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STOCK-BASED COMPENSATION | 12 Months Ended
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Mar. 29, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Pursuant to the amended and restated 1996 Stock Compensation Plan approved by stockholders, VF is authorized to grant nonqualified stock options, restricted stock units (“RSUs”), stock units and restricted stock to officers, key employees and nonemployee members of VF’s Board of Directors. Substantially all stock-based compensation awards are classified as equity awards, which are accounted for in stockholders’ equity in the Consolidated Balance Sheets. On a limited basis, cash-settled stock appreciation rights and RSUs are granted to employees in certain international jurisdictions. These awards are accounted for as liabilities in the Consolidated Balance Sheets and remeasured to fair value each reporting period until the awards are settled. Compensation cost for all awards expected to vest is recognized over the shorter of the requisite service period or the vesting period, including accelerated recognition for retirement-eligible employees. Awards that do not vest are forfeited. Total stock-based compensation cost and the associated income tax benefits recognized in the Consolidated Statements of Operations, on a continuing operations basis, are as follows:
|  | Year Ended March
(In thousands) |  | 2025 |  |  | 2024 |  | 2023
Stock-based compensation cost |  | $ | 73,247 |  |  |  | $ | 57,829 |  |  | $ | 40,040 |
Income tax benefits |  | 16,299 |  |  |  | 12,849 |  |  | 9,072 |
At the end of March 2025, there was $83.8 million of total unrecognized compensation cost, net of estimated forfeitures, related to all stock-based compensation arrangements that will be recognized over a weighted average period of 1.5 years. At the end of Marc h 2025, there were 38,032,793 shares available for future grants of stock options and stock awards under the 1996 Stock Compensation Plan. Shares for option exercises are issued from VF’s authorized but unissued Common Stock.
Stock Options
Stock options are granted with an exercise price equal to the fair market value of VF Common Stock on the date of grant. Employee stock options typically vest and become exercisable in equal annual installments over three years, and compensation cost is recognized ratably over the shorter of the requisite service period or the vesting period. Stock options granted to nonemployee members of VF’s Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ten-year terms. The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:
|  | Year Ended March
|  | 2025 |  |  | 2024 |  | 2023
Expected volatility |  | 37% to 53% |  |  | 33% to 54% |  | 30% to 46%
Weighted average expected volatility |  | 47% |  |  | 42% |  | 39%
Expected term (in years) |  | 5.5 to 7.3 |  |  | 5.9 to 7.8 |  | 6.0 to 7.8
Weighted average dividend yield |  | 2.2% |  |  | 3.7% |  | 2.9%
Risk-free interest rate |  | 3.80% to 5.43% |  |  | 3.80% to 5.50% |  | 1.53% to 4.89%
Weighted average fair value at date of grant |  | $5.31 |  |  | $5.74 |  | $13.46
Expected volatility over the contractual term of an option was based on a combination of the implied volatility from publicly traded options on VF Common Stock and the historical volatility of VF Common Stock. The expected term represents the period of time over which vested options are expected to be outstanding before exercise. VF used historical data to estimate option exercise behaviors and to estimate the number of options that would vest. Groups of employees that have historically exhibited similar option exercise behaviors were considered separately in estimating the expected term for each employee group. Dividend yield represents expected dividends on VF Common Stock for the contractual life of the options. Risk-free interest rates for the periods during the contractual life of the option were the implied yields at the date of grant from the U.S. Treasury zero coupon yield curve. Stock option activity for the year ended March 2025 is summarized as follows:
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding, March 2024 | 13,034,540 |  |  | $ | 45.04 |  |  |  |  |
Granted | 6,580,674 |  |  | 13.30 |  |  |  |  |
Exercised | (174,882) |  |  | 17.86 |  |  |  |  |
Forfeited/cancelled | (2,359,894) |  |  | 47.14 |  |  |  |  |
Outstanding, March 2025 | 17,080,438 |  |  | $ | 32.80 |  |  | 7.2 |  | $ | 17,174 |
Exercisable, March 2025 | 7,584,683 |  |  | $ | 53.51 |  |  | 5.3 |  | $ | 102 |
The total fair value of stock options that vested during the years ended March 2025, 2024 and 2023 w as $22.9 million, $21.8 million and $23.2 million, respectively. The total intrinsic value of stock options exercised during the years ended March 2025, 2024 and 2023, was $0.9 million, $0.0 million and $0.4 million, respectively.
