VF Corporation reports fourth quarter revenue and earnings and exceeds fy24 cash flow expectations

"As we move into fiscal year 2025, we will continue to execute our broader turnaround plans, including driving continued momentum on our key priorities, namely fixing the Americas, turning around Vans®, reducing costs and paying down debt, while progressing on the actions resulting from our strategic portfolio review. We have been rebuilding the leadership team, including the announcement of the CFO appointment, and I feel energized that we are positioning VF to return to sustainable and profitable growth."

Q4’FY24 Financial Review

Revenue $2.4 billion, down 13%

The North Face® down 5%, brand DTC up 6% (up 7% in constant dollars), with ongoing US wholesale weakness

Vans® down 26% (down 27% in constant dollars), largely consistent with the prior quarter and includes the additional impact from deliberate actions to further right-size inventories in the wholesale channel

Reported and adjusted gross margin 48.4%, down 120 basis points

Adjusted gross margin benefits of 180 basis points from favorable mix were more than offset by 300 basis points of unfavorable rate, largely from the impact of reset actions and ongoing promotional activity as well as negative transactional foreign currency impacts

Operating margin (15.0)%, down 910 basis points; adjusted operating margin (2.1)%, down 770 basis points

Adjusted operating margin reflects 650 basis points of deleverage and 120 basis points of unfavorable adjusted gross margin

Generated gross cost savings through Reinvent of approximately $40 million and incurred approximately $55 million of related charges in Q4'FY24

Earnings (loss) per share (EPS) $(1.08) vs. Q4'FY23 $(0.55); Adjusted EPS $(0.32) vs. Q4'FY23 $0.17

FY24 Financial Review

Revenue $10.5 billion, down 10% (down 11% in constant dollars)

Gross margin 52.0%, down 50 basis points; adjusted gross margin 52.1%, down 50 basis points

Adjusted gross margin benefits of 90 basis points from favorable mix were more than offset by 140 basis points of unfavorable rate, which included 100 basis points of negative transactional foreign currency impacts

Operating margin (0.3)%, down 310 basis points; adjusted operating margin 5.6%, down 420 basis points

Adjusted operating margin reflects 370 basis points of deleverage and 50 basis points of unfavorable adjusted gross margin

Generated gross cost savings through Reinvent of approximately $80 million and incurred approximately $105 million of related charges in FY24

Earnings (loss) per share (EPS) $(2.49) vs. FY23 $0.31; Adjusted EPS $0.74 vs. FY23 $2.10

Balance Sheet and Cash Flow Review

Inventories decreased by $382 million during Q4'FY24, down 23% versus the prior year

Generated operating cash flow of $1.015 billion for the fiscal year, with free cash flow of $804 million

Net debt at the end of Q4'FY24 was $5.3 billion, down by approximately $540 million relative to last year

FY25 Outlook

Free cash flow plus the benefit of non-core asset sales is expected to generate approximately $600 million