V.F.
Annual Report 2009

Plain-text annual report

V F Cor poration annual report 2009 Anywear and Everywear ® 7,643 7,219 7,220 7,643 7,219 7,220 2.33 2.37 2.33 2.37 2.23 2.23 5.41 5.42* 5.16** 5.41 5.42* 4.13 5.16** 4.13 07 08 09 07 08 09 09 07 08 09 07 08 09 07 08 09 09 07 08 09 Revenues (Dollars in Millions) Earnings Per Share (Dollars) Dividends Per Share (Dollars) 973 973 834 834 679 679 26.4 25.2 26.4 25.2 23.7 23.7 43.5 43.9 44.3 43.5 43.9 44.3 07 08 09 07 08 09 07 08 09 Cash Flow from 08 07 Operations (Dollars in Millions) 09 Debt to Total 08 07 Capital Ratio (Percent) 09 Gross Margins 08 07 (Percent) 09 an ywear a nd eV ery wear From an outlet store in St. Louis to a High Street store in Shanghai, from a mountaintop in Switzerland to a beach in Southern California, you’ll find the brands of VF anywhere and everywhere around the world. Our diversity is our biggest strength, but it’s more than simply geography. Our diversity is diversified. We have diversified brands, products, distribution, manufacturing, sourcing and, above all, people. Anywear and everywear is a philosophy that drives us to continuously build and grow our portfolio of brands, so that we can support the diverse lifestyles of consumers around the world. * Includes $.30 per share in expenses to reduce costs ** Excludes impairment charge of $1.03 3 A Brand for All Seasons The North Face® brand connects with outdoor athletes and enthusiasts around the world through its ever-expanding retail, online and social media presence. This year, the brand launched PlanetExplore, an active online community that helps people who are passionate about the outdoors find events and volunteer opportunities in their area. 4 5 6 7 The North Face® brand is now sold in 61 countries, including places with no mountains or snow. ® in 2009, we continued to roll out “Wrangler® Brand Zones” in mass-market retailers. there are now more than 3,600 of these easy-to-shop branded experiences in the united States. 8 Authentically Anywhere From the country to the suburbs to the city, the Wrangler® brand has distinct heritages, each with its own products, price points and styles. Wrangler westernwear is the unofficial uniform of the American West, worn by every- one from farmhands to rodeo stars. Wrangler® also captures the heartbeat of Main Street America, epitomized by sports legends Brett Favre and Dale Earnhardt, Jr. Brett Favre in Wrangler® Five Star Relaxed Fit Jeans 9 From Buenos Aires to Prague, internationally the Wrangler® brand pulses to the beat of the world’s most fashion-savvy markets. Overseas, the brand combines its heritage as an original American denim brand with sophisticated styling and authentic marketing (such as the award-winning We Are Animals® campaign). 10 11 in europe, the brand continues its bold styling with Wrangler ® Blue Bell®, a new line that takes the best of denim history and remixes it for today. Global Footprint Vans invented the skate shoe in 1966. Today, the brand is a global icon of originality for young skaters, surfers, bikers, bladers, artists, musicians and nearly everyone in between. Vans now has the highest retail square footage of all brands in the VF port- folio, opening 100 shop-in-shops in China alone in 2009. 12 13 one of Vans’ iPhone® apps, the game SK8 pool Service has been down- loaded more than 500,000 times.  in 2009, styles from the Lee® brand’s “ no Gap” collection were featured on The Oprah Winfrey Show as a “Favorite new Jeans and the rest of the Best.” The Global Brand With Local Fits For 120 years, Lee has brought classic American denim to the world while never forgetting where it comes from. The Lee® brand celebrated its 120th anniversary with accomplishments all around the world from the redesign of its flagship store in London to record revenues in China. Back home, Lee brought innovative stretch fabrics to millions with price points that were as attractive as the jeans’ fit. 14 15 In 2009, the Nautica® brand launched in Saudi Arabia and Kuwait. Ripple Effect The Nautica® brand now touches more parts of consumers’ lives, with new licenses for fragrances, home products, bedding and furniture. 16 17 International Blockbuster The megawatt 7 For All Mankind® denim brand launched its first Chinese and European boutiques with star-studded parties on two continents. Approximately fifteen more stores are planned to open in Europe in 2010. 18 19 the 7 For All Mankind® brand was the only apparel brand on Ad Age maga- zine’s “new products of the decade” list, alongside the apple® ipod® and the Mini Cooper®. 2 3 ® 1 1 2 3 4 ™ 4 napa piJr i Napapijri, Finnish for “Arctic Circle,” is actively involved in environmental awareness cam- paigns and efforts to protect and preserve the world’s Arctic and Antarctic regions. KiplinG New products like KIPLING2GO, a unique collection of durable, lightweight accessories are helping to develop penetration in European department stores and growth in China. eaStpaK Eastpak continued its success- ful collaborations with fashion designers, including Rick Owens, Christopher Shannon and Raf Simons. reeF Reef partnered with the charity 31 Bits to support the microbusi- nesses of displaced Ugandan women. The brand’s Ugandal sandal features recycled beads made by these women. 5 8 6 7 ® 5 6 7 8 lu C y In 2009, the lucy® brand cele- brated its 10th anniversary. The brand also launched monthly Fitness Friday events to bring new and traditional fitness activi- ties into consumers’ lives. J anS port JanSport had great success in 2009 with its Heritage Series, a modern reissue of the original backpack that made the brand famous. Joh n VarVato S The brand introduced two new fragrances, JOHN VARVATOS ARTISAN™ and Rock Volume One™. ea Gl e CreeK The Eagle Creek® brand’s HC2 Hovercraft® Collection of superlight travel gear helped increase market share in the lug- gage specialty channel in 2009. 20 21 11 10 12 13 14 ® ® 10 11 12 13 14 9 9 Sp le ndid Splendid opened its first flagship store in Los Angeles in 2009, displaying its broad offering of T-shirts, tanks, thermals, dresses and more. ella MoSS In 2009, Ella Moss, a hip, quirky and fashionable brand that combines flowy femininity with the comfort of your favorite T-shirt, launched an e-commerce site at ellamoss.com. red Kap The Red Kap® brand has been a workwear and uniform leader since 1923, outfitting millions of workers around the world every year. Bu lwar K Bulwark is the largest provider of personal- protective and secondary flame-resistant industrial clothing in the world. In 2009, Bulwark introduced Cool Touch® 2, a new fabric that provides flame-resistant protection while remaining lightweight and breathable. r ider S By le e Lee introduced the Lady Lee Riders™ brand in 1949, marking the very first time in the history of denim that jeans were truly designed to fit a woman’s figure. In 2009, Riders® by Lee® became the top-selling jean for women in the mass retail channel. M aJeSt iC Majestic printed and distributed over 1 million World Series® products within 24 hours of the winning pitch. 22 23 V F B randS at-a- GlanCe outdoor & aCtio n Sport S Founded: 1997 number of Countries: 63 target Consumer: Active, fashionable women. did you know? Belgium-based Kipling has sold more bags in that country than there are people. luCy lucy.com lucy inspires performance™ Founded: 1999 number of Countries: 1 target Consumer: Active women did you know? There is no Lucy. The brand started as an online-only retailer and lucy.com was available. napapi Jri napapijri.com A premium lifestyle brand with travel and outdoor heritage. Founded: 1990 number of Countries: 23 target Consumer: Outdoor-oriented travelers ages 25-45 did you know? Napapijri got its start in Italy, but its name is Finnish for “Arctic Circle.” ™ reeF reef.com Ridiculously comfortable™ Founded: 1989 number of Countries: 57 target Consumer: Beach enthusiasts ages 16-24 did you know? Reef was founded by two brothers from Argentina with just $4,000 in capital to start. the north Fa Ce thenorthface.com Never Stop Exploring® Founded: 1968 number of Countries: 61 target Consumer: Outdoor athletes and enthusiasts did you know? The North Face executes 10-12 outdoor expeditions every year. VanS vans.com Off the Wall® Since '66 Founded: 1966 number of Countries: 62 target Consumer: Youth art, music, street fashion, and action sports enthusiasts did you know? The iconic Vans® checkerboard shoe design was inspired by kids who drew the pattern on their shoes. JeanSwear le e Founded: 1889 number of Countries: 76 Lee europe eu.lee.com Make History target Consumer: Contemporary metropolitan consumers did you know? Lee’s hip, young brand posi- tioning in Europe is radically different from the U.S. eaGle Cree K eaglecreek.com Inspired by Travel® Founded: 1975 number of Countries: 30 target Consumer: World travelers did you know? Eagle Creek invented the Adven- ture Travel Gear concept and the convertible backpack on wheels. eaStpaK eastpak.com Built to resist® Founded: 1976 number of Countries: 50 target Consumer: Smart, young urban activists did you know? Eastpak sold over 25,000 tickets for its 2009 Eastpak® Antidote Tour in Europe. Ja nSport jansport.com Discover Freedom™ Founded: 1967 number of Countries: 52 target Consumer: 14-28 year-old consumers did you know? JanSport is named after one of the three founders who could sew. ® Ki plinG kipling.com Attitude included. 24 L e e No r t h A m e r i c A lee.com The brand that fits your lifestyle. target Consumer: Women and men ages 25-50 did you know? Lee launched its first premium outlet store in 2009 in Tanners- ville, Pennsylvania. L e e S o u t h A m e r i c A lee.com Night and Day target Consumer: Self-assured 25-35 year-olds did you know? Lee invented the first zippered jean. r id er S By lee ridersjeans.com Instantly slims you® Founded: 1949 number of Countries: 5 target Consumer: Female traditionalists ages 25-55 did you know? Riders® by Lee® became the top selling jean for women in the mass-retail channel in 2009. ru St ler rustler.wrangler.com Hard Working Jeans… Guaranteed.® Founded: 1965 number of Countries: 3 target Consumer: Men age 25-54 did you know? Rustler’s technical RipStop fabric combines comfort with long-wearing durability. ® wra nG ler i M aG e w e a r Founded: 1947 number of Countries: 76 Wr ANgLer he ro wrangler.com Real. Comfortable. Jeans.® target Consumer: Male traditionalists ages 25-54 did you know? One out of every five men in the U.S. wears Wrangler® jeans. Wr ANgLer J eANS co. wranglerjeansco.com Comfort. Quality. Value. You Can Count on Wrangler. target Consumer: Men ages 25-54 did you know? Wrangler Jeans Co.® is the official jean of NASCAR® driver Dale Earnhardt, Jr. Wr ANgLer W eS terN wranglerwestern.com Long Live Cowboys™ target Consumer: Authentic cowboys ages 40-60 did you know? Wrangler conducted extensive research with the women of the American Quarter Horse Association to develop the Ultimate Riding Jean® collection. Wr ANgLer i Nter NAti oNAL eu.wrangler.com We Are Animals® target Consumer: Sociable style-seekers ages 21-35 did you know? Internationally, the Wrangler® brand’s positioning celebrates its heritage as the original American denim brand. Bulwa rK bulwark.com Life Goes On. Founded: 1990 number of Countries: 56 target Consumer: Industrial workers did you know? Bulwark is the largest provider of personal protective and secondary flame-resistant clothing in the world. Ma JeStiC majesticathletic.com If it happens in Baseball, it happens in Majestic.™ Founded: 1976 number of Countries: 27 target Consumer: Baseball enthusiasts did you know? Majestic custom-measures all 750 MLB players during spring training. red Ka p redkap.com Done Right.™ Founded: 1923 number of Countries: 56 target Consumer: True working laborers did you know? Red Kap’s “Red Kaption” mar- keting campaign celebrates consumers’ personal mottos of work “done right.” the ForCe theforceonline.com Made for Heroes® Founded: 1937 number of Countries: 56 target Consumer: Public safety officers did you know? The Force won Apparel® maga- zine’s 2009 Top Innovator Award for its new Enforcer jacket. SportSw e a r did you know? The 7 For All Mankind® brand fits every style to a live model as many as 16 times to ensure a perfect fit. ® ella MoSS ellamoss.com Hip, Quirky, Fashionable. Founded: 2001 number of Countries: 18 target Consumer: Women ages 18-39 did you know? The name Ella Moss is a combination of the founder and lead designer’s nicknames. nautiCa nautica.com Inspired and energized by life by the water. Founded: 1983 number of Countries: 41 target Consumer: Men and women ages 25-44 did you know? As the title sponsor of the Nautica® New York City Triathlon, the brand provides free organic cotton shirts to every participant. John VarVatoS johnvarvatos.com For those about to rock. Founded: 2000 number of Countries: 15 target Consumer: Creative, professional men ages 18-55 did you know? Founder and Detroit native John Varvatos hosts a monthly show on Sirius® radio called “Born in Detroit.” C on t e M por a ry Br a n dS ® 7 For all ManKind 7forallmankind.com The world’s premier provider of luxury denim lifestyle products. Founded: 2000 number of Countries: 64 target Consumer: Premium-conscious consumers ® Splendid splendid.com Colorful, soft, and luxurious fabrics with a splendid fit. Founded: 2002 number of Countries: 18 target Consumer: Men and women ages 20-50 did you know? Splendid® apparel has been embraced by powerful, active women, including Hollywood celebrities. 25 to o ur Shar ehold er S: 2009 was the kind of year that tests business models and management teams. The recessionary conditions around the world presented extraordinary challenges. And the strength of VF’s diverse business model and management team was evident in our results. Our long history of disciplined execution continued to serve us well, allowing us to strengthen our financial position and advance our long-term strategies for growth. Looking back, I believe we struck the appropriate balance between cautiousness and assertiveness. We carefully managed costs and inventories, achieving significant reductions in both. At the same time, we continued to invest in our strongest brands and businesses to drive growth and gains in market share. eriC C. wi SeMan Chairman, President & Chief Executive Officer VF Corporation 26 27 Revenues in 2009 were down 6%, with foreign currency translation accounting for two percentage points of the decline. Despite lower revenues, gross margins rose to record levels, underscoring the strength of our brands. Earnings per share were $5.16 excluding a $1.03 per share noncash impairment charge for goodwill and intangible assets. Our earn- ings in both 2009 and 2008 included unusual items. In 2009, earnings were impacted by higher pension expenses, foreign currency translation effects, and the impairment charge. 2008 earnings included expenses to reduce costs. Excluding these items in both years, earnings per share would have risen by 2% in 2009. We’re proud of our long dividend history, but I’m particularly proud that despite the challeng- ing environment, 2009 marked the 37th year of higher dividend payments to shareholders. 20 09 : t he St renGth to ChanGe in ChanGinG tiMeS We took decisive action in 2009 to ensure that our company remained strong and well positioned for future growth. We reduced costs by more than $100 million and cut inventories by 17%, all while maintaining the highest levels of customer service. We further strength- ened our balance sheet, nearly doubling our cash position by year-end. We reported record cash flow from operations of nearly $1 billion. Focused investments drove solid results in many areas of our business. For example, we continued the global momentum in our Outdoor & Action Sports businesses, with revenue growth in our two largest brands — The North Face® was up 6%, and Vans® grew by 5%. We gained share in our core Wrangler® and Lee® brands in the United States with successful new product innovations and compelling in-store presentations. Conditions in upper-tier department and specialty stores have been very difficult, but international revenues of our premium 7 For All Mankind® brand increased in 2009. Our growth in Asia 3- y ear Coalition reVenueS and pr oFitS (Dollars in Millions) 2 4 7 , 2 2 5 7 , 2 7 9 8 , 2 5 6 7 , 2 2 2 5 , 2 7 8 3 , 2 RE VE N UE PR OF IT 4 5 4 8 0 5 9 7 4 3 9 3 9 7 3 0 7 3 8 8 9 1 9 9 5 6 8 1 3 6 1 7 5 8 9 4 2 4 1 2 3 1 7 8 7 6 2 4 2 5 1 5 4 2 7 4 5 9 1 4 2 2 5 7 3 07 08 09 07 08 09 07 08 09 07 08 09 07* 08 09 Outdoor & Action Sports 28 Jeanswear Imagewear Sportswear Contemporary Brands * Brands acquired in mid-2007 continued, with 2009 revenues increasing by 28%. Finally, we grew our direct-to-consumer business, with a 6% increase in revenues and the opening of 90 new stores. Acquisitions are always an important component of our long-term growth plans. In 2009 we completed the acquisition of the Splendid® and Ella Moss® brands, further expanding our Contemporary Brands coalition. We continue to seek acquisitions of high growth, high-margin lifestyle brands, particularly activity-based brands that could complement our Outdoor & Action Sports portfolio. We’re proud of our accomplishments in 2009, but we also had our share of challenges. Our European jeans business had a much more difficult year than we had envisioned, particularly in Eastern Europe, where we had experienced significant growth in recent years. Our Image (or uniform) business was hurt disproportionately during the economic downturn by higher than anticipated levels of unemployment in key sectors. And while we are encouraged by improving profitability in our Sportswear coalition, where operating margins returned to double-digit levels, the Sportswear revenue trend is still not where we want it to be. t otal r e Ven ue S By C oalitio n 38% Outdoor & Action Sports 35% Jeanswear 12% Imagewear 7% Contemporary Brands 7% Sportswear 1% Other t otal r e Ven ue S By C hann el oF di St r iBu t ion 27% International 18% Specialty Stores 17% Retail* 15% Mass 10% Royalties/Other 7% Chains 3% Upscale Department Stores 3% Mainline Department Stores 7% 1% 7% 38% 12% 10% 15% 35% 3% 3% 7% 27% 18% 29 * Includes international retail 17% VF has a decades-long history of growth through acquisitions. Due in part to the pressures imposed by the global recession, we recorded an impairment charge in 2009 to write down a portion of the goodwill and intangible asset values for three of our acquired brands: Nautica®, lucy® and Reef®. Performance of these brands since acquisition has not met our expectations, but we are encouraged about the opportunities for improved results in each. a pi V otal 2010: i nVeStinG in our Future While our overall outlook is tempered by ongoing concerns over weak global market conditions, we look forward to resuming both top- and bottom-line growth in 2010. Our confidence in the global growth potential of our brands has led to a planned increase of approximately $50 million in investment spending. Our approach is disciplined and concen- trated on our fastest growing and most profitable opportunities. In addition to continuing to fuel the growth of our Outdoor & Action Sports businesses, which have delivered con- sistently superior performance, we will invest in our Contemporary Brands business and in high-growth, high-profit international markets such as Asia. The bulk of the investment will be concentrated in brand marketing, but we also plan to strengthen our innovation and sustainability platforms. We believe that these are the right investments to make, and this is the right time to make them. And we expect to fund these investments while delivering higher margins and solid earnings per share growth. Longer term, we have a clearly identified set of priorities for growth and investment. Maintaining the momentum of our Outdoor & Action Sports brands is at the top of the list. We will focus on supercharging our growth in China and growing and gaining market share in Europe. Our direct-to-consumer business will continue to expand, with the addition of new stores and a growing e-commerce business. To support these initiatives, we will build on our best-in-class talent management and development programs and intensify our innovation, consumer insight and brand-building capabilities. And we are enthusiastic about developing and implementing a global approach to sustainability across our brands and businesses. 2010 will be a pivotal year for VF Corporation as we resume growth, expand margins and invest in our future. Our strong cash flow will enable us to repurchase at least 3 million shares in 2010, continue our industry-leading dividend payout and repay $200 million in long-term debt — all without compromising our ability to add more financially and strategi- cally attractive brands to our portfolio. We are fortunate to have a world-class leadership team in place that is passionate about success. Their outstanding efforts in 2009 have made VF stronger than ever, and I am confident in their ability to achieve even more in 2010. eriC C. wi SeMan c h A irmAN, pre SideNt & chief executive officer on e C ulture, Man y Cultu reS With so many diverse brands operating in so many different places around the world, VF is one culture made up of many cultures. We embrace the differences that make our brands unique, but there are five common threads that tie everything we do together. First, we put the consumer at the center of business with research that turns consumer insight into action. Next, we adapt our global brands to meet the needs of local markets while preserving their core appeal. Third, we understand our responsibility to pursue sustainable practices. Fourth, we invest in leadership development that will guide our brands now and in the future. Finally, we innovate to create value in new ways for both consumers and retailers. These shared values help define the performance- driven culture at VF. It’s a business advantage that allows us to deliver consistent results in diverse markets and diverse economic conditions. 30 31  one Culture, Many CultureS: A Culture of Listening “ Apparel makers used to lead the trends. Now that’s changed. Consumers have shown a much more individualistic approach to what they buy. It’s no longer the case that we can make it and they will come.” B oB Shearer Senior Vice President & Chief Financial Officer VF’s consumer-first philosophy is best cap- tured in a single phrase: “When we listen, we win.” Behind this seemingly simple statement is an unwavering commitment to uncover and understand the deep emotional connections that consumers have with our brands and to use these insights to better meet their needs. Listening comes in many forms, such as in- novative new codesign programs that bring consumers out of the fitting rooms and into our cutting rooms, retail stores that give us direct access to consumers, and rigorous, behind- the-scenes research that takes our product development teams into our consumers’ homes and closets. This focus on consumer insight is a common thread that runs through each of our brands. It helps them remain true to their core values while discovering new ways to expand their reach intelligently and more success- fully. It’s how we achieve our vision to grow by building leading lifestyle brands that excite consumers around the world. More than 400,000 people have downloaded The North Face’s iPhone® Snow Report app, giving them instant access to condi- tions at the world’s top ski resorts for free. The process of connecting emotion to fashion takes time. 7 For All Mankind® brand leaders spent three months listening to consumers on two continents in interviews, stores and online. But the results were well worth it. Consumers said that the 7 For All Mankind® brand is bigger than just great-looking and great-fitting denim. They want us to inspire, motivate, and be a part of their lives. They’ve given us permission to be more. These insights are not only informing our design and marketing processes today, but they’re also guid- ing us as we expand into new product categories such as sportswear to become a true lifestyle brand. VF iMaGewear licensed sports apparel is a game of inches — where fortunes can rise or fall on the next crack of the bat. that’s why we listen closely to both fans and retailers to succeed, no matter which team wins or loses. the two biggest trends in licensed sports apparel are contradictory. Fans want more product choices so they can make their own unique statement. at the same time, retail- ers want to do more business with less inventory. In 2009, we found ways to do both. The VF Tek Patch program offers on-demand fabrication by combining premade garments and graphic appliques. Now fans can shop online for a garment made just for them, and retailers can offer more products without having to take on more inventory. Additionally, consumers can create their own personalized jerseys on-site at new Majestic® Fan Zones inside 17 Major League Baseball stadiums. “ Whether it’s Conrad th e no rth FaCe ® Anker, one of our top climbers and bloggers, or Renan Ozturk, who posts a lot of video, social media lets our athletes come straight off the mountain and have a conversation with consumers in real time.” AAR ON C AR pENT ER Vice President, Marketing, The North Face “ Consumers tell us that our jeans make them stand a little bit taller. They feel more confi- dent — like they can take on the world. It goes beyond just jeans. Our customers have a strong emotional tie to the brand.” LE ILANI Au Gu ST IN E Vice President, Marketing & Licensing, Seven For All Mankind “ Consumers have always worn licensed apparel to make a statement about their team and their town. Now they want per- sonalization to make a statement about themselves.” MI C hAEL J OhNSON Vice President, Marketing, VF Licensed Sports Group The North Face® brand builds powerful bonds with athletes and outdoor enthusiasts around the world using a universal message: Never Stop Exploring®. the brand brings this philoso- phy to life by combining the power of social media with a growing retail presence to inspire outdoor participation and deepen consumers’ relationship with the brand. In 2009, The North Face® brand partnered with groups such as the American Hiking Society, The Sierra Club and the International Mountain Biking Association to create PlanetExplore, an online community and portal that helps individu- als and families find outdoor events in their area. The goal is to inspire people — especially young people — to go outside and explore. As part of this effort, retail locations will serve as hubs for activi- ties in 12 key U.S. markets, promoting events such as hiking, mountain biking and yoga that will encourage a new generation of consumers to get up and go outside. This strategy of encouraging outdoor participation is especially important internationally, as The North Face® brand expands into markets with a less de- fined and developed outdoor culture. For example, this year, the highly successful Global Endurance Challenge, a series of long-distance trail-running races on four continents, expanded into China. The inaugural Endurance Challenge in Beijing — whose grueling 100-kilometer course took athletes and fans alongside the Great Wall — shattered all expectations, with more than 3,000 athletes and thousands of spectators living and breathing The North Face® brand’s values. 7 For a ll Ma nK ind ® For its role in inventing the american premi- um denim category, 7 For All Mankind® jeans were named one of Ad Age magazine’s “new products of the decade.” But that doesn’t mean we’re resting on our laurels. in fact, the 7 For All Mankind® brand is embarking on an ambitious expansion plan fueled by powerful consumer insights. With design and styling eternally in touch with the trends, the 7 For All Mankind® brand is the absolute pinnacle of fashion and style for loyal consum- ers from Hollywood to Bollywood and everywhere in between. Consumers love the way the brand’s handmade fits, luxurious fabrics and stylish finishes make them look, but there’s another reason for our success that goes even deeper. People love the way they feel when they wear 7 For All Mankind® jeans. And that’s what keeps them coming back. 32 33  one Culture, Many CultureS: A Culture of Local Knowledge “ Chinese consumers have evolved so much in the past decade. Their demands for better service and better products create great opportunities, but also great challenges. That’s why consumer research remains so essential.” XIA FENG Manager, Strategy VF succeeds internationally because of careful brand management that strikes a balance between the core attributes of our global brands and the needs of local markets. It’s both an art and a science. The science includes sophis- ticated research methodologies that provide us with consumer insights for specific regions, countries, and, in some cases, cities. The art is the ability to analyze these insights and apply them in ways that create excitement and value for consumers. We believe this approach is especially important in rapidly developing markets such as China, where VF is building a foundation for the sustainable, long-term growth of our brands. not just for winter summit seekers, but for spring, summer and fall adventurers as well. The brand’s new Activity-Based Model focuses on three key consumer activities: outdoor, action sports and performance. This enables our product teams to create a comprehensive product solution with the end user in mind, rather than broad categories such as jackets or hats. We’re also applying this model to create a broader youth product offering to encourage and inspire outdoor activity. “ Chinese consumers like to understand a brand’s history and origins. They want to know that we are producing something that’s genuine — not fake.” C AR MEN C hENG Vice President/ Managing Director, Jeanswear Asia “ We never lose sight of what the 7 For All Mankind® brand stands for. We only incorporate trends or design concepts that are credible and aspirational for this brand.” MARTI NO SC ABB IA Gu E R R INI President, Sportswear & Contemporary Brands EMEA (Europe, Middle East and Africa) “ Everybody has their own Mount Everest to climb. We provide a little bit of that magic and aura whenever somebody buys one of our products.” pAT R I K FR I SK President, Outdoor & Action Sports EMEA (Europe, Middle East and Africa) l e e ® Chinese consumers’ growing desire for the gen- uine article is a perfect fit for the Lee® brand, which celebrated its 120th birthday in 2009. the challenge is making sure that the brand stays 120 years young, using all its experience to create contemporary styles that appeal to today’s savvy young Chinese consumer. The Lee® brand has become especially successful by mastering a difficult balancing act: selling an American heritage brand with European styling to Chinese consumers. Over the past five years, Lee® brand revenues have grown at a compound annual rate of more than 40% and the brand is now estab- lished as one of the top global denim brands in the country. Today, the Lee® brand is a case study for other VF brands expanding in China, sharing the lessons learned from its 15 years there. 7 F o r a l l M a n K i n d ® even the biggest hollywood blockbusters sometimes need a little editing to really make a splash overseas. the 7 For All Mankind ® brand is no different. the brand seamlessly adapts Southern California culture and style to appeal to upscale european tastes, all the while mak- ing sure that nothing is lost in the translation. Seven For All Mankind works to ensure that the contemporary, luxurious “look and feel” of its stores is presented properly overseas, where stores are often located in the heart of Europe’s oldest cities. Europe-based designers blend American silhouettes with global trends and finishings. The product offering is expanded by creating acces- sories tailored specifically for European tastes. Making sure our products remain trend-right for European consumers not only positively impacts sales, it also helps the brand continue to build its reputation as a style leader in Europe. t h e n o rt h FaC e ® every new market The North Face® brand enters is a new mountain to climb, but the brand always starts at the top. our premier position- ing — based on four decades of making gear that helps elite athletes perform in the world’s toughest outdoor conditions — is always con- sistent no matter what the language. that translates into premier distribution and pre- mier product in every new market we enter, from russia to poland to Slovenia. In addition to expanding geographically, we have also expanded the breadth and depth of our product offerings. Today, The North Face® brand is truly a brand for all seasons, with apparel and gear In 2009, the Lee® brand leveraged its 120-year anniversary in a unique marketing campaign. The brand awarded 120 limited- edition gold-button pairs of Lee® jeans to 120 Chinese consumers who were able to match 120 online ques- tions about the Lee® brand and its history with 120 answers within 120 hours. 34 35  one Culture, Many CultureS: A Culture of Values “ Sustainability is part of The North Face® brand’s DNA. We are an outdoor company. Our consumers are passionate about outdoor activities. And when you are outdoors and you are active in the outdoors it’s natural to want to protect it.” on e C ult u r e, Man y C u lt ur e S: A Culture of Leadership “ performance management isn’t just about individual results. We want to evaluate our leaders on how well they develop a team and align their personal goals with our business goals.” “ We are, as a corporation, just starting this journey. We’re going to learn as we go and get better along the way. And we’re also going to set the bar high for ourselves as in everything else we do.” C i ndy Knoe Bel Vice President, Financial & Corporate Communications As the world’s largest apparel company, we recognize that we have a responsibility to be an active participant in understanding and reduc- ing our impact on the environment. Many of our businesses have embraced sustainability because it speaks to their brand values; others, because they find that adopting more sustain- able practices can lower costs and improve efficiencies. In 2009 we made the commitment to create a sustainable approach to sustainabil- ity across our businesses — by implementing a methodical, enterprise-wide plan to reduce energy use and eliminate waste throughout our operations. To be successful, we believe sustainability must be treated like any other business discipline — incorporating solid plan- ning, measurement and accountability. 2010 will mark the launch of our Global Sustainability Plan, a roadmap that will help us understand where we are today and what we can do to improve our use of resources. We have also created a Sustainability Advisory Team with responsibility for implementing the plan across four broad areas: carbon footprint and energy, waste, internal education and measurement tools. Teams in each focus area have already developed an initial set of interim and long-term goals, and a list of action items to achieve them. letitia weBSt er Director, CSR & Corporate Communications, The North Face t h e n o rt h FaC e ® The North Face® brand’s “triple bottom line” approach looks at the brand’s actions through three lenses: good for business, good for society and good for the environment. And by focusing on SROI (sustain- ability return on investment), we’re making sure that our actions will yield efficiencies and savings in our business. In fact, sustainability is so important that we’ve written it into the performance evaluation of every associate. In July 2009, The North Face® brand issued its first Sustainability Report (thenorthface.com/sustainability). The report de- tails the brand’s many accomplishments toward eliminating waste from its internal operations and measuring its carbon footprint. Now we’re turning an eye toward our supply chain. Since 2008, The North Face® brand has partnered with bluesign®, a company that closely measures the environmental impact of products and how they’re made. bluesign® audits not only help preserve natural resources, they also reduce costs by finding and eliminating waste. The program has been so successful that The North Face® brand is planning a fourfold increase in the number of styles containing bluesign® certified materials from Spring 2010 to Fall 2010. “ Despite all the evidence, there’s a misconception that it’s expensive to integrate sustainability into business. using fewer resources means lower costs for us and for our part- ners. So it’s completely consistent with our business’s focus on reducing costs.” alli Son Kohll Manager, VF Sportswear Social Compliance nau t i C a ® As a global lifestyle brand that takes its inspiration from the water, Nautica believes that sustainability is a business imperative. In 2009, we began a partnership with the non-profit Oceana®, an organization dedicated to protecting the world’s oceans. In addition to helping protect a resource so vital to our brand and our consumers, this partnership is helping us motivate and educate every Nautica® associate to make sustainability part of their everyday responsibilities. The Nautica® brand’s commitment also extends beyond water to all areas within its operations. In 2009, the brand and the VF Sportswear coalition joined the EPA Climate Leaders program and completed our first green- house-gas inventory of our owned, operated and leased facilities. As a first step towards reducing our carbon emissions, we are retrofitting/ installing reduced wattage bulbs and sensors in three outlet stores with the expectation of achieving significant energy and cost savings. We’re also making strides in waste reduction, such as requiring thinner polybag shipping materials. ruth Kenn edy Director, Organization Development p e r F o r M a n C e M a naG e M e n t For many people, a performance review is a form you fill out once a year and then file away. At VF, we’re changing that perception with Maximizing Performance, our new best practice performance management program. Maximizing Performance transforms the act of giving and soliciting feedback into an everyday business tool that makes our associates and our business stronger. Like an elite athlete with a personal coach, the goal is to make feedback more productive, more positive and more frequent. It’s an enormous commitment to affect the lives of more than 26,000 associates, and makes it easier to identify and groom the next generation of VF leaders. And it’s already starting to have an impact. The most common response we’ve heard from managers who have started Maximizing Performance training is a request for more feedback on how to give feedback. “ Our China team works hard to understand each brand’s challenges and opportunities. We are proud that their proactive approach and continual drive to exceed expecta- tions have been recognized.” JaCq ui a lG ar Vice President, Human Resources, Asia Fa S t- G row i n G M a r K e t S VF is growing rapidly in Asia. And our Human Resources team is working just as fast, keeping pace in a critical region and laying the foundation for continued growth. VF Asia’s Human Resources and Administration Team was hon- ored with a 2009 BEST Award by the American Society of Training and Development for using learning and development programs as a strategic tool to get business results. The team played an instrumental role in the launch of our Vans® and Kipling® brands in China, helping to support these fast-growing businesses. In 2009 alone, the China team managed the recruitment and training of 162 office associates and 739 retail associates in our fast-expanding shop-in-shop program. “ Our leadership ranks are going to be stronger if they have diverse perspectives, experiences and demo- graphics. The reality is our customers are incredibly diverse around the world. Our associate base is equally diverse. We want our leadership to reflect both our employees and the customers we serve.” r on l aw re n Ce Vice President, Organization Development The strength of VF’s leadership is best shown by our performance in tough times. To maintain this competitive advantage, we are establishing best-in-class leadership development programs to make sure we continue to excel in the years to come. The skill set of the next generation of VF leaders will encompass consumer insight and market research, as well as disciplined innovation processes that build brand strength. They will be able to apply a global lens to capi- talize on local opportunities and leverage a wide diversity of perspectives to solve global