XML 24 R12.htm IDEA: XBRL DOCUMENT
v3.24.3

DISCONTINUED OPERATIONS | 6 Months Ended
--- | ---
Sep. 28, 2024
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders. Supreme On July 16, 2024, VF entered into a Purchase Agreement with EssilorLuxottica S.A. to sell Supreme for an aggregate base purchase price of $1.5 billion, subject to customary adjustments for cash, indebtedness, working capital and transaction expenses as more fully set forth in the Purchase Agreement. On October 1, 2024, VF completed the sale of Supreme. VF received proceeds of $1.5 billion, subject to post closing adjustments, and recognized an after-tax estimated loss on sale of Supreme of $124.8 million, which is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations for the three and six months ended September 2024. VF used a portion of the net cash proceeds to prepay $1.0 billion of its delayed draw Term Loan ("DDTL") pursuant to the terms of the DDTL Agreement, as amended, which required repayment within ten business days of VF’s receipt of the net cash proceeds from the sale of Supreme. During the three months ended September 2024, the Company determined that Supreme met the held-for-sale and discontinued operations accounting criteria. Accordingly, b eginning in the second quarter of Fiscal 2025, VF has reported the results of Supreme and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. These changes have been applied to all periods presented. The results of Supreme were previously reported in the Active segment. The results of Supreme recorded in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations were losses of $150.3 million (including an after-tax estimated loss on sale of $124.8 million) and $257.2 million (including an after-tax estimated loss on sale of $124.8 million and goodwill and intangible asset impairment charges of $145.0 million) for the three and six months ended September 2024, respectively, and income of $0.9 million and $6.5 million for the three and six months ended September 2023, respectively. During the three months ended June 2024, VF determined that a triggering event had occurred requiring impairment testing of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. As a result of the impairment testing performed, VF recorded impairment charges of $94.0 million and $51.0 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively. Under the terms of a transition services agreement, the Company will provide certain post-closing accounting, tax, treasury, digital technology, supply chain and human resource services on a transitional basis for periods generally up to 12 months from the closing date of the transaction. Under the terms of a secondment agreement, certain employees associated with the Supreme business will remain employees of VF and work exclusively in support of Supreme, and at Supreme's expense, through the end of Fiscal 2025. Certain corporate overhead costs and segment costs previously allocated to the Supreme brand for segment reporting purposes did not qualify for classification within discontinued operations and have been allocated to continuing operations. In addition, interest expense and the related interest rate swap impact for the DDTL were reallocated 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. Summarized Discontinued Operations Financial Information The following table summarizes the major line items for Supreme that are included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations:
|  | Three Months Ended September |  |  | Six Months Ended September
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023
Net revenues |  | $ | 101,253 |  |  |  | $ | 114,116 |  |  |  | $ | 239,494 |  |  |  | $ | 232,389 |
Cost of goods sold |  | 41,688 |  |  |  | 48,834 |  |  |  | 93,949 |  |  |  | 94,469 |
Selling, general and administrative expenses |  | 50,700 |  |  |  | 52,894 |  |  |  | 108,553 |  |  |  | 104,675 |
Impairment of goodwill and intangible assets |  | — |  |  |  | — |  |  |  | 145,000 |  |  |  | — |
Interest expense, net (a) |  | (16,037) |  |  |  | (14,533) |  |  |  | (30,767) |  |  |  | (28,676) |
Other income (expense), net |  | 447 |  |  |  | (1,327) |  |  |  | (17) |  |  |  | (1,251) |
Income (loss) from discontinued operations before income taxes |  | (6,725) |  |  |  | (3,472) |  |  |  | (138,792) |  |  |  | 3,318 |
Estimated loss on the sale of discontinued operations before income taxes |  | (132,538) |  |  |  | — |  |  |  | (132,538) |  |  |  | — |
Total income (loss) from discontinued operations before income taxes |  | (139,263) |  |  |  | (3,472) |  |  |  | (271,330) |  |  |  | 3,318 |
Income tax expense (benefit) |  | 11,068 |  |  |  | (4,417) |  |  |  | (14,140) |  |  |  | (3,177) |
Income (loss) from discontinued operations, net of tax |  | $ | (150,331) |  |  |  | $ | 945 |  |  |  | $ | (257,190) |  |  |  | $ | 6,495 |
(a)As noted above, interest expense and the related interest rate swap im pact for the DDTL were realloc ated to discontinued operations. The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented:
(In thousands) |  | September 2024 |  |  | March 2024 |  | September 2023
Cash and equivalents |  | $ | 20,188 |  |  |  | $ | 18,229 |  |  | $ | 14,087 |
Accounts receivable, net |  | 13,066 |  |  |  | 10,636 |  |  | 8,273 |
Inventories |  | 89,779 |  |  |  | 68,543 |  |  | 75,760 |
Other current assets |  | 18,910 |  |  |  | 18,817 |  |  | 15,671 |
Property, plant and equipment, net |  | 36,166 |  |  |  | 34,894 |  |  | 30,689 |
Intangible assets, net |  | 801,000 |  |  |  | 852,000 |  |  | 852,000 |
Goodwill |  | 724,800 |  |  |  | 815,058 |  |  | 815,351 |
Operating lease right-of-use assets |  | 86,465 |  |  |  | 75,287 |  |  | 59,119 |
Other assets |  | 19,157 |  |  |  | 19,882 |  |  | 28,348 |
Deferred income tax assets (a) |  | (86,009) |  |  |  | (87,479) |  |  | (89,515) |
Allowance to reduce assets to estimated fair value, less costs to sell |  | (132,538) |  |  |  | — |  |  | — |
Total assets of discontinued operations |  | $ | 1,590,984 |  |  |  | $ | 1,825,867 |  |  | $ | 1,809,783 |
Accounts payable |  | $ | 27,665 |  |  |  | $ | 28,651 |  |  | $ | 31,244 |
Accrued liabilities |  | 38,872 |  |  |  | 51,210 |  |  | 40,923 |
Operating lease liabilities |  | 78,723 |  |  |  | 69,554 |  |  | 54,725 |
Other liabilities |  | 2,531 |  |  |  | 2,387 |  |  | 10,682 |
Total liabilities of discontinued operations |  | $ | 147,791 |  |  |  | $ | 151,802 |  |  | $ | 137,574 |
(a) Deferred income tax balances reflect VF’s consolidated netting by jurisdiction.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration