vfc-20221001

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 October 1, 2022

☐ 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 October 29, 2022, there were 388,566,085 shares of the registrant’s common stock outstanding.

VF CORPORATION

Table of Contents


			PAGE NUMBER
Part I — Financial Information			3
Item 1 — Financial Statements (Unaudited)			3
Consolidated Balance Sheets: September 2022, March 2022 and September 2021			3
Consolidated Statements of Operations: Three and six months ended Septem ber 2022 and September 2021			4
Consolidated Statements of Comprehensive Income (Loss): Three and six months ended September 2022 and September 2021			5
Consolidated Statements of Cash Flows: Six months ended September 2022 and September 2021			6
Consolidated Statements of Stockholders’ Equity: Three and six months ended September 2022 and September 2021			8
Notes to Consolidated Financial Statements			10
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			43
Item 4 — Controls and Procedures			43
Part II — Other Information			44
Item 1 — Legal Proceedings			44
Item 1A — Risk Factors			44
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds			45
Item 6 — Exhibits			45
Signatures			46

Table of Contents

PART I — FINANCIAL INFORMATION


ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).

VF CORPORATION

Consolidated Balance Sheets

(Unaudited)


(In thousands, except share amounts)	September 2022		March 2022		September 2021
ASSETS
Current assets
Cash and equivalents	$	552,811	$	1,275,943	$	1,360,138
Accounts receivable, less allowance for doubtful accounts of: September 2022 - $27,515; March 2022 - $27,959; September 2021 - $33,822	1,834,598		1,467,842		1,787,331
Inventories	2,749,894		1,418,673		1,464,714

Other current assets	550,940		425,622		357,687


Total current assets	5,688,243		4,588,080		4,969,870
Property, plant and equipment, net	984,115		1,041,777		1,011,415
Intangible assets, net	2,776,022		3,000,351		3,018,242
Goodwill	2,102,700		2,393,807		2,415,767
Operating lease right-of-use assets	1,217,172		1,247,056		1,380,106
Other assets	1,015,890		1,071,137		1,093,687

TOTAL ASSETS	$	13,784,142	$	13,342,208	$	13,889,087
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	1,692,745	$	335,462	$	10,173
Current portion of long-term debt	832,136		501,051		1,001,037
Accounts payable	1,022,408		562,992		534,365
Accrued liabilities	1,798,702		1,915,892		1,838,790


Total current liabilities	5,345,991		3,315,397		3,384,365
Long-term debt	3,526,101		4,584,261		4,682,751
Operating lease liabilities	1,022,451		1,023,759		1,146,944
Other liabilities	803,963		888,436		1,076,546

Total liabilities	10,698,506		9,811,853		10,290,606
Commitments and contingencies
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at September 2022, March 2022 or September 2021	—		—		—
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at September 2022 - 388,569,062; March 2022 - 388,298,375; September 2021 - 392,758,016	97,142		97,075		98,190
Additional paid-in capital	3,952,786		3,916,384		3,854,687
Accumulated other comprehensive income (loss)	(844,165)		(926,579)		(940,834)
Retained earnings (accumulated deficit)	(120,127)		443,475		586,438
Total stockholders’ equity	3,085,636		3,530,355		3,598,481
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,784,142	$	13,342,208	$	13,889,087

See notes to consolidated financial statements.

3 VF Corporation Q2 FY23 Form 10-Q

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VF CORPORATION

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September				Six Months Ended September

(In thousands, except per share amounts)	2022		2021		2022		2021
Net revenues	$	3,080,600	$	3,198,235	$	5,342,195	$	5,392,792
Costs and operating expenses
Cost of goods sold	1,498,177		1,479,446		2,541,159		2,434,997
Selling, general and administrative expenses	1,251,320		1,160,303		2,406,571		2,196,425
Impairment of goodwill and intangible assets	421,922		—		421,922		—
Total costs and operating expenses	3,171,419		2,639,749		5,369,652		4,631,422
Operating income (loss)	(90,819)		558,486		(27,457)		761,370
Interest income	823		1,518		2,106		3,660
Interest expense	(34,726)		(35,888)		(67,271)		(70,805)

Other income (expense), net	(9,280)		7,549		(103,994)		16,590
Income (loss) from continuing operations before income taxes	(134,002)		531,665		(196,616)		710,815
Income tax expense (benefit)	(15,570)		67,612		(22,224)		92,790
Income (loss) from continuing operations	(118,432)		464,053		(174,392)		618,025
Income from discontinued operations, net of tax	—		—		—		170,273
Net income (loss)	$	(118,432)	$	464,053	$	(174,392)	$	788,298
Earnings (loss) per common share - basic
Continuing operations	$	(0.31)	$	1.18	$	(0.45)	$	1.58
Discontinued operations	—		—		—		0.43
Total earnings (loss) per common share - basic	$	(0.31)	$	1.18	$	(0.45)	$	2.01
Earnings (loss) per common share - diluted
Continuing operations	$	(0.31)	$	1.18	$	(0.45)	$	1.57
Discontinued operations	—		—		—		0.43
Total earnings (loss) per common share - diluted	$	(0.31)	$	1.18	$	(0.45)	$	2.00
Weighted average shares outstanding
Basic	387,688		391,779		387,625		391,565
Diluted	387,688		394,017		387,625		394,072

See notes to consolidated financial statements.

VF Corporation Q2 FY23 Form 10-Q 4

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VF CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended September				Six Months Ended September

(In thousands)	2022		2021		2022		2021
Net income (loss)	$	(118,432)	$	464,053	$	(174,392)	$	788,298
Other comprehensive income (loss)
Foreign currency translation and other
Gains (losses) arising during the period	(21,894)		(12,314)		(73,418)		20,857

Income tax effect	(28,786)		(11,686)		(58,796)		(7,804)
Defined benefit pension plans
Current period actuarial gains (losses)	5,426		(439)		(14,142)		(4,452)
Amortization of net deferred actuarial losses	3,953		2,871		7,674		5,711
Amortization of deferred prior service credits	(111)		(117)		(223)		(235)
Reclassification of net actuarial loss from settlement charges	1,141		76		92,902		1,024

Income tax effect	(2,815)		(595)		(22,466)		64
Derivative financial instruments
Gains arising during the period	102,685		34,361		202,115		29,798
Income tax effect	(16,356)		(5,978)		(31,731)		(5,786)
Reclassification of net (gains) losses realized	(14,906)		22,986		(23,148)		33,545
Income tax effect	2,374		(4,113)		3,647		(4,556)
Other comprehensive income (loss)	30,711		25,052		82,414		68,166
Comprehensive income (loss)	$	(87,721)	$	489,105	$	(91,978)	$	856,464

See notes to consolidated financial statements.

5 VF Corporation Q2 FY23 Form 10-Q

VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended September

(In thousands)	2022		2021
OPERATING ACTIVITIES
Net income (loss)	$	(174,392)	$	788,298
Income from discontinued operations, net of tax	—		170,273
Income (loss) from continuing operations, net of tax	(174,392)		618,025
Adjustments to reconcile net income (loss) to cash used by operating activities:
Impairment of goodwill and intangible assets	421,922		—
Depreciation and amortization	130,623		134,553
Reduction in the carrying amount of right-of-use assets	185,880		208,687
Stock-based compensation	37,474		44,283
Provision for doubtful accounts	1,004		3,345
Pension expense in excess of (less than) contributions	85,779		(12,312)



Other, net	(7,088)		(191,547)
Changes in operating assets and liabilities:
Accounts receivable	(461,904)		(502,675)
Inventories	(1,434,470)		(412,058)
Accounts payable	494,424		72,757
Income taxes	(193,671)		112,331
Accrued liabilities	138,510		233,369
Operating lease right-of-use assets and liabilities	(190,171)		(228,969)
Other assets and liabilities	52,123		(257,016)
Cash used by operating activities - continuing operations	(913,957)		(177,227)
Cash provided by operating activities - discontinued operations	—		6,090
Cash used by operating activities	(913,957)		(171,137)
INVESTING ACTIVITIES
Business acquisitions, net of cash received	—		3,760
Proceeds from sale of businesses, net of cash sold	—		616,529

Proceeds from sale of short-term investments	—		598,806
Capital expenditures	(89,958)		(144,582)
Software purchases	(47,858)		(42,119)
Other, net	6,112		20,491
Cash provided (used) by investing activities - continuing operations	(131,704)		1,052,885
Cash used by investing activities - discontinued operations	—		(525)
Cash provided (used) by investing activities	(131,704)		1,052,360
FINANCING ACTIVITIES
Contingent consideration payment	(56,976)		—
Net increase (decrease) in short-term borrowings	1,357,284		(889)
Payments on long-term debt	(500,522)		(508)
Payment of debt issuance costs	(807)		—


Cash dividends paid	(388,284)		(384,427)
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings	(1,931)		25,971

Cash provided (used) by financing activities	408,764		(359,853)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(85,888)		(10,958)
Net change in cash, cash equivalents and restricted cash	(722,785)		510,412
Cash, cash equivalents and restricted cash – beginning of year	1,277,082		851,205
Cash, cash equivalents and restricted cash – end of period	$	554,297	$	1,361,617

Continued on next page.

