vfc-20240629

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 June 29, 2024

☐ 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
4.125% Senior Notes due 2026	VFC26	New York Stock Exchange
0.250% Senior Notes due 2028	VFC28	New York Stock Exchange
4.250% Senior Notes due 2029	VFC29	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 27, 2024, there were 389,183,344 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: June 202 4 , March 202 4 and June 2023			3
Consolidated Statements of Operations: Three months ended June 202 4 and June 2023			4
Consolidated Statements of Comprehensiv e Loss : Three months ended June 202 4 and June 2023			5
Consolidated Statements of Cash Flows: Three months ended June 202 4 and June 2023			6
Consolidated Statements of Stockholders’ Equity: Three months ended June 2024 and June 2023			7
Notes to Consolidated Financial Statements			8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			32
Item 4 — Controls and Procedures			33
Part II — Other Information			33
Item 1 — Legal Proceedings			33
Item 1A — Risk Factors			33
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 5 — Other Information			34
Item 6 — Exhibits			35
Signatures			36

Table of Contents

PART I — FINANCIAL INFORMATION


ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).

VF CORPORATION

Consolidated Balance Sheets

(Unaudited)


(In thousands, except share amounts)	June 2024		March 2024		June 2023
ASSETS
Current assets
Cash and equivalents	$	637,420	$	674,605	$	806,529
Accounts receivable, less allowance for doubtful accounts of: June 2024 - $28,542; March 2024 - $26,369; June 2023 - $33,076	1,055,571		1,273,965		1,214,223
Inventories	2,110,598		1,766,366		2,787,021

Other current assets	545,542		512,011		405,784


Total current assets	4,349,131		4,226,947		5,213,557
Property, plant and equipment, net	794,212		823,886		943,163
Intangible assets, net	2,571,765		2,628,482		2,640,827
Goodwill	1,360,782		1,460,414		1,973,615
Operating lease right-of-use assets	1,332,950		1,330,361		1,349,725
Other assets	1,132,523		1,142,873		1,923,011

TOTAL ASSETS	$	11,541,363	$	11,612,963	$	14,043,898
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	263,709	$	263,938	$	58,520
Current portion of long-term debt	1,749,601		1,000,721		928,736
Accounts payable	1,157,755		817,128		1,282,313
Accrued liabilities	1,237,909		1,375,192		1,546,866


Total current liabilities	4,408,974		3,456,979		3,816,435
Long-term debt	3,940,668		4,702,284		5,722,448
Operating lease liabilities	1,167,415		1,156,858		1,155,852
Other liabilities	636,401		638,477		632,400

Total liabilities	10,153,458		9,954,598		11,327,135
Commitments and contingencies
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at June 2024, March 2024 or June 2023	—		—		—
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at June 2024 - 389,181,642; March 2024 - 388,836,219; June 2023 - 388,836,545	97,295		97,209		97,209
Additional paid-in capital	3,580,175		3,600,071		3,733,777
Accumulated other comprehensive loss	(1,053,627)		(1,064,331)		(1,053,529)
Accumulated deficit	(1,235,938)		(974,584)		(60,694)
Total stockholders’ equity	1,387,905		1,658,365		2,716,763
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	11,541,363	$	11,612,963	$	14,043,898

See notes to consolidated financial statements.

3 VF Corporation Q1 FY25 Form 10-Q

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VF CORPORATION

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended June

(In thousands, except per share amounts)	2024		2023
Net revenues	$	1,907,301	$	2,086,336
Costs and operating expenses
Cost of goods sold	915,643		985,269
Selling, general and administrative expenses	1,086,551		1,110,059
Impairment of goodwill and intangible assets	145,000		—
Total costs and operating expenses	2,147,194		2,095,328
Operating loss	(239,893)		(8,992)
Interest income	3,554		5,494
Interest expense	(59,231)		(55,213)

Other income (expense), net	(1,950)		(3,567)
Loss before income taxes	(297,520)		(62,278)
Income tax benefit	(38,634)		(4,853)
Net loss	$	(258,886)	$	(57,425)
Net loss per common share
Basic	$	(0.67)	$	(0.15)
Diluted	$	(0.67)	$	(0.15)
Weighted average shares outstanding
Basic	388,741		388,160
Diluted	388,741		388,160

See notes to consolidated financial statements.

VF Corporation Q1 FY25 Form 10-Q 4

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VF CORPORATION

Consolidated Statements of Comprehensive Loss

(Unaudited)


	Three Months Ended June

(In thousands)	2024		2023
Net loss	$	(258,886)	$	(57,425)
Other comprehensive income (loss)
Foreign currency translation and other
Losses arising during the period	(15,773)		(16,530)

Income tax effect	(3,680)		3,381
Defined benefit pension plans
Current period actuarial gains	—		1,001
Amortization of net deferred actuarial losses	5,046		4,232
Amortization of deferred prior service credits	(144)		(135)
Reclassification of net actuarial loss from settlement charges	—		3,292

Income tax effect	(1,270)		(1,909)
Derivative financial instruments
Gains (losses) arising during the period	20,021		(22,740)
Income tax effect	(4,236)		4,138
Reclassification of net (gains) losses realized	13,729		(10,680)
Income tax effect	(2,989)		1,939
Other comprehensive income (loss)	10,704		(34,011)
Comprehensive loss	$	(248,182)	$	(91,436)

See notes to consolidated financial statements.

5 VF Corporation Q1 FY25 Form 10-Q

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VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended June

(In thousands)	2024		2023
OPERATING ACTIVITIES
Net loss	$	(258,886)	$	(57,425)
Adjustments to reconcile net loss to cash provided by operating activities:
Impairment of goodwill and intangible assets	145,000		—
Depreciation and amortization	67,781		67,075
Reduction in the carrying amount of right-of-use assets	92,495		95,728
Stock-based compensation	14,662		15,784
Provision for doubtful accounts	4,424		4,633
Pension expense in excess of (less than) contributions	2,219		(10,661)



Other, net	(20,220)		10,645
Changes in operating assets and liabilities:
Accounts receivable	202,973		395,110
Inventories	(356,053)		(493,720)
Accounts payable	345,494		344,482
Income taxes	(82,414)		(30,667)
Accrued liabilities	(67,785)		(66,581)
Operating lease right-of-use assets and liabilities	(87,786)		(102,688)
Other assets and liabilities	17,926		(8,140)
Cash provided by operating activities	19,830		163,575
INVESTING ACTIVITIES


Proceeds from sale of assets	45,596		1,170


Capital expenditures	(25,187)		(61,763)
Software purchases	(16,106)		(22,827)
Other, net	(15,364)		(7,142)
Cash used by investing activities	(11,061)		(90,562)
FINANCING ACTIVITIES

Net increase (decrease) in short-term borrowings	(230)		47,029
Payments on long-term debt	(275)		(268)
Payment of debt issuance costs	—		(346)


Cash dividends paid	(35,015)		(116,575)
Proceeds from issuance of Common Stock, net of payments for tax withholdings	(1,924)		(1,725)

Cash used by financing activities	(37,444)		(71,885)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(8,340)		(9,326)
Net change in cash, cash equivalents and restricted cash	(37,015)		(8,198)
Cash, cash equivalents and restricted cash – beginning of year	676,957		816,319
Cash, cash equivalents and restricted cash – end of period	$	639,942	$	808,121

Balances per Consolidated Balance Sheets:
Cash and cash equivalents	$	637,420	$	806,529
Other current assets	2,397		1,465
Other assets	125		127
Total cash, cash equivalents and restricted cash	$	639,942	$	808,121

See notes to consolidated financial statements.

VF Corporation Q1 FY25 Form 10-Q 6

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VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Three Months Ended June 2024
				Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2024	388,836,219	$	97,209	$	3,600,071	$	(1,064,331)	$	(974,584)	$	1,658,365
Net loss	—	—		—		—		(258,886)		(258,886)
Dividends on Common Stock ($0.09 per share)	—	—		(35,015)		—		—		(35,015)

Stock-based compensation, net	345,423	86		15,119		—		(2,468)		12,737
Foreign currency translation and other	—	—		—		(19,453)		—		(19,453)
Defined benefit pension plans	—	—		—		3,632		—		3,632
Derivative financial instruments	—	—		—		26,525		—		26,525
Balance, June 2024	389,181,642	$	97,295	$	3,580,175	$	(1,053,627)	$	(1,235,938)	$	1,387,905

