Lorraine Hutchinson: Thank you very much.
Bracken Darrell: Thank you.
Operator: Thank you. Our next question is from Brooke Roach with Goldman Sachs. Please proceed with your question.
Bracken Darrell: Hi, Brooke.
Brooke Roach: Hi, Bracken. Thanks so much for taking the question.
Bracken Darrell: Thank you.
Brooke Roach: I was wondering if we could follow up on Lorraine’s question, and get your thoughts and perspective on what attributes you’re looking for in a new brand president at Vans. And what might be the right leadership attributes to drive that stabilization and turnaround there?
Bracken Darrell: Well, you know, I’m always – you know, my – the most important quality of a leader at this level is always leadership. You know, so just general leadership. But the next step down from that, if you’re looking at real capabilities, I think I tried to be very clear in my opening, I believe, the most important attributes of a leader for a brand or a brand President is being able to lead an innovation process and to consistently deliver an amazing set of innovations over time. And the segment is to build brand heat, you know, real brand power in the marketplace. And so those are the – those are two probably the top two scales we’ll be looking for.
Brooke Roach: Great. And if I could just ask one follow-up question. VF has historically had a few lenses by which they elaborate – they look at ownership of brands in the portfolio. Can you elaborate on how you’re thinking about the broader portfolio composition of VF today and whether or not those strategic lenses of ownership are still appropriate under your leadership?
Bracken Darrell: Yes. You know, I’ve been through those lenses and I like them a lot. I think it’s a great way to look at it. I never heard him called lenses. I’ve heard him call it about everything else. But I think that’s the right way to think about you know, strategy first and then you know, return on investment to various pieces. And – but I guess the most important thing to me, you know, maybe precedes a little bit of that and fits into the strategy lens is, I love to be in growing markets. I mean I think that’s the whole key. And so as I think about the portfolio we’re in, and this company has – as updated and changed and altered its portfolio over 124 years, a remarkable number of times, 121 years again, that’s the way I’m thinking about. I like to be in growing markets. I like to have leading brands.
Matt Puckett: We turn to 125 next year.
Bracken Darrell: 125. Okay, good. So there will be a big party.
Matt Puckett: Yes, exactly.
Bracken Darrell: Thank you. See you, Brooke.
Operator: Thank you. Our next question is from Simeon Siegel with BMO Capital Markets. Please proceed with your question.
Bracken Darrell: Hi, Simeon.
Simeon Siegel: Hi, everyone. Hi, good afternoon. So I guess I was wondering, just first off, any way to think through how much of the Americas wholesale decline was company-specific versus the broader environment? I mean, obviously, you guys are speaking to your challenges, but there’s stuff out there also. So just curious if you have a view there. And then any thoughts on that environment going forward? And then just any – I’m sorry if I missed it, do you guys give any notable one-time cash or working capital items built into the free cash flow reduction? Or was that mostly just the lower income? Thanks, guys.
Bracken Darrell: Thank you.
Matt Puckett: Yes. So let me try to take those. In terms of our wholesale performance, I’d suggest certainly the macro is impactful, but some of these are our issues, right? The Vans issues, I think, are very specific to us. We’ve seen a little bit of a weakness in sell-through in parts of the Timberland business, particularly the six-inch boot, the premium boot has been slower. Now you could argue, you know, lots of reasons as to why that might be externally driven, but we own it. You know, Dickies has continued to be a bit softer than we would have expected. I think that’s, in many ways, the marketplace itself, but we have to be better at creating demand. So we own all these things. The North Face is really strong. by the way, as are the rest of the outdoor emerging brands.
So I think it’s a combination of both as it relates to you know, what’s happening in the U.S. wholesale business, particularly. And by the way, you know, one of the biggest reasons that the changes we’re announcing today from an operating model perspective are so critical to us. You know, one of the biggest – the first point that Bracken made is fix the U.S. business, and that, by and large, starts with the wholesale business in a big way. So that’s one. As it relates to the change in free cash flow, that’s really primarily the operating results and updates in working capital. Right now, we haven’t yet talked about the specific cash impacts of Reinvent. There will be some charges that we’ll take over the next couple of quarters, which will include both cash and noncash charges.
We’re not ready to talk about the specifics and details of those today, but that will come. I will tell you, as it relates to the year-end liquidity number that we’ve guided to, we think we’ve captured all that very effectively.
Simeon Siegel: Great. All right. Thanks a lot. Best of luck for the rest of the year, and looking forward to see you soon.
Bracken Darrell: Thanks, Simeon.