See notes to consolidated financial statements

VF Corporation Q2 FY23 Form 10-Q 6

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VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended September

(In thousands)	2022		2021
Balances per Consolidated Balance Sheets:
Cash and cash equivalents	$	552,811	$	1,360,138
Other current assets	1,360		1,421
Other assets	126		58
Total cash, cash equivalents and restricted cash	$	554,297	$	1,361,617

See notes to consolidated financial statements.

7 VF Corporation Q2 FY23 Form 10-Q

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VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Three Months Ended September 2022
				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, June 2022	388,490,713	$	97,123	$	3,941,440	$	(874,876)	$	188,806	$	3,352,493


Net income (loss)	—	—		—		—		(118,432)		(118,432)
Dividends on Common Stock ($0.50 per share)	—	—		(5,343)		—		(188,806)		(194,149)

Stock-based compensation, net	78,349	19		16,689		—		(1,695)		15,013
Foreign currency translation and other	—	—		—		(50,680)		—		(50,680)
Defined benefit pension plans	—	—		—		7,594		—		7,594
Derivative financial instruments	—	—		—		73,797		—		73,797
Balance, September 2022	388,569,062	$	97,142	$	3,952,786	$	(844,165)	$	(120,127)	$	3,085,636

	Three Months Ended September 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, June 2021	392,621,561	$	98,155	$	3,824,656	$	(965,886)	$	317,105	$	3,274,030


Net income (loss)	—	—		—		—		464,053		464,053
Dividends on Common Stock ($0.49 per share)	—	—		—		—		(192,296)		(192,296)

Stock-based compensation, net	136,455	35		30,031		—		(2,424)		27,642
Foreign currency translation and other	—	—		—		(24,000)		—		(24,000)
Defined benefit pension plans	—	—		—		1,796		—		1,796
Derivative financial instruments	—	—		—		47,256		—		47,256
Balance, September 2021	392,758,016	$	98,190	$	3,854,687	$	(940,834)	$	586,438	$	3,598,481

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q2 FY23 Form 10-Q 8

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	Six Months Ended September 2022
				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 2022	388,298,375	$	97,075	$	3,916,384	$	(926,579)	$	443,475	$	3,530,355


Net income (loss)	—	—		—		—		(174,392)		(174,392)
Dividends on Common Stock ($1.00 per share)	—	—		(5,343)		—		(382,941)		(388,284)

Stock-based compensation, net	270,687	67		41,745		—		(6,269)		35,543
Foreign currency translation and other	—	—		—		(132,214)		—		(132,214)
Defined benefit pension plans	—	—		—		63,745		—		63,745
Derivative financial instruments	—	—		—		150,883		—		150,883
Balance, September 2022	388,569,062	$	97,142	$	3,952,786	$	(844,165)	$	(120,127)	$	3,085,636

	Six Months Ended September 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)	—	—		—		—		788,298		788,298
Dividends on Common Stock ($0.98 per share)	—	—		(2,597)		—		(381,830)		(384,427)

Stock-based compensation, net	816,539	205		79,639		—		(9,564)		70,280
Foreign currency translation and other	—	—		—		13,053		—		13,053
Defined benefit pension plans	—	—		—		2,112		—		2,112
Derivative financial instruments	—	—		—		53,001		—		53,001
Balance, September 2021	392,758,016	$	98,190	$	3,854,687	$	(940,834)	$	586,438	$	3,598,481

See notes to consolidated financial statements.

9 VF Corporation Q2 FY23 Form 10-Q

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VF CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		PAGE NUMBER

NOTE 1	Basis of Presentation and Summary of Significant Accounting Policies	11
NOTE 2	Recently Issued Accounting Standards	12
NOTE 3	Revenues	12
NOTE 4	Discontinued Operations	14
NOTE 5	Inventories	15
NOTE 6	Intangible Assets	15
NOTE 7	Goodwill	16
NOTE 8	Leases	16
NOTE 9	Long-term Debt	16
NOTE 10	Pension Plans	17
NOTE 11	Capital and Accumulated Other Comprehensive Income (Loss)	18
NOTE 12	Stock-based Compensation	20
NOTE 13	Income Taxes	21
NOTE 14	Reportable Segment Information	22
NOTE 15	Earnings Per Share	22
NOTE 16	Fair Value Measurements	23
NOTE 17	Derivative Financial Instruments and Hedging Activities	25
NOTE 18	Restructuring	27
NOTE 19	Contingencies	28
NOTE 20	Subsequent Event	28

