VF Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

REVENUES

REVENUES

12 Months Ended

Mar. 28, 2020

Revenue from Contract with Customer [Abstract]

Performance Obligations

Disclosure is required for the aggregate transaction price allocated to performance obligations that are unsatisfied at the end of a reporting period, unless the optional practical expedients are applicable. VF has elected the practical expedients to not disclose the transaction price allocated to remaining performance obligations for (i) variable consideration related to sales-based royalty arrangements, and (ii) contracts with an original expected duration of one year or less.

As of March 2020, the Company expects to recognize $70.9 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time through December 2029. The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption.

As of March 2020, there are no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and fixed consideration related to future minimum guarantees discussed above.

For the year ended March 2020, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

Contract Balances

Accounts receivable represent the Company's unconditional right to receive consideration from a customer and are recorded at net invoiced amounts, less an estimated allowance for doubtful accounts.

Contract assets are rights to consideration in exchange for goods or services that have been transferred to a customer when that right is conditional on something other than the passage of time. Once the Company has an unconditional right to consideration under a contract, amounts are invoiced and contract assets are reclassified to accounts receivable. The Company's primary contract assets relate to sales-based royalty arrangements, which are discussed in more detail within Note 1.

Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer and thus represent the Company's obligation to transfer the good or service to the customer at a future date. The Company's primary contract liabilities relate to gift cards, loyalty programs and sales-based royalty arrangements, which are discussed in more detail within Note 1, and order deposits.

The following table provides information about accounts receivable, contract assets and contract liabilities:



(In thousands)	March 2020		March 2019
Accounts receivable, net	$	1,308,051	$	1,372,625
Contract assets ^(a)	1,181		2,569
Contract liabilities ^(b)	37,498		28,801


^(a)	Included in the other current assets line item in the Consolidated Balance Sheets.


^(b)	Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets.

For the year ended March 2020, the Company recognized $211.3 million of revenue that was included in the contract liability balance during the year, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations are satisfied within the same period, such as order deposits from customers. The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

Disaggregation of Revenue

The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors. The wholesale channel includes fees generated from sourcing activities as the customers and point-in-time revenue recognition are similar to other wholesale arrangements. We adopted the new revenue recognition standard at the beginning of Fiscal 2019 using the modified retrospective method of adoption. As a result, revenue reported for the three months ended March 2018 and the year ended December 2017 have not been presented.



	Year Ended March 2020
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	2,855,043	$	2,479,965	$	723,923	$	29,976	$	6,088,907
Direct-to-consumer	1,775,127		2,417,386		140,924		8,778		4,342,215
Royalty	13,786		22,076		21,572		—		57,434
Total	$	4,643,956	$	4,919,427	$	886,419	$	38,754	$	10,488,556

Geographic revenues
United States	$	2,289,353	$	2,626,186	$	604,778	$	—	$	5,520,317
International	2,354,603		2,293,241		281,641		38,754		4,968,239
Total	$	4,643,956	$	4,919,427	$	886,419	$	38,754	$	10,488,556



	Year Ended March 2019
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	2,865,630	$	2,460,692	$	739,465	$	10,323	$	6,076,110
Direct-to-consumer	1,770,580		2,234,053		125,769		—		4,130,402
Royalty	12,814		27,047		20,514		—		60,375
Total	$	4,649,024	$	4,721,792	$	885,748	$	10,323	$	10,266,887

Geographic revenues
United States	$	2,246,706	$	2,499,393	$	589,803	$	10,323	$	5,346,225
International	2,402,318		2,222,399		295,945		—		4,920,662
Total	$	4,649,024	$	4,721,792	$	885,748	$	10,323	$	10,266,887