VF Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING

RESTRUCTURING

9 Months Ended

Dec. 29, 2018

Restructuring and Related Activities [Abstract]

The Company typically incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits. During the three and nine months ended December 2018, VF leadership approved $21.0 million and $44.6 million, respectively, of restructuring charges. VF recognized $9.9 million and $27.7 million in selling, general and administrative expenses for the three and nine months ended December 2018, respectively, and $11.1 million and $16.9 million in cost of goods sold for the three and nine months ended December 2018, respectively. The Company has not recognized significant incremental costs related to the 2016 and 2017 initiatives. Management expects to recognize additional expense for activities during Fiscal 2019.

Of the $55.1 million total restructuring accrual at December 2018, $47.8 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining $7.3 million will be paid out beyond the next 12 months and thus is classified within other liabilities.

The activity in the restructuring accrual for the nine-month period ended December 2018 is as follows:



(In thousands)	Severance			Other			Total
Accrual at March 2018	$	43,145		$	444		$	43,589
Charges	42,003			2,639			44,642
Cash payments	(26,238		)	(1,017		)	(27,255		)
Adjustments to accruals	(5,641		)	—			(5,641		)
Currency translation	(253		)	(11		)	(264		)
Accrual at December 2018	$	53,016		$	2,055		$	55,071

Restructuring charges were incurred as follows:



(In thousands)	Three Months Ended December 2018		Nine Months Ended December 2018
Outdoor	$	2,276	$	15,171
Active	485		3,537
Work	—		3,939
Jeans	17,172		18,449
Corporate and other	1,045		3,546
Total	$	20,978	$	44,642