Pennsylvania | 23-1180120 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
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 |
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. ¨ | ||||||||||||||||||||
PAGE NUMBER | |||||
ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED). |
(In thousands, except share amounts) | December 2023 | March 2023 | December 2022 | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets | |||||||||||||||||||||||
Cash and equivalents |
$ | 988,006 | $ | 814,887 | $ | 571,347 | |||||||||||||||||
Accounts receivable, less allowance for doubtful accounts of: December 2023 - $30,011; March 2023 - $28,075; December 2022 - $29,087 |
1,314,139 | 1,610,295 | 1,564,957 | ||||||||||||||||||||
Inventories |
2,148,219 | 2,292,790 | 2,591,915 | ||||||||||||||||||||
Other current assets |
485,562 | 434,737 | 515,763 | ||||||||||||||||||||
Total current assets | 4,935,926 | 5,152,709 | 5,243,982 | ||||||||||||||||||||
Property, plant and equipment, net |
913,384 | 942,440 | 932,663 | ||||||||||||||||||||
Intangible assets, net |
2,636,745 | 2,642,821 | 2,790,512 | ||||||||||||||||||||
Goodwill |
1,723,638 | 1,978,413 | 2,142,401 | ||||||||||||||||||||
Operating lease right-of-use assets |
1,314,306 | 1,372,182 | 1,293,041 | ||||||||||||||||||||
Other assets |
1,092,475 | 1,901,923 | 1,910,698 | ||||||||||||||||||||
TOTAL ASSETS | $ | 12,616,474 | $ | 13,990,488 | $ | 14,313,297 | |||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities | |||||||||||||||||||||||
Short-term borrowings |
$ | 452,286 | $ | 11,491 | $ | 901,668 | |||||||||||||||||
Current portion of long-term debt |
1,000,596 | 924,305 | 910,616 | ||||||||||||||||||||
Accounts payable |
974,844 | 936,319 | 906,340 | ||||||||||||||||||||
Accrued liabilities |
1,569,557 | 1,673,651 | 1,827,610 | ||||||||||||||||||||
Total current liabilities | 3,997,283 | 3,545,766 | 4,546,234 | ||||||||||||||||||||
Long-term debt |
4,755,252 | 5,711,014 | 4,617,441 | ||||||||||||||||||||
Operating lease liabilities |
1,133,749 | 1,171,941 | 1,068,744 | ||||||||||||||||||||
Other liabilities |
620,997 | 651,054 | 761,246 | ||||||||||||||||||||
Total liabilities | 10,507,281 | 11,079,775 | 10,993,665 | ||||||||||||||||||||
Commitments and contingencies |
|||||||||||||||||||||||
Stockholders’ equity | |||||||||||||||||||||||
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at December 2023, March 2023 or December 2022 |
— | — | — | ||||||||||||||||||||
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at December 2023 - 388,819,204; March 2023 - 388,665,531; December 2022 - 388,660,385 |
97,205 | 97,166 | 97,165 | ||||||||||||||||||||
Additional paid-in capital |
3,619,654 | 3,775,979 | 3,766,304 | ||||||||||||||||||||
Accumulated other comprehensive loss |
(1,051,373) | (1,019,518) | (929,588) | ||||||||||||||||||||
Retained earnings (accumulated deficit) |
(556,293) | 57,086 | 385,751 | ||||||||||||||||||||
Total stockholders’ equity | 2,109,193 | 2,910,713 | 3,319,632 | ||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 12,616,474 | $ | 13,990,488 | $ | 14,313,297 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Net revenues |
$ | 2,960,283 | $ | 3,530,667 | $ | 8,080,858 | $ | 8,872,862 | |||||||||||||||||||||||||||
Costs and operating expenses |
|||||||||||||||||||||||||||||||||||
Cost of goods sold |
1,327,871 | 1,593,048 | 3,792,168 | 4,134,207 | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses |
1,407,548 | 1,421,586 | 3,709,891 | 3,828,157 | |||||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets |
257,096 | — | 257,096 | 421,922 | |||||||||||||||||||||||||||||||
Total costs and operating expenses |
2,992,515 | 3,014,634 | 7,759,155 | 8,384,286 | |||||||||||||||||||||||||||||||
Operating income (loss) |
(32,232) | 516,033 | 321,703 | 488,576 | |||||||||||||||||||||||||||||||
Interest income |
4,211 | 3,914 | 14,513 | 6,020 | |||||||||||||||||||||||||||||||
Interest expense |
(67,549) | (54,144) | (183,214) | (121,415) | |||||||||||||||||||||||||||||||
Other income (expense), net |
30,029 | (9,901) | 22,952 | (113,895) | |||||||||||||||||||||||||||||||
Income (loss) before income taxes |
(65,541) | 455,902 | 175,954 | 259,286 | |||||||||||||||||||||||||||||||
Income tax expense (benefit) |
(23,089) | (51,966) | 726,528 | (74,190) | |||||||||||||||||||||||||||||||
Net income (loss) |
$ | (42,452) | $ | 507,868 | $ | (550,574) | $ | 333,476 | |||||||||||||||||||||||||||
Earnings (loss) per common share |
|||||||||||||||||||||||||||||||||||
Basic |
$ | (0.11) | $ | 1.31 | $ | (1.42) | $ | 0.86 | |||||||||||||||||||||||||||
Diluted |
$ | (0.11) | $ | 1.31 | $ | (1.42) | $ | 0.86 | |||||||||||||||||||||||||||
Weighted average shares outstanding |
|||||||||||||||||||||||||||||||||||
Basic |
388,383 | 387,739 | 388,294 | 387,663 | |||||||||||||||||||||||||||||||
Diluted |
388,383 | 388,192 | 388,294 | 388,357 | |||||||||||||||||||||||||||||||
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Net income (loss) |
$ | (42,452) | $ | 507,868 | $ | (550,574) | $ | 333,476 | |||||||||||||||||||||||||||
Other comprehensive income (loss) |
|||||||||||||||||||||||||||||||||||
Foreign currency translation and other |
|||||||||||||||||||||||||||||||||||
Losses arising during the period |
(4,373) | (1,506) | (3,809) | (74,924) | |||||||||||||||||||||||||||||||
Income tax effect |
25,609 | 43,475 | 6,607 | (15,321) | |||||||||||||||||||||||||||||||
Defined benefit pension plans |
