What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-09 · 261 added, 145 removed, 613 unchanged (40% of the section changed)

35 unchanged sentences

650,000,000 shares authorized;

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

223,706,873 shares issued and 131,088,991 outstanding at October 1, 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)

Treasury shares, at cost ( 92,617,882 shares at October 1, 2022 and 79,161,330 shares at April 2, 2022)

( 4,650 ) ( 3,987 )

Additional paid-in capital 1,311 1,260

Accumulated other comprehensive income 89 194

Accumulated other comprehensive (loss) income ( 35 ) 194

Retained earnings 5,517 5,092

7 unchanged sentences

(In millions, except share and per share data)

Three Months Ended

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Total revenue $ 1,412 $ 1,300 $ 2,772 $ 2,553

Cost of goods sold 461 416 920 813

951 884 1,852 1,740

Selling, general and administrative expenses 642 599 1,264 1,144

Depreciation and amortization 43 49 88 99

Impairment of assets 11 33 11 33

Restructuring and other charges 3 8 6 11

1 unchanged sentence

Income from operations 252 195 483 453

Interest (income) expense, net ( 4 ) 1

Foreign currency loss 4 1

Other income, net ( 1 ) ( 2 ) ( 1 ) ( 2 )

Interest expense (income), net 5 ( 5 ) 1 ( 4 )

Foreign currency (gain) loss ( 11 ) 4 ( 7 ) 5

Income before income taxes 259 198 490 454

Provision for income taxes 28 37

Provision (benefit) for income taxes 35 ( 2 ) 63 35

Net income 224 200 427 419

20 unchanged sentences

Ordinary Shares Additional

Capital Treasury Shares Accumulated Other Comprehensive Income Retained

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

Net income — — — — — — 224 224 — 224

Other comprehensive loss — — — — — ( 124 ) — ( 124 ) — ( 124 )

Total comprehensive income — — — — — — — 100 — 100

Vesting of restricted awards, net of forfeitures

199 — — — — — — — — —

Exercise of employee share options

4 — — — — — — — — —

Share-based compensation expense — — 16 — — — — 16 — 16

Repurchase of ordinary shares — — — ( 7,071 ) ( 351 ) — — ( 351 ) — ( 351 )

Other — — 1 — — — — 1 ( 1 ) —

Balance at October 1, 2022 223,707 $ — $ 1,311 ( 92,618 ) $ ( 4,650 ) $ ( 35 ) $ 5,517 $ 2,143 $ — $ 2,143

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 April 2, 2022

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

Net income — — — — — — 425 425 2 427

2 unchanged sentences

Vesting of restricted awards, net of forfeitures 1,619 — — — — — — — — —

Exercise of employee share options 121 — 6 — — — — 6 — 6

Share-based compensation expense — — 44 — — — — 44 — 44

Repurchase of ordinary shares — — — ( 13,457 ) ( 663 ) — — ( 663 ) — ( 663 )

Other — — 1 — — — — 1 ( 1 ) —

Balance at October 1, 2022 223,707 $ — $ 1,311 ( 92,618 ) $ ( 4,650 ) $ ( 35 ) $ 5,517 $ 2,143 $ — $ 2,143

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 Retained

Earnings Total Equity of Capri Non-controlling Interest Total Equity

Shares Amounts Shares Amounts

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

Net income — — — — — — 200 200 — 200

Other comprehensive income — — — — — 27 — 27 — 27

Total comprehensive income — — — — — — — 227 — 227

Vesting of restricted awards, net of forfeitures

199 — — — — — — — — —

3 unchanged sentences

Repurchase of ordinary shares — — — ( 1,818 ) ( 101 ) — — ( 101 ) — ( 101 )

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

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

Ordinary Shares Additional

8 unchanged sentences

Vesting of restricted awards, net of forfeitures

1,790 — — — — — — — — —

Exercise of employee share options

283 — 11 — — — — 11 — 11

Share-based compensation expense — — 56 — — — — 56 — 56

Repurchase of ordinary shares — — — ( 2,906 ) ( 160 ) — — ( 160 ) — ( 160 )

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

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(In millions)

Three Months Ended

2022 June 26,

Six Months Ended

2022 September 25,

Cash flows from operating activities

4 unchanged sentences

Deferred income taxes ( 1 ) ( 27 )

Impairment of assets 11 33

Changes to lease related balances, net ( 54 ) ( 67 )

27 unchanged sentences

Cash paid for interest $ 28 $ 22

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

Net cash paid for income taxes $ 80 $ 28

Supplemental disclosure of non-cash investing and financing activities

12 unchanged sentences

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

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 interim consolidated financial statements as of October 1, 2022 and for the three and six months ended October 1, 2022 and September 25, 2021 are unaudited.

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

5 unchanged sentences

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 months ended July 2, 2022 and June 26, 2021 are based on 13-week periods.

The results for the three and six months ended October 1, 2022 and September 25, 2021 are based on 13-week and 26-week periods, respectively.

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

10 unchanged sentences

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 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):

Included in the Company’s cash and cash equivalents as of October 1, 2022 and April 2, 2022 are credit card receivables of $ 25 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 October 1, 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,

5 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 $ 33 million and $ 31 million as of July 2, 2022 and April 2, 2022, respectively.

The combined total of raw materials and work in process inventory, net, recorded on the Company’s consolidated balance sheets was $ 39 million and $ 31 million as of October 1, 2022 and April 2, 2022, respectively.

Derivative Financial Instruments

7 unchanged sentences

Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged.

The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income until the hedged item affects earnings.

When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income are recognized within cost of goods sold.

The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive (loss) income until the hedged item affects earnings.

When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive (loss) income are recognized within cost of goods sold.

The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item.

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 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 (gain) 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.

6 unchanged sentences

Dollars and the associated foreign currencies.

The Company has elected the spot method of designating these contracts under ASU 2017-12, “Derivatives and Hedging (Topic 815):

The Company has elected the spot method of designating these contracts under Accounting Standards Update (“ASU”) 2017-12, “Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities”, and has designated these contracts as net investment hedges.

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.

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 (loss) income on the Company’s consolidated balance sheets.

Interest accruals and coupon payments are recognized directly in interest expense (income), 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.

1 unchanged sentence

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 May 2026.

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

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

17 unchanged sentences

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

Three Months Ended

July 2, 2022 June 26, 2021

Six Months Ended

2022 September 25, 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 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.

(1) Operating cash flows used in operating leases for the six months ended September 25, 2021 excluded $ 5 million of deferred rent payments due to the COVID-19 pandemic.

During the three and six months ended October 1, 2022, the Company recorded sublease income of $ 3 million and $ 5 million, respectively, within selling, general and administrative expenses.

During the three and six months ended September 25, 2021, the Company recorded $ 2 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 six months ended October 1, 2022, the Company recorded $ 3 million and $ 5 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 six months ended September 25, 2021, the Company recorded $ 3 million and $ 10 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

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Net income attributable to Capri $ 224 $ 200 $ 425 $ 419

9 unchanged sentences

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

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.

During the three and six months ended October 1, 2022, share equivalents of 794,933 shares and 726,136 shares, respectively, have been excluded from the above calculations due to their anti-dilutive effect.

Share equivalents of 415,331 shares and 513,088 shares have been excluded from the above calculations for the three and six months ended September 25, 2021, 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 April 2, 2022 for a complete disclosure of the Company’s significant accounting policies.

1 unchanged sentence

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in January 2021, issued ASU 2021-01, “Reference Rate Reform:

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in January 2021, issued ASU 2021-01, “Reference Rate Reform:

Both of these updates aim to ease the potential burden in accounting for reference rate reform.

2 unchanged sentences

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.

Supplier Finance Programs

In September 2022, the FASB issued ASU 2022-04, “Disclosure of Supplier Finance Program Obligations” which makes a number of changes.

The amendments require a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this standard on the Company's disclosures.

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.

10 unchanged sentences

“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 $ 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.

The contract liability related to gift cards, net of estimated “breakage”, of $ 14 million and $ 13 million as of October 1, 2022 and April 2, 2022, respectively, is included within accrued expenses and other current liabilities in the Company’s consolidated balance sheet.

Loyalty Program .

5 unchanged sentences

The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements.

Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa and certain parts of Asia.

Under geographic licensing arrangements, third party

licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa and certain parts of Asia.

The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees.

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 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):

As of October 1, 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 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 October 1, 2022 was $ 45 million, and the related asset for the right to recover returned product as of October 1, 2022 was $ 11 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 $ 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.

