What changed in this filing

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Item 1. Financial Statements

2024-02-07 compared with 2023-11-03 · 263 added, 192 removed, 717 unchanged (39% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

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

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

Current assets

2 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of:

September 2023 - $ 28,080 ;

December 2023 - $ 30,011 ;

March 2023 - $ 28,075 ;

September 2022 - $ 27,515

December 2022 - $ 29,087

1,314,139 1,610,295 1,564,957

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shares authorized, 25,000,000 ;

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

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

Common Stock, stated value $ 0.25 ;

shares authorized, 1,200,000,000 ;

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

shares outstanding at December 2023 - 388,819,204 ;

March 2023 - 388,665,531 ;

September 2022 - 388,569,062

December 2022 - 388,660,385

97,205 97,166 97,165

11 unchanged sentences

Consolidated Statements of Operations

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

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

21 unchanged sentences

( 23,089 ) ( 51,966 ) 726,528 ( 74,190 )

Net income (loss)

$ ( 42,452 ) $ 507,868 $ ( 550,574 ) $ 333,476

Net loss per common share

Earnings (loss) per common share

$ ( 0.11 ) $ 1.31 $ ( 1.42 ) $ 0.86

6 unchanged sentences

VF CORPORATION

Consolidated Statements of Comprehensive Loss

Three Months Ended September Six Months Ended September

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

Net income (loss)

$ ( 42,452 ) $ 507,868 $ ( 550,574 ) $ 333,476

1 unchanged sentence

Foreign currency translation and other

Gains (losses) arising during the period

Losses arising during the period

( 4,373 ) ( 1,506 ) ( 3,809 ) ( 74,924 )

13 unchanged sentences

Derivative financial instruments

Gains arising during the period

Gains (losses) arising during the period

( 73,375 ) ( 119,635 ) ( 36,220 ) 82,480

5 unchanged sentences

( 168 ) 4,979 3,506 8,626

Other comprehensive income

Other comprehensive loss

( 39,668 ) ( 85,423 ) ( 31,855 ) ( 3,009 )

Comprehensive loss

Comprehensive income (loss)

$ ( 82,120 ) $ 422,445 $ ( 582,429 ) $ 330,467

3 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended September

Nine Months Ended December

(In thousands) 2023 2022

OPERATING ACTIVITIES

Net income (loss)

$ ( 550,574 ) $ 333,476

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

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

Impairment of goodwill and intangible assets

257,096 421,922

Depreciation and amortization

10 unchanged sentences

Write-off of income tax receivables and interest

( 10,931 ) 15,228

Changes in operating assets and liabilities:

11 unchanged sentences

( 12,824 ) 59,698

Cash used by operating activities

Cash provided (used) by operating activities

1,105,747 ( 833,472 )

15 unchanged sentences

( 576 ) ( 819 )

Proceeds from long-term debt

Cash dividends paid

21 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended September 2023

Three Months Ended December 2023

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

(In thousands, except share amounts) Shares Amounts Total

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

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

Net income (loss)

— — — — ( 42,452 ) ( 42,452 )

9 unchanged sentences

— — — ( 60,841 ) — ( 60,841 )

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

Three Months Ended September 2022

Balance, December 2023 388,819,204 $ 97,205 $ 3,619,654 $ ( 1,051,373 ) $ ( 556,293 ) $ 2,109,193

Three Months Ended December 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

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

Net income (loss)

— — — — 507,868 507,868

9 unchanged sentences

— — — ( 129,591 ) — ( 129,591 )

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

Balance, December 2022 388,660,385 $ 97,165 $ 3,766,304 $ ( 929,588 ) $ 385,751 $ 3,319,632

Continued on next page.

3 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Six Months Ended September 2023

Nine Months Ended December 2023

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

1 unchanged sentence

Balance, March 2023 388,665,531 $ 97,166 $ 3,775,979 $ ( 1,019,518 ) $ 57,086 $ 2,910,713

Net income (loss)

— — — — ( 550,574 ) ( 550,574 )

9 unchanged sentences

— — — ( 46,644 ) — ( 46,644 )

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

Six Months Ended September 2022

Balance, December 2023 388,819,204 $ 97,205 $ 3,619,654 $ ( 1,051,373 ) $ ( 556,293 ) $ 2,109,193

Nine Months Ended December 2022

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

1 unchanged sentence

Balance, March 2022 388,298,375 $ 97,075 $ 3,916,384 $ ( 926,579 ) $ 443,475 $ 3,530,355

Net income (loss)

— — — — 333,476 333,476

9 unchanged sentences

— — — 21,292 — 21,292

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

Balance, December 2022 388,660,385 $ 97,165 $ 3,766,304 $ ( 929,588 ) $ 385,751 $ 3,319,632

See notes to consolidated financial statements.

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NOTE 1 Basis of Presentation

NOTE 2 Recently Adopted Accounting Standards

NOTE 2 Recently Adopted a nd Issued Accounting Standards

NOTE 3 Revenues

10 unchanged sentences

NOTE 14 Reportable Segment Information

NOTE 15 Net Loss Per Share

NOTE 15 Earnings (Loss) Per Share

NOTE 16 Fair Value Measurements

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

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.

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

For presentation purposes herein, all references to periods ended December 2023 and December 2022 relate to the fiscal periods ended on December 30, 2023 and December 31, 2022, respectively.

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

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Similarly, the March 2023 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.

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 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.

Operating results for the three and nine months ended December 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”).

Recent Developments and Uncertainties

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 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.

The duration and severity of these recent developments, and the related impacts on VF's business are subject to uncertainty;

however, the estimates and assumptions made by management are based on available information.

Recent Development

On October 30, 2023, VF introduced Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential.

The first announced steps in this transformation cover the following priorities:

improve North America results, deliver the Vans ® turnaround, reduce costs and strengthen the balance sheet.

Refer to Note 18 for additional information on the program.

Use of Estimates

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Actual results may differ from those estimates.

NOTE 2 — RECENTLY ADOPTED ACCOUNTING STANDARDS

NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In March 2020, January 2021 and December 2022, the Financial Accounting Standards Board (" FASB") issued Accounting Standards Update (" ASU") No.

5 unchanged sentences

Deferral of the Sunset Date of Topic 848 ", respectively.

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging r elationships and other transactions affected by reference rate reform if certain criteria are met.

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The guidance is provided to ease the potential burden of accounting for reference rate reform.

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Early adoption is permitted.

The Company adopted the required guidance in the first quarter of Fiscal 2024 and is evaluating the impact of adopting the guidance related to the rollforward information.

The Company adopted the required guidance in the first quarter of

Fiscal 2024 and is evaluating the impact of adopting the guidance related to the rollforward information.

Refer to Note 9 for disclosures related to the Company’s supply chain financing program.

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU No.

2023-07, " Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses that are regularly provided to the individual or group identified as the chief operating decision maker ("CODM").

The guidance also requires disclosure of the title and position of the CODM and how reported measures of segment profit or loss are used to assess performance and allocate resources.

The guidance will be effective for annual disclosures beginning in Fiscal 2025, and has expanded requirements to include all annual disclosures about a reportable segment's profit or loss and assets in subsequent interim periods.

Early adoption is permitted.

The guidance requires retrospective application to all prior periods presented in the financial statements.

The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

In December 2023, the FASB issued ASU No.

2023-09, " Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" , which is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid.

The rate reconciliation disclosures will require specific categories and additional information for reconciling items that meet a quantitative threshold.

The income taxes paid disclosures

VF Corporation Q3 FY24 Form 10-Q 10

will require disaggregation by individual jurisdictions that are greater than 5% of total income taxes paid.

The guidance will be effective for annual disclosures beginning in Fiscal 2026.

Early adoption is permitted.

The amendments are required to be

applied on a prospective basis;

however, retrospective application is permitted.

The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

NOTE 3 — REVENUES

1 unchanged sentence

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

(In thousands) September 2023 March 2023 September 2022

(In thousands) December 2023 March 2023 December 2022

Contract assets (a)

3 unchanged sentences

(a) Included in the other current assets line item in the Consolidated Balance Sheets.

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

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.

(b) Included in the accrued liabilities line item in the Consolidated Balance Sheets.

For the three and nine months ended December 2023, the Company recognized $ 59.9 million and $ 187.1 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 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

As of December 2023, the Company expects to recognize $ 84.6 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.

1 unchanged sentence

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 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.

As of December 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 nine months ended December 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 September 2023

Three Months Ended December 2023

(In thousands) Outdoor Active Work Other Total

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11 VF Corporation Q3 FY24 Form 10-Q

Three Months Ended September 2022

Three Months Ended December 2022

(In thousands) Outdoor Active Work Other Total

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Total $ 2,003,045 $ 1,258,682 $ 268,940 $ — $ 3,530,667

Six Months Ended September 2023

Nine Months Ended December 2023

(In thousands) Outdoor Active Work Other Total

9 unchanged sentences

Total $ 4,281,955 $ 3,147,692 $ 651,211 $ — $ 8,080,858

Six Months Ended September 2022

Nine Months Ended December 2022

(In thousands) Outdoor Active Work Other Total

10 unchanged sentences

NOTE 4 — INVENTORIES

(In thousands) September 2023 March 2023 September 2022

(In thousands) December 2023 March 2023 December 2022

Finished products $ 2,093,174 $ 2,240,215 $ 2,535,759

4 unchanged sentences

NOTE 5 — INTANGIBLE ASSETS

September 2023 March 2023

December 2023 March 2023

(In thousands) Weighted

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Intangible assets, net $ 2,636,745 $ 2,642,821

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

Amortization expense for the three and nine months ended December 2023 was $ 3.5 million and $ 10.4 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 $ 13.7 million, $ 13.1 million, $ 12.2 million, $ 11.7 million and $ 10.8 million, respectively.

3 unchanged sentences

Balance, March 2023 $ 653,787 $ 1,211,244 $ 113,382 $ 1,978,413

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

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 six months ended September 2023.

Impairment charges ( 195,287 ) — ( 61,809 ) ( 257,096 )

Foreign currency translation 1,259 1,135 ( 73 ) 2,321

Balance, December 2023 $ 459,759 $ 1,212,379 $ 51,500 $ 1,723,638

During the three months ended December 2023, VF performed interim impairment analyses of the Timberland and Dickies reporting units and recorded impairment charges of $ 195.3 million and $ 61.8 million, respectively.

The Timberland reporting unit is part of the Outdoor segment and the Dickies reporting unit is part of the Work segment.

Refer to Note 16 for additional information on fair value measurements.

Accum ulated impairm ent charges for the Outdoor segment were $ 518.5 million and $ 323.2 million as of December 2023 and March 2023, respectively.

Accumulated impairment charges for the Active segment were $ 394.1 million as of December 2023 and March 2023, and accumulated impairment charges were $ 61.8 million for the Work segment as of December 2023.

NOTE 7 — LEASES

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Components of lease cost were as follows:

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

2 unchanged sentences

Total lease cost $ 148,786 $ 140,911 $ 433,177 $ 411,219

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.

During the nine months ended December 2023 and 2022, the Company paid $ 321.1 million and $ 315.0 million for operating leases, respectively.

During the nine months ended December 2023 and 2022, the Company obtained $ 220.7 million and $ 356.1 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

During the second quarter of Fiscal 2024, 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.

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

Refer to Note 17 for additional

13 VF Corporation Q3 FY24 Form 10-Q

As of December 2023, there were no outstanding euro commercial paper borrowings under this program.

There were $ 437.0 million and $ 889.9 million in U.S.

commercial paper borrowings as of December 2023 and December 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

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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 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.

At December 2023, March 2023 and December 2022, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $ 599.0 million, $ 510.9 million and $ 502.8 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 September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

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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 $ 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.

VF contributed $ 20.6 million to its defined benefit plans during the nine months ended December 2023, and intends to make approximately $ 10.2 million of contributions during the remainder of Fiscal 2024.

VF recorded $ 0.1 million and $ 3.4 million in settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the three and nine months ended December 2023, respectively, as well as $ 0.7 million and $ 1.8 million for the three and nine months ended December 2022, respectively.

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.

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 December 2023, September 2023 and June 2023 was 5.24 %, 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.

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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 six months ended September 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 nine months ended December 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive loss (“OCL” ).

VF Corporation Q3 FY24 Form 10-Q 14

NOTE 11 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

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.

During the nine months ended December 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 September 2023, March 2023 or September 2022.

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

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

VF’s comprehensive income (loss) is presented in the Consolidated Statements of Comprehensive Income (Loss).

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

(In thousands) December 2023 March 2023 December 2022

Foreign currency translation and other $ ( 856,853 ) $ ( 859,651 ) $ ( 841,877 )

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

Three Months Ended September 2023

Three Months Ended December 2023

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

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

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

Other comprehensive income (loss) before reclassifications

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21,236 ( 63 ) ( 60,841 ) ( 39,668 )

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

Three Months Ended September 2022

Balance, December 2023 $ ( 856,853 ) $ ( 155,701 ) $ ( 38,819 ) $ ( 1,051,373 )

Three Months Ended December 2022

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

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

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

Other comprehensive income (loss) before reclassifications

4 unchanged sentences

41,969 2,199 ( 129,591 ) ( 85,423 )

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

Six Months Ended September 2023

Balance, December 2022 $ ( 841,877 ) $ ( 164,346 ) $ 76,635 $ ( 929,588 )

15 VF Corporation Q3 FY24 Form 10-Q

Nine Months Ended December 2023

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

3 unchanged sentences

Net other comprehensive income (loss) 2,798 11,991 ( 46,644 ) ( 31,855 )

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

Balance, December 2023 $ ( 856,853 ) $ ( 155,701 ) $ ( 38,819 ) $ ( 1,051,373 )

Nine Months Ended December 2022

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

3 unchanged sentences

Net other comprehensive income (loss) ( 90,245 ) 65,944 21,292 ( 3,009 )

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

Balance, December 2022 $ ( 841,877 ) $ ( 164,346 ) $ 76,635 $ ( 929,588 )

Reclassifications out of accumulated OCL were as follows:

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

(In thousands) Three Months Ended December Nine Months Ended December

Details About Accumulated Other Comprehensive Loss Components Affected Line Item in the Consolidated Statements of Operations

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Total reclassifications for the period, net of tax $ ( 3,683 ) $ 24,877 $ 5,271 $ ( 29,743 )

VF Corporation Q3 FY24 Form 10-Q 16

NOTE 12 — STOCK-BASED COMPENSATION

Incentive Equity Awards Granted

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.

During the nine months ended December 2023, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 5,837,052 shares of its Common Stock at a weighted average exercise price of $ 18.12 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.

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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:

Six Months Ended September 2023

Nine Months Ended December 2023

Expected volatility 33 % to 52 %

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Weighted average fair value at date of grant $ 5.73

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.

During the nine months ended December 2023, VF granted 709,338 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 $ 18.29 per share.

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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.

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.

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

During the nine months ended December 2023, VF granted 50,883 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 weighted average fair market value of VF Common Stock at the dates the units were granted was $ 17.88 per share.

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

In addition, VF granted 3,354,593 nonperformance-based RSUs to employees during the nine months ended December 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 $ 17.18 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 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 six months ended September 2022 included a net discrete tax expense of $ 5.1 million, which primarily related to unrecognized tax benefits and interest.

The effective income tax rate for the nine months ended December 2023 was 412.9 % compared to ( 28.6 )% in the 2022 period.

The nine months ended December 2023 included a net discrete tax expense of $ 693.6 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 $ 693.6 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 18.7 %.

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.

The nine months ended December 2022 included a net discrete tax benefit of $ 98.8 million, which primarily related to the Internal Revenue Service ("IRS") examinations for tax year 2017 and short-tax year 2018 resulting in a $ 94.9 million favorable adjustment to VF's transition tax liability under the Tax Cuts and Jobs Act.

Excluding the $ 98.8 million net discrete tax benefit in the 2022 period, the effective income tax rate would have been 9.5 %.

Without discrete items, the effective income tax rate for the nine months ended December 2023 increased by 9.2 % compared with the 2022 period primarily due to the jurisdictional mix of earnings and losses.

As previously reported, VF petitioned the U.S.

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.

Tax Court (the “Tax 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 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.

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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 Q3 FY24 Form 10-Q

the decision.

the second quarter of Fiscal 2024.

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.

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

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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.

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.

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

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.

During the nine months ended December 2023, the amount of net unrecognized tax benefits and associated interest increased by $ 0.9 million to $ 298.5 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, which were recorded in the second quarter of Fiscal 2024.

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 $ 29.4 million due to settlement of audits and expiration of statutes of limitations, of which $ 25.7 million would reduce income tax expense.

NOTE 14 — REPORTABLE SEGMENT INFORMATION

The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments.

The CODM allocates resources and assesses performance based on a global brand view which represents VF's operating segments.

The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance.

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

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

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Outdoor $ 304,741 $ 457,027 $ 557,830 $ 670,615

Active 133,970 180,255 257,752 394,286

94,020 146,885 351,772 541,171

Work ( 1,864 ) 18,487 13,482 92,989

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$ ( 65,541 ) $ 455,902 $ 175,954 $ 259,286

(a) Includes legal settlement gains of $ 29.1 million in the three and nine months ended December 2023.

VF Corporation Q3 FY24 Form 10-Q 18

NOTE 15 — NET LOSS PER SHARE

Three Months Ended September Six Months Ended September

NOTE 15 — EARNINGS (LOSS) PER SHARE

Three Months Ended December Nine Months Ended December

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

Net loss per common share – basic:

Earnings (loss) per common share – basic:

Net income (loss)

$ ( 42,452 ) $ 507,868 $ ( 550,574 ) $ 333,476

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388,383 387,739 388,294 387,663

Net loss per common share

Earnings (loss) per common share

$ ( 0.11 ) $ 1.31 $ ( 1.42 ) $ 0.86

Net loss per common share – diluted:

Earnings (loss) per common share – diluted:

Net income (loss)

$ ( 42,452 ) $ 507,868 $ ( 550,574 ) $ 333,476

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388,383 388,192 388,294 388,357

Net loss per common share

Earnings (loss) per common share

$ ( 0.11 ) $ 1.31 $ ( 1.42 ) $ 0.86

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.

In the three and nine-month periods ended December 2023, 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 19.2 million and 19.0 million potentially dilutive shares related to stock options and other dilutive securities were excluded from the diluted loss per share calculations for the three and nine-month periods ended December 2023, respectively.

Outstanding stock options and other dilutive securities of approximately 9.9 million and 9.7 million shares were excluded

from the calculations of diluted earnings per share for the three and nine-month periods ended December 2022, respectively, because the effect of their inclusion would have been anti-dilutive.

In addition, 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for both the three and nine-month periods ended December 2022, because these units were not considered to be contingent outstanding shares in those periods.

NOTE 16 — FAIR VALUE MEASUREMENTS

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(In thousands) Level 1 Level 2 Level 3

September 2023

December 2023

Financial assets:

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Deferred compensation 96,364 — 96,364 —

(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.

(a) There were no transfers among the levels within the fair value hierarchy during the nine months ended December 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.

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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

At December 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.

Additionally, at December 2023 and March 2023, the carrying values of VF’s long-term debt, including the current portion, were $ 5,755.8 million and $ 6,635.3 million, respectively, compared with fair values of $ 5,280.7 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

Timberland Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis

During the three months ended December 2023, management determined that the recent downturn in the Timberland historical financial results, combined with a downward revision to the latest Fiscal 2024 forecast and forward-looking financial projections, was a triggering event that required management to perform a quantitative impairment analysis of both the Timberland reporting unit goodwill, which includes the Timberland ® brand, and the Timberland indefinite-lived trademark intangible asset, which includes both the Timberland ® and Timberland PRO ® brands.

The carrying values of the goodwill and indefinite-lived trademark intangible asset at the December 30, 2023 testing date were $ 407.9 million and $ 999.5 million, respectively.

As a result of the impairment testing performed, VF

VF Corporation Q3 FY24 Form 10-Q 20

recorded a goodwill impairment charge of $ 195.3 million in the Consolidated Statements of Operations for the three and nine months ended December 2023 to write down the Timberland reporting unit carrying value to its estimated fair value.