|||||||||||||||||||||||||||||||||||
Current period actuarial gains (losses) |
(4,046) | (1,307) | 697 | (15,449) | |||||||||||||||||||||||||||||||
Amortization of net deferred actuarial losses |
4,106 | 3,858 | 12,508 | 11,532 | |||||||||||||||||||||||||||||||
Amortization of deferred prior service credits |
(136) | (112) | (408) | (335) | |||||||||||||||||||||||||||||||
Reclassification of net actuarial loss from settlement charges |
131 | 695 | 3,430 | 93,597 | |||||||||||||||||||||||||||||||
Income tax effect |
(118) | (935) | (4,236) | (23,401) | |||||||||||||||||||||||||||||||
Derivative financial instruments |
|||||||||||||||||||||||||||||||||||
Gains (losses) arising during the period |
(73,375) | (119,635) | (36,220) | 82,480 | |||||||||||||||||||||||||||||||
Income tax effect |
11,790 | 17,970 | 6,076 | (13,761) | |||||||||||||||||||||||||||||||
Reclassification of net (gains) losses realized |
912 | (32,905) | (20,006) | (56,053) | |||||||||||||||||||||||||||||||
Income tax effect |
(168) | 4,979 | 3,506 | 8,626 | |||||||||||||||||||||||||||||||
Other comprehensive loss |
(39,668) | (85,423) | (31,855) | (3,009) | |||||||||||||||||||||||||||||||
Comprehensive income (loss) |
$ | (82,120) | $ | 422,445 | $ | (582,429) | $ | 330,467 |
Nine Months Ended December | |||||||||||||||||
(In thousands) | 2023 | 2022 | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss) |
$ | (550,574) | $ | 333,476 | |||||||||||||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: |
|||||||||||||||||
Impairment of goodwill and intangible assets |
257,096 | 421,922 | |||||||||||||||
Depreciation and amortization |
231,493 | 192,174 | |||||||||||||||
Reduction in the carrying amount of right-of-use assets |
283,002 | 280,845 | |||||||||||||||
Stock-based compensation |
51,665 | 47,714 | |||||||||||||||
Provision for doubtful accounts |
7,157 | 1,231 | |||||||||||||||
Pension expense in excess of (less than) contributions |
(10,691) | 83,278 | |||||||||||||||
Deferred income taxes |
(258,338) | (4,488) | |||||||||||||||
Write-off of income tax receivables and interest |
921,409 | — | |||||||||||||||
Other, net |
(10,931) | 15,228 | |||||||||||||||
Changes in operating assets and liabilities: |
|||||||||||||||||
Accounts receivable |
305,490 | (120,081) | |||||||||||||||
Inventories |
148,455 | (1,200,438) | |||||||||||||||
Accounts payable |
41,663 | 352,047 | |||||||||||||||
Income taxes |
(201,151) | (1,178,547) | |||||||||||||||
Accrued liabilities |
185,187 | 173,148 | |||||||||||||||
Operating lease right-of-use assets and liabilities |
(282,361) | (290,679) | |||||||||||||||
Other assets and liabilities |
(12,824) | 59,698 | |||||||||||||||
Cash provided (used) by operating activities |
1,105,747 | (833,472) | |||||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||
Capital expenditures |
(119,662) | (130,214) | |||||||||||||||
Software purchases |
(52,855) | (75,460) | |||||||||||||||
Other, net |
(19,477) | (1,159) | |||||||||||||||
Cash used by investing activities |
(191,994) | (206,833) | |||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||
Contingent consideration payment |
— | (56,976) | |||||||||||||||
Net increase in short-term borrowings |
443,494 | 566,206 | |||||||||||||||
Payments on long-term debt |
(907,926) | (500,786) | |||||||||||||||
Payment of debt issuance costs |
(576) | (819) | |||||||||||||||
Proceeds from long-term debt |
— | 1,000,000 | |||||||||||||||
Cash dividends paid |
(268,155) | (586,335) | |||||||||||||||
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings |
(2,603) | (2,571) | |||||||||||||||
Cash provided (used) by financing activities |
(735,766) | 418,719 | |||||||||||||||
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash |
(4,984) | (82,512) | |||||||||||||||
Net change in cash, cash equivalents and restricted cash |
173,003 | (704,098) | |||||||||||||||
Cash, cash equivalents and restricted cash – beginning of year |
816,319 | 1,277,082 | |||||||||||||||
Cash, cash equivalents and restricted cash – end of period |
$ | 989,322 | $ | 572,984 | |||||||||||||
Balances per Consolidated Balance Sheets: | |||||||||||||||||
Cash and cash equivalents | $ | 988,006 | $ | 571,347 | |||||||||||||
Other current assets | 1,186 | 1,511 | |||||||||||||||
Other assets | 130 | 126 | |||||||||||||||
Total cash, cash equivalents and restricted cash | $ | 989,322 | $ | 572,984 |
Three Months Ended December 2023 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, September 2023 | 388,883,825 | $ | 97,221 | $ | 3,638,029 | $ | (1,011,705) | $ | (513,500) | $ | 2,210,045 | |||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | (42,452) | (42,452) | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.09 per share) |
— | — | (34,983) | — | — | (34,983) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net |
(64,621) | (16) | 16,608 | — | (341) | 16,251 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other |
— | — | — | 21,236 | — | 21,236 | ||||||||||||||||||||||||||||||||
Defined benefit pension plans |
— | — | — | (63) | — | (63) | ||||||||||||||||||||||||||||||||
Derivative financial instruments |
— | — | — | (60,841) | — | (60,841) | ||||||||||||||||||||||||||||||||
Balance, December 2023 | 388,819,204 | $ | 97,205 | $ | 3,619,654 | $ | (1,051,373) | $ | (556,293) | $ | 2,109,193 | |||||||||||||||||||||||||||
