Q4 2025 VF Corp Earnings Call

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Operator: Ladies and gentlemen, thank you for standing by.

Krista: Ladies and gentlemen, thank you for standing by my name is Krista and I will be your conference operator today at this time I would like to welcome everyone to the V. F Corporation fourth quarter fiscal year 'twenty five earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remark.

Krista: My name is Krista and I will be your conference operator today.

Krista: At this time, I would like to welcome everyone to the VF Corporation fourth quarter fiscal year 25 earnings conference call. All lines have been placed on mute to prevent any background noise.

Krista: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. Thank you.

Speaker Change: So it will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw your question Press Star. One again, thank you and I would now like to turn the conference over to Allegra Perry Vice President of Investor.

Allegra Perry: And I would now like to turn the conference over to Allegra Perry, Vice President of Investor Relations. Please go ahead. Hello, and welcome to VF Corporation's fourth quarter fiscal 2025 conference call. Participants on today's call will make forward looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SBA. Unless otherwise noted, amounts referred to on today's call will be on an adjusted, constant dollar, and continuing operations basis, which we've defined in the presentation that was posted this morning on our investor relations website, and which we use as lead numbers in our discussion, because we believe they more accurately represent the true operational performance and underlying results of our business You may also hear us refer to reported amounts which are in accordance with U.S.

Jim: Jim. Please go ahead.

Speaker Change: Hello, and welcome to VF Corporation's fourth quarter fiscal 2025 conference call participants on today's call will make forward looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed.

Jim: <unk> with the SEC.

Jim: Unless otherwise noted amounts referred to on today's call will be on an adjusted constant dollar and continuing operations basis, which we defined in the presentation that was posted this morning on our Investor Relations website, and which we use as lead numbers in our discussion because we believe they more accurately represent the true operational.

Jim: Formats and underlying results of our business.

Jim: You May also hear us refer to reported amounts which are in accordance with U S. GAAP.

Allegra Perry: GAAP.

Allegra Perry: Reconciliations of Gap Measures to Adjusted Amounts can be found in the Supplemental Financial Tables included in the presentation, which identify and quantify all excluded items and provide management's view of why this information is useful to investors.

Jim: Reconciliations of GAAP measures to adjusted amounts can be found in the supplemental financial tables included in the presentation, which identify and quantify all excluded items and provide management's view of why this information is useful to investors.

Allegra Perry: Joining me on the call will be VF's President and Chief Executive Officer, Bracken Darrell, and EVP and Chief Financial Officer, Paul Vogel. Following our prepared remarks, we'll open the call for questions.

Speaker Change: Joining me on the call will be Vf's, President and Chief Executive Officer, Bracken, Darrell and EVP and Chief Financial Officer, Paul Vogel following our prepared remarks, we'll open the call for questions I'll now hand over to Bracken.

Bracken Darrell: I'll now hand over to Bracken. Thank you, Allegra, and welcome to our Q4 Fiscal 2025 Earnings Call and our last call of the fiscal year. In our fourth fiscal quarter, revenue is down 3% in line with our guidance of negative 2 to negative 4. The reInvent program and our efforts to improve our operating profitability are working well and significantly overperformed on operating income, up by 400 basis points year over year to $22 million, exceeding our guidance. Gross margin improved 560 basis points versus last year from lower material costs, less distressed sales, less discounting, and higher quality inventory.

Jim: Thank you Allegra and welcome to our Q4 fiscal 2025 earnings call and our last call the fiscal year.

Jim: In our fourth fiscal quarter revenue was down 3% in line with our guidance of negative two or three.

Jim: The reinvent program and our efforts to improve our operating profitability are working well and significantly over performed on operating income by 400 basis sports year over year to $42 million exceeding our dogs.

Jim: Gross margin improved 560 basis points versus last year from lower material costs, less distressed sales less discounting and higher quality inventory.

Bracken Darrell: SG&A declined 2% as we executed comprehensive structural changes as part of our operating model transition under reInvent to simplify the company and enable long-term growth. Net debt was down by over a quarter versus last year. We reduced leverage year-end by a full turn. We're on track to deliver our stated medium-term goal of 2.5x leverage.

Jim: SG&A declined 2% as we executed comprehensive structural changes as part of our operating model transition and reinvent to simplify the company and enable long term growth.

Net debt was down by over a quarter versus last year, we reduced leverage year end by a full turn.

Jim: We're on track to deliver our stated medium term goal of $2 five <unk> leverage.

Bracken Darrell: Now let me share further details on our total revenue growth. At a high level, if you exclude VANS, we're up 4%. So, of course, let's talk about them. As I've said before, there's nothing that's not working at Vans that we can't fix with what's working in the rest of the business. We told you last quarter the turnarounds are often non-linear. To be clear, turnarounds can look nonlinear from a numerical standpoint, and this quarter is an illustration of that. However, we are methodically advancing all our initiatives. The actions we're taking to drive improved performance and progress in our turnaround are moving forward in a clear, linear manner.

Jim: Now let me share further details on our total revenue growth at a high level, if you exclude vans or up 4%.

Jim: So of course, let's talk about that.

Jim: As I've said before there is nothing that's not working at bands that we can't fix with what's working in the rest of the business.

Jim: We told you last quarter that turnarounds are often non linear.

Jim: To be clear turnarounds could look not linear from a numerical standpoint, and this quarter's illustration about.

Jim: However, we are methodically advancing all of our initiatives.

Jim: Actions, we're taking to drive improved performance and progress in our turnaround are moving forward and a clear linear manner.

Bracken Darrell: In fact, Vans, we're making progress every week to turn around the business. You don't see the results just yet numerically, but you will, and when you do, they'll be high quality. Banz was down 20% in the quarter after being down 8% in the prior quarter. This quarter's setback doesn't tell the whole story. If you adjust for deliberate strategic actions to manage the marketplace and set ourselves up to achieve profitable growth, the revenue decline was down high single digits versus last year and is consistent with last quarter's trend. Put another way, 60% of the decline this quarter is a direct effect of deliberately reduced revenue to eliminate unprofitable or unproductive business.

Jim: In fact, it bands, we're making progress every week to turnaround the business.

You don't see the results just yet numerically, but you will and when you do there'll be high quality.

Jim: Beds was down 20% in the quarter after being down 8% the prior quarter.

Jim: This quarter step back doesn't tell the whole story.

Jim: If you adjust for deliberate strategic actions to manage the marketplace and set ourselves up to achieve profitable growth. The revenue decline was down high single digits versus last year and is consistent with last quarter's trend.

Jim: Put another way 60% of the decline this quarter is a direct effect of deliberately reduced revenue to eliminate unprofitable.

Jim: Unproductive business.

Bracken Darrell: of the total Q4 decline in van sales. Almost 25% of it was driven by reduced storefronts and reduced channel inventory in China. As we've said in prior calls, the turnaround in APAC has been slower. We're taking the actions needed to set that marketplace up for long-term growth. Another 35% of the total decline was driven by an additional set of deliberate actions, which were also in place last quarter but had a lower impact. These include the closure of value doors, mainly in the U.S. that were margin eroding. The reduction of distressed sales that were unprofitable. and the closure of our own stores, also mainly in the U.S.

Jim: Of the total Q4 decline in bed sales.

Jim: Almost 25% of it was driven by reduced storefronts and reduce channel inventory in China.

Jim: As we've said in prior calls the turnaround in APAC has been slower.

Jim: We're taking the actions needed to set that marketplace up for long term growth.

Jim: Another 35% of the total glide was driven by additional an additional set of deliberate actions, which were also place last quarter, but had a lower impact.

Jim: These include the closure of value doors, mainly in the U S that were margin eroding.

Jim: The reduction of distressed sales that were unprofitable and the closure of our own stores also mainly the U S that were unprofitable.

Bracken Darrell: that run profit. And the results of these actions and others are that Van's gross margin is up significantly year over year.

Jim: And the results of these actions and others are the bands gross margin is up significantly year over year.

Bracken Darrell: Now, let me dissect the revenue a bit further. In non-value wholesale, sellout was slightly up. And in our key accounts, VANS sellout was up double digits. The balance of 40% of the client was all driven by DTC, which is primarily due to soft traffic.

Jim: Now, let me dissect the revenue a bit further and non value wholesale sellout was slightly up and our key accounts been sellout was up double digits.

Jim: The balance of 40% of decline was all driven by DTC, which is primarily due to soft traffic.

Bracken Darrell: What are we doing to address drought? We're evolving our marketing rapidly to drive brand heat, and we'll get that back. As I said, we've demonstrated that we can do this at Timberland, for example, where we also had a period of decline. So to answer the question I'll get later, how do I feel about Vans and its outlook? Good, as confident as ever. We're executing our game plan as Sun recently laid out. On talent, Sun's building her team has made several key hires, including the head of merchandising, and others are well underway. On products, we continue to focus on footwear by bringing in newness that will roll out over back to school, holiday, and next spring and beyond, while reigniting the existing core icon.

Jim: What are we doing to address traffic, we're evolving our marketing rapidly to drive brand heat and we'll get that back.

Jim: As I said, we've demonstrated that we can do this a timberland for example, where we also had a period of declines.

Jim: So the answer to answer the question I'll get later, how do I feel about vans and its outlook good as confident as ever we're executing our game plan is son recently laid out on talent SUNS building. Her team has made several key hires including the head of merchandising and others are well underway.

