V.F. (VFC) 22 May 242024 Q4 Earnings call transcript

Hello and welcome to the VF Corporation Fourth Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Vice President, Investor Relations, Allegra Perry. Please go ahead, Allegra.

Good afternoon, and welcome to VF Corporation's Fourth Quarter Fiscal 2024 Conference Call. Participants on today's call will make forward-looking statements. on cause and materially. actual based uncertainties subject are could that results statements current are expectations to These to differ uncertainties documents in are with These SEC. the filed regularly detailed today's true because noted, use numbers call the constant referred accurately as performance basis, defined was lead release we've we in underlying more results the which otherwise represent and issued Unless to this dollar will on afternoon believe an and amounts they be operational our adjusted press that discussion business. in our on which we of

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

VF's Darrell; President, Chief Martino Financial me will and EVP and Puckett. Executive on Officer, and Officer President Commercial Chief Matt Bracken be Officer, Emerging Guerrini; Chief and call the Scabbia Joining Brands, EVP,

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

now over I'll Bracken. hand to

really, like I'll prior I'd program management we've out to took it and strong, Thanks next. Matt. today I how been sustainable my calls, growth. dive expected us. for would by position today to as Then to year. finished go . Well, on of I'll Almost so progress. We've tough our return XX layers so financial And Martino better deeper return everything with end here, organizational we we've I progress and and a over understanding our approaching far moves playing can them. time reinvent made we're discussed briefly of before turning the what's key a touch good strategic first results executed you on about to lot of on we role. the I've we'll when really few this. the much Reinvent to to have I a and it taken and feel leadership growth, is our why I'm the deep to so I VF a changes, changes have largely made get months joining begin The confident needed

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to over Matt. the you Thank hand now for time. I'll

you overview 'XX, some themes results areas some for My of good afternoon, for key fiscal and focus give review a our Thanks, 'XX. more highlight Martino, a plan of in-depth high-level to QX today fiscal is of and and guardrails everyone.

and XX% We fiscal adjusted having the made delivered revenue results difficult 'XX closed of balance share namely minute. largely our further P&L progress out down the flow capital, more per detail $XXX with earnings which sheet and We exceeded against remain year on by initial year working of a guidance, year, We free $X.XX. our lower And for though in in our with even fiscal Reinvent. flow generated our million phase objectives. cash near-term cover I'll inventory, cash driven

actions QX, results, with which as work to we down on expectations. paying Reinvent while part to review, transformation and advanced business our additional quarter debt program. is complete our in sheet. operating and performance balance measures line were our of the fourth largely proactive take Throughout and with implementing our portfolio our the We our the improve strengthening to are continue and strengthen to against now balance turning Now track continue sheet, strategic which plans

QX sequential we last While actions have the there was seen to developments challenging, we've importantly, encouraging underlying from slight stemming remain a recent quarter. from financial results And relative taken. improvement some the

let's unpack than the on, flow Now we delivered where the and areas starting anticipated. stronger inventory, guided liquidity, we performance with results cash

seeing declined quarter, efforts of progress efficient across the a operate on ongoing our made double-digit of by wholesale of businesses. inventory, we with largest versus where of last marketplace brands. year, partners. benefit significant up and X the clean a First, XX% in level ahead in an more the expectations and quarter each our with in each direct to declines of the our also improvement inventories our level Inventory the We're across our health inventories of with

Turning results, flow. highlight of our to cash the financial

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review of Now to a the QX moving P&L. on

brand X similar than from our points U.S. actions. with actions our compares the QX also included revenue driven of as was results weighed impact little right reset largely with which reset from XX%, This in and line wholesale on down revenue of During a XX%, a portfolio. performance, expected, more quarter, which by including the impact minus across expectations,

X% our by APAC a growth The to QX. down in across and slightly The the double to more the region the in including wholesale DTC and to mid-single in heavily brands, most which as the quarter, our remains results. X% Americas, cautious in wholesale, growth down to for region. similar in quarter down quarter, the channel, Turning the in our North improved as channel, Europe to in rate although QX The a weighed Face the channel Vans, driven grow international digits a direct-to-consumer business to actions inventories partners performance down Vans positive. the Performance in Face, by performance particularly run continued on the by to low was led as the driven U.S. the digits was resilient, in EMEA Americas sequentially grew our the was region by in delivering region continued North as the reduce Relative DTC The to Timberland, relative anticipated, brick-and-mortar overall better quarter channel, trend from region. and anticipated, improved posture further XX%

