What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-03 · 300 added, 175 removed, 609 unchanged (44% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

(In thousands, except share amounts) June 2023 March 2023 June 2022

(In thousands, except share amounts) September 2023 March 2023 September 2022

Current assets

2 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of:

June 2023 - $ 33,076 ;

September 2023 - $ 28,080 ;

March 2023 - $ 28,075 ;

June 2022 - $ 29,780

September 2022 - $ 27,515

1,889,804 1,610,295 1,834,598

34 unchanged sentences

shares authorized, 25,000,000 ;

no shares outstanding at June 2023, March 2023 or June 2022

no shares outstanding at September 2023, March 2023 or September 2022

Common Stock, stated value $ 0.25 ;

shares authorized, 1,200,000,000 ;

shares outstanding at June 2023 - 388,836,545 ;

shares outstanding at September 2023 - 388,883,825 ;

March 2023 - 388,665,531 ;

June 2022 - 388,490,713

September 2022 - 388,569,062

97,221 97,166 97,142

11 unchanged sentences

Consolidated Statements of Operations

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands, except per share amounts) 2023 2022 2023 2022

5 unchanged sentences

1,192,284 1,251,320 2,302,343 2,406,571

Impairment of goodwill and intangible assets

— 421,922 — 421,922

Total costs and operating expenses

3 unchanged sentences

Interest income

4,808 823 10,302 2,106

Interest expense

2 unchanged sentences

( 3,510 ) ( 9,280 ) ( 7,077 ) ( 103,994 )

Loss before income taxes

Income (loss) before income taxes

303,773 ( 134,002 ) 241,495 ( 196,616 )

Income tax benefit

Income tax expense (benefit)

754,470 ( 15,570 ) 749,617 ( 22,224 )

10 unchanged sentences

Consolidated Statements of Comprehensive Loss

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

2 unchanged sentences

Foreign currency translation and other

Losses arising during the period

Gains (losses) arising during the period

17,094 ( 21,894 ) 564 ( 73,418 )

5 unchanged sentences

Amortization of net deferred actuarial losses

4,170 3,953 8,402 7,674

Amortization of deferred prior service credits

1 unchanged sentence

Reclassification of net actuarial loss from settlement charges

7 1,141 3,299 92,902

Income tax effect

1 unchanged sentence

Derivative financial instruments

Gains (losses) arising during the period

Gains arising during the period

59,895 102,685 37,155 202,115

4 unchanged sentences

Income tax effect

Other comprehensive income (loss)

1,735 2,374 3,674 3,647

Other comprehensive income

41,824 30,711 7,813 82,414

Comprehensive loss

4 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended June

Six Months Ended September

(In thousands) 2023 2022

1 unchanged sentence

$ ( 508,122 ) $ ( 174,392 )

Adjustments to reconcile net loss to cash provided (used) by operating activities:

Adjustments to reconcile net loss to cash used by operating activities:

Impairment of goodwill and intangible assets

Depreciation and amortization

7 unchanged sentences

( 10,151 ) 85,779

Deferred income taxes

( 256,048 ) ( 40,396 )

Write-off of income tax receivables and interest

Changes in operating assets and liabilities:

11 unchanged sentences

( 14,582 ) 52,123

Cash provided (used) by operating activities

Cash used by operating activities

( 19,261 ) ( 913,957 )

14 unchanged sentences

Payment of debt issuance costs

( 576 ) ( 807 )

Cash dividends paid

2 unchanged sentences

( 2,392 ) ( 1,931 )

Cash used by financing activities

Cash provided (used) by financing activities

( 125,901 ) 408,764

16 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended June 2023

Three Months Ended September 2023

Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit)

(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

Balance, June 2023 388,836,545 $ 97,209 $ 3,733,777 $ ( 1,053,529 ) $ ( 60,694 ) $ 2,716,763

— — — — ( 450,697 ) ( 450,697 )

9 unchanged sentences

— — — 41,540 — 41,540

Balance, September 2023 388,883,825 $ 97,221 $ 3,638,029 $ ( 1,011,705 ) $ ( 513,500 ) $ 2,210,045

Three Months Ended September 2022

Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit)

(In thousands, except share amounts) Shares Amounts Total

Balance, June 2022 388,490,713 $ 97,123 $ 3,941,440 $ ( 874,876 ) $ 188,806 $ 3,352,493

Three Months Ended June 2022

— — — — ( 118,432 ) ( 118,432 )

Dividends on Common Stock ($ 0.50 per share)

— — ( 5,343 ) — ( 188,806 ) ( 194,149 )

Stock-based compensation, net

78,349 19 16,689 — ( 1,695 ) 15,013

Foreign currency translation and other

— — — ( 50,680 ) — ( 50,680 )

Defined benefit pension plans

— — — 7,594 — 7,594

Derivative financial instruments

— — — 73,797 — 73,797

Balance, September 2022 388,569,062 $ 97,142 $ 3,952,786 $ ( 844,165 ) $ ( 120,127 ) $ 3,085,636

Continued on next page.

See notes to consolidated financial statements.

7 VF Corporation Q2 FY24 Form 10-Q

VF CORPORATION

Consolidated Statements of Stockholders’ Equity

Six Months Ended September 2023

Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit)

12 unchanged sentences

— — — 14,197 — 14,197

Balance, June 2022 388,490,713 $ 97,123 $ 3,941,440 $ ( 874,876 ) $ 188,806 $ 3,352,493

Balance, September 2023 388,883,825 $ 97,221 $ 3,638,029 $ ( 1,011,705 ) $ ( 513,500 ) $ 2,210,045

Six Months Ended September 2022

Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit)

(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

— — — — ( 174,392 ) ( 174,392 )

Dividends on Common Stock ($ 1.00 per share)

— — ( 5,343 ) — ( 382,941 ) ( 388,284 )

Stock-based compensation, net

270,687 67 41,745 — ( 6,269 ) 35,543

Foreign currency translation and other

— — — ( 132,214 ) — ( 132,214 )

Defined benefit pension plans

— — — 63,745 — 63,745

Derivative financial instruments

— — — 150,883 — 150,883

Balance, September 2022 388,569,062 $ 97,142 $ 3,952,786 $ ( 844,165 ) $ ( 120,127 ) $ 3,085,636

See notes to consolidated financial statements.

