockUnitsMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-04-042021-07-030000103379srt:DirectorMembervfc:NonPerformanceBasedRestrictedStockMember2021-04-042021-07-030000103379vfc:NonPerformanceBasedRestrictedStockMembervfc:KeyEmployeesInInternationalJurisdictionsMember2021-04-042021-07-030000103379vfc:NonPerformanceBasedRestrictedStockMembervfc:KeyEmployeesInInternationalJurisdictionsMember2021-07-030000103379us-gaap:RestrictedStockMember2021-04-042021-07-03iso4217:EUR0000103379us-gaap:AdministrationOfTheTreasuryBelgiumMemberus-gaap:DomesticCountryMembervfc:VFEuropeBVBAMember2018-12-310000103379us-gaap:AdministrationOfTheTreasuryBelgiumMemberus-gaap:DomesticCountryMembervfc:VFEuropeBVBAMember2017-12-300000103379us-gaap:OperatingSegmentsMember2021-04-042021-07-030000103379us-gaap:OperatingSegmentsMember2020-03-292020-06-270000103379us-gaap:CorporateNonSegmentMember2021-04-042021-07-030000103379us-gaap:CorporateNonSegmentMember2020-03-292020-06-270000103379vfc:EmployeesAndNonEmployeesStockOptionMember2021-04-042021-07-030000103379vfc:EmployeesAndNonEmployeesStockOptionMember2020-03-292020-06-270000103379vfc:PerformanceBasedRestrictedStockUnitsMember2021-04-042021-07-030000103379vfc:PerformanceBasedRestrictedStockUnitsMember2020-03-292020-06-270000103379us-gaap:MoneyMarketFundsMember2021-07-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-07-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-07-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2021-07-030000103379us-gaap:BankTimeDepositsMember2021-07-030000103379us-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2021-07-030000103379us-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2021-07-030000103379us-gaap:FairValueInputsLevel3Memberus-gaap:BankTimeDepositsMember2021-07-030000103379us-gaap:FairValueInputsLevel1Member2021-07-030000103379us-gaap:FairValueInputsLevel2Member2021-07-030000103379us-gaap:FairValueInputsLevel3Member2021-07-030000103379us-gaap:MoneyMarketFundsMember2021-04-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-04-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-04-030000103379us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2021-04-030000103379us-gaap:BankTimeDepositsMember2021-04-030000103379us-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2021-04-030000103379us-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2021-04-030000103379us-gaap:FairValueInputsLevel3Memberus-gaap:BankTimeDepositsMember2021-04-030000103379us-gaap:FairValueInputsLevel1Member2021-04-030000103379us-gaap:FairValueInputsLevel2Member2021-04-030000103379us-gaap:FairValueInputsLevel3Member2021-04-030000103379vfc:ContingentConsiderationMember2021-04-030000103379vfc:ContingentConsiderationMember2021-04-042021-07-030000103379vfc:ContingentConsiderationMember2021-07-030000103379vfc:SupremeMember2021-04-030000103379vfc:SupremeMember2021-07-030000103379us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-07-030000103379us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-04-030000103379us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-07-030000103379us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-04-030000103379us-gaap:ForeignExchangeContractMember2021-07-030000103379us-gaap:ForeignExchangeContractMember2021-04-030000103379us-gaap:ForeignExchangeContractMember2020-06-270000103379us-gaap:DesignatedAsHedgingInstrumentMember2021-07-030000103379us-gaap:DesignatedAsHedgingInstrumentMember2021-04-030000103379us-gaap:DesignatedAsHedgingInstrumentMember2020-06-270000103379us-gaap:NondesignatedMember2021-07-030000103379us-gaap:NondesignatedMember2021-04-030000103379us-gaap:NondesignatedMember2020-06-270000103379us-gaap:ForeignExchangeContractMember2021-04-042021-07-030000103379us-gaap:ForeignExchangeContractMember2020-03-292020-06-270000103379us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2021-04-042021-07-030000103379us-gaap:SalesMemberus-gaap:ForeignExchangeContractMember2020-03-292020-06-270000103379us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2021-04-042021-07-030000103379us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2020-03-292020-06-270000103379us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMember2021-04-042021-07-030000103379us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMember2020-03-292020-06-270000103379us-gaap:ForeignExchangeContractMemberus-gaap:OtherNonoperatingIncomeExpenseMember2021-04-042021-07-030000103379us-gaap:ForeignExchangeContractMemberus-gaap:OtherNonoperatingIncomeExpenseMember2020-03-292020-06-270000103379us-gaap:InterestRateContractMemberus-gaap:InterestExpenseMember2021-04-042021-07-030000103379us-gaap:InterestRateContractMemberus-gaap:InterestExpenseMember2020-03-292020-06-270000103379us-gaap:NondesignatedMember2020-03-292020-06-270000103379us-gaap:NondesignatedMember2021-04-042021-07-030000103379us-gaap:NetInvestmentHedgingMember2021-07-030000103379us-gaap:NetInvestmentHedgingMember2021-04-042021-07-030000103379us-gaap:NetInvestmentHedgingMember2020-03-292020-06-270000103379us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-042021-07-030000103379us-gaap:CostOfSalesMember2021-04-042021-07-030000103379vfc:AccruedCurrentLiabilitiesMember2021-07-030000103379us-gaap:OtherNoncurrentLiabilitiesMember2021-07-030000103379us-gaap:EmployeeSeveranceMember2021-04-030000103379us-gaap:OtherRestructuringMember2021-04-030000103379us-gaap:EmployeeSeveranceMember2021-04-042021-07-030000103379us-gaap:OtherRestructuringMember2021-04-042021-07-030000103379us-gaap:EmployeeSeveranceMember2021-07-030000103379us-gaap:OtherRestructuringMember2021-07-030000103379us-gaap:DividendDeclaredMemberus-gaap:SubsequentEventMember2021-07-27