Restricted Stock Units and Stock Units
VF grants performance-based RSUs that enable employees to receive shares of VF Common Stock at the end of a three-year performance cycle. Each performance-based RSU has a potential final payout ranging from zero to two and one-quarter shares of VF Common Stock. The number of shares earned by participants, if any, is based on the achievement of financial targets and relative total shareholder return ("TSR") targets set by the Talent and Compensation Committee of the Board of Directors. Shares are issued to participants in the year following the conclusion of each three-year performance period. For performance-based RSUs granted in Fiscal 2025, t he financial targets are based on the average, for the three years of the performance cycle, of the annual levels of achievement of VF's total revenue, weighted 50%, and the average, for the three years of the performance cycle, of the annual levels of achievement of VF's gross margin, weighted 50%. Furthermore, the actual number of shares earned may be adjusted upward or downward by 25% of the target award, based on how VF's TSR over the three-year period compares to the TSR for companies included in the Standard & Poor's 600 Consumer Discretionary Sector Index, resulting in a maximum payout of 225% of the target award. The grant date fair value of the TSR-based adjustment related to the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $2.05 per share. For performance-based RSUs granted in Fiscal 2024 and 2023, the financial targets include 50% weighting based on VF's revenue growth and 50% weighting based on VF's gross margin performance over the three-year period compared to financial targets. Furthermore, the actual number of shares earned may be adjusted upward or downward by 25% of the target award, based on how VF's TSR over the three-year period compares to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index, resulting in a maximum payout of 225% of the target award. The grant date fair value of the TSR-based adjustment related to the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $0.35 and $3.46 per share for the performance-based RSU grants in the years ended March 2024 and 2023, respectively. VF also grants nonperformance-based RSUs to employees as part of its stock compensation program and nonperformance-based stock units to nonemployee members of the Board of Directors. Each nonperformance-based RSU or stock unit entitles the holder to one share of VF Common Stock. The employee nonperformance-based RSUs generally vest over periods of up to four years from the date of grant. The stock units granted to nonemployee members of the Board of Directors vest upon grant and will be settled in shares of VF Common Stock one year from the date of grant. Dividend equivalents on the RSUs and stock units accrue without compounding and are payable in additional shares of VF Common Stock when the RSUs vest or stock units are settled. Dividend equivalents are subject to the same risk of forfeiture as the RSUs. RSU and stock unit activity for the year ended March 2025 is summarized as follows:
| Performance-based |  | Nonperformance-based
| Number Outstanding (a) |  | Weighted Average Grant Date Fair Value |  | Number Outstanding |  | Weighted Average Grant Date Fair Value
Outstanding, March 2024 | 1,132,322 |  |  | $ | 40.14 |  |  | 4,305,296 |  |  | $ | 24.68 |
Granted | 1,544,680 |  |  | 16.61 |  |  | 3,684,775 |  |  | 17.13 |
Issued as Common Stock | — |  |  | — |  |  | (980,773) |  |  | 37.79 |
Forfeited/cancelled | (275,230) |  |  | 86.13 |  |  | (997,448) |  |  | 19.91 |
Outstanding, March 2025 | 2,401,772 |  |  | $ | 19.60 |  |  | 6,011,850 |  |  | $ | 18.70 |
Vested, March 2025 | 840,579 |  |  | $ | 23.98 |  |  | 329,772 |  |  | $ | 20.58 |
(a)Reflects activity at target level of awards and has not been adjusted for performance and market conditions, except for awards issued during the period. The weighted average fair value of performance-based RSUs granted during the years ended March 2025, 2024 and 2023 was $16.61, $18.29 and $45.23 per share, respectively, based on the fair market value of the underlying VF Common Stock on each grant date. The total market value of awards outstanding at the end of March 2025 was $37.7 million. Awards earned and vested for the three-year performance period ended in March 2024 and distributed in early Fiscal 2025 totaled zero shares of VF Common Stock having a value of $0.0 million. Similarly, 13,033 shares of VF Common Stock having a value of $0.3 million were earned for the performance period ended in March 2023 and distributed in early Fiscal 2024. The weighted average fair value of nonperformance-based RSUs and stock units granted during the years ended March 2025, 2024 and 2023 was $17.13, $17.09 and $38.31 per share, respectively, which was equal to the fair market value of the underlying VF Common Stock on each grant date. The total market value of awards outstanding at the end of March 2025 was $94.3 million.
Restricted Stock
VF grants restricted shares of VF Common Stock to certain members of management. The fair value of the restricted shares, equal to the fair market value of VF Common Stock at the grant date, is recognized ratably over the vesting period. Restricted shares vest over periods of up to four years from the date of grant. Dividends accumulate in the form of additional restricted shares and are subject to the same risk of forfeiture as the restricted stock. Restricted stock activity during Fiscal 2025 included vesting of the remaining portion of the shares of VF Common Stock deposited in escrow in connection with the Supreme acquisition. Restricted stock activity for the year ended March 2025 is summarized below:
| Nonvested Shares Outstanding |  | Weighted Average Grant Date Fair Value
Nonvested shares, March 2024 | 263,083 |  |  | $ | 65.90 |
Granted | — |  |  | — |
Dividend equivalents | 737 |  |  | 14.99 |
Vested | (214,363) |  |  | 77.35 |
Forfeited | (37,844) |  |  | 47.22 |
Nonvested shares, March 2025 | 11,613 |  |  | $ | 71.43 |
Nonvested shares of restricted stock had a market value of $0.2 million at the end of March 2025. The market value of the shares that vested during the years ended March 2025, 2024 and 2023 was $4.0 million, $4.7 million and $11.1 million, respectively.

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