Jim: Products, we continue to focus on footwear by bringing in newness the royal rollout over back to school holiday and next spring and beyond.

Jim: While reigniting the existing core icons.

Bracken Darrell: Our focus on women and youth is starting to show early results with a positive response to the Super Low Pro, which was just launched and sold out in key colorways early on. Girls bought this product disproportionately, a signal that when we have something new and on trend, girls and women will come back. In terms of marketplace, we're pursuing brand elevation through channel cleanup, elevated stores and digital marketplaces, digital experiences. The cleanest of our channels, or non-value wholesale, which is a high proportion of new products, is showing encouraging results. And we have opportunities to keep driving more new products to increase that momentum and improving markets.

Jim: Our focus on women and youth is starting to show early results with a positive response to the Super low Pro which was just launched and sold out in <unk> early on.

Jim: Girls bought this product disproportionately a signal that when we have something new and on trend girls girls or women will come back.

Jim: In terms of marketplace, we're pursuing brand elevation through channel cleanup elevated stores and digital marketplaces digital experiences.

Jim: The cleanest of our channels or non value wholesale which has a high proportion of new products is showing encouraging results.

Jim: And we have opportunities to keep driving more new products to increase that momentum and improving marketing.

Bracken Darrell: To quickly summarize, we're making the right decisions to build a durable, growing brand over the long term. We're learning every week and we're making progress. Growth will come.

Jim: To quickly summarize, we're making the right decisions to build a durable growing brand over the long term for.

Jim: We're learning every week and we're making progress growth will come.

Bracken Darrell: Now, let me talk about some key highlights from our other. In the North Face, revenue for the brand was up 4% in Q4. DTC rose 9% with positive growth in all regions, including double digit increases in both America's anemia. For a product standpoint, outerwear was a standout, and footwear continued to grow nicely in all regions.

Jim: Now, let me talk about some key highlights from our other brands.

Jim: And the north face revenue for the brand was up 4% in Q4.

Jim: DTC rose, 9% with positive growth in all regions, including double digit increases in both the Americas anemia.

Jim: From a product standpoint, outerwear was a standout in footwear continued to grow nicely in all regions.

Bracken Darrell: Timberland continued its strong performance with revenue up 13% in Q4. Wholesale and DTC were both up globally, with lower discounts driving higher margins. Momentum in the 6-inch premium boot continued, while other styles also performed well, including Stone Street and Mount Badson. U.S. search interest growth remains strong in the quarter.

Jim: Timberland continues its strong performance with revenue up 13% in Q4.

Jim: Wholesale DTC were both up globally with lower discounts driving higher margins.

Jim: I'll, let them into six inch premium boot continued while other cells also performed well, including stone Street and melt beds.

Jim: U S search interest growth remained strong in the quarter.

Bracken Darrell: Let me close by touching on tariffs and the market uncertainty where Paul will go deeper. How are we approaching tariffs? The same way as we're approaching the rest of the business, with a long-term view, but a short-term pace. This is, of course, a dynamic situation, but at a high level, we are well positioned to manage the impact. We have an asset light model, which gives us great flexibility to move things and adjust quickly. And in fact, over the past several years, we've strategically diversified our supply chain and proactively reduced our U.S. finished goods source from China to less than 2% today.

Jim: Let me close by touching on tariffs and the market uncertainty, where Paul we'll go deeper.

Jim: How are we approaching tariffs the same way as we're approaching the rest of the business with a long term view, but a short term pace.

Jim: This is of course, the dynamic situation, but at a high level, we are well positioned to manage the impact.

Jim: We have an asset light model, which gives us great flexibility to move things and adjust quickly.

Jim: And in fact over the past several years, we've strategically diversified our supply chain and proactively reduced our U S finished goods.

Anish goods sourced from China to less than 2% today.

Bracken Darrell: We've also taken steps to strengthen our flexibility, learning from prior macro events. We're seasoned. When the tariffs were announced, we immediately activated our team and processes, organized a series of daily meetings to share feedback from Washington and supply our country. Supply Chain Opportunities and Costs in Factory Moves, Pricing Strategy and Communication These continue, coordinated, daily, and effective. As a result, we have excellent visibility on the whole equation and have activated a plan to effectively manage it. This is also a catalyst to make our business operate with a faster cycle time, the way we will always operate going forward.

Jim: We've also taken steps to strengthen our flexibility learning from prior macro events.

Jim: Our seasoned.

Jim: When the tariffs were announced we immediately activated our team and processes organize the series of daily meetings to share feedback from Washington and supplier countries.

Jim: Supply chain opportunities in cost and factory moves pricing strategy and communications. These continue coordinated daily and effective.

Jim: As a result, we have excellent visibility on the whole equation and have activated a planned effectively manage it.

Jim: This is also a catalyst to make our business operate with a faster cycle time, the way, we will always operate going forward.

Bracken Darrell: Looking ahead, clearly there's a lot of uncertainty out there from a macro standpoint, but we're not at all distracted by it. Our goal is to leverage it to improve our business. Our transformations on track and progressing well, as long as to be more agile, nimble, making better decisions more quickly. We're making progress towards our medium-term goals, regardless of the volatility of the macroenvironment. We continue to advance on our goal to create a unique, multi-brand portfolio company.

Jim: Looking ahead clearly there is a lot of uncertainty out there from a macro standpoint, but we're not at all distracted by it our goal is to leverage it to improve our business.

Jim: Our transformation is on track and progressing well and as long as to be more agile nimble, making better decisions more quickly.

Jim: We're making progress towards our medium term goals, regardless of the volatility of the macro environment.

Jim: We continue to advance on our goal to create a unique multi brand portfolio company.

Bracken Darrell: I'm more confident than ever that the actions we're taking will enable VF to return to growth and deliver strong, sustainable value creation.

Jim: I'm more confident than ever that the actions, we're taking will enable <unk> to return to growth and deliver strong sustainable value creation.

Paul Vogel: With that, I'll now hand it over to Paul to run through the financials. Great. Thank you, Bracken. Well, I normally dive right into the numbers.

Jim: With that I'll now hand, it over to Paul to run through the financials Paul.

Paul Vogel: Great. Thank you Bracken.

Paul Vogel: Well, then let me dive right into the numbers I did want to start today by addressing the current tariff environment.

Paul Vogel: I did want to start today by addressing the current tariff environment. As Bracken mentioned, we have been highly proactive in addressing the potential impacts from the newly implemented tariffs to ensure that we not only overcome any changes from tariff policy, but that we also emerge even stronger as a company. While we continue to closely monitor the situation, we believe the opportunity to unlock value within VF lies within our control. This is what will ultimately drive improved performance and lead to VF's turnaround. We are activating a multi-pronged plan to address the potential impacts from tariffs and believe we can offset them.

Paul Vogel: As Bracken mentioned, we have been highly proactive in addressing the potential impacts from the newly implemented tariffs to ensure that we not only overcome any changes from tariff policy, but we also emerge even stronger as a company.

Paul Vogel: While we continue to closely monitor the situation, we believe the opportunity to unlock value within VF lies within our control as to what will ultimately drive improved performance and lead to Vf's turnaround.

Paul Vogel: We are activating a multi pronged plan to address the potential impact from tariffs and believes we can offset these.

Paul Vogel: Let me start by sharing some additional information on our sourcing structure into the U.S. From a total company perspective, approximately 35% of our global cost of goods sold is related to product cost for goods sold in the U.S. Geographically, our exposure looks like this. Starting with China. China is less than 2% of total cost into the US. And some may recall a higher global number for China. That is because we do manufacture in China, but mostly for goods sold within China. Outside of that, our top sourcing regions of Southeast Asia and Central and South America in aggregate account for about 85% of what comes into the U.S.

Paul Vogel: Let me start by sharing some additional information on our sourcing structure into the U S.

Paul Vogel: From a total company perspective, approximately 35% of our global cost of goods sold is related to product product costs for goods sold in the U S.

Paul Vogel: Geographically, our exposure looks like to us starting with China, China is less than 2% of total costs into the U S and some may recall of higher global number for China does because we do manufacture in China, but mostly for goods sold within China.

Paul Vogel: Outside of that our top sourcing regions of South East Asia, and Central and South America in aggregate account for about 85% of what comes into the U S. <unk>.

Paul Vogel: Included in the 85% are top four sourcing countries are Vietnam, Bangladesh, Cambodia and Indonesia in that order. I also want to cite the potential of additional costs created by the current 10% incremental tariff for goods coming into the U.S. To be clear, this is an unmitigated number, meaning it is the total impact on the business if we did absolutely nothing to offset changes in current tariff policy. On an annualized basis, the impact would be approximately $150 million in cost. If the timing on tariff implementation stays as currently planned, we would see an impact of 65% of the annualized cost in fiscal 26, with most of the impact in the second half of the year.

Paul Vogel: Included in the 85% our top four sourcing countries are Vietnam, Bangladesh, Cambodia in Indonesia in that order.

Paul Vogel: I also want to say that the potential additional costs created by the current 10% incremental tariff for goods coming into the U S.

Paul Vogel: To be clear this is an unmitigated number.

Paul Vogel: <unk> is the total impact on the business. If we did absolutely nothing to offset changes in current tariff policy.

Paul Vogel: On an annualized basis, the impact would be approximately $150 million in costs.

Paul Vogel: The timing on tariff implementation stays as currently planned we would see an impact of 65% of the annualized cost in fiscal 'twenty six.

Paul Vogel: With most of the impact in the second half of the year.