VF Corporation Q2 FY23 Form 10-Q 10

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NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fiscal Year

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 3, 2022 through April 1, 2023 ("Fiscal 2023"). Accordingly, this Form 10-Q presents our second quarter of Fiscal 2023. For presentation purposes herein, all references to periods ended September 2022 and September 2021 relate to the fiscal periods ended on October 1, 2022 and October 2, 2021, respectively. References to March 2022 relate to information as of April 2, 2022.

Basis of Presentation

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. These changes have been applied to all periods presented.

Unless otherwise noted, discussion within these notes to the interim consolidated financial statements relates to continuing operations. Refer to Note 4 for additional information on discontinued operations.

Certain prior year amounts have been reclassified to conform to the Fiscal 2023 presentation.

The accompanying unaudited interim 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 2022 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited interim 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 and six months ended September 2022 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2023. 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 2, 2022 (“Fiscal 2022 Form 10-K”).

Use of Estimates

In preparing the interim consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the interim consolidated financial statements and accompanying notes. The duration and severity of the challenging macroeconomic environment, the coronavirus ("COVID-19") pandemic and the conflict between Russia and Ukraine, and the related impacts on VF's business are subject to uncertainty; however, the estimates and assumptions made by management are based on available information. Actual results may differ from those estimates.

Significant Accounting Policies

Supply Chain Financing Program

During the first quarter of Fiscal 2023, VF reinstated its voluntary supply chain finance ("SCF") program. The SCF program enables a significant portion of our 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. The SCF program is administered through third-party platforms that allow participating suppliers to track payments from VF and elect which VF receivables, if any, to sell to the financial institutions. The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable. The terms between VF and the supplier, including the amount due and scheduled payment dates, are not impacted by a supplier's participation in the SCF program. Amounts due to suppliers who voluntarily 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. VF has been informed by the participating financial institutions that amounts payable to them for suppliers who voluntarily participated in the SCF program and included in the accounts payable line item in VF's Consolidated Balance Sheet was $201.2 million at September 2022. The amounts settled through the SCF program during the three and six months ended September 2022 were $417.2 million and $432.2 million, respectively.

There have been no other changes to the Company's significant accounting policies described in Note 1 to the consolidated financial statements included in the Fiscal 2022 Form 10-K.

11 VF Corporation Q2 FY23 Form 10-Q

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NOTE 2 — RECENTLY ISSUED ACCOUNTING STANDARDS

Recently Issued Accounting Standards

In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 does not expect this guidance to have a material impact on VF's consolidated financial statements.

In November 2021, the FASB issued ASU No. 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance", an update that requires

annual disclosures about government assistance, including the types of assistance and the effect on the financial statements. The guidance is effective for VF in Fiscal 2023, but the Company does not expect the adoption of this guidance to have a material impact on VF's annual disclosures.

In September 2022, the FASB issued ASU No. 2022-04, "Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations". This guidance requires companies with supplier finance programs to disclose sufficient qualitative and quantitative information about the program to allow a user of the financial statements to understand the nature of, activity in, and potential magnitude of the program. The guidance will be effective for VF in the first quarter of Fiscal 2024, except for certain quantitative disclosures that will be effective in Fiscal 2025. Early adoption is permitted. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

NOTE 3 — REVENUES

Contract Balances

The following table provides information about contract assets and contract liabilities:


(In thousands)	September 2022		March 2022		September 2021
Contract assets (a)	$	2,772	$	1,065	$	1,773
Contract liabilities (b)	77,466		71,067		58,841

(a)Included in the other current assets line item in the Consolidated Balance Sheets.

(b)Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets.

For the three and six months ended September 2022, the Company recognized $96.2 million and $160.6 million, respectively, 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 September 2022, the Company expects to recognize $75.4 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 through March 2031. 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 September 2022, 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 and six months ended September 2022, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

VF Corporation Q2 FY23 Form 10-Q 12

Table of Contents

Disaggregation of Revenues

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 September 2022
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	1,157,170	$	541,031	$	216,825	$	—	$	1,915,026
Direct-to-consumer	394,324		710,547		41,252		—		1,146,123
Royalty	3,834		8,532		7,085