What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-02-07 compared with 2023-11-03 · 257 added, 238 removed, 277 unchanged (64% of the section changed)

2 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 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.

All per share amounts are presented on a diluted basis and all percentages shown in the tables below and the following discussion have been calculated using unrounded numbers.

References to the three and six months ended September 2023 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and six months ended September 2022 when translating foreign currencies into U.S.

References to the three and nine months ended December 2023 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and nine months ended December 2022 when translating foreign currencies into U.S.

VF’s most significant foreign currency exposure relates to business conducted in euro-based countries.

1 unchanged sentence

RECENT DEVELOPMENTS

Cybersecurity Incident

On December 13, 2023, VF detected unauthorized occurrences on a portion of its information technology ("IT") systems.

Upon detecting the unauthorized occurrences, VF began taking steps to contain, assess and remediate the incident, including beginning an investigation with leading external cybersecurity experts, activating its incident response plan, and shutting down some systems.

As a result of these and other measures, and while VF’s investigation and remediation efforts remain ongoing, VF believes the threat actor was ejected from VF’s IT systems on December 15, 2023.

The threat actor disrupted VF’s business operations by encrypting some IT systems, and stole data from VF, including personal data.

After VF shut down some of its systems, VF experienced disruption to certain of its operations, including interrupted replenishment of retail store inventory and delayed order fulfillment which had impacts such as the cancellation by customers and consumers of some product orders, reduced demand on certain of its brands’ e-commerce sites, and delay of some wholesale shipments.

While VF is still experiencing minor residual impacts from the cyber incident, VF has resumed retail store inventory replenishment and product order fulfillment, and is caught up on fulfilling orders that were delayed as a result of the cyber incident.

VF has substantially restored the IT systems and data that were impacted by the cyber incident, but continues to work through minor operational impacts.

While the investigation remains ongoing, VF believes that the material impact or reasonably likely material impact on VF is limited to the material impacts on VF’s business operations discussed above, which are no longer ongoing at this time.

VF also believes the impacts of the cyber incident are not material and are not reasonably likely to be material to its financial condition and results of operations.

VF will be seeking reimbursement of costs, expenses and losses stemming from the cyber incident by submitting claims to VF’s cybersecurity insurers.

The timing and amount of any such reimbursements are not known at this time.

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.

8 unchanged sentences

• Appoint new Vans ® president :

The current Global Brand President of Vans ® will be stepping down from the position and will transition to lead Reinvent and the project teams driving the work.

A search for a new brand president is underway.

The Global Brand President of Vans ® has stepped down from the position and has transitioned to lead Reinvent and the project teams driving the work.

A search for a new brand president is ongoing with VF's CEO serving in the role on an interim basis.

• Optimize cost structure to improve operating efficiency and profitability:

2 unchanged sentences

In addition to improving operating performance, VF is committed to deleveraging the balance sheet.

Reinvent will likely result in charges, including cash and non-cash items.

Reinvent charges and project-related costs in the third quarter of Fiscal 2024 were $50.9 million, which primarily included costs associated with severance and employee-related benefits and certain non-cash asset write-downs .

Dividend Update

On October 24, 2023, the Board of Directors declared a quarterly dividend of $0.09 per share that is payable during the third

quarter of Fiscal 2024, which represents a 70% reduction when compared to the dividend of $0.30 per share paid in the second quarter of Fiscal 2024.

The decrease in the dividend is an action taken to strengthen the Company's financial position by reducing debt.

On October 24, 2023, the Board of Directors declared a quarterly dividend of $0.09 per share that was paid during the third quarter of Fiscal 2024, which represented a 70% reduction when

VF Corporation Q3 FY24 Form 10-Q 26

compared to the dividend of $0.30 per share paid in the second quarter of Fiscal 2024.

The decrease in the dividend was an action taken to strengthen the Company's financial position by reducing debt.

Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.

Executive Leadership Transition

On June 16, 2023, the Board of Directors approved the appointment of Bracken Darrell as President and Chief Executive Officer of the Company, effective as of July 17, 2023.

Macroeconomic Environment and Uncertainties

The macroeconomic environment continues to dynamically evolve.

Global trends, including inflationary pressures, have weakened consumer sentiment, negatively impacting consumer spending behavior and creating variable traffic patterns across channels.

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

The Company is also operating in a higher interest rate environment, resulting in increased borrowing costs.

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.

Though not expected to have a significant impact in the current year, the coronavirus ("COVID-19") pandemic resulted in temporary closures of VF-operated retail stores in the first half of Fiscal 2023, most notably in the Asia-Pacific region, which significantly impacted prior year revenues in the region.

The ongoing conflict between Russia and Ukraine and the recent conflict in the Middle East continue to cause disruption in the regions and unknown impacts to the global economy;

On January 23, 2024, the Board of Directors declared a quarterly dividend of $0.09 per share to be paid during the fourth quarter of Fiscal 2024.

Impact of Global Events and Uncertainties

Though not expected to have a significant impact in the current year, the coronavirus ("COVID-19") pandemic resulted in

temporary closures of VF-operated retail stores in Fiscal 2023, most notably in the Asia-Pacific region, which impacted revenues in the region for the nine months ended December 2022.

The ongoing conflict between Russia and Ukraine and the conflict in the Middle East continue to cause disruption in the regions and unknown impacts to the global economy;

however, we currently do not expect significant disruption to our business.

1 unchanged sentence

Risk Factors" in the Fiscal 2023 Form 10-K.

25 VF Corporation Q2 FY24 Form 10-Q

SUMMARY OF THE SECOND QUARTER OF FISCAL 2024

• Revenues were down 2% to $3.0 billion compared to the three months ended September 2022, including a 2% favorable impact from foreign currency.

• Outdoor segment revenues increased 10% to $1.7 billion compared to the three months ended September 2022, including a 2% favorable impact from foreign currency.

• Active segment revenues decreased 14% to $1.1 billion compared to the three months ended September 2022, including a 2% favorable impact from foreign currency.

• Work segment revenues decreased 10% to $238.3 million compared to the three months ended September 2022, including a 1% favorable impact from foreign currency.

• Wholesale revenues were down 1% compared to the three months ended September 2022, including a 2% favorable impact from foreign currency.

SUMMARY OF THE THIRD QUARTER OF FISCAL 2024

• Revenues were down 16% to $3.0 billion compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.

• Outdoor segment revenues decreased 13% to $1.7 billion compared to the three months ended December 2022, including a 2% favorable impact from foreign currency.

• Active segment revenues decreased 21% to $1.0 billion compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.

• Work segment revenues decreased 17% to $222.3 million compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.

• Wholesale revenues were down 26% compared to the three months ended December 2022, including a 2% favorable impact from foreign currency.

• Direct-to-consumer revenues were down 8% over the 2022 period, including a 1% favorable impact from foreign currency.

E-commerce revenues also decreased 3% in the current period, including a 2% favorable impact from foreign currency.

Direct-to-consumer revenues accounted for 37% of VF's net revenues for the three months ended September 2023.

• International revenues increased 10% compared to the three months ended September 2022, including a 5% favorable impact from foreign currency.

Europe increased 14%, including an 8% favorable impact from foreign currency.

Greater China (which includes Mainland China, Hong Kong and Taiwan) revenues increased 8%, including a 6% unfavorable impact from foreign currency.

International revenues represented 55% of VF's net revenues for the three months ended September 2023.

• Revenues in the Americas region decreased 11% compared to the three months ended September 2022.

• Gross margin decreased 10 basis points to 51.3% compared to the three months ended September 2022, primarily driven by unfavorable rate impacts, largely offset by favorable mix.