10 unchanged sentences

NOTE 7 Leases

NOTE 8 Short-term Borrowings and Long-term Debt

NOTE 9 Supply Chain Financing Program

8 unchanged sentences

NOTE 18 Restructuring

NOTE 18 Contingencies

NOTE 19 Subsequent Event

3 unchanged sentences

The Company's current fiscal year runs from April 2, 2023 through March 30, 2024 ("Fiscal 2024").

Accordingly, this Form 10-Q presents our first quarter of Fiscal 2024.

For presentation purposes herein, all references to periods ended June 2023 and June 2022 relate to the fiscal periods ended on July 1, 2023 and July 2, 2022, respectively.

Accordingly, this Form 10-Q presents our second quarter of Fiscal 2024.

For presentation purposes herein, all references to periods ended September 2023 and September 2022 relate to the fiscal periods ended on September 30, 2023 and October 1, 2022, respectively.

References to March 2023 relate to information as of April 1, 2023.

3 unchanged sentences

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented.

Operating results for the three months ended June 2023 are not necessarily indicative of results that may be

expected for any other interim period or for Fiscal 2024.

Operating results for the three and six months ended September 2023 are not necessarily indicative of results that

may be expected for any other interim period or for Fiscal 2024.

For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended April 1, 2023 (“Fiscal 2023 Form 10-K”).

1 unchanged sentence

There is ongoing uncertainty around the global economy and macroeconomic environment, which we expect to continue and cause disruption and near-term challenges for our business.

Macroeconomic conditions include inflationary pressures, higher interest rates and weakening consumer sentiment.

These conditions have led to elevated inventories in certain markets and an increased promotional environment, and increased borrowing costs.

Macroeconomic conditions include inflationary pressures, higher interest rates and weakened consumer sentiment.

These conditions have led to elevated inventories in certain markets, a volatile promotional environment, and increased borrowing costs.

VF has considered the impact of these developments on the estimates and assumptions used when preparing the interim consolidated financial statements and accompanying notes.

28 unchanged sentences

The following table provides information about contract assets and contract liabilities:

(In thousands) June 2023 March 2023 June 2022

(In thousands) September 2023 March 2023 September 2022

Contract assets (a)

4 unchanged sentences

(b) Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets.

For the three months ended June 2023, the Company recognized $ 68.2 million of revenue that was included in the contract liability balance during the period, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers.

For the three and six months ended September 2023, the Company recognized $ 59.0 million and $ 127.2 million, respectively, of revenue that was included in the contract liability balance during the periods, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers.

The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

Performance Obligations

As of June 2023, the Company expects to recognize $ 63.6 million of fixed consideration related to the future mini mum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the contractual terms through March 2031.

The variable consideration related to

licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption.

As of September 2023, the Company expects to recognize $ 57.4 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the

contractual terms through March 2031.

The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption.

VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.

As of June 2023, there were no arrang ements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

For the three months ended June 2023, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

As of September 2023, there were no arrang ements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

For the three and six months ended September 2023, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

Disaggregation of Revenues

The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors.

Three Months Ended June 2023

Three Months Ended September 2023

(In thousands) Outdoor Active Work Other Total

10 unchanged sentences

11 VF Corporation Q2 FY24 Form 10-Q

Three Months Ended June 2022

Three Months Ended September 2022

(In thousands) Outdoor Active Work Other Total

9 unchanged sentences

Total $ 1,555,328 $ 1,260,110 $ 265,162 $ — $ 3,080,600

Six Months Ended September 2023

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 1,765,474 $ 899,268 $ 338,789 $ — $ 3,003,531

Direct-to-consumer 769,404 1,236,166 79,611 — 2,085,181

Royalty 8,498 12,862 10,503 — 31,863

Total $ 2,543,376 $ 2,148,296 $ 428,903 $ — $ 5,120,575

Geographic revenues

Americas $ 1,200,154 $ 1,211,731 $ 340,439 $ — $ 2,752,324

Europe 945,427 648,011 52,947 — 1,646,385

Asia-Pacific 397,795 288,554 35,517 — 721,866

Total $ 2,543,376 $ 2,148,296 $ 428,903 $ — $ 5,120,575

Six Months Ended September 2022

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 1,629,452 $ 1,123,191 $ 410,016 $ 148 $ 3,162,807

Direct-to-consumer 687,009 1,376,703 81,501 — 2,145,213

Royalty 7,491 14,161 12,523 — 34,175

Total $ 2,323,952 $ 2,514,055 $ 504,040 $ 148 $ 5,342,195

Geographic revenues

Americas $ 1,215,271 $ 1,515,611 $ 408,157 $ 148 $ 3,139,187

Europe 803,613 681,926 41,503 — 1,527,042

Asia-Pacific 305,068 316,518 54,380 — 675,966

Total $ 2,323,952 $ 2,514,055 $ 504,040 $ 148 $ 5,342,195

NOTE 4 — INVENTORIES

(In thousands) June 2023 March 2023 June 2022

(In thousands) September 2023 March 2023 September 2022

Finished products $ 2,427,948 $ 2,240,215 $ 2,689,412

2 unchanged sentences

Total inventories $ 2,481,051 $ 2,292,790 $ 2,749,894

VF Corporation Q2 FY24 Form 10-Q 12

NOTE 5 — INTANGIBLE ASSETS

June 2023 March 2023

September 2023 March 2023

(In thousands) Weighted

7 unchanged sentences

Intangible assets, net $ 2,630,795 $ 2,642,821

Amortization expense for the three months ended June 2023 was $ 3.5 million.

Amortization expense for the three and six months ended September 2023 was $ 3.4 million and $ 6.9 million, respectively.

Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2024 is $ 13.6 million, $ 13.0 million, $ 12.1 million, $ 11.6 million and $ 10.7 million, respectively.

4 unchanged sentences

Currency translation ( 4,197 ) ( 12,361 ) ( 635 ) ( 17,193 )

Balance, June 2023 $ 652,569 $ 1,207,971 $ 113,075 $ 1,973,615

Balance, September 2023 $ 649,590 $ 1,198,883 $ 112,747 $ 1,961,220

Accum ulated impairm ent charges were $ 323.2 million for the Outdoor segment and $ 394.1 million for the Active segment as of the dates presented above.

No impairment charges were recorded during the three months ended June 2023.

11 VF Corporation Q1 FY24 Form 10-Q

No impairment charges were recorded during the six months ended September 2023.

NOTE 7 — LEASES

3 unchanged sentences

Components of lease cost were as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

2 unchanged sentences

Total lease cost $ 142,941 $ 135,438 $ 284,391 $ 270,308

During the three months ended June 2023 and 2022, the Company paid $ 114.2 million and $ 102.3 million for operating leases, respectively.

During the three months ended June 2023 and 2022, the Company obtained $ 71.8 million and $ 105.9 million of right-of-use assets in exchange for lease liabilities, respectively.

During the six months ended September 2023 and 2022, the Company paid $ 217.6 million and $ 204.5 million for operating leases, respectively.

During the six months ended September 2023 and 2022, the Company obtained $ 140.0 million and $ 215.1 million of right-of-use assets in exchange for lease liabilities, respectively.

NOTE 8 — SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Euro Commercial Paper Program

During the three months ended September 2023, VF commenced a euro commercial paper program, which in addition to the existing U.S.

commercial paper program, is supported by VF's $ 2.25 billion Global Credit Facility.

Commercial paper borrowings under this new program were € 218.0 million ($ 230.6 million) as of September 2023 and had a weighted average interest rate of 4.09 %.

The Company has designated the euro commercial paper borrowings as a net investment hedge of VF's investment in certain foreign operations.

Refer to Note 17 for additional information.

There were also $ 778.0 million and $ 1.7 billion in U.S.

commercial paper borrowings as of September 2023 and September 2022, respectively.

Senior Notes Maturity

On September 18, 2023, VF repaid € 850.0 million ( $ 907.1 million) in aggregate principal amount of its outstanding 0.625 % Senior Notes due in September 2023, in accordance with the terms of the notes.

13 VF Corporation Q2 FY24 Form 10-Q

NOTE 9 — SUPPLY CHAIN FINANCING PROGRAM

5 unchanged sentences

All amounts due to suppliers that are eligible to participate in the SCF program are included in the accounts payable line item in VF's Consolidated Balance Sheets and VF payments made under the SCF program are reflected in cash flows from operating activities in VF's Consolidated Statements of Cash Flows.

At June 2023, March 2023 and June 2022, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $ 931.0 million, $ 510.9 million and $ 506.5 million, respectively, due to suppliers that are eligible to participate in the SCF program.

At September 2023, March 2023 and September 2022, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $ 688.0 million, $ 510.9 million and $ 626.1 million, respectively, due to suppliers that are eligible to participate in the SCF program.

NOTE 10 — PENSION PLANS

The components of pension cost for VF’s defined benefit plans were as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

8 unchanged sentences

VF has reported the service cost component of net periodic pension cost in operating income (loss) and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed $ 16.2 million to its defined benefit plans during the three months ended June 2023, and intends to make approximately $ 13.5 million of contributions during the remainder of Fiscal 2024.

VF recorded a $ 3.3 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the three months ended June 2023.

The settlement charge related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan.

Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate.

The discount rate used to determine the supplemental defined benefit pension obligation as of June 2023 was 5.44 %

Additionally, during the three months ended June 2022, VF entered into an agreement with The Prudential Insurance

VF Corporation Q1 FY24 Form 10-Q 12

Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $ 330.0 million of the U.S.

VF contributed $ 17.8 million to its defined benefit plans during the six months ended September 2023, and intends to make approximately $ 12.1 million of contributions during the remainder of Fiscal 2024.

VF recorded $ 3.3 million in settlement charges in the other income (expense), net line item in the Consolidated Statement of Operations for the six months ended September 2023, as well as $ 1.1 million for both the three and six months ended September 2022.

The settlement charges related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan.

Actuarial assumptions used in the interim valuations were reviewed and revised as appropriate.

The discount rate used to

determine the supplemental defined benefit pension obligation as of September 2023 and June 2023 was 6.10 % and 5.44 %, respectively.

Additionally, in the first quarter of Fiscal 2023, VF entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $ 330.0 million of the U.S.

qualified defined benefit pension plan obligations.

The transaction closed on June 30, 2022 and was funded entirely by existing assets of the plan.

Under the group annuity contract, Prudential assumed responsibility for benefit payments and annuity administration for approximately 17,700 retirees and

beneficiaries.

Under the group annuity contract, Prudential assumed responsibility for benefit payments and annuity administration for approximately 17,700 retirees and beneficiaries.

The transaction did not change the amount or timing of monthly retirement benefit payments.

VF recorded a $ 91.8 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the three months ended June 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive loss (“OCL”).

VF recorded a $ 91.8 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the six months ended September 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive loss (“OCL”).

NOTE 11 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

During the three months ended June 2023, the Company did no t purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors.

During the six months ended September 2023, the Company did no t purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors.

These are treated as treasury stock transactions when shares are repurchased.

VF Corporation Q2 FY24 Form 10-Q 14

Common Stock outstanding is net of shares held in treasury which are, in substance, retired.

There were no shares held in treasury at the end of June 2023, March 2023 or June 2022.

There were no shares held in treasury at the end of September 2023, March 2023 or September 2022.

The excess of the cost of treasury shares acquired over the $ 0.25 per share stated value of Common Stock is deducted from retained earnings.

Accumulated Other Comprehensive Loss

Comprehensive loss consists of net loss and specified components of OCL, which relate to changes in assets and liabilities that are not included in net loss under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet.

Comprehensive loss consists of net loss and specified components of other comprehensive income (loss), which relate to changes in assets and liabilities that are not included in net loss under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet.

VF’s comprehensive loss is presented in the Consolidated Statements of Comprehensive Loss.

The deferred components of OCL are reported, net of related income taxes, in accumulated OCL in stockholders’ equity, as follows:

(In thousands) June 2023 March 2023 June 2022

The deferred components of other comprehensive income (loss) are reported, net of related income taxes, in accumulated OCL in stockholders’ equity, as follows:

(In thousands) September 2023 March 2023 September 2022

Foreign currency translation and other $ ( 878,089 ) $ ( 859,651 ) $ ( 883,846 )

3 unchanged sentences

The changes in accumulated OCL, net of related taxes, were as follows:

Three Months Ended June 2023

Three Months Ended September 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 )

Balance, June 2023 $ ( 872,800 ) $ ( 161,211 ) $ ( 19,518 ) $ ( 1,053,529 )

Other comprehensive income (loss) before reclassifications

4 unchanged sentences

( 5,289 ) 5,573 41,540 41,824

Balance, June 2023 $ ( 872,800 ) $ ( 161,211 ) $ ( 19,518 ) $ ( 1,053,529 )

Three Months Ended June 2022

Balance, September 2023 $ ( 878,089 ) $ ( 155,638 ) $ 22,022 $ ( 1,011,705 )

Three Months Ended September 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 )

Balance, June 2022 $ ( 833,166 ) $ ( 174,139 ) $ 132,429 $ ( 874,876 )

Other comprehensive income (loss) before reclassifications

4 unchanged sentences

( 50,680 ) 7,594 73,797 30,711

Balance, June 2022 $ ( 833,166 ) $ ( 174,139 ) $ 132,429 $ ( 874,876 )

Balance, September 2022 $ ( 883,846 ) $ ( 166,545 ) $ 206,226 $ ( 844,165 )

Six Months Ended September 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 ( 18,438 ) 3,764 31,441 16,767

Amounts reclassified from accumulated other comprehensive loss — 8,290 ( 17,244 ) ( 8,954 )

Net other comprehensive income (loss) ( 18,438 ) 12,054 14,197 7,813

Balance, September 2023 $ ( 878,089 ) $ ( 155,638 ) $ 22,022 $ ( 1,011,705 )

15 VF Corporation Q2 FY24 Form 10-Q

Six Months Ended September 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 ( 132,214 ) ( 10,376 ) 170,384 27,794

Amounts reclassified from accumulated other comprehensive loss — 74,121 ( 19,501 ) 54,620

Net other comprehensive income (loss) ( 132,214 ) 63,745 150,883 82,414

Balance, September 2022 $ ( 883,846 ) $ ( 166,545 ) $ 206,226 $ ( 844,165 )

Reclassifications out of accumulated OCL were as follows:

(In thousands) Three Months Ended June

(In thousands) Three Months Ended September Six Months Ended September

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:

8 unchanged sentences

1,143 1,497 3,139 26,232

( 2,897 ) ( 3,486 ) ( 8,290 ) ( 74,121 )

Gains (losses) on derivative financial instruments:

11 unchanged sentences

10,238 14,906 20,918 23,148

( 1,735 ) ( 2,374 ) ( 3,674 ) ( 3,647 )

8,503 12,532 17,244 19,501

Total reclassifications for the period, net of tax $ 5,606 $ 9,046 $ 8,954 $ ( 54,620 )

1 unchanged sentence

Incentive Equity Awards Granted

During the three months ended June 2023, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 4,566,907 shares of its Common Stock at an exercise price of $ 17.95 per share.

During the six months ended September 2023, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 5,671,370 shares of its Common Stock at a weighted average exercise price of $ 18.24 per share.

The exercise price of each option granted was equal to the fair market value of VF Common Stock on the date of grant.

Employee stock options vest and become exercisable in equal annual installments over three years .

Stock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant.

Employee stock options typically vest and become exercisable in equal annual installments over three years .

St ock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant.

All options have ten-year terms.

VF Corporation Q2 FY24 Form 10-Q 16

The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:

Three Months Ended June 2023

Six Months Ended September 2023

Expected volatility 33 % to 52 %

4 unchanged sentences

Weighted average fair value at date of grant $ 5.74

During the three months ended June 2023, VF granted 426,885 performance-based restricted stock units ("RSUs") to executives that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle.

The fair market value of VF Common Stock at the date the units were granted was $ 17.95 per share.

During the six months ended September 2023, VF granted 677,582 performance-based restricted stock units ("RSUs") to executives that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle.

The weighted average fair market value of VF Common Stock at the dates the units were granted was $ 18.49 per share.

Each performance-based RSU has a potential final payout ranging from zero to two and one-quarter shares of VF Common Stock.

1 unchanged sentence

Shares will be issued to participants in the year following the conclusion of the three-year performance period.

The financial targets include

50 % weighting based on VF's revenue growth and 50 % weighting based on VF's gross margin performance over the three-year period compared to financial targets.

The financial targets include 50 % weighting based on VF's revenue growth and 50 % weighting based on VF's gross margin performance over the three-year period compared to financial targets.

Furthermore, the actual number of shares earned may be adjusted upward or downward by 25 % of the target award, based on how VF's total shareholder return ("TSR") over the three-year period compares to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index, resulting in a maximum payout of 225 % of the target award.

The grant date fair value of the TSR-based adjustment related to the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $ 0.35 per share.

VF Corporation Q1 FY24 Form 10-Q 14

During the three months ended June 2023, VF granted 45,126 nonperformance-based RSUs to nonemployee members of the Board of Directors.

During the six months ended September 2023, VF granted 48,671 nonperformance-based RSUs to nonemployee members of the Board of Directors.

These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of grant.

The fair market value of VF Common Stock at the date the units were granted was $ 17.95 per share.

In addition, VF granted 2,565,204 nonperformance-based RSUs to employees during the three months ended June 2023.

units generally vest over periods up to four years from the date of grant and each unit entitles the holder to one share of VF Common Stock.

The fair market value of VF Common Stock at the date the units were granted was $ 17.95 per share.

The weighted average fair market value of VF Common Stock at the dates the units were granted was $ 18.06 per share.

In addition, VF granted 2,660,333 nonperformance-based RSUs to employees during the six months ended September 2023.