Paul Vogel: We actually believe we can offset the impact from the tariffs, and we've activated our plans to do so. This entails cost management, select sourcing relocations, and pricing action. We are leveraging our deep and long-standing relationships with our partners and are working with them to ensure that we have the right cost structure. And on pricing, our approach is strategic and thoughtful. We have strong brands, which is always an advantage in price. In cost and supply chain locations, remember, we have an asset light model, as Bracken mentioned. This provides us great flexibility to move things and adjust quickly.

Paul Vogel: We actually believe we can offset the impact from the tariffs and we've activated our plans to do so.

Paul Vogel: <unk> cost management select sourcing relocations and pricing actions, we are leveraging our deep and long standing relationships with our partners and are working with them to ensure that we have the right cost structure.

Paul Vogel: And on pricing our approach is strategic and thoughtful we have strong brands, which is always an advantage in pricing.

Paul Vogel: And costs and supply chain locations remember, we have an asset light model as Bracken mentioned this provides us great flexibility to move things and adjust quickly.

Paul Vogel: Yeah.

Paul Vogel: We have every confidence we will fully offset these costs and emerge stronger as a business.

Paul Vogel: We have every confidence we will fully offset these costs and emerge stronger as a business.

Paul Vogel: So now let's turn to the financial review of the fourth quarter, starting with the P&L. Our Q4 revenue is $2.1 billion and down 3% year-over-year, in line with guidance of Down 2 to Down 5. Overall, we are flat in the second half of the year as a whole versus last year after being down 7% in the first. By brand, the North Face grew 4%, led by the brand's DTC performance. Band's revenue quarter was down 20%, driven by our intentional actions that Bracken mentioned earlier, and continued softness in DTC. And rounding out the top three, Timberland posted strong results at up 13%.

Paul Vogel: So now turning to the financial review of the fourth quarter, starting with the P&L.

Paul Vogel: Q4 revenue was $2 1 billion and down 3% year over year in line with guidance of down two to down four.

Paul Vogel: Overall, we were flat in the second half of the year as a whole versus last year after being down 7% in the first half.

Paul Vogel: By brand in North face grew 4% led by the brand's DTC performance band revenue quarter was down 20% driven by our intentional actions that fraction Bracken mentioned earlier and continued softness in DTC and rounding out the top three timberland posted strong results at up 13%.

Paul Vogel: By region, the APAC region grew 2%, while the Americas and EMEA regions were down 5 and 2, respectively, as we intentionally reduced promotional activity. The Americas is performing in line with expectations and excluding Vans, we're approximately in line with Q3 trends. and lastly by channel DTC was down 3% while wholesale was down 2%. Gross margins for the quarter was up 560 basis points to 53.4%, driven primarily by continued cost tailwinds, lower promotions, and higher quality inventory versus last year. SG&A was down 2% as faster than expected cost savings from the re-invent program and initiatives more than offset inflation and investment in product and market.

Paul Vogel: By region, the APAC region grew 2%, while the Americas and EMEA regions were down five and two respectively as we intentionally reduced promotional activity humira.

Paul Vogel: The Americas is performing in line with expectations and excluding vans grew approximately in line with Q3 trends.

Paul Vogel: And lastly by channel DTC was down 3%, while wholesale was down 2%.

Paul Vogel: Gross margin for the quarter was up 560 basis points to 53, 4% driven primarily by continued cost tailwind lower promotions and higher quality inventory versus last year.

Paul Vogel: SG&A was down 2% as faster than expected cost savings in the reinvent program and initiatives more than offset inflation and investment in product and marketing.

Paul Vogel: Our adjusted operating margin in the quarter was 1%, up 400 basis points year-over-year. Importantly, we're making real margin and profitability improvements as we continue to reshape and strengthen the foundation of our business. Finally, adjusted loss per share was a negative 13 cents versus negative 30 cents in Q4 of last year.

Paul Vogel: Our adjusted operating margin in the quarter was 1% up 400 basis points year over year importantly, we're making real margin and profitability improvements as we continue to reshape and strengthen the foundation of our business.

Paul Vogel: Finally, adjusted loss per share was a negative 13 cents versus negative 30 cents in Q4 of last year.

Paul Vogel: Let me just make one comment on the full year. The adjusted operating margin improved 110 basis points for us last year, and we continue to make great progress to turn this into an efficient and well-run business as we advance towards our medium-term targets that we outlined to you in the fall.

Paul Vogel: Let me just make one comment on the full year and adjusted operating margin improved 110 basis points versus last year, and we continue to make great progress to turn this into an efficient and well run business as we went as we advance towards our medium term targets that we outlined to you in the fall.

Paul Vogel: Moving to our balance sheet where we continue to make good progress. Eventories were down 4% or $71 million at the end of the year. Net debt was down $1.8 billion versus last year, down 26% as we fully paid off the $750 million April 2025 senior notes at the end of March, in line with our stated intention. As a result, our leverage was 4.1 times year-end, down one full turn versus last year. The free cash flow was $313 million, which when added to the sale of non-craft fits was $401 million versus our guidance of $440 million.

Paul Vogel: Moving to our balance sheet, where we continue to make good progress inventories were down 4% or $71 million at the end of the year.

Paul Vogel: Net debt was down $1 8 billion versus last year down 26% as we probably as we fully paid off the 750 million April 25 senior notes at the end of March in line with our stated intentions.

Paul Vogel: As a result, our leverage was four one times at year end down one full turn versus last year.

Paul Vogel: Our free cash flow was $330 million, which when added to the sale of noncore assets with $401 million versus our guidance of 440 million importantly, cash flow from earnings was in line with our expectations. The Delta was due to a timing impact that affected working capital.

Paul Vogel: Importantly, cash flow from earnings was in line with our expectations. The delta was due to a tiny impact that affected working capital.

Paul Vogel: Moving on to the outlook. As you know, we're not guiding for the full year. But let me give you a few metrics beyond next quarter to give some indication of where we believe we are heading. First on cash flow. We do expect operating cash flow and free cash flow, again, not including the sale of non-core assets, to be up year on year. Second, while you won't see leverage on the operating margin in Q1, we expect to see operating margin expansion in fiscal 2026, and we will continue to make progress on our re-invent workstreams in advance towards our medium-term target.

Paul Vogel: Moving on to the outlook as you know, we're not guiding for the full year, but let me give you a few metrics beyond next quarter to give some indication of where we believe we are heading first on cash flow. We do expect operating cash flow and free cash flow again, not including the sale of noncore assets to be up year on year second while you won't see leverage on the operating margin in Q1.

Paul Vogel: We expect to see operating margin expansion in fiscal 2026, and we will continue to make progress on our reinvent work streams and advanced towards our medium term targets.

Paul Vogel: Let me turn to Q1, which, as a reminder, is our smallest quarter for the year, and also one where advance has an outsized impact on the consolidated growth relative to other quarters. For revenue, we expect Q1 to be down 3% to 5% on a constant dollar basis. We stated in late January that we expected the first half of the year to be similar in growth rate to the second half of the last fiscal year. We expect VANS in Q1 to be similar to the Q4 trend due to the additional actions we've executed on stores and wholesale value channels.

Paul Vogel: Let me turn to Q1, which as a reminder is our smallest quarter for the year and also one where vans has an outsized impact on the consolidated growth relative to other quarters.

Paul Vogel: For revenue, we expect Q1 to be down 3% to 5% on a constant dollar basis.

Paul Vogel: We stayed in late January that we expected the first half of the year to be similar in growth rates in the second half of the last fiscal year.

Paul Vogel: We expect vans in Q1 to be similar to the Q4 trend due to the additional actions we've executed on stores and wholesale value channels. As a result of these actions the revenue trend in the first half of fiscal 'twenty six is expected to be slightly below the second half of fiscal 'twenty five.

Paul Vogel: As a result of these actions, the revenue trend in the first half of Fiscal 26 is expected to be slightly below the second half of Fiscal 25. Moving down the P&L, we expect Q1 operating loss to be in the range of $110 million to a loss of $125 million. Gross margin will continue to benefit from fewer discounts and promotions and FX, while SG&A dollars are expected to be flat to down slightly versus last year. Finally, we expect Q1 interest of approximately $40 million and an effective tax rate in the range of 13-14%, which is higher than last year's reported tax rate.

Paul Vogel: Moving down the P&L, we expect Q1 operating loss to be in the range of $110 million to a loss of $125 million gross margin will continue to benefit from fewer discounts and promotions and FX. While SG&A dollars are expected to be flat to down slightly versus last year.

Paul Vogel: Finally, we expect Q1 interest of approximately $40 million and an effective tax rate in the range of 13% to 14%, which is higher than last year's reported tax rate will continue to provide you with quarterly guidance on tax rate as things evolve.

Paul Vogel: We will continue to provide you with quarterly guidance on tax rate as things evolve.

Paul Vogel: I also want to take a moment to give you context around our long-term tax expense. Given the changes in global tax rates and our geographic mix, we do expect our reported tax rate to increase over the next one to two years and fluctuate quarter to quarter. This will have minimal impact on cash taxes, and we will provide quarterly guidance to help you model this going forward.

Paul Vogel: I also want to take a moment to give you context around our long term tax expense given the changes in global tax rates in our geographic mix. We do expect our reported tax rate to increase over the next one to two years and fluctuate quarter to quarter. This will have minimal impact on cash taxes, and we will provide quarterly guidance to help you model this going forward.

