Market Overview

VF Reports First Quarter Fiscal 2019 Results; Raises Full Year Fiscal 2019 Outlook

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  • Revenue from continuing operations increased 23 percent (up 21
    percent in constant dollars) to $2.8 billion; revenue from continuing
    operations increased 12 percent (up 10 percent in constant dollars)
    excluding the revenue contribution from acquisitions;
  • Active segment revenue increased 25 percent (up 22 percent in
    constant dollars) including a 35 percent (32 percent in constant
    dollars) increase in Vans
    ® brand
    revenue; Outdoor segment revenue increased 6 percent (up 3 percent in
    constant dollars) including an 8 percent (5 percent in constant
    dollars) increase in The North Face
    ®
    brand revenue and a 6-percentage point revenue growth contribution
    from acquisitions;
  • International revenue increased 27 percent (up 22 percent in
    constant dollars), including a 13-percentage point revenue growth
    contribution from acquisitions;
  • Direct-to-consumer revenue increased 22 percent (up 20 percent in
    constant dollars), including a 6-percentage point revenue growth
    contribution from acquisitions; Digital revenue increased 54 percent
    (up 50 percent in constant dollars), including a 21-percentage point
    revenue growth contribution from acquisitions;
  • Gross margin from continuing operations increased 70 basis points
    to 50.3 percent; on an adjusted basis, gross margin increased 90 basis
    points to 50.5 percent; excluding the impact of acquisitions, on an
    adjusted basis, gross margin increased 170 basis points to 51.3
    percent;
  • Earnings per share from continuing operations was $0.40. Adjusted
    earnings per share from continuing operations increased 62 percent (up
    56 percent in constant dollars) to $0.43, including a $0.04
    contribution from acquisitions;
  • Full year fiscal 2019 revenue is now expected to be in the range of
    $13.6 billion to $13.7 billion, reflecting an increase of 10 percent
    to 11 percent; and,
  • Full year fiscal 2019 adjusted earnings per share is now expected
    to be in the range of $3.52 to $3.57, reflecting an increase of 12
    percent to 14 percent.

VF Corporation (NYSE:VFC) today reported financial results for its
first quarter ended June 30, 2018. All per share amounts 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 - Nautica® Brand Business and
Licensing Business." Unless otherwise noted, results presented are based
on continuing operations. This release also refers to "adjusted"
amounts, terms that are described under the heading "Adjusted Amounts -
Excluding Williamson-Dickie, Icebreaker® and Altra®
Transaction and Deal Related Expenses and the Provisional Impact of U.S.
Tax Legislation." Unless otherwise noted, "reported" and "adjusted"
amounts are the same.

"VF's first quarter results were strong, driven by continued broad based
acceleration across our core brands and platforms," said Steve Rendle,
Chairman, President and Chief Executive Officer. "We are executing well
against our 2021 growth plan and continuing on our journey to reshape
the portfolio and transform VF into a purpose-led, performance driven,
consumer-centric organization focused on and committed to delivering
superior returns to shareholders."

Reportable Segment Change

In light of recently completed acquisitions, divestitures, and
organizational realignments, the company has changed its reporting
structure to better support and assess the operations of the business.
The company's new reportable segments are Outdoor, Active, Work and
Jeans. In this release, the company has recast historical financial
information to reflect the new reportable segments. The recast
historical financial information is included in the attached
supplemental financial tables.

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 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 - Nautica® Brand
Business and Licensing Business

On April 30, 2018, the company completed the sale of its Nautica®
brand business. Accordingly, the company has classified the assets and
liabilities of the Nautica® brand business as
held-for-sale through the date of sale and has included the operating
results of this business in discontinued operations for all periods
presented.

On April 28, 2017, the company completed the sale of its Licensed Sports
Group (LSG) business, including the Majestic®
brand. In conjunction with the LSG divestiture, VF executed its plan to
entirely exit the licensing business and completed the sale of the
assets of the JanSport® brand collegiate
business in the fourth quarter of 2017. Accordingly, the company has
removed the assets and liabilities of the licensing business as of the
dates noted above and included the operating results of these businesses
in discontinued operations for all periods presented.

The company's after-tax net income from discontinued operations was $0.4
million in the first quarter of fiscal 2019, which includes the
operating results of the Nautica® brand
business during the period through the date of sale.

Adjusted Amounts - Excluding Williamson-Dickie, Icebreaker®
and Altra
® Transaction and Deal Related
Expenses and the Provisional Impact of U.S. Tax Legislation

This release refers to adjusted amounts that exclude transaction and
deal related expenses associated with the acquisitions of
Williamson-Dickie, Icebreaker® and Altra®.
Total transaction and deal related expenses were approximately $19
million in the first quarter of fiscal 2019.

Adjusted amounts in this release also exclude the provisional amounts
recorded due to recent U.S. tax legislation. On December 22, 2017, the
U.S. government enacted comprehensive tax legislation commonly referred
to as the Tax Cuts and Jobs Act. Measurement period adjustments related
to the provisional net charge resulted in a benefit of approximately $3
million in the first quarter of fiscal 2019.

Combined, the above net charges negatively impacted earnings per share
by $0.03 during the first quarter of fiscal 2019. 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.

First Quarter Fiscal 2019 Income Statement Review

  • Revenue increased 23 percent (up 21 percent in constant
    dollars) to $2.8 billion, including a $249 million revenue
    contribution from the Williamson-Dickie, Icebreaker®
    and Altra® acquisitions. Excluding
    acquisitions, revenue increased 12 percent (up 10 percent in constant
    dollars), driven by broad-based strength across VF's international and
    direct-to-consumer platforms and Active and Work segments.
  • Gross margin improved 70 basis points to 50.3 percent, as
    benefits from a mix-shift toward higher margin businesses and
    continued focus on fundamentals were partially offset by the impact of
    acquisitions. On an adjusted basis, gross margin increased 90 basis
    points to 50.5 percent. Adjusted gross margin, excluding acquisitions,
    increased 170 basis points to 51.3 percent.
  • Operating income on a reported basis was $231 million. On an
    adjusted basis, operating income increased 57 percent to $250 million,
    including an $20 million contribution from acquisitions. Operating
    margin
    on a reported basis increased 130 basis points to 8.3
    percent. Adjusted operating margin increased 200 basis points to 9.0
    percent. Adjusted operating margin, excluding acquisitions, increased
    210 basis points to 9.1 percent.
  • Earnings per share was $0.40 on a reported basis. On an
    adjusted basis, earnings per share increased 62 percent (56 percent in
    constant dollars) to $0.43, including a $0.04 contribution from
    acquisitions.

Balance Sheet Highlights

Inventories were up 20 percent compared with the same period last year.
Excluding the impact of acquisitions, inventories increased 2 percent.
The company has $4 billion remaining under its current share repurchase
authorization.

Adjusted Full Year Fiscal 2019 Outlook

The following outlook for fiscal year 2019 is on an adjusted basis and
has been updated to include the following:

  • Revenue is now expected to be in the range of $13.6 billion to
    $13.7 billion, reflecting an increase of 10 percent to 11 percent, and
    includes more than a $150 million negative impact from unfavorable
    foreign currency exchange rates relative to the prior outlook. This
    compares to the previous expectation of revenue between $13.45 billion
    and $13.55 billion, which reflected a 9 percent to 10 percent
    increase. By segment, revenue for Outdoor is expected to
    increase 6 percent to 8 percent; revenue for Active is expected
    to increase 13 percent to 14 percent; revenue for Work is
    expected to increase more than 35 percent; and, revenue for Jeans is
    expected to be about flat compared to the prior year.
  • International revenue is now expected to increase between 12
    percent and 13 percent versus the previous expectation of a 13 percent
    to 15 percent increase. By geographic region, Europe revenue is
    expected to increase 12 percent to 13 percent (previously 13 percent
    to 15 percent); Asia Pacific revenue is expected to increase 14
    percent to 15 percent (previously 15 percent to 17 percent); and,
    Americas (non-U.S.) revenue is expected to increase 9 percent to 10
    percent (previously 10 percent to 12 percent).
  • Direct-to-consumer revenue is now expected to increase between
    11 percent and 13 percent versus the previous expectation of an 8
    percent to 10 percent increase. Digital revenue is now expected to
    increase more than 30 percent versus the previous expectation of a
    more than 25 percent increase.
  • Gross margin is still expected to approximate 51 percent.
  • Operating margin is now expected to increase 70 basis points to
    about 13.4 percent, versus the previous expectation of about 13.2
    percent.
  • Earnings per share is now expected to be in the range of $3.52
    to $3.57, reflecting an increase of 12 percent to 14 percent, and
    includes about a $0.06 negative impact from unfavorable foreign
    currency exchange rates relative to the prior outlook. This compares
    to the previous expectation of $3.48 to $3.53, which reflected an
    increase of between 11 percent and 13 percent.
  • Cash flow from operations is now expected to exceed $1.7
    billion (up from $1.6 billion previously).
  • Other full year assumptions include an effective tax rate of
    approximately 16.5 percent (down from 17 percent previously) and
    capital expenditures of approximately $275 million.

