LEASES
The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. All of these leases are operating leases. VF previously had one finance lease for a distribution center that was sold in Fiscal 2026 as part of the Dickies divestiture.
The assets and liabilities related to operating and finance leases were as follows:
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| (In thousands) | Location in Consolidated Balance Sheet | | | March 2026 | | | March 2025 |
| Assets: | | | | | | | |
| Operating lease assets | Operating lease right-of-use assets | | | $ | 1,320,733 | | | | $ | 1,262,319 | |
| Finance lease assets | Property, plant and equipment, net | | | — | | | | 10,584 | |
| Total lease assets | | | | $ | 1,320,733 | | | | $ | 1,272,903 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Current | | | | | | | |
| Operating lease liabilities | Current portion of operating lease liabilities | | | $ | 333,469 | | | | $ | 308,741 | |
| Finance lease liabilities | Current portion of long-term debt | | | — | | | | 1,011 | |
| Noncurrent | | | | | | | |
| Operating lease liabilities | Long-term portion of operating lease liabilities | | | 1,119,876 | | | | 1,079,182 | |
| Finance lease liabilities | Long-term debt | | | — | | | | 14,039 | |
| Total lease liabilities | | | | $ | 1,453,345 | | | | $ | 1,402,973 | |
The components of lease costs were as follows:
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| | Year Ended March |
| | | | | | | |
| (In thousands) | | 2026 | | | 2025 | | 2024 |
| Operating lease cost | | $ | 411,339 | | | | $ | 403,734 | | | $ | 410,427 | |
| Finance lease cost – amortization of right-of-use assets | | 370 | | | | 917 | | | 917 | |
| Finance lease cost – interest on lease liabilities | | 233 | | | | 428 | | | 457 | |
| Short-term lease cost | | 21,868 | | | | 19,014 | | | 25,227 | |
| Variable lease cost | | 127,077 | | | | 135,721 | | | 132,453 | |
| Impairment | | 5,095 | | | | — | | | 12,958 | |
| Gain recognized from sale-leaseback transaction | | — | | | | (17,434) | | | — | |
| Total lease cost | | $ | 565,982 | | | | $ | 542,380 | | | $ | 582,439 | |
Supplemental cash flow information related to leases was as follows:
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| | Year Ended March |
| | | | | | | |
| (In thousands) | | 2026 | | | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
| Operating cash flows – operating leases | | $ | 420,411 | | | | $ | 420,156 | | | $ | 424,646 | |
| Operating cash flows – finance leases | | 233 | | | | 428 | | | 457 | |
| Financing cash flows – finance leases | | 663 | | | | 1,109 | | | 1,079 | |
| Right-of-use assets obtained in exchange for lease liabilities: | | | | | | | |
| Operating leases | | 393,824 | | | | 374,707 | | | 337,980 | |
| | | | | | | |
Lease terms and discount rates were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | March 2026 | | | March 2025 | | March 2024 |
| Weighted average remaining lease term: | | | | | | | |
| Operating leases | | 6.25 years | | | 6.01 years | | 6.20 years |
| Finance leases | | N/A | | | 11.51 years | | 12.51 years |
| | | | | | | |
| Weighted average discount rate: | | | | | | | |
| Operating leases | | 4.22 | % | | | 3.72 | % | | 3.34 | % |
| Finance leases | | N/A | | | 2.71 | % | | 2.71 | % |
Maturities of operating lease liabilities for the next five fiscal years and thereafter as of March 2026 were as follows:
| | | | | | | | | | | | | | | |
| (In thousands) | | Operating Leases | | | | | |
| 2027 | | $ | 385,808 | | | | | | |
| 2028 | | 317,664 | | | | | | |
| 2029 | | 229,933 | | | | | | |
| 2030 | | 178,417 | | | | | | |
| 2031 | | 136,392 | | | | | | |
| Thereafter | | 407,194 | | | | | | |
| Total lease payments | | 1,655,408 | | | | | | |
| Less: present value adjustment | | 202,063 | | | | | | |
| Present value of lease liabilities | | $ | 1,453,345 | | | | | | |
The Company excluded approximately $103.4 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily in Fiscal 2027 with lease terms of 2 to 12 years.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.