These units generally vest over periods up to four years from the date of grant and each unit entitles the holder to one share of VF Common Stock.

The weighted average fair market value of VF Common Stock at the dates the units were granted was $ 18.00 per share.

Equity awards granted to Bracken Darrell in connection with his appointment as VF's President and Chief Executive Officer, are included within the grants of stock options, performance-based RSUs and nonperformance-based RSUs during the six months ended September 2023, as discussed above.

These include awards granted as part of Mr.

Darrell's annual long-term incentive opportunity that follow VF's normal vesting provisions, and additional make-whole equity awards that vest 50 % after one year and 50 % after two years following appointment, subject to his continued employment through the applicable vesting dates.

NOTE 13 — INCOME TAXES

The effective income tax rate for the three months ended June 2023 was 7.8 % compared to 10.6 % in the 2022 period.

The three months ended June 2023 included a net discrete tax expense of $ 0.2 million, which included a $ 4.7 million net tax expense related to unrecognized tax benefits and interest, a $ 3.1 million tax expense related to stock compensation and a $ 7.5 million net tax benefit for interest on the income tax receivable related to the Timberland court case.

The effective income tax rate for the six months ended September 2023 was 310.4 % compared to 11.3 % in the 2022 period.

The six months ended September 2023 included a net discrete tax expense of $ 703.3 million, primarily related to the tax effects of decisions in the Timberland tax case and Belgium excess profits ruling, which are discussed further below.

Excluding the $ 703.3 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 19.2 %.

The three months ended June 2022 included a net discrete tax expense of $ 0.8 million, which included a $ 1.6 million net tax expense related to unrecognized tax benefits and interest and a $ 0.8 million net tax benefit related to withholding taxes on prior foreign earnings.

The six months ended September 2022 included a net discrete tax expense of $ 5.1 million, which primarily related to unrecognized tax benefits and interest.

Excluding the $ 5.1 million net discrete tax expense in the 2022 period, the effective income tax rate would have been 13.9 %.

Without discrete items, the effective income tax rate for the three months ended June 2023 decreased by 3.8 % compared with the 2022 period primarily due to disproportionate year-to-date losses in jurisdictions with no tax benefit.

VF files a consolidated U.S.

federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions.

In the U.S., the Internal Revenue Service ("IRS") examinations for tax years throug h 2015 have been effectively settled.

Without discrete items, the effective income tax rate for the six months ended September 2023 increased by 5.3 % compared with the 2022 period primarily due to disproportionate year-to-date losses in jurisdictions with no tax benefit, as well as the jurisdictional mix of earnings.

As previously reported, VF petitioned the U.S.

Tax Court (the “Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011.

While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years.

Both parties moved for summary judgment on the issue.

On January 31, 2022, the Court issued its opinion in favor of the IRS and on July 14, 2022 issued its final decision.

VF believes the opinion of the Court was in error based on the technical merits and filed a notice of appeal on October 7, 2022.

VF continues to believe its timing and treatment of the income inclusion is appropriate and VF is vigorously defending its position.

On October 19, 2022, VF paid $ 875.7 million related to the 2011 taxes and interest being disputed, which was recorded as an income tax receivable and will accrue interest income.

These amounts are included in the other assets line item in VF's Consolidated Balance Sheet at June 2023, based on our

assessment of the position under the more-likely-than-not standard of the accounting literature.

Refer to Note 18 for additional details on this matter.

Tax Court (the “Tax Court”) to resolve an Internal Revenue Service ("IRS") dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011.

While the IRS argued that all such income should have been

immediately included in 2011, VF reported periodic income inclusions in subsequent tax years.

In Fiscal 2023, the Tax Court issued its final decision in favor of the IRS, which was appealed by VF.

On October 19, 2022, VF paid $ 875.7 million related to the 2011 taxes and interest being disputed, which was recorded as an income tax receivable and began to accrue interest income.

These amounts were included in the other assets line item in VF's Consolidated Balance Sheet, based on our assessment of the position under the more-likely-than-not standard of the accounting literature.

On September 8, 2023, the U.S.

Court of Appeals for the First Circuit (“Appeals Court”) upheld the Tax Court’s decision in favor of the IRS.

As a result of the Appeals Court decision, VF determined that its position no longer met the more-likely-than-not threshold, and thus wrote off the related income tax receivable and associated interest and recorded $ 690.0 million of income tax expense in the three months ended September 2023.

This amount includes the reversal of $ 19.6 million of interest income, of which $ 7.5 million was recorded in the first quarter of Fiscal 2024.

This amount reflects the total estimated net impact to VF’s tax expense, which includes the expected reduction in taxes paid on the periodic inclusions that VF has reported, release of related deferred tax liabilities, and consideration of indirect tax effects resulting from

17 VF Corporation Q2 FY24 Form 10-Q

the decision.

The estimated impact is subject to future adjustments based on finalization with tax authorities.

VF was granted a ruling which lowered the effective income tax rate on taxable earnings for years 2010 through 2014 under Belgium’s excess profit tax regime.

During 2015, the European Union Commission ("EU") investigated and announced its decision that these rulings were illegal and ordered the tax benefits to be collected from affected companies, including VF.

Requests for annulment were filed by Belgium and VF Europe BVBA individually.

During 2017 and 2018, VF Europe BVBA was assessed and paid € 35.0 million tax and interest, which was recorded as an income tax receivable and is included in the other current assets line item in VF's Consolidated Balance Sheets, based on the expected success of the requests for annulment.

During 2019, the General Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment.

In September 2021, the General Court's judgment was set aside by the Court of Justice of the EU and the case was sent back to the General Court to determine whether the excess profit tax regime amounted to illegal State aid.

The case remains open and unresolved.

If this matter is adversely resolved, these amounts will not be collected by VF.

During 2017 and 2018, VF Europe BVBA was assessed and paid € 35.0 million in tax and interest, which was recorded as an income tax receivable and was included in the other current assets line item in VF's Consolidated Balance Sheets, based on the expected success of the requests for annulment.

After subsequent annulments and appeals, the General Court confirmed the decision of the EU on September 20, 2023.

As a result, VF wrote off the related income tax receivable and recorded a benefit for the associated foreign tax credit, resulting in $ 26.1 million of net income tax expense in the three months ended September 2023.

VF files a consolidated U.S.

federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions.

In the U.S., the IRS examinations for tax years through 2015 have been effectively settled.

In addition, VF is currently subject to examination by various state and international tax authorities.

2 unchanged sentences

Management believes that some of these audits and negotiations will conclude during the next 12 months.

During the three months ended June 2023, the amount of net unrecognized tax benefits and associated interest increased by $ 7.0 million to $ 304.6 million.

Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $ 301.3 million due to settlement of audits and expiration of statutes of limitations, primarily comprised of tax payments related to intellectual property transfers completed in a prior period.

During the six months ended September 2023, the amount of net unrecognized tax benefits and associated interest increased by $ 5.8 million to $ 303.4 million, which includes a net reduction of $ 183.0 million due to settlement with the tax authorities related to intellectual property transfers completed in a prior period and a net increase of $ 192.5 million due to uncertainty in the application of court decisions upheld upon appeal.

Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $ 28.9 million due to settlement of audits and expiration of statutes of limitations.

The overall decrease of unrecognized tax benefits would reduce income tax expense by $ 25.2 million.

15 VF Corporation Q1 FY24 Form 10-Q

NOTE 14 — REPORTABLE SEGMENT INFORMATION

6 unchanged sentences

Financial information for VF's reportable segments is as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

3 unchanged sentences

Work 238,273 265,162 428,903 504,040

Other — — — 148

Total segment revenues $ 3,034,239 $ 3,080,600 $ 5,120,575 $ 5,342,195

5 unchanged sentences

Total segment profit 439,235 480,037 526,187 681,994

Impairment of goodwill and intangible assets

— ( 421,922 ) — ( 421,922 )

Corporate and other expenses

1 unchanged sentence

Interest expense, net ( 55,644 ) ( 33,903 ) ( 105,363 ) ( 65,165 )

Loss before income taxes

Income (loss) before income taxes

$ 303,773 $ ( 134,002 ) $ 241,495 $ ( 196,616 )

VF Corporation Q2 FY24 Form 10-Q 18

NOTE 15 — NET LOSS PER SHARE

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands, except per share amounts) 2023 2022 2023 2022

14 unchanged sentences

$ ( 1.16 ) $ ( 0.31 ) $ ( 1.31 ) $ ( 0.45 )

In the three-month periods ended June 2023 and June 2022, the dilutive impacts of outstanding stock options and other dilutive securities were excluded from dilutive shares as a result of the Company's net loss for the periods and, as such, their inclusion would have been anti-dilutive.

As a result, a total of 18.6 million and 13.3 million potentially dilutive shares related to stock options and other dilutive securities were excluded from the diluted earnings per share calculations for the three-month periods ended June 2023 and June 2022, respectively.

VF Corporation Q1 FY24 Form 10-Q 16

In the three and six-month periods ended September 2023 and September 2022, the dilutive impacts of outstanding stock options and other dilutive securities were excluded from dilutive shares as a result of the Company's net loss for the periods and, as such, their inclusion would have been anti-dilutive.

As a result, a total of 19.3 million and 19.0 million potentially dilutive

shares related to stock options and other dilutive securities were excluded from the diluted earnings per share calculations for the three and six-month periods ended September 2023, respectively, and 13.0 million and 13.2 million potentially dilutive shares were excluded for the three and six-month periods ended September 2022, respectively.

NOTE 16 — FAIR VALUE MEASUREMENTS

8 unchanged sentences

These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

19 VF Corporation Q2 FY24 Form 10-Q

Recurring Fair Value Measurements

2 unchanged sentences

(In thousands) Level 1 Level 2 Level 3

September 2023

Financial assets:

18 unchanged sentences

Deferred compensation 96,364 — 96,364 —

(a) There were no transfers among the levels within the fair value hierarchy during the three months ended June 2023 or the year ended March 2023.

(a) There were no transfers among the levels within the fair value hierarchy during the six months ended September 2023 or the year ended March 2023.

VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates that approximate fair value based on Level 1 measurements.

The fair value of derivative financial instruments, which consist of foreign exchange forward contracts and interest rate swap contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and interest rate forward curves, and considers the credit risk of the Company and its counterparties.

VF’s deferred compensation assets primarily represent investments held within plan trusts as an

economic hedge of the related deferred compensation liabilities.

VF’s deferred compensation assets primarily represent investments held within plan trusts as an economic hedge of the related deferred compensation liabilities.

These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets.

1 unchanged sentence

All other significant financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value.

These other financial assets and financial liabilities

17 VF Corporation Q1 FY24 Form 10-Q

include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities.

At June 2023 and March 2023, their carrying values approximated fair value.

Additionally, at June 2023 and March 2023, the carrying values of VF’s long-term debt, including the

current portion, were $ 6,651.2 million and $ 6,635.3 million, respectively, compared with fair values of $ 6,170.7 million and $ 6,244.4 million at those respective dates.

These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities.

At September 2023 and March 2023, their carrying values

approximated fair value.

Additionally, at September 2023 and March 2023, the carrying values of VF’s long-term debt, including the current portion, were $ 5,657.7 million and $ 6,635.3 million, respectively, compared with fair values of $ 5,111.0 million and $ 6,244.4 million at those respective dates.

Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

Nonrecurring Fair Value Measurements

During the three months ended September 2023, management determined that the recent downturn in the Dickies historical financial results, combined with a downward revision to the latest Fiscal 2024 forecast, was a triggering event that required management to perform a quantitative impairment analysis of both the Dickies reporting unit goodwill and the Dickies indefinite-lived trademark intangible asset.

Based on the analysis, management concluded both the goodwill and indefinite-lived intangible asset were not impaired.

For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by 8 %.

The estimated fair value of the indefinite-lived trademark intangible asset exceeded its carrying value by a significant amount.

