VF Reports Second Quarter 2017 Results; Raises Outlook for 2017

GREENSBORO, N.C.–(BUSINESS WIRE)–VF Corporation (NYSE: VFC) today reported financial results for its
second quarter ended July 1, 2017. All per share amounts are presented
on a diluted basis. This release refers to “reported” and “currency
neutral” amounts, terms that are described under the heading “Currency
Neutral – Excluding the Impact of Foreign Currency.” Unless otherwise
noted, “reported” and “currency neutral” amounts are the same. This
release also refers to “continuing” and “discontinued” operations
amounts, which are concepts described under the heading “Discontinued
Operations – Licensing Business and Contemporary Brands.” Unless
otherwise noted, results presented are based on continuing operations.

VF’s second quarter results were solid and consistent with our
expectations, driven by strong results from our largest global brands,
the company’s international and direct-to-consumer platforms, and our
growing workwear businesses,” said Steve Rendle, President and Chief
Executive Officer. “We have really good momentum as we move into the
second half of 2017 and are confident in our growth engines, as
evidenced by an increase in our full year outlook and our plan to
increase our cash returns to shareholders. Based on the strength of the
first half of 2017 and our expectations for the second half of the year,
we are making growth-focused investments in our largest brands and
platforms to generate additional value for our shareholders both in the
near and long term.”

Currency Neutral – Excluding the Impact of Foreign Currency

This release refers to “reported” amounts in accordance with U.S.
generally accepted accounting principles (“GAAP”), which include
translation and transactional impacts from foreign currency exchange
rates. This release also refers to “currency neutral” amounts, which exclude
both the impact of translating foreign currencies into U.S. dollars and
the impact of currency rate changes on foreign currency denominated
transactions. Reconciliations of GAAP measures to currency neutral
amounts are presented in the supplemental financial information included
with this release, which identifies and quantifies all excluded items,
and provides management’s view of why this information is useful to
investors.

Discontinued Operations – Licensing Business and Contemporary
Brands

On April 28, 2017, the company completed the sale of its Licensed Sports
Group (LSG) business, including the Majestic®
brand. Accordingly, the company removed the assets and liabilities of
LSG at that date and included the operating results of LSG in
discontinued operations for all periods presented. In conjunction with
the LSG divestiture, VF executed its plan to entirely exit the licensing
business and has classified the assets of the JanSport®
brand collegiate business as held for sale and included the operating
results in discontinued operations for all periods presented.

On August 26, 2016, the company completed the sale of its Contemporary
Brands businesses, which included the 7 For All Mankind®,
Splendid® and Ella Moss®
brands. Accordingly, the company has classified the assets and
liabilities of the Contemporary Brands businesses as held for sale as of
June 2016 and included the operating results of those businesses in
discontinued operations for all periods presented.

The company’s net loss from discontinued operations was $5.0 million in
the second quarter of 2017, which includes an adjustment to the
estimated loss on the sale of LSG recorded in the first quarter of 2017,
and the after-tax operating results of the LSG and the JanSport®
brand collegiate business during the quarter.

Income Statement Review

  • Revenue increased 2 percent to $2.4 billion (up 3 percent
    currency neutral), driven by broad-based strength across our
    international and direct-to-consumer platforms, our Outdoor & Action
    Sports coalition, and our workwear businesses.
  • Gross margin improved 80 basis points to 49.7 percent on a
    reported basis, as benefits from pricing, lower product costs and a
    mix shift toward higher margin businesses were partially offset by
    changes in foreign currency. Changes in foreign currency negatively
    affected reported gross margin by 80 basis points during the quarter.
  • Operating income on a reported basis was down 14 percent to
    $168 million compared to the same period of 2016. Changes in foreign
    currency negatively affected the operating profit decline by 8
    percentage points during the quarter. Operating margin on a
    reported basis decreased 130 basis points to 7.1 percent. Changes in
    foreign currency negatively affected reported operating margin by
    about 70 basis points in the quarter.
  • Earnings per share on a reported basis was down 11 percent to
    $0.29 compared to $0.32 during the same period last year. Excluding
    the impact of changes in foreign currency, second quarter earnings per
    share was in line with last year’s second quarter.

Balance Sheet and Cash Flow Highlights

Inventories were up 3 percent compared with the same period of 2016.
During the second quarter, the company purchased 14 million of its
shares for approximately $760 million at an average price of $54 per
share under the company’s share repurchase program authorized by VF’s
Board of Directors in 2017. The company has purchased 22 million of its
shares for approximately $1.2 billion thus far in 2017.

2017 Outlook Raised

The following outlook for 2017 has been updated and includes the
following:

  • Revenue is now expected to approximate $11.65 billion, up 2
    percent on a reported basis (up 3 percent currency neutral). By
    coalition, revenue for Outdoor & Action Sports is now
    expected to increase approximately 5 percent (up 6 to 7 percent
    currency neutral) versus the previous expectation of a
    mid-single-digit percentage rate increase; revenue for Jeanswear is
    still expected to approximate 2016 revenue; Imagewear revenue
    is now expected to increase at a mid-single-digit percentage rate
    versus the prior expectation of a low single-digit percentage rate
    increase; and Sportswear is still expected to decline at a high
    single-digit percentage rate.
  • Direct-to-consumer revenue is now expected to increase between
    10 percent and 11 percent versus the previous expectation of a high
    single-digit percentage rate increase. Digital revenue is now expected
    to increase more than 25 percent.
  • Gross margin is now expected to reach 49.8 percent, versus the
    previous expectation of 49.6 percent, a 40 basis point increase over
    2016 gross margin, and includes about a 70 basis point negative impact
    from changes in foreign currency.
  • Operating margin is still expected to approximate 14 percent,
    consistent with the 2016 adjusted operating margin, including about a
    60 basis point negative impact from changes in foreign currency.
  • Earnings per share is now expected to be $2.94, down
    approximately 1 percent on a reported basis (up at a mid-single-digit
    percentage rate currency neutral) compared to 2016 adjusted EPS of
    $2.98. This compares to the company’s prior outlook range of $2.89 to
    $2.94. Relative to our prior outlook, the company’s updated 2017
    earnings per share outlook includes about a $0.08 per share ($40
    million pre-tax) impact from additional investments to drive
    accelerated growth into 2018 and beyond.
  • Other full year assumptions include an effective tax rate in
    the low 20 percent range and cash flow from operations of about
    $1.45 billion.

Dividend Declared

VF’s Board of Directors declared a quarterly dividend of $0.42 per
share, payable on September 18, 2017 to shareholders of record on
September 8, 2017.

Webcast Information

VF will host its 2017 second quarter conference call beginning at
approximately 8:30 a.m. Eastern Time today. The conference call will be
broadcast live via the internet, accessible at ir.vfc.com.
For those unable to listen to the live broadcast, an archived version
will be available at the same location.

About VF

VF Corporation (NYSE: VFC) outfits consumers around the world with its
diverse portfolio of iconic lifestyle brands, including Vans®,
The North Face
®Timberland®,
Wrangler
® and Lee®.
Founded in 1899, VF is one of the world’s largest apparel, footwear and
accessories companies with socially and environmentally responsible
operations spanning numerous geographies, product categories and
distribution channels. VF is committed to delivering innovative products
to consumers and creating long-term value for its customers and
shareholders. For more information, visit www.vfc.com.

