UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 1-5256

V. F. CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	23-1180120
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)

1551 Wewatta Street

Denver, Colorado 80202

(Address of principal executive offices)

(720) 778-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)	(Trading Symbol(s))	(Name of each exchange on which registered)
Common Stock, without par value, stated capital, $0.25 per share	VFC	New York Stock Exchange
0.625% Senior Notes due 2023	VFC23	New York Stock Exchange
4.125% Senior Notes due 2026	VFC26	New York Stock Exchange
0.250% Senior Notes due 2028	VFC28	New York Stock Exchange
4.250% Senior Notes due 2029	VFC29	New York Stock Exchange
0.625% Senior Notes due 2032	VFC32	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑ 

On July 29, 2023, there were 388,868,414 shares of the registrant’s common stock outstanding.

VF CORPORATION

Table of Contents

	PAGE NUMBER
Part I — Financial Information	3
Item 1 — Financial Statements (Unaudited)	3
Consolidated Balance Sheets: June 2023, March 2023 and June 2022	3
Consolidated Statements of Operations: Three months ended June 2023 and June 2022	4
Consolidated Statements of Comprehensive Loss: Three months ended June 2023 and June 2022	5
Consolidated Statements of Cash Flows: Three months ended June 2023 and June 2022	6
Consolidated Statements of Stockholders’ Equity: Three months ended June 2023 and June 2022	7
Notes to Consolidated Financial Statements	8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 — Quantitative and Qualitative Disclosures about Market Risk	31
Item 4 — Controls and Procedures	31
Part II — Other Information	31
Item 1 — Legal Proceedings	31
Item 1A — Risk Factors	31
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5 — Other Information	32
Item 6 — Exhibits	32
Signatures	33

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).

VF CORPORATION

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts)	June 2023		March 2023		June 2022
ASSETS
Current assets
Cash and equivalents	$	806,529	$	814,887	$	528,029
Accounts receivable, less allowance for doubtful accounts of: June 2023  - $33,076; March 2023 - $28,075; June 2022 - $29,780	1,214,223		1,610,295		1,249,713
Inventories	2,787,021		2,292,790		2,341,395
Other current assets	405,784		434,737		492,569
Total current assets	5,213,557		5,152,709		4,611,706
Property, plant and equipment, net	943,163		942,440		1,007,853
Intangible assets, net	2,640,827		2,642,821		2,984,136
Goodwill	1,973,615		1,978,413		2,359,548
Operating lease right-of-use assets	1,349,725		1,372,182		1,227,462
Other assets	1,923,011		1,901,923		1,021,048
TOTAL ASSETS	$	14,043,898	$	13,990,488	$	13,211,753
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	58,520	$	11,491	$	827,380
Current portion of long-term debt	928,736		924,305		1,058
Accounts payable	1,282,313		936,319		1,022,755
Accrued liabilities	1,546,866		1,673,651		1,612,804
Total current liabilities	3,816,435		3,545,766		3,463,997
Long-term debt	5,722,448		5,711,014		4,468,399
Operating lease liabilities	1,155,852		1,171,941		1,006,274
Other liabilities	632,400		651,054		920,590
Total liabilities	11,327,135		11,079,775		9,859,260
Commitments and contingencies
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at June 2023, March 2023 or June 2022	—		—		—
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at June 2023 - 388,836,545; March 2023 - 388,665,531; June 2022 - 388,490,713	97,209		97,166		97,123
Additional paid-in capital	3,733,777		3,775,979		3,941,440
Accumulated other comprehensive loss	(1,053,529)		(1,019,518)		(874,876)
Retained earnings (accumulated deficit)	(60,694)		57,086		188,806
Total stockholders’ equity	2,716,763		2,910,713		3,352,493
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,043,898	$	13,990,488	$	13,211,753

See notes to consolidated financial statements.

3 VF Corporation Q1 FY24 Form 10-Q

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VF CORPORATION

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June
(In thousands, except per share amounts)	2023		2022
Net revenues	$	2,086,336	$	2,261,595
Costs and operating expenses
Cost of goods sold	985,269		1,042,982
Selling, general and administrative expenses	1,110,059		1,155,251
Total costs and operating expenses	2,095,328		2,198,233
Operating income (loss)	(8,992)		63,362
Interest income	5,494		1,283
Interest expense	(55,213)		(32,545)
Other income (expense), net	(3,567)		(94,714)
Loss before income taxes	(62,278)		(62,614)
Income tax benefit	(4,853)		(6,654)
Net loss	$	(57,425)	$	(55,960)
Net loss per common share
Basic	$	(0.15)	$	(0.14)
Diluted	$	(0.15)	$	(0.14)
Weighted average shares outstanding
Basic	388,160		387,563
Diluted	388,160		387,563

See notes to consolidated financial statements.

VF Corporation Q1 FY24 Form 10-Q 4

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VF CORPORATION

Consolidated Statements of Comprehensive Loss

(Unaudited)

	Three Months Ended June
(In thousands)	2023		2022
Net loss	$	(57,425)	$	(55,960)
Other comprehensive income (loss)
Foreign currency translation and other
Losses arising during the period	(16,530)		(51,524)
Income tax effect	3,381		(30,010)
Defined benefit pension plans
Current period actuarial gains (losses)	1,001		(19,568)
Amortization of net deferred actuarial losses	4,232		3,721
Amortization of deferred prior service credits	(135)		(112)
Reclassification of net actuarial loss from settlement charges	3,292		91,761
Income tax effect	(1,909)		(19,651)
Derivative financial instruments
Gains (losses) arising during the period	(22,740)		99,430
Income tax effect	4,138		(15,375)
Reclassification of net (gains) losses realized	(10,680)		(8,242)
Income tax effect	1,939		1,273
Other comprehensive income (loss)	(34,011)		51,703
Comprehensive loss	$	(91,436)	$	(4,257)

See notes to consolidated financial statements.

5 VF Corporation Q1 FY24 Form 10-Q

VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended June
(In thousands)	2023		2022
OPERATING ACTIVITIES
Net loss	$	(57,425)	$	(55,960)
Adjustments to reconcile net loss to cash provided (used) by operating activities:
Depreciation and amortization	67,075		66,754
Reduction in the carrying amount of right-of-use assets	95,728		93,337
Stock-based compensation	15,784		22,297
Provision for doubtful accounts	4,633		899
Pension expense in excess of (less than) contributions	(10,661)		89,277
Other, net	10,645		6,813
Changes in operating assets and liabilities:
Accounts receivable	395,110		174,125
Inventories	(493,720)		(961,113)
Accounts payable	344,482		471,065
Income taxes	(30,667)		(70,727)
Accrued liabilities	(66,581)		(94,746)
Operating lease right-of-use assets and liabilities	(102,688)		(93,734)
Other assets and liabilities	(8,140)		(6,607)
Cash provided (used) by operating activities	163,575		(358,320)
INVESTING ACTIVITIES
Capital expenditures	(61,763)		(52,657)
Software purchases	(22,827)		(26,907)
Other, net	(5,972)		10,045
Cash used by investing activities	(90,562)		(69,519)
FINANCING ACTIVITIES
Contingent consideration payment	—		(56,976)
Net increase in short-term borrowings	47,029		491,917
Payments on long-term debt	(268)		(500,261)
Payment of debt issuance costs	(346)		—
Cash dividends paid	(116,575)		(194,135)
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings	(1,725)		(1,766)
Cash used by financing activities	(71,885)		(261,221)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(9,326)		(58,988)
Net change in cash, cash equivalents and restricted cash	(8,198)		(748,048)
Cash, cash equivalents and restricted cash – beginning of year	816,319		1,277,082
Cash, cash equivalents and restricted cash – end of period	$	808,121	$	529,034
Balances per Consolidated Balance Sheets:
Cash and cash equivalents	$	806,529	$	528,029
Other current assets	1,465		880
Other assets	127		125
Total cash, cash equivalents and restricted cash	$	808,121	$	529,034

See notes to consolidated financial statements.

VF Corporation Q1 FY24 Form 10-Q 6

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VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Three Months Ended June 2023
				Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings (Accumulated Deficit)
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2023	388,665,531	$	97,166	$	3,775,979	$	(1,019,518)	$	57,086	$	2,910,713
Net loss	—	—		—		—		(57,425)		(57,425)
Dividends on Common Stock ($0.30 per share)	—	—		(59,489)		—		(57,086)		(116,575)
Stock-based compensation, net	171,014	43		17,287		—		(3,269)		14,061
Foreign currency translation and other	—	—		—		(13,149)		—		(13,149)
Defined benefit pension plans	—	—		—		6,481		—		6,481
Derivative financial instruments	—	—		—		(27,343)		—		(27,343)
Balance, June 2023	388,836,545	$	97,209	$	3,733,777	$	(1,053,529)	$	(60,694)	$	2,716,763
	Three Months Ended June 2022
				Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings (Accumulated Deficit)
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2022	388,298,375	$	97,075	$	3,916,384	$	(926,579)	$	443,475	$	3,530,355
Net loss	—	—		—		—		(55,960)		(55,960)
Dividends on Common Stock ($0.50 per share)	—	—		—		—		(194,135)		(194,135)
Stock-based compensation, net	192,338	48		25,056		—		(4,574)		20,530
Foreign currency translation and other	—	—		—		(81,534)		—		(81,534)
Defined benefit pension plans	—	—		—		56,151		—		56,151
Derivative financial instruments	—	—		—		77,086		—		77,086
Balance, June 2022	388,490,713	$	97,123	$	3,941,440	$	(874,876)	$	188,806	$	3,352,493

See notes to consolidated financial statements.

7 VF Corporation Q1 FY24 Form 10-Q

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VF CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		PAGE NUMBER
NOTE 1	Basis of Presentation	9
NOTE 2	Recently Adopted Accounting Standards	9
NOTE 3	Revenues	10
NOTE 4	Inventories	11
NOTE 5	Intangible Assets	11
NOTE 6	Goodwill	11
NOTE 7	Leases	12
NOTE 8	Supply Chain Financing Program	12
NOTE 9	Pension Plans	12
NOTE 10	Capital and Accumulated Other Comprehensive Loss	13
NOTE 11	Stock-based Compensation	14
NOTE 12	Income Taxes	15
NOTE 13	Reportable Segment Information	16
NOTE 14	Net Loss Per Share	16
NOTE 15	Fair Value Measurements	17
NOTE 16	Derivative Financial Instruments and Hedging Activities	18
NOTE 17	Restructuring	20
NOTE 18	Contingencies	20
NOTE 19	Subsequent Event	21

VF Corporation Q1 FY24 Form 10-Q 8

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NOTE 1 — BASIS OF PRESENTATION

Fiscal Year

VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from April 2, 2023 through March 30, 2024 ("Fiscal 2024"). Accordingly, this Form 10-Q presents our first quarter of Fiscal 2024. For presentation purposes herein, all references to periods ended June 2023 and June 2022 relate to the fiscal periods ended on July 1, 2023 and July 2, 2022, respectively. References to March 2023 relate to information as of April 1, 2023.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. Similarly, the March 2023 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three months ended June 2023 are not necessarily indicative of results that may be

expected for any other interim period or for Fiscal 2024. For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended April 1, 2023 (“Fiscal 2023 Form 10-K”).

Recent Developments and Uncertainties

There is ongoing uncertainty around the global economy and macroeconomic environment, which we expect to continue and cause disruption and near-term challenges for our business. Macroeconomic conditions include inflationary pressures, higher interest rates and weakening consumer sentiment. These conditions have led to elevated inventories in certain markets and an increased promotional environment, and increased borrowing costs. VF has considered the impact of these developments on the estimates and assumptions used when preparing the interim consolidated financial statements and accompanying notes. The duration and severity of these recent developments, and the related impacts on VF's business are subject to uncertainty; however, the estimates and assumptions made by management are based on available information.

Use of Estimates

In preparing the interim consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the interim consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

NOTE 2 — RECENTLY ADOPTED ACCOUNTING STANDARDS

In March 2020, January 2021 and December 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", ASU No. 2021-01, "Reference Rate Reform (Topic 848): Scope" and ASU No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848", respectively. This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The guidance is provided to ease the potential burden of accounting for reference rate reform. During the first quarter of Fiscal 2024, the Company amended the terms of its $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”), which replaced the LIBOR benchmark interest rate with a benchmark interest rate based on the forward-looking secured overnight financing rate ("Term SOFR"). This guidance was adopted in the first quarter of Fiscal 2024, but did not impact VF's consolidated financial statements.

In September 2022, the FASB issued ASU No. 2022-04, "Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations". This guidance requires companies with supplier finance programs to disclose sufficient qualitative and quantitative information about the program to allow a user of the financial statements to understand the nature of, activity in, and potential magnitude of the program. The guidance became effective for VF in the first quarter of Fiscal 2024, except for the rollforward information that will be effective for annual periods beginning in Fiscal 2025 on a prospective basis. Early adoption is permitted. The Company adopted the required guidance in the first quarter of Fiscal 2024 and is evaluating the impact of adopting the guidance related to the rollforward information. Refer to Note 8 for disclosures related to the Company’s supply chain financing program.

9 VF Corporation Q1 FY24 Form 10-Q

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NOTE 3 — REVENUES

Contract Balances

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

(In thousands)	June 2023		March 2023		June 2022
Contract assets (a)	$	2,645	$	2,294	$	2,022
Contract liabilities (b)	62,942		62,214		81,167

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

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

For the three months ended June 2023, the Company recognized $68.2 million of revenue that was included in the contract liability balance during the period, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers. The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

Performance Obligations

As of June 2023, the Company expects to recognize $63.6 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the contractual terms through March 2031. The variable consideration related to

licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption. VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.

As of June 2023, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

For the three months ended June 2023, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

Disaggregation of Revenues

The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors.

	Three Months Ended June 2023
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	489,931	$	462,265	$	146,169	$	—	$	1,098,365
Direct-to-consumer	336,333		597,621		39,654		—		973,608
Royalty	3,433		6,123		4,807		—		14,363
Total	$	829,697	$	1,066,009	$	190,630	$	—	$	2,086,336
Geographic revenues
Americas	$	404,406	$	625,847	$	153,571	$	—	$	1,183,824
Europe	288,221		277,126		19,001		—		584,348
Asia-Pacific	137,070		163,036		18,058		—		318,164
Total	$	829,697	$	1,066,009	$	190,630	$	—	$	2,086,336

VF Corporation Q1 FY24 Form 10-Q 10

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	Three Months Ended June 2022
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	472,282	$	582,160	$	193,191	$	148	$	1,247,781
Direct-to-consumer	292,685		666,156		40,249		—		999,090
Royalty	3,657		5,629		5,438		—		14,724
Total	$	768,624	$	1,253,945	$	238,878	$	148	$	2,261,595
Geographic revenues
Americas	$	394,515	$	790,729	$	199,660	$	148	$	1,385,052
Europe	275,045		303,275		16,293		—		594,613
Asia-Pacific	99,064		159,941		22,925		—		281,930
Total	$	768,624	$	1,253,945	$	238,878	$	148	$	2,261,595

NOTE 4 — INVENTORIES

(In thousands)	June 2023		March 2023		June 2022
Finished products	$	2,731,511	$	2,240,215	$	2,277,145
Work-in-process	41,827		39,508		49,002
Raw materials	13,683		13,067		15,248
Total inventories	$	2,787,021	$	2,292,790	$	2,341,395

NOTE 5 — INTANGIBLE ASSETS

			June 2023						March 2023
(In thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount
Amortizable intangible assets:
Customer relationships and other	19 years	Accelerated	$	263,268	$	177,711	$	85,557	$	88,902
Indefinite-lived intangible assets:
Trademarks and trade names							2,555,270		2,553,919
Intangible assets, net							$	2,640,827	$	2,642,821

Amortization expense for the three months ended June 2023 was $3.5 million. Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2024 is $13.6 million, $13.1 million, $12.1 million, $11.7 million and $10.7 million, respectively.

NOTE 6 — GOODWILL

Changes in goodwill are summarized by reportable segment as follows:

(In thousands)	Outdoor		Active		Work		Total
Balance, March 2023	$	653,787	$	1,211,244	$	113,382	$	1,978,413
Currency translation	(1,218)		(3,273)		(307)		(4,798)
Balance, June 2023	$	652,569	$	1,207,971	$	113,075	$	1,973,615

Accumulated impairment charges were $323.2 million for the Outdoor segment and $394.1 million for the Active segment as of the dates presented above. No impairment charges were recorded during the three months ended June 2023.

11 VF Corporation Q1 FY24 Form 10-Q

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NOTE 7 — LEASES

The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. The substantial majority of these leases are operating leases. Total lease cost includes operating lease cost, variable lease cost, finance lease cost, short-term lease cost and impairment. Components of lease cost were as follows:

	Three Months Ended June
(In thousands)	2023		2022
Operating lease cost	$	106,131	$	101,705
Other lease cost	35,319		33,165
Total lease cost	$	141,450	$	134,870

During the three months ended June 2023 and 2022, the Company paid $114.2 million and $102.3 million for operating leases, respectively. During the three months ended June 2023 and 2022, the Company obtained $71.8 million and $105.9 million of right-of-use assets in exchange for lease liabilities, respectively.

NOTE 8 — SUPPLY CHAIN FINANCING PROGRAM

VF facilitates a voluntary supply chain finance ("SCF") program that enables a significant portion of our suppliers of inventory to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier. The SCF program is administered through third-party platforms that allow participating suppliers to track payments from VF and elect which receivables, if any, to sell to the financial institutions. The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable. The terms between VF and the supplier, including the amount due and scheduled payment terms (which are generally

within 90 days of the invoice date), are not impacted by a supplier's participation in the SCF program. 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 June 2023, March 2023 and June 2022, the accounts payable line item in VF’s Consolidated Balance Sheets included total outstanding obligations of $931.0 million, $510.9 million and $506.5 million, respectively, due to suppliers that are eligible to participate in the SCF program.

NOTE 9 — PENSION PLANS

The components of pension cost for VF’s defined benefit plans were as follows:

	Three Months Ended June
(In thousands)	2023		2022
Service cost – benefits earned during the period	$	2,192	$	2,646
Interest cost on projected benefit obligations	11,812		12,631
Expected return on plan assets	(15,877)		(18,860)
Settlement charges	3,292		91,761
Amortization of deferred amounts:
Net deferred actuarial losses	4,232		3,721
Deferred prior service credits	(135)		(112)
Net periodic pension cost	$	5,516	$	91,787

VF has reported the service cost component of net periodic pension cost in operating income (loss) and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed $16.2 million to its defined benefit plans during the three months ended June 2023, and intends to make approximately $13.5 million of contributions during the remainder of Fiscal 2024.

VF recorded a $3.3 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the three months ended June 2023. The settlement charge related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan. Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate. The discount rate used to determine the supplemental defined benefit pension obligation as of June 2023 was 5.44%

Additionally, during the three months ended June 2022, VF entered into an agreement with The Prudential Insurance

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Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $330.0 million of the U.S. qualified defined benefit pension plan obligations. The transaction closed on June 30, 2022 and was funded entirely by existing assets of the plan. Under the group annuity contract, Prudential assumed responsibility for benefit payments and annuity administration for approximately 17,700 retirees and

beneficiaries. The transaction did not change the amount or timing of monthly retirement benefit payments. VF recorded a $91.8 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the three months ended June 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive loss (“OCL”).

NOTE 10 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Common Stock

During the three months ended June 2023, the Company did not purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors. These are treated as treasury stock transactions when shares are repurchased.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired. There were no shares held in treasury at the end of June 2023, March 2023 or June 2022. The excess of the cost of treasury shares acquired over the $0.25 per share stated value of Common Stock is deducted from retained earnings.

Accumulated Other Comprehensive Loss

Comprehensive loss consists of net loss and specified components of OCL, which relate to changes in assets and liabilities that are not included in net loss under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet. VF’s comprehensive loss is presented in the Consolidated Statements of Comprehensive Loss. The deferred components of OCL are reported, net of related income taxes, in accumulated OCL in stockholders’ equity, as follows:

(In thousands)	June 2023		March 2023		June 2022
Foreign currency translation and other	$	(872,800)	$	(859,651)	$	(833,166)
Defined benefit pension plans	(161,211)		(167,692)		(174,139)
Derivative financial instruments	(19,518)		7,825		132,429
Accumulated other comprehensive loss	$	(1,053,529)	$	(1,019,518)	$	(874,876)

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

	Three Months Ended June 2023
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2023	$	(859,651)	$	(167,692)	$	7,825	$	(1,019,518)
Other comprehensive income (loss) before reclassifications	(13,149)		1,088		(18,602)		(30,663)
Amounts reclassified from accumulated other comprehensive loss	—		5,393		(8,741)		(3,348)
Net other comprehensive income (loss)	(13,149)		6,481		(27,343)		(34,011)
Balance, June 2023	$	(872,800)	$	(161,211)	$	(19,518)	$	(1,053,529)

	Three Months Ended June 2022
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2022	$	(751,632)	$	(230,290)	$	55,343	$	(926,579)
Other comprehensive income (loss) before reclassifications	(81,534)		(14,484)		84,055		(11,963)
Amounts reclassified from accumulated other comprehensive loss	—		70,635		(6,969)		63,666
Net other comprehensive income (loss)	(81,534)		56,151		77,086		51,703
Balance, June 2022	$	(833,166)	$	(174,139)	$	132,429	$	(874,876)

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Reclassifications out of accumulated OCL were as follows:

(In thousands)		Three Months Ended June
Details About Accumulated Other Comprehensive Loss Components	Affected Line Item in the Consolidated Statements of Operations
		2023		2022
Amortization of defined benefit pension plans:
Net deferred actuarial losses	Other income (expense), net	$	(4,232)	$	(3,721)
Deferred prior service credits	Other income (expense), net	135		112
Pension settlement charges	Other income (expense), net	(3,292)		(91,761)
Total before tax		(7,389)		(95,370)
Tax benefit		1,996		24,735
Net of tax		(5,393)		(70,635)
Gains (losses) on derivative financial instruments:
Foreign exchange contracts	Net revenues	1,090		(3,534)
Foreign exchange contracts	Cost of goods sold	8,075		11,356
Foreign exchange contracts	Selling, general and administrative expenses	1,301		1,609
Foreign exchange contracts	Other income (expense), net	(511)		(1,216)
Interest rate contracts	Interest expense	725		27
Total before tax		10,680		8,242
Tax expense		(1,939)		(1,273)
Net of tax		8,741		6,969
Total reclassifications for the period, net of tax		$	3,348	$	(63,666)

NOTE 11 — STOCK-BASED COMPENSATION

Incentive Equity Awards Granted

During the three months ended June 2023, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 4,566,907 shares of its Common Stock at an exercise price of $17.95 per share. The exercise price of each option granted was equal to the fair market value of VF Common Stock on the date of grant. Employee stock options vest and become exercisable in equal annual installments over three years. Stock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ten-year terms.

The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:

	Three Months Ended June 2023
Expected volatility	33% to 52%
Weighted average expected volatility	42%
Expected term (in years)	6.1 to 7.8
Weighted average dividend yield	3.7%
Risk-free interest rate	3.80% to 5.44%
Weighted average fair value at date of grant	$5.72

During the three months ended June 2023, VF granted 426,885 performance-based restricted stock units ("RSUs") to executives that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle. The fair market value of VF Common Stock at the date the units were granted was $17.95 per share. Each performance-based RSU has a potential final payout ranging from zero to two and one-quarter shares of VF Common Stock. The number of shares earned by participants, if any, is based on achievement of three-year financial and relative total shareholder return targets set by the Talent and Compensation Committee of the Board of Directors. Shares will be issued to participants in the year following the conclusion of the three-year performance period. The financial targets include

50% weighting based on VF's revenue growth and 50% weighting based on VF's gross margin performance over the three-year period compared to financial targets. Furthermore, the actual number of shares earned may be adjusted upward or downward by 25% of the target award, based on how VF's total shareholder return ("TSR") over the three-year period compares to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index, resulting in a maximum payout of 225% of the target award. The grant date fair value of the TSR-based adjustment related to the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $0.35 per share.

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During the three months ended June 2023, VF granted 45,126 nonperformance-based RSUs to nonemployee members of the Board of Directors. These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of grant. The fair market value of VF Common Stock at the date the units were granted was $17.95 per share.

In addition, VF granted 2,565,204 nonperformance-based RSUs to employees during the three months ended June 2023. These

units generally vest over periods up to four years from the date of grant and each unit entitles the holder to one share of VF Common Stock. The fair market value of VF Common Stock at the date the units were granted was $17.95 per share.

NOTE 12 — INCOME TAXES

The effective income tax rate for the three months ended June 2023 was 7.8% compared to 10.6% in the 2022 period. The three months ended June 2023 included a net discrete tax expense of $0.2 million, which included a $4.7 million net tax expense related to unrecognized tax benefits and interest, a $3.1 million tax expense related to stock compensation and a $7.5 million net tax benefit for interest on the income tax receivable related to the Timberland court case. Excluding the $0.2 million net discrete tax expense in the 2023 period, the effective income tax rate would have been 8.2%. The three months ended June 2022 included a net discrete tax expense of $0.8 million, which included a $1.6 million net tax expense related to unrecognized tax benefits and interest and a $0.8 million net tax benefit related to withholding taxes on prior foreign earnings. Excluding the $0.8 million net discrete tax expense in the 2022 period, the effective income tax rate would have been 12.0%. Without discrete items, the effective income tax rate for the three months ended June 2023 decreased by 3.8% compared with the 2022 period primarily due to disproportionate year-to-date losses in jurisdictions with no tax benefit.

VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the Internal Revenue Service ("IRS") examinations for tax years through 2015 have been effectively settled.

As previously reported, VF petitioned the U.S. Tax Court (the “Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011. While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years. Both parties moved for summary judgment on the issue. On January 31, 2022, the Court issued its opinion in favor of the IRS and on July 14, 2022 issued its final decision. VF believes the opinion of the Court was in error based on the technical merits and filed a notice of appeal on October 7, 2022. VF continues to believe its timing and treatment of the income inclusion is appropriate and VF is vigorously defending its position. On October 19, 2022, VF paid $875.7 million related to the 2011 taxes and interest being disputed, which was recorded as an income tax receivable and will accrue interest income. These amounts are included in the other assets line item in VF's Consolidated Balance Sheet at June 2023, based on our

assessment of the position under the more-likely-than-not standard of the accounting literature. Refer to Note 18 for additional details on this matter.

VF was granted a ruling which lowered the effective income tax rate on taxable earnings for years 2010 through 2014 under Belgium’s excess profit tax regime. During 2015, the European Union Commission (“EU”) investigated and announced its decision that these rulings were illegal and ordered the tax benefits to be collected from affected companies, including VF. Requests for annulment were filed by Belgium and VF Europe BVBA individually. During 2017 and 2018, VF Europe BVBA was assessed and paid €35.0 million tax and interest, which was recorded as an income tax receivable and is included in the other current assets line item in VF's Consolidated Balance Sheets, based on the expected success of the requests for annulment. During 2019, the General Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment. In September 2021, the General Court's judgment was set aside by the Court of Justice of the EU and the case was sent back to the General Court to determine whether the excess profit tax regime amounted to illegal State aid. The case remains open and unresolved. If this matter is adversely resolved, these amounts will not be collected by VF.

In addition, VF is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that VF’s provision for income taxes is adequate. The outcome of any one examination is not expected to have a material impact on VF’s consolidated financial statements. Management believes that some of these audits and negotiations will conclude during the next 12 months.

During the three months ended June 2023, the amount of net unrecognized tax benefits and associated interest increased by $7.0 million to $304.6 million. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $301.3 million due to settlement of audits and expiration of statutes of limitations, primarily comprised of tax payments related to intellectual property transfers completed in a prior period. The overall decrease of unrecognized tax benefits would reduce income tax expense by $24.8 million.

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NOTE 13 — REPORTABLE SEGMENT INFORMATION

The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance.

The Company's reportable segments have been identified as: Outdoor, Active and Work. We have included an Other category in the table below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services.

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

	Three Months Ended June
(In thousands)	2023		2022
Segment revenues:
Outdoor	$	829,697	$	768,624
Active	1,066,009		1,253,945
Work	190,630		238,878
Other	—		148
Total segment revenues	$	2,086,336	$	2,261,595
Segment profit (loss):
Outdoor	$	(43,661)	$	(46,851)
Active	123,782		214,031
Work	6,831		35,002
Other	—		(225)
Total segment profit	86,952		201,957
Corporate and other expenses	(99,511)		(233,309)
Interest expense, net	(49,719)		(31,262)
Loss before income taxes	$	(62,278)	$	(62,614)

NOTE 14 — NET LOSS PER SHARE

	Three Months Ended June
(In thousands, except per share amounts)	2023		2022
Net loss per common share – basic:
Net loss	$	(57,425)	$	(55,960)
Weighted average common shares outstanding	388,160		387,563
Net loss per common share	$	(0.15)	$	(0.14)
Net loss per common share – diluted:
Net loss	$	(57,425)	$	(55,960)
Weighted average common shares outstanding	388,160		387,563
Incremental shares from stock options and other dilutive securities	—		—
Adjusted weighted average common shares outstanding	388,160		387,563
Net loss per common share	$	(0.15)	$	(0.14)

In the three-month periods ended June 2023 and June 2022, the dilutive impacts of outstanding stock options and other dilutive securities were excluded from dilutive shares as a result of the Company's net loss for the periods and, as such, their inclusion would have been anti-dilutive. As a result, a total of 18.6 million and 13.3 million potentially dilutive shares related to stock options and other dilutive securities were excluded from the diluted earnings per share calculations for the three-month periods ended June 2023 and June 2022, respectively.

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NOTE 15 — FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable

data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data.

•Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities that are measured and recorded in the consolidated financial statements at fair value on a recurring basis:

	Total Fair Value		Fair Value Measurement Using (a)
(In thousands)			Level 1		Level 2		Level 3
June 2023
Financial assets:
Cash equivalents:
Money market funds	$	118,530	$	118,530	$	—	$	—
Time deposits	30,083		30,083		—		—
Derivative financial instruments	32,888		—		32,888		—
Deferred compensation	101,041		101,041		—		—
Financial liabilities:
Derivative financial instruments	82,028		—		82,028		—
Deferred compensation	97,507		—		97,507		—
	Total Fair Value		Fair Value Measurement Using (a)
(In thousands)			Level 1		Level 2		Level 3
March 2023
Financial assets:
Cash equivalents:
Money market funds	$	418,304	$	418,304	$	—	$	—
Time deposits	21,233		21,233		—		—
Derivative financial instruments	49,688		—		49,688		—
Deferred compensation	99,200		99,200		—		—
Financial liabilities:
Derivative financial instruments	72,653		—		72,653		—
Deferred compensation	96,364		—		96,364		—

(a)There were no transfers among the levels within the fair value hierarchy during the three months ended June 2023 or the year ended March 2023.

VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts and interest rate swap contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and interest rate forward curves, and considers the credit risk of the Company and its counterparties. VF’s deferred compensation assets primarily represent investments held within plan trusts as an

economic hedge of the related deferred compensation liabilities. These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets. Liabilities related to VF’s deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments.

All other significant financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value. These other financial assets and financial liabilities

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include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities. At June 2023 and March 2023, their carrying values approximated fair value. Additionally, at June 2023 and March 2023, the carrying values of VF’s long-term debt, including the

current portion, were $6,651.2 million and $6,635.3 million, respectively, compared with fair values of $6,170.7 million and $6,244.4 million at those respective dates. Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

NOTE 16 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Summary of Derivative Financial Instruments

VF’s outstanding derivative financial instruments include foreign currency exchange forward contracts and interest rate swap contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes.

The notional amounts of all outstanding foreign currency exchange forward contracts were $3.5 billion at June 2023, $3.4 billion at March 2023 and $3.3 billion at June 2022, consisting

primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, Chinese renminbi, South Korean won, Swedish krona, Polish zloty and Japanese yen. These derivative contracts have maturities up to 20 months.

The notional amounts of VF's outstanding interest rate swap contracts were $500.0 million at June 2023 and March 2023. There were no notional amounts outstanding on interest rate swap contracts at June 2022.

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

	Fair Value of Derivatives with Unrealized Gains						Fair Value of Derivatives with Unrealized Losses
(In thousands)	June 2023		March 2023		June 2022		June 2023		March 2023		June 2022
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts	$	27,902	$	46,752	$	154,231	$	(74,050)	$	(71,052)	$	(22,612)
Interest rate contracts	4,582		—		—		—		(1,140)		—
Total derivatives designated as hedging instruments	32,484		46,752		154,231		(74,050)		(72,192)		(22,612)
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	404		2,936		2,227		(7,978)		(461)		(1,158)
Total derivatives	$	32,888	$	49,688	$	156,458	$	(82,028)	$	(72,653)	$	(23,770)

VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. If VF were to offset and record the asset and liability balances on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

	June 2023		March 2023		June 2022
(In thousands)	Derivative Asset	Derivative Liability	Derivative Asset	Derivative Liability