VFC - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the V.F. Corporation Fourth Quarter and Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

pleasure your my Joe now is to host, introduce Alkire. It ahead, sir. go Please

Joe Alkire

Good Fourth results documents forward-looking the V.F. Conference to that detailed expectations morning, welcome and in to subject Corporation’s materially. are on on uncertainties SEC. These call and are are statements cause Call. today’s with Quarter differ will filed These make actual regularly statements. could based current to Participants XXXX Fiscal uncertainties

an today’s business. otherwise that dollar they adjusted in performance amounts believe We more we on underlying to dollar will Unless numbers of in was release as discussion constant amounts operational morning. constant and results on which press call accurately defined noted, this we use represent basis, adjusted because true our our lead be referred the issued the

included You found us why hear accordance amounts U.S. items GAAP. which this to to quantify view all the of investors. useful amounts, in information and can which supplemental the with excluded provide of to reported adjusted may also management’s measures tables press GAAP release, in Reconciliations identify be and is are in refer financial

and Accordingly, all business related XXXX, the occupational operations where and During determined for for met discontinued the assets the criteria. sale that the the operations of operating company wear liabilities as accounting this presented. company business work has health above the and the fourth the quarter work date occupational discontinued reported noted include and of results of and discontinued the operations business of periods

name of of the Jeans business traded operating included and Jeans all the business removed first operations the the and quarter this of for completed of and noted company Kontoor presented. into the the its discontinued liabilities company Accordingly, independent periods the above assets fiscal has an as XXXX publicly the results Brands. business date company During of under the spin-off

results operations. on on call based today's continuing Unless otherwise are presented noted,

Chairman VF's Steve and Financial President Roe. will and Chief on Scott me be Officer, Rendle Officer, Chief Joining call today's Executive

Following our prepared remarks, we'll open Steve? the for questions. call

Steve Rendle

hope you welcome, this today And separate bear since has quickly few months family I've ahead Joe. all find with first comments XX ago. confident remarkable long of my tracking safe range everyone. our months in morning are the is last brands months of has you, world a more and It our as we how your from for Thank working because business future. year. I two changed impacted call just momentum the of locations. and well healthy. the us Please Through now plan year, been and had our the world powerful last the never VF people, profoundly as our COVID our fiscal our our and a

that We've well these companies a this. separating such ourselves serve as a the time as the prepared like times best purifying It's rest. from fire, for

under in tremendous strong of to our sheet financial allows and Our a many accelerate adequately in financial weather chain emerge position balance crisis brands, time VF their coupled to from are storm. disciplines and when any a to supply us I'm this will strength, business. fortress with that confident at unable prepared invest strain our almost

name the workwear while a targets the move occupational And been the accomplishments based year has of dominant intent to announcement Denver, been successful our that and forget brands the theme our of line science of in sustainability, of release VF. the with XXXX for Contour spin-off commitment business. to sell has recently, to let's COVID not appropriately To significant a a just few,

more global X% our we margin was growing were basis organic North revenue a growth. Even two we double our respectively. of Face, Vans XX% growth. organic with way XX% properties and And digital gross were by our managing growth, largest growing than led digit rate, quarters this platform activity, XXXX, had first XX% and strong to a year. the points three exceptional XXX Through BXC and delivered of at earnings expansion fiscal X%

what's community associates, crisis leadership managing associates thankful experienced enable to consumers. foremost, to our our incredible and other about our express infallible distribution of So fully future? team for the our to each actively our continue our from tirelessly First commitment business. am giving family cannot and VF center Words brands I serving working their their to this me how and entire

ability into position. has people, And priorities which quickly the our adapt those to Next, the and which with to preserve once our to demonstrated position nimbleness us in emerge pivot liquidity act and to of our protect enterprise, again protect thankful agility we business advantaged enterprise, This enterprise. organizational LED, managing approach consumer the renewed aggressively a focused retail portfolio centric, three VF transforming been transformation, digitally our model. has have lens that to our on an I'm simplified into focus with the focus honed and coupled a

continue distribution will through environments a be hedge Our been for a actions ability risk. as in as and light and consumer catalyst has portfolio of to well to against growth both pivot changing

deeply while uncertain attractive from evolving world. fast movement in focusing distribution and Our challenged addressable on real markets an most away advantage gives the more channels us a

wages of Finally, in purpose providing pay hourly lockdown global retail for to to for associates the commitment a act the the across a organization lead addition performance enterprise our time continuity driven crisis, distribution And increasing during and as nearly more $X VF the process up during to across committed producing XX PPE X.X million urgently to pieces initiatives. million branded associates, of than in center needed efforts. financial relief support and we're donations for in COVID-XX of different has product

and to actions related focused Change on even to Our we digitally leading planet. targets not this for just around scale based oriented deeper VF pandemic. addition VF current science the improving of connections to the to an positioned only and time thing storm, business stronger, other Collectively, with in betterment as good both leaner, planet efforts these lives are during It's our on this the even the resources Using people's enterprise the of the considerable weather most COVID people but right characteristics with do. side initiatives, forge recent the emerge not and Made as for crisis. are of ongoing of consumers

In the of operating current VF highlighting approaching are light on from the crisis like spend the elements as within few we this environment, find how the to to key how in we managing minutes next. intend the ourselves we new is a how as of capitalize world, well now, emergence and

the to response, approach financial their while prioritizing Regarding our China, of of outbreak taken also we've and our health protecting first a early people, COVID-XX the in safety from in people now, days being. the

pass Chin and them all North you storms Face weather told me is Jimmy how As my good friend in matters. athlete,

by bias manage and values. actions and I'm this have proud decisiveness We a action for the taken to guided of we've our effectively crisis

inventory As for and reducing review $X liquidity, protect strategy. compensation a have board, These proactively people, and across buffer VF senior actions prudent preserve team we've prolonged implementing enhance establish us over of have crisis. through discretionary protection flexibility and actions taken implemented to of bond spending care also cash key significant $X and a included the several near-term executing forward and billion our commitments. leadership rigorous enterprise and operations to more our These a thorough a inventory ensure offering given and billion our current we've helped and our actions manage us liquidity advance measures to to

collaborating partners program, the our VF's important announced repurchase share our finally chain of proceeding closely value business across divestiture occupational cash. with previously a potential and spending, our of source workwear strategic most with The as additional

