VF Reports Third Quarter Fiscal 2021 Results; Raises Full Year Fiscal 2021 Outlook
- Revenue from continuing operations decreased 6 percent (down 8 percent in constant dollars) to $3.0 billion;
- Active segment revenue decreased 9 percent (down 11 percent in constant dollars) including a 6 percent (8 percent in constant dollars) decrease in Vans® brand revenue; Outdoor segment revenue decreased 5 percent (down 7 percent in constant dollars) including flat revenue (down 2 percent in constant dollars) in The North Face® brand; Work segment revenue increased 8 percent (up 6 percent in constant dollars) including a 9 percent (7 percent in constant dollars) increase in Dickies® brand revenue;
- International revenue was flat (down 4 percent in constant dollars); Europe revenue increased 1 percent (down 4 percent in constant dollars); Greater China revenue increased 18 percent (up 11 percent in constant dollars), including a 22 percent (15 percent in constant dollars) increase in Mainland China;
- Direct-to-Consumer revenue decreased 2 percent (down 4 percent in constant dollars) including a 53 percent (49 percent in constant dollars) increase in Direct-to-Consumer Digital revenue;
- Gross margin from continuing operations decreased 250 basis points, including a 90 basis point negative impact from the timing of net foreign currency transaction activity, to 54.7 percent; on an adjusted basis, gross margin decreased 150 basis points to 55.7 percent;
- Operating income from continuing operations on a reported basis was $412 million; on an adjusted basis, operating income from continuing operations was $458 million;
- Earnings per share from continuing operations was $0.83; adjusted earnings per share from continuing operations was $0.93;
- VF ended the third quarter of fiscal 2021 with inventories down 14 percent compared to the prior year; at the end of the third quarter the company had approximately $3.9 billion of cash and short-term investments, including approximately $2 billion of cash designated for the acquisition of the Supreme® brand that was completed in the fourth quarter, in addition to $1.9 billion remaining under VF’s revolving credit facility; the company also returned $191 million to shareholders through dividends;
- Full year fiscal 2021 revenue is now expected to be in the range of $9.1 billion to $9.2 billion, reflecting a decrease of 12 percent to 13 percent on an adjusted basis; full year fiscal 2021 adjusted earnings per share is now expected to be approximately $1.30, reflecting a decrease of approximately 51 percent.
Denver, CO. — VF Corporation reported financial results for its third quarter ended December 26, 2020. All per share ats are presented on a diluted basis. This release refers to “reported” and “constant dollar” amounts, terms that are described under the heading “Constant Currency – Excluding the Impact of Foreign Currency.” Unless otherwise noted, “reported” and “constant dollar” amounts are the same. This release also refers to “continuing” and “discontinued” operations amounts, which are concepts described under the heading “Discontinued Operations – Occupational Workwear Business.” Unless otherwise noted, results presented are based on continuing operations. This release also refers to “adjusted” amounts, a term that is described under the heading “Adjusted Amounts – Excluding Transaction and Deal Related Expenses and Costs Related to Specified Strategic Business Decisions.” Unless otherwise noted, “reported” and “adjusted” amounts are the same.
“Our third quarter results were largely ahead of expectations despite the impact of additional COVID-19-related disruption to our business,” said Steve Rendle, VF’s Chairman, President and CEO. “Our portfolio remains on track to return to growth in the fiscal fourth quarter and we are confident in VF’s plans to accelerate growth into fiscal 2022 and to continue advancing our business model transformation. We remain optimistic about the year ahead and look forward to improvements in our geopolitical, macroeconomic and pandemic-related situations.”
Constant Currency – Excluding the Impact of Foreign Currency
This release refers to “reported” amounts in accordance with U.S. generally accepted accounting principles (“GAAP”), which include translation and transactional impacts from foreign currency exchange rates. This release also refers to “constant dollar” amounts, which exclude the impact of translating foreign currencies into U.S. dollars. Reconciliations of GAAP measures to constant currency amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.
Discontinued Operations – 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 certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel.
During the three months ended March 2020, the company determined that the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria. Accordingly, the company has reported the related held-for-sale assets and liabilities as assets and liabilities of discontinued operations and included the operating results and cash flows of the business in discontinued operations for all periods presented.
Adjusted Amounts – Excluding Transaction and Deal Related Expenses and Costs Related to Specified Strategic Business Decisions
The adjusted amounts in this release exclude transaction and deal related expenses associated primarily with the acquisition of the Supreme® brand. Total transaction and deal related expenses were approximately $7 million in the third quarter and the first nine months of fiscal 2021.
The adjusted amounts in this release exclude costs related to a transformation initiative for our Asia-Pacific regional operations as well as certain cost optimization activities and other charges indirectly related to the strategic review of the Occupational Workwear business. The adjusted amounts also exclude costs related to strategic business decisions in South America and the operating results of jeanswear wind down activities in South America following the spin-off of Kontoor Brands. Total costs were approximately $39 million in the third quarter of fiscal 2021 and $77 million in the first nine months of fiscal 2021. Adjusted amounts for the first nine months of fiscal 2021 also exclude approximately $42 million of noncash non-operating expenses related to the release of certain currency translation amounts associated with the wind down activities in South America.
Combined, the above items negatively impacted earnings per share by $0.10 during the third quarter of fiscal 2021 and $0.29 during the first nine months of fiscal 2021. All adjusted amounts referenced herein exclude the effects of these amounts.
Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.
COVID-19 Outbreak Update
As the global impact of COVID-19 continues, VF remains first and foremost focused on a people-first approach that prioritizes the health and well-being of its employees, customers, trade partners and consumers around the world. To help mitigate the spread of COVID-19 and in response to public health advisories and governmental actions and regulations, VF has modified its business practices, including the temporary closing of offices and retail stores, instituting travel bans and restrictions and implementing health and safety measures including social distancing and quarantines.
The majority of VF’s supply chain is currently operational. Suppliers are complying with local public health advisories and governmental restrictions which has resulted in isolated product delays. VF is working with its suppliers to minimize disruption. VF’s distribution centers are operational in accordance with local government guidelines while maintaining enhanced health and safety protocols.
In North America, over 95 percent of VF’s owned retail stores were open at the beginning of the third quarter, with all VF-owned retail stores re-opened by mid-October. Since that time additional stores have been re-closed, with approximately 15 percent of stores closed by the end of the quarter. The majority of the closures were Vans® stores, predominantly based in California. In addition, other stores are operating with reduced capacity. Stores in North America have begun to re-open since the end of the quarter and currently less than 10 percent of stores are closed in the region.
In the EMEA region, nearly all of VF’s owned retail stores were open at the beginning of the third quarter. Since that time additional stores have been re-closed, with approximately 50 percent of stores closed by the end of the quarter. Additional stores in the EMEA region have re-closed since the end of the quarter and currently over 60 percent of stores are closed.
Nearly all of VF’s owned retail stores in the APAC region, including Mainland China, were open during the quarter and remain open.
VF is continuing to monitor the COVID-19 outbreak globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers. As COVID-19 uncertainty continues, VF expects ongoing disruption to its business operations.
Third Quarter Fiscal 2021 Income Statement Review
- Revenue decreased 6 percent (down 8 percent in constant dollars) to $3.0 billion driven by store closures and lower consumer demand as a result of the COVID-19 outbreak and related government actions and regulations.
- Gross margin decreased 250 basis points to 54.7 percent, primarily driven by elevated promotional activity to clear excess inventory and the timing of net foreign currency transaction activity. On an adjusted basis, gross margin decreased 150 basis points to 55.7 percent.
- Operating income on a reported basis was $412 million. On an adjusted basis, operating income was $458 million. Operating margin was 13.9 percent. Adjusted operating margin was 15.4 percent.
