Business Wire | Oct 16, 2020 06:55AM EDT

VF Reports Second Quarter Fiscal 2021 Results

Oct. 16, 2020

DENVER--(BUSINESS WIRE)--Oct. 16, 2020--VF Corporation (NYSE: VFC) today reported financial results for its second quarter ended September 26, 2020. All per share amounts are presented on a diluted basis. This release refers to "reported" and "constant dollar" amounts, terms that are described under the heading "Constant Currency - Excluding the Impact of Foreign Currency." Unless otherwise noted, "reported" and "constant dollar" amounts are the same. This release also refers to "continuing" and "discontinued" operations amounts, which are concepts described under the heading "Discontinued Operations - Occupational Workwear Business." Unless otherwise noted, results presented are based on continuing operations. This release also refers to "adjusted" amounts, a term that is described under the heading "Adjusted Amounts - Excluding Costs Related to Specified Strategic Business Decisions." Unless otherwise noted, "reported" and "adjusted" amounts are the same.

"Our year to date results have surpassed our internal expectations across all brands, driven by Digital and China, two of our key growth pillars," said Steve Rendle, VF's Chairman, President and CEO. "We are beginning to see signs of stabilization and strength across all aspects of our business, supporting our decision to raise the dividend and provide a financial outlook for the balance of the year. Although uncertainties remain, investments in our digital transformation are resulting in near-term momentum and improved capabilities to emerge in an even stronger position."

Constant Currency - Excluding the Impact of Foreign Currency

This release refers to "reported" amounts in accordance with U.S. generally accepted accounting principles ("GAAP"), which include translation and transactional impacts from foreign currency exchange rates. This release also refers to "constant dollar" amounts, which exclude the impact of translating foreign currencies into U.S. dollars. Reconciliations of GAAP measures to constant currency amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management's view of why this information is useful to investors.

Discontinued Operations - Occupational Workwear Business

On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business is comprised primarily of the following brands and businesses: Red Kap(r), VF Solutions(r), Bulwark(r), Workrite(r), Walls(r), Terra(r), Kodiak(r), Work Authority(r) and Horace Small(r). The business also includes certain Dickies(r) occupational workwear products that have historically been sold through the business-to-business channel.

During the three months ended March 2020, the company determined that the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria. Accordingly, the company has reported the related held-for-sale assets and liabilities as assets and liabilities of discontinued operations and included the operating results and cash flows of the business in discontinued operations for all periods presented.

Adjusted Amounts - Excluding Costs Related to Specified Strategic Business Decisions

The adjusted amounts in this release exclude certain cost optimization activities and other charges indirectly related to the strategic review of the Occupational Workwear business. The adjusted amounts also exclude costs related to strategic business decisions in South America and the operating results of jeanswear wind down activities in South America following the spin-off of Kontoor Brands. Total costs were approximately $21 million in the second quarter of fiscal 2021 and $37 million in the first six months of fiscal 2021. In addition, the first six months of fiscal 2021 excludes approximately $42 million of noncash non-operating expenses related to the release of certain currency translation amounts associated with the wind down activities in South America.

Combined, the above items negatively impacted earnings per share by $0.04 during the second quarter of fiscal 2021 and $0.19 during the first six months of fiscal 2021. All adjusted amounts referenced herein exclude the effects of these amounts.

Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management's view of why this information is useful to investors.

COVID-19 Outbreak Update

As the global impact of COVID-19 continues, VF remains first and foremost focused on a people-first approach that prioritizes the health and well-being of its employees, customers, trade partners and consumers around the world. To help mitigate the spread of COVID-19 and in response to public health advisories and governmental actions and regulations, VF has modified its business practices, including the temporary closing of offices and retail stores, instituting travel bans and restrictions, implementing health and safety measures including social distancing and quarantines.

Nearly all of VF's retail stores in the EMEA and APAC regions, including Mainland China, remained open during the second quarter. In North America, 75 percent of all retail locations were open at the end of the first quarter and over 95 percent of all retail stores were open at the end of the second quarter. Additional retail locations have re-opened since the end of the quarter, and currently all of VF's North American retail stores are open. VF's wholesale customers in APAC, North America and EMEA have re-opened almost all of their locations.

The majority of VF's supply chain is currently operational. Suppliers are complying with local public health advisories and governmental restrictions which has resulted in isolated product delays. VF is working with its suppliers to minimize disruption. VF's distribution centers are operational in accordance with local government guidelines while maintaining enhanced health and safety protocols.

VF is continuing to monitor the COVID-19 outbreak globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers. As COVID-19 uncertainty continues, VF expects ongoing disruption to its business operations.