coming strength, with to which together the a shortly. will rigor greatest further our of always range cover our bolster operational been how VF's Scott we maintain discipline, assets has balance and our discipline of of One know-how position that for sheet. we are options Today which and manage and create

brands, which and remain times. engagement consumer driving all during our to these of Turning on focused new unprecedented brand connectivity,

share than Our in in unique using among consumer practices, insights marketing brand ever impact shift We've to learnings purposeful efficiency. leaders and to made digital engagement accelerate are a our teams our greater in. and key best this conversion. shift more This and opportunity engagement in with home find leading to and resulted strategic compassion environment empathy has all ourselves and connecting unique and consideration stay higher actions employ we at to consumers affinity the stronger

beginning websites healthcare shoe this come the move Demonstrated this to of outbreak social Timberland strong to the None to Face see we're around consumers. stay along our in what's come life. walls embrace world I'm strong proud of explore change program; you brand how activation program, the worker But already in in see campaign, united world. of and brand maintain COVID-XX workouts; and campaign. with the our or bouncing emotional of Vans to to ability space responder come. coupled first us. the exactly the world encourage connectivity I will platforms disruption North Despite to to with with Foot Bill to box our our this see knows and initiative, off challenge signs us Altra's virtual

our Unfortunately, value evolutions uniquely businesses behaviors certain address and and positioned and systems. brands consumer to are

combating will example, around believe will an appreciation personal will elevated a major of others change climate much global workers, on an keep consumers for e-commerce priority. lead during running. there'll becoming We so health and time the lifeline believe in sustainability people online people place serving safe, pandemic; outdoors We greater we spending the our on who and be keep believe trades' have For be world environmental believe the shopping, their we lifestyles world to a who as the We significant. will many focus active greater after so commitment with a people believe new exploring that for on will be value there homes. frontline well-being a increased and the to proliferation with sharper focus

activating are The post years in future seismic, And preparing positioning quartile strategy strongly the meaningfully we've repeatedly the connect in our set Regardless we're in next. for with this delivering introduced world. standard to for XXXX subtle, consumers long-term top and has intimately in our are that more growth COVID a brands quality and believe these strategy sustainable, proven already plan new of changes brand to or powerful a teams ahead. even be or working even capable Today, more whether that returns. high I will of what's relevant we're

with on introduced, a at the we heart investments transformation same. toward retail of more and finally, since strategy heightened key focus BXC minded, distorting was in choices the and everything portfolio, Asia digital, steady centric the to make remain and it of it underpinning our evolved optimizing and is digital and strategy model our hyper Driving We've but China, our the business focused do. elevating consumers VF the

systems work forward. brands our better We efficient together, activity agile building engagement to a we to working increasingly We're prepare our As our in the is for work things wherever focused the through they other digital to capabilities to just next, focused, designed on power us organization tools amongst and more exist. landscape opportunities our COVID evolving and on a lens drive to This continues leveraging and enterprise move with and how new centric, engagement to on critical on rise analytics post emphasis minded of faster whenever and teams digital importance take will an to capabilities loyalty. agile end enabling operating and transformation. retail of a data level seize model, and as digital hyper consumer an end result consumer It world. also data become in and and our will

for many managing their been past of reiterate cities of families passing this of COVID-XX before year. relocating even has over to an jeans countries our I pandemic and have the want to business, the 'XX I Scott, and an associates XX,XXX was hit, different to now Before off for each gratitude through the ask. disruption unprecedented deep effort Fiscal associates the and spinning in extraordinary put teams, incredible year our call during the

real getting been Our sharp great and to expect, as of purpose living proud more the a time than tested they meaningful that, a job to this with way. would and help did our way others extreme, in responded on done, determination they've in but of rallied so the associative has our you out associates I'm and need, very just the focus had

the times. than humbling We're our will sense confidence to a future. crisis. other led others in with side I be That consumers trying answered by foster and these decisions truly fare me VF the call truly be been over our the brand and and COVID-XX because companies a believe spirit. community hope better positioning on greater our of situation's during communities consumers teams collective and principled, based purpose values will ability gives Corporation see brands for that to will that human driven VF me great It the continuing this the of even our their when of bright to share. overcome also It's that better on moment our have gives power it together, in

And with that, Scott. to turn I'll it over

Scott Roe

while family Steve's morning, I'd am and resonant good for of I and around associates unique the nonetheless Steve a occasion. witnessed start capabilities for like a the great I more the to Steve, VF, have depth the to community part Both the everyone. as comments than to sense share years. Thanks, of VF the XX leadership of and rise been team deep I by as this And understanding that humble commitment too and excellence gratitude echoing I've have I of and within company continues by globe. deep

from you're emergence every each what nothing but VF brand individual they the business to forward our of This the short of personally. VF It's you. actions of purpose of commitment people one A doing, are and are each performance driven sincere function position The embodies enterprise. thank a throughout drive in while efforts as inspires associates you to amazing. just crisis. led, upon work accelerate exceptional doing communities and that continuing how is DNA to not The me and which broader taking it the region, group collective you're our of to to core other to

investment Day, Last the focus supply topic and as large. of resiliency the Investor diversification fall specifically and received given economic Beaver of time business at sheet we tenets. less our flexibility, core balance introduced highlighted fiscal trajectory the That the discipline, at growth backdrop at and and chain portfolio in our Creek, optionality

Steve the now. could to relevant resiliency portfolio However, for as referred are not where be what manage today more we as through we

