What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-01-29 compared with 2024-10-30 · 249 added, 227 removed, 252 unchanged (65% of the section changed)

2 unchanged sentences

The Company's current fiscal year runs from March 31, 2024 through March 29, 2025 ("Fiscal 2025").

Accordingly, this Form 10-Q presents our second quarter of Fiscal 2025.

For presentation purposes herein, all references to periods ended September 2024 and September 2023 relate to the fiscal periods ended on September 28, 2024 and September 30, 2023, respectively.

Accordingly, this Form 10-Q presents our third quarter of Fiscal 2025.

For presentation purposes herein, all references to periods ended December 2024 and December 2023 relate to the fiscal periods ended on December 28, 2024 and December 30, 2023, respectively.

References to March 2024 relate to information as of March 30, 2024.

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 2024 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and six months ended September 2023 when translating foreign currencies into U.S.

References to the three and nine months ended December 2024 foreign currency amounts and impacts below reflect the changes in foreign exchange rates from the three and nine months ended December 2023 when translating foreign currencies into U.S.

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

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On October 1, 2024, VF completed the sale of Supreme.

During the three months ended September 2024, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria.

Accordingly, b eginning in the second quarter of Fiscal 2025, VF has reported the results of Supreme and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively.

During the second quarter of Fiscal 2025, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria.

Accordingly, VF has reported the results of Supreme and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale.

In addition, interest expense and the related interest rate swap impact for the delayed draw Term Loan ("DDTL") were reallocated to discontinued operations due to the requirement within the DDTL Agreement, as amended, that the DDTL be prepaid upon the receipt of the net cash proceeds from the sale of Supreme.

The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets.

The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale.

These changes have been applied to all periods presented.

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As noted above, VF completed the sale of Supreme on October 1, 2024.

VF received proceeds of $1.5 billion , subject to post closing adjustments, and recognized an after-tax estimated loss on sale of Supreme of $124.8 million, which is included in the income (loss) from discontinue d operations, net of tax line item in the Consolidated Statements of Operations for the three and six months ended September 2024.

VF received proceeds of $1.486 billion , net of cash sold and subject to post closing adjustments, and recognized an estimated after-tax loss on sale of Supreme of $127.5 million, whic h is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the nine months ended December 2024 .

VF used a portion of the net cash proceeds to prepay $1.0 billion of the DDTL on October 4, 2024, pursuant to the terms of the DDTL Agreement, as amended, which required repayment within ten business days of VF’s receipt of the net cash proceeds from the sale of Supreme, and to repay $450.0 million of commercial paper borrowings upon maturity during the three months ended December 2024.

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.

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• Sharpen brand presidents' focus on sustainable growth:

A direct consequence and intent of the operating model change, which is particularly critical at this stage for the

Vans ® brand, enables brand presidents to direct greater focus and attention to long-term brand-building, product innovation and growth strategies.

A direct consequence and intent of the operating model change, which is particularly critical at this stage for the Vans ® brand, enables brand presidents to direct greater focus and attention to long-term brand-building, product innovation and growth strategies.

• Appoint new Vans ® President :

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

VF used a portion of the proceeds from the sale of Supreme to prepay the DDTL and the remaining proceeds will be applied to upcoming debt maturities.

VF used the proceeds from the sale of Supreme to prepay the DDTL and to repay $450.0 million of commercial paper borrowings.

During the second quarter of Fiscal 2025, the Company initiated the next phase of Reinvent, which is focused on a return to growth and improvements to profitability.

In doing so, the Company initiated a set of transformational workstreams focused on revenue growth, margin expansion and selling, general and administrative expense contraction.

Reinvent restructuring charges in the three and six months ended September 2024 were $11.8 million and $25.4 million, respectively, and cumulative charges were $134.1 million since the inception of the program, which primarily included c osts associate d with severance and employee-related benefits and the impact of asset impairments and write-downs.

Reinvent restructuring charges in the three and nine months ended December 2024 were $16.4 million and $41.8 million, respectively, and cumulative charges were $150.5 million since the inception of the program, which primarily included c osts associate d with severance and employee-related benefits and the impact of asset impairments and write-downs.

29 VF Corporation Q3 FY25 Form 10-Q

SUMMARY OF THE SECOND QUARTER OF FISCAL 2025

• Revenues were down 6% to $2.8 billion compared to the three months ended September 2023.

• Outdoor segment revenues decreased 3% to $1.7 billion compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.

• Active segment revenues decreased 9% to $879.8 million compared to the three months ended September 2023.

• Work segment revenues decreased 8% to $219.5 million compared to the three months ended September 2023.

• Wholesale revenues were down 4% compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.

• Direct-to-consumer revenues were down 8% co mpared to the three months ended September 2023.

• International revenues decreased 2% compared to the three months ended September 2023, including a 1% favorable impact from foreign currency.

• Revenues in the Americas region decreased 10% compared to the three months ended September 2023, including a 1% unfavorable impact from foreign currency.

• G ross margin increased 120 basis points to 52.2% compared to the three months ended September 2023, primarily driven by lower product costs.

SUMMARY OF THE THIRD QUARTER OF FISCAL 2025

• Revenue increased 2% to $2.8 billion compared to the three months ended December 2023.

• Outdoor segment revenues increased 6% to $1.9 billion compared to the three months ended December 2023, including a 1% unfavorable impact from foreign currency.

• Active segment revenues decreased 6% to $766.3 million compared to the three months ended December 2023.

• Work segment revenues decreased 3% to $216.5 million compared to the three months ended December 2023, including a 1% unfavorable i mpact from foreign currency.

• Wholesale revenues increased 8% compared to the three months ended December 2023.

• Direct-to-consumer revenues decreased 3% compared to the three months ended December 2023, including a 1% unfavorable impact from foreign currency.

• International revenues increased 1% compared to the three months ended December 2023, including a 1% unfavorable impact from foreign currency.

• Revenues in the Americas region increased 1% compared to the three months ended December 2023, including a 1% unfavorable impact from foreign currency.

• G ross margin increased 170 basis points to 56.3% compared to the three months ended December 2023 , primarily driven by lower product costs and less promotional activity.

• Earnings (loss) per share w as $0.43 compared to $(0.24) i n the 2023 period .

Th e three months ended September 2023 included increased tax expense due to the unfavorable decision in the Timberland tax case, which negatively impacted earnings per share by $1.72.

The thre e months ended September 2024 included Reinvent charges and lower profitability in the Outdoor and Active segments .

The increase was primarily driven by increased profitability in the Outdoor segment during the three months ended December 2024 and lower impairment charges in the current period compared to the three months ended December 2023 .

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 2024 from the comparable periods in 2023:

(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 2024 from the comparable periods in 2023:

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

Net revenues — 2023 $ 2,780.2 $ 7,668.4

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Net revenues — 2024 $ 2,833.9 $ 7,360.9

VF reported a 6% and 7% decrease in r evenues for the three and six months ended September 2024, respectively, compared to the 2023 periods.

The revenue decrease in both the three and six months ended September 2024 was driven by declines across all segments.

The revenue decrease in both the three and six months ended September 2024 was also due to declines across

the Americas and Europe regions, with the most significant declines in the Americas region.

VF reported a 2% increase and a 4% decrease in revenues for the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The revenue increase in the three months ended December 2024 was driven by an increase in the Outdoor segment, partially offset by a decrease in the Active segment.

The revenue increase in the three months ended December 2024 was also due to increases across all regions.

The revenue decrease in the nine months ended December 2024

was driven by declines across the Active and Work segments, partially offset by an increase in the Outdoor segment.

The revenue decrease in the nine months ended December 2024 was also due to declines across the Americas and Europe regions, with the most significant declines in the Americas region.

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

The following table presents the percentage relationship 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

2024 2023 2024 2023

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Selling, general and administrative expenses 46.5 48.7 47.7 46.3

Impairment of goodwill and intangible assets 1.8 9.2 0.7 3.4

Operating margin 8.0 % (3.3) % 5.1 % 3.0 %

Gross margin increased 120 and 30 bas is po ints in the three and six months ended September 2024, respectively, compared to the 2023 periods.

Amounts may not sum due to rounding.

Gross margin increased 170 and 90 basis points in the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The increase in both periods was primarily driven by lower product costs.

Selling, general and administrative expe nses as a percentage of total revenues increased 330 and 360 basis points during the three and six months ended September 2024, respectively, compared to the 2023 periods.

Selling, general and administrative expenses in crea sed $27.3 million and decreased $2.3 million in the three and six months ended September 2024,

resp ectively, compared to the 2023 periods.

T he increase in the three months ended September 2024 wa s primarily due to Reinvent charges and higher compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent and lower information technology costs and distribution expenses.

Th e decrease in the six months ended Septem ber 2024 was primarily due to cost savings from Reinvent, lower distribution expenses and information technology costs and a gain recognized from a sale leaseback transaction, partially offset by Reinvent charges and higher

The increase in the three months ended December 2024 was also due to less promotional activity.

Selling, general and administrative expe nses as a percentage of total revenues decreased 220 basis points and increased 140 basis points during the three and nine months ended December 2024, respectively, compared to the 2023 periods.

Selling, general and administrative expenses decreased $34.8 million and $37.1 million in the three and nine months ended December 2024, resp ectively, compared to the 2023 periods.

VF Corporation Q3 FY25 Form 10-Q 30

compensation costs, including performance-based compensation.

Net inter est expense increased $1.6 million and $6.9 million during the three and six months ended September 2024, respectively, compared to the 2023 periods.

The increase in net interest expense in both the three and six months ended September 2024 was primarily due to changes in international rates and increased levels of short-term commercial paper borrowings at higher rates, partially offset by lower interest on long-term debt due to the repayment of €850.0 million ($907.1 million) of long-term notes in September 2023.

Total outstanding debt averaged $6.2 billion in the six months ended September 2024 and $6.9 billion in the same period in 2023, with weighted average interest rates of 2.7% and 2.3% in the six months ended September 2024 and 2023, respectively.

The effective income tax rate for the six months ended September 2024 wa s 22.5% compared to 316.1% in the 2023 period.

The six months ended September 2024 included a net discrete tax benefit of $5.8 million , which was comprised primarily o f a $9.5 million net tax benefit related to unrecognized tax benefits and interest and a $5.3 million tax expense related to stock compensation.

Excluding the $5.8 million net discrete

tax benefit in the 2024 period, the effective income tax rate would have been 31.4%.

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.

in the three months ended December 2024 was primarily due to cost savings from Reinvent, partially offset by higher compensation costs, including performance-based compensation.

The decrease in the nine months ended December 2024 was primarily due to cost savings from Reinvent, lower information technology costs and distribution expenses and a gain recognized from a sale leaseback transaction, partially offset by Reinvent restructuring charges and project-related costs and higher compensation costs, including performance-based compensation.

VF recorded an i ntangible asset impairment charg e of $51.0 million relat ed to the Dickies indefinite-lived trademark intangible asset in the three and nine months ended December 2024.

During the third quarter of Fiscal 2025, due to the continued downturn in the Dickies financial results and projections, combined with expectations of a slower recovery than previously anticipated , the Company determined that a triggering event had occurred requiring impairment testing of the Dickies indefinite-lived trademark inta ngible asset.

The indefinite-lived trademark intangible asset impairment primarily related to the reduction in financial projections fo r Dickies.

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.

Net inter est expense decreased $12.6 million and $5.6 million during the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The decrease in net interest expense in both the three and nine months ended December 2024 was primarily due to decreased levels of short-term commercial paper borrowings and an increase in interest income due to higher cash and cash equivalents and rates.

Total outstanding debt averaged $5.0 billion in t he nine months ended

December 2024 and $6.8 billion in the same period in 2023, with weighted average interest rates of 3.3% and 2.6% in the nine months ended December 2024 and 2023, respectively.

Other income (expense), ne t decreased $21.6 million and $17.9 million during the three and nine months ended December 2024, respectively, compared to the 2023 periods.

Th e decrease in both periods was primarily due to legal settlement gains of $29.1 million recorded in the 2023 periods, partially offset by cyber insurance recoveries of $9.2 million received in the three and nine months ended December 2024 .

The effective income tax rate for the nine months ended December 2024 wa s 16.1% compared to 578.0% in the 2023 period.

Th e nine months ended December 2024 included a net discrete tax benefit of $1.9 million, which was comprised primarily of a $5.8 million net tax benefit related to unrecognized tax benefits and interest, and a $5.9 million tax expense related to stock compensation.

Excluding the $1.9 million net discrete tax benefit in the 2024 period, the effective income tax rate would have been 16.8%.

The nine months ended December 2023 included a net discrete tax expense of $693.8 million, primarily related to the tax effects of decisions in the Timberland tax case and Belgium excess profits ruling.

Excluding the $693.8 million net discrete tax exp ense in the 2023 period, the effective income tax rate would have been 31.0%.

Without discrete items, the effective income tax rate for the six months ended September 2024 increased by 10.6% c ompared with the 2023 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, income (loss) from continuing operations in the three months ended September 2024 was $202.5 million ($0.52 per diluted share) compared to $(451.6) million ($(1.16) per diluted share) in the 2023 period, and income (loss) from continuing operations in the six months ended September 2024 was $50.5 million ($0.13 per diluted share) compared to $(514.6) million ($(1.33) per diluted share) in the 2023 period.

Without discrete items, the effective income tax rate for the nine months ended December 2024 decreased by 14.2% co mpared with the 2023 period primarily due to disproportionate year-to-date losses in jurisdictions with no tax benefit and jurisdictional mix of earnings as well as the impairment of nondeductible goodwill in the prior year.

As a result of the above, income (loss) from continuing operations in the three months ended December 2024 was $169.1 million ($0.43 per diluted share) compared to $(91.7) million ($(0.24) per diluted share) in the 2023 period, and income (loss) from continuing operations in the nine months ended December 2024 was $219.6 million ($0.56 per diluted share) compared to $(606.4) million ($(1.56) per diluted share) in the 2023 period.

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

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Segment profit comprises the operating income and other income (expense), net line items of each segment.

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 from continuing operations before income taxes.

The following tables present a summary of the changes in segment revenues and profit in the three and six months ended September 2024 from the comparable periods in 2023 and revenues by region for our Top 4 brands for the three and six months ended September 2024 and 2023:

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

31 VF Corporation Q3 FY25 Form 10-Q

The following tables present a summary of the changes in segment revenues and profit in the three and nine months ended December 2024 from the comparable periods in 2023 and revenues by region for our Top 4 brands for the three and nine months ended December 2024 and 2023:

Segment Revenues:

Three Months Ended September

Three Months Ended December

(In millions) Outdoor Active Work Total

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Segment revenues — 2024 $ 1,851.1 $ 766.3 $ 216.5 $ 2,833.9

Six Months Ended September

Nine Months Ended December

(In millions) Outdoor Active Work Total

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Segment revenues — 2024 $ 4,300.0 $ 2,450.0 $ 610.9 $ 7,360.9

VF Corporation Q2 FY25 Form 10-Q 30

Segment Profit:

Three Months Ended September

Three Months Ended December

(In millions) Outdoor Active Work Total

Segment profit — 2023 $ 296.8 $ 121.2 $ 8.5 $ 426.5

Segment profit (loss)— 2023 $ 304.7 $ 32.3 $ (1.9) $ 335.2

Organic 94.6 (19.7) 15.3 90.1

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Segment profit — 2024 $ 400.6 $ 12.3 $ 13.5 $ 426.4

Six Months Ended September

Nine Months Ended December

(In millions) Outdoor Active Work Total

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Top Brand Revenues:

Three Months Ended September 2024

Three Months Ended December 2024

(In millions) The North Face ®

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Global $ 1,253.3 $ 607.6 $ 527.0 $ 133.6 $ 2,521.5

Three Months Ended September 2023

Three Months Ended December 2023

(In millions) The North Face ®

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

Six Months Ended September 2024

VF Corporation Q3 FY25 Form 10-Q 32

Nine Months Ended December 2024

(In millions) The North Face ®

4 unchanged sentences

Global $ 2,868.9 $ 1,856.8 $ 1,231.7 $ 402.8 $ 6,360.2

Six Months Ended September 2023

Nine Months Ended December 2023

(In millions) The North Face ®

6 unchanged sentences

Amounts may not sum due to rounding.

31 VF Corporation Q2 FY25 Form 10-Q

The following sections discuss the changes in revenues and profitability by segment.

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) 2024 2023 Percent

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

Global revenues for Outdoor decreased 3% in the three months ended September 2024 compared to the 2023 period, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 12%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 1%, including a 2% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 16%, including a 1% favorable impact from foreign currency and a 22% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan), including a 1% favorable impact from foreign currency.

Global revenues for Outdoor decreased 4% in the six months ended September 2024 compared to the 2023 period.

Revenues in the Americas region decreased 10%.

Revenues in the Europe region decreased 3%, including a 1% favorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 15%, including a 22% increase in Greater China with a 1% unfavorable impact from foreign currency.

Global revenues for The North Face ® brand decreased 3% in both the three and six months ended September 2024 compared to the 2023 periods, including a 1% favorable impact from foreign currency in the three months ended September 2024.

The decrease in both the three and six months ended September 2024 was driven by a decline in the Americas region, which decreased 14% and 13% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in both periods.

Revenues in the Europe region remained flat and decreased 2% in the three and six months ended September 2024, respectively, including a 2% favorable impact from foreign currency in both periods.

Revenues in the Asia-Pacific region increased 20% and 23% in the three and six months ended September 2024, respectively, including a 1% favorable and a 1% unfavorable impact from foreign currency in the respective periods.

Global revenues for the Timberland ® brand decreased 3% and 7% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% favorable impact from foreign currency in the three months ended September 2024.

Revenues in the Europe region decreased 3% and 7% in the three and six months ended September 2024, respectively, including a 2% and 1% favorable impact from foreign currency in the respective periods.

Revenue in the Americas regi on decreased 6% and 5%, respectively, in the three and six months ended September 2024, including a 1% unfavorable impact from foreign currency in the three months ended September 2024.

Revenues in the Asia-Pacific region increased 3% and decreased 8% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable imp act from foreign currency in the six months ended September 2024

Global direct-to-consumer revenues for Outdoor increased 4% and 3% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% favorable and a 1% unfavorable i mpact from foreign currency in the respective periods.

The increases were primarily due to The North Face ® brand in the Europe and Asia-Pacific regions.

Global wholesale revenues decreased 6% and 7% in the three and six months ended September 2024, respectively, compared to the 2023 periods.

The decreases were primarily driven by declines in The North Face ® brand in the Americas and Europe regions.

Operating margin remained flat and decreased in th e three and six months ended September 2024, respectively, compared to the 2023 periods.

The decrease in the six months ended September 2024 reflected increased direct-to-consumer expenses, partially offset by higher gross margin, primarily driven by lower product costs.

Global revenues for Outdoor increased 6% in the three months ended December 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 16%, including a 14% increase in Greater China (which includes Mainland China, Hong Kong and Taiwan) with a 1% favorable impact from foreign currency.

Revenues in the Americas region increased 5%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region increased 3%.

Global revenues for Outdoor remained flat in the nine months ended December 2024 compared to the 2023 period.

Revenues in the Asia-Pacific region increased 15%, including a 1% unfavorable impact from foreign currency and a 19% increase in Greater China.

Revenues in the Europe region decreased 1%.

Revenues in the Americas region decreased 4% compared to the 2023 period.

Global revenues for The North Face ® brand increased 5% in the three months ended December 2024 compared to the 2023 period, primarily driven by growth in the Asia-Pacific region, which increased 16%.

Revenues in the Americas region increased 3% in the three months ended December 2024.

Revenues in the Europe region increased 2% in the three months ended December 2024, including a 1% favorable impact from foreign currency.

Global revenues for The North Face ® brand remained flat in the nine months ended December 2024, compared to the 2023 period.

Revenue growth in the Asia-Pacific region of 20% in the nine months ended December 2024, was

offset by declines in the Americas region of 6%.

Revenues in the Europe region remained flat in the nine months ended December 2024, including a 1% favorable impact from foreign currency.

Global revenues for the Timberland ® brand increased 11% in the three months ended December 2024, compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

Revenue in the Americas region increased 15% in the three months ended December 2024, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region increased 8% in the three months ended December 2024.

Revenues in the Asia-Pacific region increased 14% in the three months ended December 2024, including a 1% unfavorable impact from foreign currency.

Global revenues for the Timberland ® brand remained flat in the nine months ended December 2024, compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

Revenue in the Americas region increased 3% in the nine months ended December 2024, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 1% in the nine months ended December 2024, including a 1% unfavorable impact from foreign currency.

These increases were offset by decreased revenues in the Europe region of 2% in the nine months ended December 2024, including a 1% favorable impact from foreign currency.

33 VF Corporation Q3 FY25 Form 10-Q

Three Months Ended September Six Months Ended September

Global direct-to-consumer revenues for Outdoor increased 6% and 5% in the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The increases were primarily due to the The North Face ® brand across all regions.

Global wholesale revenues increased 7% in the three months ended December 2024, compared to the 2023 period.

The increase was primarily driven by the Timberland ® brand across all regions.

Global wholesale revenues decreased 3% in the nine months ended December 2024, compared to the 2023 period.

The decrease was primarily driven by declines in The North Face ® brand in the Americas and Europe regions.

Operating margin increased in both th e three and nine months ended December 2024 compared to the 2023 periods, reflecting higher gross margin, primarily driven by lower product costs.

The increase in gross margin in the three months ended December 2024 was also due to less promotional activity.

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2024 2023 Percent

5 unchanged sentences

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

Global revenues for Active decreased 9% in the three months ended September 2024 compared to the 2023 period.

Revenues in the Americas region decreased 8%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 8% including a 1% favorable impact from foreign currency.

Global revenues for Active decreased 6% in the three months ended December 2024 compared to the 2023 period.

Revenues in the Asia-Pacific region decreased 27%, including a 38% decrease in Greater China with a 1% favorable impact from foreign currency.

Global revenues for Active decreased 12% in the six months ended September 2024 compared to the 2023 period.

Revenues in the Americas region decreased 13%.

Revenues in the Asia-Pacific region decreased 23%, including a 1% unfavorable impact from foreign currency, and a 32% decrease in Greater China, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 6% in the six months ended September 2024 compared to the 2023 period.

Vans ® brand global reve nues decreased 11% and 16% in the three and six months ended September 2024, respectively, compared to the 2023 periods.

The overall declines were most significantly impacted by a 10% and 18% decrease in the Americas region for the three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in both periods.

Revenues in the Asia-Pacific region decreased 27% and 28% in the three and six m onths ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in both periods.

Revenues in the Europe region decreased 7% and 5% in the three and six months ended September 2024, respectively, including a 1% favorable impact from foreign currency in both periods.

Global direct-to-consumer revenues for Active decreased 18% and 21% in the three and six months ended September 2024, respectively, compared to the 2023 periods.

The decreases were primarily driven by declines in the Americas region, which decreased 19% and 23% in t he three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in the three months ended September 2024.

Global wholesale rev enues increased 1% in the three months ended September 2024.

The increase was primarily due to a 16% increase in the Americas region in the three months ended September 2024, including a 1% unfavorable imp act from foreign currency.

Revenues in the Americas region decreased 4%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 2%.

Global revenues for Active decreased 10% in the nine months ended December 2024 compared to the 2023 period.

Revenues in the Americas region decreased 11%, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region decreased 24%, including a 34% decrease in Greater China with a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 5%.

Vans ® brand global revenues decreased 9% in the three months ended December 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

The overall decline was most significantly impacted by a 31% decrease in the Asia-Pacific region and 5% decrease in the Americas region for the three months ended December 2024.

The decrease in the Americas region included a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 8% in the three months ended December 2024 including a 1% favorable impact from foreign currency.

Vans ® brand global revenues decreased 14% in the nine months ended December 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

The overall decline was most significantly impacted by a 14% decrease in the Americas region for the nine months ended December 2024, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region decreased 29% in the nine months ended December 2024, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 6% in the nine months ended December 2024, including a 1% favorable impact from foreign currency.

Global direct-to-consumer revenues for Active decreased 17% and 20% in the three and nine months ended December 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the nine months ended December 2024.

The decreases were primarily driven by declines in the Americas region, which decreased 16% and 20% in the three and nine months ended December 2024, respectively.

Global wholesale revenues increased 15% and 2% in the three and nine months ended December 2024, respectively, including a 1% unfavorable impact from foreign currency in the three months ended December 2024.

The increases were primarily due to a 35% and 9% increase in the Americas region in the three and nine months ended December 2024, respectively, including a 2% and 1% unfavorable impact from foreign currency in the respective periods.

The current year increase is in part the result of the deliberate actions taken to right-size inventories in the Americas wholesale channel in the second half of Fiscal 2024.

Wholesale revenues in the Asia-Pacific region decreased 5% i n the three months ended September 2024 .

W holesale revenues in the Europe regi on decreased 8% in the three months ended September 2024, including a 2% favorable impact from foreign currency.

Global wholesale rev enues decreased 2% in the six months ended September 2024.

The decrease was due to declines in the Europe and Asia-Pacific regions.

Wholesale revenues in the Europe region decreased 4% in the six months ended September 2024, including a 1% favorable impact from foreign currency.

Wholesale revenues in the Asia-Pacific region decreased 12% in the six months ended September 2024, including a 1% unfavorable impact from foreign currency.

Wholesale revenues in the Americas region increased 2% in the six months ended September 2024, including a 1% unfavorable impact from foreign currency.

O perating marg in decreased in bot h the three and six months ended September 2024 compared to the 2023 periods, primarily reflecting lower leverage of operating expenses due to decreased revenues.

Three Months Ended September Six Months Ended September

Wholesale revenues in the Europe region increased 9% and decreased 1% in the three and nine months ended December 2024, respectively, including a 1% favorable impact from foreign currency in both periods.

Wholesale revenues in the Asia-Pacific region decreased 20% and 15% in the three and nine months ended December 2024, respectively, including a 1% unfavorable impact from foreign currency in the nine months ended December 2024.

O perating marg in decreased in bot h the three and nine months ended December 2024 compared to the 2023 periods, primarily due to legal settlement gains of $29.1 million recorded in the prior year periods.

The decrease in the nine months ended December 2024 also reflected lower leverage of operating expenses due to decreased revenues.

VF Corporation Q3 FY25 Form 10-Q 34

Three Months Ended December Nine Months Ended December

(Dollars in millions) 2024 2023 Percent

1 unchanged sentence

Segment revenues $ 216.5 $ 222.3 (2.6) % $ 610.9 $ 651.2 (6.2) %

Segment profit 20.4 8.5 139.7 % 25.7 15.3 67.7 %

Segment profit (loss) 13.5 (1.9) * 39.3 13.5 191.2 %

Operating margin 6.2 % (0.8) % 6.4 % 2.1 %

*Calculation not meaningful

The Work segment includes the following brands:

Dickies ® and Timberland PRO ® .

Global Work revenues decreased 8% in the three months ended September 2024 compared to the 2023 period.

Global Work revenues decreased 3% in the three months ended December 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region decreased 25%, including a 1% favorable impact from foreign currency.

Revenues in the Americas region decreased 1%.

Revenues in the Asia-Pacific region decreased 16%, including a 1% unfavorable impact from foreign currency.

Revenues in the Europe region increased 2%, including a 1% favorable impact from foreign currency.

Global Work revenues decreased 8% in the six months ended September 2024 compared to the 2023 period.

Revenues in the Americas region decreased 8%, including a 1% unfavorable impact from foreign currency.

Revenues in the Asia-Pacific region increased 10%.

Global Work revenues decreased 6% in the nine months ended December 2024 compared to the 2023 period.

Revenues in the Americas region decreased 5%.

Revenues in the Asia-Pacific region decreased 16%, including a 2% unfavorable impact from foreign currency.

Revenues in the Europe region remained flat.

33 VF Corporation Q2 FY25 Form 10-Q

Dickies ® brand global revenues decreased 11% and 13% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the six months ended September 2024.

The declines in the three and six months ended September 2024 were primarily driven by a decrease in the Americas reg ion of 14% in both periods, reflecti ng lower inventory replenishment and weakness with certain key U.S.

Revenues in the Europe region decreased 7%, including a 1% favorable impact from foreign currency.

Dickies ® brand global revenues decreased 10% and 12% in the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The declines in both the three and nine months ended December 2024 were primarily driven by

decreases in the Americas region of 9% and 12%, respectively, reflecting lower inventory replenishment and weakness with certain key U.S.

wholesale customer accounts.

The declines were also attributed to a decrease in the Asia-Pacific region of 16% and 25% in the three and six months ended September 2024, respectively, including a 1% and 2% unfavorable im pact from foreign currency

in the respective periods, primar ily due to broad-based weakness in Greater China.

R evenues in the Europe regi on increased 2% and remained flat in t he three and six months ended September 2024, respectively, in cluding a 1% favorable i mpact from foreign currency in the three months ended September 2024.

O perating margin increased in both the three and six months ended September 2024 compared to the 2023 periods, reflecting higher gross margin, primarily driven by lower inventory reserves.

Reconciliation of Segment Profit to Income From Continuing Operations Before Income Taxes

There are two types of costs necessary to reconcile total segment profit to consolidated income from continuing operations before income taxes.

These costs are (i) corporate and other expenses, discussed below, and (ii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.

Three Months Ended September Six Months Ended September

Revenues in the Europe region decreased 25% and 7% in the three and nine months ended December 2024, respectively, including a 1% favorable impact from foreign currency in both periods.

Revenues in the Asia-Pacific region increased 10% and decreased 16% in the three and nine months ended December 2024, respectively, including a 2% unfavorable impact from foreign currency in the nine months ended December 2024 , primarily due to broad-based weakness in Greater China in the nine months ended December 2024 .

O perating marg in increased in both the three and nine months ended December 2024 compared to the 2023 periods, reflecting higher gross mar gin, primarily driven by lower inventory reserves, and decreased distribution expenses.

Reconciliation of Segment Profit to Income (Loss) F rom Continuing Operations Before Income Taxes

There are three types of costs necessary to reconcile total segment profit to con solidated income (loss) from continuing operations before income taxes.

These costs are (i) impairment of goodwill and intangible assets, which is exclu ded 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 December Nine Months Ended December

(Dollars in millions) 2024 2023 Percent

Change 2024 2023 Percent

Impairment of goodwill and intangible assets $ 51.0 $ 257.1 (80.2) % $ 51.0 $ 257.1 (80.2) %

Corporate and other expenses 142.2 140.3 1.3 % 396.0 316.2 25.2 %

1 unchanged sentence

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

The increase in corporate and other expenses for both the three and six months ended September 2024 was primarily due to Reinvent charges and compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent.

The increase in corporate and other expenses for both the three and nine months ended December 2024 was due to higher compensation costs, including performance-based compensation, partially offset by cost savings from Reinvent.

The increase in the nine months ended December 2024 was also due to higher Reinvent restructuring charges and project-related costs compared to the 2023 period.

International

International revenues decreased 2% and 4% in the three and six months ended September 2024, respectively, compared to the 2023 periods.

Foreign currency had a favorable impact of 1% on international revenues in the three months ended September 2024.

Revenues in the Europe region decreased 3% and 4% in the three and six months ended September 2024, respectively, including a 2% and 1% favorable impact from foreign currency in the respective periods.

Revenues in the Americas (non-U.S.) region decreased 11% and 9% in the three and six months ended September 2024, respectively, including a 5% and 3% unfavorable impa ct from foreign currency in the respective periods.

In the Asia-Pacific region, revenues increased 6% and

remained flat in the three and six months ended September 2024, respectively.

Foreign currency had a favorable impact of 1% and an unfavorable impact of 1% on Asia-Pacific revenues in the three and six months ended September 2024, respectively.

Revenue s in Greater C hina increased 10% and 5% in the three and six months ended September 2024, respectively, including a 1% favorable and 1% unfavorable impact from foreign currency in the respective periods.

International revenues we re 57% and 55% of tot al revenues in the thre e-month periods ended September 2024 and 2023, respectively, and 55% and 53% o f total revenues in the six-month periods ended September 2024 and 2023, respectively.

Direct-to-Consumer

D irect-to-consumer revenues decreased 8% and 11% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the in the six months ended September 2024.

VF's e-commerce business decreased 5% and 7% during the three and six months ended September 2024, respectively.

The decreases were primarily driven by declines in the e-commerce business in the Americas and Asia-Pacific regions.

Revenues from VF-operated r etail stores decreased 12% and 15% during the three and six months ended September 2024, respectively, including a 1% unfavorable impact from foreign currency in the six months ended September 2024.

There wer e 1,160 VF -operated retail stores at September 2024 compared to 1,235 a t September 2023.

Direct-to-consumer revenues were 33% and 34% of total revenues in the thre e-month periods ended September 2024 and 2023, respectively, and 37% and 38% of total revenues in the six-month periods ended September 2024 and 2023, respectively.

International revenues increased 1% in the three months ended December 2024 compared to the 2023 period, including a 1% unfavorable impact from foreign currency.

In the Asia-Pacific region, revenues increased 5% in the three months ended December 2024.

Revenues in Greater China increased 4% in the three months ended December 2024.

Revenues in the Europe

region increased 1%.

Revenues in the Americas (non-U.S.) region decreased 7% in the three months ended December 2024, including a 6% unfavorable impact from foreign currency.

International revenues decreased 2% in the nine months ended December 2024 compared to the 2023 period.

Revenues in the

35 VF Corporation Q3 FY25 Form 10-Q

Wholesale revenues decreased 4% and 5% in the three and six months ended September 2024, respectively, compared to the 2023 periods, including a 1% favorable impact from foreign currency in both periods .

The decreases were primarily driven by declines in the wholesale business in the Americas and Europe regions.

Wholesale revenues were 67% and 66% of total revenues in the t hree-month periods ended September 2024 and 2023, respectively, an d 63% and 62% o f total revenues in the six-month periods ended September 2024 and 2023, respectively.

Europe region decreased 2% in the nine months ended December 2024, including a 1% favorable impact from foreign currency .

Revenues in the Americas (non-U.S.) region decreased 8% in the nine months months ended December 2024, including a 4% unfavorable impact from foreign currency.

In the Asia-Pacific region, revenues increased 2% and revenues in Greater China increased 5%.

Inte rnational revenues were 52% and 53% of total revenues in the three-month periods ended December 2024 and 2023, respectively, and 54% and 53% of total revenues in the nine-month periods ended December 2024 and 2023, respectively.

Direct-to-Consumer

Direct-to-consumer revenues decreased 3% and 7% in the three and nine months ended December 2024, respectively, compared to the 2023 periods, including a 1% unfavorable impact from foreign currency in the three months ended December 2024.

VF's e-commerce business decreased 3% and 5% during the three and nine months ended December 2024, respectively.

The decreases were primarily driven by declines in the e-commerce business in the Americas region.

Revenues from VF-operated retail stores decreased 4% and 10% during the three and nine months ended December 2024,

respectively, including a 1% unfavorable impact from foreign currency in the three months ended December 2024.

There were 1,160 VF-operated retail stores at December 2024 compared to 1,255 at December 2023.

Direct-to-consumer revenues were 55% and 58% of total revenues in the three-month periods ended December 2024 and 2023, respectively, and 44% and 45% of total revenues in the nine-month periods ended December 2024 and 2023, respectively.

Wholesale revenues increased 8% and decreased 2% in the three and nine months ended December 2024, respectively, compared to the 2023 periods.

The increase in the three months ended December 2024 was primarily driven by growth across all regions.

The current year increase is in part the result of the deliberate actions taken to right-size inventories in the Americas wholesale channel in the second half of Fiscal 2024 for the Vans ® brand.

The decrease in the nine months ended December 2024

was primarily driven by declines in the wholesale business in the Americas and Europe regions.

Wholesale revenues were 45% and 42% of total revenues in the three-month periods ended December 2024 and 2023, respectively, and 56% and 55% of total revenues in the nine-month periods ended December 2024 and 2023, respectively.

ANALYSIS OF FINANCIAL CONDITION

Consolidated Balance Sheets

The following discussion refers to significant changes in balances at September 2024 compared to March 2024:

• 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.

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

• Increase in the current portion of long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025.

• Increase in accounts payable — primarily due to the timing of payments to vendors and seasonality of inventory purchases.

• Increase in accrued liabilities — primarily due to higher accrued compensation and the timing of payments for other accruals.

• Decrease in long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025.

The following discussion refers to significant changes in balances at September 2024 compared to September 2023:

The following discussion refers to significant changes in balances at December 2024 compared to March 2024:

• Decrease in short-term borrowings — primarily due to a decrease in commercial paper borrowings resulting from a $450.0 million repayment using the proceeds from the sale of Supreme.

• Decrease in the current portion of long-term debt — due to the prepayment of $1.0 billion of long-term debt due in December 2024 related to the DDTL, partially offset by the reclassification of $750.0 million of long-term notes due in April 2025 to current liabilities.

• Increase in accounts payable — primarily due to the timing of inventory shipments from and payments to vendors.

• Increase in accrued liabilities — primarily due to the timing of services received and payments made for other accruals.

• Decrease in long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025 to current liabilities.

The following discussion refers to significant changes in balances at December 2024 compared to December 2023:

• Decrease in inventories — driven by VF reducing elevated inventory levels.

• Decrease in property, plant and equipment, net — primarily due to asset disposals and write-downs.

• Decrease in goodwill — primarily due to $507.6 million in impairment charges related to the Timberland, Dickies and Icebreaker reporting units recorded in the third and fourth quarters of Fiscal 2024.

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

• Increase in the current portion of long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025 and the reclassification of $1.0 billion of long-term debt due in December 2024 related to the DDTL.

• Increase in accounts payable — primarily due to the timing of inventory shipments from and payments to vendors.

• Decrease in long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025 and the reclassification of $1.0 billion of long-term debt due in December 2024 related to the DDTL.

• Decrease in goodwill — primarily due to $250.5 million in impairment charges related to the Timberland and Icebreaker reporting units recorded in the fourth quarter of Fiscal 2024.

• Decrease in short-term borrowings — primarily due to a decrease in commercial paper borrowings resulting from a $450.0 million repayment using the proceeds from the sale of Supreme.

• Decrease in long-term debt — due to the reclassification of $750.0 million of long-term notes due in April 2025 to current liabilities.

VF Corporation Q3 FY25 Form 10-Q 36

Liquidity and Capital Resources

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

September March September

December March December

(Dollars in millions) 2024 2024 2023

2 unchanged sentences

Net debt to total capital 73.6% 80.1% 75.8%

The decrease in working capital and the current ratio at September 2024 compared to both March 2024 and September 2023 was primarily due to a net increase in current liabilities driven by a higher current portion of long-term debt and higher accounts payable, as discussed in the "Consolidated Balance Sheets" section above.

The decrease in working capital and the current ratio at September 2024 compared to March 2024 was partially offset by a net increase in current assets driven by higher accounts receivable and inventories for the periods compared, 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.

The increase in working capital and the current ratio at December 2024 compared to March 2024 was primarily due to a net increase in current assets driven by higher cash and cash equivalents.

The increase in working capital and the current ratio at December 2024 compared to December 2023 was primarily due to a net decrease in current liabilities driven by decreased short-term borrowings and current portion of long-term debt, as discussed in the "Consolidated Balance Sheets" section above.

The increase at December 2024 compared to December 2023 was also due to a net increase in current assets driven by higher cash and cash equivalents, partially offset by lower inventory balances, 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 borrowings, current portion of long-term debt and long-term debt, in addition to operating lease liabilities, net of unrestricted cash and cash equivalents.

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

The increase in the net debt to total capital ratio at September 2024 compared to March 2024 was driven by an increase in net debt and a decrease in stockholders' equity for the periods compared.

The increase in net debt was primarily driven by an increase in short-term borowings, as discussed in the "Consolidated Balance Sheet" section above, and lower cash and cash equivalents at September 2024 .

The decrease in stockholders' equity at September 2024 compared to March 2024 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 2024

35 VF Corporation Q2 FY25 Form 10-Q

compared to September 2023 was driven by a decrease in stockholders' equity, partially offset by a decrease in net debt for the periods compared.

The decrease in the net debt to total capital ratio at December 2024 compared to both March 2024 and December 2023 was primarily driven by a decrease in net debt.

The decrease in net debt was primarily due

to the prepayment of $1.0 billion of long-term debt in October 2024 related to the DDTL and a decrease in short-term borowings as discussed in the "Consolidated Balance Sheets" section above, and higher cash and cash equivalents at December 2024.

The decrease in the net debt to total capital ratio at December 2024 compared to December 2023 was partially offset by a decrease in stockholders' equity.

The decrease in stockholders' equity was primarily driven by the net loss for the period and payments of dividends.

The decrease in net debt at September 2024 compared to September 2023 was driven by lower short-term borrowings, as discussed in the "Consolidated Balance Sheet" section above.

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.

VF's additional sources of liquidity include available borrowing capacity against its $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”), available cash balances and international lines of credit.

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

Six Months Ended September

Nine Months Ended December

(In thousands) 2024 2023

Cash used by operating activities $ (301,823) $ (60,720)

Cash used by investing activities (16,421) (145,728)

Cash provided (used) by financing activities 125,974 (125,901)

Cash Used by Operating Activities

Cash provided by operating activities $ 609,545 $ 975,171

Cash provided (used) by investing activities 1,450,486 (184,498)

Cash used by financing activities (1,359,682) (735,766)

Cash Provided by Operating Activities

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

The increase in cash used by operating activities in the six months ended September 2024 compared to September 2023 was primarily due to a decrease in income from continuing operations, excluding the write-off of income tax receivables and interest related to the Timberland tax case in the prior year, and an increase in net cash used by working capital.

Cash Used by Investing Activities

The decrease in cash used by investing activities in the six months ended September 2024 was primarily due to proceeds from the sale of assets of $76.7 million in the period, primarily related to a sale leaseback transaction of a distribution center, sale of a corporate-owned aircraft and sale of an aircraft hangar.

The decrease was also due to a decrease in capital expenditures of $47.9 million and a decrease in software purchases of $15.4 million in the six months ended September 2024 compared to the 2023 period.

Cash Provided (Used) by Financing Activities

The increase in cash provided by financing activities during the six months ended September 2024 was primarily due to a $907.1 million payment of long-term debt in the six months ended September 2023 and a $163.1 million decrease in dividends paid for the periods compared.

The increase was partially offset by a $818.6 million net decrease in short-term borrowings for the periods compared.

The decrease in cash provided by operating activities in the nine months ended December 2024 compared to December 2023 was primarily due to a decrease in net cash provided by working capital and a decrease in income from continuing operations, excluding the write-off of income tax receivables and interest related to the Timberland tax case in the prior year.

Cash Provided (Used) by Investing Activities

The increase in cash provided by investing activities in the nine months ended December 2024 was primarily due to proceeds from the sale of Supreme, net of cash sold, of $1.486 billion in the period.

The nine months ended December 2024 also included proceeds from the sale of assets of $88.1 million, primarily related to a sale leaseback transaction of a distribution center, sale of an aircraft hangar, sale of a corporate-owned aircraft

and sale of an office building.

The increase was also due to a decrease in capital expenditures of $50.2 million and a decrease in software purchases of $21.3 million in the nine months ended December 2024 compared to the 2023 period.

Cash Used by Financing Activities

The increase in cash used by financing activities during the nine months ended December 2024 was primarily due to a $694.6 million net decrease in short-term borrowings for the periods compared.

The nine months ended December 2024 also included a $1.0 billion prepayment of the DDTL compared to a $907.1 million payment of long-term debt in the nine months ended December 2023.

The increase was partially offset by a $163.1 million decrease in dividends paid for the periods compared.

Share Repurchases

VF did not purchase shares of its Common Stock in the open market during the six months ended September 2024 or the six months ended September 2023 under the share repurchase program authorized by VF's Board of Directors.

As of the end of September 2024, 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 reducing leverage and reinvesting a portion of cost savings to drive profitable and sustainable growth.

VF did not purchase shares of its Common Stock in the open market during the nine months ended December 2024 or the

37 VF Corporation Q3 FY25 Form 10-Q

nine months ended December 2023 under the share repurchase program authorized by VF's Board of Directors.

As of the end of December 2024, 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 reducing leverage and reinvesting a portion of cost savings to drive profitable and sustainable growth.

Revolving Credit Facility, DDTL Agreement and Short-term Borrowings

1 unchanged sentence

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 maintains a 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;

5 unchanged sentences

Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.

VF has restrictive covenants on its Global Credit Facility and DDTL Agreement, including a consolidated net indebtedness to consolidated net capitalization financial ratio covenant, as defined in the agreements as amended in August 2024 (effective for the first quarter of Fiscal 2025), starting at 70% with future step downs.

The calculation of consolidated net indebtedness is net of unrestricted cash and the calculation of consolidated net capitalization permits certain addbacks, including non-cash impairment charges and material impacts resulting from adverse legal rulings, as defined in the amended agreements.

VF has restrictive covenants on its Global Credit Facility and had restrictive covenants on the DDTL Agreement, including a consolidated net indebtedness to consolidated net capitalization financial ratio covenant, as defined in the agreements as amended in August 2024 (effective for the first quarter of Fiscal 2025), starting at 70% with future step downs.

The calculation of consolidated net indebtedness is net of unrestricted cash and cash equivalents and the calculation of consolidated net capitalization permits certain addbacks, including non-cash impairment charges and material impacts resulting from adverse legal rulings, as defined in the amended agreements.

The covenant calculation also excludes consolidated operating lease liabilities.

Additionally, the amended agreements restrict the total amount of cash dividends and share repurchases to $500.0 million annually, on a calendar-year basis and require the repayment of the DDTL upon the completion of the Supreme sale.

As of September 2024, VF was in compliance with all covenants.

O n October 4, 2024, VF made an aggregate $1.0 billion prepayment of the DDTL using the net cash proceeds

VF Corporation Q2 FY25 Form 10-Q 36

from the sale of Supreme, pursuant to the terms of the DDTL Agreement, as amended.

Additionally, the amended agreements restrict the total amount of cash dividends and share repurchases to $500.0 million annually, on a calendar-year basis and required the repayment of the DDTL upon the completion of the Supreme sale.

O n October 4, 2024, VF made an aggregate $1.0 billion prepayment of the DDTL using the net cash proceeds from the sale of Supreme, pursuant to the terms of the DDTL Agreement, as amended.

As of December 2024, 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 $450.0 million in U.S.

commercial paper borrowings as of September 2024 .

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 September 2024 , there were no outstanding euro commercial paper borrowings under this program.

Standby letters of credit issued under the Global Credit Facility as of September 2024 were $0.6 million, leaving approximately $1.8 billion available for borrowing against the Global Credit Facility at September 2024, subject to applicable financial covenants.

Based on VF's current ratings, there is no active market for commercial paper.

As of December 2024 there were no U.S.

or euro commercial paper borrowings.

The euro commercial paper borrowing program has been terminated as of January 2025.

Standby letters of credit issued under the Global Credit Facility as of December 2024 were $0.6 million, leaving approximately $2.2 billion available for borrowing against the Global Credit Facility at December 2024, subject to applicable financial covenants.

VF has $92.1 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 $13.2 million at September 2024.

Additionally, VF had $492.2 million of unrestricted cash and equivalents at September 2024.

Total outstanding balances under these arrangements were $12.8 million at December 2024.

Additionally, VF had $1.4 billion of unrestricted cash and cash equivalents at December 2024.

Supply Chain Financing Program

4 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 2024, March 2024 and September 2023, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $804.9 million, $485.0 million and $688.0 million, respectively, due to suppliers that are eligible to participate in the SCF program.

At December 2024, March 2024 and December 2023, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $661.4 million, $485.0 million and $599.0 million, respectively, due to suppliers that are eligible to participate in the SCF program.

Rating Agencies

At the end of September 2024, VF’s long-term debt ratings were ‘BBB-’ by Standard & Poor’s ("S&P") Global Ratings and ‘Ba1' by Moody’s Investors Service ("Moody's"), and U.S.

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

At the end of December 2024, VF’s long-term debt ratings were ‘BB’ by Standard & Poor’s ("S&P") Global Ratings and ‘Ba1' by Moody’s Investors Service ("Moody's"), and U.S.

commercial paper ratings by those rating agencies were 'B’ and ‘NP’, respectively.

The Moody's rating for VF's euro commercial paper was also 'NP'.

Based on VF's current ratings, the market for U.S.

commercial paper is limited and there is no active market for euro commercial paper.

VF's credit rating outlook by S&P was 'negative' and Moody's was 'stable' at the end of September 2024.

Based on VF's current ratings, there is no active market for commercial paper.

VF's credit rating outlook by S&P and Moody's was 'stable' at the end of December 2024.

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

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

The Company paid cash dividends of $0.09 and $0.18 per share during the three and six months ended September 2024, respectively, and the Company declared a cash dividend of $0.09 per share that is payable in the third quarter of Fiscal 2025.

The Company paid cash dividends of $0.09 and $0.27 per share during the three and nine months ended December 2024, respectively, and the Company declared a cash dividend of $0.09 per share that is payable in the fourth quarter of Fiscal 2025.

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

VF Corporation Q3 FY25 Form 10-Q 38

Contractual Obligations

Management’s Discussion and Analysis in the Fiscal 2024 Form 10-K provided a table summarizing VF’s material contractual obligations and commercial commitments at the end of Fiscal 2024 that would require the use of funds.

As of September 2024, there have been no material changes in the amounts of unrecorded commitments disclosed in the Fiscal 2024 Form 10-K, except as noted below:

As of December 2024, there have been no material changes in the amounts of unrecorded commitments disclosed in the Fiscal 2024 Form 10-K, except as noted below:

• Contractual obligations and commercial commitments at the end of Fiscal 2024 included approximately $93.7 million of inventory obligations related to Supreme, which is now classified as discontinued operations.

• Inventory purchase obligations decreased by approximately $944.0 million at the end of September 2024 primarily due to timing of inventory shipments and increased inventory levels.

• VF entered into a contract with a consulting firm during the three months ended September 2024.

• Inventory purchase obligations decreased by approximately $852.0 million at the end of December 2024 primarily due to timing of inventory shipments.

• VF entered into a contract with a consulting firm during the second quarter of Fiscal 2025.

Fees related to this contract could be up to $141.0 million, which includes $66.0 million of fixed fees and $75.0 million of contingent fees tied to increases in VF's stock price through June 2027.

The total fair value of the contingent fees was $30.7 million as of September 2024.

The total fair value of the contingent fees was $36.2 million as of December 2024 .

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.

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

37 VF Corporation Q2 FY25 Form 10-Q

Critical Accounting Policies and Estimates

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The application of these accounting policies requires management to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and related disclosures.

These estimates,

assumptions and judgments are based on historical experience, current trends and other factors believed to be reasonable under the circumstances.

These estimates, assumptions and judgments are based on historical experience,

current trends and other factors believed to be reasonable under the circumstances.

Management evaluates these estimates and assumptions, and may retain outside consultants to assist in the evaluation.

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The accounting policies that involve the most significant estimates, assumptions and management judgments used in preparation of the consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in Management’s Discussion and Analysis in the Fiscal 2024 Form 10-K.

Refer to Note 16 to VF's consolidated financial statements for additional information regarding VF's critical accounting policies and estimates during Fiscal 2025.

Cautionary Statement on Forward-looking Statements

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VF’s ability to successfully establish a global commercial organization, and identify and capture efficiencies in

39 VF Corporation Q3 FY25 Form 10-Q

its business model;

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

possible goodwill and other asset impairment;

goodwill and other asset impairment;

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

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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 pay and declare dividends or

VF Corporation Q2 FY25 Form 10-Q 38

repurchase its stock in the future;

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;

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risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis;

and tax risks

associated with the spin-off of the Jeanswear business completed in 2019.

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

More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the Securities and Exchange Commission, including VF’s Annual Report on Form 10-K.

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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