V.F. Corporation

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. 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 SEC. 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 US GAAP. 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. 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.

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 re-invent 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. 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, and we reduced leverage year-end by a full term. We're on track to deliver our stated medium-term goal of 2.5x leverage. 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 VANS. 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 that turnarounds are often nonlinear. 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. In fact, at 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. Vans was down 20% in the quarter after being down 8% in the prior quarter. This quarter's step back 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. Of the total Q4 decline in banned 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 strollers, also mainly in the U.S., that were unprofitable. And the results of these actions and others are that Vans gross margin is up significantly year over year. 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 decline was all driven by DTC, which is primarily due to soft traffic. What are we doing to address traffic? 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 declines. 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 product, 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 icons. 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 marketing. 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. Now let me talk about some key highlights from our other brands. 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. 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 six-inch premium boot continued while other styles also performed well, including Stone Street and Mount Madsen. U.S. search interest growth remained strong in the quarter. 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. 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 supplier countries, supply chain opportunities and cost and factory moves, pricing strategy, and communications. 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. 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 transformation is on track and progressing well, and is allowing us to be more agile and nimble, making better decisions more quickly. We're making progress towards our medium-term goals, regardless of the volatility of the macro environment. We continue to advance on our goal to create a unique, multi-brand portfolio company. 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. With that, I'll now hand it over to Paul to run through the financials.