Paul Vogel: In closing, we remain confident in our strategy and are well underway in transforming VF to strengthen our business and navigate any challenges or obstacles that come our way.

Paul Vogel: In closing we remain confident in our strategy and are well underway in transforming VF to strengthen our business and navigate any challenges or obstacles that come our way and with that we'll now take your questions.

Krista: And with that, we'll now take your questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw your question, simply press star one again.

Paul Vogel: Okay. Thank.

Paul Vogel: Thank you.

Speaker Change: We will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you'd like to withdraw your question simply press Star. One again, we also ask that you limit yourself to one question. Your first question comes from Simon Siegel with BMO capital markets. Please go ahead.

Krista: We also ask that you limit yourself to one question.

Simeon Siegel: Your first question comes from Simeon Siegel with BMO Capital Markets. Please go ahead. Simeon Siegel with BMO Capital Markets Thanks. Hey, everyone. Good morning. Nice job on the gross margin. Nice job on the gross margin improvements.

Simon Siegel: Thanks, Hi, everyone. Good morning.

Speaker Change: So nice job on the gross margin nice job on the gross margin improvements obviously the uncertainty there and you guys are alluding to it but just maybe any help how you think about gross margin further into the year and then how we should think about how this looks structurally longer term and then an ignorant question for you guys sorry, the 313 free cash flow. This year does that include anything from Supreme.

Simeon Siegel: Obviously, the uncertainties there and you guys were alluding to it, but just maybe any help how you think about gross margin further into the year and then how we should think about how this looks structurally longer term.

Simeon Siegel: And then an ignorant question for you guys. Sorry, the 313 free cash flow from this year, does that include anything from Supreme? And if so, can you just talk about bridging the past year's 313 to the expected growth for next year? Thanks, guys. Good.

Simon Siegel: And if.

Simon Siegel: If so can you just talk about bridging the past year's $3 13 to the expected growth for next year. Thanks, guys.

Paul Vogel: Yeah, so as you know, we don't give out full year guidance. I sort of just reiterate what I said about margins in general. So, you know, we expect to see continued improvement on the margin side in fiscal 26. We believe we're still on track to meet the goals we stated at the investor day from a few months ago. Obviously, there's lots of puts and takes right now, but we still feel really good about that.

Speaker Change: Yeah. So we obviously know we don't give out full year guidance.

Speaker Change: I'm, sorry, just repeat what I said about margins in general so we.

Speaker Change: We expect to see continued improvement on the margin side and in in fiscal 'twenty. Six we believe we're still on track to meet the goals. We said at the Investor day from a few months ago. Obviously, there's lots of puts and takes right now, but we still feel really good about that we're not going to guide specifically on gross margin or SG&A right now, but that's kind of what we were headed and as I mentioned on my.

Paul Vogel: We're not going to guide specifically on gross margin or SG&A right now. But that's kind of what we're headed as I mentioned on my prepared comments. You know, you won't see much of in Q1, which implies, you know, you can kind of make your indication of where that will go for the for the rest of the year. Free cash with a 313 does not include Supreme. What we were trying to do was, you know, I guess, last year, we had given some free cash flow numbers included asset sales and things like that. Going forward, we're not going to do that.

Speaker Change: Prepared comments you won't see much in Q1, which implies you know.

Speaker Change: Kind of major indication where that will go for the for the rest of the year.

Speaker Change: Free cash flow of 313 does not include <unk>.

Speaker Change: The frame what we're trying to do is I guess last year, we had given some free cash flow numbers included asset sales and things like that going forward, we're not going to do that we'll just talk about pure free cash flow.

Paul Vogel: We'll just talk about, you know, pure free cash flow. So we said is, you know, we expect operating cash flow, importantly, to be up next year, you know, free cash will be up as well. And the magnitude of that will, you know, we'll see depending on sort of exactly where CapEx lands for the for the full year.

Speaker Change: So what we said is we expect operating cash flow importantly to be up next year free cash will be up as well and the magnitude of that will we will see depending on sort of exactly the capex lines for the full year.

Speaker Change: Great great. Thanks, a lot guys best of luck for the year.

Simeon Siegel: Thanks a lot guys, best of luck to you.

Speaker Change: Thanks, a lot.

Brooke Roach: Your next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead. Hi, Brooke. Good morning, and good morning. Thank you for taking our question. Hi, Bracken. Hi, Paul.

Speaker Change: Your next question comes from the line of brick Roche with Goldman Sachs. Please go ahead.

Speaker Change: Good morning, and good morning. Thank you for taking my question Hi, Brian Hi, Paul was hoping that you could talk a little bit more about the one time strategic reset actions that you are taking at vans that weighed on fourth quarter results and are expected to way again on first quarter results can you just give us a sense of when you might be fully through some of those actions that have already been.

Brooke Roach: I was hoping that you could talk a little bit more about the one-time strategic reset actions that you are taking at VANS that weighed on fourth quarter results and are expected to weigh again on first quarter results. Can you just give us a sense of when you might be fully through some of those actions that have already been taken and whether or not you're contemplating any additional strategic reset actions to return the brand to health? Thank you. Yeah, thanks for the question. We expected that.

Speaker Change: Taken and whether or not you are contemplating any additional strategic reset actions to return the branch to health. Thank you.

Speaker Change: Yeah. Thanks for the question, we expected we expected that by the way Ive on the I think my seventh day of post Covid.

Bracken Darrell: By the way, I'm on the, I think my seventh day of post-COVID, so if Paul sounds like he's sitting far from me in the corner, he and Allegra huddled over there and I'm in one corner, so if I cough in the middle, you'll know why. Yeah, so I kind of highlighted in my script, I mean, the bottom line is there are four things in there. One is actions in China that are really deliberately set at trying to reduce the overall level of channel availability in China, get it to the right size and the right place.

Speaker Change: So.

Speaker Change: Paul sounds like he's sitting far for me in the quarter and he had allegra huddled over there in a in one quarter or so.

Speaker Change: Profitability over what yes.

Speaker Change: Yeah. So the.

Speaker Change: We kind of I kind of highlighted in my script I mean, the bottom line is there are four things in there one is actions in China.

China bidder really deliberately set of trying to reduce the overall level of channel availability in China get it to the right size in the right places.

Bracken Darrell: and that that really hit peaked in Q4 and that will that impact will continue into Q1 Q2 and then fade in Q3 and be gone in Q4 and then you've got the others that we talked about before which are you know the reduce the number of doors of our own doors you know we started that in last year and it really is flows through I think it's the highest quarter this this quarter and that will begin to fade as we go into Q1 and then Q2 and then more in Q3 and gone in Q4 and then you got value door closures which we talked about before peaks in Q4 starts to come down in Q1 2 3 4 and it's gone in Q4 and then the the last one is distress sales where we're bringing those down so I think you know you can kind of say the impact of these will continue you know kind of proportionally right through Q1 and Q2 and then in Q3 they come down and then come all the way down in Q4.

And that that really.

Speaker Change: It peaked in Q4 and that will that impact will continue into Q1 Q2, and then fade in Q3 and be gone in Q4.

Speaker Change: And then you've got the others that we've talked about before which are.

Speaker Change: To reduce the number of doors of our own doors, we started that in last year and it really is flows through I think it is the highest quarter of that this quarter and that will begin to fade as we go into Q1 and Q2 and then more in Q3 had gone in Q4, and then you've got valued or closures, which we talked about before peaks in Q4.

Speaker Change: <unk> starts to come down in Q1, 234, and it's gone in Q4 and then the last one is distressed sales, where we're bringing those down. So I think you know you can kind of say the impact of these will continue kind of proportionately.

Speaker Change: Right through Q1, and Q2 than in Q3, the come down and then come over down in Q4.

Speaker Change: Yeah.

Brooke Roach: Great. Thanks so much. I'll pass it on. Thank you, Brooke.

Brook: Great. Thanks, so much I'll pass it on thank you Brook.

Laurent Vasilescu: Your next question comes from Laurent Vasilescu with BNP Paribas. Please go ahead. Good morning. Thank you very much for taking. Hi, Bracken. How are you? Better, much better. Thank you very much for taking my question. Good, good to hear from you guys.

Speaker Change: Your next question comes from Laura Valla, SKU with BNP Paribas. Please go ahead.

Laura Valla: Good morning, Thank you very much.

Speaker Change: Hi, Bracken how are you.

Speaker Change: Better thanks, much for taking my question.

Speaker Change: Good good to hear from you guys. So.

Paul Vogel: So I understand that you're guiding for free cash flow to be higher at $313 million from last year. I think you have the 500 million euro note due March 2026. Should we assume that you refinance that amount or pay it down? And then Bracken, really specifically here, I think I remember a few quarters ago, you called out that you were happy with the portfolio as it stands. Is that still the right way to think about it? But to get your take there as the environment continues to change. Thank you.

Speaker Change: I understand that you're guiding for free cash flow to be higher at 300, 330 13 million from last year.

Speaker Change: You have the 500 million Euro note due March 26 should we assume that you refinance that amount or pay it down and then bracken really specifically here I think I remember a few quarters ago, you called out that you were happy with the portfolio as it stands.

Speaker Change: Is that still the right way to think about it.

Speaker Change: Got to get your take there.

Speaker Change: As the.

Speaker Change: As the environment continues to change thank you.