Forward-looking Statements

Certain statements included in this release and attachments are
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
therefore involve several risks and uncertainties. You can identify
these statements by the fact that they use words such as “will,”
“anticipate,” “estimate,” “expect,” “should,” and “may” and other words
and terms of similar meaning or use of future dates. We caution that
forward-looking statements are not guarantees and that actual results
could differ materially from those expressed or implied in the
forward-looking statements. Potential risks and uncertainties that could
cause the actual results of operations or financial condition of VF to
differ materially from those expressed or implied by forward-looking
statements in this release include, but are not limited to: foreign
currency fluctuations; the level of consumer demand for apparel,
footwear and accessories; disruption to VF’s distribution system; VF’s
reliance on a small number of large customers; the financial strength of
VF’s customers; fluctuations in the price, availability and quality of
raw materials and contracted products; disruption and volatility in the
global capital and credit markets; VF’s response to changing fashion
trends, evolving consumer preferences and changing patterns of consumer
behavior, intense competition from online retailers, manufacturing and
product innovation; increasing pressure on margins; VF’s ability to
implement its business strategy; VF’s ability to grow its international
and direct-to-consumer businesses; VF’s and its customers’ and vendors’
ability to maintain the strength and security of information technology
systems; stability of VF’s manufacturing facilities and foreign
suppliers; continued use by VF’s suppliers of ethical business
practices; VF’s ability to accurately forecast demand for products;
continuity of members of VF’s management; VF’s ability to protect
trademarks and other intellectual property rights; possible goodwill and
other asset impairment; maintenance by VF’s licensees and distributors
of the value of VF’s brands; changes in tax liabilities; legal,
regulatory, political and economic risks; and adverse or unexpected
weather conditions. More information on potential factors that could
affect VF’s financial results is included from time to time in VF’s
public reports filed with the Securities and Exchange Commission,
including VF’s Annual Report on Form 10-K and Quarterly Reports on Form
10-Q.

 

VF CORPORATION

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

 
 
      Three Months Ended June     %     Six Months Ended June     %
2017     2016 Change 2017     2016 Change
 
Net sales $ 2,333,288 $ 2,294,762 2 % $ 4,888,981 $ 4,901,744 0 %
Royalty income   26,293     25,704   2 %   52,277     53,139   (2 %)
Total revenues   2,359,581     2,320,466   2 %   4,941,258     4,954,883   0 %
 
Costs and operating expenses
Cost of goods sold 1,187,011 1,185,247 0 % 2,473,696 2,535,947 (2 %)

Selling, general and administrative expenses

  1,004,548     940,797   7 %   2,008,066     1,912,717   5 %
Total costs and operating expenses   2,191,559     2,126,044   3 %   4,481,762     4,448,664   1 %
 
Operating income 168,022 194,422 (14 %) 459,496 506,219 (9 %)
 
Interest, net (20,607 ) (21,394 ) (4 %) (40,795 ) (41,414 ) (1 %)
Other (expense) income, net   (1,653 )   1,501   *   (1,720 )   2,793   *
 

Income from continuing operations before income taxes

145,762 174,529 (16 %) 416,981 467,598 (11 %)
 
Income taxes   30,897     38,036   (19 %)   87,437     89,170   (2 %)
 
Income from continuing operations 114,865 136,493 (16 %) 329,544 378,428 (13 %)

Income (loss) from discontinued operations, net of tax

  (4,976 )   (85,478 ) *   (10,492 )   (67,144 ) *
Net income $ 109,889   $ 51,015   115 % $ 319,052   $ 311,284   2 %
 

Earnings (loss) per common share – basic (a)

Continuing operations $ 0.29 $ 0.33 (12 %) $ 0.81 $ 0.90 (10 %)
Discontinued operations   (0.01 )   (0.21 ) *   (0.03 )   (0.16 ) *
Total earnings per common share – basic $ 0.28   $ 0.12   126 % $ 0.79   $ 0.74   6 %
 

Earnings (loss) per common share – diluted (a)

Continuing operations $ 0.29 $ 0.32 (11 %) $ 0.81 $ 0.89 (9 %)
Discontinued operations   (0.01 )   (0.20 ) *   (0.03 )   (0.16 ) *
Total earnings per common share – diluted $ 0.27   $ 0.12   127 % $ 0.78   $ 0.73   7 %
 
Weighted average shares outstanding
Basic 397,065 415,991 404,527 418,870
Diluted 400,512 422,059 408,236 425,596
 
Cash dividends per common share $ 0.42 $ 0.37 14 % $ 0.84 $ 0.74 14 %
 

* Calculation not meaningful

Basis of presentation of condensed consolidated financial statements: VF
operates and reports using a 52/53 week fiscal year ending on the
Saturday closest to December 31 of each year. For presentation purposes
herein, all references to periods ended June 2017, December 2016 and
June 2016 relate to the 13-week and 26-week fiscal periods ended July 1,
2017, the 52-week fiscal period ended December 31, 2016 and the 13-week
and 26-week fiscal periods ended July 2, 2016.

(a) Amounts have been calculated using unrounded numbers.

 
VF CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)

 
 
      June     December     June
2017 2016 2016
 
ASSETS
Current assets
Cash and equivalents $ 672,542 $ 1,227,862 $ 676,262
Accounts receivable, net 1,155,674 1,161,393 1,121,053
Inventories 1,712,972 1,471,300 1,667,895
Other current assets 356,147 296,698 304,612
Current assets of discontinued operations   315   135,845     298,194  
Total current assets 3,897,650 4,293,098 4,068,016
 
Property, plant and equipment 918,975 926,010 927,058
Intangible assets 1,895,287 1,797,271 1,921,151
Goodwill 1,736,407 1,708,323 1,767,525
Other assets 725,409 929,190 899,772
Other assets of discontinued operations     85,395     90,586  
Total assets $ 9,173,728 $ 9,739,287   $ 9,674,108  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings $ 921,109 $ 26,029 $ 1,404,493
Current portion of long-term debt 253,783 253,689 3,566
Accounts payable 502,908 642,970 480,797
Accrued liabilities 753,343 827,507 720,374
Current liabilities of discontinued operations     35,205     51,403  
Total current liabilities 2,431,143 1,785,400 2,660,633
 
Long-term debt 2,111,623 2,039,180 1,400,636
Other liabilities 986,623 977,076 967,729
Other liabilities of discontinued operations(a)     (3,290 )   (3,327 )
Total liabilities 5,529,389 4,798,366 5,025,671
 
Stockholders’ equity   3,644,339   4,940,921     4,648,437  
Total liabilities and stockholders’ equity $ 9,173,728 $ 9,739,287   $ 9,674,108  
 

(a) This line contains deferred income tax liabilities that
reflect VF’s consolidated netting by jurisdiction.

 
VF CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
 
      Six Months Ended June
2017    

2016 (a)

 
 
 
Operating activities
Net income $ 319,052 $ 311,284
Depreciation and amortization 131,908 137,472
Other adjustments   (455,506 )   (432,168 )
Cash (used) provided by operating activities (4,546 ) 16,588
 
Investing activities

Proceeds from sale of businesses, net of cash sold

208,215
Capital expenditures (78,211 ) (82,642 )
Software purchases (33,731 ) (17,361 )
Other, net   (7,148 )   (1,297 )
Cash provided (used) by investing activities 89,125 (101,300 )
 
Financing activities
Net increase in short-term borrowings 894,708 954,424
Payments on long-term debt (1,821 ) (11,536 )
Payments of debt issuance costs (327 )
Purchases of treasury stock (1,200,304 ) (833,846 )
Cash dividends paid (337,606 ) (309,583 )

Proceeds from issuance of Common Stock, net of shares withheld for
taxes

  14,713     12,417  
Cash used by financing activities (630,310 ) (188,451 )
 

Effect of foreign currency rate changes on cash, cash
equivalents and restricted cash

  (8,355 )   8,342  
 
Net change in cash, cash equivalents and restricted cash (554,086 ) (264,821 )
 
Cash, cash equivalents and restricted cash – beginning of year (b)   1,231,026     946,396  
 
Cash, cash equivalents and restricted cash – end of period (b) $ 676,940   $ 681,575  
 

(a) Reflects the impact of adopting the new accounting
guidance on the presentation of restricted cash and restricted cash
equivalents as of the beginning of the first quarter of 2017, which
resulted in a $4.8 million reclassification of cash flows used by
operating activities in the Condensed Consolidated Statement of Cash
Flows for the six months ended June 2016.

(b) The cash flows related to discontinued operations have
not been segregated, and are included in the Condensed Consolidated
Statements of Cash Flows. The cash amounts presented above differ from
the Condensed Consolidated Balance Sheets due to cash included in the
“Current assets of discontinued operations” and the adoption of new
accounting guidance as discussed in (a) above.

 
VF CORPORATION
Supplemental Financial Information
Business Segment Information
(Unaudited)

(In thousands)

 

 

      Three Months Ended June    

 

   

 

    Six Months Ended June    

 

   

 

2017     2016

%
Change

% Change
Currency
Neutral*

2017     2016

%
Change

% Change
Currency
Neutral*

 
Coalition revenues
Outdoor & Action Sports $ 1,466,187 $ 1,412,751 4 % 5 % $ 3,144,997 $ 3,051,836 3 % 4 %
Jeanswear 600,807 629,180 (5 %) (4 %) 1,248,249 1,339,770 (7 %) (6 %)
Imagewear 150,008 134,830 11 % 12 % 284,974 276,641 3 % 3 %
Sportswear 114,259 114,875 (1 %) (1 %) 212,576 233,272 (9 %) (9 %)
Other   28,320     28,830   (2 %) (2 %)   50,462     53,364   (5 %) (5 %)
 
Total coalition revenues $ 2,359,581   $ 2,320,466   2 % 3 % $ 4,941,258   $ 4,954,883   0 % 1 %
 
 
Coalition profit (loss)
Outdoor & Action Sports $ 121,773 $ 123,253 (1 %) 12 % $ 352,717 $ 351,363 0 % 9 %
Jeanswear 84,757 108,843 (22 %) (20 %) 202,776 246,137 (18 %) (17 %)
Imagewear 25,572 24,377 5 % 1 % 49,972 50,516 (1 %) (1 %)
Sportswear 11,345 6,300 80 % 80 % 10,276 11,076 (7 %) (7 %)
Other   (293 )   (574 ) 49 % 49 %   (2,488 )   (3,182 ) 22 % 22 %
 
Total coalition profit 243,154 262,199 (7 %) (1 %) 613,253 655,910 (7 %) (2 %)
 
Corporate and other expenses (76,785 ) (66,276 ) 16 % 15 % (155,477 ) (146,898 ) 6 % 6 %
Interest, net   (20,607 )   (21,394 ) (4 %) (4 %)   (40,795 )   (41,414 ) (1 %) (1 %)
 

Income from continuing operations before income taxes

$ 145,762   $ 174,529   (16 %) (6 %) $ 416,981   $ 467,598   (11 %) (4 %)
 
*Refer to currency neutral definition on the following pages.
 
 
VF CORPORATION
Supplemental Financial Information
Business Segment Information – Currency Neutral Basis
(Unaudited)
(In thousands)
 
 
      Three Months Ended June 2017
       
As Reported Adjust for Foreign
under GAAP Currency Exchange Currency Neutral
 
Coalition revenues
Outdoor & Action Sports $ 1,466,187 $ 14,762 $ 1,480,949
Jeanswear 600,807 4,338 605,145
Imagewear 150,008 401 150,409
Sportswear 114,259 114,259
Other   28,320         28,320  
 
Total coalition revenues $ 2,359,581   $ 19,501   $ 2,379,082  
 
Coalition profit (loss)
Outdoor & Action Sports $ 121,773 $ 16,020 $ 137,793
Jeanswear 84,757 1,876 86,633
Imagewear 25,572 (900 ) 24,672
Sportswear 11,345 11,345
Other   (293 )       (293 )
 
Total coalition profit 243,154 16,996 260,150
 
Corporate and other expenses (76,785 ) 614 (76,171 )
Interest, net   (20,607 )       (20,607 )
 
Income from continuing operations before income taxes $ 145,762   $ 17,610   $ 163,372  
Diluted earnings per share growth   (11 %)   11 %   0 %
 

Currency Neutral Financial Information

VF is a global company that reports financial information in U.S.
dollars in accordance with GAAP. Foreign currency exchange rate
fluctuations affect the amounts reported by VF from translating its
foreign revenues and expenses into U.S. dollars, and from entering
foreign currency transactions. These rate fluctuations can have a
significant effect on reported operating results. As a supplement to our
reported operating results, we present currency neutral financial
information, which is a non-GAAP financial measure that excludes the
incremental current year impact of foreign currency exchange. We use
currency neutral information to provide a framework to assess how our
business performed excluding the effects of changes in the rates used to
calculate foreign currency translation, and transaction gains and
losses. Management believes this information is useful to investors to
facilitate comparison of operating results and better identify trends in
our businesses.

To calculate foreign currency translation on a currency neutral basis,
operating results for the current year period for entities reporting in
currencies other than the U.S. dollar are translated into U.S. dollars
at the average exchange rates in effect during the comparable period of
the prior year (rather than the actual exchange rates in effect during
the current year period). Similarly, transaction gains and losses on a
currency neutral basis are calculated using exchange rates from the
comparable period of the prior year.

These currency neutral performance measures should be viewed in addition
to, and not in lieu of or superior to, our operating performance
measures calculated in accordance with GAAP. The currency neutral
information presented may not be comparable to similarly titled measures
reported by other companies.

 
VF CORPORATION
Supplemental Financial Information
Business Segment Information – Currency Neutral Basis
(Unaudited)
(In thousands)
 
 
      Six Months Ended June 2017
       
As Reported Adjust for Foreign
under GAAP Currency Exchange Currency Neutral
 
Coalition revenues
Outdoor & Action Sports $ 3,144,997 $ 37,529 $ 3,182,526
Jeanswear 1,248,249 11,111 1,259,360
Imagewear 284,974 126 285,100
Sportswear 212,576 212,576
Other   50,462         50,462  
 
Total coalition revenues $ 4,941,258   $ 48,766   $ 4,990,024  
 
Coalition profit (loss)
Outdoor & Action Sports $ 352,717 $ 30,101 $ 382,818
Jeanswear 202,776 1,369 204,145
Imagewear 49,972 (169 ) 49,803
Sportswear 10,276 10,276
Other   (2,488 )       (2,488 )
 
Total coalition profit 613,253 31,301 644,554
 
Corporate and other expenses (155,477 ) 244 (155,233 )
Interest, net   (40,795 )       (40,795 )
 
Income from continuing operations before income taxes $ 416,981   $ 31,545   $ 448,526  
Diluted earnings per share growth   (9 %)   7 %   (2 %)
 

Currency Neutral Financial Information

VF is a global company that reports financial information in U.S.
dollars in accordance with GAAP. Foreign currency exchange rate
fluctuations affect the amounts reported by VF from translating its
foreign revenues and expenses into U.S. dollars, and from entering
foreign currency transactions. These rate fluctuations can have a
significant effect on reported operating results. As a supplement to our
reported operating results, we present currency neutral financial
information, which is a non-GAAP financial measure that excludes the
incremental current year impact of foreign currency exchange. We use
currency neutral information to provide a framework to assess how our
business performed excluding the effects of changes in the rates used to
calculate foreign currency translation, and transaction gains and
losses. Management believes this information is useful to investors to
facilitate comparison of operating results and better identify trends in
our businesses.

To calculate foreign currency translation on a currency neutral basis,
operating results for the current year period for entities reporting in
currencies other than the U.S. dollar are translated into U.S. dollars
at the average exchange rates in effect during the comparable period of
the prior year (rather than the actual exchange rates in effect during
the current year period). Similarly, transaction gains and losses on a
currency neutral basis are calculated using exchange rates from the
comparable period of the prior year.

These currency neutral performance measures should be viewed in addition
to, and not in lieu of or superior to, our operating performance
measures calculated in accordance with GAAP. The currency neutral
information presented may not be comparable to similarly titled measures
reported by other companies.

 
VF CORPORATION
Supplemental Financial Information
GAAP Continuing Operations EPS to Non-GAAP Continuing Operations
EPS
(Unaudited)
     
 

Twelve Months Ended
December

2016
 
Diluted earnings per share from continuing operations $ 2.65
 
Adjusted amounts (a) $ 0.33
 
Diluted earnings per share from continuing operations – adjusted $ 2.98
 
Contribution from Licensing Business (b) $ 0.13
 

Adjusted diluted earnings per share from continuing operations
including contribution from Licensing Business

$ 3.11
 

Non-GAAP Financial Information

The financial information above has been presented on a GAAP basis and
on an adjusted basis, which is described below in (a) and (b).
Management believes these measures provide investors with useful
supplemental information regarding VF’s underlying business trends and
the performance of VF’s ongoing operations and are useful for
period-over-period comparisons of such operations.

