V.F. Corporation · NYSE:VFC
V.F — Q2 FY2022 Earnings Presentation
37 slides from V.F's earnings presentation, Oct 22, 2021
Slide 1: Q2 Fiscal 2022 Earnings Presentation
Q2 Fiscal 2022 EARNINGS PRESENTATION OCTOBER 22, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks an
Slide 3: GAAP to Non-GAAP
GAAP to Non-GAAP All numbers and information presented are on a continuing operations basis, and thus exclude the Occupational Workwear business. Additionally, unless otherwise noted, all numbers are on an “adjusted” basis which excludes transaction and deal related activities associated primarily w
Slide 4: 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 AL 2 0 2 2 4
Slide 5: COVID-19 Updates
g —-COVID-19 Updates
Slide 6: COVID-19 Operational Update as of 10/13/2021
COVID-19 Operational Update as of 10/13/2021 All offices open with mask requirements and limited meeting sizes North America No stores were closed during the second quarter; all stores are open All offices open with limited capacity; average max capacity of 30% EMEA No stores were closed dur
Slide 7: Q2'22 Business & Financial Performance
Q2’22 Business & Financial Performance
Slide 8: Business Performance
Q2'22 Business Performance Adjusted Revenue Gross Margin Vans® $3.2B 53.9% +8% / +7% C$ +23% / +21% C$ +300bps / +300bps C$ +19%* / +17% C$* +280bps* / +280bps C$* The North Face® DTC Greater China +31% / +29% C$ +32% / +31% C$ +9% / +3% C$ +21%* / +20% C$* Mainland China +9% / +2% C$ *Organic Q 2 F
Slide 9: Financial Performance
Q2'22 Financial Performance Adjusted Adjusted Adjusted Operating Earnings Revenue Gross Margin Margin Per Share** $3.2B 53.9% 16.7% $1.11 +23% / +21% C$ +300bps / +300bps C$ +360bps / +350bps C$ +66% / +63% C$ +19%* / +17% C$* +280bps* / +280bps C$* +390bps* / +380bps C$* +64%* / +60% C$* *Organic *
Slide 10: Financial Summary
Q2'22 Financial Summary $ in millions; except EPS Q2’21 Q2'22 YOY CHANGE YOY CHANGE* REVENUE $2,608 $3,198 +23% +19% ADJUSTED GROSS MARGIN 50.9% 53.9% +300 bps +280 bps ADJUSTED OPERATING INCOME $342 $534 +56% +54% ADJUSTED OPERATING MARGIN 13.1% 16.7% +360 bps +390 bps ADJUSTED NET INCOME $260 $436
Slide 11: Strategic Growth Drivers
Q2'22 Strategic Growth Drivers Big 4 Brands International DTC DTC Digital +19% +18% / +15% C$ +32% / +31% C$ +24% / +22% C$ +17% C$ +16%* / +12% C$* +21%* / +20% C$* +5%* / +3% C$* vs. Q2’20 +54%* *Organic Q 2 F I S C AL 2 0 2 2 11
Slide 12: Q2'22: Revenue Breakdown
Q2'22: Revenue Breakdown REVENUE +21% C$; excluding acquisitions revenue +19%* (+17% C$*) BIG 4 BRANDS +19% (+17% C$), with Vans® +8% (+7% C$), The North TOTAL Face® +31% (+29% C$), Timberland ® +26% (+25% C$), and Dickies® +21% (+19% C$) $3,198 M REVENUE INTERNATIONAL +18% (+15% C$), with APAC +13%
Slide 13: Big Four Brand Revenue
Q2'22 Big Four Brand Revenue +8% +31% +26% +21% +7% C$ +29% C$ +25% C$ +19% C$ Q 2 F I S C AL 2 0 2 2 13
Slide 14: Gross Margin Bridge Q2'22 vs. Q2'21
Q2’22 vs. Q2’21 Gross Margin Bridge +20 bps 53.9% +260 bps +0 bps 50.9% +20 bps 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 AL 2 0 2 2 14
Slide 15: Gross Margin Bridge Q2'22 vs. Q2'20
Q2'22 vs. Q2’20 Gross Margin Bridge -80 bps impact from FX transaction timing & -100 bps expedited freight +50 bps -180 bps 54.4% +20 bps 53.9% +60 bps +0 bps 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 AL 2
Slide 16: Operating Margin Bridge Q2'22 vs. Q2'21
Q2’22 vs. Q2’21 Operating Margin Bridge +100 bps +10 bps -30 bps 16.7% +280 bps 13.1% Strategic Investments +21% Note: Operating Margin on an adjusted basis *Numbers on an adjusted organic basis Q 2 F I S C AL 2 0 2 2 16 ** Reflects the impact of FX translation only
Slide 17: Q2'22 Brand Performance
Q2'22 Brand Performance
Slide 18: Vans Global Performance
Q2’22 Vans ® Global Performance REVENUE INCREASED +8% (+7% C$) DTC +28% (+27% C$) driven by B&M growth of +49% (+47% C$); DTC Digital flat to prior year (-2% C$; +52% vs. Q2’20) +8% Wholesale -10% (-11% C$); impacted as a result of inventory delays due to continued global supply chain challenges
Slide 19: Vans Regional Performance
Q2’22 Vans ® Regional Performance AMERICAS +10% (+9% C$) EUROPE +10% (+7% C$) APAC -2% (-7% C$) DTC DTC WHOLESALE -4% -21% +21% WHOLESALE WHOLESALE (-9% C$) (-22% C$) (+18% C$) +0% +5% (+3% C$) (-5% C$) DTC +36% (+35% C$) Vans x Horror drove 5th highest sales day on record for Strong acceleratio
Slide 20: The North Face Global Performance
Q2’22 The North Face ® Global Performance REVENUE INCREASED +31% (+29% C$) Strong rebound continues globally across channels; +44% (+40% C$) growth in EMEA and +30% (+23% C$) growth in APAC; Global DTC Digital +51% vs. Q2’20 +31% Wholesale +35% (+33% C$); materially impacted as a result of inven
Slide 21: The North Face Regional Performance
Q2’22 The North Face ® Regional Performance AMERICAS +24% (+23% C$) EUROPE +44% (+40% C$) APAC +30% (+23% C$) DTC DTC DTC +14% +33% +25% (+13% C$) (+29% C$) (+18% C$) WHOLESALE +48% (+44% C$) WHOLESALE WHOLESALE +28% +33% (+27% C$) (+25% C$) Quality of sales significantly improved across all Bal
Slide 22: Timberland Global Performance
Q2’22 Timberland ® Global Performance REVENUE INCREASED +26% (+25% C$) Global performance fueled by continued strength in the Americas business (+47%, +46% C$) +26% Global DTC Digital +75% vs. Q2’20; DTC B&M business impacted by outsized exposure to COVID-19 disruption in Taiwan, Japan, Korea an
Slide 23: Timberland Regional Performance
Q2’22 Timberland ® Regional Performance AMERICAS +47% (+46% C$) EUROPE +11% (+10% C$) APAC +6% (+1% C$) DTC +8% DTC (+8% C$) +4% (+1% C$) DTC WHOLESALE -23% +15% WHOLESALE (-26% C$) (+14% C$) +28% WHOLESALE (+21% C$) +57% (+56% C$) Continued strength in Wholesale, despite supply chain Underlying
Slide 24: Dickies Global Performance
Q2’22 Dickies ® Global Performance REVENUE INCREASED +21% (+19% C$) +21% Work-inspired Lifestyle product continues to drive growth across all regions Demand in Americas remains very strong, with strength across channels Strong improvements in profitability driven by brand momentum and strategi
Slide 25: Dickies Regional Performance
Q2’22 Dickies ® Regional Performance AMERICAS +34% (+34% C$) EUROPE -16% (-18% C$) APAC +10% (+5% C$) DTC DTC +26% -22% (-25% C$) DTC -26% (-29% C$) WHOLESALE WHOLESALE -15% +24% WHOLESALE (-17% C$) (+18% C$) +36% (+35% C$) Strong demand across all channels and with key Work-inspired Lifestyle p
Slide 26: FY'22 Outlook
FY’22 Outlook
Slide 27: Fiscal Year 2022 Outlook
Fiscal Year 2022 Outlook Adjusted Adjusted Adjusted Adjusted Operating Earnings Revenue Gross Margin Margin Per Share* ~$12.0B ~56% ~13.0% ~$3.20 +~30% +~270bps +~500bps +~145% PREVIOUSLY AT PREVIOUSLY >56% PREVIOUSLY >13.0% PREVIOUSLY AT LEAST $12.0B LEAST $3.20 *On a diluted basis. Q 2 F I S C AL
Slide 28: Fiscal Year 2022 Revenue Outlook: Segments
Fiscal Year 2022 Revenue Outlook: Segments Outdoor Active Work +25% to +27% +35% to +37% +19% to +21% PREVIOUSLY +24% to +26% PREVIOUSLY +37% to +39% PREVIOUSLY +16% to +18% Q 2 F I S C AL 2 0 2 2 28
Slide 29: Fiscal Year 2022 Revenue Outlook: Brands
Fiscal Year 2022 Revenue Outlook: Brands +26% to +27% to +18% to >+20% 28% +29% +20% PREVIOUSLY +28% to +29% PREVIOUSLY +26% to +28% PREVIOUSLY +mid-teens% Q 2 F I S C AL 2 0 2 2 29
Slide 30: Fiscal Year 2022 Revenue Outlook: Regions
Fiscal Year 2022 Revenue Outlook: Regions +30% to +32% EMEA PREVIOUSLY +29% to +31% +33% to +35% U.S. PREVIOUSLY +32% to +34% +12% to +14% APAC PREVIOUSLY +18% to +20% +30% to +32% AMERICAS (non-U.S.) PREVIOUSLY +28% to +30% Q 2 F I S C AL 2 0 2 2 30
Slide 31: Fiscal Year 2022 Revenue Outlook: Channels
Fiscal Year 2022 Revenue Outlook: Channels Direct-to- Direct-to-Consumer Wholesale Consumer Digital ~+25% +34% to +36% ~+20% PREVIOUSLY + at least 20% PREVIOUSLY +39% to +41% PREVIOUSLY +29% to +31% Q 2 F I S C AL 2 0 2 2 31
Slide 32: Appendix
Appendix
Slide 33: 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 Months Ended September 2021 (Unaudited) (In thousands, except per share amounts) Transaction and As Reported Deal Related Specified Strategic Contribution
Slide 34: 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 Months Ended September 2020 (Unaudited) (In thousands, except per share amounts) As Reported Transaction and Deal Specified Strategic (a) (b) Three Months
Slide 35: 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 2021 Top 4 Brand Revenue Growth Americas EMEA APAC Global ® Vans % cha nge 10 % 10 % (2)% 8% (a) % cha nge cons ta nt currency 9% 7% (7)% 7% ® The
Slide 36: Appendix: Segment, Geographic & Channel Revenue – Q2'22
Appendix: Segment, Geographic & Channel Revenue – Q2'22 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth - Three Months Ended September 2021 (Unaudited) Three Months Ended September 2021 % Change Constant % Change Constant % Change Organic (
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