Paul Vogel: Unknown Speaker Yeah, so I'll take a dip first. Yeah, so we have the next maturity about a year from now. So yeah, between free cash, we have about a $2 billion revolver right now, which we'll have access to. And so our expectation right now is that between free cash flow, and drawing a little bit on the revolver, we'll be able to, you know, pay that down a year from now. And then, you know, moving forward, again, we expect free cash flow to continue to improve year on year, along with our operating performance and our operating margins.

Speaker Change: Sure.

Speaker Change: Yes, so I'll take the that first yes. So we have the next maturity about a year from now.

Speaker Change: So yeah between free cash and we have about a $2 billion revolver right now, which will have access to and so our expectation right now is that between free cash flow.

Speaker Change: And drawing level on the revolver will be able to pay that down a year from now and then moving forward again, we expect free cash flow to continue to improve year on year, along with our operating performance and our operating margins and so that's how we'll we'll move it goes moving forward. So we feel really confident that we're in a good place to continue to pay down debt and and particularly one that.

Paul Vogel: And so that's how we'll move it go moving forward. So we feel really confident that we're in a good place to continue to pay down debt and, and particularly the one that's coming up in about a year from now.

Speaker Change: Coming up in about a year from now.

Bracken Darrell: On your second question, Laurent, yeah, we're happy with the portfolio. I think it lines up nicely with the strategy we laid out in October. Now, that said, there's always things around the edges that we're going to keep raising, and we do kind of a firm review with our board every year. So we're going to go through that. If there's something that doesn't belong in the portfolio, you can bet that we'll exit it, but there's nothing significant that we talk about.

Laura Valla: On your second question, Laura Yeah, we're happy with the portfolio you know I think it lines up.

Speaker Change: The strategy, we laid out in October.

Speaker Change: You know theres always things around the edges, but youre going to keep raising and we do have a kind of a firm review with our board every year. So we're going to go through that or if there's something that doesn't belong in the portfolio. You can bet that we're all exited but there's nothing significant that we talk about.

Laurent Vasilescu: For more information, visit www.fema.gov Okay, very helpful. Thank you very much and best of luck. Thank you.

Speaker Change: Yeah.

Speaker Change: Okay very helpful. Thank you very much and best of luck.

Speaker Change: Thank you.

Michael Binetti: Your next question comes from Michael Binetti with Evercore ISI. Please go ahead. Hi, Michael. Hey, guys. Thanks for taking our questions here. Hope you're feeling okay, Bracken. I feel great.

Speaker Change: Your next question comes from Michael Binetti with Evercore ISI. Please go ahead, hi, Michael Hey, guys. Thanks for taking our questions here.

Speaker Change: Thank you.

Michael Binetti: Paul, not to beat a dead horse, on the free cash guide, would you mind just helping us think about the, I think you said, wait to see where CapEx falls out, any initial plan on CapEx and then working capital? I think there was no benefit this year, and you talked about a strategic timing shift. I'm wondering if you shifted some working capital benefit into fiscal 26 as we think about the build there. And then more on the fundamentals on VANS, since you mentioned that the next quarter is seasonally important. And anything you can talk about with the strategy for VANS back to school, what we'll see that's different coming out of SUN and the team?

Paul Vogel: Paul that's a data dead horse.

Speaker Change: Free cash guide can you would you mind, just helping us think about the.

Speaker Change: I think you said wait to see where Capex falls out any any initial plan on Capex and then working capital I think Theres no benefit is here and he talked about strategic timing shifts I'm wondering if you've shifted some working capital benefit into fiscal 'twenty as we think about the build there and then more on the fundamentals on vans since you mentioned that.

Speaker Change: The next quarter seasonally important and anything you can talk about the strategy for vans back to school, what we'll see this different coming out of <unk> and the team I know, it's a seasonally very important part of the year.

Michael Binetti: I know it's a seasonally very important part of that.

Paul Vogel: I'll take that one after Paul. Yeah. So, um, so on the first one, the free cashflow, yeah, the shift was basically we had, um, we had something payable that wasn't due in the very beginning of, of early April, um, and to avoid any issues, any potential interest and things of that sort, we actually decided to prepay in, uh, uh, at the end of the, um, at the end of March, it was literally probably a shift of a couple of weeks. Um, again, doing it, you knew we'd end up, this is where we ended up with free cashflow relative to our guidance, but we'll always do what's right for the business and it was the right business decision to pay at that time to avoid potentially additional, um, charges.

Paul Vogel: Sure I'll take that one after Paul yes. So so on the first one the free cash flow yeah. The shift was basically we had.

Speaker Change: We had something payable that wasn't doing the very beginning of early April.

Paul Vogel: And to avoid any issues any potential interest and things of that sort of we actually decide to prepay in AR.

Paul Vogel: At the end of the at the end of March It was really a probably a shift of a couple of weeks.

Paul Vogel: Again I'm doing it you knew we'd end up this is where we netted with free cash flow relative to our guidance, but we will always do whats right for the business and it was the right businesses to pay at that time to avoid a dish potentially additional charges. So that's why we did it in yet so that will kind of flip just from basically late.

Paul Vogel: So that's why we did it. And yeah, so that will kind of flip just from basically late, early April until late March, and that's what, what, uh, what that was, um, uh, and then on CapEx, we, again, the, um, operating cashflow will go up, free cashflow go up, you know, CapEx, we have a plan.

Paul Vogel: Early April until late March and that's what what what that was.

Paul Vogel: And then on Capex here, we again.

Paul Vogel: Operating cash flow will go off free cash will go up Capex, we have a plan, we're not going to guide to Capex right now we don't.

Paul Vogel: We're not gonna really guide to CapEx right now. We don't, um, but to me, CapEx is also, we will, you know, we're looking at remodels, we're looking at store openings. We're looking at, you know, things we need to do on the technology side. Um, and we have a, uh, a plan that we go through and then we, we kind of look throughout the year and we'll adjust accordingly, depend on, you know, what's working and what's not and where we want to double down, double down. So we've got, um, you know, long-term plans in place, intermediate term plans.

Paul Vogel: But to me Capex is also we will we're looking at Remodels were looking at store openings. We're looking at things we need to do on the technology side.

Paul Vogel: And we have a.

Paul Vogel: Our planning we go through and then we kind of look throughout the year and we will adjust accordingly depend on what's working and what's not and where we want a double double down so we've got.

Paul Vogel: Long term plans in place intermediate term plans and we've always had some short term flexibility to move up or down based on need. So that's that's kind of where we are.

Paul Vogel: And then we have always had some short-term flexibility to move up or down based on, on needs. So that's, that's kind of where we are.

Bracken Darrell: Yeah, Michael, to answer your second question, I'll just remind you some of the things that Sun said. And she is very deeply executing, you know, it all starts with leadership, you know, we feel so good about having the right leaders in our present roles. And, you know, I feel super about Sun. And she's, she's a magnet for talent. You know, she's worked with a lot of people in this industry, and they seem to seem to everybody seems to want to work with her, I can see why after I've been around her. So she's attracting the right people.

Yeah, and Michael to answer your second question I'll, just remind you so things that sunset.

Speaker Change: And she is very deeply executing you know.

Paul Vogel: It all starts with leadership.

Paul Vogel: We feel so good about having the right leaders and our president roles.

Paul Vogel: I feel super boat so.

Speaker Change: She's a magnet for talent. She has worked with a lot of people in this industry and they seem to seem to.

Speaker Change: Everybody seems to want to work with or I can see why is there a bit around or so she's attracting the right people. That's the first step and it's really happening.

Bracken Darrell: That's the first step. And it's really happening.

Bracken Darrell: The second thing is product, you know, she's a product person through and through and product is the most important thing we can do on the Vans brand. You know, we're systematically going to continue to roll out new products. This quarter, we rolled out super low pro at a very small level and sold out of the top two styles almost immediately. And they were they were positioned really for women, and, and youth. And so that's a very, very good sign to us. But she's, she's not just focused on women, you she's focused on men, boys, women, youth, and footwear first apparel second, and she's well underway there, you might remember the four season strategy, which which plays itself right.

Speaker Change: The second thing is product you know she's a product person through and through and product is the most important thing we can do on the brands brands.

Speaker Change: Systematically going to continue to rollout new products. This quarter, we rolled out super low pro and a very small level and sold out of the top two styles almost immediately.

Speaker Change: They were they were positioned really for women's and youth and so that's a very very good sign to us, but she's she's not just focused on whenever he or she is focused on men boys women youth.

Speaker Change: In footwear apparel and.

Speaker Change: And she is well under way there you might remember the four seasons strategy, which which plays itself right and if you look at our social media now Youll see a lot of activity and serve for example, which is a lifestyle Q.

Bracken Darrell: And if you look at our social media, now, you'll see a lot of activity and surf, for example, which is a lifestyle cue. But But, you know, we actually don't have a lot of products for surf, but the lifestyle is there. And so we're, we're going to continue to build as we go through the year into all those four different activities, which she's talked about. And then, you know, making the hard choices to make sure we have the right places to distribute that we're not in that we're not dragging along unprofitable stores and unprofitable value channels, which we've already talked about.

Speaker Change: Q, but but we actually don't have a lot of products for circuit. The lifestyles, there and so we're going to continue to build as we go through the year into all of those four different activities she talked about.

Speaker Change: And then making the hard choices to make sure we have the right places to distribute that we're not in.

Speaker Change: That we're not dragging along unprofitable stores, and then profitable value channels, which we've already talked about and and so she is really well underway and I feel very very good about our progress and you'll still see that as we come into <unk>, you'll see a little more and then holiday more still more than in spring even more so it's just going to keep rolling through and cascading.

Michael Binetti: And, and so she's really well underway. And I feel very, very good about our progress. And you'll still see that as we come into back school, you see a little more and then holiday more, still more and then in spring even more. So it's just going to keep rolling through and cascading. Thanks a lot, guys. Thank you, Michael.

Speaker Change:

Speaker Change: Thanks, a lot guys.

Speaker Change: Thank you Michael.

Matthew Boss: Your next question comes from the line of Matthew Boss with J.P. Morgan. Please go ahead. Hi, Matthew. Great, thanks. Hey, Bracken, maybe just to switch gears a bit. Sure.

Speaker Change: Your next question comes from the line of Matthew Boss with Jpmorgan. Please go ahead.

Speaker Change: Great. Thanks.

Matthew Boss: Hey, Bracken, maybe just to switch gears a bit could you maybe talk to health of the north face brands, where you see that brand today any changes with direct to consumer and momentum as we move into spring.

Matthew Boss: Could you maybe talk the health of the North Face brand where you see that brand today? Any changes with direct-to-consumer momentum as we've moved into spring?

Matthew Boss: And then maybe just for Paul, I guess what's the what's the best way to to think about progress that you're making with cost actions, where we stand on? Yeah, so on TNF, I feel really good about TNF. You know, we've got, you know, you saw we had very strong sell, you know, direct to consumer sales this quarter, which is terrific. It's a very, it continues to be a good signal. And, you know, that's without what I know is coming. You know, so I'm really excited about the whole approach in terms of spring, you know, I guess the, the one thing I point to in spring is, you know, our footwear business, which is really an all season business, but it probably, it probably literally skews outside of the winter window.

Speaker Change: And then maybe just for Paul.

Speaker Change: I guess, what's the what's the best way to think about.

Speaker Change: Progress that you're making with cost actions, where we stand on on that curve.

Speaker Change: Yeah, so on TNF I feel really good about TNF.

Speaker Change: We've got you know you saw we had very strong sell.

Speaker Change: Direct to consumer sales this quarter, which is terrific because it can do.

Speaker Change: This would be a good signal and that's without what I know is coming.

Speaker Change: So I'm really excited about the whole approach in terms of spring you know I guess, the one thing I would point to in spring as you know our footwear business, which is really an all season business, but it probably.

Speaker Change: It probably literally skews outside of a winter window.

Bracken Darrell: And that and we grew around the world in footwear and strongly, by the way. So I feel good about that. I think it just shows that this brand really has a role to play outside of the winter period. And we're going to get more and more of it over time, you'll see more and more products come through a little bit like the story on Vans, you're going to see every successive season, you'll see more coming from us on that. We've also, by the way, this is a fine point, but we've, we've, we used to develop just two seasons a year, we're moving to four.

Speaker Change: We grew around the world and and footwear and strongly by the way. So I feel good about that I think it just shows that the spread really has a role to play outside of the winter period, and we're going to get more and more of it over time, you'll see more and more products come through a little bit like sort of as you're going to see every successive <unk>.

Speaker Change: And you'll see more coming for muscle that we've also by the way this is.

Speaker Change: A final point, but we've we start we used to develop just two seasons a year, we're moving to four and the significance of that is that when you do two seasons a year, it's very easy for your design team to design kind of winter and winter because it kind of overlaps so when you add fall.

Bracken Darrell: And the significance of that is that when you do two seasons a year, it's very easy for your design team to design kind of winter and winter because it kind of overlaps when you add fall. I doubt I explained that any further. I hope I didn't confuse you. And making it four forces us to be better in the spring and the summer.

Speaker Change: So with.

Speaker Change: With that ill explain that any further I hope I didn't confuse you and making it four forces us to be better in the spring and the summer and so that youre not going to see the impact of that this year, but you're going to see absolutely going to see it next spring in next summer. So we will get.

Bracken Darrell: And so that you're not going to see the impact of that this year, but you're going to see absolutely going to see it next spring and next summer. So we'll get, that being said, we certainly have good products for this year. So we're going to keep rolling out and have more and more coming.

Speaker Change: That being said, we certainly have good products for this year. So we're going to keep rolling out and have more and more of it.

Paul Vogel: Yeah, and then on the cost side, I'd say a couple of things, actually. So first is, we've now achieved, you know, 300 million, actually a little more than 300 million from the first phase of reInvent, which we talked about. So we've hit our goals and targets there, which is great. Second, we started to see a little bit from the second initiatives, we talked about that incremental 500 to 600 million of operating profit that was split between SG&A and gross margin, we start to see a little bit of that as well in Q4. So if you look at that, and you see it, you know, we beat on the operating income line and the operating margin in Q4, with revenue that was right in line with our expectations.

Speaker Change: Yeah, and then on the.

Speaker Change: The cost I'd say, a couple of things actually so first is we've now achieved $300 million actually a little more than $300 million from the first phase and reinvent, which we talked about so we've hit our goals and targets there which is great.

Speaker Change: Second we started to see a little bit from the second initiatives, we talked about that incremental $500 million to $600 million of operating profit that was split between SG&A and gross margin, we started to see a little bit of that as well in Q4.

Speaker Change: So if you look at that and you see we beat on the operating income line and the operating margin in Q4 with revenue that was right in line with our expectations. So again, you're seeing that we're doing we're getting some of that benefit a little bit earlier than we thought.

Paul Vogel: So again, you're seeing that we're doing, we're getting some of that benefit a little bit earlier than we thought. And we're seeing good progress across, you know, our DT business, our supply chain stores, all those areas, you know, and with that, I did mention that SG&A would be flat to down in Q1. So in general, I think you're starting to see it all come through from from a cost perspective. Thank you so much.

Speaker Change: And we're seeing good progress across you know our <unk> business, our supply chain stores all of those areas and with that I did mention that SG&A would be flat to down in Q1.

Speaker Change: So in general I think youre, starting to see it all come through from a from a cost perspective.

Great Best of luck.

Speaker Change: Thank you so much.

Adrienne Yih: Your next question comes from the line of Adrienne Yih with Barclays, please go ahead. Hi, Adrienne. Great, thank you very much.

Speaker Change: Your next question comes from the line of Adrienne <unk> with Barclays. Please go ahead hi.

Great. Thank you very much and hi, sorry, you're sick.

Adrienne Yih: Hi, sorry you're sick. Yeah, me too, but I feel better now. I'm on the other side. Good. Just in time for earnings.

Speaker Change: But I feel better now.

Speaker Change: Got it okay.

Speaker Change: Different time for earnings.

Bracken Darrell: So my question is not to keep on the vans, but it sounds like there's four things that are kind of like non-comp sales headwinds, two of them, the value doors and the reducing of the inventory seem like they are largely done. But the other two kind of at various levels diminishing kind of follow us into all four quarters. Is the comp progress that you're seeing in the non-value doors enough to offset that or are you sort of tacitly guiding us to think that vans will be down throughout the year all four quarters? And then I guess a follow on to that is, you know, non-value channel demands, one thing and consumer demand, right?

Speaker Change: My question is not to keep keep on the band, but it sounds like there's four things that are kind of like non comp sales.

Speaker Change: Sales headwind.

Speaker Change: Then the value doors.

Dean give or do you think of the inventory seem like they are largely done.

Speaker Change: The other two kind of at various level diminishing kind of follow us into all four quarters is that and is it is it comp.

Speaker Change: I think youre seeing in the non value doors enough to offset that or are you fantastically guiding us to think that that will be down throughout the year.

Speaker Change: All four quarters, and then I guess a follow on to that it's.

Speaker Change: Non value town demands, one thing and consumer demand right and I think you were talking about the fallout is also getting better but in your own DTC. What are you seeing in terms of that I'm concerned I'm talking to you about calling brand equity mindset et cetera.

Bracken Darrell: And I think you're talking about the sellout is actually getting better, but in your own DTC, what are you seeing in terms of that and consumer talking to you about kind of brand equity, mindshare, et cetera?

Bracken Darrell: Sorry. Yeah. We'll do the last one. Okay. Go ahead. Okay, so first of all, on your, I think your first question, yeah, the answer to the question at a high level is, the impacts of those four things will keep, keep appearing in the base in Q2, Q1, Q2, and then a lot less in Q3, and then they're gone in Q4. And that's pretty much true for all of them on some level. So they're, they're about the same, they all have their events that keep showing that they basically, we're not doing more of them, they just, once you do, once you do for example, when you close the door, you lose four quarters of the door.

Speaker Change: Last one.

Speaker Change: Okay.

Speaker Change: Okay. So first of all on your I think your first question yes.

Speaker Change: The answer to the question that at a high level is the impacts of those four things will keep.

Speaker Change: Keep appearing in the base in Q2 Q1 Q2 less in Q3 and then they are drawn in Q4, and that's pretty much true for all of them. Some level. So they're about the same they all have their events to keep showing they basically were not doing more of them. They just once you do once you do these look for example, when you close the door and you lose four quarters of the door.

Bracken Darrell: So if you close value channels, you lose four quarters of the value channel. So, so that's, those are going to keep trailing through there. They'll be about proportionally the same through those first two, couple of quarters and less in Q3 and then gone in Q4.

Speaker Change: So if you close the HL useful quarters with IHS. So so that's those are going to keep trailing through there. The adobe bought proportionately the same through those first couple of quarters less in Q3 of the gone in Q4.

