VF Corp Stock

V. F. Corporation (VF) operates as an apparel, footwear, and accessories company worldwide.

VF’s diverse portfolio meets consumer needs across a broad spectrum of activities and lifestyles. The company’s ability to connect with consumers, as diverse as its brand portfolio, creates a unique platform for sustainable, long-term growth.

VF is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. The company owns a broad portfolio of brands in the outerwear, footwear, apparel, backpack, luggage and accessories categories. The company’s largest brands are Vans, The North Face, Timberland and Dickies.

The company’s products are marketed to consumers through its wholesale channel, primarily in specialty stores, national chains, mass merchants, department stores, independently-operated partnership stores and with strategic digital partners. The company’s products are also marketed to consumers through its own direct-to-consumer operations, which include VF-operated stores, concession retail stores, brand e-commerce sites and other digital platforms. Revenues from the direct-to-consumer business represented 46% of VF’s total Fiscal 2022 (year ended March 2022) revenues. In addition to selling directly into international markets, many of the company’s brands also sell products through licensees, agents and distributors. In Fiscal 2022, VF derived 57% of its revenues from the Americas, 29% from Europe and 14% from the Asia-Pacific.

To provide diversified products across multiple channels of distribution in different geographic areas, the company relies on its global sourcing of finished goods from independent contractors. The company utilizes state-of-the-art supply chain technologies for inventory replenishment that enable it to effectively and efficiently match its assortment of products to consumer demand.

VF's chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. Global brands have been combined into reportable segments based on similar economic characteristics and qualitative factors. The reportable segments for financial reporting purposes have been identified as: Outdoor, Active and Work.

Strategy

The key elements of the company’s strategy are to drive and optimize its portfolio; distort investments to Asia, with a heightened focus towards China; elevate direct channels; and accelerate its consumer-minded, retail-centric, hyper-digital business model transformation.

Outdoor

Outdoor segment is a group of authentic outdoor-based lifestyle brands. Product offerings include performance-based and outdoor apparel, footwear and equipment. The North Face is the largest brand in the company’s Outdoor segment. The North Face brand features performance-based apparel, outerwear, sportswear and footwear for men, women and children. Its equipment line includes tents, sleeping bags, backpacks and accessories. Many of The North Face products are designed for extreme winter sport activities, such as high altitude mountaineering, skiing, snowboarding, and ice and rock climbing. The North Face products are marketed globally, primarily through specialty outdoor and premium sporting goods stores, department stores, independent distributors, independently-operated partnership stores, concession retail stores, over 200 VF-operated stores, on websites with strategic digital partners and online at www.thenorthface.com.

The Timberland brand offers outdoor, adventure-inspired lifestyle footwear, apparel and accessories that combine performance benefits and versatile styling for men, women and children. The company sells Timberland products globally through chain, department and specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 200 VF-operated stores, on websites with strategic digital partners and online at www.timberland.com.

The Smartwool brand offers active outdoor consumers a premium, technical layering system of merino wool socks, apparel and accessories that are designed to work together in fit, form and function. Smartwool products are sold globally through specialty outdoor and premium sporting goods stores, independent distributors, on websites with strategic digital partners and online at www.smartwool.com.

The Icebreaker brand specializes in performance apparel and accessories based on natural fibers, including merino wool and other plant-based fibers. Icebreaker products are sold globally through specialty outdoor and premium sporting goods stores, concession retail stores, independent distributors, approximately 30 VF-operated stores, on websites with strategic digital partners and online at www.icebreaker.com.

Altra is a performance-based footwear brand primarily in the road and trail running categories. Altra products are sold globally through premium outdoor and specialty stores, independent distributors, on websites with strategic digital partners and online at www.altrarunning.com. Key drivers of long-term growth in the company’s Outdoor segment are expected to be a focus on product innovation, extension of its brands into new product categories, growth in the company’s direct-to-consumer business, including its digital presence, expansion of wholesale channel partnerships, geographical diversification and development, as well as the potential for the acquisition of additional brands.

Active

Active segment is a group of activity-based lifestyle brands. Product offerings include active apparel, footwear, backpacks, luggage and accessories. Vans is the largest brand in the company’s Active segment. The Vans brand offers performance and casual footwear and apparel targeting younger consumers that sit at the center of action sports, art, music and street fashion. Vans products are available globally through chain stores, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, more than 700 VF-operated stores, on websites with strategic digital partners and online at www.vans.com.

Supreme is a leading streetwear brand that offers apparel, accessories and footwear. Supreme products are available globally through more than 10 VF-operated stores, select partner retail stores and online at www.supremenewyork.com. The Napapijri brand offers outdoor-inspired casual outerwear, sportswear and accessories at a premium price with a focus on marketing to men, women and children in Europe. Products are sold in department and specialty stores, independently-operated partnership stores, concession retail stores, independent distributors, 25 VF-operated stores, on websites with strategic digital partners and online at www.napapijri.com.

Kipling branded handbags, luggage, backpacks, totes and accessories are sold globally through department, specialty and luggage stores, independently-operated partnership stores, independent distributors, concession retail stores, approximately 40 VF-operated stores, on websites with strategic digital partners and online at www.kipling.com. Eastpak backpacks, travel bags and luggage are sold primarily through department and specialty stores across Europe, on websites with strategic digital partners, throughout Asia by distributors and online at www.eastpak.com. JanSport backpacks and accessories are sold primarily in North America, through department, office supply and chain stores, as well as sports specialty stores and independent distributors. JanSport products are also sold on websites with strategic digital partners and online at www.jansport.com. Key drivers of long-term growth in the company’s Active segment are expected to be its continued focus on product innovation, extension of its brands into new product categories, growth of its direct-to-consumer business, including its digital presence, expansion of wholesale channel partnerships, geographical diversification and development, as well as the potential for the acquisition of additional brands.

Work

Work segment consists of work and work-inspired lifestyle brands with product offerings that include apparel, footwear and accessories. Dickies is the largest brand in the company’s Work segment. The Dickies brand is a leader in authentic, functional, durable and affordable workwear and has expanded to produce work-inspired, casual-use products. Dickies products are available globally through mass merchants, specialty stores, independent distributors and licensees, independently-operated partnership stores, concession retail stores, approximately 20 VF-operated stores, on websites with strategic digital partners and online at www.dickies.com.

The Timberland PRO brand offers work and work-inspired products that provide comfort, durability and performance. Timberland PRO products are available through specialty stores, chain stores, independent distributors, on websites with strategic digital partners and online at www.timberland.com. Timberland PRO products are also available in most U.S. VF-operated Timberland stores. There is a strategic opportunity for growth in the company’s Work segment in both existing and future markets, and in all channels and geographies.

Direct-To-Consumer Operations

The company’s direct-to-consumer business includes VF-operated retail stores, brand e-commerce sites, concession retail locations and other digital platforms. Direct-to-consumer revenues were 46% of total VF revenues in Fiscal 2022.

The company’s full-price retail stores allow it to display a brand’s full line of products with fixtures and imagery that support the brand’s positioning and promise to consumers. In addition, VF operates outlet stores in both premium outlet malls and more traditional value-based locations. These outlet stores carry merchandise that is specifically designed for sale in the company’s outlet stores and serves an important role in its overall inventory management and profitability by allowing VF to sell a significant portion of excess, discontinued and out-of-season products at better prices than otherwise available from outside parties, while maintaining the integrity of its brands.

The company’s global direct-to-consumer operations included 1,322 stores at the end of Fiscal 2022. The company operates retail store locations for the following brands: Vans, The North Face, Timberland, Kipling, Dickies, Icebreaker, Napapijri and Supreme. Approximately 57% of the company’s stores are located in the Americas (50% in the U.S.); 26% in Europe; and 17% in the Asia-Pacific. Additionally, the company sells certain of its branded products through approximately 900 concession retail stores located principally in Europe and Asia.

E-commerce represented approximately 44% of the company’s direct-to-consumer business and 20% of total VF revenues in Fiscal 2022. All VF brands are marketed online. The company continues to expand its e-commerce initiatives by rolling out additional, country-specific brand sites in Europe and Asia, which enhances its ability to deliver a superior, localized consumer experience. The company also continues to increase focus on digital innovation and growth across other third-party digital platforms that are reported within its direct-to-consumer business. Changes in the retail landscape resulting from the COVID-19 pandemic has accelerated the growth of the company’s e-commerce platform resulting in levels well above periods prior to COVID-19.

In addition to its direct-to-consumer operations, independent parties own and operate approximately 2,700 partnership stores. These are primarily mono-brand retail locations selling VF products that have the appearance of VF-operated stores. Most of these partnership stores are located in Europe and in Asia, and are concentrated amongst the Timberland, The North Face, Vans, Dickies, Kipling and Napapijri brands.

Licensing Arrangements

Licensing arrangements relate to a broad range of VF brands and are for fixed terms of generally 3 to 5 years, with conditional renewal options, outside of certain licensing arrangements for the Dickies brand that have longer terms. Each licensee pays royalties to VF based on its sales of licensed products, with most agreements providing for a minimum royalty requirement. Royalties generally range from 4% to 10% of the licensing partners’ net licensed product sales.

Sourcing and Distribution

In Fiscal 2022, VF sourced approximately 408 million units spread across the company’s brands. The company’s products were primarily obtained from approximately 252 independent contractor manufacturing facilities in approximately 37 countries. Additionally, the company operates 25 distribution centers and 1,322 retail stores. The company’s largest distribution centers by region are located in Visalia, California, Prague, the Czech Republic and Shanghai, China. In total, the company operates 25 owned or leased distribution centers primarily in the U.S., but also in the Czech Republic, the United Kingdom, the Netherlands, China, Canada, Mexico, Belgium, Israel, Japan and France.

Customers

VF products are sold on a wholesale basis to specialty stores, mid-tier and traditional department stores, national chains and mass merchants. In addition, the company sells products on a direct-to-consumer basis through VF-operated stores, concession retail stores, brand e-commerce sites and other digital platforms. The company’s international sales represented 48% of its total revenues in the year ended March 2022, with Europe being the largest international market. Sales to VF’s ten largest customers amounted to approximately 17% of total revenues in Fiscal 2022. Sales to the five largest customers amounted to approximately 10% of total revenues in Fiscal 2022. Sales to VF’s largest customer totaled approximately 2% of total revenues in Fiscal 2022.

Seasonality

VF’s quarterly operating results vary due to the seasonality of the company’s individual brands, and are historically stronger in the second half of the calendar year. This variation results primarily from the seasonal influences on revenues of the company’s Outdoor segment, where revenues are historically weighted towards the second and third fiscal quarters. On a quarterly basis in Fiscal 2022 (year ended April 2, 2022), revenues ranged from a low of 19% of full year revenues in the first fiscal quarter to a high of 31% in the third fiscal quarter, while operating margin was 9% in the first fiscal quarter and 19% in the third fiscal quarter. This variation results primarily from the seasonal influences on revenues of the company’s Outdoor segment, where 12% of the segment's revenues occurred in the first fiscal quarter compared to 36% in the third fiscal quarter of Fiscal 2022.

Advertising, Customer Support and Community Outreach

The company advertises in consumer and trade publications and through digital initiatives, including social media and mobile platforms on the Internet. The company also participates in cooperative advertising on a shared cost basis with major retailers in print and digital media, radio and television. The company sponsors sporting, musical and special events, as well as athletes and personalities who promote its products. The company employs marketing sciences to optimize the impact of advertising and promotional spending, and to identify the types of spending that provide the greatest return on its marketing investments.

The company provides advertising support to its wholesale customers, including independent partnership stores, in the form of point-of-sale fixtures and signage to enhance the presentation and brand image of its products. The company also participates in shop-in-shops and concession retail arrangements, which are separate sales areas dedicated to a specific VF brand within its customers' stores and other locations, to help differentiate and enhance the presentation of its products.

The company also offers sales incentive programs directly to consumers in the form of discounts, rebates and coupon offers that are eligible for use in certain VF-operated stores, brand e-commerce sites and concession retail locations. VF also offers loyalty programs for certain brands that provide a range of benefits to consumers.

In addition to sponsorships and activities that directly benefit its products and brands, VF and its associates actively support the company’s communities and various charities. For example, The North Face brand has committed to programs that encourage and enable outdoor participation, such as The North Face Explore Fund program. The Timberland brand has a strong heritage of volunteerism, including the Path of Service program that offers full-time employees paid time off to serve their local communities through global service events, such as Earth Day in the spring and Serv-a-palooza in the fall. In Fiscal 2022, the Vans brand launched Checkerboard Day, the brand's single largest philanthropic initiative, supporting charities from around the world who share a mission of revitalizing public spaces through arts, sports, culture and social impact programming.

Dispositions

On June 28, 2021, VF completed the sale of its Occupational Workwear business. The Occupational Workwear business was comprised primarily of the following brands and businesses: Red Kap, VF Solutions, Bulwark, Workrite, Walls, Terra, Kodiak, Work Authority and Horace Small. The business also included the license of certain Dickies occupational workwear products that have historically been sold through the business-to-business channel.

History

V.F. Corporation was founded in 1899.