While management believes that these non-GAAP financial measures are
useful in evaluating the business, this information should be considered
as supplemental in nature and should be viewed in addition to, and not
in lieu of or superior to, VF’s operating performance measures
calculated in accordance with GAAP. In addition, these non-GAAP
financial measures may not be the same as similarly titled measures
presented by other companies.

(a) Adjusted amounts in 2016 represent restructuring charges of $58.1
million (net of $14.4 million tax), goodwill and intangible asset
impairment charges of $79.6 million (net of $15.5 million tax) and a
pension settlement charge of $50.9 million (net of $19.5 million tax).
The EPS impact was calculated using 422,081,000 weighted average common
shares. Excluding these charges, adjusted operating income from
continuing operations in 2016 was $1.6 billion. Adjusted operating
margin from continuing operations in 2016 was 14%.

(b) In the first quarter of 2017, the Licensing Business met the
criteria for discontinued operations reporting and this adjusted amount
represents the results of our Licensing Business as if the business was
not reported as discontinued operations. The per share amounts were
calculated using weighted average common shares of 422,081,000.

Following is the reconciliation of diluted earnings per share from
discontinued operations to the adjusted amounts:

      Twelve Months Ended
December 2016
Diluted loss per share from discontinued operations, as reported
under GAAP
$ (0.10 )
Diluted loss per share related to discontinued operations of
Contemporary Brands in 2016
  0.23  
Diluted per share contribution from Licensing Business reported in
discontinued operations
$ 0.13  
 
 
VF CORPORATION
Supplemental Financial Information
Top 5 Brand Revenue Information
(Unaudited)
 
 
      Three Months Ended June 2017     Six Months Ended June 2017
                       
Americas EMEA APAC Global Americas EMEA APAC Global

Top 5 Brand Revenue Growth

 
Vans®

% change

7 % 1 % 26 % 8 % 6 % (1 %) 23 % 7 %
% change currency neutral* 7 % 5 % 29 % 9 % 7 % 3 % 25 % 8 %
 
The North Face®

% change

1 % 23 % (1 %) 5 % 3 % 17 % (3 %) 6 %
% change currency neutral* 1 % 26 % 1 % 6 % 3 % 21 % 0 % 7 %
 
Timberland®

% change

3 % 2 % (2 %) 2 % (3 %) 0 % (4 %) (2 %)
% change currency neutral* 4 % 4 % (1 %) 3 % (3 %) 2 % (4 %) (2 %)
 
Wrangler®

% change

(3 %) 4 % (10 %) (2 %) (7 %) 0 % (6 %) (6 %)
% change currency neutral* (2 %) 5 % (12 %) (2 %) (6 %) 1 % (7 %) (6 %)
 
Lee®

% change

(9 %) (6 %) (4 %) (7 %) (10 %) (2 %) (4 %) (7 %)
% change currency neutral* (9 %) (4 %) (1 %) (6 %) (10 %) 0 % 0 % (6 %)
 
*Refer to currency neutral definition on previous pages.
 
 
VF CORPORATION
Supplemental Financial Information
Geographic and Channel Revenue Information
(Unaudited)
 
 
      Three Months Ended June 2017     Six Months Ended June 2017

%
Change

   

% Change
Currency
Neutral*

%
Change

   

% Change
Currency
Neutral*

Geographic Revenue Growth

 
U.S. 1% 1% (2%) (2%)
 
EMEA 1% 4% 1% 4%
APAC 7% 9% 4% 6%
China 13% 18% 8% 14%
Americas (non-U.S.) 5% 7% 5% 8%
International 4% 6% 3% 5%
 
 
Three Months Ended June 2017 Six Months Ended June 2017

%
Change

% Change
Currency
Neutral*

%
Change

% Change
Currency
Neutral*

Channel Revenue Growth

 
Wholesale (3%) (2%) (4%) (3%)
Direct-to-Consumer 13% 14% 10% 11%
 
 
As of June
2017 2016

DTC Store Count

 
Total 1,510 1,461
 
*Refer to currency neutral definition on previous pages.
 

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