prob- lems. Our leadership training program is built on two principles: leaders teach leadership, and leaders learn best by doing. We’re invest- ing in programs that bring our leaders together to share ideas, whether it’s our Chairman, Eric Wiseman, teaching in the VF Leadership Institute or our Supply Chain University that brings together leaders from Asia, Europe and North America. In 2009, leadership initiatives such as these helped VF gain important indus- try recognition. VF was named one of Fortune® magazine’s “Top Companies for Leaders in North America,” and was also included in the magazine’s “World’s Most Admired Companies” list for the fourth consecutive year. 36 37  one Culture, Many CultureS: A Culture of Innovation “ As an organization, we are learning to want more and to reach higher than we did even last year. Not necessarily by taking more financial risk, but by thinking about who we are, who we can be, what we can do. The thinking that got us to where we are today is not going to get us to where we need to be in five or 10 years.” Ste phen du ll Vice President, Strategy At VF, innovation is not an abstract concept. It is a practical, disciplined approach to problem solving that applies consumer insights to global opportunities to create value for consumers. Innovation starts at the top, with leaders who think and act differently, who collaborate to find new ideas both inside and outside of VF and who share what they’ve learned across our en- tire organization. This commitment to shaping the VF of tomorrow is already getting results. We’re using the principles of codesign to cre- ate products that consumers love and retailers can’t wait to stock. We’re using technological tools that help us predict consumer preferences before we’ve purchased a single piece of fabric. We’re using marketing strategies that push the limits of the new digital-media landscape. And we’ve only just begun. Our goal is to embed new processes and programs into every brand and every region, so that innovation becomes part of every VF associate’s job description. We’re creating innovation platforms to pursue opportunities that no single coalition or brand would have the resources to tackle alone. And we’ve embarked upon partnerships with other innovation leaders to share best practices across industries. “ Now, when you walk into a store, Wrangler is not just a jean on the rack, it’s a com- plete outfit. It’s a lifestyle brand. That is a very big step for jeanswear.” J OE Bu GNI Vice President/ General Manager, Mass Sportswear “ It’s getting better every year. Retailers now look at us as the leader in fit innovation. For the past five years, we’ve launched a new fit solution every year.” BI LL Ly NC h Vice President/General Manager, Lee (Female) “ If we don’t speak with an authentic voice that’s true to our con- sumer, we don’t have a prayer.” DOu G pALLADI NI Vice President, Marketing, Vans w r a n G l e r ® Va n S ® Facebook. MySpace. twitter. Some may dis- miss them as fads of youth culture. But when a brand has helped define that youth culture, they naturally become part of its dna. the Vans® brand has successfully harnessed the power of digital and social media to commu- nicate its iconic and authentic brand message to a youth audience that refuses to play by the rules of conventional marketing. Founded in 1966, Vans created the original skate shoe. Today, Vans® is a multifaceted brand that taps into many subcultures from skating and action sports to multiple genres of music and art. The Vans® brand speaks with an authentic voice in each of these communities by letting their passionate brand champions — the athletes, musicians and artists — communicate the brand’s values directly to consumers. This strategy has transformed the Vans® brand into a social media powerhouse. In 2009, 18 million unique visitors went to vans.com and its seven blogs, making it far and away the most viewed action sports brand on the Web. Vans® brand videos on YouTube® have been viewed 1.3 million times. The brand’s main Twitter® feed communicates with 18,000 consum- ers following in real time. And the brand was named one of the “Facebook® 50” by Slate maga- zine’s The Big Money Web site. Every one of those numbers represents a real, one-to-one connection between the consumer and the brand in a way that traditional marketing strategies just can’t match. the Wrangler® brand is world-famous for its authentic, rugged jeans. in the united States, the brand is using cutting-edge technology to more intelligently broaden its product offering and extend its reach to consumers. The Wrangler® brand’s optimized assortment tool incorporates real-time consumer input into the design process. It facilitates an online dialogue with consumers that has enabled them to codesign the brand’s entire shirt line. By capturing the prefer- ences of a wide variety of consumers early in the process, we can focus on a few key styles that will appeal to the broadest assortment of consumers. Or, put simply, Wrangler produces fewer styles but sells more of them than ever before. We’re also analyzing how the styles work together to present the brand’s entire offering. We’ve learned that changing just one shirt — an orange shirt, to be precise — changed the way consumers viewed the entire rack and moti- vated them to purchase more. It doesn’t take a sophisticated analysis to under- stand the benefits. Unit sales of Wrangler® shirts are up nearly 30% since 2008, breaking the 10 mil- lion-unit barrier. And retailers are now dedicating more floor space than ever to Wrangler® products. l e e ® in the united States, the Lee® brand has raised the bar in product innovation to revolutionize its relationships with retailers and consum- ers. it all starts with a secret. the Lee® brand’s Slender Secret ® jeans contain a wonder fabric that stretches for a comfortable yet form-fitting fit, but never stretches out. the fabric recov- ers after years of wearing and washing so that the jeans fit as well as they did in the dressing room. the Lee® brand was the first to introduce this fabric with its mid-tier department store customers. But the real secret is the brand’s commitment to fit innovation based on intense consumer re- search. We realized that there was an opportunity to design something specifically for women who wanted fit-flattering styles without sacrificing fash- ion — jeans that were built to make them look great and feel more confident. This insight has fueled a winning streak for the Lee® brand in the U.S. In the past several years, we’ve introduced product innovations that have redefined the women’s jeans category with mid-tier customers, while significantly expanding the Lee® brand’s market share. Our customers are increasing- ly comfortable with testing less and buying more, and the Lee® brand is using that trust to transform its biggest customers into better customers. Wrangler’s optimized assortment tool is an example of innovation that has a real impact. By using technology to incorporate instant consumer feedback into the design process, Wrangler has seen double- digit increases in shirt sales for the last three years, breaking the 10 million-unit barrier in 2009. 38 39 o pe r atinG CoMMi ttee e riC C. wiSeMan Chairman, President & Chief Executive Officer MiChael t. Gannaway Vice President — VF Direct / Customer Teams FranKlin l . terKel Sen Vice President — Mergers & Acquisitions SuSan l arSon willia MS Vice President — Human Resources r o Be rt K. Shearer Senior Vice President & Chief Financial Officer B radley w. Batten Vice President — Controller & Chief Accounting Officer C a n daCe S. C uMMinGS Vice President — Administration, General Counsel & Secretary Ste phen F. dull Vice President — Strategy FranK C. piCKard iii Vice President — Treasurer Boyd a. roGerS Vice President & President — Supply Chain Karl hein Z SalZBurGer Vice President & President — VF International Martin S . SChneider Vice President & Chief Information Officer Bo a rd o F direC tor S e riC C. wiSeMan 2,3* Chairman, President & Chief Executive Officer Director since 2006, age 54 C h a rleS V. B erGh 3,5 Group President Global Grooming Procter & Gamble Company Boston, Massachusetts (Consumer products) Director since 2008, age 52 r iChar d t. C aruCCi 1,3 Chief Financial Officer Yum! Brands, Inc. Louisville, Kentucky (Casual dining restaurants) Director since 2009, age 52 Jul i an a l. Chu GG 1,4 Senior Vice President General Mills, Inc. Minneapolis, Minnesota (Consumer food products) Director since 2009, age 42 Juan e rne Sto de Bedout 1,3 Group President Latin American Operations Kimberly-Clark Corporation Roswell, Georgia (Consumer products) Director since 2000, age 65 40 urSula o. FairBairn 2,4,5 President & Chief Executive Officer Fairbairn Group LLC New York, New York (Human resources consultant) Director since 1994, age 67 ClarenCe otiS, Jr. 1,4 Chairman & Chief Executive Officer Darden Restaurants, Inc. Orlando, Florida (Casual dining restaurants) Director since 2004, age 53 M. ruSt Sharp 2,5 Of Counsel Heckscher, Teillon, Terrill & Sager West Conshohocken, Pennsylvania (Attorneys) Director since 1984, age 69 rayMond G. Viault 3,5 Former Vice Chairman General Mills, Inc. Minneapolis, Minnesota (Consumer food products) Director since 2002, age 65 Committees of the Board 1 Audit Committee 2 Executive Committee 3 Finance Committee 4 Nominating and Governance Committee 5 Compensation Committee * Ex officio member BarBara S . FeiGin 1,4 Consultant New York, New York (Strategic marketing and branding) Director since 1987, age 72 GeorGe FellowS 1,4 President & Chief Executive Officer Callaway Golf Company Carlsbad, California (Sporting goods) Director since 1997, age 67 roBert J. hurSt 2,3,4 Managing Director Crestview Partners LLC New York, New York (Private equity firm) Director since 1994, age 64 w. alan M CCollou Gh 4,5 Former Chairman of the Board, Circuit City Stores, Inc. Richmond, Virginia (National retailer) Director since 2000, age 60 Top, left to right: Eric C. Wiseman, Robert K. Shearer, Bradley W. Batten, Candace S. Cummings, Stephen F. Dull, Michael T. Gannaway. Bottom, left to right: Frank C. Pickard III, Boyd A. Rogers, Karl Heinz Salzburger, Martin S. Schneider, Franklin L. Terkelsen, Susan Larson Williams From left to right: Raymond G. Viault, Ursula O. Fairbairn, M. Rust Sharp, Juliana L. Chugg, Robert J. Hurst, Eric C. Wiseman , Juan Ernesto de Bedout, Charles V. Bergh, George Fellows, Clarence Otis, Jr., Barbara S. Feigin, W. Alan McCollough, Richard T. Carucci 41 Fi n a nCi al S uM Mary Co nSolidat ed Balan Ce SheetS Dollars and shares in thousands, except per share amounts 200 9 2008 2007 2006 2005 In thousands Su MMary o F operationS (1) Total revenues Operating income Income from continuing operations attributable to VF Corporation Discontinued operations attributable to VF Corporation Cumulative effect of a change in accounting policy Net income attributable to VF Corporation Earnings (loss) per common share attributable to VF Corporation common stockholders – basic Income from continuing operations Discontinued operations Cumulative effect of a change in accounting policy Net income Earnings (loss) per common share attributable to VF Corporation common stockholders – diluted Income from continuing operations Discontinued operations Cumulative effect of a change in accounting policy Net income Dividends per share Dividend payout ratio (2) (7) F in anCi al p oSition Working capital Current ratio Total assets Long-term debt Redeemable preferred stock Stockholders’ equity Debt to total capital ratio (3) Average number of common shares outstanding Book value per common share other Stati Sti CS (4) Operating margin Return on invested capital (5) (6) (7) Return on average stockholders’ equity (6) (7) Return on average total assets (6) (7) Cash provided by operations Cash dividends paid $ 7,220,286 736,817 $ 7,642,600 938,995 $ 7,219,359 965,441 $ 6,215,794 826,144 $ 5,654,155 767,951 461,271 – – 461,271 602,748 – – 602,748 613,246 (21,625) – 591,621 535,051 (1,535) – 533,516 482,629 35,906 (11,833) 506,702 $4.18 – – 4.18 $4.13 – – 4.13 2.37 46.0% $5.52 – – 5.52 $5.42 – – 5.42 2.33 43.0% $5.55 (0.20) – 5.36 $5.41 (0.19) – 5.22 2.23 42.7% $4.83 (0.01) – 4.82 $4.73 (0.01) – 4.72 1.94 41.1% $4.33 0.32 (0.11) 4.54 $4.23 0.31 (0.10) 4.44 1.10 24.2% $ 1,536,773 2.4 $ 6,470,657 938,494 – 3,813,285 23.7% 110,389 $34.58 $ 1,640,828 2.6 $ 6,433,868 1,141,546 – 3,557,245 25.2% 109,234 $32.37 $ 1,510,742 2.3 $ 6,446,685 1,144,810 – 3,578,555 26.4% 110,443 $32.58 $ 1,563,162 2.5 $ 5,465,693 635,359 – 3,271,849 19.5% 110,560 $29.11 $ 1,213,233 2.1 $ 5,171,071 647,728 23,326 2,813,066 22.6% 111,192 $25.50 11.9% 12.6% 15.6% 8.7% $ 973,485 261,682 12.3% 13.5% 16.5% 9.1% $ 679,472 255,235 13.4% 14.8% 18.4% 10.4% $ 833,629 246,634 13.3% 14.7% 18.0% 10.0% $ 454,128 216,529 13.6% 14.2% 18.0% 9.4% $ 533,654 124,116 (1) Operating results for 2009 include a noncash charge for impairment of goodwill and intangible assets – $122.0 million (pretax) in operating income and $114.4 million (aftertax) in income from continuing operations and net income attributable to VF Corporation, $1.02 basic earnings per share and $1.03 diluted earnings per share. (4) Operating statistics are based on continuing operations (excluding the effect of the charge for impairment of goodwill and intangible assets in 2009). (5) Invested capital is defined as average stockholders’ equity plus average short-term and long-term debt. (2) Dividends per share divided by the total of income from continuing and discontinued (6) Return is defined as income from continuing operations before net interest expense, operations per diluted share (excluding the effect of the charge for impairment of goodwill and intangible assets in 2009). after income taxes. (7) Information presented for 2009 excludes the $122.0 million noncash charge for impairment of (3) Total capital is defined as stockholders’ equity plus short-term and long-term debt. goodwill and intangible assets. aS S etS Current assets Cash and equivalents Accounts receivable, net Inventories Deferred income taxes Other current assets Total current assets property, plant and equipment Less accumulated depreciation intangible assets Goodwill other assets liaBilit ieS an d S toC Kh older S ’ e qu ity Current liabilities Short-term borrowings Current portion of long-term debt Accounts payable Accrued liabilities Total current liabilities long-term debt other liabilities Commitments and Contingencies Stockholders’ equity Common Stock Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Noncontrolling interests in subsidiaries Total stockholders’ equity DECEMBER 2009 2008 $ 731,549 776,140 958,639 64,959 98,069 2,629,356 1,601,608 987,430 614,178 1,535,121 1,367,680 324,322 $ 381,844 851,282 1,151,895 96,339 171,650 2,653,010 1,557,634 914,907 642,727 1,366,222 1,313,798 458,111 $ 6,470,657 $ 6,433,868 $ 45,453 203,179 373,186 470,765 1,092,583 938,494 626,295 110,285 1,864,499 (209,742) 2,050,109 (1,866) 3,813,285 $ 53,580 3,322 435,381 519,899 1,012,182 1,141,546 722,895 109,848 1,749,464 (276,294) 1,972,874 1,353 3,557,245 $ 6,470,657 $ 6,433,868 42 43 Co n Solidat ed StateMentS oF inCoMe Co nSolidat ed StateMent S oF Ca Sh FlowS In thousands, except per share amounts 200 9 2008 2007 In thousands YE A R E ND ED DECEMBER net Sales royalty income total revenues Costs and operating expenses Cost of goods sold Marketing, administrative and general expenses Impairment of goodwill and intangible assets operating income other income (expense) Interest income Interest expense Miscellaneous, net income from Continuing operations Before income taxes income taxes income from Continuing operations discontinued operations net income net (income) loss attributable to noncontrolling interests in Subsidiaries $ 7,143,074 77,212 7,220,286 $ 7,561,621 80,979 7,642,600 4,025,122 2,336,394 121,953 6,483,469 736,817 2,230 (85,902) 1,528 (82,144) 654,673 196,215 458,458 – 458,458 4,283,680 2,419,925 – 6,703,605 938,995 6,115 (94,050) (2,969) (90,904) 848,091 245,244 602,847 – 602,847 $ 7,140,811 78,548 7,219,359 4,080,022 2,173,896 – 6,253,918 965,441 9,310 (72,122) 4,074 (58,738) 906,703 292,832 613,871 (21,625) 592,246 2,813 (99) (625) net income attributable to VF Corporation $ 461,271 $ 602,748 $ 591,621 earnings (loss) per Common Share attributable to VF Corporation Common Stockholders – Basic Income from continuing operations Discontinued operations Net income earnings (loss) per Common Share attributable to VF Corporation Common Stockholders – diluted Income from continuing operations Discontinued operations Net income Cash dividends per Common Share $ $ $ 4.18 – 4.18 4.13 – 4.13 2.37 $ $ $ 5.52 – 5.52 5.42 – 5.42 2.33 $ $ $ 5.55 (0.20) 5.36 5.41 (0.19) 5.22 2.23 operating activities Net income Adjustments to reconcile net income to cash provided by operating activities of continuing operations: Loss from discontinued operations Impairment of goodwill and intangible assets Depreciation Amortization of intangible assets Other amortization Stock-based compensation Provision for doubtful accounts Pension funding under (over) expense Deferred income taxes Other, net Changes in operating assets and liabilities, net of acquisitions: Accounts receivable Inventories Other current assets Accounts payable Accrued compensation Accrued income taxes Accrued liabilities Other assets and liabilities Cash provided by operating activities of continuing operations Loss from discontinued operations Adjustments to reconcile loss from discontinued operations to cash used by discontinued operations: Loss on disposal of discontinued operations Other, net Cash used by operating activities of discontinued operations Cash provided by operating activities investing activities Capital expenditures Business acquisitions, net of cash acquired Software purchases Sale of intimate apparel business Sale of other businesses Other, net Cash used by investing activities of continuing operations Discontinued operations, net Cash used by investing activities Financing activities Increase (decrease) in short-term borrowings Proceeds from long-term debt Payments on long-term debt Purchase of Common Stock Cash dividends paid Proceeds from issuance of Common Stock Tax benefits of stock option exercises Other, net Cash used by financing activities effect of Foreign Currency rate Changes on Cash net Change in Cash and equivalents Cash and equivalents – Beginning of year Cash and equivalents – end of year YEAR ENDED DECEMBER 2009 2008 2007 $ 458,458 $ 602,847 $ 592,246 – 121,953 113,207 40,500 16,745 36,038 24,836 (114,149) 54,674 (6,923) 75,449 209,439 77,173 (69,560) (11,714) 14,763 (25,182) (42,222) 973,485 – – 105,059 39,427 21,685 31,592 22,062 (4,787) 23,654 (11,477) 52,679 (38,275) (66,866) (67,214) 471 24,118 (22,438) (33,065) 679,472 – – – – – – (1,071) (1,071) 973,485 678,401 (85,859) (212,339) (9,735) – 580 (9,523) (316,876) – (316,876) (11,019) – (3,242) (111,974) (261,682) 62,590 6,464 (480) (319,343) 12,439 349,705 381,844 (124,207) (93,377) (10,601) – 537 11,862 (215,786) – (215,786) (67,736) – (3,632) (149,729) (255,235) 64,972 22,504 (905) (389,761) (12,873) 59,981 321,863 21,625 – 94,540 27,106 19,581 62,413 13,859 7,094 (3,748) (13,548) (49,673) (24,113) 15,644 77,212 (1,932) (7,541) 31,986 (29,122) 833,629 (21,625) 24,554 (15,982) (13,053) 820,576 (113,863) (1,060,636) (6,367) 348,714 12,368 13,965 (805,819) (243) (806,062) 36,785 592,758 (168,671) (350,000) (246,634) 69,539 15,571 – (50,652) 14,777 (21,361) 343,224 $ 731,549 $ 381,844 $ 321,863 44 45 V F C orpo ration hiGh/low StoCK priCeS Co rpor at e i nFor Matio n C o MMon StoC K Listed on the New York Stock Exchange — trading symbol VFC. Shar eholder S oF reCord As of February 11, 2010, there were 4,523 shareholders of record. diVi den d poliC y Quarterly dividends on VF Corporation Common Stock, when declared, are paid on or about the 20th day of March, June, September and December. diVidend reinVeSt Ment plan The Plan is offered to shareholders by Computershare Trust Company, N.A. The Plan provides for automatic dividend rein- vestment and voluntary cash contributions for the purchase of additional shares of VF Corporation Common Stock. Questions concerning general Plan information should be directed to the Office of the Vice President — Administration, General Counsel and Secretary of VF Corporation. diVidend dir eC t de poS it Shareholders may have their dividends deposited into their savings or checking account at any bank that is a member of the Automated Clearing House (ACH) system. Questions concerning this service should be directed to Computershare at www.computershare.com/investor. qu arterly Co MMon StoCK p riC e inF orMation The high and low sales prices on a calendar quarter basis for the periods indicated were as follows: qu arterly Co MMon StoCK priCe First Quarter Second Quarter Third Quarter Fourth Quarter 2 0 0 9 2 0 0 8 2 0 0 7 h i G h l o w H I G H L OW H I G H L OW $ 59.98 69.72 73.81 79.79 $ 46.06 53.27 53.53 68.60 $ 83.29 79.87 84.60 77.69 $ 63.68 69.44 65.50 38.22 $ 83.29 95.10 96.20 87.36 $ 73.59 82.52 78.27 68.15 C or por at e oFF iC e VF World Headquarters 105 Corporate Center Blvd. Greensboro, NC 27408 Telephone: 336-424-6000 Facsimile: 336-424-7696 Mailing Address: P.O. Box 21488 Greensboro, NC 27420 an nu al Me et inG The Annual Meeting of Shareholders will be held on Tuesday, April 27, 2010 at 10:30 a.m. at the O.Henry Hotel, Caldwell Room, 624 Green Valley Road, Greensboro, NC 27408 in VeS tor r elation S Cindy Knoebel, CFA Vice President, Financial & Corporate Communications VF Services, Inc. 105 Corporate Center Blvd. Greensboro, NC 27408 t ran S Fer aGen t an d r eGi St r ar Computershare Trust Company, N.A. P.O. Box 43070 Providence, RI 02940 Shareholder Relations Department 800-446-2617 in depe nden t aC Cou ntan t S PricewaterhouseCoopers LLP 101 CentrePort Drive Greensboro, NC 27409 C ert iFiC at ion S VF has filed the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002 regarding the quality of the Company’s public disclosure as exhibits to the Company’s annual report on Form 10-K for the fiscal year ended January 2, 2010. After VF’s 2010 Annual Meeting of Share- holders, VF intends to file with the New York Stock Exchange (NYSE) the certification regarding VF’s compliance with the NYSE’s corporate governance listing standards as required by NYSE Rule 303A.12. Last year, VF filed this certification with the NYSE on May 7, 2009. ot her inF orM at ion VF’s filings with the SEC, including its an- nual report on Form 10-K, quarterly reports on Form 10-Q, press releases and reports on Form 8-K and other information, are avail- able and can be accessed free of charge through the Company’s Web site at vfc.com. VF’s Corporate Governance Principles, Code of Business Conduct and charters for the Audit Committee, Compensation Committee, Nominating and Governance Committee and Finance Committee are also available on our Web site. These documents will also be provided to any shareholder free of charge upon request to the Secretary of VF at P.O. Box 21488, Greensboro, NC 27420 46 47 The following trademarks owned by VF Corporation affiliates appear in this report: reGiStered tradeMarKS: The North Face, Wrangler, Blue Bell, Vans, Lee, Nautica, 7 For All Mankind, Napapijri, Kipling, Eastpak, Reef, lucy, JanSport, Splendid, Ella Moss, Riders by Lee, Red Kap, Bulwark, Majestic, Eagle Creek, Wrangler Jeans Co., The Force, John Varvatos, Slender Secret, HC2 Hovercraft, Cool Touch 2, Rustler, Inspired by Travel, Never Stop Exploring, Built to Resist, Off the Wall, Instantly Slims You, Hard Working Jeans… Guaranteed., Real. Comfortable. Jeans., Ultimate Riding Jean, We Are Animals, Made for Heroes tradeMarKS: Discover Freedom, JOHN VARVATOS ARTISAN, Rock Volume One, lucy inspires performance, Ridiculously Comfortable, Lady Lee Riders, Long Live Cowboys, If it Happens in Baseball, It Happens in Majestic., Done Right The following trademarks owned by other companies also appear in this report: iPhone, Apple, iPod, MINI Cooper, World Series, YouTube, Twitter, Facebook, Fortune, NASCAR, Oceana, Sirius, Apparel Co nCept/deSi Gn And Partners, NY andpartnersny.com illuStrati on Laura Molloy VF C orporation 105 Corporate Center Blvd. Greensboro, NC 27408 336-424-6000 vfc.com For additional content visit r e portinG.VFC .CoM 

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