So, spend environment. a the how to I'd navigating and providing we're minutes for current like few insight context

and against fiscal this was balance more long well dry one we In XXX the discipline, of XXXX sheet tracking to M&A and $X entered the old of agenda. cash in to of flow over $X legacy. to our through five billion leverage significant and fiscal dividends, crisis VF's to range share the repurchases year to a shareholders We outbreak, generate goal execute free year Xx. plan, we and were start track with Let's on were with strong Prior our than powder had next our years. to flexibility balance VF fortress sheet bedrock liquidity. close return below billion

retail our Just and a whole sector overnight, later, rates changed. handful the world in of froze higher Revenue cash resulting across months of landscape. burn disruption across the

about to high COVID our period. of The were build remained VF liquidity concerns willingness a disruption Markets for to such ability prolonged companies These times. ability Capital open, demonstrated access our But credit. there both this lines tangibly turmoil, uncertain of even are caused excess quality growing in moment credit but weather to as the by the and to we for

with raise to elected the liquidity. we our VF of billion than repay more mind, last fully in providing this and revolver, $X billion month immediate dated longer With debt $X

given current sheet of actions retail strength. our financial surrounding actions uncertainty testament clear flexibility VF's are a ultimately sector, our conservative, balance the and recent While prove the may

marketplace flexibility disruption. Moving times supply source portfolio, scale sophistication to advantage, of the coupled VF and are of our of and with second our resiliency, global our and supply competitive uncertainty operational during a rigor. and operational dimension hallmarks discipline particularly chain of of chain The

assess globally, inventory pandemic the process. As leaders to mobilized on and in operational quickly our to scale and thoroughly hand

forward and suppliers our unfolded of product and matching maintain assortments. supply as purchase partners and dialogue partners, meaningfully work we together and Assess an commitments and process. and We active through key transparent purchase key strategic a rigorous thoughtful with inventory positions commitments retail reduce inventory demand

a excess We retail considering environment. remain level our conversations purchases active plan to collaborate of partners appropriate with as the moving key on we in thoughtful and also the clear inventory forward, current inventory future

and another conversations Throughout an deep have our strayed integrity. with many with core positioned advantaged of these our values, enterprise each coupled we on our capacity, of this flexibility, long-term each example emerge while brands stakeholder fiscal is from crisis ethically honesty, the VF's difficult, of position. scale health undeniably conversations, approaching And and supply chain sustainability from discipline to of financial partners. our these transparency Yet focus and discussion our and VF's, history in treating rooted are our how not

resiliency, of Turning third optionality. portfolio both allocation and dimension to spending, applies capital investment investment as both well the Optionality capital to as expense.

Our priorities short-term allocation capital changed. have

liquidity subject dividend actions our do have taking and plan, preserve decided time While long-term course share a remain of of being. key suspend our have approval. to to for remain to repo are our committed repurchases We to element programs share the board we

has an algorithm continue taken the TSR our of to part And the ability dividend the to support our long-term. integral to recent Our over shore liquidity up to will give and remain dividend. we've testament actions

spending, we reduced interest. have spending light discretionary in investment current Regarding selectively CapEx and of the

our focused in remaining that on have we even drivers a strategy world. growth aspects will believe post-COVID important our be more We the investments of

digitally very and general technology. focused results in digital DTC still the days, will digital that increase support demand creation belief while commerce April only and importance. including it's Specifically And our early

And overhead reimagined support fast changing world. These digital a and all business are future. necessary in model finally, light evolving marketplace. traits actions Historical the will are in analog a we in reexamining this simplify increase being of hyper agility structures structural rapidly

is front your wrapping the of up concept optionality, minds any I topic run in So know a of I on will May.

occupational with business process. work First, our proceeding to with our sale regard

fiscal this our accounting buyers active completed in confident remain for prospective this we are release, has business qualified transaction have operations treatment. noticed discontinued We year. a in during you've and with sale, sure conversations I'm As held for

process months. will unfolds the as coming We the keep in apprised you

assets no divestiture there while said, a financial strategic standpoint. the is to sell for is unchanged, urgency that these the from With rationale

deterioration case material market always could the conditions in ultimate is a timing of a impact transaction. the As

As could increase caused to of strategic M&A potential COVID actively an continue and it attractive disruption relates to lead to the opportunities in and the acquisitions, assess availability we by assets. believe activity

While from capital an a offensive posture basis. our stabilizing standpoint a are first when on M&A to we positioned and business, to organic long-term medium priority remains priority liquidity well to pivot strategic allocation our top prudent. remains our

I'd is our through across capabilities demonstrated value shareholder like for disruption The The undoubtedly opportunities to resiliency companies of provide highlight ample element M&A underway with sector to diversification. significant portfolio create final growth. strong inorganic that of will

across a the global reminded earnings, this report during running enterprise companies of advantage the we As of are globe crisis.

to The reopening and ensuing protocols, trends, consumer us mono to It start allows to several our also informed ability head extract from be companies. more region traffic regions. across recovery learnings APAC behaviors for and a geography planning gives us in other compared months the

channel diversified Our most critical, also notably digital footprint our business. been has

of is DXC of While our digital about own platform the XX% closer to including today, revenue wholesale, digital business. digital total footprint, XX% is our

keep significant shortfalls. our the ability ability during our brick The digital been likely to of and in growth continually engage in mitigate suggest has mortar open these lockdown the consumers. channels recent critical And to channels to some trends this period is with

it's early to too will Although, understand fully this evolve. how

on we well wholesale, of wholesale was half is underway is Considering remaining international distribution growing positioned. I and wholesale roughly of and digital want roughly landscape. in international footprint and conclude heightened heading stores, my remains healthy see the disruption to in certain into crisis business, addressing business the half of and which facing. DXC our by segments our directly comments wholesale through partnership our Of diversification today light consumer the the

specialty, their comprised retailers these and healthy we mortar of business and wholesale exposure differentiated, less and active in in represent have of which revenue, and primarily about outdoor, The businesses revenue Most portion X% channels, healthy, U.S. what structurally mid-tier the now VF store brick represents U.S. our growing of reduced than retailers. athletic fits challenged XX% wholesale, we of of which to department fiscal is call of In 'XX. largest are dramatically digital more total own. which

with entered actively accounts in working to stronger crisis partners key our Our this crisis strong from we and this emerge are together.

diversification liquidity to positioning, position our accelerated I'm that returns ammunition us and the supply flexibility sheet to navigate with with we the summarize, investment to COVID. capacity begin chain balance So as environment growth the with and and current optionality and to from VF emerge confident provide run portfolio

balanced the Our diversified a delivers strong inorganic coupled organic optionality model. unique model to creation value with commitment QSR and dividend, with a and both

and moving business now our fundamentals recent to So on performance.

organic showing however, strong revenue The of earnings fiscal quarters into months the during profound was quarter, XXXX. conditions. three of fiscal fourth our heading marked growth organic change in momentum business evidenced year final XX% X% a Our by as the first growth and

final business our weeks, Asia three weeks, was for essentially closed American and shut of to the North European business from quarter. Our closed was the business anywhere two down was weeks our two two

the results fourth operational our of disruption Unsurprisingly, impacts the for just the reflect outlined. quarter

we're Face. generated month digital reaccelerated the at in disruption, regions. experienced trends remained Face, North basis, digital global this March, EMEA Face. in emerging during declined brands all business by led grew operational encouraged double quarter, XX% high-teens but Dickies digital growth over we a the On XX% which three EMEA's by the growth by our Despite in our digit in growth North North in triple more the and all led growth the The of than Vans, April digits. business to low-teen

XX% region generated Vans at than more led in APAC growth by strength XX% The driven growth and digital by Dickies. China,

essentially strength normalized business digital Face. somewhat single as April, at Vans at rate QX low offset growth softer by led in by high-teens. followed of the ahead was trends digit by a The in grew trends APAC were March, EMEA, in than February Dickies. rebound month XX% Vans with of significant a in a more digital sharp decline with the digital with North In and Americas Our growth during a in in

encouraged March, brands. consistent date phasing draw by into conclusions today. early triple our the May declines continued by to are digit across experienced regions of Four the strong to broad which too recovery recovery a and strength modest curves February sharp the quarter relative April, based driven performance, in growth we with in Big we've from while Following And has across it's

this we're time. a outlook due XXXX release you saw the providing in As fiscal to the current marketplace not formal morning, uncertainties, at this

we we and However, and approach North begin and share course disruption three taking America business. the planning the highly we to I continued we're Through landscape, with business We how our the improvement reopen, distribution our expect anticipate marketplace. of APAC the coming year geographic our evolve to to remainder regions, you over across the can expect EMEA quarter, resulting first promotional to a expect in steady across the the of in region.

We expect high the first followed we teen lower as a basis through the balance inventory growth by year-over-year move in the on year. quarter, levels inventory of

quarter, our and But both into Moving expect sequential on decline in year-over-year significantly a basis. regions America second we see to to improvement expect North EMEA.

APAC the holiday We By expect business North likely. we expect continue to as more the stabilizing landscape continued disruption will believe distribution third our elevated region and America the will begin to quarter, to believe promotional is enter we accelerate. We across activity European We promotional remain return believe normalized likely continue. to fall our and to season. alongside a marketplace of activity growth APAC

that retail to the to to grades environment growth. of the expect to inventory North We APAC America of our more with EMEA normalized begin promotional as consolidation moderate We modest begin and returning year and businesses our by will stabilize. to return fiscal end excess impacts believe

our just acceleration an of Underlying the evolution transformation. our expected outlined hyper of is digital business

VF's central to more and look success. become we even As growth digital will ahead,

year, XX% leap sharing a fiscal future. planned 'XX details we all the springboard in offer for I advantaged more which represent of strategic investment digital fiscal forward as investments will the Our of a transformation, unfolds. into year more to look about how

first recovery we just visibility be the outlined the current of revenue into quarter, slightly XXXX to fiscal XX%. expect in down more the the and have than expectations they Given quarter

exclude year, free expect of $X through liquidity. flow below from year end net a We billion earnings, the For numbers divestiture, working source we work with occupational cash million believe leverage at full and ratio cash least an a on to These $XXX a which capital CapEx. hand of billion over proceeds least supports this position combination deliver and lower the of management additional liquidity potential provide operating of could Xx. at our $X of

navigated stay and closing, many VF and our year has no over So, as evolves. portfolio to relevant crises our willingness the to There history evolve marketplace ability sector. question and accelerate the on the has in and casualties, that strategy likely demonstrated consumer will XXX is will There consolidation. from in based this This industry have benefit be COVID-XX category disruption will will activity brands. trends, retail excel of which lasting our will lifestyle behaviors believe impacts we

the We engagement. consumer the commerce direct importance witnessing critical and of acceleration of are digital

and an right is light We values focus our brands structurally of and growing hit, based what attractive also believe crisis we purpose Ultimately, even from the led in efforts further large, supporting portfolios our this past trends which environment will towards underlying lifestyle believe brighter of an shine our highlight markets. portfolio corporate were supporting on and years, forming the Further witnessing supporting consumer three further enterprises. minded, retail centric, importance strategy. hyper acceleration we're now reshaping addressable the digital before activity

consumer pace unchanged, market will of and long-term blocks our the evolution are undoubtedly accelerate. strategic building plan The of but

a moving a new as catalyst. Fortunately, been transformation path for this reality Using portfolio to we've to moves down years. several

around will We to VF place levers strategic transformation focus with in all digitally combination a led continue our will key these the to model enterprise. advantaged diversified an TSR The choices centric, position. coupled of retail

call with to back that, questions. we'll your turn the operator So, take and the

Operator

[Operator Instructions]

coming question Robert Securities. Drbul first is today Our from Guggenheim from

live. now is line Your

RobertDrbul

take - might pack terms price through promotion the I little for are Hope promotional stuff and the maybe well. you terms of coming environment, in inventory you to I wondering could just just different if level use Thanks brand guess I of I the demand plans was approaches on the time by could away, whether get - guess you maybe was better morning, in detail. of, good you the if Hi, of off the spend sort you guys of everybody. a of wondering just levels, your would quarter? more in explain supply little a imbalance

ScottRoe

that take one. I'll speaking, Scott Bob, Sure.

and the order but are demand we've imagine the really gone winter, APAC forward standpoint. to order a on down we ahead and books, fall, match. seeing So, And rigorous we're recovery brand demand from varies as and looked through, general, is depending forward books, which process, at geography, course XX% as a excluding in of and this that signals, that can you supply bit, range, in a XX%

is floor And the this go so as our at to little sorry a goal done XXXX importantly, assortments from Below and aggressive inventory only even not want right because through retail. Bob, that make that. point what means inventory buyer XX. from even in standpoint, we've as here, equilibrium enough than of we newness we But and on more a our more have standpoint I inventory am we've that sure the a - a exit to target that we both fiscal

market think So, brand, the the are the the on the seasonal being at that carryover inventories take to of exit as North time, by as assortments last a enough looking line varies sure as we our continue this balance the own, we I we're of a the building brand, largest we order Face about make inventory to we're you to same to expect more in the result, what Vans, the at we're about we're we you through relatively doing newness and and was low. goods have relatively and also our that discounting year. little say appropriate side at ensure that aggressively year, But if business aggressive in back that would is taking, excess try inventory looking clear that

where use holding So, really also building inventory in them gives This for have reduce at our the that our When on buys goods the looking replacing a from outlets forward forward and into we of that buys. so outlets some play. come merchandising and situation. our and is we with I standpoint, about inventory assortments cases, some those we're and hand hope shape thinking you