	Three Months Ended June 2023
				Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2023	388,665,531	$	97,166	$	3,775,979	$	(1,019,518)	$	57,086	$	2,910,713
Net loss	—	—		—		—		(57,425)		(57,425)
Dividends on Common Stock ($0.30 per share)	—	—		(59,489)		—		(57,086)		(116,575)

Stock-based compensation, net	171,014	43		17,287		—		(3,269)		14,061
Foreign currency translation and other	—	—		—		(13,149)		—		(13,149)
Defined benefit pension plans	—	—		—		6,481		—		6,481
Derivative financial instruments	—	—		—		(27,343)		—		(27,343)
Balance, June 2023	388,836,545	$	97,209	$	3,733,777	$	(1,053,529)	$	(60,694)	$	2,716,763

See notes to consolidated financial statements.

7 VF Corporation Q1 FY25 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	9
NOTE 2	Recently Adopted and Issued Accounting Standards	9
NOTE 3	Revenues	10
NOTE 4	Inventories	11
NOTE 5	Intangible Assets	11
NOTE 6	Goodwill	12
NOTE 7	Leases	12
NOTE 8	Supply Chain Financing Program	12
NOTE 9	Pension Plans	13
NOTE 10	Capital and Accumulated Other Comprehensive Loss	13
NOTE 11	Stock-based Compensation	15
NOTE 12	Income Taxes	15
NOTE 13	Reportable Segment Information	16
NOTE 14	Net Loss Per Share	16
NOTE 15	Fair Value Measurements	17
NOTE 16	Derivative Financial Instruments and Hedging Activities	19
NOTE 17	Restructuring	21
NOTE 18	Subsequent Events	22

VF Corporation Q1 FY25 Form 10-Q 8

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NOTE 1 — BASIS OF PRESENTATION

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 March 31, 2024 through March 29, 2025 (“Fiscal 2025”). Accordingly, this Form 10-Q presents our first quarter of Fiscal 2025. For presentation purposes herein, all references to periods ended June 2024 and June 2023 relate to the fiscal periods ended on June 29, 2024 and July 1, 2023, respectively. References to March 2024 relate to information as of March 30, 2024.

Basis of 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 2024 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 months ended June 2024 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2025. 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 March 30, 2024 (“Fiscal 2024 Form 10-K”).

Certain prior year amounts have been reclassified to conform to

the Fiscal 2025 presentation.

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. Actual results may differ from those estimates.

NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 became effective for VF in the first quarter of Fiscal 2024, except for the rollforward information that will be effective for annual periods beginning in Fiscal 2025 on a prospective basis. The Company adopted the required guidance in the first quarter of Fiscal 2024 and will disclose the rollforward information in our Annual Report on Form 10-K for the year ended March 29, 2025. Refer to Note 8 for disclosures related to the Company's supply chain financing program.

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses that are regularly provided to the individual or group identified as the chief operating decision maker ("CODM"). The guidance also requires disclosure of the title and position of the CODM and how reported measures of

segment profit or loss are used to assess performance and allocate resources. The guidance will be effective for annual disclosures beginning in Fiscal 2025, and has expanded requirements to include all disclosures about a reportable segment's profit or loss and assets in subsequent interim periods. Early adoption is permitted. The guidance requires retrospective application to all prior periods presented in the financial statements. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The rate reconciliation disclosures will require specific categories and additional information for reconciling items that meet a quantitative threshold. The income taxes paid disclosures will require disaggregation by individual jurisdictions that are greater than 5% of total income taxes paid. The guidance will be effective for annual disclosures beginning in Fiscal 2026. Early adoption is permitted. The amendments are required to be applied on a prospective basis; however, retrospective application is permitted. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

9 VF Corporation Q1 FY25 Form 10-Q

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NOTE 3 — REVENUES

Contract Balances

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


(In thousands)	June 2024		March 2024		June 2023
Contract assets (a)	$	3,188	$	2,393	$	2,645
Contract liabilities (b)	68,254		67,115		62,942

(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.

For the three months ended June 2024, the Company recognized $46.3 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 2024, the Company expects to recognize $75.8 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 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 June 2024, 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.

