V.F. Corporation · NYSE:VFC

V.F — Q1 FY2020 Earnings Presentation

36 slides from V.F's earnings presentation, Jul 24, 2019

  1. Slide 1: Q1 Fiscal 2020 Earnings Presentation

    Q1 FISCAL 2020 EARNINGS PRESENTATION July 24, 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 includes the contribution from the Icebreaker® and Altra® acquisitions (“acquisitions”) and excludes transaction and deal related expenses associated with the acq

  4. Slide 4: Our Purpose

    OUR PURPOSE VF POWERS MOVEMENTS OF SUSTAINABLE AND ACTIVE LIFESTYLES FOR THE BETTERMENT OF PEOPLE AND OUR PLANET 4

  5. Slide 5: Our Aspiration

    OUR ASPIRATION VF WILL GROW BY CREATING AMAZING PRODUCTS AND BRAND EXPERIENCES THAT TRANSFORM AND IMPROVE THE LIVES OF CONSUMERS WORLDWIDE, WHILE DELIVERING SUPERIOR RETURNS TO OUR SHAREHOLDERS 5

  6. Slide 6: 2021 Global Business Strategy

    2021 GLOBAL BUSINESS STRATEGY Purpose / Aspiration CHOICES CAPABILITIES Design & Innovation Reshape Demand Creation & 4 Portfolio Brand Experience Transform TSR Insights & Analytics Distort Asia Model Retail Excellence CHOICES Elevate Demand & Supply DTC, Prioritizing Chain Agility Digital Talent 6

  7. Slide 7: Q1'20 Business & Financial Highlights

    Q1’20 BUSINESS & FINANCIAL HIGHLIGHTS 7

  8. Slide 8: Q1'20: Business Highlights

    Q1'20: BUSINESS HIGHLIGHTS ADJUSTED ADJUSTED REVENUE VANS® GROSS MARGIN $2.3B +20% / +23% C$ +6% / +8% C$ 54.4% diversified growth in all regions / channels / product families +120bps +9%* / +11%* C$ THE NORTH FACE® DTC CHINA +9% / +12% C$ +14%* / +16%* C$ +21%* / +29%* C$ strong growth across 14%*

  9. Slide 9: Q1'20: Financial Highlights

    Q1'20: FINANCIAL HIGHLIGHTS ADJUSTED ADJUSTED ADJUSTED ADJUSTED GROSS OPERATING EARNINGS REVENUE MARGIN MARGIN PER SHARE** $2.3B 54.4% 7.2% $0.30 +6% / +8% C$ +120bps +100bps +61% / +67% C$ +9%* / +11%* C$ +100bps* C$ +140bps* C$ +79%* / +86%* C$ *Adjusted Organic **On a diluted basis 9

  10. Slide 10: Q1'20: Financial Summary

    Q1'20: FINANCIAL SUMMARY $ in millions; except EPS Q1’19 Q1'20 YOY CHANGE YOY CHANGE* ADJUSTED REVENUE $2,137 $2,267 +6% +9% ADJUSTED GROSS MARGIN 53.2% 54.4% +120bps +90bps ADJUSTED OPERATING INCOME $132 $163 +23% +33% ADJUSTED OPERATING MARGIN 6.2% 7.2% +100bps +130bps ADJUSTED NET INCOME $74 $120

  11. Slide 11: Q1'20: Strategic Growth Drivers

    Q1'20: STRATEGIC GROWTH DRIVERS BIG 3 BRANDS INTERNATIONAL DTC WORK +14% +4%* +14%* +3%* +16% C$ +10%* C$ +16%* C$ +4%* C$ *Adjusted Organic 11

  12. Slide 12: Revenue Breakdown

    Q1'20: REVENUE BREAKDOWN TOTAL BIG 3 BRANDS +14% (+16% C$), led by +20% (+23% C$) growth at Vans® and +9% (+12% C%) growth at The $2,267 M North Face® +6% Reported REVENUE INTERNATIONAL +4%* (+10%* C$), led by growth of +9%* +21%* (+29%* C$) in China and +5%* C$ in EMEA DTC +14%* (+16%*C$) with DIGI