Operator

Saad from today Omar Our is next Evercore with question coming ISI.

live. Your line is now

OmarSaad

being also around are also If penetration is helpful. and and remain I a offer we across traffic the points you channels go the really talking that for the omni in capabilities the a purpose. you've channel of open but detail data us. In information a specifically, omni store we on they to Appreciate morning. Good loyalty on But on if are e-commerce Thanks. don't it's on is I little and digital capabilities, maybe know all speaking bit time which subdued you. lot building in platform for love focus provided inventory environment, you touch Thank to want digital, digital shopping, and dive even you're the remain your a where store there consumer general, spend more rates, deeper and information. kind in analytical broadly about programs, channel where you're able would their a and inventory apps, management? to on

SteveRendle

on facing and in our to doubling digital focus our point our thing I'll increasing continuing mobile, and really I'll transformation shopping, you of is It this our two position, morning, and digital Omar, this we're we tell our to information checkout things on the your happy Steve. is that we're to Good you been that purchase start. putting years the of on are. data so our, digital capabilities, Yes. capabilities, platform one our invest platform in in we've one down apps. specifically, know our - last and is ease just platform, consumer where about most place strong around different

area going double of an Face where area use we're great invest. to some see, us for both do an to and you Vans and down It's that's degree, can and North those opportunity but

store. and what they're our us platform and and online of with It's expecting get consumers quite X in over engaging affinity the, million build buy million, is program, loyalty closer, level insights information. we'll North how analytics continue and into to we our business to I our bit should Our XX capability up where it's million be pick that their are, and greater think, really in consumer data we've X somewhere loyalty build of our up in on kind consumers a our pivoted Face giving in businesses engagement to them, program, Vans now

that That How standing in a here ago. notion buy then Europe. month not online at something is weeks, And America, curve. be had the up two And but of thinking our the only online, North in return about toolkit in pick store? we up that we'll we're next buy was there not new in

our April in we've and so significant the our online, where that in date. gives me significant online this digital on so growth confidence seen strengthening strongly that and sales time, the is investment is much month thing towards content engaging we've one made not our the is to capabilities where team, but showing; So, just consumers organization agility and technology brands have pivoted in as people with us

I good everything this hyper ago and to more digital our with consumer decision and couldn't really We're be three years to centric do. minded, we make and a retail happier position be pivot

OmarSaad

follow-up, quick one then Speakers] [Multiple Steve. And

ScottRoe

quick. Real

SteveRendle

Are you Scott. happy? Sure,

ScottRoe

continuing sorry. we wanted not We're This we Steve back, to I were say about to as - we just ago. right. Could though talked maintaining we're is our profitability to area focused area pulling Yes, where said, could where Yes, reiterate such assessment just more see this? cutting investments. what we short-term prioritize an investments. on is by an expenses this but we're

OmarSaad

that thanks, Thanks. so prowess follow-up, when XX% your have in you One franchises? - that digital kind go the you capabilities then, you where do acquisition penetration where and is overall you're bring with of important And quick to brand - you discussion digital see can Scott. candidates, potential could said, their

SteveRendle

capability we think significant about, wholesale is of we area they more is certainly addressable of where think that Remind partnerships, value. that acquisitions. as enhance, like advantage stated is Certainly data, to we XX% would me, see well from that we digital at bring brands energy will much the parts would talked have a But an as consumer of but it a where that would becoming standpoint, we've toolkit think within about capabilities looking our not analytics for, and part would we've that pivoting go, all partners. in be to different Joe, skills our certainly of would that don't the our markets go-to-market I also the we're both and looking this that be we strategy. get quicker And time own the is where

Operator

Binetti Our comes today Credit Michael from from next Suisse. question

Your live. now line is

MichaelBinetti

detailing for - warm. on the little a the of help the of here. quarter? Vans questions businesses. Americas on translate some how was speak the and how due in maybe of Vans were with to February, comps to start around detail the slides Thanks here number the I I know ask you you have Timberland? month little after in Americas weather on all there a a we guys. in North guess color is know I from want lot business the bit DXC I the DXC DXC Hi saw of just Could total this to a the to in DXC as of trending of of you and then much cold Face mix And emerge here. bit

SteveRendle

to Scott, grab you want that?

ScottRoe

Yes. Sure.

our I you're So in a first, question we April, last have and strong pre-maturing the re-released, been them of part big some my that seeing Michael. those really online the guess surge trends out - The in of laid particularly business. in

digits In different across seeing fact, several triple in brands we're our in and regions. of

I around with to see uptick. trend this encouraging don't specifically. significant guess your whether me now, continues, helped the very that question And a but Vans Michael So it's

MichaelBinetti

was few Vans years. growing know high I extremely rates a at Well, Yes. for growth

SteveRendle

right. That's

MichaelBinetti

at January total and bit the North we February, the but and specific the have know, a don't Vans the figure I how February. of America pieces comps I'm one quarter trying in think impacted much through month, to in But then that in out before? about is December to I'm here provided how to doing what look wondering weather brands. some the Vans was by Vans,

ScottRoe

I your question. Yes, understand

multiple own in - ago. talked And you're massive against our up years' stacks landing we we business numbers Vans and also one So year one like the thing is in a remember soft thing are about event. the that

statement, general as channels. little similar into said still line was it the would a seeing from expectations. standpoint, view you're a issues that we and leaving pricing as And looked more QX a were about, point colder that's holiday, promotional coming in drag has a and what your for while and more brands a to intention a that I impressive, for But remember it's long-term were the we right and our attractive business losing in some of moderated, our there. products based as own.com we the weather we competing coming fall increase that not we into say late to bit on that our of deep in level So at, with in talked

more goes. continuing are April us encouraging. little so all difficult. early But see to we're to all of that always where far, them cautious material I'm standpoint. this frankly is from we we and a COVID month brands, say inventory, the to address so competitive start cold get became accelerate there trends debate. lot pre as Covid But hit, weather, seeing let's encouraging to through of then COVID acceleration a Again, of in did once numbers a Vans, moving all also, days, see did the And pre the that the in of basis and channel And the sheets thing we're we both we've and course, really a seen a green

