Pennsylvania | 23-1180120 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
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 | ||||||
0.250% Senior Notes due 2028 | VFC28 | New York Stock Exchange | ||||||
0.625% Senior Notes due 2032 | VFC32 | New York Stock Exchange |
PAGE NUMBER | |||||
ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED). |
(In thousands, except share amounts) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets | |||||||||||||||||||||||
Cash and equivalents
|
$ | 1,877,398 | $ | 1,369,028 | $ | 469,912 | |||||||||||||||||
Accounts receivable, less allowance for doubtful accounts of: September 2020 - $36,121; March 2020 - $37,099; September 2019 - $19,930
|
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 discontinued operations
|
552,677 | 611,139 | 442,216 | ||||||||||||||||||||
Total current assets | 6,680,206 | 5,027,016 | 4,775,207 | ||||||||||||||||||||
Property, plant and equipment, net
|
933,990 | 954,406 | 832,237 | ||||||||||||||||||||
Intangible assets, net
|
1,851,093 | 1,854,545 | 1,857,868 | ||||||||||||||||||||
Goodwill
|
1,173,514 | 1,156,019 | 1,479,755 | ||||||||||||||||||||
Operating lease right-of-use assets
|
1,385,121 | 1,273,514 | 1,231,638 | ||||||||||||||||||||
Other assets
|
917,342 | 867,751 | 905,993 | ||||||||||||||||||||
Other assets of discontinued operations
|
— | — | 187,657 | ||||||||||||||||||||
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 debt
|
1,127 | 1,018 | 4,986 | ||||||||||||||||||||
Accounts payable
|
450,109 | 407,021 | 483,207 | ||||||||||||||||||||
Accrued liabilities
|
1,505,703 | 1,260,252 | 1,331,495 | ||||||||||||||||||||
Current liabilities of discontinued operations
|
114,356 | 126,781 | 100,329 | ||||||||||||||||||||
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 discontinued operations
|
— | — | 23,229 | ||||||||||||||||||||
Total liabilities | 9,996,028 | 7,775,917 | 6,622,736 | ||||||||||||||||||||
Commitments and contingencies
|
|||||||||||||||||||||||
Stockholders’ equity | |||||||||||||||||||||||
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at September 2020, March 2020 or September 2019
|
— | — | — | ||||||||||||||||||||
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at September 2020 - 389,964,718; March 2020 - 388,812,158; September 2019 - 398,865,790
|
97,491 | 97,203 | 99,716 | ||||||||||||||||||||
Additional paid-in capital
|
3,852,358 | 4,183,780 | 4,072,640 | ||||||||||||||||||||
Accumulated other comprehensive income (loss)
|
(959,658) | (930,958) | (930,725) | ||||||||||||||||||||
Retained earnings (accumulated deficit)
|
(44,953) | 7,309 | 1,405,988 | ||||||||||||||||||||
Total stockholders’ equity | 2,945,238 | 3,357,334 | 4,647,619 | ||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 12,941,266 | $ | 11,133,251 | $ | 11,270,355 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Net revenues
|
$ | 2,608,324 | $ | 3,179,758 | $ | 3,684,617 | $ | 5,230,412 | |||||||||||||||||||||||||||
Costs and operating expenses
|
|||||||||||||||||||||||||||||||||||
Cost of goods sold
|
1,282,406 | 1,456,317 | 1,789,357 | 2,352,601 | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses
|
1,005,970 | 1,174,879 | 1,822,121 | 2,233,284 | |||||||||||||||||||||||||||||||
Total costs and operating expenses
|
2,288,376 | 2,631,196 | 3,611,478 | 4,585,885 | |||||||||||||||||||||||||||||||
Operating income
|
319,948 | 548,562 | 73,139 | 644,527 | |||||||||||||||||||||||||||||||
Interest income
|
3,176 | 4,424 | 4,489 | 10,968 | |||||||||||||||||||||||||||||||
Interest expense
|
(34,107) | (20,810) | (63,369) | (42,937) | |||||||||||||||||||||||||||||||
Other income (expense), net
|
4,644 | (1,771) | (33,543) | 3,783 | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes
|
293,661 | 530,405 | (19,284) | 616,341 | |||||||||||||||||||||||||||||||
Income tax expense (benefit)
|
50,415 | (94,972) | 15,212 | (74,309) | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations
|
243,246 | 625,377 | (34,496) | 690,650 | |||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax
|
13,476 | 23,624 | 5,605 | 7,572 | |||||||||||||||||||||||||||||||
Net income (loss)
|
$ | 256,722 | $ | 649,001 | $ | (28,891) | $ | 698,222 | |||||||||||||||||||||||||||
Earnings (loss) per common share - basic
|
|||||||||||||||||||||||||||||||||||
Continuing operations
|
$ | 0.62 | $ | 1.57 | $ | (0.09) | $ | 1.74 | |||||||||||||||||||||||||||
Discontinued operations
|
0.03 | 0.06 | 0.01 | 0.02 | |||||||||||||||||||||||||||||||
Total earnings (loss) per common share - basic
|
$ | 0.66 | $ | 1.63 | $ | (0.07) | $ | 1.76 | |||||||||||||||||||||||||||
Earnings (loss) per common share - diluted
|
|||||||||||||||||||||||||||||||||||
Continuing operations
|
$ | 0.62 | $ | 1.55 | $ | (0.09) | $ | 1.72 | |||||||||||||||||||||||||||
Discontinued operations
|
0.03 | 0.06 | 0.01 | 0.02 | |||||||||||||||||||||||||||||||
Total earnings (loss) per common share - diluted
|
$ | 0.66 | $ | 1.61 | $ | (0.07) | $ | 1.74 | |||||||||||||||||||||||||||
Weighted average shares outstanding
|
|||||||||||||||||||||||||||||||||||
Basic
|
389,219 | 397,751 | 388,957 | 397,239 | |||||||||||||||||||||||||||||||
Diluted
|
391,180 | 402,261 | 390,986 | 402,088 | |||||||||||||||||||||||||||||||
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
$ | 256,722 | $ | 649,001 | $ | (28,891) | $ | 698,222 | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation and other
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses arising during the period
|
(33,483) | (70,473) | (29,629) | (57,644) | |||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of foreign currency translation losses
|
— | — | 42,364 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect
|
18,582 | (8,912) | 24,837 | (5,969) | |||||||||||||||||||||||||||||||||||||||||||||||||
Defined benefit pension plans
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period actuarial losses
|
(8,853) | (14,610) | (8,853) | (14,610) | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of net deferred actuarial losses
|
2,898 | 4,014 | 5,761 | 8,033 | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred prior service costs (credits)
|
(17) | 12 | (34) | 25 | |||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of net actuarial loss from settlement charge
|
572 | 519 | 572 | 519 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect
|
386 | 2,207 | 722 | 499 | |||||||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains (losses) arising during the period
|
(39,731) | 51,396 | (47,326) | 66,170 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect
|
7,197 | (7,048) | 8,727 | (10,922) | |||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of net gains realized
|
(11,379) | (23,688) | (31,659) | (34,183) | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax effect
|
1,711 | 3,244 | 5,818 | 6,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
(62,117) | (63,339) | (28,700) | (42,082) | |||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss)
|
$ | 194,605 | $ | 585,662 | $ | (57,591) | $ | 656,140 |
Six Months Ended September | |||||||||||||||||
(In thousands) | 2020 | 2019 | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss)
|
$ | (28,891) | $ | 698,222 | |||||||||||||
Income from discontinued operations, net of tax
|
5,605 | 7,572 | |||||||||||||||
Income (loss) from continuing operations, net of tax
|
(34,496) | 690,650 | |||||||||||||||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
|
|||||||||||||||||
Depreciation and amortization
|
138,853 | 125,159 | |||||||||||||||
Reduction in the carrying amount of right-of-use assets
|
205,635 | 186,327 | |||||||||||||||
Stock-based compensation
|
26,113 | 70,146 | |||||||||||||||
Provision for doubtful accounts
|
15,727 | 5,767 | |||||||||||||||
Pension expense less than contributions
|
(7,953) | (6,125) | |||||||||||||||
Other, net
|
15,852 | (99,823) | |||||||||||||||
Changes in operating assets and liabilities:
|
|||||||||||||||||
Accounts receivable
|
(275,436) | (542,150) | |||||||||||||||
Inventories
|
(115,515) | (433,360) | |||||||||||||||
Accounts payable
|
36,019 | (169) | |||||||||||||||
Income taxes
|
(40,770) | (47,964) | |||||||||||||||
Accrued liabilities
|
161,785 | (123,369) | |||||||||||||||
Operating lease right-of-use assets and liabilities
|
(150,170) | (224,750) | |||||||||||||||
Other assets and liabilities
|
63,866 | 26,915 | |||||||||||||||
Cash provided (used) by operating activities - continuing operations
|
39,510 | (372,746) | |||||||||||||||
Cash provided by operating activities - discontinued operations
|
43,298 | 7,268 | |||||||||||||||
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 - continuing operations
|
(954,685) | (70,142) | |||||||||||||||
Cash used by investing activities - discontinued operations
|
(2,693) | (7,270) | |||||||||||||||
Cash used by investing activities
|
(957,378) | (77,412) | |||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||
Net decrease in short-term borrowings
|
(1,215,575) | (168,421) | |||||||||||||||
Payments on long-term debt
|
(768) | (2,868) | |||||||||||||||
Payment of debt issuance costs
|
(21,430) | — | |||||||||||||||
Proceeds from long-term debt
|
2,996,090 | — | |||||||||||||||
Cash dividends paid
|
(373,638) | (373,604) | |||||||||||||||
Cash received from Kontoor Brands, net of cash transferred of $126.8 million
|
— | 906,148 | |||||||||||||||
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings
|
(7,221) | 50,659 | |||||||||||||||
Cash provided by financing activities
|
1,377,458 | 411,914 | |||||||||||||||
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash
|
(8,082) | (5,385) | |||||||||||||||
Net change in cash, cash equivalents and restricted cash
|
494,806 | (36,361) | |||||||||||||||
Cash, cash equivalents and restricted cash – beginning of year
|
1,411,322 | 556,587 | |||||||||||||||
Cash, cash equivalents and restricted cash – end of period
|
$ | 1,906,128 | $ | 520,226 |
Six Months Ended September | |||||||||||||||||
(In thousands) | 2020 | 2019 | |||||||||||||||
Balances per Consolidated Balance Sheets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,877,398 | $ | 469,912 | |||||||||||||
Other current assets | 1,301 | 2,748 | |||||||||||||||
Current assets of discontinued operations | 26,846 | 37,693 | |||||||||||||||
Other assets | 583 | 9,873 | |||||||||||||||
Total cash, cash equivalents and restricted cash | $ | 1,906,128 | $ | 520,226 |
Three Months Ended September 2020 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, June 2020 | 389,641,245 | $ | 97,410 | $ | 4,010,817 | $ | (897,541) | $ | (298,088) | $ | 2,912,598 | |||||||||||||||||||||||||||
Net income
|
— | — | — | — | 256,722 | 256,722 | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.48 per share)
|
— | — | (186,892) | — | — | (186,892) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net
|
323,473 | 81 | 28,433 | — | (3,587) | 24,927 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other
|
— | — | — | (14,901) | — | (14,901) | ||||||||||||||||||||||||||||||||
Defined benefit pension plans
|
— | — | — | (5,014) | — | (5,014) | ||||||||||||||||||||||||||||||||
Derivative financial instruments
|
— | — | — | (42,202) | — | (42,202) | ||||||||||||||||||||||||||||||||
Balance, September 2020 | 389,964,718 | $ | 97,491 | $ | 3,852,358 | $ | (959,658) | $ | (44,953) | $ | 2,945,238 | |||||||||||||||||||||||||||
Three Months Ended September 2019 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, June 2019 | 397,922,120 | $ | 99,481 | $ | 3,988,385 | $ | (867,386) | $ | 931,134 | $ | 4,151,614 | |||||||||||||||||||||||||||
Net income
|
— | — | — | — | 649,001 | 649,001 | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.43 per share)
|
— | — | — | — | (171,066) | (171,066) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net
|
943,670 | 235 | 84,255 | — | (3,081) | 81,409 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other
|
— | — | — | (79,385) | — | (79,385) | ||||||||||||||||||||||||||||||||
Defined benefit pension plans
|
— | — | — | (7,858) | — | (7,858) | ||||||||||||||||||||||||||||||||
Derivative financial instruments
|
— | — | — | 23,904 | — | 23,904 | ||||||||||||||||||||||||||||||||
Balance, September 2019 | 398,865,790 | $ | 99,716 | $ | 4,072,640 | $ | (930,725) | $ | 1,405,988 | $ | 4,647,619 |
Six Months Ended September 2020 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, March 2020 | 388,812,158 | $ | 97,203 | $ | 4,183,780 | $ | (930,958) | $ | 7,309 | $ | 3,357,334 | |||||||||||||||||||||||||||
Net loss
|
— | — | — | — | (28,891) | (28,891) | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.96 per share)
|
— | — | (373,638) | — | — | (373,638) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net
|
1,152,560 | 288 | 42,216 | — | (23,371) | 19,133 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other
|
— | — | — | 37,572 | — | 37,572 | ||||||||||||||||||||||||||||||||
Defined benefit pension plans
|
— | — | — | (1,832) | — | (1,832) | ||||||||||||||||||||||||||||||||
Derivative financial instruments
|
— | — | — | (64,440) | — | (64,440) | ||||||||||||||||||||||||||||||||
Balance, September 2020 | 389,964,718 | $ | 97,491 | $ | 3,852,358 | $ | (959,658) | $ | (44,953) | $ | 2,945,238 | |||||||||||||||||||||||||||
Six Months Ended September 2019 | ||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||
Balance, March 2019 | 396,824,662 | $ | 99,206 | $ | 3,921,784 | $ | (902,075) | $ | 1,179,601 | $ | 4,298,516 | |||||||||||||||||||||||||||
Adoption of new accounting standard, ASU 2016-02
|
— | — | — | — | (2,491) | (2,491) | ||||||||||||||||||||||||||||||||
Adoption of new accounting standard, ASU 2018-02
|
— | — | — | (61,861) | 61,861 | — | ||||||||||||||||||||||||||||||||
Net income
|
— | — | — | — | 698,222 | 698,222 | ||||||||||||||||||||||||||||||||
Dividends on Common Stock ($0.94 per share)
|
— | — | — | — | (373,604) | (373,604) | ||||||||||||||||||||||||||||||||
Stock-based compensation, net
|
2,041,128 | 510 | 150,856 | — | (27,393) | 123,973 | ||||||||||||||||||||||||||||||||
Foreign currency translation and other
|
— | — | — | (63,613) | — | (63,613) | ||||||||||||||||||||||||||||||||
Defined benefit pension plans
|
— | — | — | (5,534) | — | (5,534) | ||||||||||||||||||||||||||||||||
Derivative financial instruments
|
— | — | — | 27,065 | — | 27,065 | ||||||||||||||||||||||||||||||||
Spin-off of Jeans Business
|
— | — | — | 75,293 | (130,208) | (54,915) | ||||||||||||||||||||||||||||||||
Balance, September 2019 | 398,865,790 | $ | 99,716 | $ | 4,072,640 | $ | (930,725) | $ | 1,405,988 | $ | 4,647,619 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | PAGE NUMBER | |||||||
NOTE 1 | ||||||||
NOTE 2 | ||||||||
NOTE 3 | ||||||||
NOTE 4 | ||||||||
NOTE 5 | ||||||||
NOTE 6 | ||||||||
NOTE 7 | ||||||||
NOTE 8 | ||||||||
NOTE 9 | ||||||||
NOTE 10 | ||||||||
NOTE 11 | ||||||||
NOTE 12 | ||||||||
NOTE 13 | ||||||||
NOTE 14 | ||||||||
NOTE 15 | ||||||||
NOTE 16 | ||||||||
NOTE 17 | ||||||||
NOTE 18 | ||||||||
NOTE 19 | ||||||||
NOTE 20 |
(In thousands) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
Accounts receivable, net | $ | 1,606,479 | $ | 1,308,051 | $ | 1,881,374 | |||||||||||||||||
Contract assets (a)
|
2,573 | 1,181 | 2,433 | ||||||||||||||||||||
Contract liabilities (b)
|
44,010 | 37,498 | 39,346 |
Three Months Ended September 2020 | ||||||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Channel revenues | ||||||||||||||||||||||||||||||||
Wholesale | $ | 823,954 | $ | 664,868 | $ | 208,902 | $ | — | $ | 1,697,724 | ||||||||||||||||||||||
Direct-to-consumer | 329,661 | 530,231 | 40,028 | 164 | 900,084 | |||||||||||||||||||||||||||
Royalty | 792 | 5,103 | 4,621 | — | 10,516 | |||||||||||||||||||||||||||
Total | $ | 1,154,407 | $ | 1,200,202 | $ | 253,551 | $ | 164 | $ | 2,608,324 | ||||||||||||||||||||||
Geographic revenues | ||||||||||||||||||||||||||||||||
United States | $ | 522,676 | $ | 586,377 | $ | 161,458 | $ | — | $ | 1,270,511 | ||||||||||||||||||||||
International | 631,731 | 613,825 | 92,093 | 164 | 1,337,813 | |||||||||||||||||||||||||||
Total | $ | 1,154,407 | $ | 1,200,202 | $ | 253,551 | $ | 164 | $ | 2,608,324 |
Three Months Ended September 2019 | |||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | ||||||||||||||||||||||||
Channel revenues | |||||||||||||||||||||||||||||
Wholesale | $ | 1,175,422 | $ | 709,770 | $ | 186,482 | $ | 15,172 | $ | 2,086,846 | |||||||||||||||||||
Direct-to-consumer | 347,684 | 697,627 | 30,453 | 2,898 | 1,078,662 | ||||||||||||||||||||||||
Royalty | 2,831 | 6,237 | 5,182 | — | 14,250 | ||||||||||||||||||||||||
Total | $ | 1,525,937 | $ | 1,413,634 | $ | 222,117 | $ | 18,070 | $ | 3,179,758 | |||||||||||||||||||
Geographic revenues | |||||||||||||||||||||||||||||
United States | $ | 737,255 | $ | 711,541 | $ | 149,523 | $ | — | $ | 1,598,319 | |||||||||||||||||||
International | 788,682 | 702,093 | 72,594 | 18,070 | 1,581,439 | ||||||||||||||||||||||||
Total | $ | 1,525,937 | $ | 1,413,634 | $ | 222,117 | $ | 18,070 | $ | 3,179,758 |
Six Months Ended September 2020 | ||||||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Channel revenues | ||||||||||||||||||||||||||||||||
Wholesale | $ | 982,460 | $ | 906,032 | $ | 326,506 | $ | 1,275 | $ | 2,216,273 | ||||||||||||||||||||||
Direct-to-consumer | 509,675 | 854,432 | 80,643 | 208 | 1,444,958 | |||||||||||||||||||||||||||
Royalty | 3,500 | 11,054 | 8,832 | — | 23,386 | |||||||||||||||||||||||||||
Total | $ | 1,495,635 | $ | 1,771,518 | $ | 415,981 | $ | 1,483 | $ | 3,684,617 | ||||||||||||||||||||||
Geographic revenues | ||||||||||||||||||||||||||||||||
United States | $ | 675,153 | $ | 851,884 | $ | 276,090 | $ | — | $ | 1,803,127 | ||||||||||||||||||||||
International | 820,482 | 919,634 | 139,891 | 1,483 | 1,881,490 | |||||||||||||||||||||||||||
Total | $ | 1,495,635 | $ | 1,771,518 | $ | 415,981 | $ | 1,483 | $ | 3,684,617 |
Six Months Ended September 2019 | |||||||||||||||||||||||||||||
(In thousands) | Outdoor | Active | Work | Other | Total | ||||||||||||||||||||||||
Channel revenues | |||||||||||||||||||||||||||||
Wholesale | $ | 1,517,178 | $ | 1,369,912 | $ | 350,762 | $ | 17,980 | $ | 3,255,832 | |||||||||||||||||||
Direct-to-consumer | 614,026 | 1,263,514 | 63,972 | 6,352 | 1,947,864 | ||||||||||||||||||||||||
Royalty | 5,353 | 12,334 | 9,029 | — | 26,716 | ||||||||||||||||||||||||
Total | $ | 2,136,557 | $ | 2,645,760 | $ | 423,763 | $ | 24,332 | $ | 5,230,412 | |||||||||||||||||||
Geographic revenues | |||||||||||||||||||||||||||||
United States | $ | 1,040,307 | $ | 1,422,746 | $ | 292,154 | $ | — | $ | 2,755,207 | |||||||||||||||||||
International | 1,096,250 | 1,223,014 | 131,609 | 24,332 | 2,475,205 | ||||||||||||||||||||||||
Total | $ | 2,136,557 | $ | 2,645,760 | $ | 423,763 | $ | 24,332 | $ | 5,230,412 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Net revenues
|
$ | 162,310 | $ | 213,510 | $ | 287,643 | $ | 769,538 | |||||||||||||||||||||||||||
Cost of goods sold
|
113,147 | 140,990 | 214,617 | 483,944 | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses
|
34,911 | 42,017 | 68,167 | 238,483 | |||||||||||||||||||||||||||||||
Interest income, net
|
180 | 559 | 473 | 592 | |||||||||||||||||||||||||||||||
Other income (expense), net
|
79 | (41) | 79 | (664) | |||||||||||||||||||||||||||||||
Income from discontinued operations before income taxes
|
14,511 | 31,021 | 5,411 | 47,039 | |||||||||||||||||||||||||||||||
Income tax expense (benefit) (a)
|
1,035 | 7,397 | (194) | 39,467 | |||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax
|
$ | 13,476 | $ | 23,624 | $ | 5,605 | $ | 7,572 |
(In thousands) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
Cash and equivalents
|
$ | 26,846 | $ | 39,752 | $ | 37,693 | |||||||||||||||||
Accounts receivable, net
|
82,520 | 83,650 | 94,780 | ||||||||||||||||||||
Inventories
|
241,519 | 294,000 | 300,689 | ||||||||||||||||||||
Other current assets
|
7,773 | 6,701 | 9,054 | ||||||||||||||||||||
Property, plant and equipment, net
|
47,964 | 44,863 | 39,364 | ||||||||||||||||||||
Intangible assets, net
|
54,471 | 54,471 | 61,902 | ||||||||||||||||||||
Goodwill
|
43,530 | 43,530 | 49,630 | ||||||||||||||||||||
Operating lease right-of-use assets
|
42,445 | 38,941 | 32,265 | ||||||||||||||||||||
Other assets
|
5,609 | 5,231 | 4,496 | ||||||||||||||||||||
Total assets of discontinued operations
|
$ | 552,677 | $ | 611,139 | $ | 629,873 | |||||||||||||||||
Accounts payable
|
$ | 46,493 | $ | 63,380 | $ | 67,493 | |||||||||||||||||
Accrued liabilities
|
32,322 | 29,699 | 32,836 | ||||||||||||||||||||
Operating lease liabilities
|
34,688 | 35,867 | 30,907 | ||||||||||||||||||||
Other liabilities
|
5,177 | 2,270 | 2,572 | ||||||||||||||||||||
Deferred income tax liabilities (a)
|
(4,324) | (4,435) | (10,250) | ||||||||||||||||||||
Total liabilities of discontinued operations
|
$ | 114,356 | $ | 126,781 | $ | 123,558 |
(In thousands) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
Finished products | $ | 1,358,593 | $ | 1,201,562 | $ | 1,500,803 | |||||||||||||||||
Work-in-process | 59,855 | 67,603 | 64,585 | ||||||||||||||||||||
Raw materials | 16,395 | 24,747 | 24,639 | ||||||||||||||||||||
Total inventories | $ | 1,434,843 | $ | 1,293,912 | $ | 1,590,027 |
September 2020 | March 2020 | |||||||||||||||||||||||||||||||||||||||||||
(In thousands) |
Weighted
Average Amortization Period |
Amortization
Method |
Cost |
Accumulated
Amortization |
Net
Carrying Amount |
Net
Carrying Amount |
||||||||||||||||||||||||||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
Customer relationships | 19 years | Accelerated | $ | 266,350 | $ | 142,442 | $ | 123,908 | $ | 137,017 | ||||||||||||||||||||||||||||||||||
License agreements | 19 years | Accelerated | 7,766 | 5,216 | 2,550 | 2,548 | ||||||||||||||||||||||||||||||||||||||
Other | 8 years | Straight-line | 8,296 | 5,936 | 2,360 | 2,909 | ||||||||||||||||||||||||||||||||||||||
Amortizable intangible assets, net | 128,818 | 142,474 | ||||||||||||||||||||||||||||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
Trademarks and trade names | 1,722,275 | 1,712,071 | ||||||||||||||||||||||||||||||||||||||||||
Intangible assets, net | $ | 1,851,093 | $ | 1,854,545 |
(In thousands) | Outdoor | Active | Work | Total | ||||||||||||||||||||||
Balance, March 2020 | $ | 653,433 | $ | 389,848 | $ | 112,738 | $ | 1,156,019 | ||||||||||||||||||
Currency translation | 7,000 | 9,917 | 578 | 17,495 | ||||||||||||||||||||||
Balance, September 2020 | $ | 660,433 | $ | 399,765 | $ | 113,316 | $ | 1,173,514 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating lease cost | $ | 106,679 | $ | 107,023 | $ | 215,531 | $ | 206,611 | |||||||||||||||||||||||||||||||||||||||||||||
Other lease costs | 19,572 | 31,202 | 34,570 | 49,106 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total lease cost | $ | 126,251 | $ | 138,225 | $ | 250,101 | $ | 255,717 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 3,783 | $ | 3,410 | $ | 7,415 | $ | 6,791 | |||||||||||||||||||||||||||
Interest cost on projected benefit obligations | 11,981 | 14,743 | 23,929 | 29,504 | |||||||||||||||||||||||||||||||
Expected return on plan assets | (20,571) | (23,151) | (41,110) | (46,329) | |||||||||||||||||||||||||||||||
Settlement charges | 572 | 519 | 572 | 519 | |||||||||||||||||||||||||||||||
Amortization of deferred amounts: | |||||||||||||||||||||||||||||||||||
Net deferred actuarial losses | 2,898 | 4,014 | 5,761 | 8,033 | |||||||||||||||||||||||||||||||
Deferred prior service costs (credits) | (17) | 12 | (34) | 25 | |||||||||||||||||||||||||||||||
Net periodic pension cost (income) | $ | (1,354) | $ | (453) | $ | (3,467) | $ | (1,457) |
(In thousands) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
Foreign currency translation and other | $ | (700,137) | $ | (737,709) | $ | (715,286) | |||||||||||||||||
Defined benefit pension plans | (264,304) | (262,472) | (298,326) | ||||||||||||||||||||
Derivative financial instruments | 4,783 | 69,223 | 82,887 | ||||||||||||||||||||
Accumulated other comprehensive income (loss) | $ | (959,658) | $ | (930,958) | $ | (930,725) |
Three Months Ended September 2020 | ||||||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | ||||||||||||||||||||||
Balance, June 2020 | $ | (685,236) | $ | (259,290) | $ | 46,985 | $ | (897,541) | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(14,901) | (7,629) | (32,534) | (55,064) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
— | 2,615 | (9,668) | (7,053) | ||||||||||||||||||||||
Net other comprehensive income (loss)
|
(14,901) | (5,014) | (42,202) | (62,117) | ||||||||||||||||||||||
Balance, September 2020 | $ | (700,137) | $ | (264,304) | $ | 4,783 | $ | (959,658) |
Three Months Ended September 2019 | |||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | |||||||||||||||||||
Balance, June 2019 | $ | (635,901) | $ | (290,468) | $ | 58,983 | $ | (867,386) | |||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(79,385) | (10,896) | 44,348 | (45,933) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
— | 3,038 | (20,444) | (17,406) | |||||||||||||||||||
Net other comprehensive income (loss)
|
(79,385) | (7,858) | 23,904 | (63,339) | |||||||||||||||||||
Balance, September 2019 | $ | (715,286) | $ | (298,326) | $ | 82,887 | $ | (930,725) |
Six Months Ended September 2020 | ||||||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | ||||||||||||||||||||||
Balance, March 2020 | $ | (737,709) | $ | (262,472) | $ | 69,223 | $ | (930,958) | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(4,792) | (6,642) | (38,599) | (50,033) | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
42,364 | 4,810 | (25,841) | 21,333 | ||||||||||||||||||||||
Net other comprehensive income (loss)
|
37,572 | (1,832) | (64,440) | (28,700) | ||||||||||||||||||||||
Balance, September 2020 | $ | (700,137) | $ | (264,304) | $ | 4,783 | $ | (959,658) |
Six Months Ended September 2019 | |||||||||||||||||||||||
(In thousands) | Foreign Currency Translation and Other | Defined Benefit Pension Plans | Derivative Financial Instruments | Total | |||||||||||||||||||
Balance, March 2019 | $ | (725,679) | $ | (243,184) | $ | 66,788 | $ | (902,075) | |||||||||||||||
Adoption of new accounting standard, ASU 2018-02
|
(9,088) | (50,402) | (2,371) | (61,861) | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(63,613) | (11,719) | 55,248 | (20,084) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
— | 6,185 | (28,183) | (21,998) | |||||||||||||||||||
Spin-off of Jeans Business
|
83,094 | 794 | (8,595) | 75,293 | |||||||||||||||||||
Net other comprehensive income (loss)
|
10,393 | (55,142) | 16,099 | (28,650) | |||||||||||||||||||
Balance, September 2019 | $ | (715,286) | $ | (298,326) | $ | 82,887 | $ | (930,725) |
Six Months Ended September 2020 | |||||||||||
Expected volatility |
28% to 48%
|
||||||||||
Weighted average expected volatility | 37% | ||||||||||
Expected term (in years) |
6.2 to 8.0
|
||||||||||
Weighted average dividend yield | 2.4% | ||||||||||
Risk-free interest rate |
0.1% to 0.7%
|
||||||||||
Weighted average fair value at date of grant | $15.78 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Segment revenues: | |||||||||||||||||||||||||||||||||||
Outdoor | $ | 1,154,407 | $ | 1,525,937 | $ | 1,495,635 | $ | 2,136,557 | |||||||||||||||||||||||||||
Active | 1,200,202 | 1,413,634 | 1,771,518 | 2,645,760 | |||||||||||||||||||||||||||||||
Work | 253,551 | 222,117 | 415,981 | 423,763 | |||||||||||||||||||||||||||||||
Other | 164 | 18,070 | 1,483 | 24,332 | |||||||||||||||||||||||||||||||
Total segment revenues | $ | 2,608,324 | $ | 3,179,758 | $ | 3,684,617 | $ | 5,230,412 | |||||||||||||||||||||||||||
Segment profit (loss): | |||||||||||||||||||||||||||||||||||
Outdoor | $ | 132,475 | $ | 256,382 | $ | (28,236) | $ | 176,112 | |||||||||||||||||||||||||||
Active | 259,123 | 388,200 | 266,259 | 695,766 | |||||||||||||||||||||||||||||||
Work | 8,173 | 14,547 | (3,228) | 30,018 | |||||||||||||||||||||||||||||||
Other | (2,526) | 2,381 | (4,887) | 765 | |||||||||||||||||||||||||||||||
Total segment profit | 397,245 | 661,510 | 229,908 | 902,661 | |||||||||||||||||||||||||||||||
Corporate and other expenses (a)
|
(72,653) | (114,719) | (190,312) | (254,351) | |||||||||||||||||||||||||||||||
Interest expense, net | (30,931) | (16,386) | (58,880) | (31,969) | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes
|
$ | 293,661 | $ | 530,405 | $ | (19,284) | $ | 616,341 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Earnings (loss) per share – basic:
|
|||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 243,246 | $ | 625,377 | $ | (34,496) | $ | 690,650 | |||||||||||||||||||||||||||
Weighted average common shares outstanding
|
389,219 | 397,751 | 388,957 | 397,239 | |||||||||||||||||||||||||||||||
Earnings (loss) per share from continuing operations
|
$ | 0.62 | $ | 1.57 | $ | (0.09) | $ | 1.74 | |||||||||||||||||||||||||||
Earnings (loss) per share – diluted:
|
|||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 243,246 | $ | 625,377 | $ | (34,496) | $ | 690,650 | |||||||||||||||||||||||||||
Weighted average common shares outstanding
|
389,219 | 397,751 | 388,957 | 397,239 | |||||||||||||||||||||||||||||||
Incremental shares from stock options and other dilutive securities
|
1,961 | 4,510 | 2,029 | 4,849 | |||||||||||||||||||||||||||||||
Adjusted weighted average common shares outstanding
|
391,180 | 402,261 | 390,986 | 402,088 | |||||||||||||||||||||||||||||||
Earnings (loss) per share from continuing operations
|
$ | 0.62 | $ | 1.55 | $ | (0.09) | $ | 1.72 |
Total Fair Value |
Fair Value Measurement Using (a)
|
|||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
September 2020 | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | 948,543 | $ | 948,543 | $ | — | $ | — | ||||||||||||||||||
Time deposits | 11,872 | 11,872 | — | — | ||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Managed income fund | 600,000 | 600,000 | — | — | ||||||||||||||||||||||
Time deposits | 200,000 | 200,000 | — | — | ||||||||||||||||||||||
Derivative financial instruments | 33,176 | — | 33,176 | — | ||||||||||||||||||||||
Deferred compensation | 122,956 | 122,956 | — | — | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||
Derivative financial instruments | 32,318 | — | 32,318 | — | ||||||||||||||||||||||
Deferred compensation | 132,094 | — | 132,094 | — | ||||||||||||||||||||||
Total Fair Value |
Fair Value Measurement Using (a)
|
|||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
March 2020 | ||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | 1,211,887 | $ | 1,211,887 | $ | — | $ | — | ||||||||||||||||||
Time deposits | 1,932 | 1,932 | — | — | ||||||||||||||||||||||
Derivative financial instruments | 91,834 | — | 91,834 | — | ||||||||||||||||||||||
Deferred compensation | 105,706 | 105,706 | — | — | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||
Derivative financial instruments | 14,531 | — | 14,531 | — | ||||||||||||||||||||||
Deferred compensation | 113,289 | — | 113,289 | — |
Fair Value of Derivatives
with Unrealized Gains |
Fair Value of Derivatives
with Unrealized Losses |
||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | September 2020 | March 2020 | September 2019 | September 2020 | March 2020 | September 2019 | |||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts designated as hedging instruments
|
$ | 28,676 | $ | 78,298 | $ | 82,756 | $ | (31,157) | $ | (12,682) | $ | (10,944) | |||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts not designated as hedging instruments
|
4,500 | 13,536 | 7,706 | (1,161) | (1,849) | (1,408) | |||||||||||||||||||||||||||||||||||||||||
Total derivatives
|
$ | 33,176 | $ | 91,834 | $ | 90,462 | $ | (32,318) | $ | (14,531) | $ | (12,352) |
September 2020 | March 2020 | September 2019 | |||||||||||||||||||||||||||||||||||||||
(In thousands) |
Derivative
Asset |
Derivative
Liability |
Derivative
Asset |
Derivative
Liability |
Derivative
Asset |
Derivative
Liability |
|||||||||||||||||||||||||||||||||||
Gross amounts presented in the Consolidated Balance Sheets
|
$ | 33,176 | $ | (32,318) | $ | 91,834 | $ | (14,531) | $ | 90,462 | $ | (12,352) | |||||||||||||||||||||||||||||
Gross amounts not offset in the Consolidated Balance Sheets
|
(23,491) | 23,491 | (14,393) | 14,393 | (12,283) | 12,283 | |||||||||||||||||||||||||||||||||||
Net amounts
|
$ | 9,685 | $ | (8,827) | $ | 77,441 | $ | (138) | $ | 78,179 | $ | (69) |
(In thousands) | September 2020 | March 2020 | September 2019 | ||||||||||||||||||||
Other current assets | $ | 27,615 | $ | 71,784 | $ | 81,279 | |||||||||||||||||
Accrued liabilities | (22,946) | (11,378) | (10,106) | ||||||||||||||||||||
Other assets | 5,561 | 20,050 | 9,183 | ||||||||||||||||||||
Other liabilities | (9,372) | (3,153) | (2,246) |
(In thousands) |
Gain (Loss) on Derivatives Recognized in OCI
Three Months Ended September
|
Gain (Loss) on Derivatives Recognized in OCI
Six Months Ended September
|
|||||||||||||||||||||||||||||||||
Cash Flow Hedging Relationships | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Foreign currency exchange | $ | (39,731) | $ | 51,396 | $ | (47,326) | $ | 66,170 |
(In thousands) |
Gain (Loss) Reclassified from Accumulated OCI into Income
Three Months Ended September
|
Gain (Loss) Reclassified from Accumulated OCI into Income (Loss)
Six Months Ended September
|
|||||||||||||||||||||||||||||||||
Location of Gain (Loss) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Net revenues
|
$ | 2,135 | $ | (2,814) | $ | 2,306 | $ | (5,719) | |||||||||||||||||||||||||||
Cost of goods sold
|
8,443 | 22,727 | 25,148 | 33,832 | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses
|
741 | 1,382 | 2,348 | 2,098 | |||||||||||||||||||||||||||||||
Other income (expense), net
|
33 | 3,696 | 1,803 | 6,568 | |||||||||||||||||||||||||||||||
Interest expense
|
27 | (1,303) | 54 | (2,596) | |||||||||||||||||||||||||||||||
Total | $ | 11,379 | $ | 23,688 | $ | 31,659 | $ | 34,183 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | 9,883 | $ | 1,033 | $ | 28,392 | $ | 3,257 | |||||||||||||||||||||||||||
Asset impairments | 10,557 | — | 10,557 | — | |||||||||||||||||||||||||||||||
Accelerated depreciation | 2,857 | — | 6,664 | — | |||||||||||||||||||||||||||||||
Contract termination and other | 76 | — | 217 | 2,121 | |||||||||||||||||||||||||||||||
Total restructuring charges | $ | 23,373 | $ | 1,033 | $ | 45,830 | $ | 5,378 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Outdoor | $ | 1,845 | $ | 515 | $ | 6,595 | $ | 4,730 | |||||||||||||||||||||||||||
Active | 293 | 447 | 663 | 467 | |||||||||||||||||||||||||||||||
Work | 18,378 | 71 | 18,807 | 181 | |||||||||||||||||||||||||||||||
Corporate and other | 2,857 | — | 19,765 | — | |||||||||||||||||||||||||||||||
Total | $ | 23,373 | $ | 1,033 | $ | 45,830 | $ | 5,378 |
(In thousands) | Severance | Other | Total | |||||||||||||||||
Accrual at March 2020 | $ | 38,052 | $ | 2,888 | $ | 40,940 | ||||||||||||||
Charges | 28,392 | 217 | 28,609 | |||||||||||||||||
Cash payments | (20,490) | (1,368) | (21,858) | |||||||||||||||||
Adjustments to accruals | (50) | 189 | 139 | |||||||||||||||||
Impact of foreign currency | (561) | 76 | (485) | |||||||||||||||||
Accrual at September 2020 | $ | 45,343 | $ | 2,002 | $ | 47,345 |
ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
RECENT DEVELOPMENTS |
Impact of COVID-19 |
Enterprise Protection Strategy |
HIGHLIGHTS OF THE SECOND QUARTER OF FISCAL 2021
|
ANALYSIS OF RESULTS OF OPERATIONS
|
Consolidated Statements of Operations
|
(In millions) | Three Months Ended September | Six Months Ended September | |||||||||||||||
Net revenues — 2019 | $ | 3,179.8 | $ | 5,230.4 | |||||||||||||
Organic | (611.3) | (1,570.4) | |||||||||||||||
Impact of foreign currency | 39.8 | 24.6 | |||||||||||||||
Net revenues — 2020 | $ | 2,608.3 | $ | 3,684.6 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Gross margin (net revenues less cost of goods sold) | 50.8 | % | 54.2 | % | 51.4 | % | 55.0 | % | |||||||||||||||||||||||||||
Selling, general and administrative expenses | 38.5 | 36.9 | 49.4 | 42.7 | |||||||||||||||||||||||||||||||
Operating margin | 12.3 | % | 17.3 | % | 2.0 | % | 12.3 | % |
Information by Reportable Segment
|
Three Months Ended September | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment revenues — 2019 | $ | 1,525.9 | $ | 1,413.6 | $ | 222.1 | $ | 18.2 | $ | 3,179.8 | ||||||||||||||||||||||
Organic | (394.6) | (228.7) | 30.1 | (18.1) | (611.3) | |||||||||||||||||||||||||||
Impact of foreign currency | 23.1 | 15.3 | 1.4 | — | 39.8 | |||||||||||||||||||||||||||
Segment revenues — 2020 | $ | 1,154.4 | $ | 1,200.2 | $ | 253.6 | $ | 0.1 | $ | 2,608.3 |
Six Months Ended September | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment revenues — 2019 | $ | 2,136.6 | $ | 2,645.8 | $ | 423.8 | $ | 24.2 | $ | 5,230.4 | ||||||||||||||||||||||
Organic | (660.0) | (880.5) | (7.2) | (22.7) | (1,570.4) | |||||||||||||||||||||||||||
Impact of foreign currency | 19.0 | 6.2 | (0.6) | — | 24.6 | |||||||||||||||||||||||||||
Segment revenues — 2020 | $ | 1,495.6 | $ | 1,771.5 | $ | 416.0 | $ | 1.5 | $ | 3,684.6 |
Three Months Ended September | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment profit — 2019 | $ | 256.4 | $ | 388.2 | $ | 14.5 | $ | 2.4 | $ | 661.5 | ||||||||||||||||||||||
Organic | (128.7) | (133.5) | (6.8) | (5.3) | (274.3) | |||||||||||||||||||||||||||
Impact of foreign currency | 4.8 | 4.4 | 0.5 | 0.3 | 10.0 | |||||||||||||||||||||||||||
Segment profit (loss) — 2020 | $ | 132.5 | $ | 259.1 | $ | 8.2 | $ | (2.6) | $ | 397.2 |
Six Months Ended September | ||||||||||||||||||||||||||||||||
(In millions) | Outdoor | Active | Work | Other | Total | |||||||||||||||||||||||||||
Segment profit — 2019 | $ | 176.1 | $ | 695.8 | $ | 30.0 | $ | 0.8 | $ | 902.7 | ||||||||||||||||||||||
Organic | (210.6) | (433.1) | (33.6) | (7.2) | (684.5) | |||||||||||||||||||||||||||
Impact of foreign currency | 6.3 | 3.6 | 0.4 | 1.4 | 11.7 | |||||||||||||||||||||||||||
Segment profit (loss) — 2020 | $ | (28.2) | $ | 266.3 | $ | (3.2) | $ | (5.0) | $ | 229.9 |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 |
Percent
Change |
2020 | 2019 |
Percent
Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 1,154.4 | $ | 1,525.9 | (24.3) | % | $ | 1,495.6 | $ | 2,136.6 | (30.0) | % | |||||||||||||||||||||||||||||||||||
Segment profit (loss) | 132.5 | 256.4 | (48.3) | % | (28.2) | 176.1 | (116.0) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | 11.5 | % | 16.8 | % | (1.9) | % | 8.2 | % |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 |
Percent
Change |
2020 | 2019 |
Percent
Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 1,200.2 | $ | 1,413.6 | (15.1) | % | $ | 1,771.5 | $ | 2,645.8 | (33.0) | % | |||||||||||||||||||||||||||||||||||
Segment profit | 259.1 | 388.2 | (33.3) | % | 266.3 | 695.8 | (61.7) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | 21.6 | % | 27.5 | % | 15.0 | % | 26.3 | % |
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 |
Percent
Change |
2020 | 2019 |
Percent
Change |
|||||||||||||||||||||||||||||||||||||||||
Segment revenues | $ | 253.6 | $ | 222.1 | 14.2 | % | $ | 416.0 | $ | 423.8 | (1.8) | % | |||||||||||||||||||||||||||||||||||
Segment profit (loss) | 8.2 | 14.5 | (43.8) | % | (3.2) | 30.0 | (110.8) | % | |||||||||||||||||||||||||||||||||||||||
Operating margin | 3.2 | % | 6.5 | % | (0.8) | % | 7.1 | % |
Reconciliation of Segment Profit (Loss) to Income (Loss) Before Income Taxes
|
Three Months Ended September | Six Months Ended September | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 |
Percent
Change |
2020 | 2019 |
Percent
Change |
|||||||||||||||||||||||||||||||||||||||||
Corporate and other expenses | $ | 72.7 | $ | 114.7 | (36.7) | % | $ | 190.3 | $ | 254.4 | (25.2) | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | 30.9 | 16.4 | 88.8 | % | 58.9 | 32.0 | 84.2 | % |
International Operations
|
Direct-to-Consumer Operations
|
ANALYSIS OF FINANCIAL CONDITION |
Consolidated Balance Sheets
|
Liquidity and Capital Resources
|
September | March | September | |||||||||||||||||||||
(Dollars in millions) | 2020 | 2020 | 2019 | ||||||||||||||||||||
Working capital | $4,157.4 | $1,518.8 | $2,029.0 | ||||||||||||||||||||
Current ratio | 3.1 to 1 | 1.5 to 1 | 1.9 to 1 | ||||||||||||||||||||
Net debt to total capital | 64.5% | 53.4% | 42.2% |
Six Months Ended September | |||||||||||||||||
(In thousands) | 2020 | 2019 | |||||||||||||||
Cash provided (used) by operating activities | $ | 39,510 | $ | (372,746) | |||||||||||||
Cash used by investing activities | (954,685) | (70,142) | |||||||||||||||
Cash provided by financing activities | 1,377,458 | 411,914 |
Recent Accounting Pronouncements
|
Critical Accounting Policies and Estimates
|
Cautionary Statement on Forward-looking Statements
|
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4 — CONTROLS AND PROCEDURES. |
ITEM 1 — LEGAL PROCEEDINGS. |
ITEM 1A — RISK FACTORS. |
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
Second Quarter Fiscal 2021 |
Total
Number of Shares Purchased |
Weighted
Average Price Paid per Share |
Total Number of
Shares Purchased as Part of Publicly Announced Programs |
Dollar Value
of Shares that May Yet be Purchased Under the Program |
||||||||||||||||||||||
June 28 - July 25, 2020 | — | $ | — | — | $ | 2,836,975,339 | ||||||||||||||||||||
July 26 - August 22, 2020 | — | — | — | 2,836,975,339 | ||||||||||||||||||||||
August 23 - September 26, 2020 | — | — | — | 2,836,975,339 | ||||||||||||||||||||||
Total | — | — |
ITEM 6 — EXHIBITS. |
Performance-Based Restricted Stock Units ("PRSUs") for Three-Year Performance Cycle Fiscal Years 2021-2023 under the Mid-Term Incentive Plan | ||||||||
Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Scott A. Roe, Executive Vice President and Chief Financial Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Scott A. Roe, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
V.F. CORPORATION | |||||||||||
(Registrant) | |||||||||||
By: | /s/ Scott A. Roe | ||||||||||
Scott A. Roe | |||||||||||
Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
|||||||||||
Date: October 28, 2020 | By: | /s/ Bryan H. McNeill | |||||||||
Bryan H. McNeill | |||||||||||
Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer) |
October 28, 2020 | /s/ Steven E. Rendle | ||||
Steven E. Rendle | |||||
Chairman, President and Chief Executive Officer |
October 28, 2020 | /s/ Scott A. Roe | ||||
Scott A. Roe | |||||
Executive Vice President and Chief Financial Officer |
October 28, 2020 | /s/ Steven E. Rendle | ||||
Steven E. Rendle | |||||
Chairman, President and Chief Executive Officer |
October 28, 2020 | /s/ Scott A. Roe | ||||
Scott A. Roe | |||||
Executive Vice President and Chief Financial Officer |