While to delivery timing, normalization still which run in improvement negative, last of which distorted relative quarter, comparison wholesale -- is QX. the there rate the an year-on-year reflecting the partly was in

APAC region the market growth and turnaround. strong ongoing Dickies, for except Lastly, North at reflecting with led ongoing and continued momentum brands Vans was Growth in by we all Timberland. was up growing, The X% their the in Face distribute

well, as single was for digits. direct-to-consumer up high the Importantly region

remained While XX%, in up the Asia strong, Greater declines performance region overall. and China the pulled of Southeast Korea down

the X to quarter the brand. APAC Looking up brand, our China at a distributor by business. North and reflecting of with region in see X% was regions. the by in Australia shift market growth up down partly onetime XX%, impact Starting was positive Zealand the X% from model and growing of almost direct the New greater driven a XX% by growth in returns offset the to globally performance as continue for to the DTC positives. expected. Face And outperformance across The we all

impacted across a quarter the overall global as outerwear While digits and a year through The up weather business we larger was by couple mid-single remains to quarters. was last however, cold continue wholesale of for which weigh will good results underlying is the solid. sales the start, on over the slow had quarter, primarily and Americas season contained the which next performance, outlined the had pressure to

XX% line contemplated the previously expectations top on the line, a declined QX. quarter, similar inventory to impact in negative reflecting of with and revenue in actions our Vans impact the the that reset X-point

has ongoing improvement a on stronger benefits and from growth were the marketplace was and worth the business grew quarter, Asia, relatively wholesale largely reduced Europe brand's it's pressured been where DTC impact The where more reset noting both wholesale about continues global on the in in that wholesale in in U.S. and in challenged both reflecting in brand including X-point of negative Europe down has rest down it trends. markets DTC the from where deriving and those the Americas, sequential the be go-to-market books quarter, continues in to a last the reflecting is platform. and regional effective. While execution and channel XX%, soft consistent the position been to Timber and actions basis, the sell-out the resonate order with because which issues significantly with

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in associated was inclusive negative points, up been Reinvent impacts will program. offset gross Importantly, accelerate reset basis investment XXX SG&A, primarily volume-related benefits more reserves, partly SG&A from XXX timing associated compensation foreign of were comping the excluding fiscal and and incremental last margin spend with slightly, year, areas into which versus with the from about key move prior impact. sales. reflecting by year versus modest and inventory actions basis the currency would year points as than last incentive have lower our savings spending down in gains which 'XX, on asset increases we along

of adjusted decreased in revenue, points. SG&A X.X% quarter a was the negative XXX share operating As the per about to XXX earnings $X.XX. minus result lower a points by and margin basis basis Adjusted deleveraged

on fiscal we've million brief to $XX million year were head million QX, million. where approximately at We $XXX associated to fully least a in noncash. on million the were in driven full of about basis from additional an and $XXX noncash. remain primarily about deliver to I'll savings. provide total of charges, we in of to be $XX like gross 'XX. delivered the savings updates in million Including million QX, supply with you $XX $XX In the recorded I'd update We in the be heard on call. made the in savings We including target, versus to charges earlier on in middle million expect Reinvent year build which reductions which this the chain to some progress the track Bracken QX, a our which count was about cost forward Now year fiscal $XXX by on Reinvent place by rate run of charges savings, $XX annualized total $XXX we expect connected booked now million,

a the product to the we beyond. move on towards and As specifically and we of focused been intend stated, accelerate building. has into and oriented we areas of To this previously limited portion date, reinvestment design anticipate biggest and 'XX reinvest and fiscal our innovation expected, brands brand savings as and as will opportunities the

sum transformative the a optimize up I the If health fiscal and cost significant adjust the proactively improving to trajectory model 'XX, rationalize and business. it structure, amount can of by implemented operating the be begin characterized and we've the our that of actions and marketplace reset

While guidance to relative we're outlook wanted context provide flow specific I not our issuing to fiscal for cash QX some guardrails to P&L 'XX. now, and

in First, in term, revenue the challenged remained near QX. particularly

to from X over We year-over-year sell more clearance which the gross from that cleanup we've largely be expect of reset the frame. we margins, be comparable channels, This in resulting results erosion when of including we the work inventory actions benefit headwinds. out own as to much the our contained excess to residual outlets. the taken expect year that through to quarters. Specific occurred will and time the QX, fundamental margin last across during excluding actions QX tailwinds should In the impact

fiscal last level from compared less cash particular, reductions. asset in It's as from worth noncore generate financing the the for sales. expect $XXX lower year inventory considering that to plus generated We 'XX explaining is cash included capital to free activities available of this $XXX when cash in working benefit, over benefit proceeds million approximately a of result million from flow

payment least expect billion, of $X term We liquidity in $X due the year end contemplates loan the with the billion at to which December. of

