VF Corporation Reports Fourth Quarter Revenue & Earnings, Exceeds FY24 Cash Flow Expectations
VF Corporation (NYSE: VFC) has reported financial results for its fourth quarter (Q4'FY24) and fiscal year ended March 30, 2024 (FY24).
Bracken Darrell, President and CEO, said:
"In Q4, we made progress advancing our Reinvent transformation program. We closed the fiscal year with further inventory reductions helping us deliver $1 billion in operating cash flow and over $800 million in free cash flow, exceeding our guidance. As we move into fiscal year 2025, we will continue to execute our broader turnaround plans, including driving continued momentum on our key priorities, namely fixing the Americas, turning around Vans®, reducing costs and paying down debt, while progressing on the actions resulting from our strategic portfolio review. We have been rebuilding the leadership team, including the announcement of the CFO appointment, and I feel energized that we are positioning VF to return to sustainable and profitable growth."
Q4’FY24 Financial Review
- Revenue $2.4 billion, down 13%
- The North Face® down 5%, brand DTC up 6% (up 7% in constant dollars), with ongoing US wholesale weakness
- Vans® down 26% (down 27% in constant dollars), largely consistent with the prior quarter and includes the additional impact from deliberate actions to further right-size inventories in the wholesale channel
- Reported and adjusted gross margin 48.4%, down 120 basis points
- Adjusted gross margin benefits of 180 basis points from favorable mix were more than offset by 300 basis points of unfavorable rate, largely from the impact of reset actions and ongoing promotional activity as well as negative transactional foreign currency impacts
- Operating margin (15.0)%, down 910 basis points; adjusted operating margin (2.1)%, down 770 basis points
- Adjusted operating margin reflects 650 basis points of deleverage and 120 basis points of unfavorable adjusted gross margin
- Generated gross cost savings through Reinvent of approximately $40 million and incurred approximately $55 million of related charges in Q4'FY24
- Earnings (loss) per share (EPS) $(1.08) vs. Q4'FY23 $(0.55); Adjusted EPS $(0.32) vs. Q4'FY23 $0.17
FY24 Financial Review
- Revenue $10.5 billion, down 10% (down 11% in constant dollars)
- Gross margin 52.0%, down 50 basis points; adjusted gross margin 52.1%, down 50 basis points
- Adjusted gross margin benefits of 90 basis points from favorable mix were more than offset by 140 basis points of unfavorable rate, which included 100 basis points of negative transactional foreign currency impacts
- Operating margin (0.3)%, down 310 basis points; adjusted operating margin 5.6%, down 420 basis points
- Adjusted operating margin reflects 370 basis points of deleverage and 50 basis points of unfavorable adjusted gross margin
- Generated gross cost savings through Reinvent of approximately $80 million and incurred approximately $105 million of related charges in FY24
- Earnings (loss) per share (EPS) $(2.49) vs. FY23 $0.31; Adjusted EPS $0.74 vs. FY23 $2.10
Balance Sheet and Cash Flow Review
- Inventories decreased by $382 million during Q4'FY24, down 23% versus the prior year
- Generated operating cash flow of $1.015 billion for the fiscal year, with free cash flow of $804 million
- Net debt at the end of Q4'FY24 was $5.3 billion, down by approximately $540 million relative to last year
FY25 Outlook
- Free cash flow plus the benefit of non-core asset sales is expected to generate approximately $600 million
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Summary Revenue Information (Unaudited) |
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Three Months Ended March |
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Twelve Months Ended March |
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(Dollars in millions) |
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2024 |
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2023 |
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% Change |
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% Change (constant currency) |
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2024 |
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2023 |
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% Change |
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% Change (constant currency) |
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Brand: |
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The North Face® |
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$ |
814.3 |
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$ |
859.5 |
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(5 |
)% |
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(5 |
)% |
|
$ |
3,673.3 |
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$ |
3,612.7 |
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2 |
% |
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1 |
% |
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Vans® |
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|
631.2 |
|
|
857.0 |
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(26 |
)% |
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(27 |
)% |
|
|
2,785.7 |
|
|
3,682.9 |
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(24 |
)% |
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(25 |
)% |
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Timberland® |
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|
341.5 |
|
|
395.6 |
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(14 |
)% |
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(14 |
)% |
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|
1,556.9 |
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|
1,784.7 |
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(13 |
)% |
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(14 |
)% |
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Dickies® |
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|
162.4 |
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191.5 |
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(15 |
)% |
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(15 |
)% |
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|
618.4 |
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|
725.2 |
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(15 |
)% |
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(15 |
)% |
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Other Brands |
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|
424.4 |
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436.0 |
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(3 |
)% |
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(2 |
)% |
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|
1,820.3 |
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|
1,807.0 |
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1 |
% |
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0 |
% |
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VF Revenue |
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$ |
2,373.8 |
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$ |
2,739.6 |
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(13 |
)% |
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(13 |
)% |
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$ |
10,454.7 |
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$ |
11,612.5 |
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(10 |
)% |
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(11 |
)% |
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|
|
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Region: |
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Americas |
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$ |
1,126.2 |
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$ |
1,449.6 |
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(22 |
)% |
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(23 |
)% |
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$ |
5,464.9 |
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$ |
6,682.7 |
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(18 |
)% |
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(19 |
)% |
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EMEA |
|
|
869.9 |
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|
901.3 |
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(3 |
)% |
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(5 |
)% |
|
|
3,428.6 |
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|
3,411.7 |
|
0 |
% |
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(4 |
)% |
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APAC |
|
|
377.7 |
|
|
388.7 |
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(3 |
)% |
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2 |
% |
|
|
1,561.2 |
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|
1,518.1 |
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3 |
% |
|
7 |
% |
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VF Revenue |
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$ |
2,373.8 |
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$ |
2,739.6 |
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(13 |
)% |
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(13 |
)% |
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$ |
10,454.7 |
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$ |
11,612.5 |
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(10 |
)% |
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(11 |
)% |
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International |
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|
1,382.0 |
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|
1,436.4 |
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(4 |
)% |
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(4 |
)% |
|
|
5,611.6 |
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|
5,569.1 |
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1 |
% |
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(1 |
)% |
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Channel: |
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DTC |
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$ |
1,093.8 |
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$ |
1,148.8 |
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(5 |
)% |
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(4 |
)% |
|
$ |
4,965.1 |
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$ |
5,231.4 |
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(5 |
)% |
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(6 |
)% |
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Wholesale (a) |
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|
1,280.1 |
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|
1,590.8 |
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(20 |
)% |
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(20 |
)% |
|
|
5,489.5 |
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|
6,381.1 |
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(14 |
)% |
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(15 |
)% |
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VF Revenue |
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$ |
2,373.8 |
|
$ |
2,739.6 |
|
(13 |
)% |
|
(13 |
)% |
|
$ |
10,454.7 |
|
$ |
11,612.5 |
|
(10 |
)% |
|
(11 |
)% |
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All references to periods ended March 2024 relate to the 13-week and 52-week fiscal periods ended March 30, 2024 and all references to periods ended March 2023 relate to the 13-week and 52-week fiscal periods ended April 1, 2023. |
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Note: Amounts may not sum due to rounding |
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(a) Royalty revenues are included in the wholesale channel for all periods. |
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Shareholder Returns
- Returns of $35 million and $303 million to shareholders through cash dividends in Q4'FY24 and full year FY24, respectively.
- VF’s Board of Directors declared a quarterly dividend of $0.09 per share. This dividend will be payable on June 20, 2024, to shareholders of record at the close of business on June 10, 2024. Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.