Dividend Declared

VF's Board of Directors declared a quarterly dividend of $0.46 per
share, payable on September 20, 2018 to shareholders of record on
September 10, 2018.

Webcast Information

VF will host its first quarter fiscal 2019 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 first quarter fiscal 2019 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

VF Corporation (NYSE:VFC) outfits consumers around the world with its
diverse portfolio of iconic lifestyle brands, including Vans®,
The North Face
®Timberland®,
Wrangler
® and Lee®.
Founded in 1899, VF is one of the world's largest apparel, footwear and
accessories companies with socially and environmentally responsible
operations spanning numerous geographies, product categories and
distribution channels. VF is committed to delivering innovative products
to consumers and creating long-term value for its customers and
shareholders. For more information, visit www.vfc.com.

Forward-looking Statements

Certain statements included in this release and attachments are
"forward-looking statements" within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
therefore involve several risks and uncertainties. You can identify
these statements by the fact that they use words such as "will,"
"anticipate," "estimate," "expect," "should," and "may" and other words
and terms of similar meaning or use of future dates. We caution that
forward-looking statements are not guarantees and that actual results
could differ materially from those expressed or implied in the
forward-looking statements. Potential risks and uncertainties that could
cause the actual results of operations or financial condition of VF to
differ materially from those expressed or implied by forward-looking
statements in this release include, but are not limited to: foreign
currency fluctuations; the level of consumer demand for apparel,
footwear and accessories; disruption to VF's distribution system; VF's
reliance on a small number of large customers; the financial strength of
VF's customers; fluctuations in the price, availability and quality of
raw materials and contracted products; disruption and volatility in the
global capital and credit markets; VF's response to changing fashion
trends, evolving consumer preferences and changing patterns of consumer
behavior, intense competition from online retailers, manufacturing and
product innovation; increasing pressure on margins; VF's ability to
implement its business strategy; VF's ability to grow its international
and direct-to-consumer businesses; VF's and its customers' and vendors'
ability to maintain the strength and security of information technology
systems; stability of VF's manufacturing facilities and foreign
suppliers; continued use by VF's suppliers of ethical business
practices; VF's ability to accurately forecast demand for products;
continuity of members of VF's management; VF's ability to protect
trademarks and other intellectual property rights; possible goodwill and
other asset impairment; maintenance by VF's licensees and distributors
of the value of VF's brands; VF's ability to execute and integrate
acquisitions; changes in tax laws and liabilities; legal, regulatory,
political and economic risks; and adverse or unexpected weather
conditions. More information on potential factors that could affect VF's
financial results is included from time to time in VF's public reports
filed with the Securities and Exchange Commission, including VF's Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q.

   
VF CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
 
Three Months Ended June %
2018   2017 (a) Change
Net sales $ 2,765,695 $ 2,252,590 23 %
Royalty income 22,451   16,030   40 %
Total revenues 2,788,146   2,268,620   23 %
Costs and operating expenses
Cost of goods sold 1,384,977 1,142,476 21 %
Selling, general and administrative expenses 1,172,287   966,468   21 %
Total costs and operating expenses 2,557,264   2,108,944   21 %
Operating income 230,882 159,676 45 %
Interest, net (23,884 ) (20,607 ) 16 %
Other income (expense), net (20,666 ) (3,217 ) *
Income from continuing operations before income taxes 186,332 135,852 37 %
Income taxes 26,379   28,760   (8 )%
Income from continuing operations 159,953 107,092 49 %
Income from discontinued operations, net of tax 405   2,797   *
Net income $ 160,358   $ 109,889   46 %
Earnings per common share - basic (b)
Continuing operations $ 0.41 $ 0.27 50 %
Discontinued operations   0.01   *
Total earnings per common share - basic $ 0.41   $ 0.28   47 %
Earnings per common share - diluted (b)
Continuing operations $ 0.40 $ 0.27 50 %
Discontinued operations   0.01   *
Total earnings per common share - diluted $ 0.40   $ 0.27   46 %
Weighted average shares outstanding
Basic 394,165 397,065
Diluted 399,548 400,512
Cash dividends per common share $ 0.46 $ 0.42 10 %
 
* Calculation not meaningful
 
Basis of presentation of condensed consolidated financial
statements:
VF operates and reports using a 52/53 week fiscal
year. In connection with the change in fiscal year end to the
Saturday closest to March 31 from the Saturday closest to December
31, VF's current fiscal year will run from April 1, 2018 through
March 30, 2019 ("Fiscal 2019"). For presentation purposes herein,
all references to periods ended June 2018 and June 2017 relate to
the 13-week fiscal period ended June 30, 2018 and the 13-week fiscal
period ended July 1, 2017, respectively, and references to March
2018 relate to the balance sheet as of March 31, 2018.
 
(a) In the first quarter of fiscal 2019, the Company
adopted ASU 2017-07, "Compensation - Retirement Benefits (Topic
715): Improving the Presentation of Net Periodic Pension Cost and
Net Periodic Postretirement Benefit Cost"
and restated the
prior period to conform to current year presentation. For the three
months ended June 2017, operating income increased and other income
(expense), net decreased by $1.6 million.
 
(b) Amounts have been calculated using unrounded numbers.
 

           
VF CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
June March June
2018 2018 2017
ASSETS
Current assets
Cash and equivalents $ 467,917 $ 680,762 $ 672,045
Accounts receivable, net 1,428,535 1,408,587 1,143,573
Inventories 1,993,825 1,861,441 1,663,052
Other current assets 439,870   732,533   418,980
Total current assets 4,330,147 4,683,323 3,897,650
 
Property, plant and equipment 1,018,164 1,011,617 903,024
Goodwill and intangible assets 4,000,438 3,813,329 3,213,690
Other assets 843,005   803,041   1,159,364
Total assets $ 10,191,754   $ 10,311,310   $ 9,173,728
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 1,316,923 $ 1,525,106 $ 921,109
Current portion of long-term debt 6,189 6,265 253,783
Accounts payable 675,581 583,004 492,480
Accrued liabilities 1,001,602   1,024,454   763,771
Total current liabilities 3,000,295 3,138,829 2,431,143
 
Long-term debt 2,156,627 2,212,555 2,111,623
Other liabilities 1,308,455   1,271,830   986,623
Total liabilities 6,465,377   6,623,214   5,529,389
Stockholders' equity 3,726,377   3,688,096   3,644,339
Total liabilities and stockholders' equity $ 10,191,754   $ 10,311,310   $ 9,173,728
 

   
VF CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
Three Months Ended June
2018 (a)     2017 (a)
Operating activities
Net income $ 160,358 $ 109,889
Depreciation and amortization 71,130 65,470
Other adjustments 45,656   30,257  
Cash provided by operating activities 277,144 205,616
 
Investing activities
Business acquisitions, net of cash received (321,395 )
Proceeds from sale of businesses, net of cash sold 288,273 208,215
Capital expenditures (68,919 ) (37,355 )
Software purchases (21,546 ) (13,074 )
Other, net (5,643 ) (324 )
Cash (used) provided by investing activities (129,230 ) 157,462
 
Financing activities
Net (decrease) increase from short-term borrowings, long-term debt
and other
(215,940 ) 631,635
Purchases of treasury stock (762,007 )
Cash dividends paid (181,517 ) (164,893 )
Proceeds from issuance of Common Stock, net of shares withheld for
taxes
53,500   11,430  
Cash used by financing activities (343,957 ) (283,835 )
Effect of foreign currency rate changes on cash, cash equivalents
and restricted cash
(19,998 ) (10,583 )
Net change in cash, cash equivalents and restricted cash (216,041 ) 68,660
Cash, cash equivalents and restricted cash - beginning of year 689,190   608,280  
Cash, cash equivalents and restricted cash - end of period $ 473,149   $ 676,940  
 
(a) The cash flows related to discontinued operations
have not been segregated, and are included in the Condensed
Consolidated Statements of Cash Flows.
 

       
VF CORPORATION
Supplemental Financial Information
Reportable Segment Information
(Unaudited)
(In thousands)
 
Three Months Ended June

% Change Constant
Currency (a)

% Change Organic (b)
2018   2017 (a) % Change  
Segment revenues
Outdoor $ 568,600 $ 536,250 6 % 3% 0 %
Active 1,136,937 909,290 25 % 22% 25 %
Work 442,602 206,857 114 % 114% 8 %
Jeans 603,767 587,903 3 % 2% 3 %
Other 36,240   28,320   28 % 28% 28 %
Total segment revenues $ 2,788,146   $ 2,268,620   23 % 21% 12 %
Segment profit (loss)
Outdoor $ (83,495 ) $ (62,018 ) (35 )% (31)%
Active 269,197 184,628 46 % 42%
Work 55,244 34,159 62 % 62%
Jeans 87,049 81,258 7 % 5%
Other 2,160   (322 ) * *
Total segment profit 330,155 237,705 39 % 36%
Corporate and other expenses (119,939 ) (81,246 ) 48 % 47%
Interest, net (23,884 ) (20,607 ) 16 % 16%
Income from continuing operations before income taxes $ 186,332   $ 135,852   37 % 32%
 

VF's reportable segments reflect how the chief operating decision
maker allocates resources and assesses performance and are
comprised of the following primary brands:

 
Outdoor - Outdoor apparel, footwear and equipment

Primary brands: The North Face®, Timberland®
(excluding Timberland PRO®), Smartwool®,
Icebreaker® and Altra®

 
Active - Active apparel, footwear and accessories

Primary brands: Vans®, Kipling®,
Napapijri®, JanSport®,
Reef®, Eastpak®
and Eagle Creek®

 
Work - Work and work-inspired lifestyle apparel and footwear and
occupational apparel

Primary brands: Dickies®, Bulwark®,
Red Kap®, Timberland PRO®,
Wrangler® RIGGS, Walls®,
Terra®, Kodiak®
and Horace Small®

 
Jeans - Denim and casual apparel

Primary brands: Wrangler® (excluding Wrangler®
RIGGS
), Lee® and Rock & Republic®

 
Other - not considered a reportable segment

Sales of non-VF products at VF Outlet®
stores and results from transition services related to the sale of Nautica®

 

The business segment information provided above reflects the
changes in the Company's operating structure for all periods
presented. These changes had no impact on VF's consolidated
results of operations.

 
(a) Refer to constant currency definition on the
following pages.
 

(b) Excludes the operating results of
Williamson-Dickie, Icebreaker® and Altra®.
Refer to Non-GAAP financial information on "Reconciliation of
Select GAAP to Non-GAAP Measures" page for additional information.

 
* Calculation not meaningful
 

   
VF CORPORATION
Supplemental Financial Information
Reportable Segment Information – Constant Currency Basis
(Unaudited)
(In thousands)
 
Three Months Ended June 2018
As Reported     Adjust for Foreign    
under GAAP Currency Exchange Constant Currency
Segment revenues
Outdoor $ 568,600 $ (15,843 ) $ 552,757
Active 1,136,937 (26,862 ) 1,110,075
Work 442,602 (509 ) 442,093
Jeans 603,767 (2,436 ) 601,331
Other 36,240     36,240  
Total segment revenues $ 2,788,146   $ (45,650 ) $ 2,742,496  
Segment profit (loss)
Outdoor $ (83,495 ) $ 1,993 $ (81,502 )
Active 269,197 (7,338 ) 261,859
Work 55,244 6 55,250
Jeans 87,049 (1,943 ) 85,106
Other 2,160     2,160  
Total segment profit 330,155 (7,282 ) 322,873
Corporate and other expenses (119,939 ) 383 (119,556 )
Interest, net (23,884 )   (23,884 )
Income from continuing operations before income taxes $ 186,332   $ (6,899 ) $ 179,433  
Diluted earnings per share growth 50 % (5 )% 45 %
 
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 CORPORATION
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(Unaudited)
(In thousands, except per share amounts)
 
Three Months Ended June 2018 As Reported
under GAAP

Transaction and
Deal Related
Costs (a)

Impact of Tax
Act (b)

Adjusted

Contribution
from
Acquisitions (c)

Adjusted
Organic

Revenues $ 2,788,146 $ $ $ 2,788,146 $ (248,822 ) $ 2,539,324
 
Gross profit 1,403,169 4,323 1,407,492 (105,423 ) 1,302,069
Percent 50.3 % 50.5 % 42.4 % 51.3 %
 
Operating income 230,882 19,155 250,037 (20,164 ) 229,873
Percent 8.3 % 9.0 % 8.1 % 9.1 %
 
Diluted earnings per share from continuing operations (d) 0.40 0.04 (0.01 ) 0.43 (0.04 ) 0.39
 
(a) Transaction and deal related costs for the three
months ended June 2018 include acquisition and integration costs
related to the acquisitions of Williamson-Dickie and the Icebreaker®
and Altra® brands. The transaction and deal
related costs resulted in a net tax benefit of $3.5 million. The
diluted earnings per share impact was calculated using 399,548,000
shares.
 
(b) On December 22, 2017, the U.S. government enacted
comprehensive tax legislation commonly referred to as the Tax Cuts
and Jobs Act ("Tax Act"). Measurement period adjustments related to
the provisional net charge were recorded during the three months
ended June 30, 2018, resulting in a tax benefit of $2.9 million. The
diluted earnings per share impact was calculated using 399,548,000
shares.
 
(c) The contribution from acquisitions represents the
operating results of Williamson-Dickie for the three months ended
June 2018, the operating results of Icebreaker®
beginning on the acquisition date of April 3, 2018 and the operating
results of Altra® beginning on the
acquisition date of June 1, 2018. The operating results of all
acquisitions exclude transaction and deal related costs. The
contribution from acquisitions resulted in tax expense of $3.2
million and the diluted earnings per share impact was calculated
using 399,548,000 shares.
 
(d) Amounts shown in the table have been calculated using
unrounded numbers.
 
Non-GAAP Financial Information
 
The financial information above has been presented on a GAAP basis,
on an adjusted basis, which excludes the impact of transaction and
deal related costs and the provisional impact of tax reform, and on
an adjusted organic basis, which excludes the operating results of
Williamson-Dickie, Icebreaker® and Altra®.
Contributions from acquisitions also exclude transaction and deal
related costs. These adjusted presentations are non-GAAP measures.
Management believes these measures provide investors with useful
supplemental information regarding VF's underlying business trends
and the performance of VF's ongoing operations and are useful for
period-over-period comparisons of such operations.
 
Management uses the above financial measures internally in its
budgeting and review process and, in some cases, as a factor in
determining compensation. While management believes that these
non-GAAP financial measures are useful in evaluating the business,
this information should be considered as supplemental in nature and
should be viewed in addition to, and not in lieu of or superior to,
VF's operating performance measures calculated in accordance with
GAAP. In addition, these non-GAAP financial measures may not be the
same as similarly titled measures presented by other companies.
 

         
VF CORPORATION
Supplemental Financial Information
Top 5 Brand Revenue Information
(Unaudited)
 
Three Months Ended June 2018
Top 5 Brand Revenue Growth Americas           EMEA           APAC           Global
Vans®

   % change

36% 33% 34% 35%

   % change constant currency*

36% 23% 27% 32%
The North Face®

   % change

0% 21% 32% 8%

   % change constant currency*

0% 12% 26% 5%
Timberland®

   % change

6% 5% (11)% 2%

   % change constant currency*

6% (1)% (14)% (1)%
Wrangler®

   % change

5% 5% (5)% 4%

   % change constant currency*

6% (1)% (3)% 5%
Lee®

   % change

(4)% 7% 13% 1%

   % change constant currency*

(3)% 1% 7% (1)%
 
*Refer to constant currency definition on previous pages.
 

 
VF CORPORATION
Supplemental Financial Information
Geographic and Channel Revenue Information
(Unaudited)
 
Three Months Ended June 2018
% Change  

% Change Constant
Currency*

  % Change Organic (a)

Geographic Revenue Growth

U.S. 20% 20% 11%
EMEA 32% 24% 18%
APAC 24% 18% 14%
China 45% 35% 31%
Americas (non-U.S.) 21% 23% 5%
International 27% 22% 14%
 
Three Months Ended June 2018
% Change

% Change Constant
Currency*

% Change Organic (a)

Channel Revenue Growth

Wholesale 23% 21% 10%
Direct-to-consumer 22% 20% 16%
Digital 54% 50% 33%
 
As of June

 

2018 (b) 2017

DTC Store Count

Total 1,513 1,432
 
*Refer to constant currency definition on previous pages.
 
(a) Excludes the operating results of Williamson-Dickie, Icebreaker®
and Altra®. Refer to Non-GAAP
financial information on "Reconciliation of Select GAAP to Non-GAAP
Measures" page for additional information.
 
(b) The June 2018 DTC store count includes 97
Williamson-Dickie, Icebreaker® and Altra®
stores.
 

         
VF CORPORATION
Supplemental Financial Information
Revised Reportable Segment Information - Trailing Twelve Months
Ended March 31, 2018
(Unaudited)
(In thousands)
 
Three Months Ended
July 1, 2017
Three Months Ended
September 30, 2017
Three Months Ended
December 30, 2017
Three Months Ended
March 31, 2018
Trailing Twelve
Months Ended
March 31,
2018
Segment revenues
Outdoor $ 536,250 $ 1,381,002 $ 1,456,654 $ 888,039 $ 4,261,945
Active 909,290 1,089,616 983,983 1,071,598 4,054,487
Work 206,857 210,062 482,827 442,258 1,342,004
Jeans 587,903 682,884 692,506 623,266 2,586,559
Other 28,320   29,370   33,313   20,285   111,288  
Total segment revenues $ 2,268,620   $ 3,392,934   $ 3,649,283   $ 3,045,446   $ 12,356,283  
Segment profit (loss)
Outdoor $ (62,018 ) $ 250,596 $ 275,509 $ 44,673 $ 508,760
Active 184,628 273,092 198,872 237,620 894,212
Work 34,159 34,260 57,509 40,024 165,952
Jeans 81,258 117,563 93,196 103,805 395,822
Other (322 ) (782 ) 209   (3,074 ) (3,969 )
Total segment profit $ 237,705   $ 674,729   $ 625,295   $ 423,048   $ 1,960,777  
 
The information provided above reflects changes in VF's reportable
segment information for all periods presented - see segment
discussion at "Supplemental Financial Information - Reportable
Segment Information" for additional detail.
 
Non-GAAP Financial Information
 
In connection with the change in fiscal year end to the Saturday
closest to March 31 from the Saturday closest to December 31, VF's
current fiscal year will run from April 1, 2018 through March 30,
2019 ("Fiscal 2019").
 
The financial metrics provided for the trailing twelve months ended
March 31, 2018 are a non-GAAP measure and have been presented in
order to provide a comparison that aligns with VF's new fiscal year
end. Management believes these measures provide investors with
useful supplemental information regarding VF's underlying business
trends and the performance of VF's ongoing operations and are useful
for period-over-period comparisons of such operations.
 
Management uses the above financial measures internally in its
budgeting and review process. While management believes that these
non-GAAP financial measures are useful in evaluating the business,
this information should be considered as supplemental in nature and
should be viewed in addition to, and not in lieu of or superior to,
VF's operating performance measures calculated in accordance with
GAAP. In addition, these non-GAAP financial measures may not be the
same as similarly titled measures presented by other companies.

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