SteveRendle

quick. couple would quick Michael, real Hey real things just add I of a

even kind what's lot in to is of we're bit messaging much led our empathetic time quite Vans the in a on - spent stay May. what online. quarter. our As greater trying and our But and message stand, where consumers more really where had all April our we Vans we a watch content in up confidence really at much are know creativity. us changing really meet that living consumers, a getting in with purpose and we to I really you of environment goes brands good case shifting they around and more our But giving to of home this of guys' with

coming anything and the coming grab content user in seen we're as to stores box May that come I able our April will for shoe our strong challenge, are back if be this wait us from affinity the that about growth but to giving that this. and don't our online and greater generated the you've months. digital up submits But consumers, know vector results Vans confidence connectivity really we for from really in continued

MarkBianchi

I e-commerce one the in Vans to very think few the very, How obviously the years maybe COVID; be margins EBIT get Day DXC the margins. margins since to going going have if impact Thanks. compared did overall we've guess a ago. there. how more talked way mid-XXs, about talked them Analyst do I I forward margin you before lower I just lower, know could the about guys focus and Vans' bigger brands volumes that's good, brand for were a at

ScottRoe

Yes.

I most just what are be similar DXC our said factor. not fairly but the Michael, margins that the to business dilution profitable in see It's least without the our posted as So, we our really we that costs a channel, lack to gross going furlough and both being consistently, margins, think channel. of at significant in

So as a see the digital, profitability good that's move standpoint, to from from we mix a thing a standpoint.

Operator

live. Jonathan from Baird, is from you. The your next Thank Komp coming now is question line,

JonathanKomp

you're least you. think I covering that you question, your about a directionally just relative been thank helpful. of of very how basis. I'm side curious versus strong thinking the lots Hi, brand are Any want of geographies follow-up see you Timberland, of maybe and detail spectrum. just Yes. has across the all A on was how thoughts but to at a differences willing bit momentum understand the a kind a to forward which and of which has of looking been share, brand opposite the

ScottRoe

just question. was I your going to clarify

brand, talking wanted by to you're So just Is anything geography, unique? about by anything the different understand question? that

JonathanKomp

geographic the that scenario ability a to quite how you're out more in but a laid trying not various standpoint. broad, about brands to from recover the thinking that Yes, for you understand

big ahead? about you how you're go targets, thinking brand looking Just the

ScottRoe

you. Got

Okay.

SteveRendle

Sure.

is I business back as Yes, up Asia running. Scott. our see think start, I'll and So, you

open; partnership stores business are stores open our of and well. All our is extremely digital our performing are

but back with across shopping store. they're virtual XX% online. thinking Those the back We're today. traffic activate improve are consumer has events, week, ways learnings seeing brand Europe innovative with of year. virtual helping is Dickies and on the markets over real finding connect stores about and down and to about, the our in it in week how see of to and to consumers are been how over we're these our Europe America understand come being are up doing connecting We brands last really us unique each results we But our

have of our portfolio. the growth them since We really us, digital brand had working the with our crisis Covid and continue full onset across with wholesale see, solid partners to

connectivity So, will here North Face probably is really not one online Americas. the brand strongest business overachieving. in I you in tell their our the

a We our are to and will actually has brands, DTC we with messaging to week. open preparing my growth engaged do a expect And, next to are positive specifically lesser Timberland to interesting online the our that find states earlier Face, Timberland exceptional open date -we is know us. stores consumers we to in our shifted it what's degree from through point that how our connectivity, our in five here stores that. Vans and have in But marketing business extremely benefit and in now we've pivot April on the North on seen as month

that of we I think and different tactics China, really portfolio different see They're across And bring sharing universal well as other a products messaging, as the and the growth have extremely our in in that interested the we're that approaches, offering. regions. collaboration have more across a the on first as we we'll much each a worked

ScottRoe

we pretty, broad think we consumers China, widespread looks reacting well. like and start it really to remarks, we really, China sign and April, this couple of base Yes, that's so growth advantage we're like looks how to emergence the trying as across and business, North what and encouraging look to our add, the month think a as and Europe regions returning are we about progression for our understand American I'll very in the the basis of as about as how prepared at see said what had months as just you head

JonathanKomp

about the of understand want I taking, just side one approach just guess Okay, that thanks. downside think And Thanks follow I pretty you having might then through on for the line here? organization. EBIT quarters, what March several on significant understand protecting of you're in quarter expense and to flow state any up protecting pressure we thoughts maybe margin, the next the kind relative if to how line of the in look I that. more unique the had still thoughtful that the top and on

ScottRoe

not guidance, but I giving say. can We're of specific couple things a

the mentioned we margin, think work of some I and in earlier, inventory about So, moving activity on in will as I we channel. promotional three the as we gross think see particular,

and an and next we puts So, the we standpoint next next will you year. for think from think the the year. takes, standpoint, hedging we Remember, about saw long-term off benefit there have the be structural rolls for the benefit asset from

a got year, the think not as structural, that quarters, in we more from take will issue. there do the in bit we margin elevated, This this promotional would balance saw that pressure put activity, from gross you evolution the deal standpoint, you has So, we a not episodic much can next as to be and pretty we is little But of as and the some next got standpoint. ongoing. year of pressure expect about through

free just more bit standpoint; looked remind a of it couple about flow shape if looks We we things. of the little materials. with talked evolution how $XXX Maybe at you cash earnings million you a gave think from the walk about, in I'd cash a line as especially you of than evolution again, top

reference just talked of standpoint, maintenance a sales. that that which benefit. management, remainder about CapEx course, talked the you should can inventory earnings. We We are that, We working of see in of aggressive capital from X% some also mentioned X% means about CapEx range a point. reduced assume we And

that how get dealing as in are about doesn't we So you you that'll flow through. at you zip the give code least the but everything think

Operator

Thank you.

Next question Duffy is coming Stifel. from from Jim

Your now is line live.