- Earnings per share was $0.83 on a reported basis. On an adjusted basis, earnings per share was $0.93.
Balance Sheet Highlights
Inventories were down 14 percent compared with the same period last year. During the quarter, VF returned approximately $191 million of cash to shareholders through dividends. As part of the company’s liquidity preservation actions during the ongoing COVID-19 outbreak, the company has suspended its share repurchase program. VF has $2.8 billion remaining under its current share repurchase authorization.
Full Year Fiscal 2021 Outlook
VF’s full year outlook assumes no material deterioration to the company’s current business operations as a result of COVID-19, governmental actions and regulations. VF’s full year fiscal 2021 outlook has been updated and includes the following:
- Revenue is now expected to be in the range of $9.1 billion to $9.2 billion, reflecting a decrease of 12 percent to 13 percent on an adjusted basis. The updated outlook includes approximately $125 million of revenue from the Supreme® brand. This compares to the previous expectation of at least $9.0 billion, reflecting a decrease of approximately 14 percent on an adjusted basis.
- Adjusted earnings per share is expected to be approximately $1.30, reflecting a decrease of approximately 51 percent. The updated outlook includes approximately $0.05 of adjusted earnings per share from the Supreme® brand. This compares to the previous expectation of at least $1.20, reflecting a decrease of approximately 55 percent.
- Adjusted free cash flow is now expected to be approximately $650 million. This compares to the previous expectation of greater than $600 million.
Dividend Declared
VF’s Board of Directors declared a quarterly dividend of $0.49 per share, payable on March 22, 2021, to shareholders of record on March 10, 2021. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled dividend and is not currently contemplating the suspension of its dividend.
Webcast Information
VF will host its third quarter fiscal 2021 conference call beginning at 8:30 a.m. Eastern Time today. The conference call will be broadcast live via the Internet, accessible at ir.vfc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location.
Presentation
A presentation on third quarter fiscal 2021 results will be available at ir.vfc.com beginning at approximately 7:30 a.m. Eastern Time today and will be archived at the same location.
About VF
Founded in 1899, VF Corporation is one of the world’s largest apparel, footwear and accessories companies connecting people to the lifestyles, activities and experiences they cherish most through a family of iconic outdoor, active and workwear brands including Vans®, The North Face®, Timberland® and Dickies®. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit vfc.com.
| VF CORPORATION
Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||||||||||||
| Three Months Ended December | % | Nine Months Ended December | % | |||||||||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||
| Net revenues | $ | 2,971,541 | $ | 3,155,723 | (6 | )% | $ | 6,656,158 | $ | 8,386,135 | (21 | )% | ||||||||||||||
| Costs and operating expenses | ||||||||||||||||||||||||||
| Cost of goods sold | 1,345,024 | 1,351,653 | 0 | % | 3,134,381 | 3,704,254 | (15 | )% | ||||||||||||||||||
| Selling, general and administrative expenses | 1,214,518 | 1,264,031 | (4 | )% | 3,036,639 | 3,497,315 | (13 | )% | ||||||||||||||||||
