What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-02-02 · 223 added, 351 removed, 535 unchanged (52% of the section changed)

3 unchanged sentences

(In millions, except share data)

2021 March 27,

2022 April 2,

Current assets

25 unchanged sentences

Total liabilities 5,232 4,922

Commitments and contingencies (Note 10)

Commitments and contingencies

Shareholders’ equity

1 unchanged sentence

650,000,000 shares authorized;

221,322,510 shares issued and 147,252,018 outstanding at December 25, 2021;

219,222,937 shares issued and 151,280,011 outstanding at March 27, 2021

Treasury shares, at cost ( 74,070,492 shares at December 25, 2021 and 67,942,926 shares at March 27, 2021)

223,503,792 shares issued and 137,956,977 outstanding at July 2, 2022;

221,967,599 shares issued and 142,806,269 outstanding at April 2, 2022

Treasury shares, at cost ( 85,546,815 shares at July 2, 2022 and 79,161,330 shares at April 2, 2022)

( 4,299 ) ( 3,987 )

10 unchanged sentences

(In millions, except share and per share data)

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

Three Months Ended

2022 June 26,

Total revenue $ 1,360 $ 1,253

Cost of goods sold 459 397

1,048 848 2,788 1,860

Selling, general and administrative expenses 622 545

Depreciation and amortization 45 50

Impairment of assets — 90 33 110

Restructuring and other charges 3 3

1 unchanged sentence

Income from operations 231 258

Other income, net — ( 3 ) ( 2 ) ( 4 )

Interest (income) expense, net ( 4 ) 1

Foreign currency (gain) loss ( 4 ) ( 13 ) 1 ( 16 )

Foreign currency loss 4 1

Income before income taxes 231 256

Provision for (benefit from) income taxes 19 ( 5 ) 54 20

Provision for income taxes 28 37

Net income 203 219

Net income (loss) attributable to noncontrolling interest 1 ( 1 ) 1 ( 2 )

Net income attributable to noncontrolling interest 2 —

Net income attributable to Capri $ 201 $ 219

8 unchanged sentences

Foreign currency translation adjustments ( 107 ) 90

Net gain (loss) on derivatives 5 ( 7 ) 9 ( 10 )

Net gain on derivatives 2 —

Comprehensive income 98 309

Net income (loss) attributable to noncontrolling interest 1 ( 1 ) 1 ( 2 )

Net income attributable to noncontrolling interest 2 —

Foreign currency translation adjustments attributable to noncontrolling interest — ( 1 )

8 unchanged sentences

Shares Amounts Shares Amounts

Balance at September 25, 2021 221,296 $ — $ 1,225 ( 70,849 ) $ ( 3,486 ) $ 174 $ 4,689 $ 2,602 $ ( 2 ) $ 2,600

Balance at April 2, 2022 221,967 $ — $ 1,260 ( 79,161 ) $ ( 3,987 ) $ 194 $ 5,092 $ 2,559 $ ( 1 ) $ 2,558

Net income — — — — — — 201 201 2 203

Other comprehensive income — — — — — 39 — 39 — 39

Other comprehensive loss — — — — — ( 105 ) — ( 105 ) — ( 105 )

Total comprehensive income — — — — — — — 96 2 98

5 unchanged sentences

Repurchase of ordinary shares — — — ( 6,386 ) ( 312 ) — — ( 312 ) — ( 312 )

Balance at December 25, 2021 221,323 $ — $ 1,238 ( 74,071 ) $ ( 3,686 ) $ 213 $ 5,011 $ 2,776 $ ( 1 ) $ 2,775

Balance at July 2, 2022 223,504 $ — $ 1,294 ( 85,547 ) $ ( 4,299 ) $ 89 $ 5,293 $ 2,377 $ 1 $ 2,378

Ordinary Shares Additional

3 unchanged sentences

Balance at March 27, 2021

219,223 $ — $ 1,158 ( 67,943 ) $ ( 3,326 ) $ 56 $ 4,270 $ 2,158 $ ( 1 ) $ 2,157

Net income — — — — — — 219 219 — 219

Other comprehensive income (loss) — — — — — 91 91 ( 1 ) 90

Total comprehensive income — — — — — — — 898 — 898

Vesting of restricted awards, net of forfeitures

1,817 — — — — — — — — —

Exercise of employee share options

283 — 11 — — — — 11 — 11

Share based compensation expense — — 69 — — — — 69 — 69

Repurchase of ordinary shares — — — ( 6,128 ) ( 360 ) — — ( 360 ) — ( 360 )

Balance at December 25, 2021 221,323 $ — $ 1,238 ( 74,071 ) $ ( 3,686 ) $ 213 $ 5,011 $ 2,776 $ ( 1 ) $ 2,775

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions, except share data which is in thousands)

Ordinary Shares Additional

Capital Treasury Shares Accumulated Other Comprehensive Income (Loss) Retained

Earnings Total Equity of Capri Non-controlling Interest Total Equity

Shares Amounts Shares Amounts

Balance at September 26, 2020 218,563 $ — $ 1,126 ( 67,942 ) $ ( 3,326 ) $ 125 $ 4,274 $ 2,199 $ — $ 2,199

Net income (loss) — — — — — — 179 179 ( 1 ) 178

Other comprehensive loss — — — — — ( 34 ) — ( 34 ) — ( 34 )

Total comprehensive income (loss) — — — — — — — 310 ( 1 ) 309

Vesting of restricted awards, net of forfeitures 1,591 — — — — — — — — —

41 — — — — — — — — —

Exercise of employee share options 160 — 7 — — — — 7 — 7

21 — — — — — — — — —

Share based compensation expense — — 36 — — — — 36 — 36

Repurchase of ordinary shares — — — ( 1,088 ) ( 59 ) — — ( 59 ) — ( 59 )

Balance at December 26, 2020 218,625 $ — $ 1,138 ( 67,943 ) $ ( 3,326 ) $ 91 $ 4,453 $ 2,356 $ ( 1 ) $ 2,355

Ordinary Shares Additional

Capital Treasury Shares Accumulated Other Comprehensive Income Retained

Earnings Total Equity of Capri Non-controlling Interest Total Equity

Shares Amounts Shares Amounts

Balance at March 28, 2020

217,320 $ — $ 1,085 ( 67,894 ) $ ( 3,325 ) $ 75 $ 4,332 $ 2,167 $ 1 $ 2,168

Net income (loss) — — — — — — 121 121 ( 2 ) 119

Other comprehensive income — — — — — 16 — 16 — 16

Total comprehensive income (loss) — — — — — — — 137 ( 2 ) 135

Vesting of restricted awards, net of forfeitures 1,037 — — — — — — — — —

Exercise of employee share options 268 — — — — — — — — —

Share based compensation expense — — 53 — — — — 53 — 53

Repurchase of ordinary shares — — — ( 49 ) ( 1 ) — — ( 1 ) — ( 1 )

Balance at December 26, 2020 218,625 $ — $ 1,138 ( 67,943 ) $ ( 3,326 ) $ 91 $ 4,453 $ 2,356 $ ( 1 ) $ 2,355

Balance at June 26, 2021 220,974 $ — $ 1,201 ( 69,031 ) $ ( 3,385 ) $ 147 $ 4,489 $ 2,452 $ ( 2 ) $ 2,450

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(In millions)

Nine Months Ended

2021 December 26,

Three Months Ended

2022 June 26,

Cash flows from operating activities

4 unchanged sentences

Deferred income taxes 1 22

Impairment of assets 43 113

Changes to lease related balances, net ( 33 ) ( 36 )

Tax (benefit) expense on exercise of share options ( 3 ) 5

Amortization of deferred financing costs 5 4

Foreign currency gains ( 7 ) ( 16 )

Credit losses 2 ( 5 )

Foreign currency loss (gain) 1 ( 12 )

Other non-cash adjustments 1 ( 3 )

Change in assets and liabilities:

8 unchanged sentences

Capital expenditures ( 36 ) ( 23 )

Cash paid for asset acquisitions — ( 12 )

Settlement of net investment hedges 66 —

Net cash used in investing activities ( 26 ) ( 97 )

Net cash provided by (used in) investing activities 30 ( 23 )

Cash flows from financing activities

7 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 65 ) ( 2 )

Net increase (decrease) in cash, cash equivalents and restricted cash 30 ( 363 )

Net increase in cash, cash equivalents and restricted cash 52 124

Beginning of period 172 234

2 unchanged sentences

Cash paid for interest $ 18 $ 17

Net cash paid (received) for income taxes $ 49 $ ( 33 )

Net cash (received) paid for income taxes $ ( 72 ) $ 28

Supplemental disclosure of non-cash investing and financing activities

4 unchanged sentences

Business and Basis of Presentation

Capri Holdings Limited (“Capri”, and together with its subsidiaries, the “Company”) was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002.

Capri Holdings Limited (“Capri”, and together with its subsidiaries, the “Company”) was incorporated in the British Virgin Islands on December 13, 2002.

The Company is a holding company that owns brands that are leading designers, marketers, distributors and retailers of branded women’s and men’s accessories, footwear and ready-to-wear bearing the Versace, Jimmy Choo and Michael Kors tradenames and related trademarks and logos.

5 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

The interim consolidated financial statements as of December 25, 2021 and for the three and nine months ended December 25, 2021 and December 26, 2020 are unaudited.

The interim consolidated financial statements as of July 2, 2022 and for the three months ended July 2, 2022 and June 26, 2021 are unaudited.

The Company consolidates the results of its Versace business on a one-month lag, as consistent with prior periods.

2 unchanged sentences

The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation in conformity with U.S.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended March 27, 2021, as filed with the Securities and Exchange Commission on May 26, 2021, in the Company’s Annual Report on Form 10-K.

The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended April 2, 2022, as filed with the Securities and Exchange Commission on June 1, 2022, in the Company’s Annual Report on Form 10-K.

The results of operations for the interim periods should not be considered indicative of results to be expected for the full fiscal year.

The Company utilizes a 52- to 53-week fiscal year and the term “Fiscal Year” or “Fiscal” refers to that 52- or 53-week period.

The results for the three and nine months ended December 25, 2021 and December 26, 2020 are based on 13-week and 39-week periods, respectively.

The results for the three months ended July 2, 2022 and June 26, 2021 are based on 13-week periods.

The Company’s Fiscal Year 2023 is a 52-week period ending April 1, 2023.

8 unchanged sentences

The Company generally experiences greater sales during its third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during its first fiscal quarter.

COVID-19 Related Government Assistance and Subsidies

During the three and nine months ended December 25, 2021, the Company recorded $ 2 million and $ 9 million, respectively, related to government assistance and subsidies.

During the three and nine months ended and December 26, 2020, the Company recorded $ 5 million and $ 28 million, respectively, related to government assistance and subsidies.

These amounts mostly relate to rent support and payroll expense and were primarily recorded as a reduction of selling, general and administrative expenses.

Cash, Cash Equivalents and Restricted Cash

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.

Included in the Company’s cash and cash equivalents as of December 25, 2021 and March 27, 2021 are credit card receivables of $ 44 million and $ 25 million, respectively, which generally settle within two to three business days.

A reconciliation of cash, cash equivalents and restricted cash as of December 25, 2021 and March 27, 2021 from the consolidated balance sheets to the consolidated statements of cash flows is as follows (in millions):

2021 March 27,

Included in the Company’s cash and cash equivalents as of July 2, 2022 and April 2, 2022 are credit card receivables of $ 28 million and $ 18 million, respectively, which generally settle within two to three business days.

A reconciliation of cash, cash equivalents and restricted cash as of July 2, 2022 and April 2, 2022 from the consolidated balance sheets to the consolidated statements of cash flows is as follows (in millions):

2022 April 2,

Reconciliation of cash, cash equivalents and restricted cash

4 unchanged sentences

Inventories primarily consist of finished goods with the exception of raw materials and work in process inventory.

The combined total of raw materials and work in process inventory, net, recorded on the Company’s consolidated balance sheets was $ 28 million as of December 25, 2021 and March 27, 2021.

The net realizable value of the Company’s inventory as of December 25, 2021 and March 27, 2021 includes the adverse impacts associated with the COVID-19 pandemic.

The combined total of raw materials and work in process inventory, net, recorded on the Company’s consolidated balance sheets was $ 33 million and $ 31 million as of July 2, 2022 and April 2, 2022, respectively.

Derivative Financial Instruments

11 unchanged sentences

If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings.

For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income.

For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency loss in the Company’s consolidated statements of operations and comprehensive income.

The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities.

9 unchanged sentences

The net gain or loss on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets.

Interest accruals and coupon payments are recognized directly in interest (income) expense, net, in the Company’s consolidated statements of operations and comprehensive income.

Interest accruals and coupon payments are recognized directly in interest (income) expense, net, in the Company’s consolidated statements of operations and

comprehensive income.

Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

Interest Rate Swap Agreements

The Company also uses interest rate swap agreements to hedge the variability of its cash flows resulting from floating interest rates on the Company’s borrowings.

When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest (income) expense, net, in the same period during which the hedged transactions affect earnings.

During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap.

As a result, the Company recognized a $ 1 million gain within interest (income) expense, net, in the Company’s consolidated statements of operations and comprehensive income.

The Company leases retail stores, office space and warehouse space under operating lease agreements that expire at various dates through September 2043.

The Company’s leases generally have terms of up to 10 years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount.

Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through December 2025.

The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring activities.

Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through May 2026.

The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores from previous restructuring activities.

Fixed sublease payments received are recognized on a straight-line basis over the sublease term.

16 unchanged sentences

The following table presents the Company’s supplemental cash flow information related to leases (in millions):

Nine Months Ended

December 25, 2021 December 26, 2020

Three Months Ended

July 2, 2022 June 26, 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used in operating leases (1)

(1) Operating cash flows used in operating leases for the nine months ended December 25, 2021 and December 26, 2020 excluded $ 1 million and $ 41 million, respectively, of deferred rent payments due to the COVID-19 pandemic.

During the three and nine months ended December 25, 2021, the Company recorded sublease income of $ 2 million and $ 6 million, respectively, within restructuring and other charges for stores relating to our restructuring plan and selling, general and administrative expenses for all other locations.

During the three and nine months ended December 26, 2020, the Company recorded sublease income of $ 1 million and $ 4 million, respectively, within restructuring and other charges for stores relating to our restructuring plan and selling, general and administrative expenses for all other locations.

During the three and nine months ended December 25, 2021, the Company recorded $ 3 million and $ 13 million, respectively, of rent concessions negotiated in connection with the impact of COVID-19 as if it were contemplated as part of the existing contract.

During the three and nine months ended December 26, 2020, the Company recorded $ 13 million and $ 37 million, respectively, of rent concessions negotiated in connection with the impact of COVID-19 as if it were contemplated as part of the existing contract.

(1) Operating cash flows used in operating leases for the three months ended June 26, 2021 excluded $ 4 million of deferred rent payments due to the COVID-19 pandemic.

During each of the three months ended July 2, 2022 and June 26, 2021, the Company recorded sublease income of $ 2 million within selling, general and administrative expenses.

During the three months ended July 2, 2022 and June 26, 2021, the Company recorded $ 2 million and $ 7 million, respectively, of rent concessions negotiated in connection with the impact of COVID-19 as if it were contemplated as part of the existing contract.

The aforementioned rent concessions were recorded as a reduction to variable lease expense within selling, general and administrative expenses.

5 unchanged sentences

The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in millions, except share and per share data):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

Three Months Ended

2022 June 26,

Net income attributable to Capri $ 201 $ 219

9 unchanged sentences

(1) Basic and diluted net income per share are calculated using unrounded numbers.

During the three and nine months ended December 25, 2021, share equivalents of 208,168 shares and 411,394 shares, respectively, have been excluded from the above calculations due to their anti-dilutive effect.

Share equivalents of 4,269,343 shares and 4,540,029 shares have been excluded from the above calculations for the three and nine months ended December 26, 2020, respectively, due to their anti-dilutive effect.

See Note 2 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021 for a complete disclosure of the Company’s significant accounting policies.

Recently Adopted Accounting Pronouncements

Government Assistance Disclosures

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance”, which requires all business entities provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

These disclosures include providing the nature of the transactions and the related accounting policy used to account for the transactions, the amounts and financial statement line items impacted by these transactions, and the significant terms and conditions of these transactions, including commitments and contingencies related to such transactions.

ASU 2021-10 is effective for the Company beginning in its Fiscal 2023 with early adoption permitted.

The Company early adopted ASU 2021-10 during the third quarter of Fiscal 2022 and will continue to utilize the grant accounting model.

During the three months ended July 2, 2022, share equivalents of 657,340 shares have been excluded from the above calculations due to their anti-dilutive effect.

Share equivalents of 610,684 shares have been excluded from the above calculations for the three months ended June 26, 2021 due to their anti-dilutive effect.

See Note 2 in the Company’s Annual Report on Form 10-K for the fiscal year ended April 2, 2022 for a complete disclosure of the Company’s significant accounting policies.

Recently Issued Accounting Pronouncements

The Company has considered all new accounting pronouncements and, other than the recent pronouncement discussed below, has concluded that there are no new pronouncements that may have a material impact on the Company’s results of operations, financial condition or cash flows based on current information.

Reference Rate Reform

2 unchanged sentences

These updates provide optional expedients and exceptions, if certain criteria are met, for applying accounting principles generally accepted in the United States to contract modifications, hedging relationships and other transactions affected by the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

The amendments were effective upon issuance and allow companies to adopt the amendments on a prospective basis through December 31, 2022.

The Company has not applied this ASU to any contract modifications or new hedging relationships in the current year.

As of December 25, 2021, the Company’s outstanding borrowings under the 2018 Term Loan Facility of $ 495 million and the total availability of $ 1 billion under the 2018 Revolving Credit Facility are both indexed to LIBOR.

As such, these agreements are likely to be impacted by these ASUs upon adoption.

The amendments were effective upon issuance and allowed companies to adopt the amendments on a prospective basis through December 31, 2022.

The Company does not expect the adoption of this standard to have a material impact on the Company’s results of operations, financial condition or cash flows based on current information.

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on the Company’s results of operations, financial condition or cash flows based on current information.

Revenue Recognition

5 unchanged sentences

For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s trademarks.

The Company generates sales through directly operated stores and e-commerce sites throughout the Americas (U.S., Canada and Latin America), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (including Australia).

The Company generates sales through directly operated stores and e-commerce sites throughout the Americas (United States, Canada and Latin America), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania).

The Company sells gift cards that can be redeemed for merchandise, resulting in a contract liability upon issuance.

1 unchanged sentence

“Breakage” revenue is calculated under the proportional redemption methodology, which considers the historical patterns of redemption in jurisdictions where the Company is not required to remit the value of the unredeemed gift cards as unclaimed property.

The contract liability related to gift cards, net of estimated “breakage”, of $ 15 million and $ 12 million as of December 25, 2021 and March 27, 2021, respectively, is included within accrued expenses and other current liabilities in the Company’s consolidated balance sheet.

The contract liability related to gift cards, net of estimated “breakage”, of $ 15 million and $ 13 million as of July 2, 2022 and April 2, 2022, respectively, is included within accrued expenses and other current liabilities in the Company’s consolidated balance sheet.

Loyalty Program .

The Company offers a loyalty program, which allows its Michael Kors U.S.

customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites.

The Company offers a loyalty program, which allows its Michael Kors United States customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites.

The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity.

6 unchanged sentences

Generally, the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, certain guaranteed minimums for Versace are multi-year based.

As of December 25, 2021, contractually guaranteed minimum fees from the Company’s license agreements expected to be recognized as revenue during future periods were as follows (in millions):

As of July 2, 2022, contractually guaranteed minimum fees from the Company’s license agreements expected to be recognized as revenue during future periods were as follows (in millions):

Contractually Guaranteed Minimum Fees

6 unchanged sentences

Sales Returns

The refund liability recorded as of December 25, 2021 was $ 65 million, and the related asset for the right to recover returned product as of December 25, 2021 was $ 19 million.

The refund liability recorded as of March 27, 2021 was $ 46 million, and the related asset for the right to recover returned product as of March 27, 2021 was $ 14 million.

The refund liability recorded as of July 2, 2022 was $ 56 million, and the related asset for the right to recover returned product as of July 2, 2022 was $ 13 million.

The refund liability recorded as of April 2, 2022 was $ 52 million, and the related asset for the right to recover returned product as of April 2, 2022 was $ 15 million.

Contract Balances

Total contract liabilities were $ 21 million and $ 18 million as of December 25, 2021 and March 27, 2021, respectively.

For the three and nine months ended December 25, 2021, the Company recognized $ 1 million and $ 9 million, respectively, in revenue which related to contract liabilities that existed at March 27, 2021.

For the three and nine months ended December 26, 2020, the Company recognized $ 2 million and $ 7 million, respectively, in revenue which related to contract liabilities that existed at March 28, 2020.

There were no material contract assets recorded as of December 25, 2021 and March 27, 2021.

Total contract liabilities were $ 26 million and $ 30 million as of July 2, 2022 and April 2, 2022, respectively.

For the three months ended July 2, 2022, the Company recognized $ 5 million in revenue which related to contract liabilities that existed at April 2, 2022.

For the three months ended June 26, 2021, the Company recognized $ 6 million in revenue which related to contract liabilities that existed at March 27, 2021.

There were no material contract assets recorded as of July 2, 2022 and April 2, 2022.

There were no changes in historical variable consideration estimates that were materially different from actual results.

1 unchanged sentence

The following table presents the Company’s segment revenue disaggregated by geographic location (in millions):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

Three Months Ended

2022 June 26,

Versace revenue - the Americas $ 115 $ 87

14 unchanged sentences

Total revenue $ 1,360 $ 1,253

See Note 3 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021 for a complete disclosure of the Company’s revenue recognition policy.

See Note 3 in the Company’s Annual Report on Form 10-K for the fiscal year ended April 2, 2022 for a complete disclosure of the Company’s revenue recognition policy.

Receivables, net

Receivables, net, consist of (in millions):

2021 March 27,

2022 April 2,

Trade receivables (1)

2 unchanged sentences

Total receivables, net $ 394 $ 434

(1) As of December 25, 2021 and March 27, 2021, $ 97 million and $ 81 million, respectively, of trade receivables were insured.

(1) As of July 2, 2022 and April 2, 2022, $ 89 million and $ 83 million, respectively, of trade receivables were insured.

Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and credit losses.

3 unchanged sentences

Such provisions, and related recoveries, are reflected in revenues.

The Company’s allowance for credit losses is determined through analysis of periodic aging of receivables and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions.

The Company’s allowance for credit losses is determined through analysis of periodic aging of receivables and assessments of collectibility based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions.

The past due status of a receivable is based on its contractual terms.

Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered.

Allowance for credit losses was $ 15 million and $ 25 million as of December 25, 2021 and March 27, 2021, respectively, including the impact related to COVID-19.

The Company had $ 3 million of credit losses for the three months ended December 25, 2021 and $ 2 million for the nine months ended December 25, 2021.

The Company had credit losses of $( 3 ) million and $( 5 ) million for the three and nine months ended December 26, 2020, respectively.

Allowance for credit losses was $ 10 million as of July 2, 2022 and April 2, 2022.

The Company had credit losses of $ 1 million and $( 1 ) million for the three months ended July 2, 2022 and June 26, 2021, respectively.

Property and Equipment, net

Property and equipment, net, consists of (in millions):

2021 March 27,

2022 April 2,

Leasehold improvements $ 553 $ 575

Furniture and fixtures 215 350

Computer equipment and software 229 212

Furniture and fixtures 211 218

Equipment 79 81

3 unchanged sentences

accumulated depreciation and amortization ( 783 ) ( 790 )

( 791 ) ( 1,271 )

Subtotal 399 410

1 unchanged sentence

Total property and equipment, net $ 466 $ 476

(1) As of December 25, 2021, the Company wrote off $ 550 million of fully depreciated assets and related accumulated depreciation of assets no longer in use.

Depreciation and amortization of property and equipment for the three and nine months ended December 25, 2021 was $ 34 million and $ 109 million, respectively.

Depreciation and amortization of property and equipment was $ 41 million and $ 125 million for the three and nine months ended December 26, 2020, respectively.

The Company recorded no property and equipment impairment charges for the three months ended December 25, 2021 and $ 3 million for the nine months ended December 25, 2021.

During the three and nine months ended December 26, 2020, the Company recorded $ 13 million and $ 15 million in property and equipment impairment charges, respectively (see Note 11 for additional information).

Depreciation and amortization of property and equipment for the three months ended July 2, 2022 and June 26, 2021 was $ 34 million and $ 38 million, respectively.

The Company did no t record any property and equipment impairment charges for the three months ended July 2, 2022 and June 26, 2021.

Intangible Assets and Goodwill

The following table details the carrying values of the Company’s intangible assets and goodwill (in millions):

2021 March 27,

2022 April 2,

Definite-lived intangible assets:

11 unchanged sentences

$ 1,336 $ 1,418

(1) The change in the carrying value since March 27, 2021 reflects the impact of foreign currency translation.

(2) Includes accumulated impairment of $ 249 million as of December 25, 2021 and March 27, 2021.

The change in the carrying value since March 27, 2021 reflects the impact of foreign currency translation.

(3) Includes accumulated impairment of $ 265 million related to the Jimmy Choo reporting units as of December 25, 2021 and March 27, 2021.

The change in the carrying value since March 27, 2021 reflects the impact of foreign currency translation.

Amortization expense for the Company’s definite-lived intangible assets for the three and nine months ended December 25, 2021 was $ 13 million and $ 37 million, respectively.

Amortization expense for the Company’s definite-lived intangible asset for the three and nine months ended December 26, 2020 was $ 12 million and $ 35 million for the three and nine months ended December 26, 2020, respectively.

(1) The change in the carrying value since April 2, 2022 reflects the impact of foreign currency translation.

(2) Includes accumulated impairment of $ 249 million as of July 2, 2022 and April 2, 2022.

The change in the carrying value since April 2, 2022 reflects the impact of foreign currency translation.

(3) Includes accumulated impairment of $ 265 million related to the Jimmy Choo reporting units as of July 2, 2022 and April 2, 2022.

The change in the carrying value since April 2, 2022 reflects the impact of foreign currency translation.

Amortization expense for the Company’s definite-lived intangible assets for the three months ended July 2, 2022 and June 26, 2021 was $ 11 million and $ 12 million, respectively.

Current Assets and Current Liabilities

Prepaid expenses and other current assets consist of the following (in millions):

2021 March 27,

2022 April 2,

Prepaid taxes $ 79 $ 86

Other accounts receivables 18 13

Prepaid contracts 17 15

Prepaid insurance 12 2

Interest receivable related to net investment hedges 11 13

Other accounts receivables 9 17

Total prepaid expenses and other current assets $ 201 $ 192

Accrued expenses and other current liabilities consist of the following (in millions):

2021 March 27,

2022 April 2,

Other taxes payable $ 71 $ 61

1 unchanged sentence

Accrued capital expenditures 43 39

Accrued rent (1)

Accrued advertising and marketing 22 21

Professional services 16 13

Accrued rent (1)

Gift cards and retail store credits 15 17

Professional services 14 15

Accrued litigation 12 13

Accrued purchases and samples 12 11

Accrued interest 4 10

Restructuring liability 4 9

Charitable donations (2)

Accrued interest 3 10

Total accrued expenses and other current liabilities $ 379 $ 351

(1) The accrued rent balance relates to variable lease payments.

(2) The charitable donations balance relates to a $ 20 million unconditional pledge to The Capri Holdings Foundation for the Advancement of Diversity in Fashion as of March 27, 2021 which was funded during the second quarter ended September 25, 2021.

(2) The charitable donations balance relates to a $ 10 million unconditional pledge to The Versace Foundation as of July 2, 2022 and April 2, 2022.

Restructuring and Other Charges

Capri Retail Store Optimization Program

As previously announced, the Company intends to close approximately 170 of its retail stores throughout Fiscal 2021 and Fiscal 2022, in connection with its Capri Retail Store Optimization Program in order to improve the profitability of its retail store fleet.

In addition, the Company has reassessed the total cost of the plan and now expects to incur approximately $ 25 million of one-time costs related to this program, including lease termination and other store closure costs, the majority of which are expected to result in future cash expenditures.

During the three and nine months ended December 25, 2021, the Company closed 13 and 39 of its retail stores, respectively, which have been incorporated into the Capri Retail Store Optimization Program.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during the three and nine months ended December 25, 2021 were $ 10 million and $ 6 million, respectively.

Net restructuring (gains) charges recorded in connection with the Capri Retail Store Optimization Program were $( 4 ) million and $ 1 million, during the three and nine months ended December 26, 2020, respectively.

The below table presents a roll forward of the Company’s restructuring liability related to its Capri Retail Store Optimization Program (in millions):

Severance and benefit costs Lease-related and other costs Total

Balance at March 27, 2021 $ — $ 3 $ 3

Additions charged to expense (1)

Payments ( 1 ) ( 4 ) ( 5 )

Balance at December 25, 2021 $ — $ 2 $ 2

(1) Excludes $ 10 million of impairment charges related to operating lease right-of-use assets partially offset by a net credit of $ 8 million related to gains on certain lease terminations during the nine months ended December 25, 2021.

During Fiscal 2022, the Company completed its plan to close certain retail stores as part of its Capri Retail Store Optimization Program.

During the three months ended June 26, 2021, the Company closed 10 of its retail stores, which have been incorporated into the Capri Retail Store Optimization Program.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during the three months ended June 26, 2021 were $( 3 ) million.

Other Restructuring Charges

In addition to the restructuring charges related to the Capri Retail Store Optimization Program, the Company incurred charges of $ 1 million and $ 4 million during the three and nine months ended December 25, 2021, respectively, primarily relating to closures of corporate locations.

In addition to the restructuring charges related to the Capri Retail Store Optimization Program, the Company incurred charges of $ 2 million during the three and nine months ended December 26, 2020, respectively, primarily relating to closures of corporate locations.

During both three and nine months ended December 25, 2021 and December 26, 2020, the Company recorded costs of $ 3 million and $ 15 million primarily related to equity awards associated with the acquisition of Versace.

In addition to the restructuring charges related to the completed Capri Retail Store Optimization Program, the Company did not record costs for the three months ended July 2, 2022.

During the three months ended June 26, 2021, the Company recorded costs of $ 1 million, primarily relating to closures of certain corporate locations.

The Company recorded costs of $ 3 million and $ 5 million during the three months ended July 2, 2022 and June 26, 2021, respectively, primarily related to equity awards associated with the acquisition of Versace.

Debt Obligations

The following table presents the Company’s debt obligations (in millions):

2021 March 27,

Term Loan $ 497 $ 870

Senior Notes due 2024 450 450

2022 April 2,

Revolving Credit Facilities $ 922 $ 175

Senior Notes due 2024 450 450

Term Loan — 497

Total debt 1,421 1,164

Unamortized debt issuance costs 1 3

Unamortized discount on long-term debt 1 1

Unamortized discount on senior notes 1 1

Total carrying value of debt 1,419 1,160

2 unchanged sentences

$ 1,382 $ 1,131

On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated credit facility, dated as of November 15, 2018 (as amended, the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent.

Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility required it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.00 had been waived through the fiscal quarter ending June 26, 2021.

In addition, the Second Amendment added a new $ 230 million revolving line of credit with a maturity date of June 24, 2021 (the “ 364 Day Facility”).

The Second Amendment also permitted certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the 2018 Credit Facility to be guaranteed under the 2018 Credit Facility guarantees and certain supply chain financings with, and up to $ 50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by a lender or an affiliate of a lender to be guaranteed and secured under the 2018 Credit Facility guarantees and collateral documents.

The Second Amendment, among other things, also temporarily suspended the quarterly maximum leverage ratio covenant and imposed a minimum liquidity test during the period from June 25, 2020 until the earlier of (x) the date on which the Company delivers its financial statements for the fiscal quarter ending June 26, 2021 and (y) the date on which the Company certifies that its net leverage ratio as of the last day of the most recently ended fiscal quarter was no greater than 4.00 to 1.00 (the “Applicable Period”).

On May 20, 2021, the Company determined it no longer desired to maintain this additional line of credit and consequently delivered a notice to the administrative agent terminating the 364 Day Facility, and the 364 Day Facility terminated on May 25, 2021.

The remainder of the 2018 Credit Facility remains in full force and effect.

On May 26, 2021 (the “Election Date”), the Company delivered to the administrative agent the certificate required to terminate the Applicable Period.

Effective as of the Election Date, the Company will be required to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00.

On September 23, 2021, the Company agreed to suspend its rights to borrow in all non-U.S.

Pounds Sterling, Euro, Swiss Francs and Japanese Yen) currency LIBOR rate tenors under the 2018 Credit Facility after December 31, 2021 given that non-U.S.

Dollar LIBOR will no longer be published after that date.

As of December 25, 2021, and the date these financial statements were issued, the Company was in compliance with all covenants related to the 2018 Credit Facility.

As of December 25, 2021, the Company had $ 20 million of borrowings outstanding under the 2018 Revolving Credit Facility and no borrowings outstanding as of March 27, 2021.

In addition, stand-by letters of credit of $ 29 million and $ 27 million were outstanding as of December 25, 2021 and March 27, 2021, respectively.

At December 25, 2021 and March 27, 2021, the amount available for future borrowings under the 2018 Revolving Credit Facility were $ 951 million and $ 973 million, respectively.

As of December 25, 2021, the carrying value of borrowings outstanding under the 2018 Term Loan Facility was $ 495 million, which was all recorded within long-term debt in its consolidated balance sheets due to prepayments made on the Term Loan during Fiscal 2022.

As of March 27, 2021, the carrying value of borrowings outstanding under the 2018 Term Loan Facility was $ 865 million, of which $ 97 million was recorded within short-term debt and $ 768 million was recorded within long-term debt in its consolidated balance sheets.

During Fiscal 2021, the Company began offering a supplier financing program to certain suppliers as the Company continues to identify opportunities to improve liquidity.

This program enables suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide.

On July 1, 2022, the Company entered into a revolving credit facility (the “2022 Credit Facility”) with, among others, JPMorgan Chase Bank, N.A.

(“JPMorgan Chase”), as administrative agent (the “Administrative Agent”), which refinanced its existing senior unsecured revolving credit facility.

The Company, a U.S.

subsidiary of the Company, a Canadian subsidiary of the Company, a Dutch subsidiary of the Company and a Swiss subsidiary of the Company are the borrowers under the 2022 Credit Facility, and the borrowers and certain subsidiaries of the Company provide unsecured guaranties of the 2022 Credit Facility.

The 2022 Credit Facility replaced the third amended and restated senior unsecured credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”).

The 2022 Credit Facility provides for a $ 1.5 billion revolving credit facility (the “2022 Revolving Credit Facility”), which may be denominated in U.S.

Dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs.

The 2022 Revolving Credit Facility also includes sub-facilities for the issuance of letters of credit of up to $ 125 million and swing line loans at the Administrative Agent’s discretion of up to $ 100 million.

The Company has the ability to expand its borrowing availability under the 2022 Credit Facility in the form of increased revolving commitments or one or more tranches of term loans by up to an additional $ 500 million, subject to the agreement of the participating lenders and certain other customary conditions.

Borrowings under the 2022 Credit Facility bear interest, at the Company’s option, at the following rates:

• For loans denominated in U.S.

Dollars, (A) an alternate base rate, which is the greatest of (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero , plus 50 basis points, and (c) the greater of term SOFR for an interest period of one month plus 10 basis points and zero , plus 100 basis points, (B) the greater of term SOFR for the applicable interest period plus 10 basis points (“Adjusted Term SOFR”) and zero or (C) the greater of daily simple SOFR plus 10 basis points and zero ;

• For loans denominated in Pounds Sterling, the greater of Secured Overnight Index Average (“SONIA”) and zero ;

• For loans denominated in Swiss Francs, the greater of Swiss Average Rate Overnight (“SARON”) and zero ;

• For loans denominated in Euro, the greater of Euro Interbank Offer Rate (“EURIBOR”) for the applicable interest period adjusted for statutory reserve requirements (“Adjusted EURIBOR Rate”) and zero ;

• For loans denominated in Canadian Dollars, the greater of the rate applicable to Canadian Dollar Canadian banker’s acceptances quoted on Reuters for the applicable interest period adjusted for statutory reserve requirements (“Adjusted CDOR Rate”) and zero ;

• For loans denominated in Japanese Yen, the greater of Tokyo Interbank Offer Rate (“TIBOR”) for the applicable interest period adjusted for statutory reserve requirements (“Adjusted TIBOR Rate”) and zero ;

in each case, plus an applicable margin based on the Company’s public debt ratings and/or net leverage ratio.

The 2022 Credit Facility provides for an annual administration fee and a commitment fee equal to 7.5 basis points to 17.5 basis points per annum, which was 15.0 basis points as of July 2, 2022.

The fees are based on the Company’s public debt ratings and/or net leverage ratio, applied to the average daily unused amount of the 2022 Credit Facility.

Loans under the 2022 Credit Facility may be prepaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than customary “breakage” costs with respect to loans bearing interest based upon Adjusted Term SOFR, the Adjusted EURIBOR Rate, the Adjusted CDOR Rate and the Adjusted TIBOR Rate.

The 2022 Credit Facility requires the Company to maintain a net leverage ratio as of the end of each fiscal quarter of no greater than 4.0 to 1.0.

Such net leverage ratio is calculated as the ratio of the sum of total indebtedness as of the date of the measurement plus the capitalized amount of all operating lease obligations, minus unrestricted cash and cash equivalents not to exceed $ 200 million, to Consolidated EBITDAR for the last four consecutive fiscal quarters.

Consolidated EBITDAR is defined as consolidated net income plus provision for taxes based on income, profits or capital, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash losses, charge and expenses, subject to certain additions and deductions.

The 2022 Credit Facility also includes covenants that limit additional indebtedness, liens, acquisitions and other investments, restricted payments and affiliate transactions.

The 2022 Credit Facility also contains events of default customary for financings of this type, including, but not limited to, payment defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under the Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the 2022 Credit Facility to be in full force and effect, and changes of control.

If such an event of default occurs and is continuing, the lenders under the 2022 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2022 Credit Facility.

As of July 2, 2022, and the date these financial statements were issued, the Company was in compliance with all covenants related to the 2022 Credit Facility.

As of July 2, 2022, the Company had $ 922 million of borrowings outstanding under the 2022 Revolving Credit Facility and $ 175 million of borrowings outstanding under revolver in the 2018 Credit Facility as of April 2, 2022.

In addition, stand-by letters of credit of $ 21 million were outstanding as of both July 2, 2022 and April 2, 2022.

At July 2, 2022, the amount available for future borrowings under the 2022 Revolving Credit Facility was $ 557 million and $ 804 million for future borrowings under the revolver in the 2018 Credit Facility as of April 2, 2022.

As of July 2, 2022, the Company no longer had a term loan facility outstanding.

As of April 2, 2022, the carrying value of term loan outstanding under the 2018 Credit Facility was $ 495 million, which was recorded within long-term debt in the Company’s consolidated balance sheets.

As of July 2, 2022, the Company had $ 7 million of deferred financing fees associated with the 2022 Credit Facility and $ 3 million of deferred financing fees associated with the 2018 Credit Facility as of April 2, 2022, which were recorded within other assets in the Company’s consolidated balance sheets.

The Company offers a supplier financing program which enables suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide.

The Company’s obligations, including the amount due and scheduled payment dates, are not impacted by a suppliers’ decision to participate in this program.

The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary.

The amount outstanding under this program as of December 25, 2021 and March 27, 2021 was $ 18 million and $ 17 million, respectively, and was recorded within short-term debt in the Company’s consolidated balance sheets.

During the first quarter of Fiscal 2022, the Company's subsidiary, Versace, entered into an agreement with Banco BPM Banking Group (“the Bank”) to sell certain tax receivables to the Bank in exchange for cash.

As of December 25, 2021, the outstanding balance was $ 18 million, with $ 8 million and $ 10 million recorded within short-term debt and long-term debt in the Company’s consolidated balance sheets, respectively.

The amount outstanding under this program as of July 2, 2022 and April 2, 2022 was $ 36 million and $ 21 million, respectively, and is presented as short-term debt in the Company’s consolidated balance sheets.

During Fiscal 2022, the Company's subsidiary, Versace, entered into an agreement with Banco BPM Banking Group (“the Bank”) to sell certain tax receivables to the Bank in exchange for cash.

The arrangement was determined to be a financing arrangement because the de-recognition criteria for the receivables was not met at the time of the cash receipt from the Bank.

As of July 2, 2022, the outstanding balance was $ 10 million, with $ 1 million and $ 9 million recorded within short-term debt and long-term debt in the Company’s consolidated balance sheets, respectively.

As of April 2, 2022, the outstanding balance was $ 18 million, with $ 8 million and $ 10 million recorded within short-term debt and long-term debt in the Company’s consolidated balance sheets, respectively.

See Note 11 to the Company’s Fiscal 2022 Annual Report on Form 10-K for additional information regarding the Company’s credit facilities and debt obligations.

2 unchanged sentences

Although the outcome of such claims cannot be determined with certainty, the Company believes that the outcome of all pending legal proceedings, in the aggregate, will not have a material adverse effect on its cash flow, results of operations or financial position.

Please refer to the Contractual Obligations and Commercial Commitments disclosure within the Liquidity and Capital Resources section of the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021 for a detailed disclosure of other commitments and contractual obligations as of March 27, 2021.

Please refer to the Contractual Obligations and Commercial Commitments disclosure within the Liquidity and Capital Resources section of the Company’s Annual Report on Form 10-K for the fiscal year ended April 2, 2022 for a detailed disclosure of other commitments and contractual obligations as of April 2, 2022.

Fair Value Measurements

7 unchanged sentences

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

At December 25, 2021 and March 27, 2021, the fair values of the Company’s derivative contracts were determined using broker quotations, which were calculations derived from observable market information:

At July 2, 2022 and April 2, 2022, the fair values of the Company’s derivative contracts were determined using broker quotations, which were calculations derived from observable market information:

the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception.

4 unchanged sentences

All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):

Fair value at December 25, 2021 using:

Fair value at March 27, 2021 using:

Fair value at July 2, 2022 using:

Fair value at April 2, 2022 using:

Quoted prices in

17 unchanged sentences

Derivative liabilities:

Forward foreign currency exchange contracts

$ — $ — $ — $ — $ 1 $ —

Net investment hedges $ — $ 4 $ — $ — $ 37 $ —

Interest rate swap — — — — 1 —

Total derivative liabilities $ — $ 4 $ — $ — $ 37 $ —

4 unchanged sentences

The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):

December 25, 2021 March 27, 2021

July 2, 2022 April 2, 2022

Value Estimated

10 unchanged sentences

The Company determines the fair values of these assets based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

The Company recorded $ 10 million and $ 43 million in impairment charges during the three and nine months ended December 25, 2021, respectively.

The Company recorded $ 91 million and $ 113 million in impairment charges during the three and nine months ended December 26, 2020, respectively.

The following table details the carrying values and fair values of the Company’s assets that have been impaired during the three and nine months ended December 25, 2021 and three and nine months ended December 26, 2020 (in millions):

Three Months Ended

December 25, 2021 Nine Months Ended

December 25, 2021

Carrying Value Prior to

Impairment Fair Value Impairment Charge (1)

Carrying Value Prior to Impairment Fair Value Impairment Charge (1)

Operating Lease Right-of-Use Assets $ 10 $ — $ 10 $ 93 $ 53 $ 40

Property and Equipment — — — 4 1 3

Total $ 10 $ — $ 10 $ 97 $ 54 $ 43

Three Months Ended

December 26, 2020 Nine Months Ended

December 26, 2020

Carrying Value Prior to Impairment Fair Value Impairment Charge (1)

Operating Lease Right-of-Use Assets

$ 284 $ 206 $ 78

$ 321 $ 223 $ 98

Property and Equipment 17 4 13 21 6 15

Total $ 301 $ 210 $ 91 $ 342 $ 229 $ 113

(1) Includes $ 10 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program for both the three and nine months ended December 25, 2021.

Includes $ 1 million and $ 3 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program during the three and nine months ended December 26, 2020, respectively.

The Company recorded no impairment charges during the three months ended July 2, 2022 and June 26, 2021.

Derivative Financial Instruments

5 unchanged sentences

Net Investment Hedges

During the first quarter of Fiscal 2022, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 2.875 billion to hedge its net investment in Euro denominated subsidiaries (“First Quarter Modifications”).

During the third quarter of Fiscal 2022, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1.5 billion.

The modification of these hedges resulted in the Company receiving $ 59 million in cash during the third quarter of Fiscal 2022.

This amount is classified within investing activities in the Company’s consolidated statements of cash flows.

Certain of these contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the earliest effective date being November 2023.

During the first quarter of Fiscal 2023, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1.094 billion to hedge its net investment, of which $ 900 million was in Euro denominated subsidiaries and $ 194 million was in Japanese-Yen denominated subsidiaries.

The modification of these swaps resulted in the Company receiving $ 66 million in cash during the first quarter of Fiscal 2023.

These contracts have been designated as net investment hedges.

Certain of these contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the earliest effective date being May 2027.

If the outstanding position of a contract exceeds a certain threshold governed by the aforementioned CSA’s, either party is required to post cash collateral.

Due to an other-than-insignificant financing element for certain of First Quarter Modifications, the net interest cash inflows of $ 31 million during the nine months ended December 25, 2021 related to these contracts are classified as financing activities in the Company’s consolidated statements of cash flows.

As of December 25, 2021, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 4 billion to hedge its net investment in Euro denominated subsidiaries and $ 194 million to hedge its net investment in Japanese Yen denominated subsidiaries against future volatility in the exchange rates between the U.S.

As of July 2, 2022, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 4 billion to hedge its net investment in Euro denominated subsidiaries and $ 194 million to hedge its net investment in Japanese Yen denominated subsidiaries against future volatility in the exchange rates between the U.S.

Dollar and these currencies.

1 unchanged sentence

denominated debt for fixed rate payments of 0 % to 2.872 % in Euros and 1.061 % to 2.858 % in Japanese Yen.

Certain of these contracts include mandatory early termination dates between August 2025 and February 2026, while the remaining contracts have maturity dates between May 2024 and February 2051.

These contracts have been designated as net investment hedges.

These contracts have maturity dates between March 2024 and February 2051 and have been designated as net investment hedges.

When a cross-currency swap is used as a hedging instrument in a net investment hedge assessed under the spot method, the cross-currency basis spread is excluded from the assessment of hedge effectiveness and is recognized as a reduction in interest expense in the Company’s consolidated statements of operations and comprehensive income.

Accordingly, the Company recorded interest income of $ 17 million and $ 44 million during the three and nine months ended December 25, 2021, respectively.

Additionally, the Company recorded interest income of $ 6 million and $ 8 million during the three and nine months ended December 26, 2020, respectively.

This change from prior year is primarily due to the Company having higher average notional amounts outstanding on these hedges during the current period.

Interest Rate Swap

The Company had an interest rate swap with an initial notional amount of $ 500 million that would have decreased to $ 350 million in April 2022.

The swap was designated as a cash flow hedge designed to mitigate the impact of adverse interest rate fluctuations for a portion of the Company’s variable-rate debt equal to the notional amount of the swap.

The interest rate swap converted the one-month adjusted LIBOR interest rate on these borrowings to a fixed interest rate of 0.237 % through the date of termination.

When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.

During the three and nine months ended December 25, 2021 and December 26, 2020, the Company recorded an immaterial amount of net interest expense related to this agreement.

During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap.

As a result, the Company recognized a $ 1 million gain within interest (income) expense, net, within the Company’s consolidated statements of operations and comprehensive income.

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of December 25, 2021 and March 27, 2021 (in millions):

Accordingly, the Company recorded interest income of $ 17 million and $ 12 million during the three months ended July 2, 2022 and June 26, 2021, respectively.

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of July 2, 2022 and April 2, 2022 (in millions):

Notional Amounts Assets Liabilities

2021 March 27,

2021 December 25,

2021 March 27,

2021 December 25,

2021 March 27,

Forward foreign currency exchange contracts $ 124 $ 155 $ 6 (1)

Net investment hedges 4,194 3,194 40 (3)

Interest rate swap — 500 — — — 1 (4)

2022 April 2,

Designated forward foreign currency exchange contracts $ 100 $ 119 $ 8 (1)

Designated net investment hedges 4,194 4,194 166 (2)

Total designated hedges 4,294 4,313 174 48 4 37

Undesignated derivative contracts (4)

10 38 1 4 — —

Total $ 4,304 $ 4,351 $ 175 $ 52 $ 4 $ 37

(1) Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets.

