V F (VFC) risk factors, FY2025 10-K

Other

1. 01ECONOMIC AND INDUSTRY RISKS
2. 02VF’s revenues and profits depend on the level of consumer spending for apparel, footwear and accessories, which is sensitive to global economic conditions and other factors. A decline in consumer spending could have a material adverse effect on VF
3. 03The apparel, footwear and accessories industries are highly competitive, and VF’s success depends on its ability to gauge consumer preferences and product trends, and to respond to constantly changing markets
4. 04The retail industry has experienced financial difficulty that could adversely affect VF's business
5. 05products, an increase in ownership concentration within the retail industry, an increase in credit exposure to VF or an increase in leverage by VF’s customers over their suppliers
6. 06VF’s profitability may decline as a result of increasing pressure on margins

BUSINESS AND OPERATIONAL RISKS

1. 07VF’s business and the success of its products could be harmed if VF is unable to maintain the image of its brands
2. 08VF’s revenues and cash requirements are affected by the seasonal nature of its business
3. 09We may be adversely affected by weather conditions, including any potential effects from extreme environmental conditions
4. 10VF may not succeed in its business strategy, including the Reinvent turnaround program and “The VF Way” operating principles
5. 1110 VF Corporation Fiscal 2025 Form 10-K
6. 12Failure to implement our strategic objectives, including the Reinvent turnaround strategy, may have a material adverse effect on VF’s business
7. 13VF relies significantly on information technology. Any inadequacy, interruption, operational failure or security failure of this technology could harm VF’s ability to effectively operate its business
8. 14VF Corporation Fiscal 2025 Form 10-K 11
9. 15VF is subject to cybersecurity, information security and privacy risks that could negatively affect its business operations, results of operations or reputation
10. 16systems or the unauthorized release of personal or confidential information
11. 17The development and use or misuse of AI, and the failure to use AI, present risks and challenges that may negatively impact our business
12. 1812 VF Corporation Fiscal 2025 Form 10-K
13. 19If we or our business partners use AI to make decisions that affect consumers, employees or job applicants, the AI may be subject to biases or other types of unfair decision-making that may negatively impact those individuals and create legal or reputational risk for us
14. 20There are risks associated with VF’s acquisitions, divestitures and portfolio management, including our recently completed sale of the Supreme® brand to EssilorLuxottica
15. 21VF uses third-party suppliers and manufacturing facilities worldwide for its raw materials and finished products, which poses risks to VF’s business operations
16. 22A significant portion of VF’s revenues and gross profit is derived from a small number of large customers. The loss of any of these customers or the inability of any of these customers to pay VF could substantially reduce VF’s revenues and profits
17. 23Talent acquisition, management, engagement and retention are important factors in VF’s success. Turnover in VF’s leadership or other key positions may have a material adverse effect on VF
18. 24loss of services of one or more of these individuals or the inability to effectively identify a suitable successor to a key role could have a material adverse effect on VF
19. 25VF’s direct-to-consumer business includes risks that could have an adverse effect on its results of operations
20. 26VF’s net sales depend on the volume of traffic to its stores and the availability of suitable lease space
21. 27VF may be unable to protect its trademarks and other intellectual property rights
22. 28VF Corporation Fiscal 2025 Form 10-K 15
23. 29If VF encounters problems with its distribution system, VF’s ability to deliver its products to the market could be adversely affected
24. 30VF’s business and operations could be materially and adversely affected if it fails to create systems of monitoring, prevention, response, crisis management, continuity and recovery to mitigate natural or man-made economic, public health, political or environmental disruptions

LEGAL, REGULATORY AND COMPLIANCE RISKS

1. 31VF’s operations and earnings may be affected by legal, regulatory, political and economic uncertainty and risks
2. 32Changes to U.S. or international trade policy, tariff and import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations
3. 33Changes in tax laws could increase our worldwide tax rate and tax liabilities and materially affect our financial position and results of operations
4. 34We may have additional tax liabilities from new or evolving government or judicial interpretation of existing tax laws
5. 35focus on income earned in no- or low-tax jurisdictions or income that is not taxed in any jurisdiction. Tax authorities have also become skeptical of special tax rulings provided to companies offering lower taxes than may be applicable in other countries
6. 36Climate risks and increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate risks and socially responsible activities, may adversely affect our business and financial results and damage our reputation

FINANCIAL RISKS

1. 37impairment primarily related to the reduction in financial projections for Dickies
2. 38Fluctuations in wage rates and the price, availability and quality of raw materials and finished goods could increase costs
3. 39VF’s business is exposed to the risks of foreign currency exchange rate fluctuations. VF’s hedging strategies may not be effective in mitigating those risks
4. 40Our ability to obtain financing on favorable terms, if needed, could be adversely affected by geopolitical risk and volatility in the capital markets, including interest rate risks
5. 41VF Corporation Fiscal 2025 Form 10-K 19
6. 42VF is subject to the risk that its licensees may not generate expected sales or maintain the value of VF’s brands
7. 43Volatility in securities markets, interest rates and other economic factors could substantially increase VF’s defined benefit pension costs
8. 44The spin-off of Kontoor Brands, Inc. could result in substantial tax liability to us and our shareholders
9. 45generally be treated as receiving a taxable distribution of property in an amount equal to the fair market value of the shares received

GENERAL RISKS

1. 46Regional epidemics or global pandemics may materially and adversely affect our business, financial condition and results of operations