INCOME TAXES |
3 Months Ended |
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Jun. 28, 2025 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES
The effective income tax rate for the three months ended June 2025 was 8.0% compared to 8.1% in the 2024 period. The three months ended June 2025 included a net discrete tax expense of $11.5 million, which was comprised primarily of a $7.4 million net tax expense related to unrecognized tax benefits and interest, and a $4.1 million tax expense related to stock compensation. Excluding the $11.5 million net discrete tax expense in the 2025 period, the effective income tax rate would have been 17.2%. 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 12.4%. Without discrete items, the effective income tax rate for the three months ended June 2025 increased by 4.8% compared with the 2024 period primarily due to an increase in tax rates on foreign earnings.
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.
On July 4, 2025, the U.S. signed into law the One Big Beautiful Bill Act, which included various provisions specific to
businesses. This legislation was signed into law subsequent to VF’s quarter end and its impact on VF is currently being evaluated.
During the three months ended June 2025, the amount of net unrecognized tax benefits and associated interest increased by $9.4 million to $335.0 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 $137.4 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which $134.3 million would reduce income tax expense.
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