Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  VF Corporation    VFC

VF CORPORATION

(VFC)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

VF : V F CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

share with twitter share with LinkedIn share with facebook
08/04/2020 | 06:28pm EDT
VF Corporation (together with its subsidiaries, collectively known as "VF" or
the "Company") uses a 52/53 week fiscal year ending on the Saturday closest to
March 31 of each year. The Company's current fiscal year runs from March 29,
2020 through April 3, 2021 ("Fiscal 2021"). Accordingly, this Form 10-Q presents
our first quarter of Fiscal 2021. For presentation purposes herein, all
references to periods ended June 2020 and June 2019 relate to the fiscal periods
ended on June 27, 2020 and June 29, 2019, respectively. References to March 2020
relate to information as of March 28, 2020.
All per share amounts are presented on a diluted basis and all percentages shown
in the tables below and the following discussion have been calculated using
unrounded numbers. All references to foreign currency amounts below reflect the
changes in foreign currency exchange rates from the same period in 2019 and
their impact on translating foreign currencies into U.S. dollars. VF's most
significant foreign currency exposure relates to business conducted in
euro-based countries. Additionally, VF conducts business in other developed and
emerging markets around the world with exposure to foreign currencies other than
the euro.
On May 22, 2019, VF completed the spin-off of its Jeans business, which included
the Wrangler®, Lee® and Rock & Republic® brands, as well as the VF OutletTM
business, into an independent, publicly traded company now operating under the
name Kontoor Brands, Inc. ("Kontoor Brands"). As a result, VF reported the
results for the Jeans business and the related cash flows as discontinued
operations in the Consolidated Statements of Operations and Consolidated
Statements of Cash Flows,
respectively. These changes have been applied to all periods presented.
On January 21, 2020, VF announced its decision to explore the divestiture of its
Occupational Workwear business. The Occupational Workwear business is comprised
primarily of the following brands and businesses: Red Kap®, VF Solutions®,
Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®.
The business also includes certain Dickies® occupational workwear products that
have historically been sold through the business-to-business channel. During the
three months ended March 2020, the Company determined that the Occupational
Workwear business met the held-for-sale and discontinued operations accounting
criteria and expects to divest this business during Fiscal 2021. Accordingly,
the Company has reported the results of the Occupational Workwear business and
the related cash flows as discontinued operations in the Consolidated Statements
of Operations and Consolidated Statements of Cash Flows, respectively. The
related held-for-sale assets and liabilities have been reported as assets and
liabilities of discontinued operations in the Consolidated Balance Sheets. These
changes have been applied to all periods presented.
Unless otherwise noted, amounts, percentages and discussion for all periods
included below reflect the results of operations and financial condition from
VF's continuing operations.
Refer to Note 4 to VF's consolidated financial statements for additional
information on discontinued operations.
RECENT DEVELOPMENTS