(2) Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

(2) Recorded within other assets in the Company’s consolidated balance sheets.

2 unchanged sentences

The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, as shown in the previous table.

However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies, the resulting impact as of December 25, 2021 and March 27, 2021 would be as follows (in millions):

However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies, the resulting impact as of July 2, 2022 and April 2, 2022 would be as follows (in millions):

Forward Currency

Exchange Contracts Net Investment

Hedges Interest Rate

2021 March 27,

2021 December 25,

2021 March 27,

2021 December 25,

2021 March 27,

2022 April 2,

Assets subject to master netting arrangements

6 unchanged sentences

Changes in the fair value of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of goods sold within the Company’s consolidated statements of operations and comprehensive income.

The net gain or loss on net investment hedges are reported within foreign currency translation gains and losses (“CTA”) as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets.

The net gain or loss on net investment hedges are reported within CTA as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets.

Upon discontinuation of the hedge, such amounts remain in CTA until the related investment is sold or liquidated.

Changes in the fair value of the Company’s interest rate swaps that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of interest expense within the Company’s consolidated statements of operations and comprehensive income.

The following table summarizes the pre-tax impact of the gains and losses on the Company’s designated forward foreign currency exchange contracts, net investment hedges and interest rate swaps (in millions):

Three Months Ended Nine Months Ended

December 25, 2021 December 26, 2020 December 25, 2021 December 26, 2020

Three Months Ended

July 2, 2022 June 26, 2021

Pre-Tax Gains

Recognized in OCI Pre-Tax Losses

Recognized in OCI Pre-Tax Gains

Recognized in OCI Pre-Tax Losses

Recognized in OCI Pre-Tax Gains (Losses)

Recognized in OCI

Designated forward foreign currency exchange contracts

$ 5 $ ( 7 ) $ 7 $ ( 7 )

Designated net investment hedges $ 213 $ 83

Designated interest rate swaps $ 1 $ — $ 1 $ ( 1 )

The following tables summarize the pre-tax impact of the gains and losses within the consolidated statements of operations and comprehensive income related to the designated forward foreign currency exchange contracts for the three and nine months ended December 25, 2021 and December 26, 2020 (in millions):

The following tables summarize the pre-tax impact of the gains and losses within the consolidated statements of operations and comprehensive income related to the designated forward foreign currency exchange contracts for the three months ended July 2, 2022 and June 26, 2021 (in millions):

Three Months Ended

Pre-Tax Gain Reclassified from

Accumulated OCI Location of Gain Recognized

December 25, 2021 December 26, 2020

Designated forward foreign currency exchange contracts

$ — $ ( 1 ) Cost of goods sold

Nine Months Ended

Pre-Tax Loss (Gain) Reclassified from

Accumulated OCI Location of Loss (Gain) Recognized

December 25, 2021 December 26, 2020

Pre-Tax (Gain) Loss Reclassified from

Accumulated OCI Location of (Gain) Loss Recognized

July 2, 2022 June 26, 2021

Designated forward foreign currency exchange contracts

2 unchanged sentences

Undesignated Hedges

During the three and nine months ended December 25, 2021, a $ 1 million gain was recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.

During the three and nine months ended December 26, 2020, a loss of $ 2 million was recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.

During the three months ended July 2, 2022, a $ 2 million gain was recognized within foreign currency loss in the Company’s consolidated statements of operations and comprehensive income as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.

During the three months ended June 26, 2021, the net impact of changes in the fair value of undesignated forward foreign currency exchange contracts recognized within foreign currency loss in the Company’s consolidated statements of operations and comprehensive income was immaterial.

Shareholders’ Equity

Share Repurchase Program

During the first quarter of Fiscal 2022, the Company reinstated its $ 500 million share repurchase program, which was previously suspended during the first quarter of Fiscal 2021 in response to the impact of the COVID-19 pandemic and the provisions of the Second Amendment of the 2018 Credit Facility.

Subsequently, on November 3, 2021, the Company announced that its Board of Directors had terminated the Company’s existing $ 500 million share repurchase program (the “Prior Plan”), which had $ 250 million of availability remaining at the time, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which the Company may, from time to time, repurchase up to $ 1.0 billion of its outstanding ordinary shares within a period of two years from the effective date of the program.

During the nine months ended December 25, 2021, the Company purchased 5,934,244 shares for a total cost of approximately $ 350 million including commissions, through open market transactions, with 2,712,275 shares purchased for a total cost of $ 150 million including commissions under the Prior Plan and 3,221,969 shares purchased for a total cost of $ 200 million including commissions under the Fiscal 2022 Plan.

As of December 25, 2021, the remaining availability under the Company’s share repurchase program was $ 800 million.

During the nine months ended December 26, 2020, the Company did no t purchase any shares through open market transaction as the Company’s share repurchase plan was suspended at that time.

On June 1, 2022, the Company announced that its Board of Directors has terminated the Fiscal 2022 Plan, with $ 500 million of availability remaining, and authorized a new share repurchase program (the “Fiscal 2023 Plan”) pursuant to which the Company may, from time to time, repurchase up to $ 1.0 billion of its outstanding ordinary shares within a period of two years from the effective date of the program.

During the three months ended July 2, 2022, the Company purchased 6,120,174 shares for a total cost of approximately $ 300 million, including commissions, under the Fiscal 2023 Plan.

As of July 2, 2022, the remaining availability under the Company’s existing share repurchase program was $ 700 million.

During the three months ended June 26, 2021, the Company purchased 921,080 shares for a total cost of approximately $ 50 million, including commission, through open market transactions under the Prior Plan.

Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading transactions under the Company’s insider trading policy and other relevant factors.

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The Company also has in place a “withhold to cover” repurchase program, which allows the Company to withhold ordinary shares from certain executive officers and directors to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards.

During the nine month periods ended December 25, 2021 and December 26, 2020, the Company withheld 193,322 shares and 48,147 shares, respectively, with a fair value of $ 10 million and $ 1 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

During the three month periods ended July 2, 2022 and June 26, 2021, the Company withheld 265,311 shares and 167,070 shares, respectively, with a fair value of $ 12 million and $ 9 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

Accumulated Other Comprehensive Income

The following table details changes in the components of accumulated other comprehensive income (“AOCI”), net of taxes, for the nine months ended December 25, 2021 and December 26, 2020, respectively (in millions):

The following table details changes in the components of accumulated other comprehensive income (“AOCI”), net of taxes, for the three months ended July 2, 2022 and June 26, 2021, respectively (in millions):

Foreign Currency Adjustments (1)

Net (Losses) Gains on Derivatives (2)

Other Comprehensive Income Attributable to Capri

Balance at March 27, 2021 $ 57 $ ( 1 ) $ 56

Other comprehensive income before reclassifications 148 7 155

Net Gains (Losses) on Derivatives (2)

Other Comprehensive Income (Loss) Attributable to Capri

Balance at April 2, 2022 $ 184 $ 10 $ 194

Other comprehensive (loss) income before reclassifications ( 107 ) 6 ( 101 )

amounts reclassified from AOCI to earnings

— ( 2 ) ( 2 )

Other comprehensive income, net of tax 148 9 157

Balance at December 25, 2021 $ 205 $ 8 $ 213

Other comprehensive (loss) income, net of tax ( 107 ) 2 ( 105 )

Balance at July 2, 2022 $ 77 $ 12 $ 89

Balance at March 27, 2021 $ 57 $ ( 1 ) $ 56

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amounts reclassified from AOCI to earnings

Other comprehensive income (loss), net of tax 26 ( 10 ) 16

Balance at December 26, 2020 $ 98 $ ( 7 ) $ 91

(1) Foreign currency translation adjustments for the nine months ended December 25, 2021 primarily include a $ 249 million gain, net of taxes of $ 78 million, relating to the Company’s net investment hedges, and a net $ 102 million translation loss.

Foreign currency translation adjustments for the nine months ended December 26, 2020 primarily include a $ 198 million translation loss, net of taxes of $ 64 million, relating to the Company’s net investment hedges, which was offset by a net $ 227 million translation gain.

— ( 1 ) ( 1 )

Other comprehensive income, net of tax 91 — 91

Balance at June 26, 2021 $ 148 $ ( 1 ) $ 147

(1) Foreign currency translation adjustments for the three months ended July 2, 2022 primarily include a $ 151 million gain, net of taxes of $ 62 million, relating to the Company’s net investment hedges, and a net $ 253 million translation loss.

Foreign currency translation adjustments for the three months ended June 26, 2021 primarily include a $ 64 million gain, net of taxes of $ 19 million, relating to the Company’s net investment hedges, in addition to a net $ 27 million translation gain.

(2) Reclassified amounts primarily relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive income.

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The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares.

As of December 25, 2021, there were no shares available to grant equity awards under the 2008 Plan.

As of July 2, 2022, there were no shares available to grant equity awards under the 2008 Plan.

The Incentive Plan allows for grants of share options, restricted shares and RSUs, and other equity awards, and authorizes a total issuance of up to 18,846,000 ordinary shares after amendments in June 2020.

At December 25, 2021, there were 3,951,587 ordinary shares available for future grants of equity awards under the Incentive Plan.

At July 2, 2022, there were 2,516,526 ordinary shares available for future grants of equity awards under the Incentive Plan.

Option grants issued from the 2008 Plan generally expire ten years from the date of the grant, and those issued under the Incentive Plan generally expire seven years from the date of the grant.

The following table summarizes the Company’s share-based compensation activity during the nine months ended December 25, 2021:

The following table summarizes the Company’s share-based compensation activity during the three months ended July 2, 2022:

Options Service-Based RSUs Performance-Based RSUs

Outstanding/Unvested at March 27, 2021

Outstanding/Unvested at April 2, 2022

355,448 3,827,700 210,192

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Exercised/Vested ( 116,570 ) ( 1,353,698 ) ( 197,874 )

Change due to performance condition — — 26,109

Canceled/Forfeited — ( 37,753 ) —

Outstanding/Unvested at December 25, 2021

Outstanding/Unvested at July 2, 2022

238,878 3,866,794 165,239

The weighted average grant date fair value of service-based RSUs granted during the nine months ended December 25, 2021 was $ 51.75 .

The weighted average grant date fair value of service-based RSUs granted during the nine months ended December 26, 2020 was $ 16.72 .

The weighted average grant date fair value of service-based and performance-based RSUs granted during the three months ended July 2, 2022 was $ 49.02 and $ 47.41 , respectively.

The weighted average grant date fair value of service-based RSUs granted during the three months ended June 26, 2021 was $ 54.67 .

Share-Based Compensation Expense

The following table summarizes compensation expense attributable to share-based compensation for the three and nine months ended December 25, 2021 and December 26, 2020 (in millions):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

The following table summarizes compensation expense attributable to share-based compensation for the three months ended July 2, 2022 and June 26, 2021 (in millions):

Three Months Ended

2022 June 26,

Share-based compensation expense $ 28 $ 36

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The Company estimates forfeitures based on historical forfeiture rates.

The estimated value of future forfeitures for equity grants as of December 25, 2021 is approximately $ 22 million.

The estimated value of future forfeitures for equity grants as of July 2, 2022 is approximately $ 23 million.

See Note 16 in the Company’s Fiscal 2022 Annual Report on Form 10-K for additional information relating to the Company’s share-based compensation awards.

The Company’s effective tax rate for the three and nine months ended December 25, 2021 was 5.6 % and 6.8 %, respectively.

Such rates differ from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to the favorable effect of a net operating loss carryback claim made in the United States as a result of COVID-19 related losses generated in the prior fiscal year and the impact of global financing activities partially offset by the increases in uncertain tax positions during the three and nine months ended December 25, 2021.

The tax rate for the nine months ended December 25, 2021 also benefited from recently enacted tax legislation in Italy which allowed the Company to reduce its deferred tax liabilities by allowing a step up of certain intangible assets resulting in lower future cash taxes partially offset by the impact of tax rate changes in the United Kingdom on the Company’s net deferred tax liabilities.

The Company’s effective tax rate for the three months ended July 2, 2022 was 12.1 %.

Such rates differ from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to the impact of global financing activities.

The global financing activities are related to the Company’s 2014 move of its principal executive office from Hong Kong to the U.K.

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and Hungarian subsidiaries.

Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized lower effective tax rates for the three and nine months ended December 25, 2021.

Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized lower effective tax rates for the three months ended July 2, 2022.

Segment Information

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The Company’s three reportable segments are as follows:

• Versace — segment includes revenue generated through the sale of Versace luxury accessories, ready-to-wear and footwear through directly operated Versace boutiques throughout North America (United States and Canada), certain parts of EMEA and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites.

• Versace — segment includes revenue generated through the sale of Versace luxury ready-to-wear, accessories, and footwear through directly operated Versace boutiques throughout the Americas, certain parts of EMEA and certain

parts of Asia, as well as through Versace outlet stores and e-commerce sites.

In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements that allow third parties to use the Versace trademarks in connection with retail and/or wholesale sales of Versace branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of jeans, fragrances, watches, jewelry, eyewear and home furnishings.

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Such costs primarily include certain administrative, corporate occupancy, shared service and information system expenses, including enterprise resource planning system implementation costs.

In addition, certain other costs are not allocated to segments, including restructuring and other charges (including transition costs related to the Company’s acquisitions), impairment costs and COVID-19 related charges.

In addition, certain other costs are not allocated to segments, including restructuring and other charges and COVID-19 related charges.

The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance.

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The following table presents the key performance information of the Company’s reportable segments (in millions):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

Three Months Ended

2022 June 26,

Total revenue:

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Total revenue $ 1,360 $ 1,253

Income (loss) from operations:

Income from operations:

Versace $ 52 $ 48

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Restructuring and other charges ( 3 ) ( 3 )

Impairment of assets (1)

— ( 90 ) ( 33 ) ( 110 )

COVID-19 related charges 1 3

Total income from operations $ 231 $ 258

(1) Impairment of assets during the nine months ended December 25, 2021 and the three and nine months ended December 26, 2020 primarily related to operating lease right-of-use assets at certain Michael Kors store locations.

Depreciation and amortization expense for each segment are as follows (in millions):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

Three Months Ended

2022 June 26,

Depreciation and amortization:

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Michael Kors 25 29

Corporate 1 —

Total depreciation and amortization $ 45 $ 50

Total revenue (based on country of origin) by geographic location are as follows (in millions):

Three Months Ended Nine Months Ended

2021 December 26,

2020 December 25,

2021 December 26,

(U.S., Canada and Latin America) (1)

$ 954 $ 760 $ 2,370 $ 1,524

EMEA 405 299 1,095 732

Asia 250 243 697 607

Three Months Ended

2022 June 26,

The Americas (United States, Canada and Latin America) (1)

Total revenue $ 1,360 $ 1,253

(1) Total revenue earned in the U.S.

was $ 885 million and $ 2.207 billion, respectively, for the three and nine months ended December 25, 2021.

Total revenue earned in the U.S.

was $ 722 million and $ 1.414 billion, respectively, for the three and nine months ended December 26, 2020.

was $ 733 million and $ 671 million for the three months ended July 2, 2022 and June 26, 2021, respectively.

Subsequent Events

Net Investment Hedges

During the second quarter of Fiscal 2023, the Company terminated multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 4 billion related to its net investment in Euro denominated subsidiaries, while subsequently replacing these terminated contracts with aggregate notional amounts of $ 2 billion to hedge its net investment in Euro denominated subsidiaries.

The modification of these hedges resulted in the Company receiving $ 237 million in cash during the second quarter of Fiscal 2023.

These contracts have been designated as net investment hedges.

Third Amended and Restated Omnibus Incentive Plan

On August 3, 2022, the Company filed a Registration Statement in accordance with the requirements of Form S-8 under the Securities Act of 1933, as amended, to register an additional 3,625,000 of its ordinary shares, no par value, that are reserved for issuance under the Capri Holdings Limited Third Amended and Restated Omnibus Incentive Plan (the “Plan”).

An amendment to increase the number of shares available to be awarded under the Plan was approved by the Company’s shareholders on August 3, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements