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YoY shift: Lean +
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.21pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.11pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.53pp
Lean +
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+4
adverse+3
litigation+3
disruptions+2
challenges+2
Positive rising
able+2
alliance+2
successfully+1
profitability+1
improve+1
Risk Factors (Item 1A)
13,295 words
ITEM 1A. RISK FACTORS.
The following risk factors should be read carefully in connection with evaluating VF’s business and the forward-looking statements contained in this Form 10-K. These disclosures reflect VF’s beliefs and opinions as to factors that could materially and adversely affect VF and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. These risk factors do not identify all risks VF faces. Additional risks and uncertainties that VF is unaware of, or that VF currently believes are not material, may also become important factors that adversely affect VF’s business. Any of the following risks could materially adversely affect VF’s business, its operating results, the trading price of VF’s common stock, and its financial condition.
ECONOMIC AND INDUSTRY RISKS
VF’s revenues and profits depend on the level of consumer spending for apparel, footwear, equipment and accessories, which is sensitive to global economic conditions and other factors. A decline in consumer spending could have a material effect on VF.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
divestiture+13
termination+8
limitations+4
terminated+3
negative+3
Positive rising
favorable+49
gain+5
benefit+2
leadership+2
alliance+1
MD&A (Item 7)
13,714 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) is a portfolio of leading outdoor and active brands, including The North Face ® , Vans ® and Timberland ® . VF is committed to providing consumers with innovative products that are rooted in performance and elevated design, while delivering sustainable and long-term value for its employees, communities, and shareholders.
VF is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. We own a broad portfolio of brands in the apparel, footwear, equipment and accessories categories. Our products are marketed to consumers through our wholesale channel, primarily in specialty stores, national chains, mass merchants, department stores,
independently-operated partnership stores and with strategic digital partners. Our products are also marketed to consumers through our own direct-to-consumer operations, which include VF-operated stores, concession retail stores, brand e-commerce sites and other digital platforms.
VF is organized by groupings of brands and businesses represented by its reportable segments for financial reporting purpos es. The two reportable segments are Outdoor and Active. All other brands that have not been aggregated within the reportable segments described above, which do not meet the quantitative threshold to be disclosed as a separate reportable segment, have been grouped within an “All Other” category.
The success of VF’s business depends on consumer spending on apparel, footwear, equipment and accessories, and there are a number of factors that influence consumer spending, including actual and perceived economic conditions, disposable consumer income, interest rates, consumer credit availability, inflationary pressures, recessions or economic slowdowns, unemployment, stock market performance, weather conditions and natural disasters (including potential climate risks and impacts), energy and commodity prices, public health issues, geopolitical and political instability (such as the current tensions between the U.S. and China, and the current conflicts in Europe, the Middle East and Asia), trade wars, consumer discretionary spending patterns and tax rates in the international, national, regional and local markets where VF’s products are sold. Decreased consumer spending could result in reduced demand for our products, reduced orders from customers for our products, order cancellations or returns, lower revenues, higher discounts, increased inventories and lower gross margins. The uncertain state of the global economy continues to impact businesses around the world. If global economic and financial market conditions do not improve, or if they worsen, adverse economic trends or other factors could negatively impact the level of consumer spending, which could have a material adverse impact on VF.
The apparel, footwear, equipment and accessories industries are highly competitive, and VF may not be able to gauge consumer preferences and product trends, and to respond to constantly changing markets.
VF competes globally with numerous apparel, footwear, equipment and accessories brands and manufacturers. Competition is generally based upon brand name recognition, the price, design, quality, innovation and selection of products and services, product availability and purchasing convenience. Some of our competitors are larger and have more resources than VF in certain product categories and regions. In addition, VF competes directly with the private label brands of its wholesale customers. We face a variety of competitive challenges in an increasingly fast-paced environment, and our ability to compete effectively depends on our ability to:
• anticipate, respond to, and potentially influence changing consumer preferences and product trends quickly;
• design and develop attractive and innovative products that meet changing consumer needs, consistent with consumer trends and demands across various demographics;
• maintain strong brand recognition;
• improve speed to market of products;
• develop and execute on modern marketing and marketplace strategies to enable deeper consumer connections that lead to enhanced engagement with our brands;
• provide best in class marketing support and intelligence and optimize and react to available consumer data;
• price products appropriately;
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• ensure product availability and optimize supply chain efficiencies;
• manage our retail store space effectively and drive traffic to our retail stores;
• produce or procure quality products on a consistent basis; and
• adapt to a more AI-enabled, digitally driven consumer landscape, including the effective re-creation of the in-store experience in and selling through a variety of digital channels, including new and emerging types of marketplaces and selling models, and reaching consumers on social media.
In addition, our ability to compete is also dependent on our ability to reach consumers effectively and efficiently in an evolving media landscape, including digital, which is subject to evolving and increasingly restrictive privacy requirements. Failure to compete effectively or to keep pace with rapidly changing consumer preferences, markets, technology, business model and product trends could have a material adverse effect on VF’s business, financial condition and results of operations. Moreover, there are significant shifts underway in the wholesale and direct-to-consumer (e-commerce and retail store) channels. VF may not be able to manage its brands within and across channels sufficiently, which could have a material adverse effect on VF’s business, financial condition and results of operations.
The retail industry has experienced financial difficulty that could adversely affect VF's business.
There have been consolidations, reorganizations, restructurings, bankruptcies and ownership changes in the retail industry. These events individually, and together, could have a material, adverse effect on VF's business. These changes could impact VF’s opportunities in the market and increase VF’s reliance on a smaller number of large customers. In the future, retailers may further consolidate, undergo restructurings or reorganizations or bankruptcies, realign their affiliations or reposition their stores’ target markets. In addition, consumers have continued to transition away from traditional wholesale retailers to large online retailers. These developments could result in a reduction in the number of stores that carry VF’s products, an increase in
ownership concentration within the retail industry, an increase in credit exposure to VF or an increase in leverage by VF’s customers over their suppliers.
Further, the global economy periodically experiences recessionary conditions with rising unemployment, rising inflation and interest rates, rising tariffs, reduced availability of credit, increased savings rates and declines in real estate and securities values. These recessionary conditions could have a negative impact on retail sales of apparel, footwear, equipment and accessories and other consumer products. The lower sales volumes, along with the possibility of restrictions on access to the credit markets, could result in our wholesale customers experiencing financial difficulties including store closures, bankruptcies or liquidations. This could result in higher credit risk to VF relating to receivables from our customers who are experiencing these financial difficulties. If these developments occur, our inability to shift sales to other customers or to collect on VF’s trade accounts receivable could have a material adverse effect on VF’s financial condition and results of operations.
VF’s profitability may decline as a result of increasing pressure on margins.
The apparel, footwear, equipment and accessories industry is subject to significant pricing pressure caused by many factors, including intense competition, consolidation in the retail industry, rising commodity and conversion costs, inflation, tariffs levied on component and finished goods, rising freight costs, rising labor costs, pressure from retailers to reduce the costs of products, changes in consumer demand and shifts to digital shopping and purchasing. For example, the conflict in the Middle East has resulted in and is expected to continue to result in customer order cancellations, higher oil prices, an increase in shipping costs, and an increase in raw material costs. Customers may increasingly seek markdown allowances, incentives and other forms of economic support. If these factors cause us to reduce our sales prices to retailers and consumers, and we fail to sufficiently reduce our product costs or operating expenses, VF’s profitability will decline. This could have a material adverse effect on VF’s results of operations, liquidity and financial condition.
BUSINESS AND OPERATIONAL RISKS
VF’s business and the success of its products could be harmed if VF is unable to maintain the image of its brands.
VF’s success to date has been due in large part to the growth of its brands’ image and VF’s consumers’ connection to its brands. If we are unable to timely and appropriately respond to changing consumer demand, the names and image of our brands may be impaired. Even if we react appropriately to changes in consumer preferences, consumers may consider our brands’ image to be outdated or associate our brands with styles that are no longer popular. In addition, brand value is based in part on consumer perceptions on a variety of qualities, including merchandise quality, corporate integrity, and responsible business and governance practices, including with respect to human rights and our impact on the environment. Negativeclaims or publicity regarding VF, its brands or its products, including licensed products, or its culture and values, or its employees, endorsers, sponsors or suppliers could adversely affect our reputation and sales regardless of whether such claims are accurate. The rapidly changing media environment, including our increasing
reliance on social media and digital marketing, which accelerates the dissemination of information, including misinformation and disinformation, can increase the challenges of responding to negativeclaims. In addition, we have sponsorship contracts with a number of athletes, musicians and celebrities and feature those individuals in our advertising and marketing efforts. Failure to continue to obtain or maintain high-quality sponsorships and endorsers could harm our business. In addition, actions taken by those individuals associated with our products could harm their reputations, which could adversely affect the image of our brands. Our reputation and brand image also could be damaged as a result of our support of, association with or lack of support or disapproval of certain political or social issues or catastrophic events, as well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
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VF’s revenues and cash requirements are affected by the seasonal nature of its business.
VF’s business is seasonal, with a higher proportion of revenues and operating cash flows generated during the second half of the calendar year, which includes the fall and holiday selling seasons. Poor sales in the second half of the calendar year would have a material adverse effect on VF’s full year operating results and cause higher inventories. In addition, fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting retail sales.
We may be adversely affected by weather conditions, including any potential effects from extreme environmental conditions.
Our business is adversely affected by unseasonable weather conditions, including those resulting from extreme environmental conditions. A significant portion of the sales of our products is dependent in part on the weather and is likely to decline in years in which weather conditions do not favor the use of these products. For example, periods of unseasonably warm weather in the fall or winter can lead to reduced consumer spending that negatively impacts VF's direct-to-consumer business, and inventory accumulation by our wholesale customers, which can, in turn, negatively affect orders in future seasons. In addition, abnormallyharsh or inclement weather can also negatively impact retail traffic and consumer spending. If the frequency and impact of weather and environmental related events and conditions increase, we expect additional negative impacts such as supply chain disruptions following extreme weather events impacting materials sourcing and logistics. Any and all of these risks may have a material adverse effect on our financial condition, results of operations or cash flows.
VF may not succeed in its business strategy, including our turnaround program and “The VF Way” operating principles.
During Fiscal 2024, we introduced a turnaround program to reinvent how VF operates as an organization across our brands, geographies and integrated enterprise functions. As part of this program, we have taken and continue to take measures to streamline and right-size our cost base, identify and capture efficiencies in our business model, and strengthen the balance sheet while reducing leverage. Our operating model reflects a global commercial organization with an Americas regional platform, modeled on VF's operations in Europe and Asia-Pacific, all of which support VF’s global brands. We remain focused on our turnaround, however, there is no assurance that we will be able to achieve our strategic business priorities, that such measures will result in the intended outcomes, or that even if such measures are successfullyaccomplished, they will be effective in fueling sustainable and profitable growth in the future.
We are supporting our turnaround priorities by building our brands, enhancing and leveraging our capabilities such as supply chain and information technology across VF and bolstering our direct-to-consumer business, including strategically opening and closing stores, remodeling and trying new formats for our existing stores and growing our e-commerce business. In addition, “The VF Way” operating principles are a set of standardized processes across brands and regions which allow us to leverage our multi-brand competitive advantages to drive improved performance. However, we may not be able to turnaround and grow our business. For example:
• We may not be able to streamline and right-size our cost base.
• We may not be able to strengthen our balance sheet while reducing leverage.
• We may not be able to successfully implement our operating model with the establishment of a global commercial organization or identify and capture efficiencies in our operating model.
• We may not be able to successfully support our global brands through our operating model.
• We may not be able to successfully generate savings to invest in brand building and product innovation, or effectively deploy such savings towards investments in our brands and product innovation.
• We may not be able to successfully implement “The VF Way” operating principles.
• We may not be able to achieve the expected results from our supply chain initiatives and establish and maintain effective supply chain systems, data, and capabilities, infrastructure, and the sourcing strategy necessary to optimally meet current and future business needs, including direct-to-consumer needs.
• We may have difficulty recruiting, developing or retaining qualified employees.
• We may not be able to achieve our direct-to-consumer expansion goals, including in e-commerce, recommerce, or other new channels, manage our growth effectively, successfully integrate the planned new stores into our operations, operate our new, remodeled and expanded stores profitably, adapt our business model or develop relationships with consumers for e-commerce or other new channels.
• We may not be able to offset rising commodity, conversion or other costs in our product costs with pricing actions or efficiencyimprovements.
Failure to implement our strategic objectives, including our turnaround strategy, may have a material adverse effect on VF’s business.
Further, organizational effectiveness, agility and execution are important to VF’s success. Failure to create an agile and efficient operating model and organizational structure, including within VF's global commercial organization, or to effectively define, prioritize, and align on clear achievable and appropriately resourced strategic priorities could result in an inability to remain competitive in a rapidly changing marketplace and lead to increase in costs, inefficient resource allocation, reduced productivity, organizational confusion, and reduced employee morale.
Disruptions of our supply chain, which is dependent on international suppliers, could have a material adverse effect on our operating and financial results.
Our supply chain may be disrupted due to factors such as geopolitical instability and conflicts, inflationary pressures, macroeconomic conditions, pandemics, trade wars, and other factors including reduced freight availability and increased costs, port disruption, distribution center closures, extreme weather conditions due to climate change or otherwise, natural disasters, military conflicts, terrorism, or labor supply shortages or
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stoppages. Any significant disruption in our supply chain could impair our ability to procure or distribute our products, which would adversely affect our business and results of operations.
VF relies significantly on information technology. Any inadequacy, interruption, operational failure or security failure of this technology could harm VF’s ability to effectively operate its business.
Our ability to effectively manage and operate our business depends significantly on information technology systems. For example, we rely heavily on information technology to track sales and inventory and manage our supply chain. We are also dependent on information technology, including the Internet, for our direct-to-consumer sales, including our e-commerce operations and retail business credit card transaction authorization, as well as our corporate business operations. Despite our preventative efforts, our systems and those of third parties on which we rely are frequently targeted by cyberattacks of varying levels of severity, including the incident reported by VF in December 2023. These systems may be vulnerable to damage, failure or interruption, and the data that they hold may be vulnerable to encryption or theft, due to cyberattacks, malicious programs, data security incidents, technical malfunctions, natural disasters or other causes, or in connection with upgrades to our system or the implementation of new systems. Some of our systems are older and are no longer supported by the original manufacturer. The failure of our systems and those of third parties on which we rely to operate effectively or remain innovative, our inability to keep up with rapid technological change (including the successful utilization of data analytics, AI and machine learning), problems with transitioning to upgraded or replacement systems, difficulty in integrating new systems or systems of acquired businesses or a breach in security of these systems has, and in the future could again, adversely impact the operations of VF’s business. These impacts could affect, among other things, our reputation, management of inventory, ordering and replenishment of products, sourcing and distribution of products, retail store and e-commerce operations, retail business credit card transaction authorization and processing, corporate email communications and our interaction with the public on social media, and did affect our management of inventory, ordering and replenishment of products, sourcing and distribution of products, retail store and e-commerce operations, and corporate email communications. Moreover, failure to provide effective digital (including omni-channel) capabilities and information technology infrastructure could result in an inability to meet current and future business needs and a resulting loss of brand competitiveness, leading to loss of revenue and market share and decreased business agility.
Cybersecurity threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of AI. We may fail to adapt as quickly as necessary to meet the rapidly-changing threat environment.
VF is subject to cybersecurity, information security and privacy risks that could negatively affect its business operations, results of operations or reputation.
In the normal course of business, we collect, retain and transmit certain sensitive and confidential information, including payment information and personal information, over public networks. There is a significant concern by consumers and employees over the security of personal information, identity theft and user
privacy. Cybersecurity and information security breaches are increasingly sophisticated and can be difficult to detect for long periods of time. Accordingly, if unauthorized parties gain access to our networks or databases, such as with the incident reported by VF in December 2023, or those of third parties on which we rely, they have, and could continue to, be able to steal, publish, delete, hold ransom or modify our private and sensitive information, including payment information, personal information, and confidential or other proprietary business information.
We are subject to frequent cyberattacks of varying levels of severity and threats to our business from a variety of bad actors, many of whom attempt to gainunauthorized access to, steal or compromise our confidential information and systems. For example, we detected unauthorized occurrences on a portion of our information technology systems in December 2023.
In addition, cybersecurity threat actors may use AI tools, including generative AI, to deploy increasingly advanced attacks on our and our business partners' information technology systems. The increasing sophistication of cyberattacks, including through the use of AI, may create a demand for us to use increasingly sophisticated AI in our cybersecurity defense efforts. We face risks that we will fail to combat the offensive use of AI sufficiently or that we will fail to deploy defensive tools using AI adequately, either because we are unable to anticipate the risks accurately in a rapidly-evolving landscape or because we lack the knowledge or resources to adequately address the cybersecurity threats and opportunities associated with AI.
While we have implemented systems and processes designed to protect againstunauthorized access to or use of personal information and other confidential information and rely on encryption and authentication technologies to effectively secure transmission of such information, including payment information, there is no guarantee that they will be able to prevent unauthorized access to our systems and information in the future. Our facilities and systems, and those of third parties on which we rely, are frequently the target of cyberattacks of varying levels of severity and have been, and may in the future be vulnerable, and we may and have been unable to prevent, anticipate or detect security breaches and data loss.
In addition, we face amplified cybersecurity risks as a result of the number of employees we employ, including a number of employees working remotely. These amplified risks include increased demand on our information technology resources and systems, and an increase in the number of points of potential attack on networks that we do not control, such as home WiFi networks. Employees may intentionally or inadvertently cause cybersecurity breaches that result in unauthorized access to our systems or the unauthorized release of personal or confidential information.
VF and its consumers and customers could sufferharm if valuable business data, or employee, consumer, customer and other confidential and proprietary information were corrupted, lost, accessed or misappropriated by third parties due to a cyberattack, a security failure in VF’s systems, or due to one of our third-party service providers or our employees. Any such breach, including, without limitation, the incident reported by VF in December 2023, has and could require significant expenditures to remediate; could cause damage to our reputation, to confidence in our e-commerce platforms and to our relationships with customers, consumers, employees and
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third parties on whom we rely; has and could result in business disruption, negative media attention and lost sales; and has and could expose us to risks of litigation, liability and increased scrutiny from regulatory entities. In addition, as a result of recent security breaches at a number of prominent retailers and other companies, media and public scrutiny of information security and privacy has become more intense, and the regulatory environment has become increasingly uncertain, rigorous and complex. As a result, we may incur significant costs to comply with laws regarding the privacy and security of personal information, and we may not be able to comply with new data protection laws and regulations being adopted around the world. Any failure to comply with the laws and regulations and consumer expectations surrounding the privacy and security of personal information has and could in the future subject us to legal and reputational risk, including significant fines and/or litigation for non-compliance in multiple jurisdictions, negative media coverage, diminished consumer confidence and decreased attraction to our brands, any of which could have a negative impact on revenues and profits. In addition, while we maintain cyber insurance policies, those existing insurance policies have not and may not adequately protect VF from all of the adverse effects and damages that could be caused by a security breach. Moreover, if our employees or business partners, intentionally or inadvertently, misuse consumer data or are not transparent with consumers about how we use their data, our brands, reputation and relationships with consumers could be damaged.
The use or misuse of AI and the failure to use AI, present risks and challenges that may negatively impact our business.
Our business operates in a highly competitive space, and our success may require the adoption of new and emerging technologies, such as AI, and specifically generative AI, by us or our business partners. Failure to adapt to a rapidly changing technological environment or failure to adopt emerging technologies in a timely manner could result in negative impacts to our business.
We also face risks from the adoption of new technologies such as AI if we or our business partners use them incorrectly or in ways that introduce new risks. We or our business partners may incorporate AI tools into their offerings which may not meet existing or rapidly changing regulatory, ethical or industry standards and may inhibit our or our business partners' ability to maintain an adequate level of service.
The development of AI technologies is complex, and there are challenges associated with achieving the desired level of accuracy, efficiency, and reliability. The algorithms and models utilized in generative AI systems may have limitations, including biases, errors, or inability to handle certain data types or scenarios. Furthermore, there is a risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of data inputs or the generated content. These limitations or failures could result in reputational harm, legal liabilities, or loss of consumer, customer, employee or business partner confidence.
If we or our business partners use AI to make decisions that affect consumers, customers, employees or job applicants, the AI may be subject to biases or other types of unfair decision-making that may negatively impact those individuals and create legal or reputational risk for us.
If we or our business partners use AI to create intellectual property (IP), such as product designs, patents, trademarks, or copyrightable text or code, we may be subject to IP rights claims from third parties claiming ownership of, or demanding rights to the IP that we or our business partners have developed using AI, or we may face the risk of not being able to adequately secure the rights to the IP created. We or our business partners may also experience loss of IP or other proprietary or confidential information through user input of such information into AI tools.
Uncertainty in the regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with U.S. and international laws, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including the European Union (“EU”) and certain U.S. states, have proposed or enacted laws governing AI. Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These obligations and restrictions may lead to regulatory fines or penalties for non-compliance, make it harder for us to conduct our business using AI, require us to change our business practices, or prevent or limit our use of AI. If we or our business partners cannot use AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Any of these factors could adversely affect our business, financial condition, and results of operations.
There are risks associated with VF’s acquisitions, divestitures and portfolio management.
Any acquisitions, divestitures or mergers by VF, including our completed sale of the Dickies ® brand to Bluestar Alliance LLC, will be accompanied by the risks commonly encountered in acquisitions or divestitures of companies, businesses or brands. These risks include, among other things, higher than anticipated acquisition or divestiture costs and expenses, the difficulty and expense of integrating or separating the operations, systems and personnel of the companies, businesses or brands, the loss of key employees and consumers as a result of changes in management or ownership, and slowerprogress toward environmental, social and governance goals given challenges with data acquisition and integration, the difficulty of accessing and disclosing sufficient environmental, social and governance data to comply with current and emerging environmental, social and governance regulations, and integration of environmental, social and governance initiatives overall. In addition, geographic distances may make integration of acquired businesses more difficult. We may not be successful in overcoming these risks or any other problems encountered in connection with any acquisitions or divestitures. Moreover, failure to effectively manage VF’s portfolio of brands in line with growth targets and shareholder expectations, including acquisition choices, integration approach, transaction pricing and divestiture timing could result in unfavorable impacts to growth and value creation.
Our acquisitions and divestitures may cause large one-time expenses or create goodwill or other intangible assets that could result in significant impairment charges. We also make certain estimates and assumptions in order to determine purchase price allocation and estimate the fair value of assets acquired and liabilities assumed. If our estimates or assumptions used to value these assets and liabilities are not accurate, we may be exposed to losses that may be material.
On September 15, 2025, we announced that we entered into a definitive agreement for Bluestar Alliance LLC to acquire the
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Dickies ® brand from VF for $600 million in cash, subject to customary adjustments for cash, indebtedness, working capital and transaction expenses. On November 12, 2025, we completed the Dickies ® brand sale. Although the sale is completed, we may not realize some or all the expected benefits of separating the brand, including strategic and other objectives. Further, divestitures involve significant challenges and risks, including the need to provide transition services, which may result in stranded costs and the diversion of resources and focus; and the need to separate operations, systems, and technologies, which is an inherently risky and potentially lengthy and costly process.
VF uses third-party suppliers and manufacturing facilities worldwide for its raw materials and finished products, which poses risks to VF’s business operations.
During Fiscal 2026, VF’s products were sourced from independent manufacturers primarily located in Asia. Any of the following could impact, and in some cases has impacted, our ability to source or deliver VF products, or our cost of sourcing or delivering products and, as a result, our profitability:
• imposition of duties, tariffs, taxes and other charges on imports;
• political or labor instability in areas where VF’s contractors and suppliers are located;
• inflationary pressures or changes in local economic conditions in areas where VF’s contractors and suppliers are located;
• public health issues such as pandemics could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;
• political or military conflict could cause a delay in the transportation of products to VF and an increase in transportation costs;
• disruption at ports of entry has caused, and in the future could cause, delays in product availability and increase transportation times and costs;
• heightened terrorism security concerns could subject imported or exported goods to additional, more frequent or lengthier inspections, leading to delays in deliveries or impoundment of goods for extended periods;
• increased risk of detention by customs officials of raw materials or goods used by our suppliers in the manufacture of our products, and increased risk of detention of our products;
• decreased scrutiny by customs officials for counterfeit goods, leading to more counterfeit goods and reduced sales of VF products, increased costs for VF’s anti-counterfeiting measures and damage to the reputation of its brands;
• disruptions at manufacturing or distribution facilities or in shipping and transportation locations caused by natural and man-made disasters (including potential effects from extreme environmental conditions or potential climate risks and impacts) or political or military conflicts;
• imposition of regulations and quotas relating to imports could create regulatory compliance challenges and our ability to adjust timely to changes in trade regulations could limit our ability to source products in cost-effective countries that have the required labor and expertise; and
• imposition or the repeal of laws that affect intellectual property rights.
There continues to be uncertainty in the current global trade regime due to recent changes in, and proposals and declared intentions to change trade policy, including trade restrictions, the negotiation, renegotiation or termination of trade agreements, and the imposition of new tariffs or increases in existing tariffs on imports into the affected countries. Tariffs and other changes in trade policy have triggered in the past, are currently triggering and could continue to trigger retaliatory actions by affected countries, including through the use of counter tariffs and other measures, which has resulted in higher costs, and may result in higher future costs, or restrictions, on the importation of the products we sell. Our supply chain is geographically diverse, and we continuously identify alternative sourcing manufacturers and countries to minimize reliance on a single source. We may be unable to shift sourcing locations timely, if at all, to relocate production from a country when new or increased duties, tariffs, taxes or other charges are imposed. In addition, higher costs in sourcing from other countries, including because others in the industry seek to shift production for the same reason, may make such a sourcing shift cost-prohibitive. We may not be able to, or could choose not to, pass the entire cost increase resulting from tariffs, duties, taxes or other expenses onto consumers and customers. Any increase in prices to consumers could have an adverse impact on our sales to consumers and customers and as a result, on our profits. Any adverse impact on such sales or increase in our cost of goods sold could have a material adverse effect on our business and results of operations.
Although no single supplier and no one country is critical to VF’s production needs, if we were to lose a supplier it could result in interruption of finished goods shipments to VF, cancellation of orders by customers and termination of relationships. This, along with the potential damage to our reputation, could have a material adverse effect on VF’s revenues and, consequently, our results of operations.
In addition, although we audit our third-party material suppliers and contracted manufacturing facilities and set strict compliance standards, actions by a third-party supplier or manufacturer that fail to comply could result in such third-party supplier failing to manufacture products that consistently meet our quality standards, violating human rights, engaging in unfavorable labor practices, causing environmental impacts such as pollution or providing unfavorable working conditions that negatively impact worker health, safety and wellness. Such noncompliance could expose VF to claims for damages, financial penalties, delay or inability to clear goods through customs authorities, operational disruptions and reputational harm, any of which could have a material adverse effect on our business and operations.
A significant portion of VF’s revenues and gross profit is derived from a small number of large customers. The loss of any of these customers or the inability of any of these customers to pay VF could substantially reduce VF’s revenues and profits.
A few of VF’s customers account for a significant portion of revenues. Sales to VF’s ten largest customers were approximately 17% o f total revenues in Fiscal 2026, with our largest customer accounting for approximately 4% of revenues. Sales to our customers are generally on a purchase or der basis and not subject to long-term agreements. A decision by any of VF’s major customers to significantly decrease the volume of
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products purchased from VF could substantially reduce revenues and have a material adverse effect on VF’s financial condition and results of operations.
Talent acquisition, management, engagement and retention are important factors in VF’s success. Turnover in VF’s leadership or other key positions may have a material adverse effect on VF.
Our future success also depends on our ability to acquire, develop, and retain talent needed to mobilize VF against our current and future needs and sustain our culture as a performance-driven company that is committed to its values. Competition for experienced and well-qualified personnel is intense and we may not be successful in attracting, developing, and retaining such personnel, which could impact VF’s ability to remain competitive. Our ability to acquire, develop and retain personnel has been, and may continue to be impacted by, wage inflation, labor shortages, increased employee turnover, and changes in availability of the workforce as well as the broader labor market. Additionally, changes to our office environments, the adoption of new work models, and our requirements and/or expectations about when or how often certain employees work on-site or remotely may not meet the expectations of our employees. If our employee proposition is not perceived as favorable compared to other companies, it could negatively impact our ability to acquire and retain our employees. If we are unable to retain, acquire, and engage talented employees with the appropriate skill sets, or if changes to our organizational structure, operating results, or business model adversely affect morale, productivity or retention, we may not achieve our objectives, our relationships with our customers, consumers or other third parties may be disrupted, and our results of operations could be adversely impacted.
VF depends on the services and management experience of its executive officers and business leaders who have substantial experience and expertise in VF’s business, and in developing and retaining employees. This loss of experience and expertise can be mitigated through successful hiring and transition, but there can be no assurance that we will be successful in such efforts. Acquiring and retaining qualified senior leadership may be more challenging under adverse business conditions. The unexpectedloss of services of one or more of these key employees or the inability to effectively identify a suitable successor to a key role could have a material adverse effect on VF.
Leadership transitions can be inherently difficult to manage; inadequate transitions may cause disruption to our business, including to our relationships with our employees and other third parties. Further, these changes also increase our dependency on other remaining members of our global leadership team further increasing the risk of potential disruption.
VF’s direct-to-consumer business includes risks that could have an adverse effect on its results of operations.
VF sells merchandise directly to consumers through VF-operated stores and e-commerce sites. Its direct-to-consumer business is subject to numerous risks that could have a material adverse effect on its results. Risks include, but are not limited to, (i) U.S. or international resellers purchasing merchandise and reselling it outside VF’s control, (ii) failure or interruption of the systems that operate the stores and websites, and their related support systems, including due to computer viruses, theft of consumer information, privacy concerns, telecommunication failures, electronic break-ins and similar
disruptions, technical malfunctions, and natural disasters or other causes, (iii) retail and credit card fraud and theft, (iv) risks related to VF’s direct-to-consumer distribution centers and processes, (v) shift in consumer preferences away from retail stores, and (vi) loss of inventory due to damage, theft (including from organized retail crime), and other causes. Risks specific to VF’s e-commerce business also include (i) diversion of sales from VF stores or wholesale customers, (ii) difficulty in recreating the in-store experience through e-commerce channels, (iii) liability for digital content, (iv) changing patterns of consumer behavior and not keeping up with new and emerging digital selling models, (v) intense competition from online retailers, and (vi) fraud. VF’s failure to successfully respond to these risks might adversely affect sales in its e-commerce business, as well as damage its reputation and brands.
Our VF-operated stores and e-commerce business require substantial fixed investments in equipment and leasehold improvements, information systems, inventory and personnel. We have entered into substantial operating lease commitments for retail space. Due to the high fixed-cost structure associated with our direct-to-consumer operations, a decline in sales or the closure of or poor performance of individual or multiple stores could result in significant lease termination costs, write-offs of equipment, leasehold improvements and right-of-use assets, and employee-related costs.
VF’s net sales depend on the volume of traffic to its stores and the availability of suitable lease space.
A significant portion of our revenues are direct-to-consumer sales through VF-operated stores. In order to generate consumer traffic, we locate many of our stores in prominent locations within successful retail shopping centers or in fashionable shopping districts. Our stores benefit from the ability of the retail center and other attractions in an area to generate consumer traffic in the vicinity of our stores. Part of our future growth is significantly dependent on our ability to operate stores in desirable locations with capital investment and lease costs providing the opportunity to earn a reasonable return. We cannot control the development of new shopping centers or districts; the availability or cost of appropriate locations within existing or new shopping centers or districts; competition with other retailers for prominent locations; or the success of individual shopping centers or districts. Further, if we are unable to renew or replace our existing store leases or enter into leases for new stores on favorable terms, or if we violate the terms of our current leases, our growth and profitability could be harmed. All of these factors may impact our ability to meet our growth targets and could have a material adverse effect on our financial condition or results of operations.
VF may be unable to protect its trademarks and other intellectual property rights.
VF’s trademarks and other intellectual property rights are important to its success and its competitive position. VF is susceptible to others copying its products and infringing its intellectual property rights, especially with the shift in product mix to higher priced brands and innovative new products in recent years. Some of VF’s brands, such as The North Face ® , Vans ® and Timberland ® enjoy significant worldwide consumer recognition, and the higher pricing of certain of the brands' products creates additional risk of counterfeiting and infringement.
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VF’s trademarks, trade names, copyrights, patents, trade secrets and other intellectual property are important to VF’s success. Counterfeiting of VF’s products or infringement on its intellectual property rights could diminish the value of our brands, damage our reputation, and adversely affect VF’s revenues. Actions we have taken to establish and protect VF’s intellectual property rights may not be adequate to prevent copying of its products by others or to prevent others from seeking to invalidate its trademarks or block sales of VF’s products as a violation of the trademarks and intellectual property rights of others. In addition, unilateral actions in the U.S. or other countries, including changes to or the repeal of laws recognizing trademark or other intellectual property rights, such as the Russian government's announcements that it would not protect intellectual property rights, including patent rights and rights that could block parallel imports of gray market goods, as a result of the sanctions imposed on Russia in connection with the Russia-Ukraine conflict, could have an impact on VF’s ability to enforce those rights.
The value of VF’s intellectual property could diminish if others assert rights in or ownership of trademarks and other intellectual property rights of VF, or trademarks that are similar to VF’s trademarks, or trademarks that VF licenses from others. We may be unable to successfullyresolve these types of conflicts to our satisfaction. In some cases, there may be trademark owners who have prior rights to VF’s trademarks because the laws of certain foreign countries may not protect intellectual property rights to the same extent as do the laws of the U.S. In other cases, there may be holders who have prior rights to similar trademarks.
There have been, and there may in the future be, opposition and cancellation proceedings from time to time with respect to some of VF's intellectual property rights. In some cases, litigation may be necessary to protect or enforce our trademarks and other intellectual property rights. Furthermore, third parties may assert intellectual property claimsagainst us, and we may be subject to liability, required to enter into costly license agreements, if available at all, required to rebrand our products and/or prevented from selling some of our products if third parties successfullyoppose or challenge our trademarks or successfully claim that we infringe, misappropriate or otherwise violate their trademarks, copyrights, patents or other intellectual property rights. Bringing or defending any such claim, regardless of merit, and whether successful or unsuccessful, could be expensive and time-consuming and have a negative effect on VF's business, reputation, results of operations and financial condition.
If VF encounters problems with its distribution system, VF’s ability to deliver its products to the market could be adversely affected.
VF relies on owned or leased VF-operated and third party-operated distribution facilities to warehouse and ship product to
VF customers and consumers. VF’s distribution system includes computer-controlled and automated equipment, which may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, power interruptions or other system failures. Because substantially all of VF’s products are distributed from a relatively small number of locations, VF’s operations could also be interrupted by earthquakes, extreme environmental conditions, fires, floods or other natural disasters (including potential climate risks and impacts) or other events outside VF's control affecting its distribution centers, including political or labor instability. We maintain business interruption insurance under our property and cyber insurance policies, but they may not adequately protect VF from the adverse effects that could be caused by significant disruptions in VF’s distribution facilities. In addition, VF’s distribution capacity is dependent on the timely performance of services by third parties, including the transportation of product to and from its distribution facilities. If we encounter problems with our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected.
VF’s business and operations could be materially and adversely affected if it fails to create systems of monitoring, prevention, response, crisis management, continuity and recovery to mitigate natural or man-made economic, public health, political or environmental disruptions.
Business resiliency is important to VF’s success because there are a variety of risks generally associated with doing business on a global basis that may involve natural or man-made economic, public health, political or environmental disruptions. Disruptions, and government responses to any disruption, could cause, among other things, a decrease in consumer spending that would negatively impact our sales, delays in the fulfillment or cancellation of customer orders or disruptions in the manufacture and shipment of products, increased costs and a negative impact on our reputation and long-term growth plans. The impact of disruptions may vary based on the length and severity of the disruption. VF’s failure to create and implement systems of monitoring, prevention, response, crisis management, continuity and recovery to anticipate, prepare, prevent, mitigate, and respond to potential threats impacting its business, people, processes and facilities could result in extended disruptions and unpredictability.
LEGAL, REGULATORY AND COMPLIANCE RISKS
VF’s operations and earnings may be affected by legal, regulatory, political and economic uncertainty and risks.
Our ability to maintain the current level of operations in our existing markets and to capitalize on growth in existing and new markets is subject to legal, regulatory, political and economic uncertainty and risks. These include the burdens of complying
with U.S. and international laws and regulations, and changes in regulatory requirements.
Changes in regulatory, geopolitical policies and other factors may adversely affect VF’s business, results of operations and financial condition or may require us to modify our current business practices. While enactment of any such change is not certain, if such changes were adopted or if we failed to anticipate
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and mitigate the impact of such changes, our costs could increase, which would reduce our earnings. Any such change could adversely affect worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets.
Beginning in February 2022, in response to the military conflict between Russia and Ukraine, the U.S. and other North Atlantic Treaty Organization member states, as well as non-member states, and the EU announced targeted economic sanctions on Russia, including certain Russian citizens and enterprises, and the continuation of the conflict may trigger additional economic and other sanctions. To date, we have experienced revenue impacts due to business model changes in Russia, currency devaluation, and costs associated with compliance with sanctions and other regulations. For example, we have closed all VF-operated retail stores, terminated all leases and ceased all direct-to-consumer e-commerce operations in Russia. In addition, as of March 28, 2026, there was approximately $50.4 million of cash in Russia that, although it can be used without limits within Russia, is currently limited on movement out of Russia. Further impacts of the conflict could include macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, heightened cybersecurity threats, harm to employee health and safety, reputational harm, increase in counterfeiting and intellectual property infringement activity, nationalization of our assets, and additional costs associated with compliance with sanctions and other regulations and risks associated with failure to comply with the same. Although our operations in Russia are not significant, the conflict could escalate and result in broader economic and security concerns, including in other geographies, which could in turn adversely affect our business, financial condition or results of operations.
As a result of our global operations, we are subject to a number of risks impacting our employees working outside the U.S., including regulations that may differ from or be more stringent than analogous U.S. regulations, political or economic instability, cross-border political tensions and challenges in effectively managing employees in foreign jurisdictions. VF is subject to increased tax and regulatory risks related to employees working remotely or otherwise in a tax location other than their normal work location or residential state or country. These changes have created, and continue to create, challenges in managing our tax and regulatory compliance as well as acquiring and retaining cross-border talent, which could adversely affect our business, results of operations and financial condition.
Changes to U.S. or international trade policy, tariff and import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations.
Changes and uncertainty in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories or countries where we currently sell our products or conduct our business, as well as any negative sentiment toward the U.S. as a result of such changes, could adversely affect our business. There is currently significant uncertainty around the tariffs and trade policies of the U.S. government and the governments of foreign countries with respect to tariffs, tariff refunds, international trade agreements, and economic sanctions. Such volatility has the potential to
adversely impact the U.S. economy or certain sectors thereof, our industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial condition and results of operations. For example, the U.S. government has instituted changes in trade policies imposing higher tariffs on imports into the U.S. Tariffs and other changes in U.S. trade policy have in the past triggered, are currently triggering and could continue to trigger retaliatory actions by affected countries, and certain foreign governments have instituted, considered or are considering imposing retaliatory measures on certain U.S. goods. The timing of any tariff refunds that are legally owed to VF is uncertain as it is subject to the establishment of processes and systems by the U.S. government. In addition, import bans and other laws impacting sourcing of raw materials and finished goods may lead to greater supply chain compliance costs and delays to us and to our suppliers and customers.
Changes in tax laws could increase our worldwide tax rate and tax liabilities and materially affect our financial position and results of operations.
We are subject to taxation in the U.S. and numerous foreign jurisdictions. Many countries in the EU and around the globe have adopted or proposed significant changes to current tax laws. These changes include rules published by the Organisation for Economic Co-operation and Development (“OECD”) to address tax challenges arising from the digitization of the economy (i.e., Global Anti Base Erosion (“GloBE”) rules and Subject to Tax Rule (“STTR”) or “Pillar Two”) and are expected to increase our tax obligations and compliance costs in the countries where VF operates. We continue to evaluate the impact of these changes on our income tax expense, profitability and capital allocation decisions.
Due to the large scale of our U.S. and international business activities, many of these enacted and proposed changes to the taxation of our activities are expected to increase our worldwide effective tax rate and harm our financial position and results of operations.
We may have additional tax liabilities from new or evolving government or judicial interpretation of existing tax laws.
As a global company, we determine our income tax liability in various tax jurisdictions based on an analysis and interpretation of U.S. and international tax laws and regulations. This analysis requires a significant amount of judgment and estimation and is often based on various assumptions about the future actions of tax authorities. These determinations are the subject of periodic U.S. and international tax audits and court proceedings. In particular, tax authorities and the courts have increased their focus on income earned in no- or low-tax jurisdictions or income that is not taxed in any jurisdiction. Tax authorities have also become skeptical of special tax rulings provided to companies offering lower taxes than may be applicable in other countries.
Although we accrue for uncertain tax positions, our accrual may be insufficient to satisfyunfavorable findings. Unfavorable audit findings, or court interpretations (involving VF or other companies with similar tax profiles) may result in payment of taxes, fines and penalties for prior periods and higher tax rates in future periods, which may have a material adverse effect on our financial condition, results of operations or cash flows.
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Our business is subject to international, national, state and local laws and regulations for environmental, consumer protection, corporate governance, competition, employment, privacy, safety and other matters. The costs of compliance with, or the violation of, such laws and regulations by VF or by independent suppliers who manufacture products for VF could have an adverse effect on our operations and cash flows, as well as on our reputation.
Our business is subject to comprehensive international, national, state and local laws and regulations on a wide range of matters such as environmental, climate risk, consumer protection, social, employment, privacy, safety and other matters. VF could be adversely affected by costs of compliance with or violations of those laws and regulations. In addition, while we do not control their business practices, we require third-party suppliers to operate in compliance with applicable laws, rules and regulations regarding working conditions, safety, employment practices, the environment and other areas. The costs of products purchased by VF from independent contractors could increase due to the costs of compliance by those contractors.
Failure by VF or its third-party suppliers to comply with such laws and regulations, as well as with ethical, social, product, safety, labor and environmental standards, or related political considerations, could result in a material adverse effect on our financial condition, results of operations or cash flows, including resulting in interruption of finished goods shipments to VF, extensive remediation efforts, cancellation of orders by customers and termination of relationships. If VF or one of our independent contractors violates labor or other laws, implements improper labor or other business practices or takes other actions that are generally regarded as unethical, it could result in unwanted or negative media attention, jeopardize our reputation and potentially lead to various adverse consumer actions, including boycotts that may reduce demand for VF’s products. Damage to VF’s reputation or loss of consumer confidence for any of these or other reasons could have a material adverse effect on VF’s results of operations, financial condition and cash flows, as well as require additional resources to rebuild VF’s reputation.
Our operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other anti-bribery laws applicable to our operations. Although we have policies and procedures to address compliance with the FCPA and similar laws, there can be no assurance that all of our employees, agents and other partners will not take actions in violation of our policies. Any such violation could subject us to sanctions or other penalties that could negatively affect our reputation, business and operating results.
We are subject to periodic litigation and regulatory proceedings, which could have an adverse effect on our business, financial condition and results of operations.
We are currently involved in, and may from time to time in the future become involved in, legal actions and proceedings arising in the ordinary course of our business. These include, or may in the future include, actions, demands, claims, lawsuits, government investigations or other legal proceedings, including assertions by third parties relating to intellectual property rights, breaches of contract or warranties, employment-related matters, compliance with securities or other laws, regulatory matters, customs matters, data privacy and cybersecurity matters and commercial matters. See “Item 3—Legal Proceedings” for additional information. In general, claims made by us or against us in litigation, disputes, or other proceedings
can be expensive and time consuming to bring or defendagainst and could result in settlements, injunctions, or damages that could significantly affect our business. It is not possible to predict the final resolution of the litigation, disputes, or proceedings to which we currently are or may in the future become party to. Regardless of the final resolution, such proceedings may have an adverse effect on our reputation, financial condition, and business, including by utilizing our resources and potentially diverting the attention of our management from the operation of our business.
Climate risks and increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate risks and socially responsible activities, may adversely affect our business and financial results and damage our reputation.
Climate risks due to extreme environmental conditions may impact our business in numerous ways. Failure to monitor, adapt, build resilience, and develop solutions against the physical and transitional impacts from extreme environmental conditions may lead to revenue loss, market share loss, business interruptions, physical damage to our facilities, and rising costs. Extreme environmental conditions could lead to increased volatility due to physical impacts of environmental conditions on the supply chain, including the availability, quality and cost of raw materials. Increased frequency and severity of extreme weather events (such as storms and floods) could cause increased incidence of disruption to the production and distribution of our products, increased costs for our business, including maintenance, repair, utilities and insurance costs, and an adverse impact on consumer demand and spending.
Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders, and other stakeholders, including non-governmental organizations, employees, and consumers, have been interested in the social and environmental practices of companies. These parties have placed importance on the implications of the social cost of their investments and/or have higher expectations of corporate conduct. If our environmental, social and governance practices do not meet investor or other stakeholder expectations and standards, including related to climate risk, corporate responsibility, social impact, and human rights, and do not meet related regulations and expectations for increased transparency, which continue to evolve, our brands, reputation and employee retention may be negatively impacted. In addition, governmental and self-regulatory organizations, including the Securities and Exchange Commission (“SEC”), the New York Stock Exchange (“NYSE”) and the European Financial Reporting Advisory Group (“EFRAG”), promulgate rapidly changing rules and regulations addressing environmental, social and governance topics. These rules and regulations continue to evolve in scope and complexity and have resulted in, and are likely to continue to result in, uncertainty in the requirements for compliance and increased expenses and increased management time and attention spent complying with or meeting such rules and regulations. For example, collection and assurance of environmental, social and governance data, developing and acting on initiatives within the scope of environmental, social and governance, and collecting, measuring and reporting environmental, social and governance related information and targets can be costly, difficult and time consuming and is subject to evolving reporting standards, including climate- and nature-related disclosure requirements and the EU's environmental, social and governance-related disclosure requirements set forth in the Corporate Sustainability
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Reporting Directive (“CSRD”), and similar proposals and laws by other domestic and international regulatory bodies. If our environmental, social and governance related data, information, processes or reporting are incomplete or inaccurate, our reputation, business, financial performance and growth could be adversely affected. For example, customer expectations with respect to our ability to meet rapidly evolving environmental, social and governance reporting standards in the EU member states and other countries may impact our ability to do business with customers, or otherwise present barriers to entry, which could result in an adverse impact on our business, financial performance and growth.
It is possible that stakeholders may oppose our environmental, social and governance practices or disagree with them. It is also possible that stakeholders may not be satisfied with our environmental, social and governance practices or the speed of their adoption. While we may announce voluntary environmental, social and governance targets, we may not be able to meet such targets in the manner or on such a timeline as initially contemplated, including, but not limited to as a result of
unforeseen costs or technical difficulties associated with achieving such results. Achieving environmental, social and governance targets will require significant efforts from us and other stakeholders, such as our suppliers and other third parties, and also require capital investment, additional costs, and the development of technology that may not currently exist. In addition, we could be criticized for the scope or nature of such targets, or for any revision to those targets. We could also incur additional costs and require additional resources to monitor, report, and comply with various environmental, social and governance practices and regulations. Also, our failure, or perceived failure, to manage reputational threats and meet stakeholder expectations or shifting consumer and customer preferences with respect to environmentally or socially responsible activities and products and packaging and sustainability commitments and regulations could negatively impact our brand, image, reputation, credibility, employee retention, and the willingness of our customers and suppliers to do business with us.
FINANCIAL RISKS
VF’s balance sheet includes a significant amount of intangible assets and goodwill. A decline in the fair value of an intangible asset or of a business unit could result in an asset impairment charge, such as the recent impairment charges related to the Napapijri reporting unit goodwill.
VF’s policy is to evaluate indefinite-lived intangible assets and goodwill for possible impairment as of the beginning of the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying amount. In addition, intangible assets that are being amortized are tested for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. For these impairment tests, we use various valuation methods to estimate the fair value of our business units and intangible assets. If the fair value of an asset is less than its carrying value, we would recognize an impairment charge for the difference.
During the third quarter of Fiscal 2026, a downward revision in Napapijri financial projections triggered VF to perform a quantitative analysis of the Napapijri reporting unit goodwill and indefinite-lived trademark intangible assets. As a result of the impairment testing performed, VF recorded an impairment charge of $30.7 million to the Napapijri reporting unit goodwill.
It is possible that we could have another impairment charge for goodwill or trademark and trade name intangible assets in future periods if (i) the businesses do not perform as projected, (ii) overall economic conditions in Fiscal 2027 or future years vary from our current assumptions (including changes in discount rates, foreign currency exchange rates and tariffs), (iii) business conditions or our strategies for a specific business unit change from our current assumptions, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or of actual sales transactions of comparable companies, were to decline, resulting in lower comparable multiples of revenues and earnings before interest, taxes, depreciation and amortization and, accordingly, lower implied values of goodwill and intangible assets. Any future impairment charge for goodwill or intangible assets could have a material
effect on our consolidated financial position or results of operations.
Fluctuations in wage rates and the price, availability and quality of raw materials and finished goods could increase costs.
Fluctuations in the price, availability and quality of purchased finished goods or the fabrics, leather, cotton or other raw materials used therein could have a material adverse effect on VF’s cost of goods sold or its ability to meet its customers’ demands. Prices of purchased finished products may depend on wage rate increases required by legal or industry standards in Asia and other geographic areas where our independent contractors are located, as well as increasing freight costs from those regions. Inflation, including as a result of inflationary pressures related to global supply chain disruptions, can also have a long-term impact on us because increasing costs of materials and labor may impact our ability to maintain satisfactory margins. For example, the cost and availability of the materials that are used in our products, such as oil-related commodity prices and other raw materials, such as cotton, dyes and chemical and other costs, such as fuel, energy and utility costs, can fluctuate significantly as a result of inflation in addition to many other factors, including general economic conditions and demand, crop yields, oil and energy prices, weather patterns, water supply quality and availability, public health issues and speculation in the commodities markets. A significant portion of our products also are manufactured in other countries and declines in the values of the U.S. dollar may result in higher manufacturing costs. In the future, VF may not be able to offset cost increases with other cost reductions or efficiencies or to pass higher costs on to its consumers and customers. This could have a material adverse effect on VF’s results of operations, liquidity and financial condition.
VF’s business is exposed to the risks of foreign currency exchange rate fluctuations. VF’s hedging strategies may not be effective in mitigating those risks.
A significant portion of VF’s total revenue (approximately 56% in Fiscal 2026) is derived from markets outside the U.S. Many of VF’s international businesses operate in functional currencies
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other than the U.S. dollar. Changes in currency exchange rates affect the U.S. dollar value of the foreign currency-denominated amounts at which VF’s international businesses purchase products, incur costs or sell products. In addition, for VF’s U.S.-based businesses, the majority of products are sourced from independent contractors located in foreign countries. As a result, the costs of these products are affected by changes in the value of the relevant currencies. Furthermore, much of VF’s licensing revenue is derived from sales in foreign currencies. Changes in foreign currency exchange rates could have an adverse impact on VF’s financial condition, results of operations and cash flows. VF also has foreign currency debt obligations (euro bonds) and as a result is exposed to risks related to maturity and interest cash outflows which could be adversely impacted by significant appreciation of foreign currency exchange rates (particularly the euro), which could adversely impact our overall cash flows and interest expense.
In accordance with our operating practices, we hedge a significant portion of our foreign currency transaction exposures arising in the ordinary course of business to reduce risks in our cash flows and earnings. Our hedging strategy may not be effective in reducing all risks, and no hedging strategy can completely insulate VF from foreign exchange risk.
Further, our use of derivative financial instruments may expose VF to counterparty risks. Although VF only enters into hedging contracts with counterparties having investment grade credit ratings, it is possible that the credit quality of a counterparty could be downgraded or a counterparty could default on its obligations, which could have a material adverse impact on VF’s financial condition, results of operations and cash flows.
Our ability to obtain financing on favorable terms, if needed, could be adversely affected by geopolitical risk and volatility in the capital markets, including interest rate risks.
Any disruption in the capital markets could limit the availability of funds or the ability or willingness of financial institutions to extend capital to VF in the future. Future volatility in the financial and credit markets, including adverse interest rates, could make it more difficult for us to obtain financing or refinance existing debt, on terms that would be acceptable to us. This disruption or volatility could adversely affect our liquidity and funding resources or significantly increase our cost of capital. An inability to access capital and credit markets may have an adverse effect on our business, results of operations, financial condition and cash flows. In addition, if the U.S. or another material country's government were to default on its debt obligations, the U.S. and global capital markets would be adversely affected and our liquidity and cost of capital would be adversely impacted.
VF’s indebtedness could have a material adverse effect on its business, financial condition and results of operations and prevent VF from fulfilling its financial obligations, and VF may not be able to maintain its current credit ratings, may not continue to pay dividends or repurchase its common stock and may not remain in compliance with existing debt covenants.
As of March 28, 2026, VF had approximately $3.5 billion of debt outstand ing. VF’s debt and interest payment requirements could have important consequences on its business, financial condition and results of operations. For example, they could:
• require VF to dedicate a substantial portion of its cash flow from operations to repaying its indebtedness, which
would reduce the availability of its cash flow to fund working capital requirements, capital expenditures, future acquisitions, dividends, repurchases of VF’s common stock, and for other general corporate purposes;
• limit VF’s flexibility in planning for or reacting to general adverse economic conditions or changes in its business and the industries in which it operates;
• place VF at a competitive disadvantage compared to its competitors that have less indebtedness outstanding; and
• negatively affect VF's credit ratings and limit, along with the financial and other restrictive covenants in VF’s debt documents and its ability to borrow additional funds.
VF's credit ratings may impact the cost and availability of future borrowings. In addition, VF may incur substantial additional indebtedness in the future to fund acquisitions, repurchase common stock or fund other activities for general business purposes. If VF incurs additional indebtedness, it may limit VF’s ability to access the debt capital markets or other forms of financing in the future and may result in increased borrowing costs.
Although VF has historically declared and paid quarterly cash dividends on its common stock and has been authorized to repurchase its stock subject to certain limitations under its share repurchase programs, any determinations by the Board of Directors to continue to declare and pay cash dividends on VF’s common stock or to repurchase VF’s common stock will be based primarily upon VF’s financial condition, results of operations and business requirements, its access to debt capital markets or other forms of financing, the price of its common stock in the case of the repurchase program and the Board of Directors’ continuing determination that the repurchase programs and the declaration and payment of dividends are in the best interests of VF’s shareholders and are in compliance with all laws and agreements applicable to the repurchase and dividend programs. Our cash dividend payments may change from time to time, and we cannot provide assurance that we will increase our cash dividend payment or declare cash dividends in any particular amount or at all. A reduction in the amount or suspension of our cash dividend payments or a reduction in the level or discontinuation of our share repurchases could have a negative effect on VF’s stock price.
VF is required to comply with certain financial and other restrictive debt covenants in its debt documents. These restrictions, in combination with our leveraged condition, may make it more difficult for us to successfully execute our business strategy, grow our business or compete with companies not similarly restricted, and we cannot assure that we will be able to comply with our financial or other covenants or that any covenant violations would be waived in the future. Failure by VF to comply with these covenants could result in an event of default that, if not cured or waived, could have a material adverse effect on VF if the lenders declare any outstanding obligations to be immediately due and payable, suspend commitments to make any advances, or require any outstanding letters of credit to be collateralized by an interest bearing cash account, any or all of which could adversely affect our business, financial condition, and results of operations.
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VF is subject to the risk that its licensees may not generate expected sales or maintain the value of VF’s brands.
During Fiscal 2026, $49.7 million of VF’s revenues were derived from licensing royalties. Although VF generally has significant control over its licensees’ products and advertising, we rely on our licensees for, among other things, operational and financial controls over their businesses. Failure of our licensees to successfully market licensed products or our inability to replace existing licensees, if necessary, could adversely affect VF’s revenues, both directly from reduced royalties received and indirectly from reduced sales of our other products. Risks are also associated with a licensee’s ability to:
• obtain capital;
• manage its labor relations;
• maintain relationships with its suppliers;
• manage its credit risk effectively;
• maintain relationships with its customers; and
• adhere to VF’s Global Compliance Principles.
In addition, VF relies on its licensees to help preserve the value of its brands. Although we attempt to protect VF’s brands through approval rights over design, production processes, quality, packaging, merchandising, distribution, advertising and promotion of our licensed products, we cannot completely control the use of licensed VF brands by our licensees. The misuse of a brand by a licensee, including through the marketing of products under one of our brand names that do not meet our quality standards, could have a material adverse effect on that brand and on VF.
Volatility in securities markets, interest rates and other economic factors could substantially increase VF’s defined benefit pension costs.
VF currently has obligations under its defined benefit pension plans. The funded status of the pension plans is dependent on many factors, including returns on invested assets and the discount rates used to determine pension obligations. Unfavorable impacts from returns on plan assets, changes in discount rates, changes in plan demographics or revisions in the applicable laws or regulations could materially change the timing and amount of pension funding requirements, which could reduce cash available for VF’s business.
VF’s operating performance also may be negatively impacted by the amount of expense recorded for its pension plans. Pension expense is calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic
and demographic conditions. Differences between estimated and actual results give rise to gains and losses that are deferred and amortized as part of future pension expense, which can create volatility that adversely impacts VF’s future operating results.
In May 2025 VF executed a resolution to terminate VF's U.S. qualified defined benefit pension plan, which is frozen and no longer accrues benefits. In February 2026, VF completed the termination of the plan through a combination of lump-sum payments to eligible participants and the purchase of group annuity contracts to settle the remaining benefit obligations.
The spin-off of Kontoor Brands, Inc. could result in substantial tax liability to us and our shareholders.
We received opinions of tax advisors substantially to the effect that, for U.S. Federal income tax purposes, the May 22, 2019 spin-off of our Jeans business, Kontoor Brands, Inc. (“Kontoor Brands”) and certain related transactions qualify for tax-free treatment under certain sections of the Internal Revenue Code. However, if the factual assumptions or representations made by us in connection with the delivery of the opinions are inaccurate or incomplete in any material respect, including those relating to the past and future conduct of our business, we will not be able to rely on the opinions. Furthermore, the opinions are not binding on the IRS or the courts. If, notwithstanding receipt of the opinions, the spin-off transaction and certain related transactions are determined to be taxable, we would be subject to a substantial tax liability. In addition, if the spin-off transaction is taxable, each holder of our common stock who received shares of Kontoor Brands in connection with the spin-off would generally be treated as receiving a taxable distribution of property in an amount equal to the fair market value of the shares received.
Even if the spin-off otherwise qualifies as a tax-free transaction, the distribution would be taxable to us (but not to our shareholders) in certain circumstances if future significant acquisitions of our stock or the stock of Kontoor Brands are deemed to be part of a plan or series of related transactions that included the spin-off. In this event, the resulting tax liability could be substantial. In connection with the spin-off, we entered into a tax matters agreement with Kontoor Brands, pursuant to which Kontoor Brands agreed to not enter into any transaction that could cause any portion of the spin-off to be taxable to us without our consent and to indemnify us for any tax liability resulting from any such transaction. In addition, these potential tax liabilities may discourage, delay or prevent a change of control of us.
GENERAL RISKS
Regional epidemics or global pandemics may materially and adversely affect our business, financial condition and results of operations.
Public health crises, such as the COVID-19 global pandemic have, and may in the future, adversely affect our business, financial condition and results of operations. A significant outbreak or resurgence of infectious disease in countries and territories where we operate and where our employees, suppliers, third-party service providers, consumers or customers are located could result in significant reductions in demand and significant volatility in demand for our products by
consumers and customers, resulting in reduced orders, order cancellations, lower revenues, higher discounts, increased inventories, decreased value of inventories and lower gross margins. We may be negatively impacted by significant uncertainty and turmoil in global economic and financial market conditions causing, among other things: decreased consumer confidence and decreased consumer spending, inability to access financing in the credit and capital markets (including the commercial paper market) at reasonable rates (or at all), increased exposure to fluctuations in foreign currency exchange rates relative to the U.S. Dollar, and volatility in the availability and prices for commodities and raw materials we use for our
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products and in our supply chain. We may fail to meet our consumers’ and customers’ needs for inventory production and fulfillment due to disruptions in our supply chain and increased costs associated with mitigating the effects of a pandemic.
These impacts have placed, and could continue to place, limitations on our ability to execute our business plan and
materially and adversely affect our business, financial condition and results of operations. Measures to contain a global pandemic may exacerbate other risks discussed in this “Risk Factors” section, any of which could have a material effect on us.
BASIS OF PRESENTATION
VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. All references to the years ended March 2026 (“Fiscal 2026”), March 2025 (“Fiscal 2025”) and March 2024 (“Fiscal 2024”) relate to the 52-week fiscal years ended March 28, 2026, March 29, 2025, and March 30, 2024, respectively.
The following discussion and analysis focuses on our financial results for the years ended March 2026 and 2025 and year-to-year comparisons between these years. A discussion of our results of operations for the year ended March 2025 compared to the year ended March 2024 is included in Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 29, 2025 , filed with the SEC on May 22, 2025, and is incorporated by reference into this Form 10-K.
All per share amounts are presented on a diluted basis. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
References to the year ended March 2026 foreign currency amounts and impacts below reflect the changes in foreign
exchange rates from the year ended March 2025 when translating foreign currencies into U.S. dollars. VF’s most significant foreign currency exposure relates to business conducted in euro-based countries. Additionally, VF conducts business in other developed and emerging markets around the world with exposure to foreign currencies other than the euro.
On September 15, 2025, VF entered into a definitive agreement with Bluestar Alliance LLC to sell the Dickies ® brand business (“Dickies”). On November 12, 2025 , VF completed the sale of Dick ies. All references to the impact of Dickies divestiture below represent the difference between Dickies revenue recognized in the third quarter of Fiscal 2026 (through the date of sale) and the amount of Dickies revenue recognized in the third and fourth quarters of Fiscal 2025. The Company determined that the sale of Dickies did not represent a strategic shift that would have a major effect on the Company's operations and financial results, and therefore did not qualify for presentation as a discontinued operation. Refer to Note 3 to VF's consolidated financial statements for additional information on the divestiture.
In the first quarter of Fiscal 2026, VF realigned its reportable segments to reflect a change in how the Timberland ® brand is
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managed and the chief operating decision maker's key areas of focus. VF began managing its Timberland ® and Timberland PRO ® brands as one operating segment during the first quarter of Fiscal 2026. This operating segment has been aggregated with The North Face ® brand in the Outdoor reportable segment and the Vans ® , Kipling ® , Eastpak ® and Jansport ® brands have been aggregated in the Active reportable segment. All other brands that have not been aggregated within the reportable segments described above, which do not meet the quantitative threshold to be disclosed as a separate reportable segment, have been grouped within an “ All Other ” category. This group includes the following brands: Dickies ® (through the date of sale), Altra ® , Smartwool ® , Napapijri ® and Icebreaker ® . In the tables below, the Company has recast historical financial information to reflect the new reportable segments. These changes had no impact on previously reported consolidated results of operations. Refer to additional discussion in the “Information by Reportable Segment” section below and Note 21 to VF's consolidated financial statements.
On July 16, 2024, VF entered into a definitive Stock and Asset Purchase Agreement with EssilorLuxottica S.A. to sell the
Supreme ® brand business (“Supreme”). On October 1, 2024, VF completed the sale of Supreme. During the second quarter of Fiscal 2025, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria. Accordingly, VF has reported the results of Supreme and the related cash flows as discontinued operations in the Consolidated Financial Statements, through the date of sale. These changes have been applied to all periods presented. In addition, interest expense and the related interest rate swap impact for the delayed draw Term Loan (“DDTL”), which totaled $31.1 million for the year ended March 2025, were allocated to discontinued operations due to the requirement within the DDTL Agreement, as amended, that the DDTL be prepaid upon the receipt of the net cash proceeds from the sale of Supreme. Refer to Note 3 to VF’s consolidated financial statements for additional information on discontinued operations.
Unless otherwise noted, amounts, percentages and discussion for all periods included below reflect the results of operations and financial condition from VF’s continuing operations.
RECENT DEVELOPMENTS
Conflict in the Middle East
The conflict in the Middle East, which began during the fourth quarter of Fiscal 2026, has contributed to heightened geopolitical uncertainty, including impacts to global supply chains and increased fuel and oil costs. These and other factors may lead to broader macroeconomic implications, such as decreased consumer spending. While the length, scope and intensity of the conflict is unknown, VF does not believe the impact will be material, but will continue to monitor the evolving macroeconomic environment and its ability to mitigate the impact on VF's business, financial condition and results of operations.
Dickies Divestiture
As noted above, VF completed the sale of Dickies on November 12, 2025. In connection with the closing of the transaction, VF received proceeds of $600.5 million, net of cash sold. VF recorded a final pre-tax gain of $127.2 million in the year ended March 2026, which included a reduction to the gain to reflect final working capital adjustments of $11.9 million in the fourth quarter of Fiscal 2026, which will be paid in Fiscal 2027. The pre-tax gain is included in the other income (expense), net line item in the Consolidated Statement of Operations for the year ended March 2026 .
Impact of Tariffs
In April 2025, the U.S. government announced broad-based, reciprocal tariffs on foreign imports under the International Emergency Economic Power Act ( “ IEEPA ” ). In February 2026, the U.S. Supreme Court invalidated tariffs imposed under the IEEPA. Immediately following the IEEPA ruling, the U.S. government imposed additional new tariffs under other statutory authorities, resulting in a rapidly evolving tariff environment.
VF paid tariffs totaling $149.7 million imposed under IEEPA, and on February 20, 2026 the U.S. Supreme Court ruled that these tariffs were deemed invalid. Further, on March 4, 2026, the Court of International Trade ruled that U.S. Customs and Border
Protection ( “ CBP ” ) must refund IEEPA tariffs that were collected, with interest. As a result, VF recorded a tariff refund receivable of $149.7 million related to tariffs paid under IEEPA from April 2025 until February 20, 2026. Interest is not included due to the uncertainty of the amount but is not believed to be material. On April 20, 2026, approximately $57 million of IEEPA entries were submitted for refund processing. Submission and processing of the remaining IEEPA tariffs is subject to finalization of the process for the next phase of refunds by CBP. VF will re-evaluate its assessment at each reporting period based on any new information.
The tariff refund receivable is included in the accounts receivable, net line item in the Consolidated Balance Sheet as of March 2026. For the year ended March 2026, VF recognized $93.8 million as a reduction to cost of goods sold. As of March 2026, $55.9 million is recorded as a reduction to inventory and will be recognized as a decrease in cost of goods sold as the inventory turns.
Also, VF recorded a liability of $37.6 million as of March 2026, reflecting the portion of the refund that VF has committed to reimburse certain vendors and partners, which is included in the accounts payable line item in the Consolidated Balance Sheet. For the year ended March 2026, VF recognized $22.7 million as an increase to cost of goods sold and $14.9 million as an increase to inventory. Amounts that are deferred into inventory will be recognized as an increase in the cost of goods sold as the inventory turns. Reimbursements will not be made to vendors and partners until after collection of the applicable IEEPA refunds.
VF has a diversified sourcing country mix. Approximately 85% of products purchased for sale in the U.S. are sourced through Southeast Asia and Central and South America, with Vietnam, Bangladesh, Cambodia and Indonesia comprising the top four sourcing markets. Less than 2% of total U.S. products are sourced through China.
While the tariff situation is dynamic and evolving, VF continues to analyze the impact of tariffs on our business and has taken steps
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to mitigate our tariff exposure. Mitigation strategies have included, and may continue to include, sourcing optimization, accelerating production and shipments into the U.S., negotiations with our vendors and tactical price increases. The duration and scope of the tariffs are difficult to predict, along with the extent to which VF will be able to offset the impact through our mitigation efforts. VF will continue to monitor and evaluate new information as it becomes available.
Reinvent
On October 30, 2023, VF introduced Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential. The first announced steps in this transformation covered the following priorities: improve North America results, deliver the Vans ® turnaround, reduce costs and strengthen the balance sheet.
In Fiscal 2025, the Company initiated the second phase of Reinvent, which is focused on a return to growth and improvements to profitability. In doing so, the Company initiated a set of transformational workstreams focused on revenue growth, margin expansion and selling, general and
administrative expense contraction. VF aims to generate between $500.0 and $600.0 million in net operating income expansion in Fiscal 2028 compared to the end of Fiscal 2024.
Reinvent restructuring charges in the year ended March 2026 were $14.9 million and cumulative charges were $205.0 million since the inception of the program, which primarily included costs associated with severance and employee-related benefits and the impact of asset impairments and write-downs.
All restructuring actions related to Reinvent were substantially complete at the end of the first quarter of Fiscal 2026. In addition, as further discussed in Note 24 to VF's consolidated financial statements, VF has entered into a contract with a consulting firm to support Reinvent. Fees related to the contract consist of fixed fees for services performed and contingent fees tied to increases in VF’s stock price. Services provided under the contract were substantially complete by the end of the third quarter of Fiscal 2026 and contingent fees tied to increases in VF’s stock price will be measured through June 2027.
For additional information regarding recent developments, see “Item 1A. Risk Factors. ”
SUMMARY OF THE YEAR ENDED MARCH 2026
• Revenues increased 1% to $9.6 billion compared to the year ended March 2025, including a 3% favorable impact from foreign currency.
• Outdoor segm ent revenues increased 8% to $5.7 billion compared to the year ended March 2025, including a 3% favorable impact from foreign currency.
• Active segment revenues decreased 7% to $2.7 billion compared to the year ended March 2025, including a 2% favorable impact from foreign currency.
• Wholesale rev enues increased 1% compared to the year ended March 2025, including a 3% favorable impact from foreign currency.
• Direct-to-consumer revenues increased 2% compared to the year ended March 2025, including a 3% favorable impact from foreign currency.
• International revenues increased 2% compared to the year ended March 2025, including a 5% favorable impact from foreign currency.
• Revenues in the Americas region remained flat compar ed to the year ended March 2025.
• Gross margin increased 130 basis points to 54.8% in t he year ended March 2026 compared to the year ended March 2025, primarily driven by higher quality inventory, lower product costs, increased pricing and favorable foreign currency impacts.
• Earnings per share was $0.64 in the year ended March 2026 compared to $0.18 in the year ended March 2025. The increase i n earnings per share was primarily driven by the $127.2 million gain related to the Dickies divestiture, lower Reinvent charges, lower impairment charges and increased profitability in the Outdoor segment during the year ended March 2026 compared to the year ended March 2025. The increase was partially offset by $217.2 million of pension settlement charges and excise taxes related to the termination of the U.S. qualified pension plan in the year ended March 2026.
ANALYSIS OF RESULTS OF OPERATIONS
Consolidated Statements of Operations
The following table presents a summary of the changes in revenues for the year ended March 2026 compared to the year ended March 2025:
(In millions)
Year Ended March
Revenues — 2025
Organic
Impact of Dickies divestiture
Impact of foreign currency
Revenues — 2026
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Year Ended March 2026 Compared to Year Ended March 2025
VF reported a 1% increase in r even ues in Fiscal 2026 compared to Fiscal 2025, including a 3% favorable impact from foreign currency. I ncreases in the Outdoor segment in Fiscal 2026 and favorable impacts from foreign currency were partially offset by decreases in the Active segment and decreased rev enue due to the Dickies divestiture in the current year. In Fiscal 2026 ,
revenue increases in the Europe region, including favorable impacts from foreign currency, were partially offset by decreases in the Asia-Pacific region.
Additional details on revenues are provided in the section titled “Information by Reportable Segment”.
The following table presents the percentage relationship to revenues for components of the Consolidated Statements of Operations:
Year Ended March
Gross margin (revenues less cost of goods sold)
Selling, general and administrative expenses
Impairment of goodwill and intangible assets
Operating margin
Note: Amounts may not sum due to rounding.
Year Ended March 2026 Compared to Year Ended March 2025
Gross margin increased 130 basis points to 54.8% in Fiscal 2026 compared to 53.5% in Fiscal 2025. The increase i n gross margin in Fiscal 2026 was primarily driven by higher quality inventory, lower product costs, increased pricing and favorable foreign currency impacts.
Selling, general and administrative expenses as a percentage of revenues decreased 90 basis points ($36.4 million) in Fiscal 2026 comp ared to Fiscal 2025. The decrease was primarily due to cost savings from Reinvent, including lower information technology costs, partially offset by increased advertising costs in Fiscal 2026 and gains recognized from sale leaseback transactions in Fiscal 2025. The decrease was also due to lower Reinvent restructuring charges and project-related costs in Fiscal 2026 .
During the year ended March 2026 , VF recorde d a goodwill impairment charge of $30.7 million related to the Napapijri reporting unit. During the third quarter of Fiscal 2026, due to a recent downward revision in the Napapijri forward-looking financial projections, the Company determined that a triggering event had occurred requiring impairment testing of the Napapijri reporting unit goodwill and indefinite-lived trademark i ntangible asset. Recent leadership changes within the brand have resulted in strategic actions that are projected to deliver short- to medium-term revenue and profit reductions to support long-term growth of the brand. The goodwill impairment primarily related to the reduction in financial projections for Napapijri.
During the year ended March 2025, VF recorde d goodwill and intangible asset impairment charges of $89.2 million related to the Dickies indefinite-lived trademark intangible asset and Icebreaker reporting unit. During the third quarter of Fiscal 2025, VF determined that a triggering event had occurred requiring a quantitative analysis of the Dickies indefinite-lived trademark intangible asset, and as a result of the impairment testing performed, VF recorded an indefinite-lived trademark intangible asset impairment charge of $51.0 million . As a result of VF's annual impairment testing as of the beginning of the fourth quarter of Fiscal 2025, VF recorded a goodwill impairment charge of $38.2 million related t o the Icebreaker reporting unit.
In Fiscal 2026, operati ng margin increased to 6.0% from 3.2% in Fiscal 2025, primarily due to the items described above.
N et interest expense remained relatively flat in Fiscal 2026, compared to Fiscal 2025 , as unfavorable foreign currency impacts were offset by the March 2025 early redemption of $750.0 million in aggregate principal amount of its outstanding 2.400% Senior Notes due in April 2025. T otal outstanding interest-bearing debt averaged $4.5 billion and $5.0 billion for Fiscal 2026 and Fiscal 2025, respectively, with short-term borrowings represent ing 6.2% and 4.1% of average debt outstanding for the respective years. The weighted average interest rate on outstanding debt was 3.2% in both Fiscal 2026 and Fiscal 2025 .
Other income (expense), net primarily consists of components of net periodic pension cost (excluding the service cost component), certain foreign currency and hedging gains and losses and other non-operating gains and losses. Other income (expense) netted to ($86.6) million and ($9.4) million in Fiscal 2026 and Fiscal 2025, respectively. Other income (expense), net in Fiscal 2026 included non-cash pension settlement charges of $192.1 million related to the termination of the U.S. qualified plan and $25.1 million of excise taxes related to the termination . Other income (expense), net also included t he final pre-tax gain on the sale of Dickies of $127.2 million. O ther income (expense), net in Fiscal 2025 primarily includ ed equity investment impairments of $15.6 million, cyber insurance recoveries of $13.7 million received in Fiscal 2025, $4.2 million of net periodic pension cost and $2.3 million of foreign currency and hedging losses.
T he effective income tax rate was 25.3% in Fiscal 2026 compared to 52.2% in Fiscal 2025. The Fiscal 2026 effective income tax rate included a net discrete tax benefit of $5.5 million, which included a $44.4 million net tax benefit related to unrecognized tax benefits and interest, a $12.4 million tax expense related to stock compensation, a $16.0 million tax expense related to return to accrual adjustments, and a $10.6 million net tax expense related to other audit adjustments. Refer to Note 20 to VF's consolidated financial statements for additional information. The $5.5 million net discrete tax benefit in Fiscal 2026 decreased the effective income tax rate by 1.6% compared to an unfavorable 13.4% impact of discrete items for Fiscal 2025. Excluding discrete items, the effective tax rate during Fiscal
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2026 decreased by approximately 12.0% primarily due to jurisdictional mix of earnings.
As a result of the above, income from continuing operations in Fiscal 2026 was $254.9 million ($0.64 p er diluted share),
compared to $69.3 million ($0.18 per diluted share) in Fiscal 2025.
Refer to additional discussion in the “Information by Reportable Segment” section below.
Information by Reportable Segment
As discussed above, VF realigned its reportable segments during the first quarter of Fiscal 2026. VF's new reportable segments are Outdoor and Active. We have included an “All Other ” category in the revenues table below for purposes of reconciliation of total revenues. “All Other ” includes the following brands: Dickies ® (through the date of sale), Altra ® , Smartwool ® , Napapijri ® and Icebreaker ® , which do not meet the quantitative threshold to be disclosed as a separate reportable segment. The Company has recast historical financial information to reflect the new reportable segments. These changes had no impact on previously reported consolidated results of operations.
The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit. Segment profit comprises the operating income and other income (expense), net line items of each segment.
Refer to Note 21 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income (loss) from continuing operations before income taxes.
Year Ended March 2026 Compared to Year Ended March 2025
The following tables present a summary of the changes in revenues and segment profit in the year ended March 2026 compared to the year ended March 2025 and revenues by region for our Top 3 brands for the years ended March 2026 and 2025:
Revenues:
Year Ended March
(In millions)
Outdoor Segment
Active Segment
All Other
Total
Revenues — 2025
Organic
Impact of Dickies divestiture
Impact of foreign currency
Revenues — 2026
Note: Amounts may not sum due to rounding.
Segment Profit:
Year Ended March
(In millions)
Outdoor Segment
Active Segment
Total
Segment profit — 2025
Organic
Impact of foreign currency
Segment profit — 2026
Note: Amounts may not sum due to rounding.
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Top Brand Revenues:
Year Ended March 2026
(In millions)
The North Face ®
Vans ®
Timberland ®
Total
Americas
Europe
Asia-Pacific
Global
Year Ended March 2025
(In millions)
The North Face ®
Vans ®
Timberland ®
Total
Americas
Europe
Asia-Pacific
Global
Note: Amounts may not sum due to rounding.
The following sections discuss the changes in revenues and profitability by segment. For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.
Outdoor Segment
Year Ended March
(Dollars in millions)
Percent Change
Segment revenues
Segment profit
Segment profit margin
The Outdoor segment includes the following brands: The North Face ® and Timberland ® .
Year Ended March 2026 Compared to Year Ended March 2025
Global revenues for Out door increased 8% in Fiscal 2026 compared to Fiscal 2025, including a 3% favorable im pact from foreign currency. Revenues in the Americas region increased 9% in Fiscal 2026. Revenues in the Europe region increased 9%, including an 8% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 5% in Fiscal 2026, including a 2% favorable impact from foreign currency.
Global revenues for The North Face ® brand increased 8% in Fiscal 2026, including a 3% favorable impact from foreign currency. Revenue growth in Fiscal 2026 was primarily driven by growth in the Americas and Europe regions. Revenues in the Americas region increased 9% in Fiscal 2026. Revenues in the Europe region increased 8% in Fiscal 2026, including a 7% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 7% in Fiscal 2026, including a 2% favorable impact from foreign currency.
Global revenues for the Timberlan d ® brand increased 8% in Fiscal 2026, including a 3% favorable impact from foreign currency, driven by growth in the Americas and Europe regions. Revenues in the Americas region increased 10% in Fiscal 2026,
including a 1% favorable impact from foreign currency. Revenues in the Europe region increased 10% in Fiscal 2026, including an 8% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 3% in Fiscal 2026, including a 1% favorable impact from for eign currency.
Glob al direct-to-consumer revenues for Outdoor increased 8% in Fiscal 2026, including a 3% favorable impact from for eign currency. The increase was driven by growth in The North Face ® and Timberland ® brands across all regions. Global wholesale revenues increased 8% in Fiscal 2026, including a 3% favorable impact from foreign currency. The increase was primarily driven by increases in The North Face ® brand across all regions and increases in the Timberland ® brand in the Americas and Europe regions.
Segment profit margin increased in Fiscal 2026 compared to Fiscal 2025 , reflecting higher gross margin from lower product costs, increased pricing and favorable foreign currency impacts, partially offset by increased direct-to-consumer and advertising costs .
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Active Segment
Year Ended March
(Dollars in millions)
Percent Change
Segment revenues
Segment profit
Segment profit margin
The Active segment includes the following brands: Vans ® , Kipling ® , Eastpak ® and JanSport ® .
Year Ended March 2026 Compared to Year Ended March 2025
Global revenues for Active decreased 7% in Fiscal 2026 compared to Fiscal 2025, including a 2% favorable impact from foreign currency. Revenues in the Americas region decreased 7% in Fiscal 2026, including a 1% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 14% in Fiscal 2026, including a 1% favorable impact from foreign currency. Revenues in the Europe region decreased 3% in Fiscal 2026, including a 6% favorable impact from foreign currency.
Vans ® brand global revenues decreased 9% in Fiscal 2026, including a 2% favorable impact from foreign currency. The overall decline in Fiscal 2026 was most significantly driven by a 7% decrease in the Americas region, including a 1% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 19% in Fiscal 2026, including a 1% favorable impact from foreign currency. Revenues in the Europe region decreased 7% in Fiscal 2026, including a 6% favorable impact from foreign currency. The declines i n Vans ® revenues in Fiscal
2026 were partially attribute d to deliberate strategic actions, including exiting value-channel wholesale customers and closingunprofitable owned retail stores in the Americas region, and reducing wholesale store fronts in the Asia-Pacific region.
Global direct-to-consumer revenues for Active decreased 7% in Fiscal 2026, including a 1% favorable impact from foreign currency. The decrease was primarily due to declines in the Vans ® brand in the Americas region . Global wholesale revenues for Active decreased 6% in Fiscal 2026, including a 3% favorable impact from foreign currency. T he decrease was primarily due to a decrease in the Vans ® brand in the Americas region.
Segment profit marg in decreased in Fiscal 2026 compared to Fiscal 2025, primarily due to lower gross margin, which was driven by product mix, and lower lev erage of operating expenses due to decreased revenues.
All Other
Year Ended March
(Dollars in millions)
Percent Change
Revenues
The “All Other ” grouping includes the following brands: Dickies ® (through the date of sale), Altra ® , Smartwool ® , Napapijri ® and Icebreaker ® . The “All Other ” grouping represents the aggregation of brands that do not meet the quantitative threshold for disclosure and it is not a reportable segment.
Year Ended March 2026 Compared to Year Ended March 2025
Global “All Ot her” revenues decreased 11% in Fiscal 2026 compared to Fiscal 2025, including a 2% favorable impact fro m foreign currency. Revenues in the Americas region decreased 13% in Fiscal 2026. Revenues in the Asia -Pacific region decreased 21%, including a 1% favorable impact from foreign currency. Revenues in the Europe region decreased 5%, including a 6% favorable impact from foreign currency.
Revenues were impacted by the sale of Dickies on November 12, 2025. Excluding the impact of the Dickies divestiture, global “All
Ot her” revenues increased 8% in Fiscal 2026, compared to Fiscal 2025, including a 3% favorable impact from foreign currency. Excluding the impact of the Dickies divestiture, revenues in the Americas region increased 9% and revenues in the Europe region increased 6%, including a 7% favorable impact from foreign currency. Excluding the impact of the Dickies divestiture, revenues in the Asia -Pacific region increased 8% in Fiscal 2026, including a 1% favorable impact from foreign currency.
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Reconciliation of Segment Profit to Income From Continuing Operations Before Income Taxes
There are four types of costs necessary to reconcile total segment profit to consolidated income from continuing operations before income taxes. These costs are (i) impairment of goodwill and intangible assets, which is excluded from segment profit because these costs are not part of the ongoing operations of the respective businesses, (ii) corporate and other expenses, which are excluded from segment profit to the extent they are not allocated to the segments, (iii) interest expense, net, which is excluded from segment profit because substantially all financing costs are managed at the corporate office and are not
under the control of segment management and (iv) profit related to the “All Other” category, which includes the following brands: Dickies ® (through the date of sale), Altra ® , Smartwool ® , Napapijri ® and Icebreaker ® . The “All Other ” grouping represents the aggregation of brands that do not meet the quantitative threshold for disclosure and it is not a reportable segment. Impairment of goodwill and intangible assets and net interest expense are discussed in the “Consolidated Statements of Operations” section, and corporate and other expenses and profit related to the “All Other” category are discussed below.
Year Ended March
(In millions)
Percent Change
Impairment of goodwill and intangible assets
Corporate and other expenses
Interest expense, net
“All Other” profit
Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses.
Information Systems and Shared Services
These costs include management information systems and the centralized finance, supply chain and human resources functions that support worldwide operations. The costs also include software system implementations and upgrades and other strategic projects. Operating costs of information systems and shared services are charged to the segments based on utilization of those services. Costs to develop new software and related applications are generally not allocated to the segments.
Corporate Headquarters’ Costs
Headquarters’ costs include compensation and benefits of corporate management and staff, legal and professional fees, and general and administrative expenses that have not been allocated to the segments.
Other
This category includes (i) costs of corporate programs or corporate-managed decisions that are not allocated to the segments, (ii) costs of registering, maintaining and enforcing certain of VF’s trademarks, and (iii) miscellaneous consolidated activities, the most significant of which is related to VF’s centrally-managed U.S. defined benefit pension plans.
Corporate and other expenses decreased $34.9 million in Fiscal 2026 when compared to Fiscal 2025. The decrease was primarily due to the final pre-tax gain on the sale of Dickies of $127.2 million, cost savings from Reinvent, lower Reinvent restructuring charges and project-related costs, lower information technology costs and no equity investment impairments compared to prior year. The decrease was partially offset by pension settlement charges of $192.1 million and excise taxes of $25.1 million related to the termination of the U.S. qualified plan in Fiscal 2026 .
Th e increase in “All Other” profit for the year ended March 2026 was primarily d ue to higher gross margin, driven by higher quality inventory, partia lly offset by lower gross profit related to Dickies.
International
International revenues increased 2% in Fiscal 2026 compared to Fiscal 2025. Foreign currency had a favorable impact of 5% on international revenues in Fiscal 2026.
Revenues in the Europe region increased 4% in Fiscal 2026, including a 7% favorable impact from fo reign currency . Revenues in the Americas (non -U.S.) region increased 4% in Fiscal 2026, including a 2% favorable impact from foreign
currency. In the Asia-Pacific region, revenues decreased 1% in Fiscal 2026, including a 2% favorable imp act from foreign currency . Revenues in Greater China (which includes Mainland China, Hong Kong and Taiwan) decreased 2% in Fiscal 2026, including a 2% favorable impact from foreign currency.
International revenues were 56% of total VF revenues in Fiscal 2026 compared to 55% in Fiscal 2025.
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Direct-to-Consumer
Direct-to-consumer revenues increased 2% in Fiscal 2026 compared to Fiscal 2025, including a 3% favorable impact from foreign currency.
VF's e-commerce business increased 4% in Fiscal 2026, including a 3% favorable impact from for eign currency . The increase was primarily due to increased e-commerce revenues in the Americas region.
Revenues from VF-operated retail stores decreased 1% in Fiscal 2026, including a 2% favorable impact from foreign currency,
primarily due to a decrease in the Americas region. VF opened 61 stores in Fiscal 2026, bringing the total number of VF-owned retail stores to 1,080 at March 2026, which also reflects 108 store closures (including stores related to the Dickies divestiture) d uring the period. There were 1,127 VF-owned retail stores at March 2025. Direct-to-consumer revenues w ere 44% of total VF revenues in both Fiscal 2026 and Fiscal 2025.
Wholesale
Wholesale revenues increased 1% in Fiscal 2026 compared to Fiscal 2025, including a 3% favorable impact from for eign currency. The results were primarily driven by revenue increases in the wholesale business in the Europe region,
including favorable impacts from foreign currency, partially offset by a decrease in the Americas region. Wholesale revenues were 56% of total revenues in both Fiscal 2026 and Fiscal 2025.
ANALYSIS OF FINANCIAL CONDITION
Consolidated Balance Sheets
The following discussion refers to significant changes in balances at March 2026 compared to March 2025:
• Increase in accounts receivable — primarily due to a tariff refund receivable of $149.7 million , partially offset by the removal of Dickies from the Consolidated Balance Sheet in connection with the completed divestiture in the third quarter of Fiscal 2026. Dickies' accounts receivable balance at March 2025 was $116.9 million. The increase was also due to the timing of collections.
• Decrease in inventories — primarily due to the removal of Dickies from the Consolidated Balance Sheet in connection with the completed divestiture in the third
quarter of Fiscal 2026. Dickies' inventory balance at March 2025 was $134.2 million. The decrease was also due to foreign currency fluctuations and VF reducing the level of slow-moving and excess inventory.
• Decrease in intangible assets — primarily due to the removal of Dickies from the Consolidated Balance Sheet in connection with the completed divestiture in the third quarter of Fiscal 2026.
• Decrease in current portion of long-term debt — due to the early redemption of €500.0 million ( $582.2 million ) of long-term notes due in March 2026.
Liquidity and Cash Flows
We consider the following to be measures of our liquidity and capital resources:
(Dollars in millions)
March 2026
March 2025
Working capital
Current ratio
Net debt to total capital
The increase in working capital and the current ratio at March 2026 compared to March 2025 was primarily due to a net decrease in current liabilities driven by decreased current portion of long-term debt as discussed in the “Consolidated Balance Sheets” section above. The increase in working capital and the current ratio was also due to a net increase in current assets driven by higher cash balances and higher accounts receivables, partially offset by a decrease in inventories, as discussed in the “Consolidated Balance Sheets” section above.
For the ratio of net debt to total capital, net debt is defined as short-term borrowings, current portion of long-term debt and long-term debt, in ad dition to operating lease liabilities, net of unrestricted cash and cash equivalents. Total capital is defined
as net debt plus stockholders’ equity. The decrease in the net debt to total capital ratio at March 2026 compared to March 2025 was primarily driven by a decrease in net debt due to the early redemption of €500.0 million ($582.2 million) of long-term notes in February 2026, as discussed in the “Consolidated Balance Sheets” section above and higher cash and cash equivalents at March 2026. The decrease in the net debt to total capital ratio at March 2026 compared to March 2025 was also due to an increase in stockholders' equity, primarily driven by net income in the period.
VF’s primary source of liquidity is its expected annual cash flow from operating activities. Cash from operations is typically lower in the first half of the calendar year as inventory builds to
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support peak sales periods in the second half of the calendar year. Cash provided by operating activities in the second half of the calendar year is substantially higher as inventories are sold and accounts receivable are collected. Additionally, direct-to-consumer sales are highest in the fourth quarter of the calendar
year. VF's additional sources of liquidity include available borrowing capacity against its $1.5 billion secured asset based revolving credit facility (the “ ABL Credit Facility ” ) , available cash balances and international lines of credit.
In summary, our cash flows from continuing operations were as follows:
Year Ended March
(In millions)
Cash provided by operating activities
Cash provided by investing activities
Cash used by financing activities
Cash Provided by Operating Activities
Cash flows related to operating activities are dependent on income (loss) from continuing operations, adjustments to income (loss) from continuing operations and changes in working capital. The increase in cash provided by operating activities in Fiscal 2026 compared to Fiscal 2025 was primarily due to an increase in income from continuing operations, excluding non-cash charges and the final gain on the sale of Dickies, and the pension termination asset reversion, net of $125.4 million, partially offset by an increase in net cash used by working capital and the excise tax related to the pension termination asset reversion.
Cash Provided by Investing Activities
The decrease in cash provided by investing activities in Fiscal 2026 compared to Fiscal 2025 was primarily due to proceeds from the sale of Supreme, net of cash sold, of $1.506 billion in the prior year period compared to proceeds from the sale of Dickies, net of cash sold, of $600.5 million in Fiscal 2026. Fiscal 2025 also included proceeds from the sale of assets of $88.2 million, primarily related to a sale leaseback transaction of a distribution center, sale of an aircraft hangar, sale of a corporate-owned aircraft and sale of an office building.
Cash Used by Financing Activities
The decrease in cash used by financing activities in Fiscal 2026 compared to Fiscal 2025 was primarily due to a $1.0 billion prepayment of the DDTL and a $750.0 million early redemption of long-term debt in Fiscal 2025, compared to a €500.0 million ($582.2 million) early redemption of long-term debt in Fiscal 2026.
Share Repurchases
VF did not purchase shares of its Common Stock in the open market during Fiscal 2026 or Fiscal 2025 under the share repurchase program authorized by VF's Board of Directors.
As of the end of Fiscal 2026, VF had $2.5 billion remaining for future repurchases under its share repurchase authorization. VF's capital deployment priorities in the near-to-medium term will be focused on reducing leverage and reinvesting a portion of cost savings to drive profitable and sustainable growth.
ABL Credit Facility and Short-term Borrowings
VF relies on its ability to generate cash flows to finance its ongoing operations. In addition, VF has significant liquidity from
its available cash balances and credit facilities. On August 26, 2025, VF entered into a credit agreement that provides the Company with a $1.5 billion senior secured asset based revolving credit facility (the “ ABL Credit Facility ” ), subject to a borrowing base that is composed of eligible credit card receivables, eligible wholesale receivables, eligible inventory and eligible in-transit inventory. The ABL Credit Facility includes up to a $100.0 million letter of credit subfacility and a $100.0 million swing-line subfacility. Multicurrency borrowings are available under the credit agreement, including borrowings in U.S. dollars, Canadian dollars, euros, sterling, and Swiss francs (subject to certain limitations as set forth in the credit agreement).
The Agent, as defined in the credit agreement, has discretion to establish various reserves against the borrowing base, as outlined in the credit agreement, including a requirement for a Debt Maturity Reserve to be established beginning 90-days prior to the maturity of any Material Indebtedness, as defined in the credit agreement.
The ABL Credit Facility has a stated maturity date of August 26, 2030 and replaces VF's previous $2.25 billion senior unsecured revolving line of credit, dated November 24, 2021 (as amended, the “ Terminated Agreement ” ). Outstanding short-term balances may vary from period to period depending on the level of corporate requirements and operational needs.
The ABL Credit Facility contains various customary affirmative and negative covenants, which include, among other things, required financial reporting, limitations on indebtedness and granting certain liens, restrictions on fundamental changes to the business, restrictions on disposal of assets, restrictions on changes to the nature of the business, restrictions on prepayment of certain indebtedness, restricted payment limitations, along with other restrictions and limitations similar to those typical for credit facilities of this type. Certain actions restricted by the negative covenants are permitted so long as Payment Conditions, as defined in the credit agreement, are satisfied.
The ABL Credit Facility includes a financial covenant that requires VF to maintain a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 for the 12-month period ending on the last day of any applicable fiscal quarter. However, the financial covenant only applies if at any time Global Excess Availability (as defined in the credit agreement) is less than the greater of (i) 10.0% of the Global Line Cap (as defined in the credit agreement), and (ii) $100.0 million, and ceases to apply when Global Excess Availability has equaled or exceeded the greater of (i) 10.0% of
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the Global Line Cap, and (ii) $100.0 million for 30 consecutive days. As of March 2026, specified availability under the ABL Credit Faci lity exceeded the required threshold and, as a result, the financial covenant was not applicable.
The Company was in compliance with all applicable debt covenants as of March 2026.
VF had a global commercial paper program that allowed for borrowings of up to $2.25 billion to the extent that it had borrowing capacity under the Terminated Agreement . The U.S. commercial paper borrowing program was terminated as of May 2025 and the euro commercial paper borrowing program was terminated as of January 2025.
As of March 2026, the Company had no outstanding borrowings under the ABL Credit Facility. Reserves for outstanding, unfunded letters of credit under the ABL Credit Facility were $0.3 million as of March 2026. Availability under the ABL Credit Facility was $977.2 million as of March 2026, after giving effect to the borrowing base, outstanding borrowings and outstanding letters of credit.
VF h as $72.5 million of inte rnational lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks . Total outstanding balances under these arrangements were $10.1 million at March 2026. Borrowings under these arrangements had a weighted average interest rate of 46.3% at March 2026, related to borrowings in certain highly inflationary economies.
Additionally, VF had $823.9 million of unrestricted cash and cash equivalents at March 2026.
Redemption
On February 7, 2026, VF completed an early redemption of €500.0 million ($582.2 million) in aggregate principal amount of its outstanding 4.125% Senior Notes due March 2026. The redemption price was equal to 100% of the principal amount of the Notes to be redeemed.
Supply Chain Financing Program
VF facilitates a voluntary supply chain finance (“SCF”) program that enables a significant portion of our inventory suppliers to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier. The SCF program is
administered through third-party platforms that allow participating suppliers to track payments from VF and elect which receivables, if any, to sell to the financial institutions. The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable. The terms between VF and the supplier, including the amount due and scheduled payment terms (which are generally within 90 days of the invoice date) are not impacted by a supplier's participation in the SCF program. All amounts due to suppliers that are eligible to participate in the SCF program are included in the accounts payable line item in VF's Consolidated Balance Sheets and VF payments made under the SCF program are reflected in cash flows from operating activities in VF's Consolidated Statements of Cash Flows . At March 2026 and 2025 , the accounts payable line item in VF's Consolidated Balance Sheets included total outstanding obligations of $466.0 million and $481.7 million , respectively, due to suppliers that ar e eligible to participate in the SCF program.
Rating Agencies
At th e end of March 2026 , VF’s long-term debt ratings were 'BB’ by Standard & Poor’s (“S&P”) Global Ratings and 'Ba2' by Moody’s Investors Service (“Moody's”). VF's credit rating outlook was 'stable' by S&P and 'negative' by Moody's at the end of March 2026 . Further downgrades to VF's ratings would neg atively impact borrowing costs.
None of VF’s long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings. However, if there were a change in control of VF and, as a result of the change in control the notes were rated below investment grade by recognized rating agencies, then VF would be obligated to repurchase the notes at 101% of the aggregate principal amount, plus any accrued and unpaid interest, if required by the respective holders of the notes. The change of control provision applies to all notes, except for the notes due in 2033.
Dividends
Cash dividends totaled $0.36 per share in both Fiscal 2026 and Fis cal 2025. The dividend payout ratio was 55.9% of diluted earnings (loss) per share in Fiscal 2026 compared to (74.5%) in Fiscal 2025. The Company declared a divide nd of $0.09 per share that is payable in the first quarter of Fiscal 2027. Subject to approval by its Board of Directors, VF intends to continue to pay quarterly dividends.
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Contractual Obligations
Following is a summary of VF’s material contractual obligations and commercial commitments at the end of March 2026 that will require the use of funds:
Payment Due or Forecasted by Fiscal Year
(In millions)
Total
Thereafter
Recorded liabilities:
Long-term debt (1)
Operating leases (2)
Unrecorded commitments:
Interest payment obligations (3)
Inventory obligations (4)
Note: Amounts may not sum due to rounding.
(1) Long-term debt consists of required undiscounted principal payments on long-term debt.
(2) Operating leases represent required undiscounted lease payments during the noncancelable lease term. Variable payments for occupancy-related costs, real estate taxes, insurance and contingent rent are not included above. In addit ion, approximately $103.4 million of leases (on an undiscounted basis) that have not yet commenced with terms of 2 to 12 years beginning primarily in Fiscal 2027 are not included above .
(3) Interest payment obligations represent required interest payments on long-term debt. Amounts exclude amortization of debt issuance costs, debt discounts and acquisition costs that would be included in interest expense in the consolidated financial statements.
(4) Inventory obligations represent binding commitments to purchase finished goods and raw materials that are payable upon VF taking ownership of the inventory. This obligation excludes the amount included in accounts payable at March 2026 related to inventory purchases.
VF had other financial commitments at the end of Fiscal 2026 that are not included in the above table but may require the use of funds under certain circumstances:
• $125.7 million of surety b onds, custom bonds, unfunded letters of credit and international bank guarantees are not included in the table above because they represent contingent guarantees of performance under self-insurance and other programs and would only be drawn upon if VF were to fail to meet its other obligations.
• Purchase orders for goods or services in the ordinary course of business are not included in the above table
because they represent authorizations to purchase rather than binding commitments.
Management believes that VF has sufficient liquidity and flexibility to operate its business and meet its current and long-term obligations as they become due.
VF does not participate in transactions with unconsolidated entities or financial partnerships that are reasonably likely to have a material impact on the Company.
Risk Management
VF is exposed to risks in the ordinary course of business. Management regularly assesses and manages exposures to these risks through operating and financing activities and, when appropriate, by (i) taking advantage of natural hedges within VF, (ii) purchasing insurance from commercial carriers, or (iii) using derivative financial instruments. Some potential risks are discussed below:
Insured risks
VF is self-insured for a significant portion of its employee medical, workers’ compensation, vehicle and general liability exposures. VF purchases insurance from highly-rated commercial carriers to cover other risks, including directors and officers, cyber, property, stock throughput, employment practices, wage and hour and umbrella, and to establish stop-loss limits on self-insurance arrangements.
Cash and cash equivalents risks
VF had $823.9 million of cash and cash equivalents at the end of Fiscal 2026. Management continually monitors the credit ratings of the financial institutions with whom VF conducts business and geopolitical risks that may impact countries where VF has cash
balances. Management also monitors the credit quality of cash equivalents.
Defined benefit pension plan risks
In May 2025, VF executed a resolution to terminate the U.S. qualified plan, which was previously frozen and no longer accruing benefits. In February 2026, the Company completed the termination of the plan through a combination of lump-sum payments to eligible participants and the purchase of group annuity contracts to settle the remaining benefit obligations.
In the third quarter of Fiscal 2026, VF offered participants the option to elect lump-sum payouts in exchange for future benefit obligations. VF recorded a $34.0 million non-cash settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the year ended March 2026 to recognize the related deferred actuarial losses in accumulated other comprehensive loss ( “ OCL ” ) resulting from lump-sum payments of retirement benefits. Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate.
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In the fourth quarter of Fiscal 2026, VF purchased a group annuity contract to transfer the remaining benefit obligation to an insurance company. The purchase of the group annuity contract was fully funded directly by plan assets. As a result, VF recorded a $158.1 million non-cash settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the year ended March 2026 to recognize the remaining deferred actuarial losses in OCL.
In the fourth quarter of Fiscal 2026, VF transferred approximately $83.5 million of funds from plan assets to a qualified replacement plan managed by the Company which will be used to fund future incremental annual Company contributions to VF's U.S. 401(k) program. As of March 2026, $11.9 million was recorded in the other current assets line item and $71.6 million was recorded in the other assets line item in the Consolidated Balance Sheet. The remaining plan assets reverted to the Company as part of the final termination process. As a result, approximately $125.4 million reverted to the Company, resulting in $25.1 million of excise tax being paid and recorded in the other income (expense), net line item in the Consolidated Statement of Operations for the year ended March 2026.
At the end of Fiscal 2026, VF’s remaining defined benefit pension plans were underfunded by a net total of $77.3 million. The underfunded status includes a $45.6 million liability related to our U.S. unfunded supplemental defined benefit plan and $31.7 million of net liabilities related to our non-U.S. defined benefit plans. These plans are underfunded primarily due to differences in actuarial assumptions and plan classification relative to local statutory accounting standards, which generally result in higher reported benefit obligations under U.S. GAAP. VF intends to make approximately $16.1 million of contributions to its defined benefit plans during Fiscal 2027.
VF’s reported earnings are subject to risks due to the volatility of its pension cost, which has ranged in recent years from $12.1 million in the year ended March 2024 to $206.0 million in the year ended March 2026. These fluctuations are primarily due to differences in the amount of settlement charges recorded in the respective periods, including $192.1 million recorded in Fiscal 2026 related to the termination of the U.S. qualified plan. The changes are also impacted by varying amounts of actuarial gains and losses that are deferred and amortized to future years’ pension cost. The assumptions that impact actuarial gains and losses include the rate of return on investments held by the pension plans, the discount rate used to value participant liabilities and demographic characteristics of the participants.
Interest rate risks
VF limits the risk of interest rate fluctuations by managing the mix of fixed and variable interest rate debt. In addition, VF may use derivative financial instruments to manage risk. Since all of VF’s long-term debt has fixed interest rates, the exposure relates to changes in interest rates on variable rate short-term borrowings (which averaged approximatel y $275.0 million at a 7.2% ra te during Fiscal 2026). Howev er, any change in interest rates would also affect interest income earned on VF’s cash equivalents. Based on the average amount of variable rate borrowings and cash equivalents during Fiscal 2026, the effect of a hypothetical 1% increase in interest rates woul d be an increase in reported net income of approximately $3.0 million and a hypothetical 1% decrease in interest rates would be a decrease in reported net income of approximate ly $3.0 million.
Foreign currency exchange rate risks
VF is a global enterprise subject to the risk of foreign currency fluctuations. Approxim ately 56% of VF’s revenues in the year ended March 2026 were generated in international markets. Most of VF’s foreign businesses operate in functional currencies other than the U.S. dollar. In periods where the U.S. dollar strengthens relative to the euro or other foreign currencies where VF has operations, there is a negative impact on VF’s operating results upon translation of those foreign operating results into the U.S. dollar. As discussed later in this section, management hedges VF’s investments in certain foreign operations and foreign currency transactions.
The reported values of assets and liabilities in these foreign businesses are subject to fluctuations in foreign currency exchange rates. For net advances to and investments in VF’s foreign businesses that are considered to be long-term, the impact of changes in foreign currency exchange rates on those long-term advances is deferred as a component of accumulated OCL in stockholders’ equity. The U.S. dollar value of net investments in foreign subsidiaries fluctuates with changes in the underlying functional currencies. In both March 2023 and February 2020, VF issued €1.0 billion of euro-denominated fixed-rate notes. These notes have been designated as net investment hedges of VF’s investment in certain foreign operations. Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses on the debt are deferred in the foreign currency translation and other component of accumulated OCL as an offset to the foreign currency translation adjustments on the hedged investments. Any amounts deferred in accumulated OCL will remain until the hedged investment is sold or substantially liquidated. In the year ended March 2026, VF de-designated the aggregate principal of its €500.0 million euro-denominated fixed-rate notes due 2026, and entered into a fair value hedging relationship. In February 2026, these notes were redeemed.
VF monitors net foreign currency market exposures and enters into derivative foreign currency contracts to hedge the effects of exchange rate fluctuations for a significant portion of forecasted foreign currency cash flows or specific foreign currency transactions (relating to cross-currency inventory purchases, product sales, operating costs and intercompany royalty payments). VF’s practice is to buy or sell foreign currency exchange contracts that cover up to 80% of foreign currency exposures for periods of up to 24 months. Currently, VF uses only foreign exchange forward contracts but may use options or collars in the future. This use of financial instruments allows management to reduce the overall exposure to risks from exchange rate fluctuations on VF’s cash flows and earnings, since gains and losses on these contracts will offset a portion of losses and gains on the transactions being hedged.
For cash flow hedging contracts outstanding at the end of Fiscal 2026, a hypothetical 10% decrease and 10% increase in foreign currency exchange rates compared to rates at the end of Fiscal 2026 , would result in a decrease in the unrealized net loss of approximately $26.6 million and an increase in the unrealized net loss of approximately $21.6 million, respectively. However, any change in the fair value of the hedging contracts would be substantially offset by a change i n the fair value of the underlying hedged exposure impacted by the currency rate changes.
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Counterparty risks
VF is exposed to credit-related losses in the event of nonperformance by counterparties to derivative hedging instruments. To manage this risk, we have established counterparty credit guidelines and only enter into derivative transactions with financial institutions that have ‘A minus/A3’ investment grade credit ratings or better. VF continually monitors the credit rating of, and limits the amount hedged with, each counterparty. Additionally, management utilizes a portfolio of financial institutions to minimize exposure to potential counterparty defaults and adjusts positions as necessary. VF also monitors counterparty risk for derivative contracts within the defined benefit pension plans.
Commodity price risks
VF is exposed to market risks for the pricing of cotton, leather, rubber, wool, oil and other materials, primarily due to the impact
on the cost of sourced finished goods from independent contractors. To manage risks of commodity price changes, management negotiates prices of finished goods in advance when possible. VF has not historically managed commodity price exposures by using derivative instruments.
Deferred compensation and related investment security risks
VF has nonqualified deferred compensation plans in which liabilities to the plans’ participants are based on the market values of the participants’ selection of a hypothetical portfolio of investment funds. VF invests in a portfolio of securities and variable life insurance contracts that substantially mirror the participants’ investment selections. The increases and decreases in deferred compensation liabilities are substantially offset by corresponding increases and decreases in the market value of VF’s investments, resulting in an insignificant net exposure to operating results and financial position.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management has chosen accounting policies it considers to be appropriate to accurately and fairly report VF’s operating results and financial position in conformity with generally accepted accounting principles in the United States of America. Our critical accounting policies are applied in a consistent manner. Significant accounting policies are summarized in Note 1 to the consolidated financial statements.
The application of these accounting policies requires management to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and related disclosures. These estimates, assumptions and judgments are based on historical experience, current trends and other factors believed to be reasonable under the circumstances. Management evaluates these estimates and assumptions on an ongoing basis. In addition, VF may retain
outside specialists to assist in valuations of business acquisitions and impairment testing of goodwill and intangible assets. Because VF’s business cycle is relatively short (i.e., from the date inventory is purchased until that inventory is sold and payment is collected), actual results related to most estimates are known within a few months after any balance sheet date. If actual results ultimately differ from previous estimates, the revisions are included in results of operations when the actual amounts become known.
VF believes the following accounting policies involve the most significant management estimates, assumptions and management judgments used in preparation of the consolidated financial statements or are the most sensitive to change from outside factors. The application of these critical accounting policies and estimates is discussed with the Audit Committee of the Board of Directors.
Business Combinations
VF accounts for business combinations using the acquisition method of accounting. Under the acquisition method, the consolidated financial statements reflect the operations of an acquired business starting from the closing date of the acquisition. All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. VF allocates the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill. Contingent consideration, if any, is included within the purchase price and is recognized at its fair value on the acquisition date.
The application of the acquisition method of accounting for business combinations and determination of fair value requires management to make judgments and may involve the use of significant estimates, including assumptions related to estimated future revenues, growth rates, cash flows, discount rates and royalty rates, among other items. VF generally evaluates fair value at acquisition using three valuation techniques - the replacement cost, market and income methods
- and weights the valuation methods based on what is most appropriate in the circumstances. The process of assigning fair values, particularly to acquired intangible assets, is highly subjective. VF also utilizes third-party valuation specialists to assist management in the determination of the fair value of assets acquired and liabilities assumed. Management estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. If the actual results differ from the estimates and judgments used, the amounts recorded in the consolidated financial statements may be exposed to potential impairment of the intangible assets and goodwill, as discussed in the “ Long-Lived Assets, Including Intangible Assets and Goodwill ” section below.
During the measurement period, which is up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill.
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Long-Lived Assets, Including Intangible Assets and Goodwill
Definite-Lived Assets
VF’s depreciation policies for property, plant and equipment reflect judgments on the estimated economic lives and residual values, if any. VF’s amortization policies for definite-lived intangible assets reflect judgments on the estimated amounts and duration of future cash flows expected to be generated by those assets. In evaluating the amortizable life for customer relationship intangible assets, management considers historical attrition patterns for various groups of customers. In determining the lease term used to amortize operating lease right-of-use assets, VF considers initial terms and any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of lease term.
VF’s policy is to review property, plant and equipment, definite-lived intangible assets and operating lease right-of-use assets for potential impairment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. VF tests for potential impairment at the asset or asset group level, which is the lowest level for which there are identifiable cash flows that are largely independent. VF measures recoverability of the carrying value of an asset or asset group by comparison to the estimated pre-tax undiscounted cash flows expected to be generated by the asset. If the forecasted pre-tax undiscounted cash flows to be generated by the asset are not expected to be adequate to recover the asset’s carrying value, a fair value analysis is performed, and an impairment charge is recorded if there is an excess of the asset’s carrying value over its estimated fair value.
When testing property, plant and equipment for potential impairment, VF uses the income-based discounted cash flow method using the estimated cash flows of the respective asset or asset group. The estimated pre-tax undiscounted cash flows of the asset or asset group through the end of its useful life are compared to its carrying value. If the pre-tax undiscounted cash flows of the asset or asset group exceed its carrying value, there is no impairment charge. If the pre-tax undiscounted cash flows of the asset or asset group are less than its carrying value, the estimated fair value of the asset or asset group is calculated based on the after-tax discounted cash flows using an appropriate weighted average cost of capital ( “ WACC ” ), and an impairment charge is recognized for the difference between the estimated fair value of the asset or asset group and its carrying value.
When testing customer relationship intangible assets for potential impairment, management considers historical customer attrition rates and projected revenues and profitability related to customers that existed at acquisition. Management uses the multi-period excess earnings method, which is a specific application of the discounted cash flow method, to value customer relationship assets. The estimated pre-tax undiscounted cash flows of the asset through the end of its useful life are compared to its carrying value. If the pre-tax undiscounted cash flows of the asset exceed its carrying value, there is no impairment charge. If the pre-tax undiscounted cash flows of the asset are less than its carrying value, the estimated fair value of the asset is calculated based on the present value of the after-tax cash flows expected to be generated by the customer relationship asset after deducting contributory asset charges, and an impairment charge is recognized for the
difference between the estimated fair value of the asset and its carrying value.
When testing operating lease right-of-use assets for potential impairment, VF uses the income-based discounted cash flow method using the estimated cash flows of the respective asset or asset group. The estimated pre-tax undiscounted cash flows of the asset or asset group through the end of its useful life are compared to its carrying value. If the pre-tax undiscounted cash flows of the asset exceed its carrying value, there is no impairment charge. If the pre-tax undiscounted cash flows of the asset or asset group are less than its carrying value, the estimated fair value of the asset or asset group is calculated considering what a market participant would pay to lease the asset for its highest and best use, and an impairment charge is recognized for the difference between the estimated fair value of the asset or asset group and its carrying value. The impairmentloss is allocated to the long-lived assets of the group on a pro-rata basis using the relative carrying amounts of those assets.
Indefinite-Lived Intangible Assets and Goodwill
Fair value for acquired intangible assets is generally based on the present value of expected cash flows. Indefinite-lived trademark or trade name intangible assets (collectively referred to herein as “trademarks”) represent individually acquired trademarks, some of which are registered in multiple countries. Goodwill represents the excess of cost of an acquired business over the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, and is assigned at the reporting unit level.
VF’s policy is to evaluate indefinite-lived intangible assets and goodwill for possible impairment as of the beginning of the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying amount. As part of its annual impairment testing, VF may elect to assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If management’s assessment of these qualitative factors indicates that it is more likely than not that the fair value of the intangible asset or reporting unit is more than its carrying value, then no further testing is required. Otherwise, the intangible asset or reporting unit is quantitatively tested for impairment.
An indefinite-lived intangible asset is quantitatively tested for possible impairment by comparing the estimated fair value of the asset to its carrying value. Fair value of an indefinite-lived trademark is based on an income approach using the relief-from-royalty method. Under this method, forecasted revenues for products sold with the trademark are assigned a royalty rate that would be charged to license the trademark (in lieu of ownership), and the estimated fair value is calculated as the present value of those forecasted royalties avoided by owning the trademark. The discount rate is based on the reporting unit’s WACC that considers market participant assumptions and is adjusted, as appropriate, to factor in the risk of the intangible asset. The royalty rate is selected based on consideration of (i) royalty rates included in active license agreements, if applicable, (ii) royalty rates received by market participants in the apparel and footwear industry, and (iii) the current performance of the reporting unit. If the estimated fair value of the trademark intangible asset exceeds its carrying value, there is no
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impairment charge. If the estimated fair value of the trademark is less than its carrying value, an impairment charge is recognized for the difference.
Goodwill is quantitatively evaluated for possible impairment by comparing the estimated fair value of a reporting unit to its carrying value. Reporting units are businesses with discrete financial information that is available and reviewed by management.
For goodwill impairment testing, VF estimates the fair value of a reporting unit using both income-based and market-based valuation methods. The income-based approach is based on the reporting unit’s forecasted future cash flows that are discounted to present value using the reporting unit’s WACC, as discussed above. For the market-based approach, management uses both the guideline company and similar transaction methods. The guideline company method analyzes market multiples of revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for a group of comparable public companies. The market multiples used in the valuation are based on the relative strengths and weaknesses of the reporting unit compared to the selected guideline companies. Under the similar transactions method, valuation multiples are calculated utilizing actual transaction prices and revenue/EBITDA data from target companies deemed similar to the reporting unit. Management typically assigns more weight to the income-based valuation method. Management also evaluates the fair value estimates of reporting units in the context of VF's total enterprise market value.
Based on the range of estimated fair values developed from the income and market-based methods, VF determines the estimated fair value for the reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, the goodwill is not impaired and no further review is required. However, if the estimated fair value of the reporting unit is less than its carrying value, VF calculates the impairmentloss as the difference between the carrying value of the reporting unit and the estimated fair value, limited to the amount of reporting unit goodwill.
The income-based fair value methodology requires management’s assumptions and judgments regarding economic conditions in the markets in which VF operates and conditions in the capital markets, many of which are outside of management’s control. At the reporting unit level, fair value estimation requires management’s assumptions and judgments regarding the effects of overall economic conditions on the specific reporting unit, along with assessment of the reporting unit’s strategies and forecasts of future cash flows. Forecasts of individual reporting unit cash flows involve management’s estimates and assumptions regarding:
• Annual cash flows, on a debt-free basis, arising from future revenues and profitability, changes in working capital, capital spending and income taxes for a forecast period.
• A terminal growth rate for years beyond the forecast period. The terminal growth rate is selected based on consideration of growth rates used in the forecast period, historical performance of the reporting unit and economic conditions.
• A discount rate that reflects the risks inherent in realizing the forecasted cash flows. A discount rate considers the risk-free rate of return on long-term treasury securities,
the risk premium associated with investing in equity securities of comparable companies, the beta obtained from comparable companies and the cost of debt for investment grade issuers. In addition, the discount rate may consider any company-specific risk (at the reporting unit level) in achieving the prospective financial information.
Under the market-based fair value methodology, judgment is required in evaluating market multiples and recent transactions. Management believes that the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of VF’s reporting units.
Fiscal 2026 Impairment Testing
Interim Impairment Testing
During the third quarter of Fiscal 2026, management determined that a recent downward revision in the Napapijri forward-looking financial projections was a triggering event that required management to perform a quantitative impairment analysis of both the Napapijri reporting unit goodwill and indefinite-lived trademark intangible asset. Recent leadership changes within the brand have resulted in strategic actions that are projected to deliver short- to medium-term revenue and profit reductions to support long-term growth of the brand. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the September 28, 2025 testing date were $62.3 million and $32.4 million , respectively. As a result of the impairment testing performed, VF recorded an impairment charge of $30.7 million in the Consolidated Statement of Operations in the third quarter of Fiscal 2026 to write down the Napapijri reporting unit carrying value to its estimated fair value. Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by a significant amount.
Annual Impairment Testing
Management performed its annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2026. VF elected to bypass the qualitative analysis for the Vans reporting unit goodwill and indefinite-lived trademark intangible asset. As a result of the annual impairment testing, m anagement concluded the Vans reporting unit goodwill and indefinite-lived trademark intangible asset were not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by a significant amount . The estimated fair value of the indefinite-lived trademark intangible asset also exceeded its carrying value by a significant amount .
For the remaining reporting units and indefinite-lived trademark intangible assets, VF elected to perform a qualitative analysis during the annual goodwill and indefinite-lived intangible asset impairment testing, as of the beginning of the fourth quarter of Fiscal 2026, to determine whether it was more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired. Based on the results of the qualitative assessment, VF concluded it was more likely than not the carrying values of the goodwill and indefinite-lived trademark intangible assets were less than their fair values, and that further quantitative testing was not necessary.
Refer to Notes 9 and 24 to the consolidated financial statements for additional discussion on Fiscal 2026 impairment testing.
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Management’s Use of Estimates and Assumptions
Management made its estimates based on information available as of the date of our assessments, using assumptions we believe market participants would use in performing an independent valuation of the business. Although management believes the estimates and assumptions used in the impairment testing are reasonable and appropriate, it is possible that VF's assumptions and conclusions regarding impairment or recoverability of goodwill or indefinite-lived trademark intangible assets in any reporting unit could change in future periods. There can be no assurance the estimates and assumptions, particularly our long-term financial projections, used in our goodwill and indefinite-lived intangible asset impairment testing will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic
conditions in Fiscal 2027 or future years vary from current assumptions (including changes in discount rates, royalty rates, foreign currency exchange rates and tariffs), (iii) business conditions or strategies change from current assumptions, including loss of major customers or channels, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and EBITDA.
Changes in these estimates and assumptions could result in a future impairment charge of goodwill or indefinite-lived intangible assets and such charges could have a material effect on VF’s consolidated financial position and results of operations.
Income Taxes
As a global company, VF is subject to income taxes and files income tax returns in over 100 U.S. and foreign jurisdictions each year. Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change. The Company could be subject to changes in its tax rates, the adoption of new U.S. or international tax legislation or changes in interpretation of existing tax laws and regulations or rulings by courts or government authorities leading to exposure to additional tax liabilities. In particular, tax authorities and the courts have increased their focus on income earned in no- or low-tax jurisdictions or income that is not taxed in any jurisdiction. Tax authorities have also become skeptical of special tax rulings provided to companies offering lower taxes than may be applicable in other countries. VF makes an ongoing assessment to identify any significant exposure related to increases in tax rates in the jurisdictions in which VF operates.
The calculation of income tax liabilities involves uncertainties in the application of complex tax laws and regulations, which are subject to legal interpretation and significant management judgment. VF’s income tax returns are regularly examined by federal, state and foreign tax authorities, and those audits may result in proposed adjustments. VF has reviewed all issues raised upon examination, as well as any exposure for issues that may be raised in future examinations. VF has evaluated these potential issues under the “more-likely-than-not” standard of the accounting literature. A tax position is recognized if it meets this standard and is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized. Such
judgments and estimates may change based on audit settlements, court cases and interpretation of tax laws and regulations. Income tax expense could be materially affected to the extent VF prevails in a tax position or when the statute of limitations expires for a tax position for which a liability for unrecognized tax benefits or valuation allowances has been established, or to the extent VF is required to pay amounts greater than the established liability for unrecognized tax benefits. Under the more-likely-than-not standard, VF does not currently anticipate any material impact on earnings from the ultimate resolution of income tax uncertainties. There are no accruals for general or unknown tax expenses.
As of March 2026, VF h ad $935.3 million of gross deferred income tax assets related to operating loss, credit and capital loss carryforwards, and $771.3 million of valuation allowances against those assets. Realization of defe rred tax assets related to operating loss, credit and capital loss carryforwards is dependent on future taxable income in specific jurisdictions, the amount and timing of which are uncertain, and on possible changes in tax laws. If management believes that VF will not be able to generate sufficient taxable income or capital gains to offset losses or credits during the carryforward periods, VF records valuation allowances to reduce those deferred tax assets to amounts expected to be ultimately realized. If in a future period management determines that the amount of deferred tax assets to be realized differs from the net recorded amount, VF would record an adjustment to income tax expense in that future period.
Recently Issued and Adopted Accounting Standards
Refer to Note 1 to the consolidated financial statements for discussion of recently issued and adopted accounting standards.