As this great I I enjoyed take my from and you time years, can the the and a close getting over learned thank to VF, you. that particular, minute deal truly spent in know earnings with I've X call of I work a last the with to I've tell our you CFO. was wanted interactions. with the a And role in last all of to

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I'll over to operator, take With your the and that, hand it questions. we'll

Instructions] coming from [Operator Our ISI. from first is Evercore Binetti question Michael

I you me to you spoke little ask, maybe positive. that help you bit market turning that Can Let Bracken, in a a indicator. dots connect just Europe, DTC us the Vans more? know like as leading

any to be do Or said the is as wholesale or are be signs we uneven can there we that DTC from see leading order if that you direct-to-consumer? DTC to think so, the channels? far are order this I'm rebuild cleaned the in to that can thoughts similar the the that maybe I in I'm think, turn say forward -- of up look safe think more also will it indicator wholesale? books the happening in the there trying -- as -- about inventory can You to wholesale DTC anything there -- improvements book had could trying channel with happen clean there stabilizing inventories Is to to we positive. reasons do to guess, season on be for And a you that between some as evidence

ahead, or I Yes, opening -- think the today, from channel DTC the think pretty to in world think one there, turnaround I'm start. answer what Martino. they start But come DTC to and to Europe not in hear Michael, in and you that but I mentioned just great now question I Yes, think Go one going I I do quickly you, think then versus do seeing systematically, to is virally Martino we're Okay. wholesale. as we're that see and I mentioned in the start seeing generally I can Thank we're already going you. specific the last to part wholesale but and of let spread -- that's think and positive. Europe. say about call, I

Yes. Michael. Thank Nice you. hear from you, Bracken. to

improved, direct get definitely simply I mix from allowed starting stronger much a we Europe a assortment definitely conversion can that has focus consumer consumers. it's on think traction and newness bit in see a experience, of and better driven a by to

that we and we that marketplace, engagement a win They At want with may brand. with the was They a Vans the traffic see that improved same see win see time, brand, really really definitely, trends to as the have again better with brand. search an our we the to they but and little inventories interested the love to we together challenging, So want we bit engage in better offset And partners us. brand. discussed. with the improving, opportunity remain in are

creating we've think, the to work conditions So opportunity. been, I that now against

add. can I if And Yes. just

overloaded happen cleanup I think the need is a we meant as in didn't indicator good in leading never channels it the is were Europe to as same because which Americas, Americas were the in the Europe in in way. we

coming from Vasilescu Paribas. BNP Laurent Next from question is

coming there. overall we how How North U.S. by revenues ongoing But around about is I Bracken, I'd wholesale you're bit a like not about do to ask this know give the you framework tonight. weakness Face about release, company, the call Can The or year? North for maybe the guiding of not press on in think -- just know it little in think brand we by says Nicole for but the do Face. I

especially true of -- the overall ongoing wholesale winter apparel the U.S. The in the weakness and in Yes. products. kind is

questions, these relevant. I'm let take buy lot I'm let and to So so this. a regional I'll let to take going of I brand, -- you think going start I'll very that's Martino to

Yes.

comment about, I the our Americas performance specifically and in overall wholesale think in honestly, channel. the one region

I think of key it's our been one challenges.

You wholesale the stronger the definitely double biggest probably to we brand The the and not specifically strategically opportunity information the focused lost really this actually also, know there. can that Americas is reset that number lead But to are future now that. has for in partnership down and into the opportunity TNF frame face market. we our on

issue segmented strength, so high or relevant for more opportunity the leverage distribution, materials across distribution. of The the and North including the common far have a of a also bit their really Americas in a it's diversified Face more more the region say would opportunity into into to play a to brands and I and American So

guiding be by But brand, not continue The about by world. Face. region Not brand to I the of certainly bullish very North

think I great great it's position. brand, a

awesome lot rate product at have in going of We out we're kind and building. to products continue both the and invest coming of to same brand a and

going of then, the down to And in heard if Should correctly, think the you're said you Matt, $X I that $XXX helpful. December. pay assume expect you we refinancing comes tranche I billion the 'XX. Very due some don't in think for guardrails us should April? And front. if know if give you expense we about year so, for I audience that kind fiscal on interest how can of million

Yes, that you to want take Bracken? me one,

Yes, why don't you go ahead.

