VF(US:VFC)2025-10-28 17:55Financial Performance - Total revenues for the three months ended September 2025 were $2,802,706, an increase of 1.6% compared to $2,757,948 in September 2024[11]. - Operating income for the three months ended September 2025 was $312,620, up 14.1% from $273,903 in the same period last year[11]. - Net income for the three months ended September 2025 was $189,765, compared to a net income of $52,178 in September 2024, representing a significant increase[11]. - Comprehensive income for the three months ended September 2025 was $203,148, compared to $35,225 in the same period last year[14]. - Net income for the six months ended September 2025 was $73,357,000, a significant improvement compared to a net loss of $206,708,000 in the same period of 2024[17]. - Income from continuing operations, net of tax, increased to $73,357,000 from $50,482,000 year-over-year[17]. - Earnings per share for continuing operations were $0.49 for the three months ended September 2025, compared to $0.52 in September 2024[11]. - Income from continuing operations for the three months ended September 2025 was $189.8 million ($0.48 per diluted share), compared to $202.5 million ($0.52 per diluted share) in the 2024 period[155]. Assets and Liabilities - Total current assets as of September 2025 were $5,118,868, an increase from $3,786,098 in March 2025[9]. - Total liabilities increased to $9,166,269 as of September 2025, compared to $7,890,177 in March 2025[9]. - The company’s total assets were $10,644,124 as of September 2025, down from $12,219,638 in September 2024[9]. - Total inventories as of September 2025 were $1.855 billion, a decrease from $2.083 billion in September 2024[62]. - The balance of common stock shares increased to 390,712,620 as of September 2025, up from 389,283,419 in September 2024[24]. - Working capital increased to $1,360.1 million as of September 2025, compared to $1,088.2 million in March 2025[184]. - The net debt to total capital ratio was 79.4% as of September 2025, an increase from 76.8% in March 2025[185]. Cash Flow and Expenditures - Cash used by operating activities for continuing operations was $(372,468,000), compared to $(301,823,000) in the prior year, indicating increased cash outflow[17]. - Total cash, cash equivalents, and restricted cash at the end of the period was $435,504,000, down from $514,630,000 at the end of September 2024[20]. - Cash and cash equivalents decreased to $419,115 as of September 2025 from $492,164 in September 2024[9]. - The company paid cash dividends of $(70,312,000) during the period, slightly up from $(70,048,000) in the prior year[17]. - The Company paid cash dividends of $0.09 and $0.18 per share during the three and six months ended September 2025, respectively, and declared a cash dividend of $0.09 per share for Q3 Fiscal 2026[204]. Segment Performance - Wholesale revenues for the Outdoor segment reached $1.21 billion for the three months ended September 2025, compared to $1.14 billion in the same period of 2024, reflecting a growth of 6.0%[47]. - Direct-to-consumer revenues for the Active segment were $376.8 million for the three months ended September 2025, a decrease from $413.7 million in the same period of 2024[47]. - The Americas generated $1.34 billion in total revenues for the three months ended September 2025, compared to $1.36 billion in the same period of 2024, indicating a slight decline[47]. - Outdoor segment revenues increased to $1,663,479,000 in September 2025 from $1,566,722,000 in September 2024, reflecting a growth of 6.2%[103][104]. - Active segment revenues decreased to $760,750,000 in September 2025 from $824,536,000 in September 2024, a decline of 7.8%[103][104]. - Segment profit for the Outdoor segment was $300,740,000 for the three months ended September 2025, up from $278,138,000 in the same period of 2024, an increase of 8.2%[103][104]. Accounting and Compliance - The company is evaluating the impact of new accounting standards on its disclosures, including those related to income taxes and expense disaggregation[40][41]. - The ABL Credit Facility includes a financial covenant requiring a Fixed Charge Coverage Ratio of at least 1.00 to 1.00, applicable only if Global Excess Availability falls below $100.0 million[74]. - The Company has chosen accounting policies that accurately report operating results and financial position in conformity with generally accepted accounting principles[207]. - Significant accounting policies are summarized in Note 1 to the consolidated financial statements included in the Fiscal 2025 Form 10-K[207]. - There have been no material changes in the Company's accounting policies from those disclosed in the Fiscal 2025 Form 10-K[207]. Restructuring and Transformation - VF introduced the Reinvent transformation program, with 74% of total charges related to severance and employee-related benefits, totaling $49.9 million in cash payments during the six months ended September 2025[125]. - VF's restructuring charges related to Reinvent for the six months ended September 2025 totaled $21.6 million, with cumulative charges since inception amounting to $211.7 million[126]. - The company entered into a definitive agreement to sell the Dickies brand business for $600.0 million in cash on September 15, 2025[137]. Market and Economic Conditions - VF expects to recognize $51.2 million of fixed consideration related to future minimum guarantees under licensing agreements through March 2031[44]. - Approximately 85% of products purchased for sale in the U.S. are sourced through Southeast Asia and Central and South America, with less than 2% sourced from China[138]. - The company expects gross margin to be negatively impacted (though not materially) throughout the second half of Fiscal 2026 due to the implementation of tariffs[140].