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 June 2024
(In thousands)	Outdoor		Active		Work		Total
Channel revenues
Wholesale	$	441,881	$	435,264	$	136,644	$	1,013,789
Direct-to-consumer	345,290		499,957		33,933		879,180
Royalty	3,028		6,918		4,386		14,332
Total	$	790,199	$	942,139	$	174,963	$	1,907,301

Geographic revenues
Americas	$	373,400	$	526,726	$	144,643	$	1,044,769
Europe	264,181		270,153		18,522		552,856
Asia-Pacific	152,618		145,260		11,798		309,676
Total	$	790,199	$	942,139	$	174,963	$	1,907,301

VF Corporation Q1 FY25 Form 10-Q 10

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	Three Months Ended June 2023
(In thousands)	Outdoor		Active		Work		Total
Channel revenues
Wholesale	$	489,931	$	462,265	$	146,169	$	1,098,365
Direct-to-consumer	336,333		597,621		39,654		973,608
Royalty	3,433		6,123		4,807		14,363
Total	$	829,697	$	1,066,009	$	190,630	$	2,086,336

Geographic revenues
Americas	$	404,406	$	625,847	$	153,571	$	1,183,824
Europe	288,221		277,126		19,001		584,348
Asia-Pacific	137,070		163,036		18,058		318,164
Total	$	829,697	$	1,066,009	$	190,630	$	2,086,336

NOTE 4 — INVENTORIES


(In thousands)	June 2024		March 2024		June 2023
Finished products	$	2,063,417	$	1,718,676	$	2,731,511
Work-in-process	36,881		39,539		41,827
Raw materials	10,300		8,151		13,683
Total inventories	$	2,110,598	$	1,766,366	$	2,787,021

NOTE 5 — INTANGIBLE ASSETS


			June 2024						March 2024
(In thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount
Amortizable intangible assets:
Customer relationships and other	19 years	Accelerated	$	261,408	$	189,927	$	71,481	$	74,963



Indefinite-lived intangible assets:
Trademarks and trade names							2,500,284		2,553,519
Intangible assets, net							$	2,571,765	$	2,628,482

During the three months ended June 2024, VF determined that a triggering event had occurred requiring impairment testing of the Supreme® indefinite-lived trademark intangible asset. VF's assessment gave consideration to the ongoing negotiations to sell the Supreme® brand. As a result of the impairment testing performed, VF recorded an impairment charge of $51.0 million to the Supreme® indefinite-lived trademark intangible asset related to an increase in the market-based discount rate applied. Refer to Note 15 for additional information on fair value measurements.

Amortization expense for the three months ended June 2024 was $3.3 million. Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2025 is $13.2 million, $12.2 million, $11.7 million, $10.8 million and $9.8 million, respectively.

11 VF Corporation Q1 FY25 Form 10-Q

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NOTE 6 — GOODWILL

Changes in goodwill are summarized by reportable segment as follows:


(In thousands)	Outdoor		Active		Work		Total
Balance, March 2024	$	205,868	$	1,203,046	$	51,500	$	1,460,414
Impairment charge	—		(94,000)		—		(94,000)

Foreign currency translation	383		(6,015)		—		(5,632)
Balance, June 2024	$	206,251	$	1,103,031	$	51,500	$	1,360,782

During the three months ended June 2024, VF determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill. VF's assessment gave consideration to the ongoing negotiations to sell the Supreme reporting unit. As a result of the impairment testing performed, VF recorded an impairment charge of $94.0 million to the Supreme reporting unit goodwill related to the estimates of fair value subsequently confirmed by the transaction price discussed in Note 18. The Supreme reporting unit is part of the Active

segment. Refer to Note 15 for additional information on fair value measurements.

Accumulated impairment charges for the Outdoor and Work segments were $769.0 million and $61.8 million, respectively, as of June 2024 and March 2024. Accumulated impairment charges for the Active segment were $488.1 million and $394.1 million as of June 2024 and March 2024, respectively.

NOTE 7 — LEASES

The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. The substantial majority of these leases are operating leases. Total lease cost includes operating lease cost, variable lease cost, finance lease cost, short-term lease cost and gain recognized from a sale leaseback transaction. The components of lease cost were as follows:


	Three Months Ended June

(In thousands)	2024		2023
Operating lease cost	$	105,143	$	106,131
Other lease cost	22,231		35,319
Total lease cost	$	127,374	$	141,450

During the three months ended June 2024, the Company entered into a sale leaseback transaction for certain warehouse real estate and related assets. The transaction qualified as a sale, and thus the Company recognized a gain of $15.5 million in the selling, general and administrative expenses line item in VF's Consolidated Statement of Operations for the three months ended June 2024.