Yes.

contemplates then kind coming and $X generate of the in with bit the fund the billion going increase into a what balance would we the pay of that's yes, year. And that with of on prepared liquidity, going excess that of to just is. of cash kind short-term little business. an what So cash. from we quite borrowings from of quite honestly, then a cash bit quickly, sheet the pretty a back we've in come talked December, the paydown bit more about got I some which We -- than we'll We're billion and of remarks said that there was in little to So -- right? year $X end -- can

we you're the it to $XXX to million looking ongoing the do actions, be obviously, some refinanced, not gets that's start aggressively work we're see barring at other associated with pretty think -- the And right? portfolio think about And things, is I which So that. to strategic now math, difficult mean, you needing and obviously, talked complete. And I -- assumptions other I the right. to there there. review

the So right. -- but I think math you have

so. but year-over-year, not on it modestly dramatically thing other . The be lower interest, will

if that. just any but could it, add refinance I And have Matt don't any intention of we and to said

question Capital Simeon BMO from today from Siegel Next coming is Markets.

again, the Nice North which the around about want just Bracken, hear Face. just follow-up chapter. the next best last a on Matt positivity you in luck one. and

from probably missed Face's about there any Like North would level, you Vans? you on higher I do North sell-through. if how declines did differ do maybe just any then the revenue they decline? be think Face How helpful? depth I'm Just give potential the of And inverse thoughts sorry sell diagnosing it, wholesale

people trying growth to seeing about Just North Face think the are versus brand through tells challenge what and you wholesale it. the U.S. how its at

I'm good feel second overall, going take I'd But first I North one I'm let handle going say, the to The about the and one. Matt very to Face.

a growth portfolio. in a and from got we're think we've in position Face North not in is a in quite general few really The strong styles. very I broad-based, different It's concentrated Vans. So The

the world over by we're we're But way. continues a have time. The of this The We quarter, world, gain North and underlying the in think we have strong, the Face, across been around in I -- in sellout and strong very in X% dynamics China. strong general, lot opportunity share to strong it's be strong a and

versus So quarter, think We North Matt, position. that about answer sell-out you'll last really to sell-through been. it continue Face? see stronger I in in different to we question DTC said question want we're do and that has The than had be you a

Yes.

was say overall I channels. and is think pretty been year and good out growing the right? good, has my across outerwear that mean across would said I what in still generally I comments that I was

North we've fall very in right? real Another the And The beginning less year, this factor reset, good place. actions inventories there's we in down. order here happening We a no is because Face about reset pretty in sold The of said year. really books from that a wholesale at the lot talked were we're

the had of cetera, a start kind couple forward seasons, terms Some those we obviously, to we build marketplace some . is we'll and future into of disappointing that deliveries is challenges that the residual so as credibility from ago, on-time of sell-through, back of of And we continued And look right? et happening. in need to seasons things. benefit of see the

in just of that's add true any -- one Americas I it's The and the If model North context up the just hard Also in past of certainly not bring brands, our the it's operating Face. thing. could in to more

general So Americas we several in for underperformed the years, in years. many

too. that model, bring on operating really that, I'm So and as bullish we

we this the time, come. and think really it to take over pretty and I or it's to a see it's quarter, in quarter The Don't going North next but Americas. going hold dramatic Face improvement in expect

Brooke coming Sachs. from Next is from question Roach Goldman

to that the up SKU reductions you've including cleanup of the you gross be result, thinking for on gross be to marketplace end the might follow and promotion, in initiative other both pricing the DTC taken, year? your complete about inventory the to wanted as items And a driving and first takes mix between how puts Will count actions and that relative wholesale. I margin and margin that at are quarter?

in want be brought the opening hear quarter, which Thank going may rest you, a -- for by great the to to of is off Matt, remarks. fully complete to selling inventory we that? Matt back, generally And Brooke. his do end complete be that high-level going to comment, through of but you. to Yes, referenced going you actions to what those the may finish I'm first it are we not hand not but make or on Matt. that speaking, the

sure. for Yes,

pretty So So through through marketplace, the marketplace of the actions, the right? full-price getting done, I'll selling definitive. I'll just as be the -- getting largely well. clearing system, obviously, Brooke, season with We're meaning out reset through be excesses inventory the actual and clean,

good a that's pretty So in place.