Total contract liabilities were $ 20 million and $ 30 million as of October 1, 2022 and April 2, 2022, respectively.

For the three and six months ended October 1, 2022, the Company recognized $ 3 million and $ 8 million respectively, in revenue which related to contract liabilities that existed at April 2, 2022.

For the three and six months ended September 25, 2021, the Company recognized $ 2 million and $ 8 million, respectively, in revenue which related to contract liabilities that existed at March 27, 2021.

There were no material contract assets recorded as of October 1, 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

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Versace revenue - the Americas $ 120 $ 107 $ 235 $ 194

22 unchanged sentences

Total receivables, net $ 441 $ 434

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

(1) As of October 1, 2022 and April 2, 2022, $ 84 million and $ 83 million, respectively, of trade receivables were insured.

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

6 unchanged sentences

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

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.

Allowance for credit losses was $ 9 million and $ 10 million as of October 1, 2022 and April 2, 2022, respectively.

The Company had credit losses of $ 1 million and $ 2 million for the three and six months ended October 1, 2022, respectively.

The Company had immaterial credit losses for the three months ended September 25, 2021 and $( 1 ) million for the six months ended September 25, 2021.

Property and Equipment, net

5 unchanged sentences

Equipment 77 81

Building 46 48

In-store shops 47 47

Building 43 48

Total property and equipment, gross 1,166 1,200

3 unchanged sentences

Total property and equipment, net $ 470 $ 476

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.

Depreciation and amortization of property and equipment for the three and six months ended October 1, 2022 was $ 31 million and $ 65 million, respectively.

Depreciation and amortization of property and equipment was $ 37 million and $ 75 million for the three and six months ended September 25, 2021, respectively.

During the three and six months ended October 1, 2022, the Company recorded $ 2 million in property and equipment impairment charges.

During the three and six months ended September 25, 2021, the Company recorded $ 3 million of property and equipment impairment charges.

Intangible Assets and Goodwill

15 unchanged sentences

(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.

(2) Includes accumulated impairment of $ 249 million as of October 1, 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.

(3) Includes accumulated impairment of $ 265 million related to the Jimmy Choo reporting units as of October 1, 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.

Amortization expense for the Company’s definite-lived intangible assets for the three and six months ended October 1, 2022 was $ 12 million and $ 23 million, respectively.

Amortization expense for the Company’s definite-lived intangible asset for the three and six months ended September 25, 2021 was $ 12 million and $ 24 million, respectively.

Current Assets and Current Liabilities

3 unchanged sentences

Prepaid contracts 24 15

Other accounts receivables 12 17

Prepaid insurance 10 2

Interest receivable related to net investment hedges 1 13

Other accounts receivables 9 17

Total prepaid expenses and other current assets $ 249 $ 192

9 unchanged sentences

Accrued litigation 12 13

Accrued purchases and samples 12 11

Charitable donations (2)

Accrued interest 10 10

Accrued purchases and samples 9 11

Total accrued expenses and other current liabilities $ 312 $ 351

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

(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.

(2) The charitable donations balance relates to a $ 10 million unconditional pledge to The Versace Foundation as of October 1, 2022 and April 2, 2022.

Restructuring and Other Charges

Capri Retail Store Optimization Program

Restructuring Charges - Capri Retail Store Optimization Program

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 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.

During the three and six months ended September 25, 2021, the Company closed 16 and 26 of its retail stores, respectively, which were incorporated into the Capri Retail Store Optimization Program.

Net restructuring (gains) charges recorded in connection with the Capri Retail Store Optimization Program during the three and six months ended September 25, 2021 were $( 1 ) million and $( 4 ) million, respectively.

Other Charges

During the three and six months ended October 1, 2022, the Company recorded costs of $ 3 million and $ 6 million, respectively, primarily related to equity awards associated with the acquisition of Versace.

During the three and six months ended September 25, 2021, the Company recorded costs of $ 9 million and $ 15 million, respectively, primarily related to equity awards associated with the acquisition of Versace.

Debt Obligations

29 unchanged sentences

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 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 October 1, 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.

6 unchanged sentences

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 October 1, 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 October 1, 2022, the Company had $ 1.126 billion of borrowings outstanding under the 2022 Revolving Credit Facility.

The Company had $ 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 $ 22 million and $ 21 million were outstanding as of both October 1, 2022 and April 2, 2022, respectively.

At October 1, 2022, the amount available for future borrowings under the 2022 Revolving Credit Facility was $ 352 million.

The amount available for future borrowings under the revolver in the 2018 Credit Facility was $ 804 million as of April 2, 2022.

As of October 1, 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 had $ 7 million and $ 3 million of deferred financing fees related to Revolving Credit Facilities as of October 1, 2022 and April 2, 2022, respectively, and are 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.

1 unchanged sentence

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 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.

The amount outstanding under this program as of October 1, 2022 and April 2, 2022 was $ 14 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.

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

As of October 1, 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.

13 unchanged sentences

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

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:

At October 1, 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.

1 unchanged sentence

The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities to the Company.

The fair values of net investment hedges and interest rate swaps are included in other assets, and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company.

The fair value of net investment hedges is included in other assets, and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company.

See Note 12 for further detail.

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 July 2, 2022 using:

Fair value at October 1, 2022 using:

Fair value at April 2, 2022 using:

25 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):

July 2, 2022 April 2, 2022

October 1, 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 no impairment charges during the three months ended July 2, 2022 and June 26, 2021.

The Company recorded $ 11 million of impairment charges during the three and six months ended October 1, 2022.

The Company recorded $ 33 million of impairment charges during the three and six months ended September 25, 2021.

The following table details the carrying values and fair values of the Company’s assets that have been impaired during the three and six months ended October 1, 2022 and the three and six months ended September 25, 2021 (in millions):

Three and Six Months Ended

October 2, 2022 Three and Six Months Ended

September 25, 2021

Carrying Value Prior to Impairment Fair Value Impairment Charge Carrying Value Prior to Impairment Fair Value Impairment Charge

Operating Lease Right-of-Use Assets

$ 25 $ 16 $ 9

$ 83 $ 53 $ 30

Property and Equipment 3 1 2 4 1 3

Total $ 28 $ 17 $ 11 $ 87 $ 54 $ 33

Derivative Financial Instruments

8 unchanged sentences

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.

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.

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 (the “Euro Net Investment Hedges”) and $ 194 million to hedge its net investment in Japanese Yen denominated subsidiaries (the “Japanese Yen Net Investment Hedges”).

During the month of July 2022, the Euro Net Investment Hedges with aggregate notional amount of $ 4 billion outstanding as of July 2, 2022 were terminated resulting in the Company receiving $ 237 million in cash.

During the second quarter of Fiscal 2023, the Company also entered into, and subsequently terminated, additional Euro Net Investment Hedges with aggregate notional amount of $ 4 billion.

The termination of these contracts resulted in the Company receiving additional $ 100 million in cash.

During the second quarter of Fiscal 2023, the Company modified certain Japanese Yen Net Investment Hedges with notional amounts of $ 100 million.

The modification of these hedges resulted in the Company receiving $ 6 million in cash during the second quarter of Fiscal 2023.

The Company entered into additional Japanese Net Investment Hedges with notional amount of $ 100 million.

These contracts have been designated as net investment hedges.

During the second quarter of Fiscal 2023, the Company received $ 343 million from termination of Euro Net Investment Hedges and modification of Japanese Yen Net Investment Hedges.

As of October 1, 2022, the Company had Japanese Yen Net Investment Hedges with aggregate notional amounts of $ 294 million.

Under the terms of these contracts, the Company will exchange the semi-annual fixed rate payments on U.S.

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

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

denominated debt for fixed rate payments of 0 % to 2.665 % in Japanese Yen.

These contracts have maturity dates between May 2027 and February 2051 and are designated as net investment hedges.

As of October 1, 2022, the Company did not have any notional amounts hedged in relation to its net investment in Euro denominated subsidiaries.

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

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 $ 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):

Accordingly, the Company recorded interest income of $ 11 million and $ 28 million during the three and six months ended October 1, 2022, respectively.