• Net loss per share was $(1.16) compared to $(0.31) in the 2022 period.

The loss per share was primarily driven by increased tax expense due to the unfavorable decision in the Timberland tax case during the three months ended September 2023 , compared to being primarily driven by the goodwill and intangible asset impairment charges related to the Supreme reporting unit in the three months ended September 2022.

The loss per share for the periods compared was also impacted by lower profitability in the Active and Work segments, partially offset by growth in the Outdoor segment, during the three months ended September 2023.

E-commerce revenues decreased 13% in the current period, including a 1% favorable impact from foreign currency.

Direct-to-consumer revenues accounted for 60% of VF's net revenues for the three months ended December 2023.

• International revenues decreased 5% compared to the three months ended December 2022, including a 3% favorable impact from foreign currency.

Revenues in Europe decreased 7%, including a 5% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 2%, including a 1% unfavorable impact from foreign currency.

International revenues represented 52% of VF's net revenues for the three months ended December 2023.

• Revenues in the Americas region decreased 24% compared to the three months ended December 2022, including a 1% favorable impact from foreign currency.

• Gross margin increased 20 basis points to 55.1% compared to the three months ended December 2022, primarily driven by favorable mix, partially offset by unfavorable foreign currency impacts.

• Earnings (loss) per share was $(0.11) compared to $1.31 in the 2022 period.

The decrease was primarily driven by lower profitability across all segments, goodwill impairment charges related to the Timberland and Dickies reporting units and Reinvent charges during the three months ended December 2023, partially offset by legal settlement gains in the quarter .

The three months ended December 2022 included a $0.24 discrete tax benefit in the quarter.

ANALYSIS OF RESULTS OF OPERATIONS

Consolidated Statements of Operations

The following table presents a summary of the changes in net revenues for the three and six months ended September 2023 from the comparable periods in 2022:

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

The following table presents a summary of the changes in net revenues for the three and nine months ended December 2023 from the comparable periods in 2022:

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

Net revenues — 2022 $ 3,530.7 $ 8,872.9

2 unchanged sentences

Net revenues — 2023 $ 2,960.3 $ 8,080.9

VF reported a 2% and 4% decrease in revenues for the three and six months ended September 2023, respectively, compared to the 2022 periods, including a 2% and 1% favorable impact from foreign currency in the respective periods.

The revenue decrease was primarily driven by declines in the Active segment in both the three and six months ended September 2023.

Revenues in the Active segment during the three and six months ended September 2023 were significantly impacted by weakness in the Vans ® brand, with declines across all regions, most notably in the Americas.

The revenue decrease in both the three and six months ended September 2023 was also due to declines in the Work segment, driven by declines in the Dickies ® brand.

decrease in both periods was partially offset by global growth in the Outdoor segment driven by increases in The North Face ® brand across all regions.

The revenue decrease in both periods was also partially offset by overall growth in the Europe and Asia-Pacific regions in both the three and six months ended September 2023.

The Asia-Pacific region was negatively impacted by COVID-19 resurgence in Mainland China in the prior year periods.

VF reported a 16% and 9% decrease in revenues for the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in both periods.

The revenue decrease in the three months ended December 2023 was driven by declines across all segments.

The revenue decrease in the nine months ended December 2023 was primarily due to declines in the Active and Work segments.

The revenue decrease in both periods was

partially offset by overall growth in the Asia-Pacific region in both the three and nine months ended December 2023.

The Asia-Pacific region was negatively impacted by COVID-19 resurgence in Mainland China in the nine months ended December 2022.

Additional details on revenues are provided in the section titled “Information by Reportable Segment.”

1 unchanged sentence

The following table presents the percentage relationships to net revenues for components of the Consolidated Statements of Operations:

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

2023 2022 2023 2022

3 unchanged sentences

Operating margin (1.1) % 14.6 % 4.0 % 5.5 %

Gross margin decreased 10 and 50 basis points in the three and six months ended September 2023, respectively, compared to the 2022 periods.

The decrease in both the three and six months ended September 2023 was driven by higher product costs, partially offset by favorable mix and price increases.

Selling, general and administrative expenses as a percentage of total revenues decreased 130 basis points and remained flat during the three and six months ended September 2023, respectively, compared to the 2022 periods.

Selling, general and administrative expenses decreased $59.0 million and $104.2 million in the three and six months ended September 2023, respectively, compared to the 2022 periods.

The decrease was due to lower compensation and administrative costs, corporate restructuring charges and direct-to-consumer expenses in both the three and six months ended September 2023, which was partially offset by higher information technology costs in both periods.

Net interest expense increased $21.7 million and $40.2 million during the three and six months ended September 2023, respectively, compared to the 2022 periods.

The increase in net interest expense in both the three and six months ended September 2023 was primarily due to additional borrowings on long-term debt at higher rates, partially offset by lower short-term commercial paper borrowings and higher investment rates.

Total outstanding debt averaged $6.9 billion in the six months ended September 2023 and $5.3 billion in the same period in 2022, with weighted average interest rates of 3.2% and 2.3% in the six months ended September 2023 and 2022, respectively.

Other income (expense), net decreased $5.8 million and $96.9 million during the three and six months ended September 2023, respectively, compared to the 2022 periods.

The decrease in the three months ended September 2023 was primarily due to lower foreign currency losses compared to the 2022 period.

The decrease in the six months ended September 2023 was primarily due to a $91.8 million pension settlement charge recorded in the 2022 period, which resulted from the purchase of a group annuity contract and transfer of a portion of the assets and

liabilities associated with the U.S.

qualified defined benefit pension plan to an insurance company.

VF recorded goodwill and intangible asset impairment charges of $229.0 million and $192.9 million, respectively, in the three and six months ended September 2022 related to the Supreme reporting unit.

During the three months ended September 2022, due to continued increases in the federal funds rate and strengthening of the U.S.

Gross margin increased 20 basis points and decreased 30 basis points in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

The increase in the three months ended December 2023 was primarily driven by favorable mix, partially offset by unfavorable foreign currency impacts.

The decrease in the nine months ended December 2023 was primarily driven by unfavorable foreign currency impacts , partially offset by favorable mix.

Selling, general and administrative expenses as a percentage of total revenues increased 720 and 280 basis points during the three and nine months ended December 2023, respectively, compared to the 2022 periods.

Selling, general and administrative expenses decreased $14.0 million and $118.3 million in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

The decrease in the three months ended December 2023 was primarily due to lower distribution and advertising expenses, partially offset by Reinvent charges.

The decrease in the nine months ended December 2023 was due to lower compensation and administrative costs, direct-to-consumer expenses and distribution costs, partially offset by higher information technology costs.

VF recorded goodwill impairment charges of $195.3 million and $61.8 million related to the Timberland and Dickies reporting units, respectively, in the three and nine months ended December 2023.

During the third quarter of Fiscal 2024, due to continued weakness and downturn in the financial results, combined with expectations of a slower recovery, the Company determined that a triggering event had occurred requiring impairment testing of the Timberland and Dickies reporting unit goodwill and indefinite-lived trademark intangible assets.

The goodwill impairment related to the reduction in financial projections for both reporting units.

VF recorded goodwill and intangible asset impairment charges of $229.0 million and $192.9 million, respectively, in the nine months ended December 2022 related to the Supreme reporting unit.

During the second quarter of Fiscal 2023, due to continued increases in the federal funds rate and strengthening of the U.S.

dollar relative to other currencies, the Company determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset.

The impairment related to an increase in the market-based discount rates used in the valuation and the negative impact of foreign currency exchange rate changes on financial projections.

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.

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.

Net interest expense increased $13.1 million and $53.3 million during the three and nine months ended December 2023, respectively, compared to the 2022 periods.

The increase in net

interest expense in both the three and nine months ended December 2023 was primarily due to additional borrowings on long-term debt at higher rates, partially offset by lower short-term commercial paper borrowings and higher investment rates.

Total outstanding debt averaged $6.8 billion in the nine months ended December 2023 and $6.5 billion in the same period in 2022, with weighted average interest rates of 3.4% and 2.3% in the nine months ended December 2023 and 2022, respectively.

Other income (expense), net decreased $39.9 million and $136.8 million during the three and nine months ended December 2023, respectively, compared to the 2022 periods.

The decrease in the three months ended December 2023 was primarily due to legal settlement gains of $29.1 million and lower foreign currency losses compared to the 2022 period.

The decrease in the nine months ended December 2023 was primarily due to the above-mentioned benefits during the fiscal third quarter and a $91.8 million pension settlement charge recorded in the 2022 period, which resulted from the purchase of a group annuity contract and transfer of a portion of the assets and liabilities associated with the U.S.

qualified defined benefit pension plan to an insurance company.

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.

Refer to Note 13 to VF's consolidated financial statements for additional information.

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.

As a result of the above, net loss in the three months ended September 2023 was $(450.7) million ($(1.16) per diluted share) compared to $(118.4) million ($(0.31) per diluted share) in the 2022 period, and net loss in the six months ended September 2023 was $(508.1) million ($(1.31) per diluted share) compared to $(174.4) million ($(0.45) per diluted share) in the 2022 period.

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 a result of the above, net income (loss) in the three months ended December 2023 was $(42.5) million ($(0.11) per diluted share) compared to $507.9 million ($1.31 per diluted share) in the 2022 period, and net income (loss) in the nine months ended December 2023 was $(550.6) million ($(1.42) per diluted share) compared to $333.5 million ($0.86 per diluted share) in the 2022 period.

Refer to additional discussion in the “Information by Reportable Segment” section below.

VF Corporation Q3 FY24 Form 10-Q 28

Information by Reportable Segment

4 unchanged sentences

Refer to Note 14 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income (loss) before income taxes.

27 VF Corporation Q2 FY24 Form 10-Q

The following tables present a summary of the changes in segment revenues and profit (loss) in the three and six months ended September 2023 from the comparable periods in 2022 and revenues by region for our top 4 brands for the three and six months ended September 2023 and 2022:

The following tables present a summary of the changes in segment revenues and profit (loss) in the three and nine months ended December 2023 from the comparable periods in 2022 and revenues by region for our top 4 brands for the three and nine months ended December 2023 and 2022:

Segment Revenues:

Three Months Ended September

Three Months Ended December

(In millions) Outdoor Active Work Other Total

3 unchanged sentences

Segment revenues — 2023 $ 1,738.6 $ 999.4 $ 222.3 $ — $ 2,960.3

Six Months Ended September

Nine Months Ended December

(In millions) Outdoor Active Work Other Total

4 unchanged sentences

Segment Profit (Loss):

Three Months Ended September

Three Months Ended December

(In millions) Outdoor Active Work Other Total

2 unchanged sentences

Impact of foreign currency 6.7 1.6 0.2 — 8.5

Segment profit — 2023 $ 296.8 $ 134.0 $ 8.5 $ — $ 439.2

Six Months Ended September

Segment profit (loss) — 2023 $ 304.7 $ 94.0 $ (1.9) $ — $ 396.9

Nine Months Ended December

(In millions) Outdoor Active Work Other Total

6 unchanged sentences

Top Brand Revenues:

Three Months Ended September 2023

Three Months Ended December 2023

(In millions) Vans ®

5 unchanged sentences

Global $ 668.2 $ 1,192.1 $ 473.0 $ 147.9 $ 2,481.2

Three Months Ended September 2022

Three Months Ended December 2022

(In millions) Vans ®

5 unchanged sentences

Global $ 926.9 $ 1,321.2 $ 595.5 $ 177.0 $ 3,020.6

Six Months Ended September 2023

Nine Months Ended December 2023

(In millions) Vans ®

5 unchanged sentences

Global $ 2,154.5 $ 2,859.0 $ 1,215.5 $ 456.0 $ 6,685.0

Six Months Ended September 2022

Nine Months Ended December 2022

(In millions) Vans ®

10 unchanged sentences

For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2023 2022 Percent

5 unchanged sentences

The North Face ® , Timberland ® , Smartwool ® , Altra ® and Icebreaker ® .

Global revenues for Outdoor increased 10% in the three months ended September 2023 compared to 2022, including a 2% favorable impact from foreign currency.

Revenues in the Europe region increased 24%, including an 8% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 27%, including a 5% unfavorable impact from foreign currency and a 30% increase in Greater China (including a 7% unfavorable impact from foreign currency).

Global revenues for Outdoor decreased 13% in the three months ended December 2023 compared to 2022, including a 2% favorable impact from foreign currency.

Revenues in the Americas region decreased 26%.

Global revenues for Outdoor increased 9% in the six months ended September 2023 compared to 2022, including a 1% favorable impact from foreign currency.

Revenues in the Europe region increased 18%, including a 6% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 30%, including a 6% unfavorable impact from foreign currency and a 35% increase in Greater China (including an 8% unfavorable impact from foreign currency).

Revenues in the Europe region decreased 3%, including a 5% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 18%, including a 2% unfavorable impact from foreign currency and a 22% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan), including a 2% unfavorable impact from foreign currency.

Global revenues for Outdoor decreased 1% in the nine months ended December 2023 compared to 2022, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 13%.

Global revenues for The North Face ® brand increased 19% and 16% in the three and six months ended September 2023, respectively, compared to the 2022 periods.

This includes a 2% and 1% favorable impact from foreign currency in the three and six months ended September 2023, respectively.

The increase reflects growth in all regions and channels compared to the three and six months ended September 2022.

Revenues in the Europe region increased 38% and 26% in the three and six months ended September 2023, respectively, including a 9% and 7% favorable impact from foreign currency in the respective periods.

Revenues in the Asia-Pacific region increased 37% and 41% in the three and six months ended September 2023, respectively, including a 6% unfavorable impact from foreign currency in both periods.

Revenues in the Americas region increased 3% and 5% in the three and six months ended September 2023, respectively.

Global revenues for the Timberland ® brand decreased 5% and 4% in the three and six months ended September 2023, respectively, compared to the 2022 periods.

This includes a 4% and 2% favorable impact from foreign currency in the three and six months ended September 2023, respectively.

Revenues in the Americas region decreased 25% and 24% in the three and six months ended September 2023, respectively, including a 1% favorable impact from foreign currency in both periods, driven by declines in the wholesale channel in both periods.

Revenues in the Europe region increased 10% and 9% in the three and six months ended September 2023, respectively, including an 8% and 6% favorable impact from foreign currency in the respective periods.

Revenues in the Asia-Pacific region increased 6% and 12% in the three and six months ended September 2023, respectively, compared to the 2022 periods, including a 5% and 4% unfavorable impact from foreign currency in the respective periods.

Global direct-to-consumer revenues for Outdoor increased 10% and 12% in the three and six months ended September 2023, respectively, compared to the 2022 periods, including a 2% and 1% favorable impact from foreign currency in the respective periods.

The increases were primarily due to strength in The North Face ® brand and growth in both our VF-operated retail stores and e-commerce.