During the three months ended June 2024 and 2023, the Company paid $105.4 million and $114.2 million for operating leases, respectively. During the three months ended June 2024 and 2023, the Company obtained $102.7 million and $71.8 million of right-of-use assets in exchange for lease liabilities, respectively.

NOTE 8 — 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. The SCF program is administered through third-party platforms that allow participating suppliers to track payments from VF and elect which 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 terms (which are generally

within 90 days of the invoice date), are not impacted by a supplier's participation in the SCF program. 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. At June 2024, March 2024 and June 2023, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $843.0 million, $485.0 million and $931.0 million, respectively, due to suppliers that are eligible to participate in the SCF program.

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NOTE 9 — PENSION PLANS

The components of pension cost for VF’s defined benefit plans were as follows:


	Three Months Ended June

(In thousands)	2024		2023
Service cost – benefits earned during the period	$	2,408	$	2,192
Interest cost on projected benefit obligations	11,680		11,812
Expected return on plan assets	(15,296)		(15,877)
Settlement charge	—		3,292

Amortization of deferred amounts:
Net deferred actuarial losses	5,046		4,232
Deferred prior service credits	(144)		(135)
Net periodic pension cost	$	3,694	$	5,516

VF has reported the service cost component of net periodic pension cost in operating loss and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed $1.5 million to its defined benefit plans during the three months ended June 2024, and intends to make approximately $7.7 million of contributions during the remainder of Fiscal 2025.

VF recorded a $3.3 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the three months ended June 2023. The settlement charge related to the recognition of deferred actuarial losses resulting from lump-sum payments of retirement benefits in the supplemental defined benefit pension plan. Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate.

NOTE 10 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Common Stock

During the three months ended June 2024, the Company did not purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors. These are treated as treasury stock transactions when shares are repurchased.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired. There were no shares held in treasury at the end of June 2024, March 2024 or June 2023. The excess of the cost of treasury shares acquired over the $0.25 per share stated value of Common Stock is deducted from retained earnings (accumulated deficit).

Accumulated Other Comprehensive Loss

Comprehensive loss consists of net loss and specified components of other comprehensive income (loss), which relate to changes in assets and liabilities that are not included in net loss under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet. VF’s comprehensive loss is presented in the Consolidated Statements of Comprehensive Loss. The deferred components of other comprehensive income (loss) are reported, net of related income taxes, in accumulated other comprehensive loss ("OCL") in stockholders’ equity, as follows:


(In thousands)	June 2024		March 2024		June 2023
Foreign currency translation and other	$	(887,892)	$	(868,439)	$	(872,800)
Defined benefit pension plans	(178,701)		(182,333)		(161,211)
Derivative financial instruments	12,966		(13,559)		(19,518)
Accumulated other comprehensive loss	$	(1,053,627)	$	(1,064,331)	$	(1,053,529)

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The changes in accumulated OCL, net of related taxes, were as follows:


	Three Months Ended June 2024
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2024	$	(868,439)	$	(182,333)	$	(13,559)	$	(1,064,331)
Other comprehensive income (loss) before reclassifications	(19,453)		(10)		15,785		(3,678)
Amounts reclassified from accumulated other comprehensive loss	—		3,642		10,740		14,382
Net other comprehensive income (loss)	(19,453)		3,632		26,525		10,704
Balance, June 2024	$	(887,892)	$	(178,701)	$	12,966	$	(1,053,627)


	Three Months Ended June 2023
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2023	$	(859,651)	$	(167,692)	$	7,825	$	(1,019,518)
Other comprehensive income (loss) before reclassifications	(13,149)		1,088		(18,602)		(30,663)
Amounts reclassified from accumulated other comprehensive loss	—		5,393		(8,741)		(3,348)
Net other comprehensive income (loss)	(13,149)		6,481		(27,343)		(34,011)
Balance, June 2023	$	(872,800)	$	(161,211)	$	(19,518)	$	(1,053,529)