Additionally, the Company recorded interest expense of $ 15 million and $ 27 million during the three and six months ended September 25, 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 October 1, 2022 and April 2, 2022 (in millions):

Notional Amounts Assets Liabilities

2022 April 2,

2022 October 1,

2022 April 2,

2022 October 1,

2022 April 2,

3 unchanged sentences

Undesignated derivative contracts (4)

10 38 1 4 — —

Total $ 370 $ 4,351 $ 12 $ 52 $ 11 $ 37

4 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 July 2, 2022 and April 2, 2022 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 October 1, 2022 and April 2, 2022 would be as follows (in millions):

Forward Currency

1 unchanged sentence

2022 April 2,

2022 October 1,

2022 April 2,

6 unchanged sentences

Currently, the Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties.

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 CTA as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets.

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 (loss) income and are reclassified from accumulated other comprehensive (loss) 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 CTA as a component of accumulated other comprehensive (loss) 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.

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

July 2, 2022 June 26, 2021

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

Three Months Ended Six Months Ended

October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

Pre-Tax Gains

Recognized in OCI Pre-Tax Gains (Losses)

Recognized in OCI Pre-Tax Gains

Recognized in OCI

Designated forward foreign currency exchange contracts

$ 5 $ 3 $ 11 $ 2

Designated net investment hedges $ 152 $ 89 $ 365 $ 172

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):

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 six months ended October 1, 2022 and September 25, 2021 (in millions):

Three Months Ended

1 unchanged sentence

Accumulated OCI Location of (Gain) Loss Recognized

July 2, 2022 June 26, 2021

2022 September 25, 2021

Designated forward foreign currency exchange contracts

$ ( 3 ) $ 1 Cost of goods sold

The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive income for its forward foreign currency exchange contracts will be reclassified into earnings during the next 12 months, based upon the timing of inventory purchases and turnover.

Six Months Ended

Pre-Tax (Gain) Loss Reclassified from

Accumulated OCI Location of (Gain) Loss Recognized

2022 September 25, 2021

Designated forward foreign currency exchange contracts

$ ( 7 ) $ 2 Cost of goods sold

The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive (loss) income for its forward foreign currency exchange contracts will be reclassified into earnings during the next 12 months, based upon the timing of inventory purchases and turnover.

Undesignated Hedges

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.

During the three months ended October 1, 2022, there was no gain recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income, while during the six months ended October 1, 2022, a $ 2 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 six months ended September 25, 2021, the net impact of changes in the fair value of undesignated forward foreign currency exchange contracts recognized within foreign currency (gain) 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 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.

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.

On June 1, 2022, the Company announced that its Board of Directors had terminated the Fiscal 2022 Plan, with $ 500 million of availability remaining, and authorized a new share repurchase program (the “Existing Share Repurchase 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.

Share repurchases may be made in open market or privately negotiated transactions and/or pursuant to Rule 10b5-1 trading plans, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors.

The program may be suspended or discontinued at any time.

During the six months ended October 1, 2022, the Company purchased 13,183,355 shares for a total cost of approximately $ 650 million, including commissions, under the Existing Share Repurchase Plan.

As of October 1, 2022, the remaining availability under the Company’s existing share repurchase program was $ 350 million.

On November 9, 2022, the Company terminated the Existing Share Repurchase Plan and implemented a new share repurchase plan.

See Note 17 for additional information.

During the six months ended September 25, 2021, the Company purchased 2,712,275 shares for a total cost of approximately $ 150 million, including commission, through open market transactions under the Prior Plan.

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 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 three months ended July 2, 2022 and June 26, 2021, respectively (in millions):

During the six month periods ended October 1, 2022 and September 25, 2021, the Company withheld 273,197 shares and 193,322 shares, respectively, with a fair value of $ 13 million and $ 10 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

Accumulated Other Comprehensive (Loss) Income

The following table details changes in the components of accumulated other comprehensive (loss) income (“AOCI”), net of taxes, for the six months ended October 1, 2022 and September 25, 2021, respectively (in millions):

Foreign Currency Adjustments (1)

5 unchanged sentences

Other comprehensive (loss) income, net of tax ( 232 ) 3 ( 229 )

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

Balance at October 1, 2022 $ ( 48 ) $ 13 $ ( 35 )

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

Other comprehensive income (loss) before reclassifications 91 ( 1 ) 90

Other comprehensive income before reclassifications 114 2 116

amounts reclassified from AOCI to earnings

1 unchanged sentence

Other comprehensive income, net of tax 114 4 118

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.