Bracken Darrell: In terms of in consumer demand, we're still not getting enough traffic into our stores and our websites. And I refer to that in my script, and this is fundamental brand heat. And we are, we're doing a lot of experimenting to see what we to do to trigger that. And I don't want to let the cow out of the bag on anything that's ahead of us. So we are certainly learning a ton. And the good news is that when we have traffic and when there is traffic, when you have a curated assortment, as you do in, in our non-value wholesale, we're actually flat to up.

Speaker Change: In terms of ink consumer demand, we're still not getting enough traffic into our stores and our websites and I referred to that in my script and this is fundamental brand heat and we are we're doing a lot of experimenting to see what we need to do to trigger that and I don't want to let the counter of the bag and then anything that's ahead of US. So we're certainly learning a ton and.

Speaker Change: The good news is that when we have traffic and when there is traffic when you have a curated assortment as you do and in our non value wholesale we're actually flat to up and if you looked at our key accounts, we're really making sure we have the best assortment the best.

Bracken Darrell: And if you looked in our key accounts, we're really making sure we have the best assortment, the best execution that we can have. We're up double digit. So the key now for us is to take the medicine that we've talked about and then get the traffic up. And so that's a function of two things. You've got to have things people want to come by and they've got to know about them. And so Sun is working feverishly on developing those new products and Super Low Pro is a great example of what's ahead of us. And then the second one is, we just got to keep working on that marketing.

Speaker Change: Execution that we can have were up double digits.

Speaker Change: No.

Speaker Change: The key now for US is to take the medicine that we've talked about and then get the traffic up and so that's a function of two things you've got to have things people want to come by and they've got to know about.

Speaker Change: So sun has working feverishly on developing those new products and Super low code is a great example of what's ahead of us.

Speaker Change: And then the second one is we just got to keep working on that marketing. So we've got a stronger sort of marketing program. We've made a lot of changes in there they're not.

Bracken Darrell: So we've got a stronger and stronger marketing program. We've made a lot of changes in there. You aren't seeing all of them flow through yet, so it's coming, but we'll get there.

Speaker Change: We're not seeing all of them flow through yet so it's coming but we will get there you know we've done it in timberland, we know how to do this we just got to execute.

Bracken Darrell: We've done it in Timberland. We know how to do this. We just got to... By the way, Timberline looks great.

Speaker Change: Yeah.

Speaker Change: That's great.

Adrienne Yih: My follow up is either Bracken or Paul, the tariff dollar amount unmitigated, if you were to try to mitigate that through pricing, it looks like a low to mid single digit price increase across, you know, all geos, well, across, yeah, across the geography. So, A, when does the inventory come off the balance sheet and impact you, which brands, which geos, and then just any other color and thoughts on price Let me take the first part of that. I'm going to let Paul take the end when it starts to show up in our P&L. Yeah. Sorry about that.

Speaker Change: My follow up is either tracking or Paul.

Speaker Change: Tariffs dollar amount on mitigated if you were to try to mitigate that through pricing it looks like a low to mid single digit price increase across all geos well, yeah across the geography. So a when does the inventory come off the balance sheet and impact to you which brands.

Speaker Change: And then just any other color on thoughts on pricing let.

Paul Vogel: Let me take the first part of that I'm going to let Paul take that.

Speaker Change: Starts to show up in our P&L.

Paul Vogel: Yeah.

Bracken Darrell: Paul just ran out of the room. Yeah, that's you're exactly right. To mitigate that, we have a history of pricing. So pricing is not completely foreign to us. We've systematically priced over time. And so we're comfortable with with our ability to price. I've gone through and really dug into this and we're pretty good at it. And you're right, it's completely offset that 10% would be a low or mid single digit number. But we're not going to do that. We're going to be very strategic about how we price. We're also going after costs. We're going after relocations of manufacturing, as we said in the script.

Paul Vogel: Sorry about the Pall just ran out of the room.

Paul Vogel: Yes, that's you're exactly right.

Paul Vogel: To mitigate that we have a history of pricing so pricing is not completely for the us we've systematically priced over time and so we were comfortable with.

Paul Vogel: Our ability to price all gone through a really dug into this and we're pretty good at it.

Paul Vogel: And you're right, it's a completely offset the 10% would be would be a low single or mid single digit number.

Paul Vogel: But we're not going to do that we're going to be very strategic about how we price. We're also going after costs, we're going after relocations.

Paul Vogel: Manufacturing as we said in the script so.

Bracken Darrell: So we're leaving no stone unturned. And we're also not viewing this as a problem that we've just got to try our hardest to offset as much as we can. We view this as an opportunity. We're going to more than offset what comes our way and turn this into an opportunity. You know, never waste a crisis is not just a cliche. I have gone through three or four of these in my career. One time I took the mindset of, gosh, we'll try to mitigate all we can. And we did. We got pats on the back by investors.

Paul Vogel: We're leaving no stone unturned there. We're also not viewing this as a problem that we've just got to try our hardest to offset as much as we can we view this as an opportunity we're going to more than offset.

Paul Vogel: What comes our way in terms of material opportunity.

Paul Vogel: Waste a crisis is not just a cliche.

Paul Vogel: I have I have gone through three or four of these in my career, one time I took the mindset of gosh, we'll try to mitigate all we can and we did we got pats on the back by investors.

Bracken Darrell: and our board. And then after about a week after we closed the year, I was like, wow, what was I thinking? If we just said, if we'd really had the right mindset, we could have more than offset all of it. And we did the next year. And that's what we're going to do here. So we're really after it.

Paul Vogel: And our board and then after about a week after we close the year I was like well what was I think if we just sort of if we would really have the right mindset, we could have more than offset all of it and.

Paul Vogel: And we do the next year and that's what we're going to do here. So we're really after it.

Paul Vogel: Yeah, I mean, bracking out the most of it, I think just from the impact, you know, you'll see most the impact in the back half of the year, we're, we're not gonna get into specific, you know, you know, by brand, we don't really disclose sort of the brand geographic mix of our cogs. But yeah, second half of the year. And as I said, the numbers that we gave you, we expect, if nothing changes, if the timing of the implementation doesn't change, it's exactly where it is. We'll see about 65% of that, as I mentioned, in, in fiscal 26.

Speaker Change: Yes, I mean backing out the most of it I think just from the impact of you mentioned Youll see most of the impact in the back half of the year, where we're not going to get specific.

Speaker Change: By brand, we don't really disclose sort of the brand geographic mix of our Cogs, but yes.

Speaker Change: Yes, the second half of the year and as I said the numbers that we gave you we expect if nothing changes if the timing of the implementation doesn't change it's exactly where it is mostly about 65% of that as I mentioned in the in fiscal 'twenty six.

Paul Vogel: Again, with most of that, coming in the last two quarters of the year.

Speaker Change: Again with most of that coming in the last two quarters of the year.

Ike Boruchow: Great. Thank you very much.

Speaker Change: Great. Thank you very much best of luck and feel better thank.

Bracken Darrell: Best of luck and feel better. Thank you. I do. I don't sound better, but I feel better.

Speaker Change: Thank you I do.

Speaker Change: Well better.

Speaker Change: Feel better.

Ike Boruchow: Your next question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead. Thanks, Ike. Hey, good morning, guys. Bracken. Paul, hope you're feeling better, Bracken. I guess just two questions from me.

Speaker Change: Your next question comes from the line of Ike <unk> with Wells Fargo. Please go ahead.

Speaker Change: Thanks, Mike.

Speaker Change: Hey, good morning, guys.

Speaker Change: Paul Hope I hope, you're feeling better bracken.

Speaker Change: I guess just two questions from me just one if we could talk about maybe not the revenue per se, but can you talk about the thoughts on what you plan to do with the store base from here I don't know yet what the ending store count was for Q4, but are.

Bracken Darrell: Just one, if we could talk about advance, maybe not the revenue per se, but can you talk about the thoughts on what you plan to do with the store base from here? I don't know yet what the ending store count was for Q4, but are there more closures you guys are planning? How are you thinking about that strategically?

Speaker Change: Are there more closures you guys are planning how are you thinking about that strategically and then maybe bracket higher level.

Bracken Darrell: And then maybe Bracken, higher level on the dividend, I know you've reduced it given what's going on in the business. Okay, I'll take the first one, I'll let Paul take the second one. Excuse me. Uh yeah on the store count you know we've we've edited our store count pretty aggressively as we as we've suggested the last two calls and you know I think that's great. We're never going to be done you know you're always going to be um editing away stores that aren't working and adding where you feel like you have opportunities and we'll be doing both but I think the happy lifting is is basically done.

Speaker Change: On the dividend I know you've reduced it.

Speaker Change: Given what's going on in the business.

Speaker Change: The tariffs and the macro like are there any thoughts going on about potentially.

Speaker Change: Reducing it further or even cutting it outrageous curious how you're thinking about cash preservation in that sense.

Paul Vogel: Okay I'll take the first I'll, let Paul take cycling.

Speaker Change: Excuse me.

Paul Vogel: Yeah on the store count.

Paul Vogel: We've edited our store count pretty aggressively as we as we suggested last two calls.

Paul Vogel: That's great we're never going to be done you know you're always going to be.

Paul Vogel: Editing away for stores that arent, working and adding where you feel like you have opportunities we will be doing both but I think the heavy lifting is is basically done.

Paul Vogel: Yeah, and on the store count, it is down on a percentage term, about 7%, yeah, or so, year on year down 8% actually, officially, global, I think, yeah, yeah, yeah, 8%. And no, we'll, we're going to continue to look to optimizers, no, no news, I think you've probably seen the majority of it, but we'll see where it goes. And again, it's all part of CapEx, right, we'll strategically look at stores to close, look at stores to open, if it makes sense, we'll look at ways to remodel stores, if that makes sense, we've been testing some new remodels that have gone pretty well, again, very early days.

Yeah and on the store count is down on a percentage term.

Paul Vogel: 7% yeah.

Paul Vogel: So.

Paul Vogel: Year on year down 8% actually officially.

Paul Vogel: Global I think yeah, yeah eight 8%.

Paul Vogel: And now we'll keep we're going to continue to to look to optimize as no. No news I think you've probably seen majority of it but we'll see where where it goes and again, it's all part of Capex I wall strategically located stores to close look at stores that opened if it makes sense, we'll look at ways to remodel stores. If that makes sense. We've been testing some new remodels that have gone pretty well.

Paul Vogel: Again very early days, so we'll see we'll rather not slowly again, that's why I said that we leave some room in our capex budget to adjust right. So we have some new store remodel is not just in vans, but across our entire store footprint when.

Bracken Darrell: So we'll see, we'll roll them out slowly. Again, that's why I said that we leave some room in our CapEx budget to adjust, right. So we have some new store remodels, not just in Vans, but across our entire store footprint. When we get traction, if we think they're working, we'll have the capacity to accelerate remodels. You know, if they if we don't get the ROI on those that we think we will, we can always decide to pull back and think about other ways. So that's how I think about both Vans, but the store count in general, and how we're thinking about it from a growth perspective and a CapEx perspective.

Paul Vogel: When we get traction if we think they're working well have the capacity to accelerate remodels.

Paul Vogel: If we don't get the ROI on those that we think we will we can always decide to pull back in and think about other way. So that's how I think about both fans, but the store count in general and how we're thinking about it from a growth perspective, and a capex perspective dividends.

Bracken Darrell: Dividend, you know, I'll start and Paul can finish if he feels like I didn't do a good job. You know, we're, there's nothing to announce, you know, we have, we reduced our dividend twice, we took it down to 140, it's about $140 million a year now, that's always on the table, you know, if we felt like we needed it, you know, we would certainly open that back up. We've said we're, our priority is to bring the leverage down under two and a half times. So if we feel like we needed to do something there, we will, we would.

Paul Vogel: I'll start and Paul can finish if he feels like a very good job there.

Paul Vogel: Nothing to announce we have we reduced our dividend twice we took about two.

Paul Vogel: 140, it's about $140 million a year now that's always on the table you know if we felt like we needed it.

Paul Vogel: Certainly opened back up we've said, we're our priority is to bring the leverage down under two and a half times. So if we feel like we needed to do something that we will we would.

Paul Vogel: But we have made that decision that we and I don't know, I don't anticipate that. No, I have nothing else to add.

Paul Vogel: But we have made the decision that we and I don't know.

Paul Vogel: I don't anticipate that.

Paul Vogel: Yes.

Paul Vogel: Thank you.

Paul Vogel: Thank you.

Paul Vogel: Cute.

Paul Vogel: Okay.

Dana Telsey: We only have time for one more question, and that question comes from the line of Dana Telsey with Telsey Group. Please go ahead. Hello, Dana. Hi, good morning, everyone. Hi.

Speaker Change: Thank you and we have time for one more question and that question comes from the line of Dana Telsey with Telsey Group. Please go ahead.

Speaker Change: Hello, David Good morning, everyone.

Dana Telsey: As you think about the buckets of the gross margin where you mentioned the product cost tailwind for lower promos and the higher quality inventory, how does that relate by channel and by brand? And if any of these buckets continue going forward, what's your outlook? Thank you.

Speaker Change: Hi, as you think about the <unk>.

Speaker Change: The buckets of the gross margin.

Speaker Change: From a product cost tailwind for lower promos in the higher quality inventory, how does that relate by channel and by brand and in any of these buckets continue going forward. What's your outlook. Thank you.

Bracken Darrell: Boy, that's a that's a pretty complex question. I'm not sure how to answer that, except I'll take a stab at a higher level answer, then I'll let Paul see if he can go deeper to try to help you here. You know, overall, what we're doing goes forward. So this is not, these are not temporary changes to boost our gross margin, and they kind of fade over time. We're fundamentally improving our gross margin. The mix between the suggestion here that there is a gross margin difference between wholesale and retail, you know, you got a higher SG&A on one and on the retail side and a lower SG&A on the other, but then the gross margin is true.

Speaker Change: Boy that's a.

Speaker Change: Pretty complex question.

Speaker Change: I'm not sure how to answer that except I'll take a stab at a higher level answer then I'll, let policy. If you can go deeper to try to help you here.

Speaker Change: Overall, what we're doing goes forward. So this is not these are not temporary changes to boost our gross margin as they kind of fade over time, where fundamentally improving our gross margin the mix between the suggestion here that there is a gross margin difference between wholesale and.

Speaker Change: And and retail you know you're at a higher SG&A on one of the.

On the retail side, the lower SG&A or the other but then the gross margins to Mr. It is true, but we really think that we've got a we'll have a pretty balanced view.

Paul Vogel: But we really think that we've got a pretty balanced Portfolio of Channel Choices there that should actually have very strong gross margin. So we expect it to carry forward. I mean, I'm really excited about the gross margin improvement we're getting in VANS as planned. A lot of this medicine we're taking is absolutely healing the patient just to stay on the theme today. And, you know, I think we can certainly see it in our P&L, especially in our gross margin. So we're excited about it and we have no interest, desire or willingness to backslide on that.

Speaker Change: Balanced.

Speaker Change:

Speaker Change: Portfolio of channel choices, there that should actually have very strong gross margin. So we expect that to carry forward I mean, I'm really excited about the gross margin improvement, where we're getting in vans as planned Youll a lot of this medicine. We're taking is is absolutely healing the patients just to stay on that theme today.

Speaker Change: And and you know I think we can certainly see it in our P&L, especially in our gross margin. So we're excited about it and we have no no interest desire or our willingness to backslide on that so we expect it to stay.

Bracken Darrell: So we expect it to stay. Yeah, I mean, I guess I would just add that, you know, obviously, the reInvent initiatives are initiatives that affect all of our brands positively, things like integrative business planning. Again, it's the benefits that Bracken was talking about and why we think we've become a great multi-brand company is the things, the initiatives that we're doing on the reInvent side, the things we're doing on integrative business planning, they will affect and it's a standardized process that will help all of our brands. And so that will help grow those margins. Again, markdown management will help all of our brands.

Speaker Change: Yes, I guess I would just add that obviously the.

Speaker Change: The reinvent initiatives or niches that affect all of our brands positively things like integrated business planning again, it's that the benefits of Bracken has talked about why we think it will become a great multi brand company as the things that with the initiatives that we're doing on the reinvent sides of things we're doing on integrated business planning they will affect that and it's a standardized process that will help all of our brands and so that will help gross.

Speaker Change: And again, Mark down management will help all of our brands. So that helps everything and then as Bracken mentioned, you know getting rid of some of the distressed and unproductive value doors advance hubs gross margins there specifically, but in general most of the initiatives. We have mostly talk about really go against all the all the brands.

Paul Vogel: So that helps everything. And then as Bracken mentioned, you know, getting rid of some of the distressed and unproductive value doors advance helps grow some margins there, specifically, but in general, most of the initiatives we have, most we talk about really go against all the brands.

Bracken Darrell: Yeah, I guess, and maybe I'll parlay that into a close here. So thank you for the question. You know, I'm, I'm We're, you know, Paul and I, and I think I can speak for my whole leadership team, we're, we all recognize gross margins, the most important number in any P&L. And so we're, we're absolutely fixated on improving it systematically over time. My last company, we improved 900 basis points, almost, almost 1000 basis points in gross margin over the time I was there. And while I realize this is a different world, different industry, different, I'm very realistic.

Speaker Change: I guess, maybe I'll parlay that into a close here. So thank you for the question.

Speaker Change:

Speaker Change: You know, Paul and I think I can speak from our whole leadership team, where we all recognize gross margins. The most important number at any P&L and so where we are.

Speaker Change: We're absolutely fixated on improving its systematically over time my last company, we improved 900 basis points.

Speaker Change: Almost.

Speaker Change: 1000 basis points of gross margin over the time I was there and while I realize this is a different world different industry different a very realistic we have a lot. We have significant improvement of gross margin still so I expect to continue to make good progress there.

Bracken Darrell: We have a lot, we have significant improvement in gross margin still. So I expect to continue to make good progress there.

Bracken Darrell: In closing, we really are confident about our strategy. We're really well underway in transforming VF to really strengthen the business and, and navigate whatever challenges from a macro standpoint, they're not going to distract us. We feel good about where we are. We have a fantastic team. We're making great progress and, and we'll, we'll keep you updated as time goes on. Thanks everyone for the questions and the engagement and we'll see you next quarter. This concludes today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change: In closing, we really are confident about our strategy, we're really well underway of transforming VF to really strengthen the business and navigate whatever challenges from a macro standpoint, they're not going to distract us we feel good about where we are we have a fantastic team, we're making great progress and it will we'll keep you updated as time goes on thanks every.

Speaker Change: And for the questions and the engagement and we will see you next quarter.

Speaker Change: Yeah.

Speaker Change: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change: Yeah.

Speaker Change: Yeah.