V.F. Corporation Earnings Call - VFC

V.F. Corporation's CEO Bracken Darrell highlighted the company's achievement of reducing inventories by 23% or over $500 million in the fourth quarter, enabling a $540 million reduction in net debt. This underscores V.F. Corporation's commitment to financial health and operational efficiency, as stated on the earnings call.

Darrell and his leadership team have focused on the "Reinvent" program, comprising three phases: reset, ignite, and accelerate. This program, which includes leadership changes and team strengthening, is seen as the cornerstone for returning to robust growth. As Darrell stated, "Reinvent, which we introduced back in Q2, is fundamentally how we get back to strong growth."

V.F. Corporation experienced an 11% decline in revenue for fiscal 2024, with adjusted earnings per share of $0.74. Despite a 13% dip in fourth-quarter revenue, the company generated over $1 billion in operating cash flow and $800 million in free cash flow, surpassing earlier projections. The company has emphasized an integrated marketplace strategy, combining wholesale and DTC channels to elevate brand execution, with a focus on commercial excellence.

The Vans brand has shown early signs of positive momentum, particularly with its Europe DTC segment turning positive. Strategic inventory actions have set the stage for introducing new products. The North Face has continued investing in product innovation, design, and new categories, demonstrating strong performance in global DTC channels and resilience in the APAC region, despite facing challenges in the U.S. wholesale market. Supreme has delivered robust performance, with sales surging in the fourth quarter, driven by strategic expansions, particularly in Asia.

Analysts posed questions about the Vans turnaround and inventory management, The North Face's performance, portfolio and brand strategy, market strategy and execution, and the company's future outlook. V.F. Corporation's leadership has not provided specific quantitative guidance for fiscal 2025 but has projected sequential improvements each quarter, postulating confidence in long-term sustainable growth. Strategic debt reductions and operational improvements remain top priorities, as acknowledged on the earnings call.