JimDuffy

morning. from you questions the doing are Difficult today. families well. strategy a times eight good have digital and months no the relevant doubt, your you, more clearly even on ago I Hope Thank but few business. seems

APAC? are What closed? add North an North American digital seeing in triple outpacing digital regions? you're the evolved digital digit be rates speak then and that And EMEA growth there are changing growth the digital be the in with store about seems changes, and you seeing economics accelerated to can business rates more creation? the conversion you're other Are that First, demand with can American the things in

SteveRendle

don't point. dollars We've We've And deploy start real and how the seen But at let used level, think digital to of that's pivoted have pivoted we seen conversion. our the high to and I so more we traffic all our Okay. approach our dollars just is budgeting ad more even zero significant what based me rates. up. towards marketing tactics. our e-commerce Jim. - But to we've benefits trend clearly having add this

to shoe support their shoes that As contribute we have the challenge. our the the just Foot are business, to of create online are with specialty. engaging level see a dwell consumers, coming to program great examples of they we Vans back box to People Bill that pair custom

looking really of to things very improving improving programs, with different So ways entice different content participate to us. at consumers in just

specifically business, Our seen their medical the over workers, in most to growth tremendous the in workers, has increase brought frontline a where probably program North Face we four exceptional weeks support the three, traffic. last

we're to. building our And driving We and a people longer-term have something new if bringing concentration giving as much, you're really benefit. you we're the connection, females, and not funnel, brand through just our available, to but much stronger of a like of really, additional and high on traffic, transaction connect driving XX% consumers, for much as when affinity engagement that and focused that speak to engagement very

U.S. that build and engagement are deploying with growth same Our in to that line That's and platforms. seeing we would draw the expect we're strong to But that in be looking and long-term is Asia growth affinity different where continue right using we tactics and here our Europe really in into consumers our stronger. And is the in true. to here. digital

Operator

you. Thank

is Sandler. question Erinn Piper next from coming from Murphy Our

line is live. now Your

ErinnMurphy

morning. you thanks. well. are Great, Good Hope all

you guys to in fiscal there's you your do if the curious expect own experience to safe. product current around you. to any cost for just to staffing then I'm for environment. requirements ensure stores, or an you've second curious just two the me, what how you stores within And within if XXXX. if question is shopping had I'm And added the just connect shifts this expect need do launches that or your reopen you make change given then stores? year Thank Just

SteveRendle

Scott start, blanks I'll Erinn, Yes. certainly the in here. fill

very We to are open to our begin stores. ready

States. in stores our United were open in open and We're As Europe I we're mentioned, store in begun preparing China. here to the

Our you China five the that able we've in this staff are assure a good last comfortable is to to that in we playbook, what of just develop four over giving really consumers is be to weeks our understanding environment. comfortable. doing But been important new know or equally us feels need

some what we're our is security not not proper the for traffic associated have there it PPE, And, distancing. to people be get is. costs sanitation, our proper normally increased that proper re-merchandised social to using, So stores we bringing are with - around that

really from to really, open and we that gratifying as and half is out in your is sure just service, our really question, really Aaron, the could And feedback get a confidence, adjusting we're me. people, environment. enjoying the So are right we're the make accordingly of that, to there. we've second and engage high the degree one-to-one and staffing very personal for safe what's providing level of that consumers a getting you levels engagement opportunity got of if right our repeat And thankful

ErinnMurphy

Just product launches. Yes.

SteveRendle

Product launches.

ErinnMurphy

and given been of when your forecast that just you're inventory had your of products if in launching had change to on COVID-XX change terms impact Just the year, value? some any you has there this

SteveRendle

we store Thank and transformation. and Yes. Dickies the our China. shopping frequency in it our a anything, be reasons of doing been to The tests more is stores. how operate heightened virtual be you. online. team of retail need and the part think it's of No. to I mentioned And new big of No, centric our level some in that if much this engage newness the has really,

weekly with really Looking engage reasons for to us.

same as of been to our flowing buy earlier to that begins done it new brands, that open have we partners the So, has our or product into level intact I thoughtful assuring inventory much our stay as available right be of well. newness to of our with open to to the mean buys, with each eye around forward wholesale the own for our very hand DXC, and and comment on offer, our Scott's product looking schedules that collab management release at

ErinnMurphy

Thank you.

ScottRoe

I to that we're do byproduct just what of is Erinn. day, have transforming had an focus intense one as through this newness. every the offers own retail digital thing, on Steve we're first a the retail asked we our good centric, our wholesale and SKUs, newness? retail another also how There's are process - going of stores, the mindset. our environment enough in There's partners. own tighter, from perspective that reduction much very applies It's

been both that So retail makes assortment that newness a very a lot we has focus ensuring tight a on from have of the rigor and sense environment. and discipline and

discipline good a we actually this constrained So environment. that add that there's byproduct comes with

Operator

Thank you.

today Yih is Adrienne question Barclays. next Our coming from from

live. now is line Your

AdrienneYih

Great. Well, that margin does then is my obvious well. the my I to of actually. I you're to emerging first sort big of environment? each gain in how secular hear shift seeing follow brand pictures more are guess to my gross outside hope follow will Good consumer up behaviors really the on is be digital. from the or up. pillar then question dramatic Steve, foresee And like that doing And What everybody Scott, you. post-COVID? four other stand

SteveRendle

Scott. ready, get To

ScottRoe

appreciate that. I

SteveRendle

and the question. conversations So uptick digital immediate we've great in the demand digital about Clearly, been having the connectivity. - comments

aligned portfolio conversations interesting and seeing with our through well to that things analytics are trends our that addition and trends that, In consumers is some we're against. extremely really

into vision trends would wellbeing. this one this for the their with be getting people seeing city in coming And individual outdoors. connection focused and think there. China travel people climate. just their to the And of people and health purpose home house staying significant our of focus loud home this be - and of and is nearby are appreciation health back outdoors probably outside led most clearly home, strong our If their apt the the or if thinking clear about with be with out outdoor activity very health, the are I at less state, one we would of coupled very on is the the portfolio be

We see the of in X.X workers work actually workers has the the Dickies doing the the in for pieces million brand that across of and a commitment medical here PPE our lot supporting been States. frontline of interest globe

is extremely businesses keeping are As and well seen We've interest as supporting those in reacting up supporting workers that Dickies well. and infrastructure running. our tremendous

but and be reshaping three across portfolio, deep way we've health our could to creating in our So been last not line the being the those trends, wellbeing, outdoor value commitment led purpose of our years, climate as the the more for focused with also performance doing driven on shareholders. our