The carrying values of the goodwill and indefinite-lived trademark intangible asset at the September 30, 2023 testing date were $ 61.2 million and $ 290.0 million,

VF Corporation Q2 FY24 Form 10-Q 20

respectively.

The Dickies reporting unit is included in the Work reportable segment.

The fair values of the Dickies reporting unit and indefinite-lived trademark intangible asset were estimated using valuation techniques consistent with those discussed in the Critical Accounting Policies and Estimates section included in Management's Discussion and Analysis in the Fiscal 2023 Form 10-K.

Management's revenue and profitability forecasts used in the Dickies reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors.

Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business.

Key assumptions developed by management and used in the quantitative analysis of the Dickies reporting unit and indefinite-lived trademark intangible asset include:

• Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, with revenue growth and profitability improvement throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business;

• Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled;

• Royalty rates based on market data as well as active license agreements for the brand and similar VF brands;

• Market-based discount rates.

The valuation model used by management in the impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth and improved profitability.

If the brand is unable to achieve the financial projections, an impairment of the reporting unit goodwill or indefinite-lived trademark intangible asset could occur in the future.

Management performed a sensitivity analysis on the impairment model used to test the Dickies reporting unit goodwill.

In doing so, management determined that individual changes of a 30 %

reduction in the annual growth for earnings before interest, tax, depreciation and amortization ("EBITDA"), or a 100 basis point increase in the discount rate used in the discounted cash flow model did not cause the estimated fair value of the reporting unit to decline below its carrying value.

Management made its estimates based on information available as of the date of our assessment, using assumptions we believe market participants would use in performing an independent valuation of the business.

Although management believes the estimates and assumptions used in the impairment testing are reasonable and appropriate, it is possible that VF's assumptions and conclusions regarding impairment or recoverability of the Dickies reporting unit goodwill or indefinite-lived trademark intangible asset could change in future periods.

There can be no assurance the estimates and assumptions, particularly our long-term financial projections, used in our goodwill and indefinite-lived intangible asset impairment testing will prove to be accurate predictions of the future, if, for example, (i) the business does not perform as projected, (ii) overall economic conditions in the remainder of Fiscal 2024 or future years vary from current assumptions (including changes in discount rates and foreign currency exchange rates), (iii) business conditions or strategies change from current assumptions, including loss of major customers or channels, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and EBITDA.

A future impairment charge of the Dickies reporting unit goodwill or indefinite-lived trademark intangible asset could have a material effect on VF's consolidated financial position and results of operations.

The Company owns a broad, diverse portfolio of other brands and businesses for which material amounts of goodwill and intangible assets have been recorded in the Consolidated Balance Sheets.

Management continuously evaluates the current and future performance of VF's brands and businesses, as well as other relevant factors, in assessing the recoverability of these assets.

There can be no assurances that the estimates and assumptions used in our long-term financial projections, among other factors, will prove to be accurate predictions of the future.

As such, a future impairment charge of goodwill or intangible assets could occur, and if so, could have a material effect on VF's consolidated financial position and results of operations.

NOTE 17 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

2 unchanged sentences

Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes.

The notional amounts of all outstanding foreign currency exchange forward contracts were $ 3.5 billion at June 2023, $ 3.4 billion at March 2023 and $ 3.3 billion at June 2022, consisting

primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, Chinese renminbi, South Korean won, Swedish krona, Polish zloty and Japanese yen.

The notional amounts of all outstanding foreign currency exchange forward contracts were $ 3.3 billion at September 2023, $ 3.4 billion at March 2023 and $ 3.0 billion at September

2022, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Chinese renminbi, Mexican peso, South Korean won, Swedish krona, Polish zloty and Japanese yen.

These derivative contracts have maturities up to 20 months.

The notional amounts of VF's outstanding interest rate swap contracts were $ 500.0 million at June 2023 and March 2023.

There were no notional amounts outstanding on interest rate swap contracts at June 2022.

The notional amounts of VF's outstanding interest rate swap contracts were $ 500.0 million at September 2023 and March 2023.

There were no notional amounts outstanding on interest rate swap contracts at September 2022.

21 VF Corporation Q2 FY24 Form 10-Q

The following table presents outstanding derivatives on an individual contract basis:

2 unchanged sentences

with Unrealized Losses

(In thousands) June 2023 March 2023 June 2022 June 2023 March 2023 June 2022

(In thousands) September 2023 March 2023 September 2022 September 2023 March 2023 September 2022

Derivatives Designated as Hedging Instruments:

8 unchanged sentences

If VF were to offset and record the asset and liability balances on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

June 2023 March 2023 June 2022

September 2023 March 2023 September 2022

(In thousands) Derivative

9 unchanged sentences

$ 31,911 $ ( 13,109 ) $ 23,218 $ ( 46,183 ) $ 182,906 $ ( 563 )

VF Corporation Q1 FY24 Form 10-Q 18

Derivatives are classified as current or noncurrent based on maturity dates, as follows:

(In thousands) June 2023 March 2023 June 2022

(In thousands) September 2023 March 2023 September 2022

Derivative Instruments Balance Sheet Location

9 unchanged sentences

The effects of cash flow hedging included in VF’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Loss are summarized as follows:

(In thousands) Gain (Loss) on Derivatives Recognized in OCL

Three Months Ended June

(In thousands) Gain on Derivatives

Recognized in Accumulated OCL

Three Months Ended September

Gain on Derivatives

Recognized in Accumulated OCL

Six Months Ended September

Cash Flow Hedging Relationships 2023 2022 2023 2022

2 unchanged sentences

Total $ 59,895 $ 102,685 $ 37,155 $ 202,115

VF Corporation Q2 FY24 Form 10-Q 22

(In thousands) Gain (Loss) Reclassified from Accumulated OCL into Net Loss

Three Months Ended June

Three Months Ended September

Gain (Loss) Reclassified from Accumulated OCL into Net Loss

Six Months Ended September

Cash Flow Hedging Relationships Location of Gain (Loss) 2023 2022 2023 2022

11 unchanged sentences

In the case of derivative contracts executed on foreign currency exposures that are no longer probable of occurring, VF de-designates these hedges and the fair value changes of these instruments are also recognized directly in earnings.