Impact of COVID-19


As the global impact of the novel coronavirus ("COVID-19") continues, VF remains
first and foremost focused on a people-first approach that prioritizes the
health and well-being of its employees, customers, trade partners and consumers
around the world. To help mitigate the spread of COVID-19 and in response to
health advisories and governmental actions and regulations, VF has modified its
business practices including the temporary closing of offices and retail stores,
instituting travel bans and restrictions and implementing health and safety
measures including social distancing and quarantines. VF has also implemented
measures that are designed to ensure the health, safety and well-being of
associates employed in its distribution, fulfillment and manufacturing centers
around the world.
During the first quarter, all 265 VF-operated retail stores reopened in the
Asia-Pacific region and while store traffic improved, it remained down when
compared with the prior year. VF initiated a phased reopening of its retail
stores in Europe and North America during the first quarter in accordance with
guidance from government entities and public health authorities, to allow proper
training and preparation of the retail environment. In Europe, over 90 percent
of the 339 VF-operated retail stores reopened during the first quarter, with
most of the stores that remained closed located in the United Kingdom. In North
America, approximately 75 percent of the 772 VF-operated retail stores reopened
during the first quarter. Subsequent to
quarter-end, over 150 additional stores reopened in North America; however,
approximately 120 stores have temporarily reclosed due to localized resurgence
of COVID-19 outbreaks and resulting health advisories and governmental actions.
VF's wholesale customers in all regions have reopened most of their retail
stores. VF is continuing to monitor the COVID-19 outbreak globally and will
comply with guidance from government entities and public health authorities to
prioritize the health and well-being of its employees, customers, trade partners
and consumers. As COVID-19 uncertainty continues, additional retail store
reclosures may occur.
Consistent with VF's long-term strategy, the Company's digital platform remains
a high priority through which its brands stay connected with consumer
communities while providing experiential content. Many of VF's distribution and
fulfillment facilities have remained operational in support of digital consumer
engagement with its brands and to service retail partners as needed. Prior to
the COVID-19 pandemic, consumer spending had started shifting to brand
e-commerce sites and other digital platforms, which has accelerated due to
changes in the retail landscape resulting from the COVID-19 pandemic.
COVID-19 has also impacted some of VF's suppliers, including third-party
manufacturers, logistics providers and other vendors. At this time, the majority
of VF's supply chain is operational. Suppliers are complying with local health
advisories
                                             VF Corporation Q1 FY21 Form 10-Q 24

--------------------------------------------------------------------------------

  Table     of Contents
and governmental restrictions which can result in product delays; however, VF is
actively working with its suppliers to minimize disruption. VF's distribution
centers are operational in accordance with local government guidelines but are
experiencing intermittent disruptions while maintaining enhanced health and
safety protocols.
In response to COVID-19, various government programs have been announced to
provide financial relief to affected businesses including the Coronavirus Aid,
Relief, and Economic Security Act ("CARES Act"). The CARES Act, among other
things, provides employer payroll tax credits for wages paid to employees unable
to work during the COVID-19 pandemic and options to defer payroll tax payments.
Other foreign government programs available to VF also provide certain payroll
tax credits and wage subsidies. During the first quarter of Fiscal 2021, the
Company recognized $50.4 million as a result of relief from the CARES Act and
other governmental packages, which were recorded as a
reduction in selling, general and administrative expenses. The Company also
intends to defer qualified payroll and other tax payments as permitted by the
CARES Act.
The COVID-19 pandemic is ongoing and dynamic in nature, and has driven global
uncertainty and disruption. As a result, COVID-19 had a significant negative
impact on the Company's business, including the consolidated financial
condition, results of operations and cash flows during the first quarter of
Fiscal 2021. While we are not able to determine the ultimate length and severity
of the COVID-19 pandemic, we expect ongoing disruption to our business
operations including retail store closures, both VF-operated and our customers,
a reduction in traffic once stores reopen and a highly promotional marketplace,
which will continue to have a significant negative impact on our Fiscal 2021
financial performance, including an expected decrease in revenues of less than
25 percent in the second quarter compared to the same period in the prior year.
Enterprise Protection Strategy