Three Months Ended December 2022 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, September 2022 | 388,569,062 | $ | 97,142 | $ | 3,952,786 | $ | (844,165) | $ | (120,127) | $ | 3,085,636 | |||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | 507,868 | 507,868 | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.51 per share) |
— | — | (198,051) | — | — | (198,051) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net |
91,323 | 23 | 11,569 | — | (1,990) | 9,602 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other |
— | — | — | 41,969 | — | 41,969 | ||||||||||||||||||||||||||||||||
Defined benefit pension plans |
— | — | — | 2,199 | — | 2,199 | ||||||||||||||||||||||||||||||||
Derivative financial instruments |
— | — | — | (129,591) | — | (129,591) | ||||||||||||||||||||||||||||||||
Balance, December 2022 | 388,660,385 | $ | 97,165 | $ | 3,766,304 | $ | (929,588) | $ | 385,751 | $ | 3,319,632 |
Nine Months Ended December 2023 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings (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 income (loss) |
— | — | — | — | (550,574) | (550,574) | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.69 per share) |
— | — | (211,069) | — | (57,086) | (268,155) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net |
153,673 | 39 | 54,744 | — | (5,719) | 49,064 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other |
— | — | — | 2,798 | — | 2,798 | ||||||||||||||||||||||||||||||||
Defined benefit pension plans |
— | — | — | 11,991 | — | 11,991 | ||||||||||||||||||||||||||||||||
Derivative financial instruments |
— | — | — | (46,644) | — | (46,644) | ||||||||||||||||||||||||||||||||
Balance, December 2023 | 388,819,204 | $ | 97,205 | $ | 3,619,654 | $ | (1,051,373) | $ | (556,293) | $ | 2,109,193 | |||||||||||||||||||||||||||
Nine Months Ended December 2022 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive 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) |
— | — | — | — | 333,476 | 333,476 | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($1.51 per share) |
— | — | (203,394) | — | (382,941) | (586,335) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net |
362,010 | 90 | 53,314 | — | (8,259) | 45,145 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other |
— | — | — | (90,245) | — | (90,245) | ||||||||||||||||||||||||||||||||
Defined benefit pension plans |
— | — | — | 65,944 | — | 65,944 | ||||||||||||||||||||||||||||||||
Derivative financial instruments |
— | — | — | 21,292 | — | 21,292 | ||||||||||||||||||||||||||||||||
Balance, December 2022 | 388,660,385 | $ | 97,165 | $ | 3,766,304 | $ | (929,588) | $ | 385,751 | $ | 3,319,632 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | PAGE NUMBER | |||||||
NOTE 1 | ||||||||
NOTE 2 | ||||||||
NOTE 3 | ||||||||
NOTE 4 | ||||||||
NOTE 5 | ||||||||
NOTE 6 | ||||||||
NOTE 7 | ||||||||
NOTE 8 | ||||||||
NOTE 9 | ||||||||
NOTE 10 | ||||||||
NOTE 11 | ||||||||
NOTE 12 | ||||||||
NOTE 13 | ||||||||
NOTE 14 | ||||||||
NOTE 15 | ||||||||
NOTE 16 | ||||||||
NOTE 17 | ||||||||
NOTE 18 | ||||||||
NOTE 19 |
(In thousands) | December 2023 | March 2023 | December 2022 | ||||||||||||||||||||
Contract assets (a) |
$ | 1,877 | $ | 2,294 | $ | 1,273 | |||||||||||||||||
Contract liabilities (b) |
67,103 | 62,214 | 80,456 |
Three Months Ended December 2023 | ||||||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Channel revenues | ||||||||||||||||||||||||||||||||
Wholesale | $ | 734,130 | $ | 264,606 | $ | 157,841 | $ | — | $ | 1,156,577 | ||||||||||||||||||||||
Direct-to-consumer | 999,694 | 728,479 | 58,038 | — | 1,786,211 | |||||||||||||||||||||||||||
Royalty | 4,755 | 6,311 | 6,429 | — | 17,495 | |||||||||||||||||||||||||||
Total | $ | 1,738,579 | $ | 999,396 | $ | 222,308 | $ | — | $ | 2,960,283 | ||||||||||||||||||||||
Geographic revenues | ||||||||||||||||||||||||||||||||
Americas | $ | 821,506 | $ | 578,955 | $ | 185,916 | $ | — | $ | 1,586,377 | ||||||||||||||||||||||
Europe | 622,377 | 267,075 | 22,829 | — | 912,281 | |||||||||||||||||||||||||||
Asia-Pacific | 294,696 | 153,366 | 13,563 | — | 461,625 | |||||||||||||||||||||||||||
Total | $ | 1,738,579 | $ | 999,396 | $ | 222,308 | $ | — | $ | 2,960,283 |
Three Months Ended December 2022 | |||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | ||||||||||||||||||||||||
Channel revenues | |||||||||||||||||||||||||||||
Wholesale | $ | 973,292 | $ | 401,521 | $ | 198,956 | $ | — | $ | 1,573,769 | |||||||||||||||||||
Direct-to-consumer | 1,023,428 | 850,167 | 63,773 | — | 1,937,368 | ||||||||||||||||||||||||
Royalty | 6,325 | 6,994 | 6,211 | — | 19,530 | ||||||||||||||||||||||||
Total | $ | 2,003,045 | $ | 1,258,682 | $ | 268,940 | $ | — | $ | 3,530,667 | |||||||||||||||||||
Geographic revenues | |||||||||||||||||||||||||||||
Americas | $ | 1,110,134 | $ | 766,394 | $ | 217,408 | $ | — | $ | 2,093,936 | |||||||||||||||||||
Europe | 643,740 | 312,857 | 26,752 | — | 983,349 | ||||||||||||||||||||||||
Asia-Pacific | 249,171 | 179,431 | 24,780 | — | 453,382 | ||||||||||||||||||||||||
Total | $ | 2,003,045 | $ | 1,258,682 | $ | 268,940 | $ | — | $ | 3,530,667 |
Nine Months Ended December 2023 | ||||||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Channel revenues | ||||||||||||||||||||||||||||||||
Wholesale | $ | 2,499,604 | $ | 1,163,874 | $ | 496,630 | $ | — | $ | 4,160,108 | ||||||||||||||||||||||
Direct-to-consumer | 1,769,098 | 1,964,645 | 137,649 | — | 3,871,392 | |||||||||||||||||||||||||||
Royalty | 13,253 | 19,173 | 16,932 | — | 49,358 | |||||||||||||||||||||||||||
Total | $ | 4,281,955 | $ | 3,147,692 | $ | 651,211 | $ | — | $ | 8,080,858 | ||||||||||||||||||||||
