Quarterly report pursuant to Section 13 or 15(d)

REPORTABLE SEGMENT INFORMATION

v3.10.0.1
REPORTABLE SEGMENT INFORMATION
 6 Months Ended
Sep. 29, 2018
Segment Reporting [Abstract]  
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION

In light of recently completed portfolio management actions and organizational realignments, the Company realigned its internal reporting structure in the first quarter of Fiscal 2019 to reflect the organizational changes to better support and assess the operations of the business. The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they have met the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance. Based on this assessment, the Company's reportable segments have been identified as: Outdoor, Active, Work and Jeans.
Below is a description of VF's reportable segments and the primary brands included within each:
REPORTABLE SEGMENT
 
PRIMARY BRANDS
Outdoor - Outdoor apparel, footwear and equipment
 
The North Face®
 
 
Timberland® (excluding Timberland PRO®)
 
 
Smartwool®
 
 
Icebreaker®
 
 
Altra®
 
 
 
Active - Active apparel, footwear and accessories
 
Vans®
 
 
Kipling®
 
 
Napapijri®
 
 
JanSport®
 
 
Reef®
 
 
Eastpak®
 
 
Eagle Creek®
 
 
 
Work - Work and work-inspired lifestyle apparel, footwear and occupational apparel
 
Dickies®
 
 
Bulwark®
 
 
Red Kap®
 
 
Timberland PRO®
 
 
Wrangler® RIGGS
 
 
Walls®
 
 
Terra® 
 
 
Kodiak®
 
 
Horace Small®
 
 
 
Jeans - Denim and casual apparel
 
Wrangler® (excluding Wrangler® RIGGS)
 
 
Lee®
 
 
Rock and Republic®


Other - included in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes sales of non-VF products at VF Outlet® stores and results from transition services related to the sale of the Nautica® brand business.

In the tables below, the Company has recast historical financial information to reflect the new reportable segments. The recast historical information has no impact on the Company's previously reported consolidated financial statements.
The results of Williamson-Dickie have been included in the Work segment since the October 2, 2017 acquisition date. The results of Kipling North America, which were previously included in the former Sportswear segment, have been included in the Active segment for all periods presented. The results of Icebreaker and Altra have been included in the Outdoor segment since their acquisition dates of April 3, 2018 and June 1, 2018, respectively.
The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit. Segment profit comprises the operating income and other income (expense), net line items of each segment.
Accounting policies used for internal management reporting at the individual segments are consistent with those in Note A of the 2017 Form 10-K, except as stated below. Corporate costs (other than common costs allocated to the segments), impairment charges and net interest expense are not controlled by segment management and therefore are excluded from the measurement of segment profit. Common costs such as information systems processing, retirement benefits and insurance are allocated from corporate costs to the segments based on appropriate metrics such as usage or employment. Corporate costs that are not allocated to the segments consist of corporate headquarters expenses (including compensation and benefits of corporate management and staff, certain legal and professional fees and administrative and general costs) and other expenses which include a portion of defined benefit pension costs, development costs for management information systems, costs of registering, maintaining and enforcing certain of VF's trademarks and miscellaneous consolidated costs. Defined benefit pension plans in the U.S. are centrally managed. The current year service component of pension costs is allocated to the segments, while the remaining pension cost components are reported in corporate and other expenses.
Financial information for VF's reportable segments is as follows:
 
 
Three Months Ended September
 
 
Six Months Ended September
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
2018
 
 
2017
 
 
2018
 
 
2017
Segment revenues:
 
 
 
 
 
 
 
 
 
 
 
Outdoor
 
$
1,466,503

 
 
$
1,381,002

 
 
$
2,035,103

 
 
$
1,917,252

Active
 
1,299,961

 
 
1,089,616

 
 
2,436,898

 
 
1,998,906

Work
 
472,827

 
 
210,062

 
 
915,429

 
 
416,919

Jeans
 
632,896

 
 
682,884

 
 
1,236,663

 
 
1,270,787

Other
 
35,199

 
 
29,370

 
 
71,439

 
 
57,690

Total segment revenues
 
$
3,907,386

 
 
$
3,392,934

 
 
$
6,695,532

 
 
$
5,661,554

Segment profit:
 
 
 
 
 
 
 
 
 
 
 
Outdoor
 
$
258,121

 
 
$
250,596

 
 
$
174,626

 
 
$
188,578

Active
 
351,051

 
 
273,092

 
 
620,248

 
 
457,720

Work
 
57,917

 
 
34,260

 
 
113,161

 
 
68,419

Jeans
 
97,658

 
 
117,563

 
 
184,707

 
 
198,821

Other
 
539

 
 
(782
)
 
 
2,699

 
 
(1,104
)
Total segment profit
 
765,286

 
 
674,729

 
 
1,095,441

 
 
912,434

Corporate and other expenses (a)
 
(140,672
)
 
 
(101,115
)
 
 
(260,611
)
 
 
(182,361
)
Interest expense, net
 
(25,513
)
 
 
(22,537
)
 
 
(49,397
)
 
 
(43,144
)
Income from continuing operations before income taxes
 
$
599,101

 
 
$
551,077

 
 
$
785,433

 
 
$
686,929

(a) 
Certain corporate overhead and other costs of $4.2 million and $8.4 million for the three and six-month periods ended September 2017, respectively, previously allocated to the former Sportswear and Outdoor & Action Sports segments for segment reporting purposes, have been reallocated to continuing operations as discussed in Note 5.