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 1-5256
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Pennsylvania | | 23-1180120 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. employer identification number) |
1551 Wewatta Street
Denver, Colorado 80202
(Address of principal executive offices)
(720) 778-4000
(Registrant’s telephone number, including area code)
| | | | | | | | |
Securities registered pursuant to Section 12(b) of the Act: |
(Title of each class) | (Trading Symbol(s)) | (Name of each exchange on which registered) |
Common Stock, without par value, stated capital, $0.25 per share | VFC | New York Stock Exchange |
0.625% Senior Notes due 2023 | VFC23 | New York Stock Exchange |
0.250% Senior Notes due 2028 | VFC28 | New York Stock Exchange |
0.625% Senior Notes due 2032 | VFC32 | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | |
Large accelerated filer | | ☑ | | Accelerated filer | | ☐ |
| | | |
Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | | | |
| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
On July 31, 2021, there were 392,638,627 shares of the registrant’s common stock outstanding.
VF CORPORATION
Table of Contents
PART I — FINANCIAL INFORMATION
| | |
ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED). |
VF CORPORATION
Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
(In thousands, except share amounts) | | June 2021 | | | March 2021 | | June 2020 |
ASSETS | | | | | | | |
Current assets | | | | | | | |
Cash and equivalents | | $ | 1,274,926 | | | | $ | 815,750 | | | $ | 2,145,111 | |
Accounts receivable, less allowance for doubtful accounts of: June 2021 - $33,666; March 2021 - $33,654; June 2020 - $38,179 | | 1,138,811 | | | | 1,298,020 | | | 934,984 | |
Inventories | | 1,216,818 | | | | 1,061,839 | | | 1,402,858 | |
Short-term investments | | 598,806 | | | | 598,806 | | | 700,000 | |
Other current assets | | 334,777 | | | | 423,877 | | | 513,049 | |
| | | | | | | |
Current assets of discontinued operations | | — | | | | 587,578 | | | 565,135 | |
Total current assets | | 4,564,138 | | | | 4,785,870 | | | 6,261,137 | |
Property, plant and equipment, net | | 1,016,465 | | | | 975,876 | | | 957,309 | |
Intangible assets, net | | 3,027,886 | | | | 3,029,545 | | | 1,855,764 | |
Goodwill | | 2,427,324 | | | | 2,425,427 | | | 1,162,606 | |
Operating lease right-of-use assets | | 1,426,706 | | | | 1,474,434 | | | 1,354,308 | |
Other assets | | 1,087,832 | | | | 1,062,877 | | | 887,921 | |
| | | | | | | |
TOTAL ASSETS | | $ | 13,550,351 | | | | $ | 13,754,029 | | | $ | 12,479,045 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
Current liabilities | | | | | | | |
Short-term borrowings | | $ | 8,091 | | | | $ | 11,061 | | | $ | 19,256 | |
Current portion of long-term debt | | 1,001,030 | | | | 1,023 | | | 1,025 | |
Accounts payable | | 534,803 | | | | 463,208 | | | 348,932 | |
Accrued liabilities | | 1,527,522 | | | | 1,609,928 | | | 1,254,967 | |
| | | | | | | |
Current liabilities of discontinued operations | | — | | | | 125,257 | | | 91,283 | |
Total current liabilities | | 3,071,446 | | | | 2,210,477 | | | 1,715,463 | |
Long-term debt | | 4,726,234 | | | | 5,709,149 | | | 5,609,792 | |
Operating lease liabilities | | 1,192,792 | | | | 1,236,461 | | | 1,104,500 | |
Other liabilities | | 1,285,849 | | | | 1,541,778 | | | 1,136,692 | |
| | | | | | | |
Total liabilities | | 10,276,321 | | | | 10,697,865 | | | 9,566,447 | |
Commitments and contingencies | | | | | | | |
Stockholders’ equity | | | | | | | |
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at June 2021, March 2021 or June 2020 | | — | | | | — | | | — | |
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at June 2021 - 392,621,561; March 2021 - 391,941,477; June 2020 - 389,641,245 | | 98,155 | | | | 97,985 | | | 97,410 | |
Additional paid-in capital | | 3,824,656 | | | | 3,777,645 | | | 4,010,817 | |
Accumulated other comprehensive income (loss) | | (965,886) | | | | (1,009,000) | | | (897,541) | |
Retained earnings (accumulated deficit) | | 317,105 | | | | 189,534 | | | (298,088) | |
Total stockholders’ equity | | 3,274,030 | | | | 3,056,164 | | | 2,912,598 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 13,550,351 | | | | $ | 13,754,029 | | | $ | 12,479,045 | |
See notes to consolidated financial statements.
3 VF Corporation Q1 FY22 Form 10-Q
VF CORPORATION
Consolidated Statements of Operations
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June | | | |
| | | | | | | | | | | |
(In thousands, except per share amounts) | | 2021 | | | 2020 | | | | | | |
Net revenues | | $ | 2,194,557 | | | | $ | 1,076,293 | | | | | | | |
Costs and operating expenses | | | | | | | | | | | |
Cost of goods sold | | 955,551 | | | | 506,951 | | | | | | | |
Selling, general and administrative expenses | | 1,036,122 | | | | 816,151 | | | | | | | |
| | | | | | | | | | | |
Total costs and operating expenses | | 1,991,673 | | | | 1,323,102 | | | | | | | |
Operating income (loss) | | 202,884 | | | | (246,809) | | | | | | | |
Interest income | | 2,142 | | | | 1,313 | | | | | | | |
Interest expense | | (34,917) | | | | (29,262) | | | | | | | |
Other income (expense), net | | 9,041 | | | | (38,187) | | | | | | | |
Income (loss) from continuing operations before income taxes | | 179,150 | | | | (312,945) | | | | | | | |
Income tax expense (benefit) | | 25,178 | | | | (35,203) | | | | | | | |
Income (loss) from continuing operations | | 153,972 | | | | (277,742) | | | | | | | |
Income (loss) from discontinued operations, net of tax | | 170,273 | | | | (7,871) | | | | | | | |
Net income (loss) | | $ | 324,245 | | | | $ | (285,613) | | | | | | | |
Earnings (loss) per common share - basic | | | | | | | | | | | |
Continuing operations | | $ | 0.39 | | | | $ | (0.71) | | | | | | | |
Discontinued operations | | 0.44 | | | | (0.02) | | | | | | | |
Total earnings (loss) per common share - basic | | $ | 0.83 | | | | $ | (0.73) | | | | | | | |
Earnings (loss) per common share - diluted | | | | | | | | | | | |
Continuing operations | | $ | 0.39 | | | | $ | (0.71) | | | | | | | |
Discontinued operations | | 0.43 | | | | (0.02) | | | | | | | |
Total earnings (loss) per common share - diluted | | $ | 0.82 | | | | $ | (0.73) | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | |
Basic | | 391,351 | | | | 388,695 | | | | | | | |
Diluted | | 394,128 | | | | 390,791 | | | | | | | |
| | | | | | | | | | | |
See notes to consolidated financial statements.