Global wholesale revenues increased 10% and 8% in the three and six months ended September 2023, respectively, compared to the 2022 periods.

The increase includes a 2% and 1% favorable impact from foreign currency in the three and six months ended September 2023, respectively.

Operating margin improved in both the three and six months ended September 2023 compared to the 2022 periods primarily due to higher gross margin and leverage of operating expenses due to increased revenues.

Revenues in the Asia-Pacific region increased 25%, including a 4% unfavorable impact from foreign currency and a 29% increase in Greater China, including an 5% unfavorable impact from foreign currency.

Revenues in the Europe region increased 8%, including a 5% favorable impact from foreign currency.

Global revenues for The North Face ® brand decreased 10% and increased 4% in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

This includes a 1% favorable impact from foreign currency in both periods.

The decrease in the three months ended December 2023 was driven by a decline in the Americas region, which decreased 24% compared to the 2022 period.

Revenues in the Asia-Pacific region increased 26% in the three months ended December 2023, including a 2% unfavorable impact from foreign currency.

Revenues in the Europe region were flat in the three months ended December 2023, including a 5% favorable impact from foreign currency.

The increase in the nine months ended December 2023 was driven by growth in the Asia-Pacific and Europe regions.

Revenues in the Asia-Pacific region increased 34% in the nine months ended December 2023, including a 4% unfavorable impact from foreign currency.

Revenues in the Europe region increased 13% in the nine months ended December 2023, including a 5% favorable impact from foreign currency.

Revenues in the Americas region decreased 9% in the nine months ended December 2023.

Global revenues for the Timberland ® brand decreased 21% and 11% in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

This includes a 2% favorable impact from foreign currency in both periods.

The overall declines were most significantly impacted by a 34% and 29% decrease in the Americas region for the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in both periods.

Revenues in the Europe region decreased 11% and increased 1% in the three and nine months ended December 2023, respectively, including a 5% and 6% favorable impact from foreign currency in the respective periods.

Revenues in the Asia-Pacific region decreased 1% and increased 6% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% and 4% unfavorable impact from foreign currency in the respective periods.

Global direct-to-consumer revenues for Outdoor decreased 2% and increased 3% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% and 1% favorable impact from foreign currency in the respective periods.

The decrease in the three months ended December 2023 was primarily due to declines in the Americas region.

The increase in the nine months ended December 2023 was primarily due to The North Face ® brand in the Europe and Asia-Pacific regions.

Global wholesale revenues decreased 25% and 4% in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

The decrease includes a 1% and 2% favorable impact from foreign currency in the three and nine months ended December 2023, respectively.

The decrease in both periods was primarily driven by declines in the Americas region.

Operating margin decreased in both the three and nine months ended December 2023 compared to the 2022 periods, reflecting increased direct-to-consumer expenses and higher information technology costs.

The decreases in both periods were partially offset by higher gross margin, primarily driven by favorable mix and unfavorable foreign currency impacts.

The decrease in the three months ended December 2023 also reflects lower leverage of operating expenses due to decreased revenues.

31 VF Corporation Q3 FY24 Form 10-Q

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2023 2022 Percent

5 unchanged sentences

Vans ® , Supreme ® , Kipling ® , Napapijri ® , Eastpak ® and JanSport ® .

Global revenues for Active decreased 14% in the three months ended September 2023 compared to the 2022 period, including a 2% favorable impact from foreign currency.

Global revenues for Active decreased 21% in the three months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 24%, including a 1% favorable impact from foreign currency.

Revenues in the Asia-Pacific region decreased 20%, including a 2% unfavorable impact from foreign currency, and a 27% decrease in Greater China (including a 4% unfavorable impact from foreign currency).

Revenues in the Europe region decreased 15%, including a 4% favorable impact from foreign currency.

Global revenues for Active decreased 15% in the six months ended September 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 20%, including a 1% favorable impact from foreign currency.

Revenues in the Asia-Pacific region decreased 15%, including a 2% unfavorable impact from foreign currency, and a 24% decrease in Greater China, including a 1% unfavorable impact from foreign currency.

Global revenues for Active decreased 17% in the nine months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 22%.

Revenues in the Europe region decreased 8%, including a 4% favorable impact from foreign currency.

Vans ® brand global revenues decreased 21% and 22% in the three and six months ended September 2023, respectively, compared to the 2022 periods.

This includes a 2% and 1% favorable impact from foreign currency in the three and six months ended September 2023, respectively.

The overall declines were most significantly impacted by a 25% and 26% decrease in the Americas region for the three and six months ended September 2023, respectively, including a 1% favorable impact from foreign currency in the three months ended September 2023.

Revenues in the Asia-Pacific region decreased 33% and 20% in the three and six months ended September 2023, respectively, including a 2% and 3% unfavorable impact from foreign currency in the respective periods.

Revenues in the

Europe region decreased 6% and 11% in the three and six months ended September 2023, respectively, including a 6% and 4% favorable impact from foreign currency in the respective periods.

Global direct-to-consumer revenues for Active decreased 10% in both the three and six months ended September 2023, compared to the 2022 periods, including a 1% favorable impact from foreign currency in both periods.

The decreases were primarily due to declines in the Americas region, which decreased 17% in both the three and six months ended September 2023.

Global wholesale revenues decreased 19% and 20% in the three and six months ended September 2023, respectively, including a 4% and 2% favorable impact from foreign currency in the respective periods.

The decreases were primarily due to a 25% and 26% decrease in the Americas region in the three and six months ended September 2023, respectively, including a 2% and 1% favorable impact from foreign currency in the respective periods.

Wholesale revenues in the Europe region decreased 7% and 11% in the three and six months ended September 2023, respectively, including a 6% and 4% favorable impact from foreign currency in the respective periods.

Wholesale revenues in the Asia-Pacific region decreased 43% and 25% in the three and six months ended September 2023, respectively, and included a 2% unfavorable impact from foreign currency in both periods.

Operating margin decreased in the three and six months ended September 2023 compared to the 2022 periods, reflecting lower leverage of operating expenses due to decreased revenues.

The decrease in the three months ended September 2023 was partially offset by higher gross margin, primarily driven by lower freight cost.

The decrease in the six months ended September 2023 was also impacted by increased discounts and other promotional activity.

Revenues in the Asia-Pacific region decreased 11%, including a 3% unfavorable impact from foreign currency, and a 15% decrease in Greater China, including a 3% unfavorable impact from foreign currency.

Vans ® brand global revenues decreased 28% and 24% in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

This includes a 1% favorable impact from foreign currency in both periods.

The overall declines were most significantly impacted by a 31% and 27% decrease in the Americas region for the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in the nine months ended December 2023.

Revenues in the Europe region decreased 19% and 13% in the three and nine months ended December 2023, respectively, including a 4% favorable impact from foreign currency in both periods.

Revenues in the Asia-Pacific region decreased 27% and 22% in the three and nine months ended

December 2023, respectively, including a 2% unfavorable impact from foreign currency in the nine months ended December 2023.

Global direct-to-consumer revenues for Active decreased 14% and 12% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in the three months ended December 2023.

The decreases were primarily driven by declines in the Americas region, which decreased 18% and 17% in the three and nine months ended December 2023, respectively.

Global wholesale revenues decreased 34% and 23% in the three and nine months ended December 2023, respectively, including a 2% favorable impact from foreign currency in both periods.

The decreases were primarily due to a 44% and 31% decrease in the Americas region in the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in both periods.

Wholesale revenues in the Europe region decreased 25% and 14% in the three and nine months ended December 2023, respectively, including a 4% favorable impact from foreign currency in both periods.

Wholesale revenues in the Asia-Pacific region decreased 19% and 23% in the three and nine months ended December 2023, respectively, and included a 1% unfavorable impact from foreign currency in the nine months ended December 2023.

Operating margin decreased in the three and nine months ended December 2023 compared to the 2022 periods, reflecting lower leverage of operating expenses due to decreased revenues.

The decrease in the three and nine months ended December 2023 was partially offset by legal settlement gains of $29.1 million.

The decrease in the three months ended December 2023 was partially offset by higher gross margin, primarily driven by favorable mix and unfavorable foreign currency impacts.

VF Corporation Q3 FY24 Form 10-Q 32

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2023 2022 Percent

1 unchanged sentence

Segment revenues $ 222.3 $ 268.9 (17.3) % $ 651.2 $ 773.0 (15.8) %

Segment profit 8.5 39.5 (78.4) % 15.3 74.5 (79.4) %

Segment profit (loss) (1.9) 18.5 (110.1) % 13.5 93.0 (85.5) %

Operating margin (0.8) % 6.9 % 2.1 % 12.0 %

1 unchanged sentence

Dickies ® and Timberland PRO ® .

Global Work revenues decreased 10% in the three months ended September 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency.

Global Work revenues decreased 17% in the three months ended December 2023 compared to the 2022 period, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 14%.

Revenues in the Asia-Pacific region decreased 44%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region increased 35%, including a 10% favorable impact from foreign currency.

Global Work revenues decreased 15% in the six months ended September 2023 compared to the 2022 period.

Revenues in the Americas region decreased 17%, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region decreased 45%.

Revenues in the Europe region decreased 15%, including a 4% favorable impact from foreign currency.

Global Work revenues decreased 16% in the nine months ended December 2023 compared to the 2022 period.

Revenues in the Americas region decreased 16%.

Revenues in the Asia-Pacific region decreased 38%, including a 2% unfavorable impact from foreign currency.

Revenues in the Europe region increased 11%, including a 6% favorable impact from foreign currency.

Dickies ® brand global revenues decreased 8% and 14% in the three and six months ended September 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in the three months ended September 2023.

The decline in the three months ended September 2023 was primarily driven by a decrease in the Asia-Pacific region of

44%, including a 1% unfavorable impact from foreign currency, primarily due to weakness in the wholesale channel.

The decline in the three months ended September 2023 was also attributed to a decrease in the Americas region of 7%.

The decline in the six months ended September 2023 was primarily driven by a decrease of 16% in the Americas region, reflecting lower inventory replenishment and weakness in certain key U.S.

Dickies ® brand global revenues decreased 16% and 15% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in the three months ended December 2023.

The decline in both the three and nine months ended December 2023 was primarily driven by a decrease in the

Americas region of 11% and 14% in the respective periods, reflecting lower inventory replenishment and weakness with certain key U.S.

wholesale customer accounts.

The decline in the six months ended September 2023 was also attributed to decreases in the Asia-Pacific region of 35%, including a 3% unfavorable impact from foreign currency.

Revenues in the Europe region increased 35% and 28% in the three and six months ended September 2023, respectively, including a 10% and 7% favorable impact from foreign currency in the respective periods.

Operating margin decreased in the three and six months ended September 2023 compared to the 2022 periods, reflecting lower gross margin resulting from higher material costs and increased inventory reserves, and lower leverage of operating expenses due to decreased revenues.

The decreases were partially offset by price increases and channel mix.

The decline in both periods was also attributed to decreases in the Asia-Pacific region of 45% and 38% in the three and nine months ended December 2023, respectively, including a 2% unfavorable impact from foreign currency in the nine months ended December 2023, primarily due to broad-based weakness in Greater China.

Revenues in the Europe region decreased 15% and increased 11% in the three and nine months ended December 2023, respectively, including a 4% and 6% favorable impact from foreign currency in the respective periods.

Operating margin decreased in the three and nine months ended December 2023 compared to the 2022 periods, reflecting lower gross margin resulting from increased inventory reserves and higher material costs, and lower leverage of operating expenses due to decreased revenues.

The decreases were partially offset by price increases and favorable mix.

Reconciliation of Segment Profit to Income (Loss) Before Income Taxes

1 unchanged sentence

These costs are (i) impairment of goodwill and intangible assets, which is excluded from segment profit because these costs are not part of the ongoing operations of the businesses, (ii) corporate and other expenses, discussed below, and (iii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2023 2022 Percent

4 unchanged sentences

Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) certain information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses.

The decrease in corporate and other expenses for both the three and six months ended September

2023 was due to lower compensation and administrative costs and lower corporate restructuring charges.

The decrease in the six months ended September 2023 was also due to a $91.8 million pension settlement charge recorded in the six months ended September 2022.

The increase in corporate and other expenses for the three months ended December 2023 was

primarily due to Reinvent charges and project-related costs of $50.9 million.

The decrease in the nine months ended December 2023 was due to a $91.8 million pension settlement charge recorded in the first quarter of Fiscal 2023 and lower compensation and administrative costs in Fiscal 2024.

33 VF Corporation Q3 FY24 Form 10-Q

International Operations

International revenues increased 10% and 7% in the three and six months ended September 2023, respectively, compared to the 2022 periods.

Foreign currency had a favorable impact of 5% and 2% on international revenues in the three and six months ended September 2023, respectively.

In the Asia-Pacific region, revenues increased 2% and 7% in the three and six months ended September 2023, respectively.

Foreign currency had an unfavorable impact of 4% on Asia-Pacific revenues in both the three and six months ended September 2023.

Revenues in Greater China increased 8% and 14% in the three and six months ended September 2023,

respectively, including a 6% unfavorable impact from foreign currency in both periods.

The prior year periods were negatively impacted by COVID-19 resurgence in Mainland China.

Revenues in the Europe region increased 14% and 8% in the three and six months ended September 2023, respectively, including an 8% and 5% favorable impact from foreign currency in the respective periods.

International revenues were 55% and 49% of total revenues in the three-month periods ended September 2023 and 2022, respectively, and 52% and 47% of total revenues in the six-month periods ended September 2023 and 2022, respectively.

Direct-to-Consumer Operations

Direct-to-consumer revenues decreased 3% in both the three and six months ended September 2023, compared to the 2022 periods, including a 2% favorable impact from foreign currency in the three months ended September 2023.

VF's e-commerce business decreased 3% and 4% during the three and six months ended September 2023, respectively, including a 2% favorable impact from foreign currency in the three months ended September 2023.

These results were primarily driven by declines in the Active segment e-commerce business, partially offset by growth in the Outdoor segment.

Revenues from VF-operated retail stores decreased 4% during both the three and six months ended September 2023, including a 2% and 1% favorable impact from foreign currency in the respective periods.

There were 1,251 VF-operated retail stores at September 2023 compared to 1,283 at September 2022.

Direct-to-consumer revenues were 37% of total revenues in both the three-month periods ended September 2023 and 2022, and 41% and 40% of total revenues in the six-month periods ended September 2023 and 2022, respectively.

Wholesale Operations

Wholesale revenues decreased 1% and 5% in the three and six months ended September 2023, respectively, compared to the 2022 periods, including a 2% favorable impact from foreign currency in both periods.

These results were due to declines in the Active and Work segments' wholesale business, partially offset by growth in the Outdoor segment.

Wholesale revenues were 63% of total revenues in both the three-month periods ended September 2023 and 2022, and 59% and 60% of total revenues in the six-month periods ended September 2023 and 2022, respectively.

International

International revenues decreased 5% and increased 2% in the three and nine months ended December 2023, respectively, compared to the 2022 periods.

Foreign currency had a favorable impact of 3% and 2% on international revenues in the three and nine months ended December 2023, respectively.

Revenues in the Europe region decreased 7% and increased 2% in the three and nine months ended December 2023, respectively, including a 5% favorable impact from foreign currency in both periods.

In the Asia-Pacific region, revenues increased 2% and 5% in the three and nine months ended December 2023, respectively.

Foreign currency had an

unfavorable impact of 1% and 3% on Asia-Pacific revenues in the three and nine months ended December 2023, respectively.

Revenues in Greater China increased 5% and 10% in the three and nine months ended December 2023, respectively, including a 2% and 4% unfavorable impact from foreign currency in the respective periods.

The nine months ended December 2022 was negatively impacted by COVID-19 resurgence in Mainland China.

International revenues were 52% and 46% of total revenues in the three-month periods ended December 2023 and 2022, respectively, and 52% and 47% of total revenues in the nine-month periods ended December 2023 and 2022, respectively.

Direct-to-Consumer

Direct-to-consumer revenues decreased 8% and 5% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 1% favorable impact from foreign currency in both periods.

VF's e-commerce business decreased 13% and 9% during the three and nine months ended December 2023, respectively, including a 1% favorable impact from foreign currency in the three months ended December 2023.

These results were primarily driven by declines in the e-commerce business in the Americas region.

Revenues from VF-operated retail stores decreased 4% during the three and nine months ended December 2023, including a

1% favorable impact from foreign currency in both periods.

There were 1,271 VF-operated retail stores at December 2023 compared to 1,282 at December 2022.

Direct-to-consumer revenues were 60% and 55% of total revenues in the three-month periods ended December 2023 and 2022, respectively, and 48% and 46% of total revenues in the nine-month periods ended December 2023 and 2022, respectively.

Wholesale revenues decreased 26% and 12% in the three and nine months ended December 2023, respectively, compared to the 2022 periods, including a 2% favorable impact from foreign currency in both periods.

These results were primarily driven by declines in the wholesale business in the Americas region.

Wholesale revenues were 40% and 45% of total revenues in the three-month periods ended December 2023 and 2022, respectively, and 52% and 54% of total revenues in the nine-month periods ended December 2023 and 2022, respectively.

VF Corporation Q3 FY24 Form 10-Q 34

1 unchanged sentence

Consolidated Balance Sheets

The following discussion refers to significant changes in balances at September 2023 compared to March 2023:

• Increase in accounts receivable — primarily due to the seasonality of the business and the timing of collections.

• Increase in inventories — primarily due to the seasonality of the business and planned inventory purchases.

• Decrease in other assets — primarily due to the write-off of the $875.7 million income tax receivable related to the 2011 taxes and interest disputed in the Timberland tax case due to the unfavorable decision in the case.

The following discussion refers to significant changes in balances at December 2023 compared to March 2023:

• Decrease in accounts receivable — primarily due to lower wholesale shipments.

• Decrease in inventories — driven by VF reducing elevated inventory levels, primarily in core and replenishment products.

• Decrease in goodwill — primarily due to $257.1 million in impairment charges related to the Timberland and Dickies reporting units recorded in the third quarter of Fiscal 2024.

• Decrease in other assets — primarily due to the write-off of the $875.7 million income tax receivable in the second quarter of Fiscal 2024 due to the unfavorable decision in the Timberland tax case related to 2011 taxes and interest disputed with the IRS.

• Increase in short-term borrowings — primarily due to an increase in commercial paper borrowings.

• Decrease in the current portion of long-term debt — due to the repayment of €850.0 million ( $907.1 million) of long-term notes due in September 2023.

• Decrease in accrued liabilities — primarily due to the expected net reduction in taxes previously paid on the periodic income inclusions related to the Timberland acquisition.

The following discussion refers to significant changes in balances at September 2023 compared to September 2022:

• Decrease in inventories — driven by VF reducing elevated inventory levels, primarily in core and replenishment products, resulting from supply chain challenges and softening consumer demand.

• Decrease in other current assets — primarily due to a decrease in derivative assets resulting from lower unrealized gains on foreign currency exchange contracts.

• Decrease in long-term debt — due to the reclassification of $1.0 billion of long-term debt due in December 2024 related to our delayed draw Term Loan Agreement (the "DDTL Agreement").

The following discussion refers to significant changes in balances at December 2023 compared to December 2022:

• Decrease in accounts receivable — primarily due to lower wholesale shipments.

• Decrease in inventories — driven by VF reducing elevated inventory levels, primarily in core and replenishment products.

• Decrease in intangible assets — primarily due to a $148.0 million impairment charge related to the Supreme ® indefinite-lived trademark intangible asset recorded in the fourth quarter of Fiscal 2023.

• Decrease in goodwill — primarily due to a $165.1 million impairment charge related to the Supreme reporting unit recorded in the fourth quarter of Fiscal 2023.

• Decrease in goodwill — primarily due to $257.1 million in impairment charges related to the Timberland and Dickies reporting units recorded in the third quarter of Fiscal 2024 and a $165.1 million impairment charge related to the Supreme reporting unit recorded in the fourth quarter of Fiscal 2023.

• Decrease in short-term borrowings — primarily due to a decrease in commercial paper borrowings.

• Decrease in the current portion of long-term debt — due to the repayment of €850.0 million ( $907.1 million) of long-term notes due in September 2023.

• Decrease in accrued liabilities — primarily due to the expected net reduction in taxes previously paid on the periodic income inclusions related to the Timberland acquisition, and lower accrued compensation and restructuring costs.

• Increase in long-term debt — due to the March 2023 issuance of €500.0 million euro-denominated 4.125% fixed-rate notes maturing in March 2026 and €500.0 million euro-denominated 4.250% fixed-rate notes maturing in March 2029, and borrowings of $1.0 billion under the delayed draw Term Loan Agreement (the "DDTL Agreement") in the third quarter of Fiscal 2023.

• Decrease in accrued liabilities — primarily due to a decrease in income taxes payable related to the Timberland tax case decision and lower accrued compensation.

• Decrease in other liabilities — primarily due to a decrease in deferred income tax liabilities, including the impacts from the Timberland tax case decision.

1 unchanged sentence

We consider the following to be measures of our liquidity and capital resources:

September March September

December March December

(Dollars in millions) 2023 2023 2022

2 unchanged sentences

Net debt to total capital 76.0% 71.6% 68.7%

The increase in working capital and the current ratio at September 2023 compared to March 2023 was primarily due to a net increase in current assets driven by higher accounts receivable and inventories as discussed in the "Consolidated Balance Sheets" section above, partially offset by lower cash balances.

The increase in working capital and the current ratio at September 2023 compared to September 2022 was primarily due to a net decrease in current liabilities driven by decreased current portion of long-term debt, short-term borrowings and accrued liabilities, partially offset by lower inventories, as discussed in the "Consolidated Balance Sheets" section above.

The decrease in working capital and the current ratio at December 2023 compared to March 2023 was primarily due to a net increase in current liabilities driven by higher short-term borrowings, and a net decrease in current assets driven by lower accounts receivable and inventories for the periods compared, as discussed in the "Consolidated Balance Sheets" section above, partially offset by higher cash balances.

The increase in working capital at December 2023 compared to December 2022 was primarily due to a net decrease in current liabilities driven by decreased short-term borrowings and accrued liabilities, partially offset by a net decrease in current assets driven by lower accounts receivable and inventories, as discussed in the "Consolidated Balance Sheets" section above.

For the ratio of net debt to total capital, net debt is defined as short-term and long-term borrowings, in addition to operating lease liabilities, net of unrestricted cash.

Total capital is defined as net debt plus stockholders’ equity.

The increase in the net

debt to total capital ratio at September 2023 compared to March 2023 was driven by an increase in net debt and a decrease in stockholders' equity for the periods compared.

The increase in net debt was driven by an increase in short-term borrowings, partially offset by a decrease in the current portion of long-term debt, as discussed in the "Consolidated Balance Sheet" section above, and lower cash and cash equivalents at September 2023.

The decrease in stockholders' equity at September 2023 compared to March 2023 was primarily driven by the net loss for the period and payments of dividends.

The increase in the net debt to total capital ratio at September 2023 compared to September 2022 was primarily driven by an increase in net debt and a decrease in stockholders' equity.

The increase in net debt was primarily attributed to the issuance of €1.0 billion euro-denominated fixed-rate notes and $1.0 billion of borrowings under the DDTL Agreement in Fiscal 2023, partially offset by

VF Corporation Q2 FY24 Form 10-Q 34

lower current portion of long-term debt and short-term borrowings as discussed in the "Consolidated Balance Sheet" section above.

The decrease in stockholders' equity at September 2023 compared to September 2022 was primarily driven by payments of dividends and the net loss in the period.

The increase in the net debt to total capital ratio at December 2023 compared to both March 2023 and December 2022 was driven by a decrease in

stockholders' equity, partially offset by a decrease in net debt for the periods compared.

The decrease in stockholders' equity for both comparisons was driven by net loss in the respective periods and payments of dividends.

The decrease in net debt at December 2023 compared to March 2023 was driven by the repayment of €850.0 million in aggregate principal amount of Senior Notes due in September 2023, partially offset by higher short-term borrowings.

The decrease in net debt at December 2023 compared to December 2022 was driven by lower short-term borrowings, as discussed in the "Consolidated Balance Sheets" section above, and higher cash and cash equivalents at December 2023.

VF’s primary source of liquidity is its expected annual cash flow from operating activities.

Cash from operations is typically lower in the first half of the calendar year as inventory builds to

support peak sales periods in the second half of the calendar year.

Cash from operations is typically lower in the first half of the calendar year as inventory builds to support peak sales periods in the second half of the calendar year.

Cash provided by operating activities in the second half of the calendar year is substantially higher as inventories are sold and accounts receivable are collected.

Additionally, direct-to-consumer sales are highest in the fourth quarter of the calendar year.

VF's additional sources of liquidity include available borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.

In summary, our cash flows from operations were as follows:

Six Months Ended September

Additionally, direct-to-

35 VF Corporation Q3 FY24 Form 10-Q

consumer sales are highest in the fourth quarter of the calendar year.

VF's additional sources of liquidity include available

borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.

In summary, our cash flows were as follows:

Nine Months Ended December

(In thousands) 2023 2022

Cash used by operating activities $ (19,261) $ (913,957)

Cash provided (used) by operating activities $ 1,105,747 $ (833,472)

Cash used by investing activities (191,994) (206,833)

Cash provided (used) by financing activities (735,766) 418,719

Cash Used by Operating Activities

Cash flows related to operating activities are dependent on net loss, adjustments to net loss and changes in working capital.

The decrease in cash used by operating activities in the six months ended September 2023 compared to September 2022 was primarily due to a decrease in net cash used by working capital driven by lower inventory levels.

Cash Provided (Used) by Operating Activities

Cash flows related to operating activities are dependent on net income (loss), adjustments to net income (loss) and changes in working capital.

The increase in cash provided by operating activities in the nine months ended December 2023 compared to December 2022 was primarily due to a decrease in net cash used by working capital driven by lower accounts receivable and inventory balances in the 2023 period and the $875.7 million payment related to the Timberland tax case in the prior year period.

The increase in cash provided by operating activities was partially offset by lower earnings for the periods compared.

Cash Used by Investing Activities

The increase in cash used by investing activities in the six months ended September 2023 was primarily due to increased capital expenditures of $6.4 million compared to the 2022 period, and proceeds from the sale of assets of $8.9 million included in the six months ended September 2022.

Software purchases decreased $5.3 million in the six months ended September 2023 compared to the 2022 period.

The decrease in cash used by investing activities in the nine months ended December 2023 was primarily due to decreased software purchases of $22.6 million and decreased capital expenditures of $10.6 million, partially offset by lower proceeds from the sale of assets of $14.2 million compared to the 2022 period.

Cash Provided (Used) by Financing Activities

The increase in cash used by financing activities during the six months ended September 2023 was primarily due to a $907.1 million payment of long-term debt in the six months ended September 2023 compared to a $500.0 million payment of long-term debt in the six months ended September 2022.

The increase in cash used by financing activities during the nine months ended December 2023 was primarily due to borrowings of $1.0 billion under the DDTL Agreement during the 2022 period and a $907.1 million payment of long-term debt in the nine months ended December 2023 compared to a $500.0 million payment of long-term debt in the nine months ended December 2022.

The increase was also due to a $122.7 million net decrease in short-term borrowings for the periods compared.

1 unchanged sentence

Share Repurchases

VF did not purchase shares of its Common Stock in the open market during the six months ended September 2023 or the six months ended September 2022 under the share repurchase program authorized by VF's Board of Directors.

As of the end of September 2023, VF had $2.5 billion remaining for future repurchases under its share repurchase authorization.

VF did not purchase shares of its Common Stock in the open market during the nine months ended December 2023 or the nine months ended December 2022 under the share repurchase program authorized by VF's Board of Directors.

As of the end of December 2023, VF had $2.5 billion remaining for future repurchases under its share repurchase authorization.

VF's capital deployment priorities in the near-to-medium term will be focused on optimizing and driving the performance of the current portfolio and reducing leverage.

1 unchanged sentence

VF relies on its ability to generate cash flows to finance its ongoing operations.

In addition, VF has significant liquidity from its available cash balances and credit facilities.

In addition, VF has significant liquidity from

its available cash balances and credit facilities.

VF maintains a $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”) that expires in November 2026.

VF may request an unlimited number of one-year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions;

however, granting of any extension is at the discretion of the lenders.

The Global Credit Facility may be used to borrow funds in U.S.

1 unchanged sentence

dollars, approved at the request of the Company by the lenders) and has a $75.0 million letter of credit sublimit.

In addition to the U.S.

commercial paper program, VF commenced a euro commercial paper borrowing program during the three months ended September 2023.

The Global Credit Facility supports VF’s global commercial paper program for short-term, seasonal working capital requirements and general corporate purposes.

3 unchanged sentences

The covenant calculation also excludes consolidated operating lease liabilities.

As of September 2023, VF was in compliance with all covenants.

As of December 2023, VF was in compliance with all covenants.

VF has a global commercial paper program that allows for borrowings of up to $2.25 billion to the extent that it has borrowing capacity under the Global Credit Facility.

There were $1.0 billion in global commercial paper borrowings as of September 2023 .

Standby letters of credit issued under the Global Credit Facility as of September 2023 were $1.0 million, leaving approximately $1.2 billion available for borrowing against the Global Credit Facility at September 2023.

Additionally, VF had $498.9 million of cash and equivalents at September 2023.

35 VF Corporation Q2 FY24 Form 10-Q

There were $437.0 million in U.S.

commercial paper borrowings as of December 2023 .

In addition to the U.S.

commercial paper program, VF commenced a euro commercial paper borrowing program during the second quarter of Fiscal 2024.

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

Standby letters of credit issued under the Global Credit Facility as of December 2023 were $0.6 million, leaving approximately $1.8 billion available for borrowing against the Global Credit Facility at December 2023, subject to applicable financial covenants.

VF has $85.1 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks.

Total outstanding balances under these arrangements were $14.6 million at September 2023.

Total outstanding balances under these arrangements were $15.3 million at December 2023.

Additionally, VF had $988.0 million of unrestricted cash and equivalents at December 2023.

VF Corporation Q3 FY24 Form 10-Q 36

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.

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 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.

In the second quarter of Fiscal 2023, VF extended its payment terms with eligible suppliers under the SCF program.

2 unchanged sentences

Rating Agencies

VF’s credit agency ratings allow for access to additional liquidity at competitive rates.

At the end of September 2023, VF’s long-term debt ratings were ‘BBB’ by Standard & Poor’s ("S&P") Global Ratings and ‘Baa2’ by Moody’s Investors Service ("Moody's"), and U.S.

At the end of December 2023, VF’s long-term debt ratings were ‘BBB’ by Standard & Poor’s ("S&P") Global Ratings and ‘Baa3 by Moody’s Investors Service ("Moody's"), and U.S.

commercial paper ratings by those rating agencies were ‘A-2’ and ‘P-3’, respectively.

The Moody's rating for VF's euro commercial paper was also 'P-2' at the end of September 2023.

VF's credit rating outlook by S&P and Moody's at the end of September 2023 was 'stable' and 'negative', respectively.

On November 2, 2023, S&P updated VF's credit rating outlook to 'negative', while maintaining VF's long-term debt rating of 'BBB' and commercial paper rating of 'A-2'.

The Moody's rating for VF's euro commercial paper was also 'P-3' at the end of December 2023.

There is no active market for euro commercial paper based on VF's current rating.

VF's credit rating outlook by both S&P and Moody's at the end of December 2023 was 'negative'.

VF’s credit agency ratings currently allow for access to additional liquidity at competitive rates.

Further downgrades to VF's ratings could negatively impact borrowing costs.

None of VF’s long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings.

2 unchanged sentences

The change of control provision applies to all notes, except for the notes due in 2033.

The Company paid cash dividends of $0.30 and $0.60 per share during the three and six months ended September 2023, respectively, and the Company has declared a cash dividend of $0.09 per share that is payable in the third quarter of Fiscal 2024.

The Company paid cash dividends of $0.09 and $0.69 per share during the three and nine months ended December 2023, respectively, and the Company has declared a cash dividend of $0.09 per share that is payable in the fourth quarter of Fiscal 2024.

Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.

1 unchanged sentence

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.

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.

3 unchanged sentences

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 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.

As a result of the Appeals Court decision, VF wrote off the related income tax receivable and associated interest and recorded $690.0 million of income tax expense in 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.

3 unchanged sentences

Management’s Discussion and Analysis in the Fiscal 2023 Form 10-K provided a table summarizing VF’s material contractual obligations and commercial commitments at the end of Fiscal 2023 that would require the use of funds.

As of September 2023, there have been no material changes in the amounts of unrecorded commitments disclosed in the Fiscal 2023 Form 10-K, except as noted below:

• Inventory purchase obligations decreased by approximately $948.0 million at the end of September 2023 primarily due to timing of inventory shipments, overall inventory levels that remain elevated and decreased demand.

There continues to be uncertainty about the duration and extent of the impact of the challenging macroeconomic environment.

However, management believes that VF has sufficient liquidity and flexibility to operate during and after the disruptions caused by the challenging macroeconomic environment, and meet its current and long-term obligations as they become due.

VF Corporation Q2 FY24 Form 10-Q 36

As of December 2023, there have been no material changes in the amounts of unrecorded commitments disclosed in the Fiscal 2023 Form 10-K, except as noted below:

• Inventory purchase obligations decreased by approximately $1.1 billion at the end of December 2023 primarily due to timing of inventory shipments and an overall planned reduction in inventory levels.

Management believes that VF has sufficient liquidity and flexibility to operate its business and meet its current and long-term obligations as they become due.

Recent Accounting Pronouncements

Refer to Note 2 to VF’s consolidated financial statements for information on recently adopted accounting standards.

37 VF Corporation Q3 FY24 Form 10-Q

Critical Accounting Policies and Estimates

12 unchanged sentences

From time to time, VF may make oral or written statements, including statements in this quarterly report, that constitute “forward-looking statements” within the meaning of the federal securities laws.

You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "should," and "may," and other words and terms of similar meaning or use of future dates.

You can identify these statements by the fact that they use words such as "will," "anticipate," "believe," "estimate," "expect," "should," and "may," and other words and terms of similar meaning or use of future dates.

However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.

15 unchanged sentences

VF’s ability to grow its international, direct-to-consumer and digital businesses;

VF's ability to find and amplify consumer tailwinds, build brands on

multiple growth horizons and leverage platforms for speed to scale and efficiency;

VF's ability to find and amplify consumer tailwinds, build brands on multiple growth horizons and leverage platforms for speed to scale and efficiency;

retail industry changes and challenges;

VF's ability to execute its transformation and other business strategies, including cost reduction and productivity initiatives and the update and maintenance of an agile and efficient operating model and organizational structure;

VF’s and its vendors’ ability to maintain the strength and security of information technology systems;

the risk that VF’s facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data or information security breaches and data or financial loss;

VF’s ability to properly collect, use, manage and secure business, consumer and employee data and comply with privacy and security regulations;

VF's ability to execute its transformation and other business strategies, such as the Reinvent transformation program,

including cost reduction and productivity initiatives and the update and maintenance of an agile and efficient operating model and organizational structure;

any inability of VF or third parties on which we rely, to maintain the strength and security of information technology systems;

the fact that VF’s facilities and systems, and those of third parties on which we rely, are frequent targets of cyber-attacks of varying levels of severity, and may be vulnerable to such attacks, and any inability or failure by us or such third parties to anticipate or detect data or information security breaches or other cyber-attacks, including the cyber incident that was reported by VF in December 2023, could result in data or financial loss, reputational harm, business disruption, damage to our relationships with customers, consumers, employees and third parties on which we rely, litigation, regulatory investigations, enforcement actions or other negative impacts;

any inability by VF or third parties on which we rely to properly collect, use, manage and secure business, consumer and employee data and comply with privacy and security regulations;

foreign currency fluctuations;

7 unchanged sentences

VF’s ability to protect trademarks and other intellectual property rights;

possible goodwill and other asset impairment such as the impairment charges related to the Supreme ® reporting unit goodwill and indefinite-lived trademark intangible asset;

possible goodwill and other asset impairment such as the impairment charges related to the Timberland ® and Dickies ® reporting unit goodwill and Supreme ® reporting unit goodwill and indefinite-lived trademark intangible asset;

maintenance by VF’s licensees and distributors of the value of VF’s brands;

5 unchanged sentences

adverse or unexpected weather conditions, including any potential effects from climate change;

VF's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations;

VF's ability to

VF's indebtedness and its ability to obtain

VF Corporation Q3 FY24 Form 10-Q 38

pay and declare dividends or repurchase its stock in the future;

financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations;

VF's ability to pay and declare dividends or repurchase its stock in the future;

climate change and increased focus on environmental, social and governance issues;

VF's ability to execute on its sustainability strategy and achieve its sustainability-related goals and targets;

risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global

risks arising from the widespread outbreak of an illness or any other

communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic;

and tax risks associated with the spin-off of our Jeanswear business completed in 2019.

3 unchanged sentences

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 2. Management’s Discussion and Analysis