Annual report [Section 13 and 15(d), not S-K Item 405]

DISCONTINUED OPERATIONS

v3.25.1
DISCONTINUED OPERATIONS
 12 Months Ended
Mar. 29, 2025
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS 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.
Supreme
On July 16, 2024, VF entered into a Purchase Agreement with EssilorLuxottica S.A. to sell Supreme for an aggregate base purchase price of $1.500 billion, subject to customary adjustments for cash, indebtedness, working capital and transaction expenses as more fully set forth in the Purchase Agreement. On October 1, 2024, VF completed the sale of Supreme. VF received proceeds of $1.506 billion, net of cash sold, resulting in a final after-tax loss on sale of $126.6 million, which is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the year ended March 2025. VF used a portion of the net cash proceeds to prepay $1.0 billion of its delayed draw Term Loan ("DDTL") pursuant to the terms of the DDTL Agreement, as amended, which required repayment within ten business days of VF’s receipt of the net cash proceeds from the sale of Supreme, and to repay $450.0 million of commercial
paper borrowings upon maturity during the third quarter of Fiscal 2025.
During the second quarter of Fiscal 2025, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria. Accordingly, the Company has reported the results of Supreme 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. These changes have been applied to all periods presented.
The results of Supreme were previously reported in the Active segment. The results of Supreme recorded in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations were a loss of $259.0 million (including a final after-tax loss on sale of $126.6 million and goodwill and intangible asset impairment charges of $145.0 million), income of $49.6 million and a loss of $637.2 million (including goodwill and intangible asset impairment charges of
$735.0 million) for the years ended March 2025, 2024 and 2023, respectively.
During the first quarter of Fiscal 2025, VF determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. 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.
During the year ended March 2023, VF recorded impairment charges of $394.1 million and $340.9 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively. During the second quarter of Fiscal 2023, VF determined that a triggering event had occurred requiring quantitative analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. As a result of the impairment testing performed, VF recorded impairment charges of $229.0 million and $192.9 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively. During the fourth quarter of Fiscal 2023, in connection with its annual impairment testing, VF performed a quantitative analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. As a result of the
impairment testing performed, VF recorded additional impairment charges of $165.1 million and $148.0 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively.
Under the terms of a transition services agreement, the Company will provide certain post-closing accounting, tax, treasury, digital technology, supply chain and human resource services on a transitional basis for periods generally up to 12 months from the closing date of the transaction. Under the terms of a secondment agreement, certain employees associated with the Supreme business remained employees of VF and worked exclusively in support of Supreme, and at Supreme's expense, through the end of Fiscal 2025.
Certain corporate overhead costs and segment costs previously allocated to the Supreme brand for segment reporting purposes did not qualify for classification within discontinued operations and have been allocated to continuing operations. In addition, interest expense and the related interest rate swap impact for the DDTL were allocated to discontinued operations due to the requirement within the DDTL Agreement, as amended, that the DDTL be prepaid upon the receipt of the net cash proceeds from the sale of Supreme.
Summarized Discontinued Operations Financial Information
The following table summarizes the major line items for Supreme that are included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations:
Year Ended March
(In thousands) 2025 2024 2023
Revenues $ 244,524  $ 538,989  $ 523,116 
Cost of goods sold 95,529  214,067  222,869 
SG&A expenses 109,641  215,049  236,282 
Impairment of goodwill and intangible assets 145,000  —  735,009 
Interest expense, net (a)
(30,767) (57,729) (20,972)
Other income (expense), net (17) (908) (2,487)
Income (loss) from discontinued operations before income taxes (136,430) 51,236  (694,503)
Loss on the sale of discontinued operations before income taxes (134,225) —  — 
Total income (loss) from discontinued operations before income taxes (270,655) 51,236  (694,503)
Income tax expense (benefit) (11,615) 1,641  (57,353)
Income (loss) from discontinued operations, net of tax $ (259,040) $ 49,595  $ (637,150)
(a)As noted above, interest expense and the related interest rate swap impact for the DDTL were allocated to discontinued operations.
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as of March 2024:
(In thousands) March 2024
Cash and cash equivalents $ 18,229 
Accounts receivable, net 10,636 
Inventories 68,543 
Other current assets 18,817 
Property, plant and equipment, net 34,894 
Intangible assets, net 852,000 
Goodwill 815,058 
Operating lease right-of-use assets 75,287 
Other assets 19,882 
Deferred income tax assets (a)
(87,479)
Total assets of discontinued operations $ 1,825,867 
Accounts payable $ 28,651 
Accrued liabilities 51,210 
Operating lease liabilities 69,554 
Other liabilities 2,387 
Total liabilities of discontinued operations $ 151,802 
(a)Deferred income tax balances reflect VF’s consolidated netting by jurisdiction.