| Total costs and operating expenses | 2,559,542 | 2,615,684 | (2 | )% | 6,171,020 | 7,201,569 | (14 | )% | ||||||||||||||||||
| Operating income | 411,999 | 540,039 | (24 | )% | 485,138 | 1,184,566 | (59 | )% | ||||||||||||||||||
| Interest, net | (31,776 | ) | (17,337 | ) | 83 | % | (90,656 | ) | (49,306 | ) | 84 | % | ||||||||||||||
| Other income (expense), net | 6,484 | (22,144 | ) | * | (27,059 | ) | (18,361 | ) | * | |||||||||||||||||
| Income from continuing operations before income taxes | 386,707 | 500,558 | (23 | )% | 367,423 | 1,116,899 | (67 | )% | ||||||||||||||||||
| Income tax expense | 59,048 | 78,976 | (25 | )% | 74,260 | 4,667 | * | |||||||||||||||||||
| Income from continuing operations | 327,659 | 421,582 | (22 | )% | 293,163 | 1,112,232 | (74 | )% | ||||||||||||||||||
| Income from discontinued operations, net of tax | 19,581 | 43,421 | (55 | )% | 25,186 | 50,993 | (51 | )% | ||||||||||||||||||
| Net income | $ | 347,240 | $ | 465,003 | (25 | )% | $ | 318,349 | $ | 1,163,225 | (73 | )% | ||||||||||||||
| Earnings per common share – basic (a) | ||||||||||||||||||||||||||
| Continuing operations | $ | 0.84 | $ | 1.06 | (21 | )% | $ | 0.75 | $ | 2.80 | (73 | )% | ||||||||||||||
| Discontinued operations | 0.05 | 0.11 | (54 | )% | 0.06 | 0.13 | (50 | )% | ||||||||||||||||||
| Total earnings per common share – basic | $ | 0.89 | $ | 1.17 | (24 | )% | $ | 0.82 | $ | 2.93 | (72 | )% | ||||||||||||||
| Earnings per common share – diluted (a) | ||||||||||||||||||||||||||
| Continuing operations | $ | 0.83 | $ | 1.05 | (21 | )% | $ | 0.75 | $ | 2.77 | (73 | )% | ||||||||||||||
| Discontinued operations | 0.05 | 0.11 | (54 | )% | 0.06 | 0.13 | (49 | )% | ||||||||||||||||||
| Total earnings per common share – diluted | $ | 0.88 | $ | 1.16 | (24 | )% | $ | 0.81 | $ | 2.90 | (72 | )% | ||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
| Basic | 389,872 | 395,940 | 389,262 | 396,806 | ||||||||||||||||||||||
| Diluted | 392,851 | 400,322 | 391,607 | 401,499 | ||||||||||||||||||||||
| Cash dividends per common share | $ | 0.49 | $ | 0.48 | 2 | % | $ | 1.45 | $ | 1.42 | 2 | % | ||||||||||||||
| * Calculation not meaningful | ||||||||||||||||||||||||||
| Basis of presentation of condensed consolidated financial statements: VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. For presentation purposes herein, all references to periods ended December 2020 relate to the 13-week and 39-week fiscal periods ended December 26, 2020 and all references to periods ended December 2019 relate to the 13-week and 39-week fiscal periods ended December 28, 2019. References to March 2020 relate to information as of March 28, 2020. | ||||||||||||||||||||||||||
| (a) Amounts have been calculated using unrounded numbers. | ||||||||||||||||||||||||||
| VF CORPORATIONCondensed Consolidated Balance Sheets
(Unaudited) (In thousands) |
||||||||||||
| December | March | December | ||||||||||
| 2020 | 2020 | 2019 | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and equivalents | $ | 3,254,236 | $ | 1,369,028 | $ | 540,029 | ||||||
| Accounts receivable, net | 1,411,565 | 1,308,051 | 1,539,923 | |||||||||
| Inventories | 1,075,983 | 1,293,912 | 1,254,460 | |||||||||
| Short-term investments | 599,403 | — | — | |||||||||
| Other current assets | 383,384 | 444,886 | 356,882 | |||||||||
| Current assets of discontinued operations | 560,648 | 611,139 | 464,404 | |||||||||
| Total current assets | 7,285,219 | 5,027,016 | 4,155,698 | |||||||||
| Property, plant and equipment, net | 955,845 | 954,406 | 867,205 | |||||||||
| Goodwill and intangible assets, net | 3,056,254 | 3,010,564 | 3,377,738 | |||||||||
| Operating lease right-of-use assets | 1,476,503 | 1,273,514 | 1,259,066 | |||||||||
| Other assets | 970,520 | 867,751 | 958,253 | |||||||||
| Other assets of discontinued operations | — | — | 196,302 | |||||||||
| Total assets | $ | 13,744,341 | $ | 11,133,251 | $ | 10,814,262 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Short-term borrowings | $ | 299,748 | $ | 1,228,812 | $ | 56,001 | ||||||
| Current portion of long-term debt | 1,006 | 1,018 | 4,677 | |||||||||
| Accounts payable | 412,324 | 407,021 | 389,749 | |||||||||
| Accrued liabilities | 1,664,760 | 1,260,252 | 1,410,609 | |||||||||
| Current liabilities of discontinued operations | 120,185 | 126,781 | 101,056 | |||||||||
| Total current liabilities | 2,498,023 | 3,023,884 | 1,962,092 | |||||||||
| Long-term debt | 5,786,552 | 2,608,269 | 2,110,488 | |||||||||
| Operating lease liabilities | 1,211,655 | 1,020,651 | 1,014,544 | |||||||||
| Other liabilities | 1,109,937 | 1,123,113 | 1,128,834 | |||||||||
| Other liabilities of discontinued operations | — | — | 30,714 | |||||||||
| Total liabilities | 10,606,167 | 7,775,917 | 6,246,672 | |||||||||
| Stockholders’ equity | 3,138,174 | 3,357,334 | 4,567,590 | |||||||||
| Total liabilities and stockholders’ equity | $ | 13,744,341 | $ | 11,133,251 | $ | 10,814,262 | ||||||
| VF CORPORATIONCondensed Consolidated Statements of Cash Flows
(Unaudited) (In thousands) |
||||||||||
| Nine Months Ended December | ||||||||||
| 2020 | 2019 | |||||||||
| Operating activities | ||||||||||
| Net income | $ | 318,349 | $ | 1,163,225 | ||||||
| Income from discontinued operations, net of tax | 25,186 | 50,993 | ||||||||
| Income from continuing operations, net of tax | 293,163 | 1,112,232 | ||||||||
| Depreciation and amortization | 204,580 | 194,647 | ||||||||
| Reduction in the carrying amount of right-of-use assets | 309,579 | 282,531 | ||||||||
| Other adjustments | 276,955 | (775,433 | ) | |||||||
| Cash provided by operating activities – continuing operations | 1,084,277 | 813,977 | ||||||||
| Cash provided by operating activities – discontinued operations | 57,779 | 27,649 | ||||||||
| Cash provided by operating activities | 1,142,056 | 841,626 | ||||||||
| Investing activities | ||||||||||
| Purchases of short-term investments | (800,000 | ) | — | |||||||
| Proceeds from maturities of short-term investments | 200,000 | — | ||||||||
| Capital expenditures | (152,446 | ) | (179,195 | ) | ||||||
| Software purchases | (51,964 | ) | (36,104 | ) | ||||||
| Other, net | (9,116 | ) | 52,728 | |||||||
| Cash used by investing activities – continuing operations | (813,526 | ) | (162,571 | ) | ||||||
| Cash used by investing activities – discontinued operations | (3,171 | ) | (11,385 | ) | ||||||
| Cash used by investing activities | (816,697 | ) | (173,956 | ) | ||||||
| Financing activities | ||||||||||
| Net increase (decrease) from short-term borrowings and long-term debt | 2,044,426 | (601,055 | ) | |||||||
| Share repurchases | — | (500,003 | ) | |||||||
| Cash dividends paid | (564,904 | ) | (562,298 | ) | ||||||
| Cash received from Kontoor Brands, net of cash transferred of $126.8 million | — | 906,148 | ||||||||
