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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended
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Jun. 28, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments All of VF’s outstanding derivative financial instruments at June 2025 are foreign currency exchange forward contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The notional amounts of all outstanding foreign currency exchange forward contracts we re $3.2 billion at June 2025 and $3.1 billion at March 2025 and June 2024, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Chinese renminbi, Mexican peso, Polish zloty, Swedish krona, South Korean won and Japanese yen. These derivative contracts have maturities up to 20 months. During the three months ended December 2024, VF settled interest rate swap contracts that were in place to hedge the cash flow risk of interest payments on the variable-rate DDTL Agreement. The DDTL was prepaid on October 4, 2024. The notional amount of VF's outstanding interest rate swap contracts was $500.0 million at June 2024. The following table presents outstanding derivatives on an individual contract basis:
|  | Fair Value of Derivatives with Unrealized Gains |  |  | Fair Value of Derivatives with Unrealized Losses
(In thousands) |  | June 2025 |  |  | March 2025 |  | June 2024 |  |  | June 2025 |  |  | March 2025 |  | June 2024
Derivatives Designated as Hedging Instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 18,528 |  |  |  | $ | 32,608 |  |  | $ | 38,160 |  |  |  | $ | (129,307) |  |  |  | $ | (29,847) |  |  | $ | (27,436) |
Interest rate contracts |  | — |  |  |  | — |  |  | 1,690 |  |  |  | — |  |  |  | — |  |  | — |
Total derivatives designated as hedging instruments |  | 18,528 |  |  |  | 32,608 |  |  | 39,850 |  |  |  | (129,307) |  |  |  | (29,847) |  |  | (27,436) |
Derivatives Not Designated as Hedging Instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | 128 |  |  |  | 1,763 |  |  | 1,507 |  |  |  | (722) |  |  |  | (156) |  |  | (142) |
Total derivatives |  | $ | 18,656 |  |  |  | $ | 34,371 |  |  | $ | 41,357 |  |  |  | $ | (130,029) |  |  |  | $ | (30,003) |  |  | $ | (27,578) |
VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. If VF were to offset and record the asset and liability balances on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:
|  | June 2025 |  |  | March 2025 |  | June 2024
(In thousands) |  | Derivative Asset |  | Derivative Liability |  |  | Derivative Asset |  | Derivative Liability |  | Derivative Asset |  | Derivative Liability
Gross amounts presented in the Consolidated Balance Sheets |  | $ | 18,656 |  |  | $ | (130,029) |  |  |  | $ | 34,371 |  |  | $ | (30,003) |  |  | $ | 41,357 |  |  | $ | (27,578) |
Gross amounts not offset in the Consolidated Balance Sheets |  | (17,940) |  |  | 17,940 |  |  |  | (13,592) |  |  | 13,592 |  |  | (6,699) |  |  | 6,699 |
Net amounts |  | $ | 716 |  |  | $ | (112,089) |  |  |  | $ | 20,779 |  |  | $ | (16,411) |  |  | $ | 34,658 |  |  | $ | (20,879) |
Derivatives are classified as current or noncurrent based on maturity dates, as follows:
(In thousands) |  |  | June 2025 |  |  | March 2025 |  | June 2024
Derivative Instruments | Balance Sheet Location |  |  |  |  |  |  |
Foreign exchange contracts | Other current assets |  | $ | 14,964 |  |  |  | $ | 32,290 |  |  | $ | 33,562 |
Foreign exchange contracts | Accrued liabilities |  | (101,114) |  |  |  | (19,810) |  |  | (24,802) |
Foreign exchange contracts | Other assets |  | 3,692 |  |  |  | 2,081 |  |  | 6,105 |
Foreign exchange contracts | Other liabilities |  | (28,915) |  |  |  | (10,193) |  |  | (2,776) |
Interest rate contracts | Other current assets |  | — |  |  |  | — |  |  | 1,690 |
Cash Flow Hedges VF primarily uses foreign currency exchange forward contracts to hedge a portion of the exchange risk for its forecasted sales, inventory purchases, operating costs and certain intercompany transactions, including sourcing and management fees and royalties. The Company also used interest rate swap contracts to hedge against a portion of the exposure related to its interest payments on its variable-rate debt, which was prepaid on October 4, 2024. The effects of cash flow hedging included in VF’s Consolidated Statements of Comprehensive Loss and Consolidated Statements of Operations are summarized as follows:
(In thousands) |  | Gain (Loss) on Derivatives Recognized in Accumulated OCL Three Months Ended June |  |  |
Cash Flow Hedging Relationships |  | 2025 |  |  | 2024 |  |  |  |  |  |
Foreign exchange contracts |  | $ | (131,290) |  |  |  | $ | 19,501 |  |  |  |  |  |  |
Interest rate contracts |  | — |  |  |  | 520 |  |  |  |  |  |  |
Total |  | $ | (131,290) |  |  |  | $ | 20,021 |  |  |  |  |  |  |
(In thousands) |  |  | Gain (Loss) Reclassified from Accumulated OCL into Net Loss Three Months Ended June |  |  |
Cash Flow Hedging Relationships | Location of Gain (Loss) |  | 2025 |  |  | 2024 |  |  |  |  |  |
Foreign exchange contracts | Revenues |  | $ | (1,971) |  |  |  | $ | (4,331) |  |  |  |  |  |  |
Foreign exchange contracts | Cost of goods sold |  | 15,034 |  |  |  | (10,126) |  |  |  |  |  |  |
Foreign exchange contracts | SG&A expenses |  | (261) |  |  |  | (408) |  |  |  |  |  |  |
Foreign exchange contracts | Other income (expense), net |  | 476 |  |  |  | (56) |  |  |  |  |  |  |
Interest rate contracts | Interest expense |  | 27 |  |  |  | 27 |  |  |  |  |  |  |
Interest rate contracts | Loss from discontinued operations, net of tax |  | — |  |  |  | 1,165 |  |  |  |  |  |  |
Total |  |  | $ | 13,305 |  |  |  | $ | (13,729) |  |  |  |  |  |  |
Derivative Contracts Not Designated as Hedges VF uses foreign currency exchange contracts to manage foreign currency exchange risk on third-party and intercompany accounts receivable and payable, as well as third-party and intercompany borrowings and interest payments. These contracts are not designated as hedges, and are recorded at fair value in the Consolidated Balance Sheets. Changes in the fair values of these instruments are recognized directly in earnings. Gains or losses on these contracts largely offset the net transaction losses or gains on the related assets and liabilities. In the case of derivative contracts executed on foreign currency exposures that are no longer probable of occurring, VF de-designates these hedges and the fair value changes of these instruments are also recognized directly in earnings. The impact of de-designated derivative contracts and changes in the fair value of derivative contracts not designated as hedges, recognized as gains or losses in VF's Consolidated Statements of Operations were not material for the three months ended June 2025 and June 2024. Other Derivative Information At June 2025, accumulated OCL included $50.9 million of pre-tax net deferred losses for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on exchange rates in effect when outstanding derivative contracts are settled. Net Investment Hedge The Company has designated its euro-denominated fixed-rate notes, which represented €2.0 billion in aggregate principal as of June 2025, as a net investment hedge of VF’s investment in certain foreign operations. Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of 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. During the three-month period ended June 2025, the Company recognized an after-tax loss of $134.4 million in other comprehensive income (loss) related to the net investment hedge transaction and an after-tax gain of $10.8 million for the three-month period ended June 2024. Any amounts deferred in accumulated OCL will remain until the hedged investment is sold or substantially liquidated.

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