Second Quarter Fiscal 2021 Income Statement Review

* Revenue decreased 18 percent (down 19 percent in constant dollars) to $2.6 billion driven by store closures and lower consumer demand as a result of the COVID-19 outbreak and related government actions and regulations. * Gross margin decreased 340 basis points to 50.8 percent, primarily driven by elevated promotional activity to clear excess inventory and the timing of net foreign currency transaction activity. On an adjusted basis, gross margin decreased 350 basis points to 50.9 percent. * Operating income on a reported basis was $320 million. On an adjusted basis, operating income was $342 million. Operating margin was 12.3 percent. Adjusted operating margin was 13.1 percent. * Earnings per share was $0.62 on a reported basis. On an adjusted basis, earnings per share was $0.67.

Balance Sheet Highlights

Inventories were down 10 percent compared with the same period last year. During the quarter, VF returned approximately $186 million of cash to shareholders through dividends. As part of the company's liquidity preservation actions during the ongoing COVID-19 outbreak, the company has suspended its share repurchase program. VF has $2.8 billion remaining under its current share repurchase authorization.

Full Year Fiscal 2021 Outlook

VF's full year outlook assumes no material deterioration to the company's current business operations as a result of COVID-19, governmental actions and regulations. VF's full year fiscal 2021 outlook includes the following:

* Revenue is expected to be at least $9.0 billion, reflecting a decrease of approximately 14 percent on an adjusted basis, including low single-digit growth in the second half driven by a return to growth in the fourth quarter.

* Adjusted earnings per share is expected to be at least $1.20, reflecting a decrease of approximately 55 percent (down approximately 56 percent in constant dollars).

* Adjusted free cash flow is still expected to exceed $600 million.

Dividend Declared

VF's Board of Directors declared a quarterly dividend of $0.49 per share, payable on December 21, 2020, to shareholders of record on December 10, 2020. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled dividend and is not currently contemplating the suspension of its dividend.

Webcast Information

VF will host its second quarter fiscal 2021 conference call beginning at 8:30 a.m. Eastern Time today. The conference call will be broadcast live via the Internet, accessible at ir.vfc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location.

Presentation

A presentation on second quarter fiscal 2021 results will be available at ir.vfc.com beginning at approximately 7:30 a.m. Eastern Time today and will be archived at the same location.

About VF

Founded in 1899, VF Corporation is one of the world's largest apparel, footwear and accessories companies connecting people to the lifestyles, activities and experiences they cherish most through a family of iconic outdoor, active and workwear brands including Vans(r), The North Face(r), Timberland(r) and Dickies(r). Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit vfc.com.

Forward-looking Statements

Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks and uncertainties. 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, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding VF's plans, objectives, projections and expectations relating to VF's operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. VF undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: 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; the level of consumer demand for apparel, footwear and accessories; disruption to VF's distribution system; the financial strength of VF's customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF's response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers; manufacturing and product innovation; increasing pressure on margins; VF's ability to implement its business strategy; VF's ability to grow its international and direct-to-consumer businesses; retail industry changes and challenges; 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 security breaches and data or financial loss; VF's ability to properly collect, use, manage and secure consumer and employee data; foreign currency fluctuations; stability of VF's manufacturing facilities and foreign suppliers; continued use by VF's suppliers of ethical business practices; VF's ability to accurately forecast demand for products; continuity of members of VF's management; VF's ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF's licensees and distributors of the value of VF's brands; VF's ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; the risk of economic uncertainty associated with the exit of the United Kingdom from the European Union ("Brexit") or any other similar referendums that may be held; adverse or unexpected weather conditions; VF's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations; climate change and increased focus on sustainability issues; and risks associated with the spin-off of our Jeanswear business completed on May 22, 2019, including the risk that VF will not realize all of the expected benefits of the spin-off; the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; and the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of VF. 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 SEC, including VF's Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.

VF CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended September Six Months Ended September

2020 2019 2020 2019

Net revenues $ 2,608,324 $ 3,179,758 $ 3,684,617 $ 5,230,412

Costs andoperating expenses

Cost of goods 1,282,406 1,456,317 1,789,357 2,352,601 sold

Selling,general and 1,005,970 1,174,879 1,822,121 2,233,284 administrativeexpenses

Total costs andoperating 2,288,376 2,631,196 3,611,478 4,585,885 expenses

Operating 319,948 548,562 73,139 644,527 income

Interest, net (30,931 ) (16,386 ) (58,880 ) (31,969 )

Other income 4,644 (1,771 ) (33,543 ) 3,783 (expense), net

Income (loss)from continuingoperations 293,661 530,405 (19,284 ) 616,341 before incometaxes

Income taxexpense 50,415 (94,972 ) 15,212 (74,309 )(benefit)

Income (loss)from continuing 243,246 625,377 (34,496 ) 690,650 operations

Income fromdiscontinued 13,476 23,624 5,605 7,572 operations, netof tax

Net income $ 256,722 $ 649,001 $ (28,891 ) $ 698,222 (loss)