VF Corporation Q1 FY22 Form 10-Q 4
VF CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June | | | | | | |
| | | | | | | | | | | | | | | | | |
(In thousands) | | 2021 | | | 2020 | | | | | | | | | | | | |
Net income (loss) | | $ | 324,245 | | | | $ | (285,613) | | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | |
Foreign currency translation and other | | | | | | | | | | | | | | | | | |
Gains arising during the period | | 33,171 | | | | 3,854 | | | | | | | | | | | | | |
Reclassification of foreign currency translation losses | | — | | | | 42,364 | | | | | | | | | | | | | |
Income tax effect | | 3,882 | | | | 6,255 | | | | | | | | | | | | | |
Defined benefit pension plans | | | | | | | | | | | | | | | | | |
Current period actuarial losses | | (4,013) | | | | — | | | | | | | | | | | | | |
Amortization of net deferred actuarial losses | | 2,840 | | | | 2,863 | | | | | | | | | | | | | |
Amortization of deferred prior service credits | | (118) | | | | (17) | | | | | | | | | | | | | |
Reclassification of net actuarial loss from settlement charge | | 948 | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income tax effect | | 659 | | | | 336 | | | | | | | | | | | | | |
Derivative financial instruments | | | | | | | | | | | | | | | | | |
Gains (losses) arising during the period | | (4,563) | | | | (7,595) | | | | | | | | | | | | | |
Income tax effect | | 192 | | | | 1,530 | | | | | | | | | | | | | |
Reclassification of net (gains) losses realized | | 10,559 | | | | (20,280) | | | | | | | | | | | | | |
Income tax effect | | (443) | | | | 4,107 | | | | | | | | | | | | | |
Other comprehensive income (loss) | | 43,114 | | | | 33,417 | | | | | | | | | | | | | |
Comprehensive income (loss) | | $ | 367,359 | | | | $ | (252,196) | | | | | | | | | | | | | |
See notes to consolidated financial statements.
5 VF Corporation Q1 FY22 Form 10-Q
VF CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | Three Months Ended June |
| | | | | |
(In thousands) | | 2021 | | | 2020 |
OPERATING ACTIVITIES | | | | | |
Net income (loss) | | $ | 324,245 | | | | $ | (285,613) | |
Income (loss) from discontinued operations, net of tax | | 170,273 | | | | (7,871) | |
Income (loss) from continuing operations, net of tax | | 153,972 | | | | (277,742) | |
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | | | | | |
| | | | | |
Depreciation and amortization | | 68,050 | | | | 63,026 | |
Reduction in the carrying amount of right-of-use assets | | 104,930 | | | | 101,772 | |
Stock-based compensation | | 21,701 | | | | 9,686 | |
Provision for doubtful accounts | | 1,850 | | | | 8,145 | |
Pension expense less than contributions | | (6,759) | | | | (3,802) | |
| | | | | |
| | | | | |
Other, net | | (176,493) | | | | 32,858 | |
Changes in operating assets and liabilities: | | | | | |
Accounts receivable | | 167,798 | | | | 372,754 | |
Inventories | | (150,966) | | | | (100,129) | |
Accounts payable | | 70,197 | | | | (59,768) | |
Income taxes | | 134,115 | | | | (65,128) | |
Accrued liabilities | | (71,905) | | | | (26,917) | |
Operating lease right-of-use assets and liabilities | | (113,465) | | | | (51,579) | |
Other assets and liabilities | | (128,107) | | | | (13,630) | |
Cash provided (used) by operating activities - continuing operations | | 74,918 | | | | (10,454) | |
Cash provided by operating activities - discontinued operations | | 6,090 | | | | 7,266 | |
Cash provided (used) by operating activities | | 81,008 | | | | (3,188) | |
INVESTING ACTIVITIES | | | | | |
| | | | | |
Proceeds from sale of businesses, net of cash sold | | 616,529 | | | | — | |
Purchases of short-term investments | | — | | | | (700,000) | |
| | | | | |
Capital expenditures | | (93,218) | | | | (69,191) | |
Software purchases | | (21,006) | | | | (13,477) | |
Other, net | | 7,048 | | | | (573) | |
Cash provided (used) by investing activities - continuing operations | | 509,353 | | | | (783,241) | |
Cash used by investing activities - discontinued operations | | (525) | | | | (1,914) | |
Cash provided (used) by investing activities | | 508,828 | | | | (785,155) | |
FINANCING ACTIVITIES | | | | | |
Net decrease in short-term borrowings | | (2,973) | | | | (1,209,556) | |
Payments on long-term debt | | (253) | | | | (222) | |
Payment of debt issuance costs | | — | | | | (21,271) | |
Proceeds from long-term debt | | — | | | | 2,996,090 | |
| | | | | |
Cash dividends paid | | (192,131) | | | | (186,746) | |
| | | | | |
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings | | 20,910 | | | | (15,634) | |
| | | | | |
Cash provided (used) by financing activities | | (174,447) | | | | 1,562,661 | |
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash | | 10,003 | | | | 4,126 | |
Net change in cash, cash equivalents and restricted cash | | 425,392 | | | | 778,444 | |
Cash, cash equivalents and restricted cash – beginning of year | | 851,205 | | | | 1,411,322 | |
Cash, cash equivalents and restricted cash – end of period | | $ | 1,276,597 | | | | $ | 2,189,766 | |
Continued on next page.
See notes to consolidated financial statements.