in of through so have that at out we will we a mean fiscal think the consider. were continue. several as 'XX of beyond of minimum -- in They'll year, fiscal outlets, margin of 'XX sell anything, through bit things full-price issue. kind be be meaningfully, an the wholesale clearance less be story inventory that residual through We're right? mix If a fairly Americas going to as We about looking into than slightly a would expectation the costs kind the a 'XX. in would that will the channels, on pulled the basis quarter impact there. that right? there be not sell fiscal you puts of across through they in and some year to the own Product and to kind generally I are that could going largely be that's first takes channels, of improves they benefits But -- time. down And are in full and our

be And been less impact headwind headwind, the but a It you've to of of has be the course, and year. a will We're Marketplace standpoint. actions of to that then, still know it cleaner. bit across been. be going to themselves. consumers do the exactly a got to which meaningful so. cleaner. what has an degree will the be what into we're Foreign will inventory not marketplace currency, appears cleaner from coming the the certainly, Hard will year do

think, attention So the pay I to to. key those . things, are

one could add I just If last comment. Yes.

resetting the brought what the effects it selling on marketplace -- is outlets. got just own we think residual the about as through reset, of to this this through chapter our back if largely said, Matt way I we for think done, chapter Vans is

Your Matthew Boss next question from coming is from JPMorgan.

to pick Bracken, up where off. maybe left wanted you I just

do as new where do reset what And How what's on Or innovation of inventory part remain your potential hand? Vans, Vans? phase? you us on and today you to some So see in bottom -- versus remarks? the the line that cited feel the at the do just actions time scale of product you about

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So I shoots green think some there's here. real

different Across just remains positions maybe then what of to terms a And follow-up. the currently sale? leadership in Great. still organization, holds

really think about leadership and talked my that. I opening, I'm super about I'm excited proud position have we excited. in the to say, and I

industry primary Abishek CHRO for who at X strong even been preceded from looking And from had came time Brand industry. Dalmia, at came Salesforce. and background it, like years. the this in strong So has from at that Pacific or His who X across we've The Hydro focus apparel unicorn. -- a We the larger Salesforce BCG to such but to been was this industry at somebody ours then there. company is BCG, background a [indiscernible] and attracted than footwear able attract really the we've extremely XXx came retail in is

and I and on. could -- So on go

we're really brought We've feeling here. several now. I'm the got So people in that -- excited there's jobs right about we

new going promotion, there. for today we'll press internal So an will Vans excited him we're the and role, have announced in about in. coming Americas that be We and President he's really example,

where comes about it and in finished feel people coming are. completely never you're out, and some to going there's really people severe good we because always So and I

Dana Advisory from Telsey from coming is Telsey question Group. Next

any you the we'll does it are Bracken, that as changes? over speak. so like? update you on how you And turning What Where look portfolio process? to I do you when think, think as have in cow, think an particular restructuring about sacred to and mentioned, nothing

Yes. one. Thanks for the question. I was hoping this get I'd

with say to optionality. review all, complete. is I we're of to of The assortment portfolio lucky gives sitting deal here with, incredibly so just brands great have I such First which us that rich feel

share be on so decision but acting. completely we what and or we're you believe to a acting we're are there. might doing And what acting, we We not that optionality made we publicly, can have

out, good to I very they but directions see -- you feel we about them going So when can't we be give and we're when the frame actions to those have do. go. I come you'll I -- we But announce time obviously, don't multiple -- when we'll will are very good we're review. a where -- about

channels And When just you at are to that. on on base, what stay is your it? physical of and the store own following there? digital think the the going store to the up seeing store your capital you allocation base in view distribution, about level? base and same digital wholesale, your What's And physical

industry that's to X They critical. the is And in each probably would that direction mistake one the other. First, I all swing think in super another. a or could our they're different play hasn't be prioritize made over pit made and not role. I -- the one And

amazing course, we advantage model a between I balanced in of you're wholesale. our of think, in because not wholesale, be taking and you're brand know DTC private just we have lucky if if boy, distribution a only brick-and-mortar online strength because you We're own very don't room. you're winning And in wholesale you bricks-and-mortar winning, and have. might not if you're the

job wholesale. We a done good as on have not

year. not in And another over especially could last job we XX good the dropped We'll about Americas XXX We've stores our ending done as in probably we stores. probably have. retail, have years own drop the X in a Vans. We this are

aggressively -- total fleet XX% we're if that So Matt. I've but reduction got right, in that's a

on count to do really anything Martino? managing think store aggressively smart I want you but pretty we're they're And decisions. add So there, the

anywhere. integrated at marketplace I try holistically, and is journey think to the and view ourselves better version consumer to going going is the a the what of how channels look to important we're be how we're

stronger dynamic our I approach formats, globally elevation regions. to a I think think and in partnership concepts, spoke the with more new then adopting stores, fully with a new wholesale, a integrated and across winners scale testing, about I

half maybe more I legs taxing we point, way U.S., run opportunity the speak So And and in and ever. have have into in that adopted Europe our the that elevating we're and is X about and when agility going and I really it's consumer wholesale than Shanghai then Europe can and we think to sorry, the within. we or to first direct half flagships the innovate the -- way and walk hopefully in not in adopted in and to future best Bracken's that

question next Lorraine coming Your Bank Hutchinson today is from America. of from

million million noncore that $XXX the cash exactly the that had in is business? together. Is of target. the Jets you of PACS on what up follow assets to the that? Wanted sale What included you wondering Anything else? flow Just planned when put $XXX

Lorraine, $XXX all. the a plus at flow of brand benefit little asset It's sales. not is sales free cash million noncore bit from

Most those assets, aviation will sell-off fiscal So program. these 'XX. that our sales are a from probably of of assets. done in A flow. kind in of there's got XX% million physical couple assets. 'XX in terms were building cash of bit said little the bit of things coming free of that a occur we as smaller part of of $XXX that. We most in range But of of the is And eliminating little

take -- to space the we not about, and extremely aircraft like expensive said, that Matt program of that the comment as If have a been exiting in should consolidating turnaround I could aggressive had say have about I'll a double we context this.

of could going the be fiscal these pulled space, our We've enter we together. release and planes even year. quickly the where you -- bet we out we're have new can pretty So hanger we now as space to

office creativity urgency Costa into across in urgent felt in So our where we'll a people from the in across that are company. moving the doing at Denver And sites. from dropped We're really is probably I am X buildings moving that can get here we're so happen benefit and the people in can release where office way get all running sense other some X and to focus together, building Mesa X bring we've real for each the example, to today in to our floors that, that fast be intense culture but of Vans. of

it's So can feel the and you a energy returning. generalized practice

don't then, I brand mentioned of intention would the think sales that come debt. refinancing Great. Bracken, have ahead any And you Would maturity? that million the imply of you $XXX

Yes.

Next from Bob question today is coming from Drbul Guggenheimer.

I on bring was guess is can seeing the bit your then a you an wondering Supreme could him Bracken, Paul candidate. a and as And willing you decision you're to in if the might that just of more other outlook what there talk be update sort you attracted to little about us Vogel you share? give what to with thing of sort just

them. they you but transparently be bet soul. this of little Supreme really performer. is we very the The in those their I'll opened And of piece publicly, We about Yes, they continues don't numbers can good. start quarter, performance. -- We Shanghai report Supreme. period -- to proud team strong executing I'm public with a look good well. a quarter a those got of and feel really

went I've a it's get industries I very feel parts -- about said, and I Supreme Vogel, to have lot year. sales broad slate think learned rest to the very can through Paul and and up we a do of count it's of candidates and the just team we're low from Paul, store, a I really multiple that per performing multiple very So of good very high store we very well. deep to with throughout the world what across the him. And and

also transformation have CFOs going we're like tough strong in the here. culture -- the the super are context backbone EQ important have through think a or I that's the but they best and of and

transition and like solid I does at in He and He a IR. CFO Valley had [indiscernible] lot especially and most length one didn't and of but change Silicon a he in super respected Spotify finance. Paul of spend after by really bearing at that, have top So CFOs good a Spotify He of Barry that. he time every under went he and fall. worked started the is because through extended Peloton trained really account McCarthy

personal pulls combination took and just of it skills really them those or straight top. to the all So things then it the

coming Next from Citigroup. question is Lejuez Paul today from

just working guidance, assuming manage flow inventory from and cash year? you can you you talk this how you're free that Or inventory too benefit are whether point? Within about missed plan And capital to a it, could down sure and if just at did you that say give but I'm on was? what this Also, how number you if CapEx it I not spend? the breaks low