Geographic revenues | ||||||||||||||||||||||||||||||||
Americas | $ | 2,021,660 | $ | 1,790,686 | $ | 526,355 | $ | — | $ | 4,338,701 | ||||||||||||||||||||||
Europe | 1,567,804 | 915,086 | 75,776 | — | 2,558,666 | |||||||||||||||||||||||||||
Asia-Pacific | 692,491 | 441,920 | 49,080 | — | 1,183,491 | |||||||||||||||||||||||||||
Total | $ | 4,281,955 | $ | 3,147,692 | $ | 651,211 | $ | — | $ | 8,080,858 |
Nine Months Ended December 2022 | |||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | ||||||||||||||||||||||||
Channel revenues | |||||||||||||||||||||||||||||
Wholesale | $ | 2,602,744 | $ | 1,524,712 | $ | 608,972 | $ | 148 | $ | 4,736,576 | |||||||||||||||||||
Direct-to-consumer | 1,710,437 | 2,226,870 | 145,274 | — | 4,082,581 | ||||||||||||||||||||||||
Royalty | 13,816 | 21,155 | 18,734 | — | 53,705 | ||||||||||||||||||||||||
Total | $ | 4,326,997 | $ | 3,772,737 | $ | 772,980 | $ | 148 | $ | 8,872,862 | |||||||||||||||||||
Geographic revenues | |||||||||||||||||||||||||||||
Americas | $ | 2,325,405 | $ | 2,282,005 | $ | 625,565 | $ | 148 | $ | 5,233,123 | |||||||||||||||||||
Europe | 1,447,353 | 994,783 | 68,255 | — | 2,510,391 | ||||||||||||||||||||||||
Asia-Pacific | 554,239 | 495,949 | 79,160 | — | 1,129,348 | ||||||||||||||||||||||||
Total | $ | 4,326,997 | $ | 3,772,737 | $ | 772,980 | $ | 148 | $ | 8,872,862 |
(In thousands) | December 2023 | March 2023 | December 2022 | ||||||||||||||||||||
Finished products | $ | 2,093,174 | $ | 2,240,215 | $ | 2,535,759 | |||||||||||||||||
Work-in-process | 43,453 | 39,508 | 41,307 | ||||||||||||||||||||
Raw materials | 11,592 | 13,067 | 14,849 | ||||||||||||||||||||
Total inventories | $ | 2,148,219 | $ | 2,292,790 | $ | 2,591,915 |
December 2023 | March 2023 | |||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 264,610 | $ | 185,650 | $ | 78,960 | $ | 88,902 | ||||||||||||||||||||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
Trademarks and trade names | 2,557,785 | 2,553,919 | ||||||||||||||||||||||||||||||||||||||||||
Intangible assets, net | $ | 2,636,745 | $ | 2,642,821 |
(In thousands) | Outdoor | Active | Work | Total | ||||||||||||||||||||||
Balance, March 2023 | $ | 653,787 | $ | 1,211,244 | $ | 113,382 | $ | 1,978,413 | ||||||||||||||||||
Impairment charges | (195,287) | — | (61,809) | (257,096) | ||||||||||||||||||||||
Foreign currency translation | 1,259 | 1,135 | (73) | 2,321 | ||||||||||||||||||||||
Balance, December 2023 | $ | 459,759 | $ | 1,212,379 | $ | 51,500 | $ | 1,723,638 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Operating lease cost | $ | 104,266 | $ | 103,127 | $ | 316,368 | $ | 306,259 | |||||||||||||||||||||||||||
Other lease cost | 44,520 | 37,784 | 116,809 | 104,960 | |||||||||||||||||||||||||||||||
Total lease cost | $ | 148,786 | $ | 140,911 | $ | 433,177 | $ | 411,219 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 2,224 | $ | 2,632 | $ | 6,653 | $ | 7,904 | |||||||||||||||||||||||||||
Interest cost on projected benefit obligations | 11,763 | 10,754 | 35,350 | 34,065 | |||||||||||||||||||||||||||||||
Expected return on plan assets | (15,882) | (14,752) | (47,661) | (48,364) | |||||||||||||||||||||||||||||||
Settlement charges | 131 | 695 | 3,430 | 93,597 | |||||||||||||||||||||||||||||||
Amortization of deferred amounts: | |||||||||||||||||||||||||||||||||||
Net deferred actuarial losses | 4,106 | 3,858 | 12,508 | 11,532 | |||||||||||||||||||||||||||||||
Deferred prior service credits | (136) | (112) | (408) | (335) | |||||||||||||||||||||||||||||||
Net periodic pension cost | $ | 2,206 | $ | 3,075 | $ | 9,872 | $ | 98,399 |
(In thousands) | December 2023 | March 2023 | December 2022 | ||||||||||||||||||||
Foreign currency translation and other | $ | (856,853) | $ | (859,651) | $ | (841,877) | |||||||||||||||||
Defined benefit pension plans | (155,701) | (167,692) | (164,346) | ||||||||||||||||||||
Derivative financial instruments | (38,819) | 7,825 | 76,635 | ||||||||||||||||||||
Accumulated other comprehensive loss | $ | (1,051,373) | $ | (1,019,518) | $ | (929,588) |
Three Months Ended December 2023 | ||||||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | ||||||||||||||||||||||
Balance, September 2023 | $ | (878,089) | $ | (155,638) | $ | 22,022 | $ | (1,011,705) | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications |
21,236 | (3,002) | (61,585) | (43,351) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss |
— | 2,939 | 744 | 3,683 | ||||||||||||||||||||||
Net other comprehensive income (loss) |
21,236 | (63) | (60,841) | (39,668) | ||||||||||||||||||||||
Balance, December 2023 | $ | (856,853) | $ | (155,701) | $ | (38,819) | $ | (1,051,373) |
Three Months Ended December 2022 | ||||||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | ||||||||||||||||||||||
Balance, September 2022 | $ | (883,846) | $ | (166,545) | $ | 206,226 | $ | (844,165) | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications |
41,969 | (850) | (101,665) | (60,546) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss |
— | 3,049 | (27,926) | (24,877) | ||||||||||||||||||||||
Net other comprehensive income (loss) |
41,969 | 2,199 | (129,591) | (85,423) | ||||||||||||||||||||||
Balance, December 2022 | $ | (841,877) | $ | (164,346) | $ | 76,635 | $ | (929,588) |
Nine Months Ended December 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 | 2,798 | 762 | (30,144) | (26,584) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 11,229 | (16,500) | (5,271) | ||||||||||||||||||||||
Net other comprehensive income (loss) | 2,798 | 11,991 | (46,644) | (31,855) | ||||||||||||||||||||||
Balance, December 2023 | $ | (856,853) | $ | (155,701) | $ | (38,819) | $ | (1,051,373) |
Nine Months Ended December 2022 | ||||||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | ||||||||||||||||||||||
Balance, March 2022 | $ | (751,632) | $ | (230,290) | $ | 55,343 | $ | (926,579) | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (90,245) | (11,226) | 68,719 | (32,752) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 77,170 | (47,427) | 29,743 | ||||||||||||||||||||||
Net other comprehensive income (loss) | (90,245) | 65,944 | 21,292 | (3,009) | ||||||||||||||||||||||
Balance, December 2022 | $ | (841,877) | $ | (164,346) | $ | 76,635 | $ | (929,588) |
(In thousands) | Three Months Ended December | Nine Months Ended December | |||||||||||||||||||||||||||||||||||||||
Details About Accumulated Other Comprehensive Loss Components | Affected Line Item in the Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||
Amortization of defined benefit pension plans: | |||||||||||||||||||||||||||||||||||||||||
Net deferred actuarial losses |
Other income (expense), net | $ | (4,106) | $ | (3,858) | $ | (12,508) | $ | (11,532) | ||||||||||||||||||||||||||||||||
Deferred prior service credits |
Other income (expense), net | 136 | 112 | 408 | 335 | ||||||||||||||||||||||||||||||||||||
Pension settlement charges |
Other income (expense), net | (131) | (695) | (3,430) | (93,597) | ||||||||||||||||||||||||||||||||||||
Total before tax |
(4,101) | (4,441) | (15,530) | (104,794) | |||||||||||||||||||||||||||||||||||||
Tax benefit |
1,162 | 1,392 | 4,301 | 27,624 | |||||||||||||||||||||||||||||||||||||
Net of tax |
(2,939) | (3,049) | (11,229) | (77,170) | |||||||||||||||||||||||||||||||||||||
Gains (losses) on derivative financial instruments: | |||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts |
Net revenues | (794) | 782 | (220) | (9,173) | ||||||||||||||||||||||||||||||||||||
Foreign exchange contracts |
Cost of goods sold | (2,697) | 33,816 | 14,777 | 68,830 | ||||||||||||||||||||||||||||||||||||
Foreign exchange contracts |
Selling, general and administrative expenses | 833 | 1,816 | 3,141 | 5,380 | ||||||||||||||||||||||||||||||||||||
Foreign exchange contracts |
Other income (expense), net | 536 | (3,536) | (725) | (9,065) | ||||||||||||||||||||||||||||||||||||
Interest rate contracts |
Interest expense | 1,210 | 27 | 3,033 | 81 | ||||||||||||||||||||||||||||||||||||
Total before tax |
(912) | 32,905 | 20,006 | 56,053 | |||||||||||||||||||||||||||||||||||||
Tax expense |
168 | (4,979) | (3,506) | (8,626) | |||||||||||||||||||||||||||||||||||||
Net of tax |
(744) | 27,926 | 16,500 | 47,427 | |||||||||||||||||||||||||||||||||||||
Total reclassifications for the period, net of tax | $ | (3,683) | $ | 24,877 | $ | 5,271 | $ | (29,743) |
Nine Months Ended December 2023 | |||||||||||
Expected volatility | 33% to 52% |
||||||||||
Weighted average expected volatility | 42% | ||||||||||
Expected term (in years) | 5.9 to 7.8 |
||||||||||
Weighted average dividend yield | 3.8% | ||||||||||
Risk-free interest rate | 3.80% to 5.50% |
||||||||||
Weighted average fair value at date of grant | $5.73 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Segment revenues: | |||||||||||||||||||||||||||||||||||
Outdoor | $ | 1,738,579 | $ | 2,003,045 | $ | 4,281,955 | $ | 4,326,997 | |||||||||||||||||||||||||||
Active | 999,396 | 1,258,682 | 3,147,692 | 3,772,737 | |||||||||||||||||||||||||||||||
Work | 222,308 | 268,940 | 651,211 | 772,980 | |||||||||||||||||||||||||||||||
Other | — | — | — | 148 | |||||||||||||||||||||||||||||||
Total segment revenues | $ | 2,960,283 | $ | 3,530,667 | $ | 8,080,858 | $ | 8,872,862 | |||||||||||||||||||||||||||
Segment profit (loss): | |||||||||||||||||||||||||||||||||||
Outdoor | $ | 304,741 | $ | 457,027 | $ | 557,830 | $ | 670,615 | |||||||||||||||||||||||||||
Active (a) |
94,020 | 146,885 | 351,772 | 541,171 | |||||||||||||||||||||||||||||||
Work | (1,864) | 18,487 | 13,482 | 92,989 | |||||||||||||||||||||||||||||||
Other | — | (134) | — | (516) | |||||||||||||||||||||||||||||||
Total segment profit | 396,897 | 622,265 | 923,084 | 1,304,259 | |||||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets |
(257,096) | — | (257,096) | (421,922) | |||||||||||||||||||||||||||||||
Corporate and other expenses |
(142,004) | (116,133) | (321,333) | (507,656) | |||||||||||||||||||||||||||||||
Interest expense, net | (63,338) | (50,230) | (168,701) | (115,395) | |||||||||||||||||||||||||||||||
Income (loss) before income taxes |
$ | (65,541) | $ | 455,902 | $ | 175,954 | $ | 259,286 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Earnings (loss) per common share – basic: |
|||||||||||||||||||||||||||||||||||
Net income (loss) |
$ | (42,452) | $ | 507,868 | $ | (550,574) | $ | 333,476 | |||||||||||||||||||||||||||
Weighted average common shares outstanding |
388,383 | 387,739 | 388,294 | 387,663 | |||||||||||||||||||||||||||||||
Earnings (loss) per common share |
$ | (0.11) | $ | 1.31 | $ | (1.42) | $ | 0.86 | |||||||||||||||||||||||||||
Earnings (loss) per common share – diluted: |
|||||||||||||||||||||||||||||||||||
Net income (loss) |
$ | (42,452) | $ | 507,868 | $ | (550,574) | $ | 333,476 | |||||||||||||||||||||||||||
Weighted average common shares outstanding |
388,383 | 387,739 | 388,294 | 387,663 | |||||||||||||||||||||||||||||||