No impairment charge was recorded on the indefinite-lived trademark intangible asset.

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

The Timberland ® brand, acquired in 2011, offers outdoor, adventure-inspired lifestyle footwear, apparel and accessories that combine performance benefits and versatile styling for men, women and children.

Products are sold globally through chain, department and specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, VF-operated stores, on websites with strategic digital partners and online at www.timberland.com.

The Timberland reporting unit is included in the Outdoor reportable segment.

The fair values of the Timberland 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 Timberland 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 Timberland reporting unit and indefinite-lived trademark intangible asset include:

• Financial projections and future cash flows that considered recent historical results, actual results lower than previous internal forecasts, with forecasted revenue growth and profitability improvement throughout the forecast period that reflects the long-term strategy for the business with a return to historical averages, 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 over the projection period.

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

Dickies Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis

September 30, 2023 Testing

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.

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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 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, respectively.

December 30, 2023 Testing

During the three months ended December 2023, management determined that the continued downturn in the Dickies financial results, weakness in certain key U.S.

wholesale customer accounts, including lost product placement, and weakness in certain international markets, combined with expectations of a slower recovery, which have resulted in further reductions to the financial projections, 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.

The carrying values of the goodwill and indefinite-lived trademark intangible asset at the December 30, 2023 testing date were $ 61.8 million and $ 290.0 million, respectively.

Based on the analysis, management concluded that the Dickies reporting unit goodwill was fully impaired and thus recorded an impairment charge of $ 61.8 million in the Consolidated Statements of Operations for the three and nine months ended December 2023.

Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by a significant amount.

The Dickies ® brand, acquired in 2017, is a leader in authentic, functional, durable and affordable workwear and has expanded to produce work-inspired, casual-use products.

Products are sold globally through mass merchants, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, VF-operated stores, on websites with strategic digital partners and online at www.dickies.com.

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

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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.

Assumptions used in the valuations were similar to those that

21 VF Corporation Q3 FY24 Form 10-Q

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;

• Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, continued weakness in certain key accounts and markets, slower recovery from the recent downturn, with moderate revenue growth and improved profitability 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;

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• Market-based discount rates.

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.

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

Management's Use of Estimates and Assumptions

Management made its estimates based on information available as of the date of our assessments, 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 Timberland reporting unit goodwill or the Timberland and Dickies indefinite-lived trademark intangible assets 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 businesses do 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, royalty 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 earnings before interest, tax, depreciation and amortization ("EBITDA").

A future impairment charge of the Timberland reporting unit goodwill or the Timberland and Dickies indefinite-lived trademark intangible assets 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.

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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.

VF Corporation Q3 FY24 Form 10-Q 22

NOTE 17 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

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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 $ 3.3 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.

The notional amounts of all outstanding foreign currency exchange forward contracts were $ 3.0 billion at December 2023, $ 3.4 billion at March 2023 and $ 3.3 billion at December 2022,

consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, South Korean won, Chinese renminbi, 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 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 notional amounts of VF's outstanding interest rate swap contracts were $ 500.0 million at December 2023, March 2023 and December 2022.

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

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with Unrealized Losses

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

(In thousands) December 2023 March 2023 December 2022 December 2023 March 2023 December 2022

Derivatives Designated as Hedging Instruments:

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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:

September 2023 March 2023 September 2022

December 2023 March 2023 December 2022

(In thousands) Derivative

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

(In thousands) September 2023 March 2023 September 2022

(In thousands) December 2023 March 2023 December 2022

Derivative Instruments Balance Sheet Location

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Foreign exchange contracts Other liabilities ( 9,138 ) ( 11,518 ) ( 16,502 )

Interest rate contracts Other current assets 1,737 — —

Interest rate contracts Other assets — — 422

Interest rate contracts Other liabilities — ( 1,140 ) —

23 VF Corporation Q3 FY24 Form 10-Q

Cash Flow Hedges

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The company also uses interest swap contracts to hedge against a portion of the exposure related to its interest payments on its variable-rate debt.

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 on Derivatives

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

(In thousands) Gain (Loss) on Derivatives

Recognized in Accumulated OCL

Three Months Ended September

Gain on Derivatives

Three Months Ended December

Gain (Loss) on Derivatives

Recognized in Accumulated OCL

Six Months Ended September

Nine Months Ended December

Cash Flow Hedging Relationships 2023 2022 2023 2022

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Total $ ( 73,375 ) $ ( 119,635 ) $ ( 36,220 ) $ 82,480

VF Corporation Q2 FY24 Form 10-Q 22

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

Three Months Ended September

Gain (Loss) Reclassified from Accumulated OCL into Net Loss

Six Months Ended September

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

Three Months Ended December

Gain (Loss) Reclassified from Accumulated OCL into Net Income (Loss)

Nine Months Ended December

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

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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 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.

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 and six months ended September 2023 and September 2022.

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

Accordingly, the Company reclassified amounts from accumulated OCL and recognized an $ 8.3 million loss in cost of goods sold during the nine months ended December 2023.

Other Derivative Information

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.

A t December 2023, accumulated OCL included $ 40.7 million of pre-tax net deferred losses for foreign currency exchange contracts and a $ 1.7 million pre-tax deferred gain for interest rate swap contracts, which 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 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.

The Company has designated its euro-denominated fixed-rate notes and euro commercial paper borrowings, which represented € 2.0 billion in aggregate principal as of December 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.

During the three and nine-month periods ended December 2023, the Company recognized an after-tax loss of $ 74.8 million and $ 19.3 million, respectively, in other comprehensive income (loss) related to the net investment hedge transaction, and an after-tax loss of $ 126.5 million and an after-tax gain of $ 45.2 million for the three and nine-month periods ended December 2022, respectively.

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

VF Corporation Q3 FY24 Form 10-Q 24

NOTE 18 — RESTRUCTURING

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 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 Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities.

Beginning in the three months ended December 2023, restructuring costs include charges related to Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential.

The Company currently estimates that it will incur approximately $ 80.0 million to $ 130.0 million in restructuring and restructuring-related charges in connection with Reinvent, and that substantially all actions will be completed by the end of Fiscal 2025.

Of the total estimated charges, the Company anticipates that approximately one-half will relate to severance and employee-related benefits and that the remainder will relate to asset impairments and other non-cash write-downs.

Cash payments are generally expected to be paid within one year of charges incurred.

During the three and nine months ended December 2023, VF recorded $ 50.3 million of charges in connection with Reinvent, of which $ 31.6 million related to severance and employee-related benefits and $ 18.7 million related to non-cash asset write-downs.

As of December 2023,

$ 3.7 million of cash payments related to the Reinvent charges have been made.

During the three and nine months ended December 2023, VF recognized $ 50.8 million and $ 51.9 million, respectively, of total restructuring charges, related to approved initiatives.

Of the total restructuring charges recognized in the three and nine months ended December 2023, $ 46.6 million and $ 47.7 million were reflected in selling, general and administrative expenses, respectively, and $ 4.2 million in cost of goods sold in both periods.

The Company has not recognized any significant incremental costs related to accruals for the year ended March 2023 or prior periods.

Of the $ 45.2 million total restructuring accrual at December 2023, $ 43.7 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The remaining $ 1.5 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 September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

Severance and employee-related benefits $ 31,602 $ 10,607 $ 32,278 $ 50,165

Asset impairments and write-downs 18,739 — 18,739 —

Accelerated depreciation — 25 — 7,276

2 unchanged sentences

Restructuring costs by business segment are as follows:

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2023 2022 2023 2022

3 unchanged sentences

Total $ 50,776 $ 11,092 $ 51,906 $ 63,004

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

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

(In thousands) Severance Other Total

4 unchanged sentences

Impact of foreign currency 37 26 63

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

Accrual at December 2023 $ 44,064 $ 1,150 $ 45,214

NOTE 19 — SUBSEQUENT EVENT

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.

On January 23, 2024, VF’s Board of Directors declared a quarterly cash dividend of $ 0.09 per share, payable on March 20, 2024 to stockholders of record on March 11, 2024.

25 VF Corporation Q3 FY24 Form 10-Q

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