Yes.

anything through get the didn't the side fiscal organization those manage it of is both of as sold of as of which got about we down, made tribute lot further to on on a than -- marketplace. we in to in kind well terms the across kind getting we We and supply that levels specific say So inventory. 'XX. a thought we would in progress Actually, bringing the

to the team. kudos So

said down. than and in remiss to at I continue least we it thought a to the our when better we we much pretty still modest began we it the But So would in probably year, than place didn't end have year be opportunity, in if assumptions. will better and some expect I'd bring our be. we next be year little we

is mid-single-digit to in about. of kind we're say decline inventory thinking I'd So low what

to much next a modest it didn't impact year we've So an from so be say, won't relative from but different capital working We been. inventory. more overall where

CapEx about stores, maintenance and new stores, share? breakdown How in the on that

Yes.

focused but consumer-facing, going stores as you stores current little new I numbers, terms the more say and it will of bit So and both not as percentage-wise, a toward to I'm store in refreshment base. remodeling right, of give well is

from Yih Barclays. Adrienne from coming is question Next

for thanks over of years your all the luck. Matt, Great. help best and

been And kind at a Or oftentimes, When first question, my then kind you how done? FY you when guess, categories? strategically the leverage of did for of has think net cleaner reduction TNF of 'XX is inventory. you how kind take forecast should broad-brush take that we SKU approach. about any asset was inventory, through Obviously, of in style sales? ratio? excluding debt, much for And big a on So you different Matt, of you I Bracken, cut or the go end a how notion --

inventory would I'll it pretty very much, you say Amy. one. start I was the Thank with surgical.

to channel inventory products here have Our reduction our some to new folks, the channel. talk really flow you of we products in room older icon flow in the school. the for of really out We was especially about clear like -- in the -- inventory to focus so when our progressive newer

Matt, us I question? think that's serve the want coming of quarters. answer so second And going you well super next to that part to the over

on Nothing Yes. leverage.

haven't debt, as But that's ultimately, on, plan. which We do Bracken plan, do any probably number be include But but base the it's math yourself brand given aren't sales. down our do based asset it, net you a that. could -- there few indicated, hundred and a to going million a the not prepared relative the to I'll doesn't call

we're which in obviously million, well. is paid that to penalty is be that March with and as to in positioned ensure plan $XXX off Our no due could pay April

coming Jonathan Komp Your next is from Baird. question from

If financial and the And as about point you're year outlook if timing Is broader ask reinstill targets? at talked top right follow-up, during point have I cash the some improving just point? million about view future on for in getting talked given growth embedding Paul up ability. total know a don't you for predictability forecasting the could revenue I know one separately, follow to I that outlook improvement in $XXX Can year. at thinking a the the just you've there about and to sequential some you line. near have if the implies then Bracken, the the back discussion or

Okay.

Let generally not improvements. we're going look get me to first a sequential that whether that's generally positive year, optimistic to sequential when end it. year. you number you go pretty better can see by the it, speaking, the to business. going I dodge going I that. feel your and consistent the we and year, will to hope did question come first. see think one And about question answer feel the across effectively it you're I they're I'm positive. to going But answer I can the your but be show We about across us back about better. the of you I'm we'll hope they're

In terms a one. that of talked his reinstating things, interviews. of guidance, in Paul and We lot talked about that early I about have not

about guidance. the a the business of predictability and overall steps I a think taking across got I the we future predictability top We've also where reinstating idea make all we're feel the on past. we months improvement X consecutive improve to the reality. performance this really of relative were good change. mean, of like it's really, I now big in to

don't ready I we're not do tuned. stay far too we're So that. to but away, think

Next question Fargo. Irwin Boruchow is coming Wells from from

just ones. couple quick of Matt, a

like same Just CapEx, as of like it think you D&A the well? I something said kind response as Is for historical that? or similar kind of

fiscal will 'XX, because 'XX you a But the onetime in of if that some degree. would it kind closer I where fiscal suggest. were were lower same to be bit look will to repeat won't probably write-offs little to there we back be D&A

it. Got

like know to the quarter, the QX's out? margins decline just looking talking start first at put The expect? of needed context us However QX, my context. even done the flatten like And going Okay. gross are do giving the there "clean", around an to number, it And Is to you XQ. there to quarter, we like kind first is answer going margin how you to much first can not exact you're the of a more it's one way in be but Or is you're to then sounds that? follow be you'd gross after up like work maybe should larger clearance as that just give anybody versus think impact question, then erosion activity to after I kind about quarter? sequentially

discussion QX. that. guardrail we ask give I'm and is about up out close you get those opening on. QX, you they of sure set this there overview add to the this a before general Matt, going let's question Matt, that another Once to because want make

Yes.

So talked more things about, bit just -- there. right, so the revenue give me a X we you margins, little color and let

I QX, everybody. We think points. helpful be line a right? -- reported to for that we of So couple will excluding reported we XX%, down reset, top similar reset the said

So that sense you there. give will a

bit planning think standpoint, -- of a think a bit XX% and look QX, that, to the there's as was that. a little extend wholesale spring most business big which different impacted we last in into of year, into So little would of have even will the it's number the year, double of Americas the be I as Remember, reopenings right? to our X-year I quarter And marketplace. was penetration exposure but demand much of of are a year Americas more there's QX. recent the So of the then things a the in say of of more XX% short we're is comping Order order has really the in growth the some about region the books implications were in future remember expectations couple region written QX the quarter, modest we'd We're less smallest for kind a and there you stack nearly quarter season, seasons. the which from impact less terms the in than a a first more APAC for expectation comparably than little kind as latter pent-up kind parts will conservatively. in across books, term. fiscal QX region 'XX XX% right? digits, the the And post-COVID still outsized

was year-over-year little in of what think QX, down of you, overall, thing similar it point we margin, I'll the to to but understand we Gross I factors. why tell from it help why will bit surface just view. there it So think, for a a you, there color are some on relatively think QX same the looks be the

the everything I way it you think you think simplest probably that's and to gives need. about

Trading. question Sam final is today coming from Our from Poser Williams

me, The going been potentially guess I a it to brands you've tax I while. to think -- has you issue the sell. almost chosen one, chosen sounds we've you've on for want everything. covered

the picture help you, is -- and to in as to So far complete first expenses us fall there? and Matt, year-over-year that thinking there. Can the go. the see expenses in about And sorry with any as you two, how update just away there quarter maybe the whole

the the It start about tax well tax me review business. would at is On say tax, is, our I'll to the for the -- made portfolio sale. bottom have back and a really Let wow, then decisions and taxes it top And and hand expenses. on update tax, with good Matt on you I'll the in what continues give I very we line. perform to

in review. optionality our have We

all say. I would Matt, that add you the that's [indiscernible] answer want So question? you really to

Yes.

fiscal see starting And QX. right? for So a in spend SG&A, a was basis. we're saw about we 'XX dollar to on X% reductions, little Actually, down bit constant

we're something let's benefits in and that's coming around So we're savings, gotten an of, in say, 'XX. of terms reductions. we move of cost the through as acceleration taking The that we've seeing fiscal actions

one But to not think SG&A probably will of more not so XX%, of that's remember, reinvest. in and SG&A. circumstance like than hit to it depending maybe going little is to it's And a or the X/X I X/X about we're gross on all margin, we're reinvest. to hit bit So -- places XX% that that some talked thing. looking that going of We've higher confidence our

look to factors it's be in compensation, directions. whether kind like other inflationary got and of we more centers. inflationary forward in We've terms start meaningful more headwind our merit, a that is factors, that we're incentive So going of more and and certainly things get stores our as that, certain seeing those compensation distribution

-- the and there's several program cost program to the where takes, The we business down driving that given and standpoint, and intent at there of an savings really time, appropriate remains we rightsizing reinvest. will and accelerate, level, the puts but underlying it, exactly So the we're from focused on and SG&A are underlying down. same to SG&A where I think looking as are started the are. a that's And we

further We've turn to back reached closing to the end floor like comments. session. or over any the Bracken for of question-and-answer I'd our

they're X green am and about some about to you. shoes Sam. excited great I I excited they've through ongoing. talking I'm Thank super to things. it's we've actions areas start come or the team to the these more things about. just Thank because want you, happened, even say been And here. see of in X already

indication This to thank think dedicated want way a that would we of VF, here years do the start close positive beyond years I an I will So good had last and Paul to all is it -- and the as your for terrific great for you've how XX on the that. be finish. earnings like service you been, opportunity worked really you've be always felt from And contributions be we call, -- to over and what's felt come. tenure, to take to you've of said will excellent, are those just Matt. impact will your really being I to

you to the you, and for all thank of call. thanks joining So

today's teleconference. conclude does That you. Thank

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