WHEN I LAST WROTE TO YOU A YEAR AGO, VF CORPORATION AND OUR BRANDS WERE NEARLY THREE MONTHS INTO OUR RESPONSE TO THE CHALLENGES CREATED BY COVID-19 AND THE RESULTING GLOBAL SHUTDOWN.
WE DIDN'T KNOW HOW THE PANDEMIC WOULD UNFOLD. WE DIDN'T KNOW HOW LONG IT WOULD LAST. BUT WE DID KNOW ONE THING: WE WERE DETERMINED NOT JUST TO SURVIVE THE SITUATION, BUT TO CAPITALIZE ON THE MOMENT, EMERGE EVEN STRONGER AND POSITION VF AND OUR BRANDS FOR THE NEXT CHAPTER IN OUR 122-YEAR HISTORY.
Thanks to the incredible resilience and agility of our people, combined with our early actions to preserve liquidity and protect our balance sheet, today I can say with confidence that VF is indeed emerging from this crisis as a stronger, smarter and more focused enterprise.
Throughout fiscal year 2021 (FY21), our teams remained sharply focused on executing their plans, and we continued to invest in our brands' greatest opportunities to drive organic revenue across the portfolio. At the same time, we took bold, forward-looking actions to spark additional growth and value creation. Our acquisition of the Supreme® brand, for example, reinforced our vision and strategy to evolve our portfolio to align with the market opportunities we see driving the apparel and footwear sector.
We also kicked off Project Enable - a multiyear initiative to evolve our organizational design to ensure we have the right capabilities, resources and talent in place to propel us forward. This work includes upskilling and reskilling parts of our workforce to equip them with the know-how to thrive in a digital-first world. Project Enable will help us accelerate our business model transformation and reduce our global cost structure by about $125 million over three years.
OUR FINANCIAL RESULTS
By any measure, the collective work of our associates to navigate FY21 was nothing short of remarkable. From a financial standpoint, we achieved global revenues of $9.2 billion, including the contribution from Supreme® in the fourth quarter.
ADDITIONAL HIGHLIGHTS OF VF'S CONTINUING
OPERATIONS,1 INCLUDE THE FOLLOWING:
Our DTC Digital business achieved 58% growth on an organic basis2 (55% in constant dollars3), balanced between the first and second halves
of the year.
Revenue in Greater China increased 24% (20% in constant dollars).
Gross margin was 52.7%. On an adjusted organic basis,4 gross margin was 53.2%.
Earnings per share (EPS) was $0.91. On an adjusted organic basis,5
EPS was $1.24.
And our liquidity remains strong. We ended the year with approximately $1.4 billion in cash and short-term investments and approximately $2.2 billion remaining undrawn on our revolver. Just as important, we remained fully committed throughout the year to paying and growing our dividend.
Earnings Per Share
53.2% on an adjusted
$1.24 on an adjusted
DTC Digital Business
Letter to Shareholders and Stakeholders
55% in constant dollars3
20% in constant dollars
VF CorporationAnnual Report FISCAL YEAR 2021
PURPOSE-LED AND PEOPLE-FIRST
Along with our focus on business performance throughout the pandemic, we were determined to maintain our momentum in building our reputation as a purpose-led company that leads by example. We continued to activate our people-first approach throughout FY21. We prioritized the health and safety of our people worldwide, going to great lengths to support their mental and financial well-being. I'm extremely proud to say that even during the darkest days of the crisis, when nearly all our stores around the world were closed for months on end, not one of our retail associates was laid off or furloughed because of the pandemic.
"I'm extremely proud to say that even during the darkest days of the crisis, when nearly all our stores
around the world were closed for months on end, not one of our retail associates was laid off or furloughed because
of the pandemic."
We also continued to meet our commitments to the communities we serve and the planet we all share. FY21 was a year of tremendous progress in our efforts around the world to advance environmental sustainability. We allocated the net proceeds from our €500 million green bond - the first in the apparel and footwear industry - toward VF's eligible sustainability projects worldwide, as outlined in our Green Bond Framework. Collectively, these projects are helping to deliver meaningful environmental benefits. That has included the potential to avoid an estimated 16,000 metric tonnes of carbon dioxide equivalents and 970 million liters of water consumption annually through our procurement of more sustainable materials.
In addition, we announced our goal to eliminate all single-use plastic packaging, including polybags, by 2025. From that point on, all remaining nonplastic packaging used by VF and our brands would originate from sustainable sources and be designed for reuse or recyclability.
In FY21, we also published our first Human Rights Report in alignment with the United Nations Guiding Principles on Business and Human Rights. It shares our due diligence efforts, lessons learned and a few stories about the lives we've touched in our efforts to be a force for good worldwide. We're very proud of this work, and we aim to continuously improve as we uphold human rights in all our operations and across our global supply chain.
Beyond the global pandemic, other events of last year laid bare the pervasive racial and socioeconomic injustices that plague our world, especially as they impact people of color. In response, VF and our brands took action to build on our inclusion and diversity work by establishing the Council to Advance Racial Equity (CARE). CARE spearheaded the development of a detailed plan comprising internal actions and programs, community partnerships and public policy initiatives to support three specific opportunity gaps:
access to education and advancement, 2) economic equity and 3) environmental justice. Although CARE is still young, we believe it will be a galvanizing force for our entire company as we take collective actions in the years ahead to fight for racial equity and social justice.
"... we aim to continuously improve as we uphold human rights in all our operations and across our global supply chain."
ADVANCING OUR STRATEGIC PRIORITIES
This time last year, I shared my belief that, despite the global disruptions and uncertainties caused by COVID-19, the four priorities that make up our business strategy were more relevant than ever. Our global teams' accomplishments since then have further reinforced that belief.
Ironically, the very challenges that negatively affected our business throughout FY21 also led us to accelerate progress against our strategy as we worked to become a more consumer-minded,retail-centric and hyper-digital organization - a company built to win in a post-pandemic world.