Incremental shares from stock options and other dilutive securities |
— | 453 | — | 694 | |||||||||||||||||||||||||||||||
Adjusted weighted average common shares outstanding |
388,383 | 388,192 | 388,294 | 388,357 | |||||||||||||||||||||||||||||||
Earnings (loss) per common share |
$ | (0.11) | $ | 1.31 | $ | (1.42) | $ | 0.86 |
Total Fair Value | Fair Value Measurement Using (a) |
|||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
December 2023 | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | 69,840 | $ | 69,840 | $ | — | $ | — | ||||||||||||||||||
Time deposits | 27,659 | 27,659 | — | — | ||||||||||||||||||||||
Derivative financial instruments | 15,804 | — | 15,804 | — | ||||||||||||||||||||||
Deferred compensation | 91,666 | 91,666 | — | — | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||
Derivative financial instruments | 64,700 | — | 64,700 | — | ||||||||||||||||||||||
Deferred compensation | 88,566 | — | 88,566 | — | ||||||||||||||||||||||
Total Fair Value | Fair Value Measurement Using (a) |
|||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
March 2023 | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | 418,304 | $ | 418,304 | $ | — | $ | — | ||||||||||||||||||
Time deposits | 21,233 | 21,233 | — | — | ||||||||||||||||||||||
Derivative financial instruments | 49,688 | — | 49,688 | — | ||||||||||||||||||||||
Deferred compensation | 99,200 | 99,200 | — | — | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||
Derivative financial instruments | 72,653 | — | 72,653 | — | ||||||||||||||||||||||
Deferred compensation | 96,364 | — | 96,364 | — | ||||||||||||||||||||||
Fair Value of Derivatives with Unrealized Gains |
Fair Value of Derivatives with Unrealized Losses |
||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | December 2023 | March 2023 | December 2022 | December 2023 | March 2023 | December 2022 | |||||||||||||||||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 13,901 | $ | 46,752 | $ | 80,435 | $ | (63,897) | $ | (71,052) | $ | (58,455) | |||||||||||||||||||||||||||||||||||
Interest rate contracts | 1,737 | — | 422 | — | (1,140) | — | |||||||||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments | 15,638 | 46,752 | 80,857 | (63,897) | (72,192) | (58,455) | |||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | 166 | 2,936 | 4,061 | (803) | (461) | (321) | |||||||||||||||||||||||||||||||||||||||||
Total derivatives |
$ | 15,804 | $ | 49,688 | $ | 84,918 | $ | (64,700) | $ | (72,653) | $ | (58,776) |
December 2023 | March 2023 | December 2022 | |||||||||||||||||||||||||||||||||||||||
(In thousands) | Derivative Asset |
Derivative Liability |
Derivative Asset |
Derivative Liability |
Derivative Asset |
Derivative Liability |
|||||||||||||||||||||||||||||||||||
Gross amounts presented in the Consolidated Balance Sheets |
$ | 15,804 | $ | (64,700) | $ | 49,688 | $ | (72,653) | $ | 84,918 | $ | (58,776) | |||||||||||||||||||||||||||||
Gross amounts not offset in the Consolidated Balance Sheets |
(15,011) | 15,011 | (26,470) | 26,470 | (24,024) | 24,024 | |||||||||||||||||||||||||||||||||||
Net amounts |
$ | 793 | $ | (49,689) | $ | 23,218 | $ | (46,183) | $ | 60,894 | $ | (34,752) |
(In thousands) | December 2023 | March 2023 | December 2022 | |||||||||||||||||||||||
Derivative Instruments | Balance Sheet Location | |||||||||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 12,261 | $ | 48,132 | $ | 79,862 | |||||||||||||||||||
Foreign exchange contracts | Accrued liabilities | (55,562) | (59,995) | (42,274) | ||||||||||||||||||||||
Foreign exchange contracts | Other assets | 1,806 | 1,556 | 4,634 | ||||||||||||||||||||||
Foreign exchange contracts | Other liabilities | (9,138) | (11,518) | (16,502) | ||||||||||||||||||||||
Interest rate contracts | Other current assets | 1,737 | — | — | ||||||||||||||||||||||
Interest rate contracts | Other assets | — | — | 422 | ||||||||||||||||||||||
Interest rate contracts | Other liabilities | — | (1,140) | — |
(In thousands) |
Gain (Loss) on Derivatives
Recognized in Accumulated OCL
Three Months Ended December
|
Gain (Loss) on Derivatives
Recognized in Accumulated OCL
Nine Months Ended December
|
|||||||||||||||||||||||||||||||||
Cash Flow Hedging Relationships | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | (71,398) | $ | (120,057) | $ | (42,049) | $ | 82,058 | |||||||||||||||||||||||||||
Interest rate contracts | (1,977) | 422 | 5,829 | 422 | |||||||||||||||||||||||||||||||
Total | $ | (73,375) | $ | (119,635) | $ | (36,220) | $ | 82,480 |
(In thousands) |
Gain (Loss) Reclassified from Accumulated OCL into Net Income (Loss)
Three Months Ended December
|
Gain (Loss) Reclassified from Accumulated OCL into Net Income (Loss)
Nine Months Ended December
|
||||||||||||||||||||||||||||||||||||
Cash Flow Hedging Relationships | Location of Gain (Loss) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
Foreign exchange contracts | Net revenues | $ | (794) | $ | 782 | $ | (220) | $ | (9,173) | |||||||||||||||||||||||||||||
Foreign exchange contracts | Cost of goods sold | (2,697) | 33,816 | 14,777 | 68,830 | |||||||||||||||||||||||||||||||||
Foreign exchange contracts | Selling, general and administrative expenses | 833 | 1,816 | 3,141 | 5,380 | |||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other income (expense), net | 536 | (3,536) | (725) | (9,065) | |||||||||||||||||||||||||||||||||
Interest rate contracts | Interest expense | 1,210 | 27 | 3,033 | 81 | |||||||||||||||||||||||||||||||||
Total | $ | (912) | $ | 32,905 | $ | 20,006 | $ | 56,053 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | 31,602 | $ | 10,607 | $ | 32,278 | $ | 50,165 | |||||||||||||||||||||||||||
Asset impairments and write-downs | 18,739 | — | 18,739 | — | |||||||||||||||||||||||||||||||
Accelerated depreciation | — | 25 | — | 7,276 | |||||||||||||||||||||||||||||||
Contract termination and other | 435 | 460 | 889 | 5,563 | |||||||||||||||||||||||||||||||
Total restructuring charges | $ | 50,776 | $ | 11,092 | $ | 51,906 | $ | 63,004 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Outdoor | $ | — | $ | 391 | $ | 242 | $ | 887 | |||||||||||||||||||||||||||
Active | — | — | 434 | 1,478 | |||||||||||||||||||||||||||||||
Work | — | — | — | 9 | |||||||||||||||||||||||||||||||
Corporate and other | 50,776 | 10,701 | 51,230 | 60,630 | |||||||||||||||||||||||||||||||
Total | $ | 50,776 | $ | 11,092 | $ | 51,906 | $ | 63,004 |
(In thousands) | Severance | Other | Total | |||||||||||||||||
Accrual at March 2023 | $ | 38,721 | $ | 6,545 | $ | 45,266 | ||||||||||||||
Charges | 32,278 | — | 32,278 | |||||||||||||||||
Cash payments and settlements | (24,574) | (4,839) | (29,413) | |||||||||||||||||
Adjustments to accruals | (2,398) | (582) | (2,980) | |||||||||||||||||
Impact of foreign currency | 37 | 26 | 63 | |||||||||||||||||
Accrual at December 2023 | $ | 44,064 | $ | 1,150 | $ | 45,214 |
ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
RECENT DEVELOPMENTS |
SUMMARY OF THE THIRD QUARTER OF FISCAL 2024 |
ANALYSIS OF RESULTS OF OPERATIONS |
Consolidated Statements of Operations |
(In millions) | Three Months Ended December | Nine Months Ended December | |||||||||||||||
Net revenues — 2022 | $ | 3,530.7 | $ | 8,872.9 | |||||||||||||
Organic | (615.1) | (897.7) | |||||||||||||||
Impact of foreign currency | 44.7 | 105.7 | |||||||||||||||
Net revenues — 2023 | $ | 2,960.3 | $ | 8,080.9 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||
Gross margin (net revenues less cost of goods sold) | 55.1 | % | 54.9 | % | 53.1 | % | 53.4 | % | |||||||||||||||||||||||||||
Selling, general and administrative expenses | 47.5 | 40.3 | 45.9 | 43.1 | |||||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | 8.7 | — | 3.2 | 4.8 | |||||||||||||||||||||||||||||||
Operating margin | (1.1) | % | 14.6 | % | 4.0 | % | 5.5 | % |
Information by Reportable Segment |
Three Months Ended December | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment revenues — 2022 | $ | 2,003.0 | $ | 1,258.7 | $ | 268.9 | $ | — | $ | 3,530.7 | ||||||||||||||||||||||
Organic | (293.0) | (274.4) | (47.7) | — | (615.1) | |||||||||||||||||||||||||||
Impact of foreign currency | 28.6 | 15.1 | 1.1 | — | 44.7 | |||||||||||||||||||||||||||
Segment revenues — 2023 | $ | 1,738.6 | $ | 999.4 | $ | 222.3 | $ | — | $ | 2,960.3 | ||||||||||||||||||||||
Nine Months Ended December | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment revenues — 2022 | $ | 4,327.0 | $ | 3,772.7 | $ | 773.0 | $ | 0.1 | $ | 8,872.9 | ||||||||||||||||||||||
Organic | (107.0) | (667.3) | (123.2) | (0.1) | (897.7) | |||||||||||||||||||||||||||
Impact of foreign currency | 62.0 | 42.3 | 1.4 | — | 105.7 | |||||||||||||||||||||||||||
Segment revenues — 2023 | $ | 4,282.0 | $ | 3,147.7 | $ | 651.2 | $ | — | $ | 8,080.9 |
Three Months Ended December | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment profit (loss) — 2022 | $ | 457.0 | $ | 146.9 | $ | 18.5 | $ | (0.1) | $ | 622.3 | ||||||||||||||||||||||
Organic | (159.0) | (54.5) | (20.6) | 0.1 | (233.9) | |||||||||||||||||||||||||||
Impact of foreign currency | 6.7 | 1.6 | 0.2 | — | 8.5 | |||||||||||||||||||||||||||
Segment profit (loss) — 2023 | $ | 304.7 | $ | 94.0 | $ | (1.9) | $ | — | $ | 396.9 | ||||||||||||||||||||||
Nine Months Ended December | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment profit (loss) — 2022 | $ | 670.6 | $ | 541.2 | $ | 93.0 | $ | (0.5) | $ | 1,304.3 | ||||||||||||||||||||||
Organic | (125.8) | (197.0) | (80.3) | 0.5 | (402.6) | |||||||||||||||||||||||||||
Impact of foreign currency | 13.0 | 7.6 | 0.8 | — | 21.4 | |||||||||||||||||||||||||||
Segment profit — 2023 | $ | 557.8 | $ | 351.8 | $ | 13.5 | $ | — | $ | 923.1 |
Top Brand Revenues: | ||||||||||||||||||||||||||||||||
Three Months Ended December 2023 | ||||||||||||||||||||||||||||||||
(In millions) | Vans® |
The North Face® |
Timberland® (a) |
Dickies® |
Total | |||||||||||||||||||||||||||
Americas | $ | 434.1 | $ | 557.7 | $ | 231.4 | $ | 111.5 | $ | 1,334.7 | ||||||||||||||||||||||
Europe | 149.4 | 418.1 | 172.6 | 22.8 | 762.9 | |||||||||||||||||||||||||||
Asia-Pacific | 84.7 | 216.3 | 69.1 | 13.6 | 383.7 | |||||||||||||||||||||||||||
Global | $ | 668.2 | $ | 1,192.1 | $ | 473.0 | $ | 147.9 | $ | 2,481.2 | ||||||||||||||||||||||
Three Months Ended December 2022 | ||||||||||||||||||||||||||||||||
(In millions) | Vans® |
The North Face® |
Timberland® (a) |
Dickies® |
Total | |||||||||||||||||||||||||||
Americas | $ | 625.6 | $ | 731.8 | $ | 330.7 | $ | 125.4 | $ | 1,813.5 | ||||||||||||||||||||||
Europe | 185.1 | 417.8 | 195.0 | 26.8 | 824.7 | |||||||||||||||||||||||||||
Asia-Pacific | 116.2 | 171.6 | 69.8 | 24.8 | 382.4 | |||||||||||||||||||||||||||
Global | $ | 926.9 | $ | 1,321.2 | $ | 595.5 | $ | 177.0 | $ | 3,020.6 | ||||||||||||||||||||||
Nine Months Ended December 2023 | ||||||||||||||||||||||||||||||||
(In millions) | Vans® |
The North Face® |
Timberland® (a) |
Dickies® |
Total | |||||||||||||||||||||||||||
Americas | $ | 1,350.3 | $ | 1,377.0 | $ | 549.6 | $ | 331.1 | $ | 3,608.0 | ||||||||||||||||||||||
Europe | 526.4 | 990.9 | 489.5 | 75.8 | 2,082.6 | |||||||||||||||||||||||||||
Asia-Pacific | 277.9 | 491.1 | 176.3 | 49.1 | 994.4 | |||||||||||||||||||||||||||
Global | $ | 2,154.5 | $ | 2,859.0 | $ | 1,215.5 | $ | 456.0 | $ | 6,685.0 | ||||||||||||||||||||||
Nine Months Ended December 2022 | ||||||||||||||||||||||||||||||||
(In millions) | Vans® |
The North Face® |
Timberland® (a) |
Dickies® |
Total | |||||||||||||||||||||||||||
Americas | $ | 1,859.9 | $ | 1,511.9 | $ | 737.7 | $ | 386.3 | $ | 4,495.8 | ||||||||||||||||||||||
Europe | 608.3 | 874.1 | 485.8 | 68.3 | 2,036.5 | |||||||||||||||||||||||||||
Asia-Pacific | 357.6 | 367.1 | 165.6 | 79.2 | 969.5 | |||||||||||||||||||||||||||
Global | $ | 2,825.9 | $ | 2,753.2 | $ | 1,389.1 | $ | 533.7 | $ | 7,501.9 |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | Percent Change |
2023 | 2022 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 1,738.6 | $ | 2,003.0 | (13.2) | % | $ | 4,282.0 | $ | 4,327.0 | (1.0) | % | |||||||||||||||||||||||||||||||||||
Segment profit | 304.7 | 457.0 | (33.3) | % | 557.8 | 670.6 | (16.8) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | 17.5 | % | 22.8 | % | 13.0 | % | 15.5 | % |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | Percent Change |
2023 | 2022 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 999.4 | $ | 1,258.7 | (20.6) | % | $ | 3,147.7 | $ | 3,772.7 | (16.6) | % | |||||||||||||||||||||||||||||||||||
Segment profit | 94.0 | 146.9 | (36.0) | % | 351.8 | 541.2 | (35.0) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | 9.4 | % | 11.7 | % | 11.2 | % | 14.3 | % |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | Percent Change |
2023 | 2022 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 222.3 | $ | 268.9 | (17.3) | % | $ | 651.2 | $ | 773.0 | (15.8) | % | |||||||||||||||||||||||||||||||||||
Segment profit (loss) | (1.9) | 18.5 | (110.1) | % | 13.5 | 93.0 | (85.5) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | (0.8) | % | 6.9 | % | 2.1 | % | 12.0 | % |
Reconciliation of Segment Profit to Income (Loss) Before Income Taxes |
Three Months Ended December | Nine Months Ended December | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2023 | 2022 | Percent Change |
2023 | 2022 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | $ | 257.1 | $ | — | 100.0 | % | $ | 257.1 | $ | 421.9 | (39.1) | % | |||||||||||||||||||||||||||||||||||
Corporate and other expenses | 142.0 | 116.1 | 22.3 | % | 321.3 | 507.7 | (36.7) | % | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 63.3 | 50.2 | 26.1 | % | 168.7 | 115.4 | 46.2 | % | |||||||||||||||||||||||||||||||||||||||
International |
Direct-to-Consumer |
Wholesale |
ANALYSIS OF FINANCIAL CONDITION |
Consolidated Balance Sheets |
Liquidity and Capital Resources |
December | March | December | |||||||||||||||||||||
(Dollars in millions) | 2023 | 2023 | 2022 | ||||||||||||||||||||
Working capital | $938.6 | $1,606.9 | $697.7 | ||||||||||||||||||||
Current ratio | 1.2 to 1 | 1.5 to 1 | 1.2 to 1 | ||||||||||||||||||||
Net debt to total capital | 76.0% | 71.6% | 68.7% |
Nine Months Ended December | |||||||||||||||||
(In thousands) | 2023 | 2022 | |||||||||||||||
Cash provided (used) by operating activities | $ | 1,105,747 | $ | (833,472) | |||||||||||||
Cash used by investing activities | (191,994) | (206,833) | |||||||||||||||
Cash provided (used) by financing activities | (735,766) | 418,719 |
Recent Accounting Pronouncements |
Critical Accounting Policies and Estimates |
Cautionary Statement on Forward-looking Statements |
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4 — CONTROLS AND PROCEDURES. |
ITEM 1 — LEGAL PROCEEDINGS. |
ITEM 1A — RISK FACTORS. |
LEGAL, REGULATORY AND COMPLIANCE RISKS |
BUSINESS AND OPERATIONAL RISKS |
FINANCIAL RISKS |
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
Third Quarter Fiscal 2024 | Total Number of Shares Purchased |
Weighted Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Programs |
Dollar Value of Shares that May Yet be Purchased Under the Program |
||||||||||||||||||||||
October 1 - October 28, 2023 | — | $ | — | — | $ | 2,486,971,057 | ||||||||||||||||||||
October 29 - November 25, 2023 | — | — | — | 2,486,971,057 | ||||||||||||||||||||||
November 26 - December 30, 2023 | — | — | — | 2,486,971,057 | ||||||||||||||||||||||
Total | — | — |
ITEM 5 — OTHER INFORMATION. |
RULE 10B5-1 TRADING PLANS |
ITEM 6 — EXHIBITS. |
Severance Plan for Section 16 Officers (effective October 6, 2023) | ||||||||
Certification of Chief Executive Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
V.F. CORPORATION | |||||||||||
(Registrant) | |||||||||||
By: | /s/ Matthew H. Puckett | ||||||||||
Matthew H. Puckett | |||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
|||||||||||
Date: February 7, 2024 | By: | /s/ Bryan H. McNeill | |||||||||
Bryan H. McNeill | |||||||||||
Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) |
February 7, 2024 | /s/ Bracken Darrell | ||||
Bracken Darrell | |||||
President and Chief Executive Officer |
February 7, 2024 | /s/ Matthew H. Puckett | ||||
Matthew H. Puckett | |||||
Executive Vice President and Chief Financial Officer |
February 7, 2024 | /s/ Bracken Darrell | ||||
Bracken Darrell | |||||
President and Chief Executive Officer |
February 7, 2024 | /s/ Matthew H. Puckett | ||||
Matthew H. Puckett | |||||
Executive Vice President and Chief Financial Officer |