The operator, Angela, introduces Allegra Perry as the host of the VF Corporation's First Quarter Fiscal Year 2025 Earnings Call. Allegra discusses forward-looking statements and the use of adjusted constant dollar basis for more accurate representation of the company's performance. Bracken Darrell, VF's President and CEO, and Paul Vogel, EVP and CFO, will also be on the call. Bracken reflects on his 1-year anniversary with VF and the recent Supreme divestiture, and discusses the company's ongoing transformation.

The speaker introduces the progress of the Reinvent transformation program and the changes in the leadership team. They mention the addition of Paul Vogel as the new CFO and his excitement to be a part of the team. Paul also shares his belief in re-establishing VF as a top company and his plans to improve profitability, cost efficiency, and free cash flow.

The speaker, Bracken Darrell, introduces a new member of the VF company, Paul, who has experience in both operating and investing. He expresses confidence in the leadership team and their ability to rebuild trust with Wall Street and reach long-term goals. He also mentions the recent promotions and hires within the company. Bracken then discusses the Reinvent phase, which focuses on reducing costs, lowering debt, and getting Vans back on track. He emphasizes the potential for improved profitability.

In the fourth quarter, we were able to generate $50 million in cost savings, bringing us closer to our target of $300 million. We plan to have all actions for cost savings in place by the end of the first half of the year, and we are reinvesting some of those savings into product and brand building. We are also committed to further cost reduction. Our balance sheet is stronger with a significant reduction in inventories and net debt. We have completed our strategic portfolio review and have sold Supreme for $1.5 billion, allowing us to focus on our core business and improve leverage. The Americas continues to perform below potential, but the decline has softened and we have been able to accurately forecast the business for 8 consecutive months.

In the first quarter of this year, Vans saw a slight improvement compared to the previous quarter, with wholesale up for the first time in 6 quarters. The brand's new products, such as the Knu Skool and AVE 2.0, are performing well and a collaboration with Broze Knu Schooler was launched. Vans also had a successful event during Paris Fashion Week and leveraged the excitement of the Paris games to launch a global campaign featuring their top athletes.

The company's new products and marketing efforts have been successful in improving Google search trends and contributing to progress in all markets. In the first quarter, revenue was down 8%, but showed slight improvement compared to the previous quarter. The DTC business was in line with last quarter, except for Vans which is closing unprofitable stores. The North Face saw a 2% decrease in revenue, but DTC grew globally. Gross margin was down 80 basis points due to clear out activities from Vans, and operating margin was down 360 basis points due to SG&A deleverage. The company plans to continue reducing SG&A while investing in growth. Q1 loss per share was negative $0.33. Looking ahead to Q2, the company expects similar results without factoring in the impact of Supreme.

The overall Q2 revenue trend is expected to show modest improvement compared to Q1, with Vans and The North Face seeing slight declines. Gross margin is expected to be slightly up due to improved inventory quality. SG&A expenses will be slightly up, but reinvestment of savings will occur. Further revenue declines will lead to a higher rate of deleverage in Q2. The company is on track to meet its free cash flow guidance for fiscal year '25 and expects to complete the divestiture of Supreme by the end of the calendar year. The company is making progress and remains committed to cost reduction.

The new platform in the Americas is making progress and the leadership team at VF is confident in their ability to deliver growth and value. VF will be hosting an investor event in October to discuss their broader strategy and plans for brand and commercial strategies. The brand president for Vans has been announced and the brand is expected to continue with new product launches and marketing campaigns in the coming quarters. Further details will be shared in the next quarter or two.

The speaker discusses the success of new franchises and the launch of new products, as well as the company's revamped marketing approach. They also mention the positive performance of the North Face brand in direct-to-consumer sales, but note that wholesale sales in the US have been lagging. The speaker is optimistic about future trends in wholesale as the season progresses.

The company has seen good growth in direct-to-consumer sales, particularly in China. However, wholesale sales have been weak due to lower foot traffic and cautiousness among retailers in the US and other countries. The company is not providing guidance for the future, but the CEO is confident in the brand and upcoming product initiatives. There have been no changes in the company's free cash flow guidance, except for the expected addition of Supreme, which will bring in most of its cash towards the end of the year. Last year, the company's free cash flow was $520 million with a 20% operating income.

The company expects to generate around $600 million in cash this year and is not yet sure when the Supreme sale will close. They do not have any specific plans for additional asset sales but will continue to review their portfolio. They plan to use the cash to pay off debt and generate strong cash flow. They are also working on identifying additional cost savings and will provide more information on this in October.

The operator introduces a question from Matthew Boss of JPMorgan regarding Bracken Darrell's priorities as the new CEO of the company. Boss asks about any key roles that need to be filled, visibility on a return to top line growth, and the company's organic free cash flow and debt pay down priorities. Darrell responds by mentioning the 4 priorities he previously outlined and expresses confidence in the management team. He also hints at a potential turnaround in October and mentions that they will discuss debt paydown at that time. The operator then introduces a question from Laurent Vasilescu of BNP regarding Sansa's decision to leave Wu [ph] to join the company.

The speaker discusses the potential disruptions from the Red Sea and Bangladesh in the company's second quarter revenues. They mention that the company has workarounds in place and is able to move production if needed. The speaker also talks about Caroline Brown, who has been recently onboarded for TNF. They mention her extensive experience in the apparel industry and her passion for the North Face brand. The speaker also hints at some undisclosed actions the company is taking.

The speaker discusses the current state of the company's portfolio and mentions recent changes, such as new brands and personnel. They then shift the focus to China, stating that it is a great market for VF and each brand has its own story there. Vans is undergoing a turnaround, North Face is doing well, and Timberland is a work in progress. The speaker notes that Timberland's success varies in different parts of the world, but this also presents an opportunity for growth.

During a conference call, the CEO of VF Corporation discussed the company's performance and plans for its various brands. He mentioned that they are not currently focused on Timberland, but are working to improve the struggling Dickies brand in the U.S. Outside of the U.S., Dickies is doing well. The CEO also mentioned that Vans has seen a modest improvement in the second quarter, but it is still down compared to the previous year. He expressed confidence in the brand's marketing and product initiatives and stated that they will provide more updates on back-to-school performance in the future.

Bracken Darrell, CEO of the company, discussed the expected improvements for Vans in the coming months and emphasized the need for gradual progress throughout the year. He also mentioned the company's efforts to rightsize distribution, particularly in the value channel in Europe and the US, as well as closing stores in the US, China, and Europe. When asked about the biggest opportunities for Vans, Darrell highlighted the brand's strong potential and acknowledged that the company had over-rotated on certain styles, resulting in a decline in energy and a saturation of the market.

The speaker discusses the success of their brand Vans, which is still popular and constantly innovating. They plan to release new styles and collaborate with influencers to continue growth. They also see potential in expanding their apparel business. The company has been meeting their financial goals for several months and the speaker is confident in their future guidance. They also mention that their clean inventory has allowed them to avoid vendor concessions and shape their gross margins.

Bracken Darrell, CEO of Vans, discusses the expected improvement in gross margin in the second half of the year and the company's focus on this metric. He also mentions that the company will provide more guidance in the future and talks about the current state of the market for Vans products. Tom Nikic follows up with a question about the conversations with wholesale partners.

The speaker discusses the positivity surrounding the new products of Knu Skool and the potential for wholesale partners to reengage with the Vans brand. They mention that all key partners are positive and want Vans to be successful. When asked to rank the confidence in the four brands, the speaker declines and states that they see opportunities for growth in all of them. They also mention that the trend in the mall has slightly improved and they hope to see consistent improvement in the future. The speaker feels good about the work being done in Vans, North Face, and Timberland, but acknowledges that there is still work to be done in Dickies.

During a conference call, a question was asked about the company's gross margin beat and the 20 bps of pressure from unfavorable mix. The CEO was unable to provide specific details but mentioned that they expect mix to be a small tailwind for the year. The CEO also mentioned that wholesale versus DTC growth will impact mix, but overall, they anticipate a good year for wholesale. There is no significant story regarding ASP versus units.

In this paragraph, the speaker discusses the current state of inventory and promotion for the company. They mention that they are in good shape across all brands and that there is no significant divergence to note. They also touch on the topic of Vans and mention that there has not been much change in terms of segmentation and lead times for the brand. However, they do see time to market as a potential opportunity for improvement.

The speaker discusses the current state of the company and mentions that they are putting a hold on certain aspects of the business model until they get the fundamentals in place. They are also pulling back in Europe and the U.S. in terms of distribution. The next question is about the DTC channel and the speaker mentions that footfall in retail continues to be weak, but e-tail is slightly better. They also mention that there is not much notable difference in the wholesale business by brand. The last question is about Vans and the speaker does not provide much information in response.

The speaker, Bracken Darrell, is discussing the drivers of improvement in the EMEA region for the company. He mentions that wholesale is stronger than DTC in Europe, which is a reason for optimism. He believes that EMEA may be the first region to turn positive for the company. The speaker also mentions that there have been a lot of changes in the company and he is excited for the upcoming meeting in October.

This summary was generated with AI and may contain some inaccuracies.