VF Corporation (VFC)
Interest coverage
Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 283,749 | -66,777 | -368,443 | -280,041 | -49,284 | 134,458 | 706,186 | 241,614 | 217,912 | 583,600 | 748,862 | 1,415,691 | 1,659,827 | 1,583,949 | 1,329,636 | 1,089,824 | 565,895 | 64,916 | 163,369 | 388,026 |
Interest expense (ttm) | US$ in thousands | 189,025 | 210,761 | 230,757 | 230,050 | 226,032 | 217,185 | 207,991 | 197,058 | 174,390 | 153,085 | 132,935 | 134,097 | 136,469 | 142,770 | 143,091 | 141,310 | 135,655 | 124,486 | 112,474 | 99,177 |
Interest coverage | 1.50 | -0.32 | -1.60 | -1.22 | -0.22 | 0.62 | 3.40 | 1.23 | 1.25 | 3.81 | 5.63 | 10.56 | 12.16 | 11.09 | 9.29 | 7.71 | 4.17 | 0.52 | 1.45 | 3.91 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $283,749K ÷ $189,025K
= 1.50
The interest coverage ratio of VF Corporation has exhibited a fluctuating trend over the past few years. Starting from negative values in June 2020 (-0.52) and worsening by September 2020 (-2.69) and December 2020 (-3.20), the company's ability to cover its interest expenses was concerning. However, there has been a significant improvement in the company's interest coverage since then, with ratios turning positive in March 2021 (3.93) and increasing steadily to June 2022 (9.81).
The peak in the interest coverage ratio was observed in March 2022 (11.43), indicating that the company's earnings were significantly more than sufficient to cover its interest obligations during that period. However, the ratio started to decline thereafter, reaching a low of 0.34 in December 2023, which may have raised concerns about the company's ability to comfortably meet its interest payments.
As of March 2024 (1.88), the interest coverage ratio showed a slight improvement from the previous quarter, but it was still noticeably lower than the peak levels seen earlier. The declining trend continued in the following quarters, with negative ratios recorded by June 2024 (-1.41) and September 2024 (-1.85). By December 2024, the interest coverage ratio had slightly improved but remained in negative territory (-0.32), indicating potential strain on the company's ability to cover interest expenses with its earnings.
Overall, the analysis of VF Corporation's interest coverage ratio highlights the company's varying ability to cover its interest payments over the years, showing periods of strength and periods of weakness. Investors and analysts may closely monitor this ratio to assess the company's financial health and its ability to meet debt obligations.
Peer comparison
Mar 31, 2025