Earnings (loss)per common share - basic ^(a)

Continuing $ 0.62 $ 1.57 $ (0.09 ) $ 1.74 operations

Discontinued 0.03 0.06 0.01 0.02 operations

Total earnings(loss) per $ 0.66 $ 1.63 $ (0.07 ) $ 1.76 common share -basic

Earnings (loss)per common share - diluted^ (a)

Continuing $ 0.62 $ 1.55 $ (0.09 ) $ 1.72 operations

Discontinued 0.03 0.06 0.01 0.02 operations

Total earnings(loss) per $ 0.66 $ 1.61 $ (0.07 ) $ 1.74 common share -diluted

Weightedaverage shares outstanding

Basic 389,219 397,751 388,957 397,239

Diluted 391,180 402,261 390,986 402,088

Cash dividendsper common $ 0.48 $ 0.43 $ 0.96 $ 0.94 share

Basis of presentation of condensed consolidated financial statements: VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. For presentation purposes herein, all references to periods ended September 2020 relate to the 13-week and 26-week fiscal periods ended September 26, 2020 and all references to periods ended September 2019 relate to the 13-week and 26-week fiscal periods ended September 28, 2019. References to March 2020 relate to information as of March 28, 2020.

(a) Amounts have been calculated using unrounded numbers.

Basis of presentation of condensed consolidated financial statements: VFoperates and reports using a 52/53 week fiscal year ending on the Saturdayclosest to March 31 of each year. For presentation purposes herein, allreferences to periods ended September 2020 relate to the 13-week and 26-weekfiscal periods ended September 26, 2020 and all references to periods endedSeptember 2019 relate to the 13-week and 26-week fiscal periods ended September28, 2019. References to March 2020 relate to information as of March 28, 2020.

^(a) Amounts have been calculated using unrounded numbers.

VF CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

September March September

2020 2020 2019

ASSETS

Current assets

Cash and equivalents $ 1,877,398 $ 1,369,028 $ 469,912

Accounts receivable, net 1,606,479 1,308,051 1,881,374

Inventories 1,434,843 1,293,912 1,590,027

Short-term investments 800,000 - -

Other current assets 408,809 444,886 391,678

Current assets of 552,677 611,139 442,216 discontinued operations

Total current assets 6,680,206 5,027,016 4,775,207

Property, plant and 933,990 954,406 832,237 equipment, net

Goodwill and intangible 3,024,607 3,010,564 3,337,623 assets, net

Operating lease right-of-use 1,385,121 1,273,514 1,231,638 assets

Other assets 917,342 867,751 905,993

Other assets of discontinued - - 187,657 operations

Total assets $ 12,941,266 $ 11,133,251 $ 11,270,355

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Short-term borrowings $ 13,237 $ 1,228,812 $ 484,321

Current portion of long-term 1,127 1,018 4,986 debt

Accounts payable 450,109 407,021 483,207

Accrued liabilities 1,505,703 1,260,252 1,331,495

Current liabilities of 114,356 126,781 100,329 discontinued operations

Total current liabilities 2,084,532 3,023,884 2,404,338

Long-term debt 5,679,440 2,608,269 2,090,922

Operating lease liabilities 1,129,840 1,020,651 997,456

Other liabilities 1,102,216 1,123,113 1,106,791

Other liabilities of - - 23,229 discontinued operations

Total liabilities 9,996,028 7,775,917 6,622,736

Stockholders' equity 2,945,238 3,357,334 4,647,619

Total liabilities and $ 12,941,266 $ 11,133,251 $ 11,270,355 stockholders' equity

VF CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended September

2020 2019

Operating activities

Net income (loss) $ (28,891 ) $ 698,222

Income from discontinued operations, net of 5,605 7,572 tax

Income (loss) from continuing operations, (34,496 ) 690,650 net of tax

Depreciation and amortization 138,853 125,159

Reduction in the carrying amount of 205,635 186,327 right-of-use assets

Other adjustments (270,482 ) (1,374,882 )

Cash provided (used) by operating activities 39,510 (372,746 ) - continuing operations

Cash provided by operating activities - 43,298 7,268 discontinued operations

Cash provided (used) by operating activities 82,808 (365,478 )

Investing activities

Purchases of short-term investments (800,000 ) -

Capital expenditures (112,501 ) (104,988 )

Software purchases (38,345 ) (24,712 )

Other, net (3,839 ) 59,558

Cash used by investing activities - (954,685 ) (70,142 ) continuing operations

Cash used by investing activities - (2,693 ) (7,270 ) discontinued operations

Cash used by investing activities (957,378 ) (77,412 )

Financing activities

Net increase (decrease) from short-term 1,758,317 (171,289 ) borrowings and long-term debt

Cash dividends paid (373,638 ) (373,604 )