Reclassifications out of accumulated OCL were as follows:


(In thousands)		Three Months Ended June
Details About Accumulated Other Comprehensive Loss Components	Affected Line Item in the Consolidated Statements of Operations

		2024		2023





Amortization of defined benefit pension plans:
Net deferred actuarial losses	Other income (expense), net	$	(5,046)	$	(4,232)
Deferred prior service credits	Other income (expense), net	144		135

Pension settlement charges	Other income (expense), net	—		(3,292)
Total before tax		(4,902)		(7,389)
Tax benefit		1,260		1,996
Net of tax		(3,642)		(5,393)
Gains (losses) on derivative financial instruments:
Foreign exchange contracts	Net revenues	(4,331)		1,090
Foreign exchange contracts	Cost of goods sold	(10,126)		8,075
Foreign exchange contracts	Selling, general and administrative expenses	(408)		1,301
Foreign exchange contracts	Other income (expense), net	(56)		(511)
Interest rate contracts	Interest expense	1,192		725
Total before tax		(13,729)		10,680
Tax benefit (expense)		2,989		(1,939)
Net of tax		(10,740)		8,741
Total reclassifications for the period, net of tax		$	(14,382)	$	3,348

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NOTE 11 — STOCK-BASED COMPENSATION

Stock Options Granted

During the three months ended June 2024, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 5,485,215 shares of its Common Stock at an exercise price of $12.35 per share. The exercise price of each option granted was equal to the fair market value of VF Common Stock on the date of grant. Employee stock options vest and become exercisable in equal annual installments over three years. Stock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ten-year terms.

The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:


						Three Months Ended June 2024
Expected volatility						37% to 53%
Weighted average expected volatility						47%
Expected term (in years)						5.5 to 7.2
Weighted average dividend yield						2.1%
Risk-free interest rate						4.54% to 5.43%
Weighted average fair value at date of grant						$4.93

Equity Awards Contingent Upon Shareholder Approval

During the three months ended June 2024, VF contingently granted certain equity awards under VF's 1996 Stock Compensation Plan (the “1996 Plan”) as part of VF’s regular annual grant program. Grants for performance-based restricted stock units (“RSUs”) and nonperformance-based RSUs, totaling 3,642,883 shares, were contingent upon shareholder approval of

an amendment and restatement of VF’s 1996 Plan. Proposed changes to the 1996 Plan included an increase in the number of shares of common stock available for awards. Shareholders approved the proposed changes to the 1996 Plan at the 2024 Annual Meeting of Shareholders held on July 23, 2024, which is the accounting grant date for the contingently awarded RSUs.

NOTE 12 — INCOME TAXES

The effective income tax rate for the three months ended June 2024 was 13.0% compared to 7.8% in the 2023 period. The three months ended June 2024 included a net discrete tax expense of $7.1 million, which was comprised primarily of a $3.6 million net tax expense related to unrecognized tax benefits and interest, and a $4.3 million tax expense related to stock compensation. Excluding the $7.1 million net discrete tax expense in the 2024 period, the effective income tax rate would have been 15.4%. The three months ended June 2023 included a net discrete tax expense of $0.2 million, which was comprised primarily of a $4.7 million net tax expense related to unrecognized tax benefits and interest, a $3.1 million tax expense related to stock compensation and a $7.5 million net tax benefit for interest on income tax receivables. Excluding the $0.2 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 8.2%. Without discrete items, the effective income tax rate for the three months ended June 2024 increased by 7.2% compared with the 2023 period primarily due to the jurisdictional mix of earnings and year-to-date losses generated in the current year, including non-deductible goodwill impairment.

VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the Internal Revenue Service ("IRS") examinations for tax years through 2015 have been effectively settled. In addition, VF is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that VF’s provision for income taxes is adequate. The outcome of any one examination is not expected to have a material impact on VF’s consolidated financial statements. Management believes that some of these audits and negotiations will conclude during the next 12 months.

During the three months ended June 2024, the amount of net unrecognized tax benefits and associated interest increased by $5.3 million to $308.1 million. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $4.1 million due to settlement of audits and expiration of statutes of limitations, of which $1.0 million would reduce income tax expense.