VF Corporation Q1 FY22 Form 10-Q 6
VF CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | Three Months Ended June |
| | | | | |
(In thousands) | | 2021 | | | 2020 |
Balances per Consolidated Balance Sheets: | | | | | |
Cash and cash equivalents | | $ | 1,274,926 | | | | $ | 2,145,111 | |
Other current assets | | 1,643 | | | | 1,216 | |
| | | | | |
Current assets of discontinued operations | | — | | | | 42,986 | |
Other assets | | 28 | | | | 453 | |
Total cash, cash equivalents and restricted cash | | $ | 1,276,597 | | | | $ | 2,189,766 | |
See notes to consolidated financial statements.
7 VF Corporation Q1 FY22 Form 10-Q
VF CORPORATION
Consolidated Statements of Stockholders’ Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 2021 | |
| | | | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings (Accumulated Deficit) | | | |
| Common Stock | | | | | | |
(In thousands, except share amounts) | Shares | | Amounts | | | | | Total | |
Balance, March 2021 | 391,941,477 | | | $ | 97,985 | | | $ | 3,777,645 | | | $ | (1,009,000) | | | $ | 189,534 | | | $ | 3,056,164 | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net income (loss) | — | | | — | | | — | | | — | | | 324,245 | | | 324,245 | | |
Dividends on Common Stock ($0.49 per share) | — | | | — | | | (2,597) | | | — | | | (189,534) | | | (192,131) | | |
| | | | | | | | | | | | |
Stock-based compensation, net | 680,084 | | | 170 | | | 49,608 | | | — | | | (7,140) | | | 42,638 | | |
Foreign currency translation and other | — | | | — | | | — | | | 37,053 | | | — | | | 37,053 | | |
Defined benefit pension plans | — | | | — | | | — | | | 316 | | | — | | | 316 | | |
Derivative financial instruments | — | | | — | | | — | | | 5,745 | | | — | | | 5,745 | | |
| | | | | | | | | | | | |
Balance, June 2021 | 392,621,561 | | | $ | 98,155 | | | $ | 3,824,656 | | | $ | (965,886) | | | $ | 317,105 | | | $ | 3,274,030 | | |
| | | | | | | | | | | | |
| Three Months Ended June 2020 | |
| | | | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings (Accumulated Deficit) | | | |
| Common Stock | | | | | | |
(In thousands, except share amounts) | Shares | | Amounts | | | | | Total | |
Balance, March 2020 | 388,812,158 | | | $ | 97,203 | | | $ | 4,183,780 | | | $ | (930,958) | | | $ | 7,309 | | | $ | 3,357,334 | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net income (loss) | — | | | — | | | — | | | — | | | (285,613) | | | (285,613) | | |
Dividends on Common Stock ($0.48 per share) | — | | | — | | | (186,746) | | | — | | | — | | | (186,746) | | |
| | | | | | | | | | | | |
Stock-based compensation, net | 829,087 | | | 207 | | | 13,783 | | | — | | | (19,784) | | | (5,794) | | |
Foreign currency translation and other | — | | | — | | | — | | | 52,473 | | | — | | | 52,473 | | |
Defined benefit pension plans | — | | | — | | | — | | | 3,182 | | | — | | | 3,182 | | |
Derivative financial instruments | — | | | — | | | — | | | (22,238) | | | — | | | (22,238) | | |
| | | | | | | | | | | | |
Balance, June 2020 | 389,641,245 | | | $ | 97,410 | | | $ | 4,010,817 | | | $ | (897,541) | | | $ | (298,088) | | | $ | 2,912,598 | | |
See notes to consolidated financial statements.
VF Corporation Q1 FY22 Form 10-Q 8
VF CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
| | | | | | | | |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | PAGE NUMBER |
| | |
NOTE 1 | | |
NOTE 2 | | |
NOTE 3 | | |
NOTE 4 | | |
NOTE 5 | | |
NOTE 6 | | |
NOTE 7 | | |
NOTE 8 | | |
NOTE 9 | | |
NOTE 10 | | |
NOTE 11 | | |
NOTE 12 | | |
NOTE 13 | | |
NOTE 14 | | |
NOTE 15 | | |
NOTE 16 | | |
NOTE 17 | | |
NOTE 18 | | |
NOTE 19 | | |
NOTE 20 | | |
9 VF Corporation Q1 FY22 Form 10-Q
NOTE 1 — BASIS OF PRESENTATION
VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from April 4, 2021 through April 2, 2022 ("Fiscal 2022"). Accordingly, this Form 10-Q presents our first quarter of Fiscal 2022. For presentation purposes herein, all references to periods ended June 2021 and June 2020 relate to the fiscal periods ended on July 3, 2021 and June 27, 2020, respectively. References to March 2021 relate to information as of April 3, 2021.
On June 28, 2021, VF completed the sale of its Occupational Workwear business. The Occupational Workwear business was comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The business also included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. The results of the Occupational Workwear business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale. These changes have been applied to all periods presented.
Unless otherwise noted, discussion within these notes to the condensed consolidated financial statements relates to continuing operations. Refer to Note 5 for additional information on discontinued operations.
Certain prior year amounts have been reclassified to conform to the Fiscal 2022 presentation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. Similarly, the March 2021 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three months ended June 2021 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2022. For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended April 3, 2021 (“Fiscal 2021 Form 10-K”).
In preparing the condensed consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. The duration and severity of the novel coronavirus ("COVID-19") pandemic, which is subject to uncertainty, continues to impact VF's business. Management's estimates and assumptions have contemplated both current and expected impacts related to COVID-19 based on available information. Actual results may differ from those estimates.
NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", an update that amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance and providing new guidance to reduce complexity in certain areas. The guidance became effective for VF in the first quarter of Fiscal 2022, but did not have a material impact on VF's consolidated financial statements.
Recently Issued Accounting Standards
In March 2020 and January 2021, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and ASU No. 2021-01, "Reference Rate Reform (Topic 848): Scope", respectively. This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The optional guidance is provided to ease the potential burden of accounting for reference rate reform. The guidance is effective and can be adopted no later than December 31, 2022. The Company is evaluating the impact that adopting this guidance would have on VF's consolidated financial statements.
NOTE 3 — REVENUES
Contract Balances
The following table provides information about contract assets and contract liabilities:
| | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | June 2021 | | | March 2021 | | June 2020 |
Contract assets (a) | | $ | 1,135 | | | | $ | 880 | | | $ | 2,487 | |
Contract liabilities (b) | | 68,921 | | | | 49,869 | | | 45,622 | |
(a)Included in the other current assets line item in the Consolidated Balance Sheets.
(b)Included in the accrued liabilities line item in the Consolidated Balance Sheets.
VF Corporation Q1 FY22 Form 10-Q 10
For the three months ended June 2021, the Company recognized $91.0 million of revenue that was included in the contract liability balance during the period, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers. The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.
Performance Obligations
As of June 2021, the Company expects to recognize $63.8 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the contractual terms, with the majority of the revenue recognized by Fiscal
2025. The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption. VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.
As of June 2021, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.
For the three months ended June 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.
Disaggregation of Revenue
The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 2021 | |
(In thousands) | Outdoor | | Active | | Work | | Other | | Total | |
Channel revenues | | | | | | | | | | |
Wholesale | $ | 334,875 | | | $ | 546,025 | | | $ | 226,871 | | | $ | — | | | $ | 1,107,771 | | |
Direct-to-consumer | 279,658 | | | 751,235 | | | 42,812 | | | — | | | 1,073,705 | | |
Royalty | 3,221 | | | 4,808 | | | 5,052 | | | — | | | 13,081 | | |
Total | $ | 617,754 | | | $ | 1,302,068 | | | $ | 274,735 | | | $ | — | | | $ | 2,194,557 | | |
| | | | | | | | | | |
Geographic revenues | | | | | | | | | | |
United States | $ | 283,158 | | | $ | 695,835 | | | $ | 217,526 | | | $ | — | | | $ | 1,196,519 | | |
International: | | | | | | | | | | |
Europe | 218,555 | | | 307,216 | | | 14,196 | | | — | | | 539,967 | | |
Asia-Pacific | 88,060 | | | 238,473 | | | 26,139 | | | — | | | 352,672 | | |
Americas (non-U.S.) | 27,981 | | | 60,544 | | | 16,874 | | | — | | | 105,399 | | |
Total | $ | 617,754 | | | $ | 1,302,068 | | | $ | 274,735 | | | $ | — | | | $ | 2,194,557 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 2020 |
(In thousands) | Outdoor | | Active | | Work | | Other | | Total |
Channel revenues | | | | | | | | | |
Wholesale | $ | 158,506 | | | $ | 241,164 | | | $ | 117,604 | | | $ | 1,275 | | | $ | 518,549 | |
Direct-to-consumer | 180,014 | | | 324,201 | | | 40,615 | | | 44 | | | 544,874 | |
Royalty | 2,708 | | | 5,951 | | | 4,211 | | | — | | | 12,870 | |
Total | $ | 341,228 | | | $ | 571,316 | | | $ | 162,430 | | | $ | 1,319 | | | $ | 1,076,293 | |
| | | | | | | | | |
Geographic revenues | | | | | | | | | |
United States | $ | 152,477 | | | $ | 265,507 | | | $ | 114,632 | | | $ | — | | | $ | 532,616 | |
International: | | | | | | | | | |
Europe | 99,024 | | | 125,526 | | | 13,301 | | | 1,319 | | | 239,170 | |
Asia-Pacific | 79,267 | | | 162,414 | | | 24,509 | | | — | | | 266,190 | |
Americas (non-U.S.) | 10,460 | | | 17,869 | | | 9,988 | | | — | | | 38,317 | |
Total | $ | 341,228 | | | $ | 571,316 | | | $ | 162,430 | | | $ | 1,319 | | | $ | 1,076,293 | |
11 VF Corporation Q1 FY22 Form 10-Q
NOTE 4 — ACQUISITION
On December 28, 2020, VF acquired 100% of the outstanding shares of Supreme Holdings, Inc. ("Supreme") for $2.2 billion in cash, which is subject to working capital and other adjustments. The transaction also included $0.2 billion of cash acquired by VF. The preliminary purchase price was primarily funded with cash on hand.
The acquisition of Supreme includes a contingent arrangement that may require additional cash consideration to be paid to the selling shareholders of Supreme ranging from zero to $300.0 million, subject to the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022. The initial estimated fair value of the contingent consideration of $207.0 million is included in the preliminary purchase price and was reported in the other liabilities line item in the Consolidated Balance Sheet at March 2021. The estimated fair value of the contingent consideration was determined based on the probability-weighted present value of various future cash payment outcomes. In subsequent reporting periods, the contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. Refer to Note 16 for additional information on fair value measurements.
Supreme was a privately-held company based in New York, New York and is a global streetwear leader that sells apparel, accessories and footwear under its namesake brand, Supreme®, through direct-to-consumer channels, including digital. The acquisition of Supreme accelerates VF's long-term growth
strategy and builds on a long-standing relationship between Supreme and VF, with the Supreme® brand being a regular collaborator with VF's Vans®, The North Face® and Timberland® brands. The acquisition also provides VF with deeper access to attractive consumer segments and the ability to leverage VF's enterprise platforms and capabilities to enable sustainable long-term growth.
In connection with the acquisition, VF deposited in escrow 605,050 shares of VF Common Stock. The common shares are subject to certain future service requirements and vest over periods of up to four years. For accounting purposes, VF will recognize the stock-based compensation cost for the fair value of these awards of $51.7 million over the vesting periods.
For the three months ended June 2021, Supreme contributed revenues of $145.7 million and net income of $26.3 million. The results of Supreme have been reported in the Active segment since the date of acquisition. Total transaction expenses for the Supreme acquisition were $8.7 million, all of which were recognized in the year ended March 2021 in the selling, general and administrative expenses line item in the Consolidated Statement of Operations.
The allocation of the purchase price is preliminary and subject to change, primarily for certain income tax matters and final adjustments for net working capital. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.
The following table summarizes the preliminary estimated fair values of the Supreme assets acquired and liabilities assumed at the date of acquisition:
| | | | | | | | |
(In thousands) | | December 28, 2020 |
Cash and equivalents | | $ | 218,104 | |
Accounts receivable | | 19,698 | |
Inventories | | 44,937 | |
Other current assets | | 35,091 | |
Property, plant and equipment | | 18,914 | |
Intangible asset | | 1,201,000 | |
Operating lease right-of-use assets | | 55,668 | |
Other assets | | 58,479 | |
Total assets acquired | | 1,651,891 | |
| | |
Accounts payable | | 25,717 | |
Other current liabilities | | 78,205 | |
Operating lease liabilities | | 53,062 | |
Deferred income tax liabilities | | 275,718 | |
Other liabilities | | 35,245 | |
Total liabilities assumed | | 467,947 | |
| | |
Net assets acquired | | 1,183,944 | |
Goodwill | | 1,250,311 | |
Purchase price | | $ | 2,434,255 | |
VF Corporation Q1 FY22 Form 10-Q 12
The preliminary purchase price consisted of the following components:
| | | | | | | | |
(In thousands) | | December 28, 2020 |
Cash consideration | | $ | 2,227,255 | |
Contingent consideration | | 207,000 | |
Purchase price | | $ | 2,434,255 | |
The goodwill is attributable to our ability to expand the Supreme® brand into new markets, the acquired workforce and future collaboration opportunities for the Supreme® brand. All of the goodwill was assigned to the Active segment and will not be deductible for tax purposes.
The Supreme® trademark, which management believes to have an indefinite life, has been valued at $1.2 billion using the relief-from-royalty method, which is an income valuation approach. The relief-from-royalty method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, royalty rate, tax rates and discount rate.