  13. Slide 13: Q1'20: Top Four Brand Revenue

    Q1'20: TOP FOUR BRAND REVENUE +20% +9% -1% +1% +23% C$ +12% C$ +2% C$ +2% C$ 13

  14. Slide 14: Q1'20: Gross Margin Bridge

    Q1'20: GROSS MARGIN BRIDGE +30 bps 54.4% +40 bps +60 bps -10 bps 53.2% *Gross Margin on an adjusted basis **Numbers on an adjusted organic basis 14

  15. Slide 15: Q1'20: Operating Margin Bridge

    Q1'20: OPERATING MARGIN BRIDGE +110 bps -10 bps +100 bps 7.2% -70 bps -30 bps 6.2% Strategic Investments +11% *Operating Margin on an adjusted basis **Numbers on an adjusted organic basis 15

  16. Slide 16: Brand Highlights

    BRAND HIGHLIGHTS 16

  17. Slide 17: Q1'20: Vans Global Performance

    Q1'20: VANS ® GLOBAL PERFORMANCE REVENUE INCREASED +20% (+23% C$) WITH STRONG GROWTH ACROSS ALL REGIONS, CHANNELS +20% & PRODUCT CATEGORIES  DTC +23% (+25% C$) with >+20% total comp, including +39% (+43% C$) growth in DTC digital  Wholesale increased +17% (+20% C$) driven by balanced, broad based

  18. Slide 18: Q1'20: Vans Regional Performance

    Q1'20: VANS ® REGIONAL PERFORMANCE AMERICAS +22% (+22% C$) EUROPE +8% (+15% C$) APAC +26% (+33% C$) DTC DTC WHOLESALE +20% WHOLESALE DTC +23% +3% (+27% C$) +27% +25% WHOLESALE (+24% C$) (+9% C$) (+34% C$) (+32% C$) +20% (+21% C$)  Strong momentum continues with  Growth driven by DTC with comps up

  19. Slide 19: Q1'20: The North Face Global Performance

    Q1'20: THE NORTH FACE ® GLOBAL PERFORMANCE REVENUE INCREASED +9% (+12% C$) WITH STRENGTH ACROSS ALL REGIONS & CHANNELS +9%  DTC +6% (+9% C$), including +6% total comp and +17% (+20% C$) growth in DTC digital  Wholesale increased +11% (+14% C$) driven by strength in all regions  Growth balanced ac

  20. Slide 20: Q1'20: The North Face Regional Performance

    Q1'20: THE NORTH FACE ® REGIONAL PERFORMANCE AMERICAS +10% (+10% C$) EUROPE +4% (+11% C$) APAC +14% (+20% C$) DTC +1% WHOLESALE DTC WHOLESALE DTC WHOLESALE -2% (+2% C$) +17% +14% +14% +18% (+4% C$) (+24% C$) (+19% C$) (+20% C$)  Double-digit growth across Mountain Sports &  Double-digit growth acr

  21. Slide 21: Q1'20: Timberland Global Performance

    Q1'20: TIMBERLAND ® GLOBAL PERFORMANCE REVENUE -1% (+2 C$) DRIVEN BY STRENGTH IN THE U.S. AND CHINA -1%  Diversification strategy continues; high single digit growth in both apparel and Non-Classics footwear, partially offset by decline in European Classics  DTC digital increased +10% (+14% C$) FI

  22. Slide 22: Q1'20: Timberland Regional Performance

    Q1'20: TIMBERLAND ® REGIONAL PERFORMANCE AMERICAS +6% (+7% C$) EUROPE -9% (-4% C$) APAC +1% (+5% C$) DTC +4% WHOLESALE DTC WHOLESALE DTC WHOLESALE (+5% C$) -16% -1% +13% -3% +7% (-11% C$) (+5% C$) (+17% C$) (+1% C$) (+8% C$)  Double digit growth across both Classics  In line with expectations, rev

  23. Slide 23: Q1'20: Dickies Global Performance

    Q1'20: DICKIES ® GLOBAL PERFORMANCE +1% REVENUE +1% (+2% C$) DRIVEN BY STRENGTH IN THE AMERICAS AND CHINA  Strong performance in strategic growth drivers (lifestyle, China, DTC, digital wholesale)  Revenue growth impacted by strategic repositioning of the brand in Japan and timing of shipments in

  24. Slide 24: Q1'20: Dickies Regional Performance

    Q1'20: DICKIES ® REGIONAL PERFORMANCE AMERICAS +4% (+4% C$) EUROPE -11% (-5% C$) APAC -3% (+2% C$) DTC DTC +18% +1% WHOLESALE (+7% C$) WHOLESALE DTC -12% +2% (-7% C$) +9% (+15% C$) WHOLESALE -13% (-8% C$)  Continued momentum in core work  Performance impacted by timing of  China +18% C$ partially

  25. Slide 25: Financial Outlook

    FINANCIAL OUTLOOK 25

  26. Slide 26: 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*** +16% to +18% +6% +80bps +90bps +18%* to +20%* +8%* PREVIOUSLY +7%* to +8%* PREVIOUSLY ~54.0% PREVIOUSLY ~13.7% PREVIOUSLY $3.30 to $3.35 *Adj

  27. Slide 27: Fiscal Year 2020 Revenue Outlook: Segments

    FI SCAL YEAR 2020 REVENUE OUTLOOK: SEGMENTS OUTDOOR ACTIVE WORK +5% +7% to +8% +3% to +5% +6%* +10%* to +11%* +4%* to +6%* PREVIOUSLY +5%* to +6%* PREVIOUSLY +9%* to +10%* *Adjusted Organic, C$ basis 27

  28. Slide 28: Fiscal Year 2020 Revenue Outlook: Brands

    FI SCAL YEAR 2020 REVENUE OUTLOOK: BRANDS +10% to +12% +7% to +8% “Up modestly” +4% to +6% +11%* to +13%* +8%* to +9%* +1%* to +3%* +5%* to +7%* PREVIOUSLY +10%* to +12%* PREVIOUSLY +7%* to +9%* *Adjusted Organic, C$ basis 28

  29. Slide 29: Fiscal Year 2020 Revenue Outlook: Regions

    FI SCAL YEAR 2020 REVENUE OUTLOOK: REGIONS +1% to +3% +5%* to +7%* +6% to +7% EMEA U.S. +12% to +14% +14%* to +16%* APAC +2% to 4% +3%* to +5%* ex. impact of business model change +9%* to +11%* AMERICAS (non-U.S.) *Adjusted Organic, C$ basis **Revenue on an adjusted basis 29

  30. Slide 30: Fiscal Year 2020 Revenue Outlook: Channels

    FI SCAL YEAR 2020 REVENUE OUTLOOK: CHANNELS DIRECT-TO- DIRECT-TO- CONSUMER - WHOLESALE CONSUMER DIGITAL +2% to +3% +10% to +12% +25% +4%* to +5%* +11%* to +13%* PREVIOUSLY +10%* to +12%* *Adjusted Organic, C$ basis **Revenue on an adjusted basis 30

  31. Slide 31: Appendix

    APPENDIX 31

  32. Slide 32: 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) Transaction and Relocation and As Reported Deal Related Specified Strategic Con

  33. 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 June 2018 (Unaudited) (In thousands, except per share amounts) As Reported Transaction and Deal Impact of Tax Contribution from Adjusted Three

  34. Slide 34: 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 2019 Top 4 Brand Revenue Growth Americas EMEA APAC Global ® Vans % cha nge 22 % 8% 26 % 20 % % cha nge cons ta nt currency 22 % 15 % 33 % 23 % ® The Nor

  35. Slide 35: Appendix: Segment, Geographic & Channel Revenue

    APPENDIX: SEGMENT, GEOGRAPHIC & CHANNEL REVENUE VF CORPORATION Supplemental Financial Information Reportable Segment, Geographic and Channel Revenue Growth (Unaudited) Three Months Ended June 2019 % Change Constant % Change Constant % Change Constant % Change Currency and % Change Adjusted Currency

  36. Slide 36: VFC.com

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V.F. — Q1 FY2020 Earnings Presentation on 6ix