In early Q4, you might have seen the brand’s Louis Vuitton Timberland collaboration created enormous buzz at Paris Fashion Week and I’m excited about the brand’s potential. More to come on that in future calls. To round out our highlights, VF continues to be recognized for our sustainability leadership by MSCI, where as of December 2023, we carry the top rating available for companies for the first time. In fact, we are the highest ranked in our industry. I’m immensely proud of our ongoing commitment to sustainability and it shows what we’re capable of in this business across all parts of it when focused and invested. I’m keenly aware sustainability performance without company performance is not satisfying. To me it’s not just a good thing to do, but it’s an example of what we’re capable of in every part of our business.
Now we have to work to get our company performance to match that. Now let me update you briefly on Reinvent, which prioritizes aggressively four key areas we introduced last quarter, which are first, fix the U.S.; second, deliver the Vans turnaround; three, lower our cost base; and four, strengthen our balance sheet. As part of the recently established Global Commercial Structure led by Martino, the America’s regional platform is taking shape. Every day this platform improves and changes have already resulted in giving management greater transparency on the business. They will take time to bring it up to the standard we have around the world. EMEA and APAC have consistently outperformed our U.S. business and Martino has imported the same key processes to the U.S. platform, including the areas of key account management, go-to-market execution, merchandise planning and forecasting.
The overall discipline of one approach has been sorely missed in the U.S. The Americas team is expected to be fully in place and operational as we begin the next fiscal year. I discussed the Vans turnaround already. I’ll just reiterate a few things. Along with the work we are doing on brand purpose, product innovation and marketing, we’re resetting the marketplace to accelerate our progress now. This marketplace clean-up will integrate with products and marketing spun from the same storylines and that is a new approach relative to the past few years. I’m excited about what’s ahead. On costs we’re on track to deliver the $300 million dollar fixed cost savings target which is entirely within our control. This quarter we began to simplify and right size the company’s structure, real estate and others nonstrategic areas.
Matt will talk you through some of the numbers here. There’s more to do, but we’re making very good progress. Reducing debt and strengthening the balance sheet remains a top priority and during the quarter we benefited from the reduction of inventories and the recent reduction in the dividend. We’re already reducing the net debt substantially this quarter versus last year and that’s before we sell any assets. We’ve also identified noncore physical assets which will be monetized in the coming quarters and we’re activating a plan to pay down our next two rounds of debt without refinancing. As the next phase of our transformation plan, today we announced a strategic review of our brand portfolio in alignment with the Board of Directors. This is the next natural step in our turnaround plan as we continue to execute on reinvent.
VF has a long history of growth and value creation through evolution of our portfolio. We are objectively assessing what fits and what doesn’t as we look to reshape our business toward the greatest opportunities for near and long-term profitable growth and value creation. Looking ahead to the rest of the fiscal year, as we continue to implement actions and make instrumental changes across our business, we remain focused and committed to achieving our cash flow objective for fiscal 2024. We eliminated revenue and profit guidance for now, but we’re committed to cash flow and we’re on track to deliver. Now, let me briefly address the cyber incident we experienced in December. It obviously impacted us, but it could have been much worse. I’m super impressed by the quality of work done by our teams across the company.
Rarely have I seen a company rally so quickly and so effectively to a cause. Great preparation beforehand, leadership and teamwork during and meticulous follow through mitigated the impact. I don’t think it could have been handled much better and I’m really proud of the team. We’ve instituted a range of additional control to derisk the potential for any future incidents. Now I want to summarize what I see VF becoming over the next several years. We’re leveraging our strengths, world class brands and great people while taking action to make VF leaner, faster and stronger through proactive measures. As I outlined last quarter, this will take time, but we’re making progress quickly and building on what we laid out just a few months ago. The ultimate outcome will be a leaner, more cohesive set of brands relentlessly focused on the consumer and will deliver industry-leading innovation in products and marketing, enabled by much more efficient operations.
Design or perhaps a better word for it in this industry for now, innovation will be at the center of our transformation agenda. Our commercial operations will run efficiently and effectively across all three regions. Each brand will have powerful capabilities to build innovative products consumers are hungry for with powerful marketing to tell their story. With that, I’ll now hand this over to Matt to talk you through the financials.
Matt Puckett: Thank you, Bracken. Before I get into the financial update, let me take a minute to reflect on my time at VF. I’ve lived and loved VF for over two decades and my time with this great company has provided me with many enriching and fulfilling experiences across our business and across the world. I’m thankful for those many opportunities and more importantly, for the great friendships and relationships that have come from it. However, there always comes a time for change and Bracken and I are aligned on this being the right time. While I’ll be stepping down in the coming months, in the interim, I remain committed to helping pursue the transformation agenda, leading the finance organization and supporting the transition.