Cash received from Kontoor Brands, net of - 906,148 cash transferred of $126.8 million

Proceeds from issuance of Common Stock, net (7,221 ) 50,659 of (payments) for tax withholdings

Cash provided by financing activities 1,377,458 411,914

Effect of foreign currency rate changes on (8,082 ) (5,385 ) cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and 494,806 (36,361 ) restricted cash

Cash, cash equivalents and restricted cash - 1,411,322 556,587 beginning of year

Cash, cash equivalents and restricted cash - $ 1,906,128 $ 520,226 end of period

VF CORPORATION

Supplemental Financial Information

Reportable Segment Information

(Unaudited)

(In thousands)

% Change Three Months Ended September % Change Constant % Constant % Change Currency Change Currency Adjusted and ^(a) ^(b) Adjusted 2020 2019 ^ (a)(b)

Segment revenues

Outdoor $ 1,154,407 $ 1,525,937 (24)% (26)% (24)% (26)%

Active 1,200,202 1,413,634 (15)% (16)% (15)% (16)%

Work 253,551 222,117 14% 14% 14% 14%

Other ^(c) 164 18,070 * * * *

Totalsegment $ 2,608,324 $ 3,179,758 (18)% (19)% (18)% (19)%revenues

Segmentprofit (loss)

Outdoor $ 132,475 $ 256,382

Active 259,123 388,200

Work 8,173 14,547

Other ^(c) (2,526 ) 2,381

Totalsegment 397,245 661,510 profit

Corporateand other (72,653 ) (114,719 ) expenses

Interest, (30,931 ) (16,386 ) net

Incomefromcontinuingoperations $ 293,661 $ 530,405 beforeincometaxes

(a) Refer to constant currency definition on the following pages.

(b) Excludes the operating results of jeanswear wind down activities in South America post the separation of Kontoor Brands for the three months ended September 2019. Refer to Non-GAAP financial information on "Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Six Months Ended September 2019" page for additional information.

(c) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes results primarily related to the sale of non-VF products.

* Calculation not meaningful

^(a) Refer to constant currency definition on the following pages.

^(b) Excludes the operating results of jeanswear wind down activities in SouthAmerica post the separation of Kontoor Brands for the three months endedSeptember 2019. Refer to Non-GAAP financial information on "Reconciliation ofSelect GAAP Measures to Non-GAAP Measures - Three and Six Months EndedSeptember 2019" page for additional information.

^(c) Other is included for purposes of reconciliation of revenues and profit,but it is not considered a reportable segment. Includes results primarilyrelated to the sale of non-VF products.

* Calculation not meaningful

VF CORPORATION

Supplemental Financial Information

Reportable Segment Information

(Unaudited)

(In thousands)

% Change Six Months Ended September % Change Constant % Constant % Change Currency Change Currency Adjusted and ^(a) ^(b) Adjusted 2020 2019 ^(a)(b)

Segment revenues

Outdoor $ 1,495,635 $ 2,136,557 (30)% (31)% (30)% (31)%

Active 1,771,518 2,645,760 (33)% (33)% (33)% (33)%

Work 415,981 423,763 (2)% (2)% (2)% (2)%

Other ^(c) 1,483 24,332 * * * *

Totalsegment $ 3,684,617 $ 5,230,412 (30)% (30)% (29)% (30)%revenues

Segmentprofit (loss)

Outdoor $ (28,236 ) $ 176,112

Active 266,259 695,766

Work (3,228 ) 30,018

Other ^(c) (4,887 ) 765

Totalsegment 229,908 902,661 profit

Corporateand other (190,312 ) (254,351 ) expenses

Interest, (58,880 ) (31,969 ) net

Income(loss)fromcontinuing $ (19,284 ) $ 616,341 operationsbeforeincometaxes

(a) Refer to constant currency definition on the following pages.

(b) Excludes the operating results of jeanswear wind down activities in South America post the separation of Kontoor Brands for the six months ended September 2019. Refer to Non-GAAP financial information on "Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Six Months Ended September 2019" page for additional information.

(c) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes results primarily related to the sale of non-VF products.

* Calculation not meaningful

^(a) Refer to constant currency definition on the following pages.

^(b) Excludes the operating results of jeanswear wind down activities in SouthAmerica post the separation of Kontoor Brands for the six months endedSeptember 2019. Refer to Non-GAAP financial information on "Reconciliation ofSelect GAAP Measures to Non-GAAP Measures - Three and Six Months EndedSeptember 2019" page for additional information.

^(c) Other is included for purposes of reconciliation of revenues and profit,but it is not considered a reportable segment. Includes results primarilyrelated to the sale of non-VF products.

* Calculation not meaningful

VF CORPORATION

Supplemental Financial Information

Reportable Segment Information - Constant Currency Basis

(Unaudited)

(In thousands)

Three Months Ended September 2020

As Reported Adjust for Foreign

under GAAP Currency Constant Exchange Currency

Segment revenues

Outdoor $ 1,154,407 $ (23,131 ) $ 1,131,276

Active 1,200,202 (15,277 ) 1,184,925

Work 253,551 (1,424 ) 252,127

Other 164 (28 ) 136

Total segment revenues $ 2,608,324 $ (39,860 ) $ 2,568,464

Segment profit (loss)

Outdoor $ 132,475 $ (4,840 ) $ 127,635

Active 259,123 (4,423 ) 254,700

Work 8,173 (521 ) 7,652

Other (2,526 ) (308 ) (2,834 )

Total segment profit 397,245 (10,092 ) 387,153

Corporate and other (72,653 ) 56 (72,597 ) expenses

Interest, net (30,931 ) - (30,931 )

Income from continuingoperations before income $ 293,661 $ (10,036 ) $ 283,625 taxes

Constant Currency Financial Information

VF is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by VF from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses.

To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

Constant Currency Financial Information

VF is a global company that reports financial information in U.S. dollars inaccordance with GAAP. Foreign currency exchange rate fluctuations affect theamounts reported by VF from translating its foreign revenues and expenses intoU.S. dollars. These rate fluctuations can have a significant effect on reportedoperating results. As a supplement to our reported operating results, wepresent constant currency financial information, which is a non-GAAP financialmeasure that excludes the impact of translating foreign currencies into U.S.dollars. We use constant currency information to provide a framework to assesshow our business performed excluding the effects of changes in the rates usedto calculate foreign currency translation. Management believes this informationis useful to investors to facilitate comparison of operating results and betteridentify trends in our businesses.

To calculate foreign currency translation on a constant currency basis,operating results for the current year period for entities reporting incurrencies other than the U.S. dollar are translated into U.S. dollars at theaverage exchange rates in effect during the comparable period of the prior year(rather than the actual exchange rates in effect during the current yearperiod).

These constant currency performance measures should be viewed in addition to,and not in lieu of or superior to, our operating performance measurescalculated in accordance with GAAP. The constant currency information presentedmay not be comparable to similarly titled measures reported by other companies.

VF CORPORATION

Supplemental Financial Information

Reportable Segment Information - Constant Currency Basis

(Unaudited)

(In thousands)

Six Months Ended September 2020

As Reported Adjust for Foreign

under GAAP Currency Constant Exchange Currency

Segment revenues

Outdoor $ 1,495,635 $ (19,009 ) $ 1,476,626

Active 1,771,518 (6,242 ) 1,765,276

Work 415,981 583 416,564

Other 1,483 29 1,512

Total segment revenues $ 3,684,617 $ (24,639 ) $ 3,659,978

Segment profit (loss)

Outdoor $ (28,236 ) $ (6,298 ) $ (34,534 )

Active 266,259 (3,551 ) 262,708

Work (3,228 ) (449 ) (3,677 )

Other (4,887 ) (1,589 ) (6,476 )

Total segment profit 229,908 (11,887 ) 218,021

Corporate and other (190,312 ) (171 ) (190,483 ) expenses

Interest, net (58,880 ) - (58,880 )

Income (loss) fromcontinuing operations $ (19,284 ) $ (12,058 ) $ (31,342 ) before income taxes

Constant Currency Financial Information

VF is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by VF from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses.

To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

Constant Currency Financial Information

VF is a global company that reports financial information in U.S. dollars inaccordance with GAAP. Foreign currency exchange rate fluctuations affect theamounts reported by VF from translating its foreign revenues and expenses intoU.S. dollars. These rate fluctuations can have a significant effect on reportedoperating results. As a supplement to our reported operating results, wepresent constant currency financial information, which is a non-GAAP financialmeasure that excludes the impact of translating foreign currencies into U.S.dollars. We use constant currency information to provide a framework to assesshow our business performed excluding the effects of changes in the rates usedto calculate foreign currency translation. Management believes this informationis useful to investors to facilitate comparison of operating results and betteridentify trends in our businesses.

To calculate foreign currency translation on a constant currency basis,operating results for the current year period for entities reporting incurrencies other than the U.S. dollar are translated into U.S. dollars at theaverage exchange rates in effect during the comparable period of the prior year(rather than the actual exchange rates in effect during the current yearperiod).

These constant currency performance measures should be viewed in addition to,and not in lieu of or superior to, our operating performance measurescalculated in accordance with GAAP. The constant currency information presentedmay not be comparable to similarly titled measures reported by other companies.