During the three months ended June 2023, certain derivative contracts were de-designated as hedged forecasted transactions were no longer deemed probable of occurring.

Accordingly, the Company reclassified amounts from accumulated OCL and recognized an $ 8.4 million loss in cost of goods sold.

The changes in fair value of derivative contracts not designated as hedges and recognized as gains or losses in VF's Consolidated Statements of Operations were not material fo r the three months ended June 2023 and June 2022.

During the six months ended September 2023, certain derivative contracts were de-designated as hedged forecasted transactions were no longer deemed probable of occurring.

Accordingly, the Company reclassified amounts from accumulated OCL and recognized an $ 8.1 million loss in cost of goods sold during the six months ended September 2023.

Other Derivative Information

At June 2023, accumulated OCL included $ 13.2 million of pre-tax net deferred losses for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months.

At September 2023, accumulated OCL included $ 4.9 million of pre-tax net deferred losses for foreign currency exchange

contracts that are expected to be reclassified to earnings during the next 12 months.

The amounts ultimately reclassified to earnings will depend on exchange rates in effect when outstanding derivative contracts are settled.

Net Investment Hedge

The Company has designated its euro-denominated fixed-rate notes, which represent € 2.850 billion in aggregate principal, as a net investment hedge of VF’s investment in certain foreign operations.

Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses

19 VF Corporation Q1 FY24 Form 10-Q

of the debt are deferred in the foreign currency translation and other component of accumulated OCL as an offset to the foreign currency translation adjustments on the hedged investments.

During the three-month periods ended June 2023 and June 2022, the Company recognized an after-tax loss of $ 10.4 million and an

after-tax gain of $ 87.7 million, respectively, in OCL related to the net investment hedge transaction.

The Company has designated its euro-denominated fixed-rate notes and euro commercial paper borrowings, which represented € 2.218 billion in aggregate principal as of September 2023, as a net investment hedge of VF’s investment in certain foreign operations.

Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and other component of accumulated OCL as an offset to the foreign currency translation adjustments on the hedged investments.

During the three and six-month periods ended September 2023, the Company recognized an after-tax gain of $ 65.9 million and $ 55.5 million, respectively, in other comprehensive income (loss) related to the net investment hedge transaction and an after-tax gain of $ 84.0 million and $ 171.7 million for the three and six-month periods ended September 2022, respectively.

Any amounts deferred in accumulated OCL will remain until the hedged investment is sold or substantially liquidated.

1 unchanged sentence

The Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits.

During the three months ended June 2023, VF recognized $ 0.7 million of restructuring charges, related to approved initiatives.

All restructuring charges recognized in the three months ended June 2023, were reflected in selling, general and administrative expenses.

The Company has not recognized any significant

incremental costs related to accruals for the year ended March 2023 or prior periods.

Of the $ 30.5 million total restructuring accrual at June 2023, $ 29.2 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

During the three and six months ended September 2023, VF recognized $ 0.4 million and $ 1.1 million, respectively, of restructuring charges, related to approved initiatives.

All restructuring charges recognized in the three and six months ended September 2023 were reflected in selling, general and administrative expenses.

The Company has not recognized any

significant incremental costs related to accruals for the year ended March 2023 or prior periods.

Of the $ 21.5 million total restructuring accrual at September 2023, $ 20.7 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The remaining $ 0.8 million will be paid out beyond the next 12 months and thus is classified within other liabilities.

23 VF Corporation Q2 FY24 Form 10-Q

The components of the restructuring charges are as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

4 unchanged sentences

Restructuring costs by business segment are as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2023 2022 2023 2022

Outdoor $ — $ 496 $ 242 $ 496

Active — 1,478 434 1,478

Corporate and other 435 43,823 454 49,929

Total $ 435 $ 45,806 $ 1,130 $ 51,912

The activity in the restructuring accrual for the three-month period ended June 2023 was as follows:

The activity in the restructuring accrual for the six-month period ended September 2023 was as follows:

(In thousands) Severance Other Total

4 unchanged sentences

Impact of foreign currency ( 52 ) — ( 52 )

Accrual at June 2023 $ 28,520 $ 1,935 $ 30,455

NOTE 18 — CONTINGENCIES

As previously reported, VF petitioned the U.S.

Tax Court (the “Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011.

While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years.

Both parties moved for summary judgment on the issue.

On January 31, 2022, the Court issued its opinion in favor of the IRS and on July 14, 2022 issued its final decision.

VF believes the opinion of the Court was in error based on the

technical merits and filed a notice of appeal on October 7, 2022.

On October 19, 2022, VF paid $ 875.7 million related to the 2011 taxes and interest being disputed, which was recorded as an income tax receivable based on the technical merits of our position with regards to the case and will accrue interest income.

VF continues to believe its timing and treatment of the income inclusion is appropriate and VF is vigorously defending its position.

However, should the Court opinion ultimately be upheld on appeal, this income tax receivable will not be collected by VF.

If the Court opinion is upheld, VF should be entitled to a

VF Corporation Q1 FY24 Form 10-Q 20

refund of taxes paid on the periodic inclusions that VF has reported.

However, any such refund could be substantially reduced by potential indirect tax effects resulting from application of the Court opinion.

Deferred tax liabilities, representing VF’s future tax on annual inclusions, would also be released.

The net impact to tax expense is estimated to be up to $ 730.0 million, plus the reversal of any interest income accrued on the payment, which was approximately $ 19.6 million at June 2023.

The Company is currently involved in other legal proceedings that are ordinary, routine litigation incidental to the business, the resolution of which is not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows.

Accrual at September 2023 $ 19,890 $ 1,583 $ 21,473

NOTE 19 — SUBSEQUENT EVENT

On July 25, 2023, VF’s Board of Directors declared a quarterly cash dividend of $ 0.30 per share, payable on September 20, 2023 to stockholders of record on September 11, 2023.

On October 24, 2023, VF’s Board of Directors declared a quarterly cash dividend of $ 0.09 per share, payable on December 20, 2023 to stockholders of record on December 11, 2023.

VF Corporation Q2 FY24 Form 10-Q 24

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements