V.F. Corporation · NYSE:VFC

V.F — Q2 2020 Earnings Presentation

43 slides from V.F's earnings presentation, Oct 25, 2019

  1. Slide 1: Q2 Fiscal 2020 Earnings Presentation

    Q2 Fiscal 2020 E A R N I N G S P R E S E N TAT I O N OCTOBER 25, 2019

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement Certain statements included in this presentation are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several ris

  3. Slide 3: GAAP to Non-GAAP

    GAAP to Non-GAAP All numbers presented in this presentation, unless otherwise noted, are on an adjusted continuing operations basis which excludes transaction and deal related expenses associated with the acquisitions and integration of Icebreaker® and Altra® and transaction expenses associated with

  4. Slide 4: Our Purpose

    Our Purpose VF POWERS MOVEMENTS OF SUSTAINABLE AND ACTIVE LIFESTYLES FOR THE BETTERMENT OF PEOPLE AND OUR PLANET Q 2 F I S C A L 2 0 2 0 4

  5. Slide 5: Fiscal 2024 Global Business Strategy

    Fiscal 2024 Global Business Strategy DRIVE AND ELEVATE DISTORT TO OPTIMIZE OUR DIRECT ASIA PORTFOLIO CHANNELS ACCELERATE CONSUMER-MINDED, RETAIL- CENTRIC, HYPER-DIGITAL BUSINESS MODEL TRANSFORMATION Q 2 F I S C A L 2 0 2 0 5

  6. Slide 6: Q2'20 Business & Financial Highlights

    Q2’20 Business & Financial Highlights

  7. Slide 7: Q2'20: Business Highlights

    Q2’20: Business Highlights Adjusted Revenue Adjusted Gross Margin Vans® $3.4B 53.1% +14% / +16% C$ +5% / +7% C$ +90bps diversified growth in all regions / +6%* / +8%* C$ channels / product families The North Face® DTC China +8% / +10% C$ +11%* / +12%* C$ +20%* / +24%* C$ strong growth across total c

  8. Slide 8: Q2'20 Financial Highlights

    Q2’20 Financial Highlights Adjusted Adjusted Adjusted Adjusted Operating Earnings Revenue Gross Margin Margin Per Share** $3.4B 53.1% 17.9% $1.26 +5% / +7% C$ +90bps +40bps +6% / +8% C$ +6%* / +8%* C$ +80bps* +20bps* +6%* / +8%* C$ *Organic **On a diluted basis Q 2 F I S C A L 2 0 2 0 8

  9. Slide 9: Q2'20: Financial Summary

    Q2’20: Financial Summary $ in millions; except EPS Q2’19 Q2'20 YOY CHANGE YOY CHANGE* ADJUSTED REVENUE $3,219 $3,384 +5% +6% ADJUSTED GROSS MARGIN 52.2% 53.1% +90bps +80bps ADJUSTED OPERATING INCOME $565 $606 +7% +7% ADJUSTED OPERATING MARGIN 17.5% 17.9% +40bps +20bps ADJUSTED NET INCOME $477 $505 +

  10. Slide 10: Q2'20: Strategic Growth Drivers

    Q2'20: Strategic Growth Drivers Big 4 Brands International DTC +7% +4%* +11%* +9% C$ +8%* C$ +12%* C$ *Adjusted Organic Q 2 F I S C A L 2 0 2 0 10

  11. Slide 11: Q2'20: Revenue Breakdown

    Q2’20: Revenue Breakdown REVENUE +8% C$ excluding acquisition and divestitures TOTAL BIG 4 BRANDS +7% (+9% C$), led by +14% (+16% C$) growth at Vans® $3,384 M REVENUE and +8% (+10% C%) growth at The North Face® +5% Reported +6%* INTERNATIONAL +4%* (+8%* C$), led by growth of +20%* (+24%* C$) in Chin

  12. Slide 12: Q2'20: Big Four Brand Revenue

    Q2'20: Big Four Brand Revenue +14% +8% -1% -4% +16% C$ +10% C$ +1% C$ -3% C$ Q 2 F I S C A L 2 0 2 0 12

  13. Slide 13: Q2'20: Gross Margin Bridge

    Q2'20: Gross Margin Bridge +20 bps NM +10bps 53.1% +60 bps 52.2% Note: Gross Margin on an adjusted basis *Numbers on an adjusted organic basis ** Reflects the impact of FX translation only Q 2 F I S C A L 2 0 2 0 13

  14. Slide 14: Q2'20: Operating Margin Bridge

    Q2'20: Operating Margin Bridge +30 bps +80 bps 17.5% 17.9% -20 bps -70 bps +20 bps Strategic Investments +10% Note: Operating Margin on an adjusted basis *Numbers on an adjusted organic basis Q 2 F I S C A L 2 0 2 0 14 ** Reflects the impact of FX translation only

  15. Slide 15: 1H'20 Business & Financial Highlights

    1H’20 Business & Financial Highlights

  16. Slide 16: 1H'20: Business Highlights

    1H’20: Business Highlights Adjusted Revenue Adjusted Gross Margin Vans® $5.7B 53.6% +17% / +19% C$ +5% / +7% C$ +100bps diversified growth in all regions / +7%* / +9%* C$ channels / product families The North Face® DTC China +8% / +10% C$ +12%* / +14%* C$ +21%* / +26%* C$ strong growth across total

  17. Slide 17: 1H'20 Financial Highlights

    1H’20 Financial Highlights Adjusted Adjusted Adjusted Adjusted Gross Operating Earnings Revenue Margin Margin Per Share** $5.7B 53.6% 13.6% $1.55 +5% / +7% C$ +100bps +60bps +13% / +16% C$ +7%* / +9%* C$ +80bps* +50bps* +15%* / +18%* C$ *Organic **On a diluted basis Q 2 F I S C A L 2 0 2 0 17

  18. Slide 18: 1H'20: Financial Summary

    1H’20: Financial Summary $ in millions; except EPS 1H’19 1H'20 YOY CHANGE YOY CHANGE* ADJUSTED REVENUE $5,357 $5,651 +5% +7% ADJUSTED GROSS MARGIN 52.6% 53.6% +100bps +80bps ADJUSTED OPERATING INCOME $697 $770 +10% +12% ADJUSTED OPERATING MARGIN 13.0% 13.6% +60bps +50bps ADJUSTED NET INCOME $550 $62

  19. Slide 19: 1H'20: Revenue Breakdown

    1H’20: Revenue Breakdown REVENUE +9% C$ excluding acquisitions and divestitures TOTAL BIG 4 BRANDS +9% (+11% C$), led by +17% (+19% C$) growth at Vans® $5,651 M REVENUE and +8% (+10% C$) growth at The North Face® +5% Reported +7%* INTERNATIONAL +4%* (+9%* C$), led by growth of +21%* (+26%* C$) in Ch

  20. Slide 20: 1H'20: Strategic Growth Drivers

    1H'20: Strategic Growth Drivers Big 4 Brands International DTC +9% +4%* +12%* +11% C$ +9%* C$ +14%* C$ *Adjusted Organic Q 2 F I S C A L 2 0 2 0 20

  21. Slide 21: 1H'20: Big Four Brand Revenue

    1H'20: Big Four Brand Revenue +17% +8% -1% -2% +19% C$ +10% C$ +1% C$ Flat C$ Q 2 F I S C A L 2 0 2 0 21

  22. Slide 22: Q2'20 Brand Highlights

    Q2’20 Brand Highlights

  23. Slide 23: Q2'20: Vans | Global Performance

    Q2'20: Vans® | Global Performance REVENUE INCREASED +14% (+16% C$) WITH STRONG BACK TO SCHOOL RESULTS IN BOTH DTC AND WHOLESALE  DTC +17% (+18% C$) with +13% total comp, including +24% (+26% C$) growth in DTC digital +14%  Wholesale increased +11% (+13% C$) with strong sell-through across product

  24. Slide 24: Q2'20: Vans | Regional Performance

    Q2'20: Vans® | Regional Performance AM E R I C AS + 1 5 % EUROPE +4% (+9% C$) AP A C + 2 8 % ( + 3 1 % C $ ) DTC +9% (+14% C$) DTC WHOLESALE +23% WHOLESALE WHOLESALE +31% (+26% C$) +11% DTC +2% +17% (+35% C$) (+7% C$) (+18% C$)  Back-to-school finished strong across all channels  Revenue growth dr

  25. Slide 25: Q2'20: The North Face | Global Performance

    Q2'20: The North Face ® | Global Performance REVENUE INCREASED +8% (+10% C$) WITH STRONG BACK TO SCHOOL RESULTS AND STRENGTH ACROSS +8% ALL REGIONS  DTC +7% (+8% C$), including +6% total comp and +13% (+14% C$) growth in DTC digital​  Wholesale increased +9% (+11% C$) driven by strength in all reg

  26. Slide 26: Q2'20: The North Face | Regional Performance

    Q2'20: The North Face ® | Regional Performance AM E R I C AS + 9 % EUROPE +7% (+12% C$) AP A C + 9 % ( + 1 2 % C $ ) DTC DTC +5% +11% DTC (+17% C$) +14% (+17% C$) WHOLESALE WHOLESALE +6% +8% (+11% C$) (+10% C$) WHOLESALE +10% (+11% C$)  Double-digit growth across Mountain Lifestyle &  Broad-based

  27. Slide 27: Q2'20: Timberland | Global Performance

    Q2'20: Timberland ® | Global Performance REVENUE DECREASED -1% (+1% C$) WITH STRENGTH IN THE U.S., CHINA AND TIMBERLAND PRO; RESULTS IMPACTED BY PLANNED BUSINESS MODEL CHANGES IN NON-U.S. AMERICAS, EXCLUDING THOSE CHANGES, REVENUE WOULD HAVE -1% BEEN UP +2% C$  DTC +1% (+4% C$) with +2% total comp,

  28. Slide 28: Q2'20: Timberland | Regional Performance

    Q2'20: Timberland ® | Regional Performance AM E R I C AS + 9 % EUROPE -12% (-7% C$) AP A C + 4 % ( + 6 % C $ ) DTC DTC Flat +6% (+11% C$) DTC WHOLESALE WHOLESALE -5% WHOLESALE +11% +10% (-3% C$) -15% (+13% C$) (+11% C$) (-11% C$)  Growth driven by high-single digit growth in Men’s  Revenue decline

  29. Slide 29: Q2'20: Dickies | Global Performance

    Q2'20: Dickies® | Global Performance REVENUE DECLINED -4% (-3% C$) WITH STRENGTH FROM CHINA AND DTC; EXCLUDING TIMING OF SHIPMENTS IN THE -4% AMERICAS, REVENUE +6% ​  Strong performance in strategic growth drivers (lifestyle, China, DTC, digital wholesale)​ FISCAL 2020 OUTLOOK: Revenue now expected

  30. Slide 30: Q2'20: Dickies | Regional Performance

    Q2'20: Dickies® | Regional Performance AM E R I C AS - 9 % EUROPE -3% (+2% C$) AP A C + 2 0 % ( + 2 2 % C $ ) DTC DTC +15% -2% DTC (+3% C$) +12% WHOLESALE (+13% C$) -3% WHOLESALE WHOLESALE (+2% C$) +25% -11% (+27% C$)  Wholesale impacted by timing of shipments;  Performance impacted by timing of s

  31. Slide 31: Financial Outlook

    Financial Outlook

  32. Slide 32: Fiscal Year 2020 Outlook

    Fiscal Year 2020 Outlook Adjusted Adjusted Adjusted Adjusted Gross Operating Earnings Revenue Margin Margin Per Share** $11.8B 54.1% 13.8% $3.32 to $3.37 ~6% +80bps +90bps +16% to +18% ~8% C$* +19%* to +21%* *Organic, C$ basis **On a diluted basis. Q 2 F I S C A L 2 0 2 0 32

  33. Slide 33: Fiscal Year 2020 Revenue Outlook: Segments

    Fiscal Year 2020 Revenue Outlook: Segments Outdoor Active Work +5% +8% to +9% +2% to +3% +6%* to +7%* +11%* to +12%* +4%* to +5%* PREVIOUSLY +6%* PREVIOUSLY +10%* to +11%* PREVIOUSLY +4%* to +6%* *Organic, C$ basis Q 2 F I S C A L 2 0 2 0 33

  34. Slide 34: Fiscal Year 2020 Revenue Outlook: Brands

    Fiscal Year 2020 Revenue Outlook: Brands +12% to +13% +7% to +8% “about” flat +3% to +4% +13%* to +14%* +9%* to +10%* +1%* to +2%* +5%* to +6%* PREVIOUSLY +11%* to +13%* PREVIOUSLY +8%* to +9%* PREVIOUSLY +1%* to +3%* PREVIOUSLY +5%* to +7%* *C$ basis Q 2 F I S C A L 2 0 2 0 34

  35. Slide 35: Fiscal Year 2020 Revenue Outlook: Regions

    Fiscal Year 2020 Revenue Outlook: Regions Flat to +1% +6%* to +7%* PREVIOUSLY: +5%* to +7%* +7% to +8% EMEA PREVIOUSLY: +6% to +7% U.S. +12% to +13% +16%* to +17%* PREVIOUSLY: +14%* to +16%* APAC +2% to 3% +4%* to +5%* ex. impact of business model change +7%* to +8%* PREVIOUSLY: +3%* to +5%* AMERICA

  36. Slide 36: Fiscal Year 2020 Revenue Outlook: Channels

    Fiscal Year 2020 Revenue Outlook: Channels Direct-to- Direct-to-Consumer Wholesale Consumer Digital +2% to +3% +5%* to +6%* +11% to +12% +12%* to +13%* ~+25% PREVIOUSLY +4%* to +5%* PREVIOUSLY +11%* to +13%* *Adjusted Organic, C$ basis **Revenue on an adjusted basis Q 2 F I S C A L 2 0 2 0 36

  37. Slide 37: Appendix

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  38. Slide 38: Appendix: GAAP to Non-GAAP

    Appendix: GAAP to Non-GAAP VF CORPORATION Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Six Months Ended September 2019 (Unaudited) (In thousands, except per share amounts) Transaction and Relocation and As Reported Deal Related Specified

  39. Slide 39: Appendix: GAAP to Non-GAAP

    Appendix: GAAP to Non-GAAP VF CORPORATION Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Six Months Ended September 2018 (Unaudited) (In thousands, except per share amounts) As Reported Transaction and Deal Relocation and other Impact of U.

  40. Slide 40: Appendix: Top 4 Brand Revenue

    Appendix: Top 4 Brand Revenue VF CORPORATION Supplemental Financial Information Top 4 Brand Revenue Information (Unaudited) Three Months Ended September 2019 Six Months Ended September 2019 Top 4 Brand Revenue Growth Americas EMEA APAC Global Americas EMEA APAC Global ® Vans % cha nge 15 % 4% 28 % 1

  41. Slide 41: Appendix: Segment, Geographic & Channel Revenue – Q2'20

    Appendix: Segment, Geographic & Channel Revenue – Q2’20 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth (Unaudited) Three Months Ended September 2019 % Change Constant % Change Constant % Change Constant % Change Currency and % Change Adjus

  42. Slide 42: Appendix: Segment, Geographic & Channel Revenue – 1H'20

    Appendix: Segment, Geographic & Channel Revenue – 1H’20 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth (Unaudited) Six Months Ended September 2019 % Change Constant % Change Constant % Change Constant % Change Currency and % Change Adjuste

  43. Slide 43: Q 2 F I S C A L 2 0 2 0 43

    Q 2 F I S C A L 2 0 2 0 43

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