VF CORPORATION

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and SixMonths Ended September 2020

(Unaudited)

(In thousands, except per share amounts)

Transaction SpecifiedThree Months Ended As Reported and StrategicSeptember 2020 under GAAP Deal Business Adjusted Related Decisions Costs ^(a) ^(b)

Revenues $ 2,608,324 $ - $ - $ 2,608,324



Gross profit 1,325,918 - 1,646 1,327,564

Percent 50.8 % 50.9 %



Operating income 319,948 42 21,516 341,506

Percent 12.3 % 13.1 %



Diluted earnings pershare from 0.62 - 0.04 0.67 continuingoperations ^(c)



Transaction SpecifiedSix Months Ended As Reported and StrategicSeptember 2020 under GAAP Deal Business Adjusted Related Decisions Costs ^(a) ^(b)

Revenues $ 3,684,617 $ - $ - $ 3,684,617



Gross profit 1,895,260 410 14,663 1,910,333

Percent 51.4 % 51.8 %



Operating income 73,139 452 37,485 111,076

Percent 2.0 % 3.0 %



Diluted earnings(loss) per share (0.09) - 0.19 0.10 from continuingoperations ^(c)

(a) Transaction and deal related costs include expenses associated with the anticipated sale of the Occupational Workwear business of $0.4 million, that did not meet the criteria for discontinued operations, for the six months ended September 2020.

(b) Specified strategic business decisions for the three and six months ended September 2020 include cost optimization activity and other charges indirectly related to the strategic review of the Occupational Workwear business, which totaled $20.2 million and $33.2 million during the three and six months ended September 2020, respectively. The costs also include $1.1 million and $4.0 million for the three and six months ended September 2020, respectively, for jeanswear wind down activities in South America after the separation of Kontoor Brands, and costs related to specified strategic business decisions to cease operations in Argentina and planned business model changes in certain other countries in South America. The six months ended September 2020 also include a $42.4 million noncash charge recorded in the 'Other income (expense), net' line related to the release of certain currency translation amounts associated with the wind down activities in South America. The specified business decisions costs resulted in a net tax benefit of $4.1 million and $6.0 million in the three and six months ended September 2020, respectively.

(c) Amounts shown in the table have been calculated using unrounded numbers. The diluted earnings per share impacts were calculated using 391,180,000 and 390,986,000 weighted average common shares for the three and six months ended September 2020, respectively.

Non-GAAP Financial Information

The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of transaction and deal related costs and activity related to specified strategic business decisions. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding VF's underlying business trends and the performance of VF's ongoing operations and are useful for period-over-period comparisons of such operations.

Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, VF's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies.

^(a) Transaction and deal related costs include expenses associated with theanticipated sale of the Occupational Workwear business of $0.4 million, thatdid not meet the criteria for discontinued operations, for the six months endedSeptember 2020.

^(b) Specified strategic business decisions for the three and six months endedSeptember 2020 include cost optimization activity and other charges indirectlyrelated to the strategic review of the Occupational Workwear business, whichtotaled $20.2 million and $33.2 million during the three and six months endedSeptember 2020, respectively. The costs also include $1.1 million and $4.0million for the three and six months ended September 2020, respectively, forjeanswear wind down activities in South America after the separation of KontoorBrands, and costs related to specified strategic business decisions to ceaseoperations in Argentina and planned business model changes in certain othercountries in South America. The six months ended September 2020 also include a$42.4 million noncash charge recorded in the 'Other income (expense), net' linerelated to the release of certain currency translation amounts associated withthe wind down activities in South America. The specified business decisionscosts resulted in a net tax benefit of $4.1 million and $6.0 million in thethree and six months ended September 2020, respectively.

^(c) Amounts shown in the table have been calculated using unrounded numbers.The diluted earnings per share impacts were calculated using 391,180,000 and390,986,000 weighted average common shares for the three and six months endedSeptember 2020, respectively.



Non-GAAP Financial Information

The financial information above has been presented on a GAAP basis and on anadjusted basis, which excludes the impact of transaction and deal related costsand activity related to specified strategic business decisions. The adjustedpresentation provides non-GAAP measures. Management believes these measuresprovide investors with useful supplemental information regarding VF'sunderlying business trends and the performance of VF's ongoing operations andare useful for period-over-period comparisons of such operations.

Management uses the above financial measures internally in its budgeting andreview process and, in some cases, as a factor in determining compensation.While management believes that these non-GAAP financial measures are useful inevaluating the business, this information should be considered as supplementalin nature and should be viewed in addition to, and not in lieu of or superiorto, VF's operating performance measures calculated in accordance with GAAP. Inaddition, these non-GAAP financial measures may not be the same as similarlytitled measures presented by other companies.

VF CORPORATION

Supplemental Financial Information

Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and SixMonths Ended September 2019

(Unaudited)

(In thousands, except per share amounts)

RelocationThree Transaction and ImpactMonths As Reported and Specified ofEnded under GAAP Deal Related Strategic Swiss AdjustedSeptember Costs^ (a) Business Tax Act2019 Decisions ^ ^(c) (b)

Revenues $ 3,179,758 $ - $ (9,706 ) $ - $ 3,170,052



Gross 1,723,441 37 (445 ) - 1,723,033 profit

Percent 54.2 % 54.4 %



Operating 548,562 9,477 17,945 - 575,984 income

Percent 17.3 % 18.2 %



Dilutedearningsper sharefrom 1.55 0.02 0.03 (0.41 ) 1.20 continuingoperations^(d)



RelocationSix Months Transaction and ImpactEnded As Reported and Specified ofSeptember under GAAP Deal Related Strategic Swiss Adjusted2019 Costs ^(a) Business Tax Act Decisions ^ ^(c) (b)

Revenues $ 5,230,412 $ - $ (14,021 ) $ - $ 5,216,391



Gross 2,877,811 (630 ) (2,613 ) - 2,874,568 profit

Percent 55.0 % 55.1 %



Operating 644,527 22,317 34,898 - 701,742 income

Percent 12.3 % 13.5 %



Dilutedearningsper sharefrom 1.72 0.04 0.07 (0.41 ) 1.42 continuingoperations^(d)

(a) Transaction and deal related costs include acquisition and integration costs primarily related to the acquisition of the Icebreaker(r) brand, which totaled $9.5 million and $12.8 million for the three and six months ended September 2019, respectively. The costs also include separation and related expenses associated with the spin-off of the jeanswear business of $9.5 million, that did not meet the criteria for discontinued operations, for the six months ended September 2019. The transaction and deal related costs resulted in a net tax benefit of $2.7 million and $5.8 million in the three and six months ended September 2019, respectively.

(b) Relocation and other specified strategic business decisions include costs associated with the relocation of VF's global headquarters and certain brands to Denver, Colorado, which totaled $15.7 million and $30.7 million for the three and six months ended September 2019, respectively. This activity includes a gain of approximately $11.0 million on the sale of certain office real estate and related assets in connection with the relocation, which was recorded in the three months ended June 2019. The activity also reflects costs related to specified strategic business decisions to cease operations in Argentina and planned business model changes in certain other countries in South America as well as the operating results of jeanswear wind down activities in South America after the separation of Kontoor Brands, which totaled $2.2 million and $4.2 million for the three and six months ended September 2019, respectively. The relocation and specified strategic business decisions costs results in a net tax benefit of $4.2 million and $8.3 million for the three and six months ended September 2019, respectively.

(c) On May 19, 2019, Switzerland voted to approve the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Act"). Certain provisions of the Swiss Tax Act were enacted during the three months ended September 2019, which resulted in adjustments to deferred tax positions of $164.4 million for the three and six months ended September 2019.

(d) Amounts shown in the table have been calculated using unrounded numbers. The diluted earnings per share impacts were calculated using 402,261,000 and 402,088,000 weighted average common shares for the three and six months ended September 2019, respectively.

Non-GAAP Financial Information

The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of transaction and deal related costs, relocation and specified strategic business decisions and the impact of the Swiss Tax Act. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding VF's underlying business trends and the performance of VF's ongoing operations and are useful for period-over-period comparisons of such operations.

Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, VF's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies.

^(a) Transaction and deal related costs include acquisition and integrationcosts primarily related to the acquisition of the Icebreaker^(r) brand,which totaled $9.5 million and $12.8 million for the three and six monthsended September 2019, respectively. The costs also include separation andrelated expenses associated with the spin-off of the jeanswear business of$9.5 million, that did not meet the criteria for discontinued operations,for the six months ended September 2019. The transaction and deal relatedcosts resulted in a net tax benefit of $2.7 million and $5.8 million in thethree and six months ended September 2019, respectively.

^(b) Relocation and other specified strategic business decisions includecosts associated with the relocation of VF's global headquarters and certainbrands to Denver, Colorado, which totaled $15.7 million and $30.7 millionfor the three and six months ended September 2019, respectively. Thisactivity includes a gain of approximately $11.0 million on the sale ofcertain office real estate and related assets in connection with therelocation, which was recorded in the three months ended June 2019. Theactivity also reflects costs related to specified strategic businessdecisions to cease operations in Argentina and planned business modelchanges in certain other countries in South America as well as the operatingresults of jeanswear wind down activities in South America after theseparation of Kontoor Brands, which totaled $2.2 million and $4.2 millionfor the three and six months ended September 2019, respectively. Therelocation and specified strategic business decisions costs results in a nettax benefit of $4.2 million and $8.3 million for the three and six monthsended September 2019, respectively.

^(c) On May 19, 2019, Switzerland voted to approve the Federal Act on TaxReform and AHV Financing ("Swiss Tax Act"). Certain provisions of the SwissTax Act were enacted during the three months ended September 2019, whichresulted in adjustments to deferred tax positions of $164.4 million for thethree and six months ended September 2019.