| Proceeds from issuance of Common Stock, net of payments for tax withholdings | 45,867 | 135,086 | ||||||||
| Cash provided (used) by financing activities | 1,525,389 | (622,122 | ) | |||||||
| Effect of foreign currency rate changes on cash, cash equivalents and restricted cash | 12,513 | (4,927 | ) | |||||||
| Net change in cash, cash equivalents and restricted cash | 1,863,261 | 40,621 | ||||||||
| Cash, cash equivalents and restricted cash – beginning of year | 1,411,322 | 556,587 | ||||||||
| Cash, cash equivalents and restricted cash – end of period | $ | 3,274,583 | $ | 597,208 | ||||||
| VF CORPORATIONSupplemental Financial Information
Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||||||||||||
| Three Months Ended December | % Change | % Change Constant Currency (a) |
% Change Adjusted (b) |
% Change Constant Currency and Adjusted (a) (b) |
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| 2020 | 2019 | |||||||||||||||||||||
| Segment revenues | ||||||||||||||||||||||
| Outdoor | $ | 1,571,043 | $ | 1,659,108 | (5 | )% | (7 | )% | (5 | )% | (7 | )% | ||||||||||
| Active | 1,127,121 | 1,239,462 | (9 | )% | (11 | )% | (9 | )% | (11 | )% | ||||||||||||
| Work | 270,182 | 251,063 | 8 | % | 6 | % | 8 | % | 6 | % | ||||||||||||
| Other (c) | 3,195 | 6,090 | * | * | * | * | ||||||||||||||||
| Total segment revenues | $ | 2,971,541 | $ | 3,155,723 | (6 | )% | (8 | )% | (6 | )% | (8 | )% | ||||||||||
| Segment profit (loss) | ||||||||||||||||||||||
| Outdoor | $ | 311,767 | $ | 348,995 | (11 | )% | (13 | )% | ||||||||||||||
| Active | 201,373 | 286,474 | (30 | )% | (31 | )% | ||||||||||||||||
| Work | 16,900 | 22,111 | (24 | )% | (22 | )% | ||||||||||||||||
| Other (c) | (4,435 | ) | (2,800 | ) | * | * | ||||||||||||||||
| Total segment profit | 525,605 | 654,780 | (20 | )% | (21 | )% | ||||||||||||||||
| Corporate and other expenses | (107,122 | ) | (136,885 | ) | (22 | )% | (22 | )% | ||||||||||||||
| Interest, net | (31,776 | ) | (17,337 | ) | 83 | % | 83 | % | ||||||||||||||
| Income from continuing operations before income taxes | $ | 386,707 | $ | 500,558 | (23 | )% | (25 | )% | ||||||||||||||
| (a) Refer to constant currency definition on the following pages. | ||||||||||||||||||||||
| (b) Excludes the operating results of jeanswear wind down activities in South America post the separation of Kontoor Brands for the three months ended December 2019. Refer to Non-GAAP financial information on “Reconciliation of Select GAAP Measures to Non-GAAP Measures – Three and Nine Months Ended December 2019” page for additional information. | ||||||||||||||||||||||
| (c) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes results primarily related to the sale of non-VF products. | ||||||||||||||||||||||
| * Calculation not meaningful | ||||||||||||||||||||||
| VF CORPORATIONSupplemental Financial Information
Reportable Segment Information (Unaudited) (In thousands) |
||||||||||||||||||||||
| Nine Months Ended December | % Change | % Change Constant Currency (a) |
% Change Adjusted (b) |
% Change Constant Currency and Adjusted (a) (b) |
||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||||
| Segment revenues | ||||||||||||||||||||||
| Outdoor | $ | 3,066,678 | $ | 3,795,665 | (19 | )% | (21 | )% | (19 | )% | (21 | )% | ||||||||||
| Active | 2,898,639 | 3,885,222 | (25 | )% | (26 | )% | (25 | )% | (26 | )% | ||||||||||||
| Work | 686,163 | 674,826 | 2 | % | 1 | % | 2 | % | 1 | % | ||||||||||||