AdrienneYih

Great. very helpful. That's

quarter? you partners it deeper bit patterning obviously of retail, pressure and like six inventory liquidate store at one quarter books the the hit promotions, margin, is in So, certainly I better. as competing Thank margin It season, And are little out. format sort on does which see you you'll in to on gross that a quarters, own digging lower then take? giving the costs then a there's be deepest at sounds Scott, - open gross like DXC more of in channel in months to those what to but your inventory When the of outset getting vendor gets forward September understand you. the fall you on which little of allowances, you price a the is are suppose. as just from do kind I start bit in

ScottRoe

Yes.

year we but half. about and as see and moderate half to shaping a full see of of first can you So year in terms pressure start that in some the this the talked little pressure you'll get in the the the for materials, you'll elevated move first through you the for in bit more prepared promotional sure the environment, more although

partnering best we cetera. are net and terms key generally to returns into a basis and options generally, more go the third-party accounts price gross focus and the that's markdowns goods. use like I a to In looking region hard to in the we've weapons use. market, past But see et of as not off got to range within these you is of dumping but too channels, or doing ways That's to off that. much clear discounting our we that about we goods they're we limited one at good of And opposed Those they're with On from the effective outlet won't specifics, wholesale things learned say some tactics, it's lessons that. into have won't and us wide tactics partners of how the networks. price bunch tend don't we of

without But the this working in And going that's dispose we it's conflicts can is where that accounts outlets. brand to in weapon, back channel majority And of I a key of be appropriate to things boomerang with on the causing in going inventory a is our or owndigital.com. and having broader as our biggest said, marketplace. our be way lot us

Operator

from and BTIG. final interest our question in Lyon comes Ladies from you. of today the Camilo time, Thank gentlemen,

line now is Your live.

CamiloLyon

for you Thanks. the Good detail. morning Thanks guys great. doing Hope everyone. all

me. two So just questions for

I some of could your brands flows delve been, the would chain that when to the resolved into had if was supply to. that stands resume of the they've - you if this impacts. where by and The in that supply they impacts you that really just being I if used are kind in you’re expect think you supply haven't mentioned and first been chain which and press one, chain morning you hurt wondering deeper some release

up going closures? to the or anticipating what rightly the you're as of some changed influence the and and this curious terms doors, And forward? what's rolling what's channel closing know, of overspend into view so on then based life it. the size, right lot or you right sort I'm a active mall and spend, spend lease maybe the your result store the of your on lease respect some time and if off, lease particular end is, importance question And of a to has off just size the whether second digital and anything view with of rolling

SteveRendle

to pivots No anything really If purchases the forward partners spending no time are Good. garment material we as we position our right the really purchase these hands production, and to amount over where start. but and material there's ourselves demand of Scott, newness. impacts our current to against I'll bring our the over our aligned those down been that really the to side today. course we've both with also Camilo, quick the us footwear tremendous and years, the a on chain. meter buy proper year with our key built on see that If sized supply make is amount allowing and partnerships supply open the we've connectivity of that the are of

So really, as reopen degree seeing an if recently our community-based base to store that And question. It's no stores then any impacts we're thing most there's one within local Europe, the our on And well, interesting really is supply in footprint. and China chain. size. retail we in

would they And Face businesses, would closer our home think shopping to in or our across attention be consumers in footprint States about really call communities and Timberland that local, to proving the that is here we extremely pay neighborhoods Some those United live be something to as hyper valuable to. in. North people that Vans,

exposure Our significant. the to not malls is

We have sits tapers and the in the then to off D. the really then B tail XX% of about, malls. in are And our and it A footprint C

the very strategy as consumers are we positioned a of element go But interesting we're So have, they changing behavior well be where going at really your located. we're this. that buy Do consumer - forward the telling have to to can online a pick into they be store? for comfortable want client We're curb? up coming and where as relationship they will ready

technology bit doing to our been do preparation; the to able Our IT a teams quite have providing be is team of that.

the to important. and trend our today closer in is positioned be the But continues. China is the you that live, if to size with thing store there's in footprint consumers is is that very that well where seems one we've connect a growing And way trend. with the learned honestly, The stores it

ScottRoe

is bit, pretty XX% our time, year. just that manage every too, we in of up at I aggressively but renewal a a lease terms talked essentially point quite Camilo. build quarter We on fleet any about for and this the

And refining like, us into. So our as continuing it's while that nobody understand better we're lot footprint changing and adapt. fully retail we're opportunity what of today. looks constantly that and know gives understands updating, always that just what also a we to evolves We

Our ability is to turn pretty quick. fleet that

Operator

We you. over to question or any session; comments. I'd out Steve to back for Thank floor our turn the answer reached of and further like closing

Steve Rendle

putting us worked you here. up joining home and from conversation everybody. Thank model our for it Hope with Great. for everybody

navigate The strengths that are foundational you strong us financial have have leave business. of to our history in very us strong to in couple have that disciplines put history XXX built that absolutely VF and prepared over today. guided we a have a really like thought. position just of strong, elements the the operational we I that we to both manage with year is and for in the times

with these of in trends. strong position Our we've the three portfolio taken iconic in very connect and us that years, and brands, the consumer to market reshaping our puts last consumers over a evolving

through extremely our data the be engagement platforms. more other on taking digital And that point retail of All to us position the minded our our been we've are this side proof transform been years enterprise. digital navigate And VF consumer deep commitment DXC to centric actions a our investments to over hyper the on the to and strategy working; consumer crisis. deep, elevating past well we've two accelerate and

to we're really to we you acceleration stay our for for in talking Again, look the work on joining you give brands, strategies drive putting would with engagement that July. connected And thank what kind be to you in reinforce doing that prepared just online, watch side. and in doing other to to us. we're just we're business the forward encourage you place, our And confidence of and

Operator

That does Thank today's teleconference. you. conclude

time. at participation thank for We line You you today. have your wonderful day. may your this a disconnect And

Joe Alkire	Vice President, Investor Relations
Steve Rendle	Chairman, President and Chief Executive Officer
Scott Roe	Chief Financial Officer
Robert Drbul	Guggenheim Securities
Omar Saad	Evercore ISI
Michael Binetti	Credit Suisse
Jonathan Komp	Baird
Jim Duffy	Stifel
Erinn Murphy	Piper Jaffray
Adrienne Yih	Barclays
Camilo Lyon	BTIG

V.F. (VFC) 15 May 202020 Q4 Earnings call transcript