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NOTE 13 — REPORTABLE SEGMENT INFORMATION

VF's President and Chief Executive Officer, who is considered the Company's CODM, allocates resources and assesses performance based on a global brand view that represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance.

The Company's reportable segments have been identified as: Outdoor, Active and Work.

Financial information for VF's reportable segments is as follows:


	Three Months Ended June

(In thousands)	2024		2023
Segment revenues:
Outdoor	$	790,199	$	829,697
Active	942,139		1,066,009
Work	174,963		190,630

Total segment revenues	$	1,907,301	$	2,086,336
Segment profit (loss):
Outdoor	$	(83,415)	$	(43,661)
Active	98,549		123,782
Work	5,328		6,831

Total segment profit	20,462		86,952
Impairment of goodwill and intangible assets	(145,000)		—
Corporate and other expenses	(117,305)		(99,511)
Interest expense, net	(55,677)		(49,719)

Loss before income taxes	$	(297,520)	$	(62,278)

NOTE 14 — NET LOSS PER SHARE


	Three Months Ended June

(In thousands, except per share amounts)	2024		2023
Net loss per common share – basic:
Net loss	$	(258,886)	$	(57,425)
Weighted average common shares outstanding	388,741		388,160
Net loss per common share	$	(0.67)	$	(0.15)
Net loss per common share – diluted:
Net loss	$	(258,886)	$	(57,425)
Weighted average common shares outstanding	388,741		388,160
Incremental shares from stock options and other dilutive securities	—		—
Adjusted weighted average common shares outstanding	388,741		388,160
Net loss per common share	$	(0.67)	$	(0.15)

In the three-month periods ended June 2024 and June 2023, the dilutive impacts of all outstanding stock options and other dilutive securities were excluded from dilutive shares as a result of the Company's net loss for the periods and, as such, their inclusion would have been anti-dilutive. As a result, a total of

22.6 million and 18.6 million potentially dilutive shares related to stock options and other dilutive securities were excluded from the diluted loss per share calculations for the three-month periods ended June 2024 and June 2023, respectively.

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NOTE 15 — FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable

data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data.

•Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities that are measured and recorded in the consolidated financial statements at fair value on a recurring basis:


	Total Fair Value		Fair Value Measurement Using (a)
(In thousands)			Level 1		Level 2		Level 3
June 2024
Financial assets:
Cash equivalents:
Money market funds	$	189,722	$	189,722	$	—	$	—
Time deposits	7,897		7,897		—		—

Derivative financial instruments	41,357		—		41,357		—
Deferred compensation and other	94,365		94,365		—		—
Financial liabilities:
Derivative financial instruments	27,578		—		27,578		—
Deferred compensation	89,570		—		89,570		—


	Total Fair Value		Fair Value Measurement Using (a)
(In thousands)			Level 1		Level 2		Level 3
March 2024
Financial assets:
Cash equivalents:
Money market funds	$	171,931	$	171,931	$	—	$	—
Time deposits	54,853		54,853		—		—

Derivative financial instruments	32,548		—		32,548		—
Deferred compensation and other	95,236		95,236		—		—
Financial liabilities:
Derivative financial instruments	40,234		—		40,234		—
Deferred compensation	90,804		—		90,804		—

(a)There were no transfers among the levels within the fair value hierarchy during the three months ended June 2024 or the year ended March 2024.

VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates, that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts and interest rate swap contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and interest rate forward curves, and considers the credit risk of the Company and its counterparties. VF’s deferred compensation assets primarily represent investments held within plan trusts as an

economic hedge of the related deferred compensation liabilities. These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets. Liabilities related to VF’s deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments.

All other significant financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value. These other financial assets and financial liabilities

17 VF Corporation Q1 FY25 Form 10-Q

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include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities. At June 2024 and March 2024, their carrying values approximated their fair values. Additionally, at June 2024 and March 2024, the carrying values of VF’s long-term debt, including the current portion, were $5,690.3 million and $5,703.0 million, respectively, compared with fair values of $5,231.4 million and $5,263.3 million at those respective dates. Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

Nonrecurring Fair Value Measurements

Supreme Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis

During the three months ended June 2024, VF determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. VF's assessment gave consideration to the ongoing negotiations to sell the Supreme reporting unit. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the testing date were $811.6 million and $852.0 million, respectively. As a result of the impairment testing performed, VF recorded impairment charges of $94.0 million and $51.0 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively.

The Supreme reporting unit is included in the Active reportable segment.

Management estimated the fair value of the Supreme reporting unit using Company-specific inputs, including estimates of fair value subsequently confirmed by the transaction price discussed in Note 18. The fair value of the Supreme® indefinite-lived trademark intangible asset was estimated using valuation

techniques consistent with those discussed in the Critical Accounting Policies and Estimates section included in Management’s Discussion and Analysis in the Fiscal 2024 Form 10-K.

Management’s revenue forecasts used in the Supreme® indefinite-lived trademark intangible asset valuation considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuation were similar to those that would be used by market participants performing independent valuations of the asset.

Key assumptions developed by management and used in the quantitative analysis of the Supreme® indefinite-lived trademark intangible asset include:

•Financial projections that are comparable to those used in the prior year testing, as the brand is executing on its strategy, with moderate revenue growth throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business;

•Tax rates based on the statutory rates for the countries in which the related intellectual property is domiciled;

•Royalty rates based on market data as well as active license agreements with similar VF brands; and,

•Market-based discount rates that are slightly higher than prior testing due to overall market conditions.

The valuation models used by management in the impairment testing assumes continued recovery in the brand’s operating results with revenue growth over the projection period. If the brand is unable to achieve the financial projections or if market-based discount rates increase, additional impairment of the reporting unit goodwill and indefinite-lived trademark intangible asset could occur in the future.

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NOTE 16 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Summary of Derivative Financial Instruments

VF’s outstanding derivative financial instruments include foreign currency exchange forward contracts and interest rate swap contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes.

The notional amounts of all outstanding foreign currency exchange forward contracts were $3.1 billion at June 2024, $3.1 billion at March 2024 and $3.5 billion at June 2023, consisting primarily of contracts hedging exposures to the euro, British

pound, Canadian dollar, Swiss franc, Mexican peso, Polish zloty, Swedish krona, South Korean won, Chinese renminbi and Japanese yen. These derivative contracts have maturities up to 20 months.

The notional amount of VF's outstanding interest rate swap contracts was $500.0 million at June 2024, March 2024 and June 2023. These contracts hedge the cash flow risk of interest payments on VF's variable-rate delayed draw Term Loan ("DDTL") Agreement.

The following table presents outstanding derivatives on an individual contract basis:


	Fair Value of Derivatives with Unrealized Gains						Fair Value of Derivatives with Unrealized Losses

(In thousands)	June 2024		March 2024		June 2023		June 2024		March 2024		June 2023
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts	$	38,160	$	29,657	$	27,902	$	(27,436)	$	(39,639)	$	(74,050)
Interest rate contracts	1,690		2,335		4,582		—		—		—
Total derivatives designated as hedging instruments	39,850		31,992		32,484		(27,436)		(39,639)		(74,050)
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	1,507		556		404		(142)		(595)		(7,978)
Total derivatives	$	41,357	$	32,548	$	32,888	$	(27,578)	$	(40,234)	$	(82,028)

VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. If VF were to offset and record the asset and liability balances on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:


	June 2024				March 2024				June 2023

(In thousands)	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
Gross amounts presented in the Consolidated Balance Sheets	$	41,357	$	(27,578)	$	32,548	$	(40,234)	$	32,888	$	(82,028)
Gross amounts not offset in the Consolidated Balance Sheets	(6,699)		6,699		(11,322)		11,322		(27,128)		27,128
Net amounts	$	34,658	$	(20,879)	$	21,226	$	(28,912)	$	5,760	$	(54,900)

Derivatives are classified as current or noncurrent based on maturity dates, as follows:


(In thousands)		June 2024		March 2024		June 2023
Derivative Instruments	Balance Sheet Location
Foreign exchange contracts	Other current assets	$	33,562	$	26,366	$	26,145
Foreign exchange contracts	Accrued liabilities	(24,802)		(35,578)		(73,049)
Foreign exchange contracts	Other assets	6,105		3,847		2,161
Foreign exchange contracts	Other liabilities	(2,776)		(4,656)		(8,979)
Interest rate contracts	Other current assets	1,690		2,335		—