^(d) Amounts shown in the table have been calculated using unroundednumbers. The diluted earnings per share impacts were calculated using402,261,000 and 402,088,000 weighted average common shares for the three andsix months ended September 2019, respectively.



Non-GAAP Financial Information

The financial information above has been presented on a GAAP basis and on anadjusted basis, which excludes the impact of transaction and deal relatedcosts, relocation and specified strategic business decisions and the impactof the Swiss Tax Act. The adjusted presentation provides non-GAAP measures.Management believes these measures provide investors with usefulsupplemental information regarding VF's underlying business trends and theperformance of VF's ongoing operations and are useful for period-over-periodcomparisons of such operations.

Management uses the above financial measures internally in its budgeting andreview process and, in some cases, as a factor in determining compensation.While management believes that these non-GAAP financial measures are usefulin evaluating the business, this information should be considered assupplemental in nature and should be viewed in addition to, and not in lieuof or superior to, VF's operating performance measures calculated inaccordance with GAAP. In addition, these non-GAAP financial measures may notbe the same as similarly titled measures presented by other companies.

VF CORPORATION

Supplemental Financial Information

Top 4 Brand Revenue Information

(Unaudited)

Three Months Ended September Six Months Ended September 2020 2020

Top 4 BrandRevenue Americas EMEA APAC Global Americas EMEA APAC GlobalGrowth

Vans^(r)

% change (17)% 0% 5% (10)% (40)% (19) 1% (30)% %

% change (21)constant (17)% (4)% 4% (11)% (40)% % 2% (30)%currency*

The North Face^(r)

% change (32)% (15) (3)% (25)% (38)% (21) (5)% (30)% % %

% change (19) (24)constant (32)% % (5)% (26)% (38)% % (5)% (31)%currency*

Timberland^ (r)

% change (27)% (26) (7)% (24)% (32)% (33) (15) (30)% % % %

% change (30) (35) (16)constant (27)% % (9)% (26)% (32)% % % (31)%currency*

Dickies^(r)

% change 14% 8% 48% 19% (1)% (11) 25% 2% %

% change (13)constant 14% 3% 45% 18% 0% % 25% 2%currency*

*Refer to constant currency definition on previous pages.

VF CORPORATION

Supplemental Financial Information

Geographic and Channel Revenue Information

(Unaudited)

Three Months Ended September 2020

% % Change % Change % Change Constant Change Constant Adjusted ^ Currency Currency* (a) and Adjusted*^(a)

Geographic Revenue Growth

U.S. (21)% (21)% (21)% (21)%

EMEA (16)% (20)% (16)% (20)%

APAC 2% 0% 2% 0%

Greater China 16% 14% 16% 14%

Americas (non-U.S.) (38)% (36)% (36)% (34)%

International (15)% (18)% (15)% (17)%

Global (18)% (19)% (18)% (19)%



Six Months Ended September 2020

% % Change % Change % Change Constant Change Constant Adjusted ^ Currency Currency* (a) and Adjusted*^(a)

Geographic Revenue Growth

U.S. (35)% (35)% (35)% (35)%

EMEA (26)% (29)% (26)% (29)%

APAC (4)% (4)% (4)% (4)%

Greater China 9% 9% 9% 9%

Americas (non-U.S.) (50)% (48)% (48)% (46)%

International (24)% (25)% (24)% (25)%

Global (30)% (30)% (29)% (30)%



Three Months Ended September 2020

% % Change % Change % Change Constant Change Constant Adjusted ^ Currency Currency* (a) and Adjusted*^(a)

Channel Revenue Growth

Wholesale^ (b) (19)% (20)% (18)% (20)%

Direct-to-consumer (17)% (18)% (16)% (17)%

Digital 44% 42% 44% 42%



Six Months Ended September 2020

% % Change % Change % Change Constant Change Constant Adjusted ^ Currency Currency* (a) and Adjusted*^(a)

Channel Revenue Growth

Wholesale^ (b) (32)% (32)% (32)% (32)%

Direct-to-consumer (26)% (26)% (26)% (26)%

Digital 60% 60% 60% 60%



As of September

2020 2019

DTC Store Count

Total 1,382 1,372

*Refer to constant currency definition on previous pages.

(a) Excludes the operating results of jeanswear wind down activities in South America after the separation of Kontoor Brands for the three and six months ended September 2019. Refer to Non-GAAP financial information on "Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Six Months Ended September 2019" page for additional information.

(b) Royalty revenues are included in the wholesale channel for all periods.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201016005079/en/

CONTACT: VF Corporation Joe Alkire, 720-778-4051 Vice President, Corporate Development, Investor Relations and Treasury or Craig Hodges, 720-778-4116 Vice President, Corporate Affairs