The following unaudited pro forma summary presents consolidated information of VF as if the acquisition of Supreme had occurred on March 31, 2019:
| | | | | | | | |
(In thousands, except per share amounts) | | Three Months Ended June 2020 (unaudited) |
Total revenues | | $ | 1,190,285 | |
Income (loss) from continuing operations | | (264,463) | |
Earnings (loss) per common share from continuing operations | | |
Basic | | $ | (0.68) | |
Diluted | | (0.68) | |
These pro forma amounts have been calculated after applying VF’s accounting policies and adjusting the results of Supreme to reflect the fair value adjustments to intangible assets, property, plant and equipment and inventory. The results of Supreme have also been adjusted for historical interest expense as the acquired business was debt-free on the acquisition date. These changes have been applied from March 31, 2019, with related tax effects.
Pro forma financial information is not necessarily indicative of VF’s operating results if the acquisition had been effected at the date indicated, nor is it necessarily indicative of future operating results. Amounts do not include any marketing leverage, or operating efficiencies that VF believes are achievable.
NOTE 5 — DISCONTINUED OPERATIONS
The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders.
Occupational Workwear Business
On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business is comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The business also includes the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. As of March 28, 2020, the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria. Accordingly, the Company has reported the results of the Occupational Workwear business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale.
On June 28, 2021, VF completed the sale of the Occupational Workwear business. The Company received proceeds of $616.5 million, net of cash sold, resulting in an estimated after-tax gain on sale of $145.6 million, which is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the three months ended June 2021, and is subject to working capital and other adjustments.
The results of the Occupational Workwear business were previously reported in the Work segment. The results of the Occupational Workwear business recorded in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations were income of $170.3 million (including an estimated after-tax gain on sale of $145.6 million) and a loss of $7.9 million for the three months ended June 2021 and June 2020, respectively.
Under the terms of a transition services agreement, the Company will provide certain support services for periods generally up to 12 months from the closing date of the transaction.
13 VF Corporation Q1 FY22 Form 10-Q
Summarized Discontinued Operations Financial Information
The following table summarizes the major line items for the Occupational Workwear business that are included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June | | | |
| | | | | | | | | | | |
(In thousands) | | 2021 | | | 2020 | | | | | | |
Net revenues | | $ | 181,424 | | | | $ | 125,333 | | | | | | | |
Cost of goods sold | | 117,193 | | | | 101,470 | | | | | | | |
Selling, general and administrative expenses | | 38,735 | | | | 33,256 | | | | | | | |
| | | | | | | | | | | |
Interest income, net | | 194 | | | | 293 | | | | | | | |
Other income (expense), net | | 6 | | | | — | | | | | | | |
Income (loss) from discontinued operations before income taxes | | 25,696 | | | | (9,100) | | | | | | | |
Gain on the sale of discontinued operations before income taxes | | 133,571 | | | | — | | | | | | | |
Total income (loss) from discontinued operations before income taxes | | 159,267 | | | | (9,100) | | | | | | | |
Income tax benefit (a) | | (11,006) | | | | (1,229) | | | | | | | |
Income (loss) from discontinued operations, net of tax | | $ | 170,273 | | | | $ | (7,871) | | | | | | | |
(a)Income tax benefit for the three months ended June 2021 includes $12.0 million of deferred tax benefit related to capital and other losses realized upon the sale of the Occupational Workwear business.
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | June 2021 | | | March 2021 | | June 2020 |
Cash and equivalents | | $ | — | | | | $ | 34,132 | | | $ | 42,986 | |
Accounts receivable, net | | — | | | | 103,835 | | | 64,065 | |
Inventories | | — | | | | 245,227 | | | 258,632 | |
Other current assets | | — | | | | 8,208 | | | 10,027 | |
Property, plant and equipment, net | | — | | | | 49,394 | | | 46,697 | |
Intangible assets, net | | — | | | | 54,471 | | | 54,471 | |
Goodwill | | — | | | | 43,530 | | | 43,530 | |
Operating lease right-of-use assets | | — | | | | 43,220 | | | 39,452 | |
Other assets | | — | | | | 5,561 | | | 5,275 | |
| | | | | | | |
Total assets of discontinued operations | | $ | — | | | | $ | 587,578 | | | $ | 565,135 | |
| | | | | | | |
| | | | | | | |
Accounts payable | | $ | — | | | | $ | 59,965 | | | $ | 27,810 | |
Accrued liabilities | | — | | | | 38,956 | | | 31,134 | |
Operating lease liabilities | | — | | | | 31,301 | | | 34,462 | |
Other liabilities | | — | | | | |