V.F. Corporation · NYSE:VFC
V.F — Q1 FY2021 Earnings Presentation
38 slides from V.F's earnings presentation, Jul 31, 2020
Slide 1: Q1 Fiscal 2021 Earnings Presentation
Q1 Fiscal 2021 Earnings Presentation JULY 31, 2020
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
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 and Jeans businesses. Additionally, unless otherwise noted, all numbers are on an “adjusted” basis which excludes costs related to strategic business decisions in S
Slide 4: Our Purpose
Our Purpose VF POWERS MOVEMENTS OF SUSTAINABLE AND ACTIVE LIFESTYLES FOR THE BETTERMENT OF PEOPLE AND OUR PLANET Ranked #33 Ranked #1 by Social Metrics (#2 in Consumer Durables & Apparel) (#21 overall) out of the Russell 1000 Index Q 1 F I S C A L 2 0 2 1 4
Slide 5: Taking Action for Social Justice
Taking Action for Social Justice announced five step $100K $50K action plan to combat donation to NAACP first large brand to donation to Equal Justice inequality join Stop Hate for Initiative $75K Profit campaign $100K donation to .Paak House donated between June 12 National Urban League’s $50K Entr
Slide 6: 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 1 F I S C A L 2 0 2 1 6
Slide 7: COVID-19 Update
COVID-19 Update
Slide 8: COVID-19 Operational Update as of 7/30/20
COVID-19 Operational Update as of 7/30/20 Offices have begun to re-open with a phased approach; About one-third of locations remain closed At the end of Q1, ~75% of all DTC stores were open; since the end of the quarter additional stores have re-opened, North America partially offset by more tha
Slide 9: Consolidated DTC Revenue Trends
Consolidated DTC Revenue Trends Total Greater China Total EMEA Total Americas 10% 20% 20% 0% 0% 0% -10% -20% -20% Brick & Mortar -20% -30% -40% -40% (B&M) -40% -60% -60% -50% -80% -80% -60% -70% -100% -100% Apr-Dec Jan Feb Mar Apr May Jun Apr-Dec Jan Feb Mar Apr May Jun Apr-Dec Jan Feb Mar Apr May J
Slide 10: Q1'21 Business & Financial Performance
Q1’21 Business & Financial Performance
Slide 11: Business Performance
Q1’21 Business Performance Adjusted Adjusted Revenue Gross Margin Vans® $1.1B 54.1% -52% / -51% C$ -47% -220bps / -200bps C$ The North Face® DTC Greater China -45% / -44% C$ -37% / -36% C$ Flat / +3% C$ Digital +78% / +81% C$ Mainland China +5% / +9% C$ Q 1 F I S C A L 2 0 2 1 11
Slide 12: Digital Highlights
Q1’21 Digital Highlights BOPIS / Vans® Family 8 million Ship from Store loyalty program new consumers interacted with VF brands on Tmall capability over 12M members >35% higher spend vs non-members rolling out through Q2* Record-setting The North Face® new Dickies® new Vans® Foot the Bill and Digita
Slide 13: Financial Performance
Q1’21 Financial Performance Adjusted Adjusted Adjusted Operating Earnings (Loss) Revenue Gross Margin Margin Per Share* $1.1B 54.1% -21.4% -$0.57 *On a diluted basis Q 1 F I S C A L 2 0 2 1 13
Slide 14: Financial Summary
Q1’21 Financial Summary $ in millions; except EPS Q1’20 Q1'21 YOY CHANGE ADJUSTED REVENUE $2,046 $1,076 -47% ADJUSTED GROSS MARGIN 56.3% 54.1% -220 bps ADJUSTED OPERATING INCOME (LOSS) $126 -$230 -283% ADJUSTED OPERATING MARGIN 6.1% -21.4% -2760 bps ADJUSTED NET INCOME (LOSS) $88 -$221 -351% ADJUSTE
Slide 15: Strategic Growth Drivers
Q1’21 Strategic Growth Drivers Big 4 Brands International DTC DTC Digital -46% -39% -37% +78% -46% C$ -37% C$ -36% C$ +81% C$ Q 1 F I S C A L 2 0 2 1 15
Slide 16: Q1'21: Revenue Breakdown
Q1'21: Revenue Breakdown REVENUE -47% C$ TOTAL BIG 4 BRANDS -46% (-46% C$), with Vans® -52% (-51% C$), The North Face® -45% (-44% C$), Timberland ® -43% (-43% C$), and Dickies® -16% $1,076 M REVENUE (-15% C$) -48% Reported -47% INTERNATIONAL -39% (-37% C$), with Greater China flat (+3% C$), includin
Slide 17: Big Four Brand Revenue
Q1’21 Big Four Brand Revenue -52% -45% -43% -16% -51% C$ -44% C$ -43% C$ -15% C$ Q 1 F I S C A L 2 0 2 1 17
Slide 18: Gross Margin Bridge
Q1’21 Gross Margin Bridge +220 bps 56.3% 54.1% -430bps -10bps Note: Gross Margin on an adjusted basis *Numbers on an adjusted organic basis ** Reflects the impact of FX translation only Q 1 F I S C A L 2 0 2 1 18
Slide 19: Operating Margin Bridge
Q1’21 Operating Margin Bridge 6.1% -220bps -540bps +10bps -2000bps -21.4% Note: Operating Margin on an adjusted basis *Numbers on an adjusted organic basis Q 1 F I S C A L 2 0 2 1 19 ** Reflects the impact of FX translation only
Slide 20: Q1'21 Brand Performance
Q1'21 Brand Performance
Slide 21: Vans Global Performance
Q1’21 Vans® Global Performance REVENUE DECREASED -52% (-51% C$) Revenue decline due to DTC and retail partner store closures in addition to proactive management of wholesale inventories -52% Q1 revenue impacted by timing of inventory receipts and delays in product supply; expected to normalize i
Slide 22: Vans Regional Performance
Q1’21 Vans® Regional Performance AM E R I C AS - 6 4 % EUROPE -47% (-46% C$) AP A C - 3 % ( + 1 % C $ ) WHOLESALE -80% WHOLESALE WHOLESALE -55% DTC -11% DTC (-53% C$) -36% (-8% C$) +7% (-34% C$) (+11% C$) DTC -51% On average, ~80% of DTC B&M doors were closed during On average, ~65% of DTC B&M d
Slide 23: The North Face Global Performance
Q1’21 The North Face ® Global Performance REVENUE DECREASED -45% (-44% C$) -45% Revenue decline due to DTC and retail partner store closures and reduced wholesale shipments as a result of COVID-19 DTC -29% (-28% C$), including +121% (+124% C$) growth in DTC Digital Strength from broader Futur
Slide 24: The North Face Regional Performance
Q1’21 The North Face ® Regional Performance AM E R I C AS - 5 4 % EUROPE -41% (-40% C$) AP A C - 9 % ( - 6 % C $ ) WHOLESALE -30% DTC (-27% C$) WHOLESALE -45% -35% DTC (-43% C$) (-33% C$) WHOLESALE -37% -65% DTC +4% (+7% C$) On average, ~70% of DTC B&M doors were closed On average, ~55% of DTC B
Slide 25: Timberland Global Performance
Q1’21 Timberland ® Global Performance REVENUE DECREASED -43% -43% Revenue decline due to DTC and retail partner store closures and reduced wholesale shipments as a result of COVID-19 DTC -43%, including +61% (+63% C$) growth in DTC Digital Continued relative strength from Outdoor Footwear and
Slide 26: Timberland Regional Performance
Q1’21 Timberland ® Regional Performance AM E R I C AS - 4 4 % EUROPE -50% AP A C - 2 7 % ( - 2 6 % C $ ) WHOLESALE DTC -34% -49% (-32% C$) WHOLESALE DTC -4 7 % -55% (-4 6 % C$) (-54% C$) WHOLESALE -4 2 % DTC -23% On average, ~75% of DTC B&M doors were closed On average, ~50% of DTC B&M doors wer
Slide 27: Dickies Global Performance
Q1’21 Dickies® Global Performance REVENUE DECREASED -16% (-15% C$) -16% Revenue impacted by lower wholesale Workwear shipments in Americas and EMEA resulting from COVID-19 DTC +21% (+22% C$), including +43% (+45% C$) growth in DTC Digital Positive C$ growth in APAC, led by +8% (+13% C$) growt
Slide 28: Dickies Regional Performance
Q1’21 Dickies® Regional Performance AM E R I C AS - 1 6 % ( - 1 5 % C $ ) EUROPE -37% (-35% C$) AP A C - 2 % ( + 1 % C $ ) DTC WHOLESALE WHOLESALE +42% -44% DTC -3% (-43% C$) +16% DTC WHOLESALE (flat C$) (+19% C$) -1% -25% (-24% C$) (+2% C$) On average, ~65% of DTC B&M doors were closed On avera
Slide 29: FY'21 Update
TL HE pe LAAT TTT TL - LACE mA
Slide 30: VF's Evolving Distribution Footprint
VF’s Evolving Distribution Footprint Digital Wholesale International International Wholesale Wholesale Digital Wholesale DTC: FY’20 US Digital FY’21 DTC: Wholesale US Digital Revenue Revenue Wholesale DTC: Stores DTC: Stores Acceleration of Hyper-Digital Transformation, Total Digital >25% in FY21 Q
Slide 31: FY'21 Expected Business Evolution
FY’21 Expected Business Evolution 1Q21 2Q21 3Q21 4Q21 North America and EMEA North America re-opening in Steady improvement in North North America stabilizes begin to reopen flux America On a normalized basis, EMEA Continued steady Continued steady EMEA stabilizes begins to return to
Slide 32: FY'21 Cash Evolution
FY’21 Cash Evolution Net proceeds from Occupational Work divestiture incremental to $3.0B ($2.2B) liquidity estimates below >$0.7B ($0.6B) ($0.1B) ($0.2B) ~$3.0B ~$2.8B $1.0B $1.4B FY’21 Beginning 4/7/20 Term Debt Revolver & Q1’21 Free Q1’21 Dividend Q1’21 Ending YTG Free Cash YTG FY’21 Ending Cash
Slide 33: Appendix
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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 June 2020 (Unaudited) (In thousands, except per share amounts) As Reported Transaction and Deal Specified Strategic Three Months Ended June 20
Slide 35: 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 June 2019 (Unaudited) (In thousands, except per share amounts) Relocation and Other As Reported Transaction and Deal Strategic Business Three
Slide 36: Appendix: Top 4 Brand Revenue
Appendix: Top 4 Brand Revenue VF CORPORATION Supplemental Financial Information Top 4 Brand Revenue Information (Unaudited) Three Months Ended June 2020 Top 4 Brand Revenue Growth Americas EMEA APAC Global ® Vans % cha nge (64)% (47)% (3)% (52)% (a) % cha nge cons ta nt currency (64)% (46)% 1% (51)%
Slide 37: Appendix: Segment, Geographic & Channel Revenue – Q1'21
Appendix: Segment, Geographic & Channel Revenue – Q1'21 VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth - Three Months Ended June 2020 (Unaudited) Three Months Ended June 2020 % Change Constant (a) % Change % Change Constant Currency % Chan
Slide 38: Q 1 F I S C A L 2 0 2 1 38
Q 1 F I S C A L 2 0 2 1 38