| Other (c) | 4,678 | 30,422 | * | * | * | * | ||||||||||||||||
| Total segment revenues | $ | 6,656,158 | $ | 8,386,135 | (21 | )% | (22 | )% | (20 | )% | (22 | )% | ||||||||||
| Segment profit (loss) | ||||||||||||||||||||||
| Outdoor | $ | 283,531 | $ | 525,107 | (46 | )% | (48 | )% | ||||||||||||||
| Active | 467,632 | 982,240 | (52 | )% | (53 | )% | ||||||||||||||||
| Work | 13,672 | 52,129 | (74 | )% | (74 | )% | ||||||||||||||||
| Other (c) | (9,322 | ) | (2,035 | ) | * | * | ||||||||||||||||
| Total segment profit | 755,513 | 1,557,441 | (51 | )% | (53 | )% | ||||||||||||||||
| Corporate and other expenses | (297,434 | ) | (391,236 | ) | (24 | )% | (24 | )% | ||||||||||||||
| Interest, net | (90,656 | ) | (49,306 | ) | 84 | % | 84 | % | ||||||||||||||
| Income from continuing operations before income taxes | $ | 367,423 | $ | 1,116,899 | (67 | )% | (69 | )% | ||||||||||||||
| (a) Refer to constant currency definition on the following pages. | ||||||||||||||||||||||
| (b) Excludes the operating results of jeanswear wind down activities in South America post the separation of Kontoor Brands for the nine months ended December 2019. Refer to Non-GAAP financial information on “Reconciliation of Select GAAP Measures to Non-GAAP Measures – Three and Nine Months Ended December 2019” page for additional information. | ||||||||||||||||||||||
| (c) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes results primarily related to the sale of non-VF products. | ||||||||||||||||||||||
| * Calculation not meaningful | ||||||||||||||||||||||
| VF CORPORATIONSupplemental Financial Information
Reportable Segment Information – Constant Currency Basis (Unaudited) (In thousands) |
|||||||||||||||
| Three Months Ended December 2020 | |||||||||||||||
| As Reported | Adjust for Foreign | ||||||||||||||
| under GAAP | Currency Exchange | Constant Currency | |||||||||||||
| Segment revenues | |||||||||||||||
| Outdoor | $ | 1,571,043 | $ | (35,799 | ) | $ | 1,535,244 | ||||||||
| Active | 1,127,121 | (21,655 | ) | 1,105,466 | |||||||||||
| Work | 270,182 | (3,750 | ) | 266,432 | |||||||||||
| Other | 3,195 | 667 | 3,862 | ||||||||||||
| Total segment revenues | $ | 2,971,541 | $ | (60,537 | ) | $ | 2,911,004 | ||||||||
| Segment profit (loss) | |||||||||||||||
| Outdoor | $ | 311,767 | $ | (6,748 | ) | $ | 305,019 | ||||||||
| Active | 201,373 | (3,161 | ) | 198,212 | |||||||||||
| Work | 16,900 | 398 | 17,298 | ||||||||||||
| Other | (4,435 | ) | (1,468 | ) | (5,903 | ) | |||||||||
| Total segment profit | 525,605 | (10,979 | ) | 514,626 | |||||||||||
| Corporate and other expenses | (107,122 | ) | 254 | (106,868 | ) | ||||||||||
| Interest, net | (31,776 | ) | — | (31,776 | ) | ||||||||||
| Income from continuing operations before income taxes | $ | 386,707 | $ | (10,725 | ) | $ | 375,982 | ||||||||
| Diluted earnings per share growth | (21 | ) | % | (2 | ) | % | (23 | ) | % | ||||||
| Constant Currency Financial Information | |||||||||||||||
| VF is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by VF from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses. | |||||||||||||||
| To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). | |||||||||||||||
| These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. | |||||||||||||||
| VF CORPORATIONSupplemental Financial Information
Reportable Segment Information – Constant Currency Basis (Unaudited) |