VF has taken a number of actions to advance its Enterprise Protection Strategy
in response to the COVID-19 pandemic.
On April 23, 2020, VF closed its sale of senior unsecured notes, which provided
net proceeds to the Company of approximately $2.98 billion. A portion of the net
proceeds was used to repay borrowings under the Company's senior unsecured
revolving credit facility (the "Global Credit Facility") and the remaining net
proceeds will be used for general corporate purposes. At June 2020, VF had
approximately $2.8 billion of cash and equivalents and short-term investments
and approximately $2.2 billion available for borrowing against the Global Credit
Facility, subject to certain restrictions including a $750.0 million minimum
liquidity requirement.
Other actions VF has taken to support its business in response to the COVID-19
pandemic include the Company's decision to temporarily pause its share
repurchase program. The Company currently has $2.8 billion remaining under its
current share repurchase authorization. The Company paid a cash dividend of
$0.48 per share during the three months ended June 2020 and has declared a cash
dividend of $0.48 per share that is payable in the second quarter of Fiscal
2021. Subject to approval by its Board of Directors, VF intends to continue to
pay its regularly scheduled dividend and is not contemplating the suspension of
its dividend at this time. VF's planned divestiture of the Occupational Workwear
business would provide an additional source of cash.
Other actions taken by VF also included a four-month reduction of CEO Steve
Rendle's base salary by 50 percent and the base salaries of VF's Executive
Leadership Team by 25 percent. In addition, VF's Board of Directors elected to
temporarily forgo their cash retainer for the same period.
VF has implemented cost controls to reduce discretionary spending to help
mitigate the loss of sales and to conserve cash while continuing to support
employees. VF continues to assess its forward inventory purchase commitments to
ensure proper matching of supply and demand, which we expect will result in an
overall reduction in future commitments from comparable periods in the prior
year. As VF continues to actively monitor the situation, we may take further
actions that affect our operations.
We believe the Company has sufficient liquidity and flexibility to operate
during the disruptions caused by the COVID-19 pandemic and related governmental
actions and regulations and health authority advisories and meet its obligations
as they become due. However, due to the uncertainty of the duration and severity
of the COVID-19 pandemic, governmental actions in response to the pandemic, and
the impact on us and our consumers, customers and suppliers, there is no
certainty that the measures we take will be sufficient to mitigate the risks
posed by COVID-19. See Part II, "Item 1A. Risk Factors." below for additional
discussion.
                HIGHLIGHTS OF THE FIRST QUARTER OF FISCAL 2021


•Revenues were down 48% to $1.1 billion compared to the three months ended June 2019, primarily due to the negative impact of COVID-19 and a 1% unfavorable impact from foreign currency. •Active segment revenues decreased 54% to $571.3 million compared to the three months ended June 2019, including a 1% unfavorable impact from foreign currency. •Outdoor segment revenues decreased 44% to $341.2 million compared to the three months ended June 2019, including a 1% unfavorable impact from foreign currency.


•Direct-to-consumer revenues were down 37% over the 2019 period. E-commerce
revenues increased 78% in the current period, including a 3% unfavorable impact
from foreign currency. Direct-to-consumer revenues accounted for 51% of net
revenues for the three months ended June 2020.
•International revenues decreased 39% compared to the three months ended June
2019, including a 2% unfavorable impact from foreign currency. Greater China
revenues were flat in the current period, including a 3% unfavorable impact from
foreign currency. International revenues represented 51% of net revenues in the
current period.
25 VF Corporation Q1 FY21 Form 10-Q
--------------------------------------------------------------------------------

Table of Contents •Gross margin decreased 340 basis points to 52.9% compared to the three months ended June 2019, primarily driven by elevated promotional activity to clear excess inventory, partially offset by favorable mix shift toward higher margin businesses and channels.

•Earnings (loss) per share was $(0.71) compared to $0.16 in the 2019 period. The decrease was driven by the negative impact of COVID-19, costs related to specified strategic business decisions and the unfavorable impacts from foreign currency.

© Edgar Online, source Glimpses


share with twitter share with LinkedIn share with facebook
All news about VF CORPORATION
10/28VF : V F CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RE..
AQ
10/26VANS : Checkerboard Day Champions Creative Self-Expression As An Outlet For Ment..
PR
10/22Adidas plans to sell Reebok within months
RE
10/22Adidas plans to sell ailing Reebok business within months - manager magazin
RE
10/19VF : Reports Second Quarter Fiscal 2021 Results
AQ
10/19VF : Named One of America's Most JUST Companies by Forbes and JUST Capital
AQ
10/16V.F. : Fiscal 2Q Earnings Snapshot
AQ
10/16V F CORP : Results of Operations and Financial Condition, Financial Statements a..
AQ
10/16VF : Reports Second Quarter Fiscal 2021 Results
BU
10/14VF CORPORATION : Named One of America's Most JUST Companies by Forbes and JUST C..
BU
More news