Balance at September 25, 2021 $ 171 $ 3 $ 174

(1) Foreign currency translation adjustments for the six months ended October 1, 2022 primarily include a net $ 486 million translation loss partially offset by a $ 247 million gain, net of taxes of $ 118 million, relating to the Company’s net investment hedges.

Foreign currency translation adjustments for the six months ended September 25, 2021 primarily include a $ 132 million gain, net of taxes of $ 40 million, relating to the Company’s net investment hedges, partially offset by a net $ 23 million translation loss.

(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.

4 unchanged sentences

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

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

As of October 1, 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 22,471,000 ordinary shares after amendments in August 2022.

At October 1, 2022, there were 6,434,269 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 three months ended July 2, 2022:

The following table summarizes the Company’s share-based compensation activity during the six months ended October 1, 2022:

Options Service-Based RSUs Performance-Based RSUs

4 unchanged sentences

Canceled/Forfeited ( 4,900 ) ( 355,943 ) —

Outstanding/Unvested at July 2, 2022

Outstanding/Unvested at October 1, 2022

229,675 3,479,661 165,239

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 .

The weighted average grant date fair value of service-based and performance-based RSUs granted during the six months ended October 1, 2022 was $ 49.80 and $ 47.41 , respectively.

The weighted average grant date fair value of service-based RSUs granted during the six months ended September 25, 2021 was $ 51.64 .

Share-Based Compensation Expense

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,

The following table summarizes compensation expense attributable to share-based compensation for the three and six months ended October 1, 2022 and September 25, 2021 (in millions):

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Share-based compensation expense $ 16 $ 20 $ 44 $ 56

2 unchanged sentences

The Company estimates forfeitures based on historical forfeiture rates.

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

The estimated value of future forfeitures for equity grants as of October 1, 2022 is approximately $ 11 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 months ended July 2, 2022 was 12.1 %.

The Company’s effective tax rate for the three and six months ended October 1, 2022 was 13.5 % and 12.9 %, respectively.

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

The Company’s effective tax rate for the three and six months ended September 25, 2021 was ( 1.0 )% and 7.7 %, respectively.

Such rates differ from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to a benefit recognized as a result of recently enacted tax legislation in Italy which allowed the Company to reduce its deferred tax liabilities.

Specifically, this change allowed the Company to step up certain intangible assets which will result in lower future cash taxes.

In addition, the tax rate for each period was further reduced by the favorable impact of global financing activities, partially offset by the increases in uncertain tax positions for the three months ended September 25, 2021.

For the six months ended September 25, 2021, the tax rate was also negatively impacted by the tax rate change in the United Kingdom on the Company's net deferred tax liabilities.

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

4 unchanged sentences

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 months ended July 2, 2022.

Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized lower effective tax rates for the three and six months ended October 1, 2022.

Segment Information

4 unchanged sentences

The Company’s three reportable segments are as follows:

• 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.

11 unchanged sentences

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

Three Months Ended

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Total revenue:

10 unchanged sentences

( 55 ) ( 45 ) ( 115 ) ( 86 )

Impairment of assets (1)

( 11 ) ( 33 ) ( 11 ) ( 33 )

Restructuring and other charges ( 3 ) ( 8 ) ( 6 ) ( 11 )

1 unchanged sentence

Total income from operations $ 252 $ 195 $ 483 $ 453

(1) Impairment of assets during the three and six months ended October 1, 2022 and September 25, 2021 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

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

Depreciation and amortization:

5 unchanged sentences

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

Three Months Ended

2022 June 26,

Three Months Ended Six Months Ended

2022 September 25,

2021 October 1,

2022 September 25,

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

$ 806 $ 701 $ 1,600 $ 1,416

EMEA 400 388 764 690

Asia 206 211 408 447

Total revenue $ 1,412 $ 1,300 $ 2,772 $ 2,553

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

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

was $ 739 million and $ 1.472 billion, respectively, for the three and six months ended October 1, 2022.

Total revenue earned in the U.S.

was $ 651 million and $ 1.322 billion, respectively, for the three and six months ended September 25, 2021.

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.

Share Repurchase Plan

Subsequent to October 1, 2022, the Company purchased 2,295,845 shares for a total cost of approximately $ 100 million, including commissions, under the Existing Share Repurchase Plan pursuant to a Rule 10b5-1 trading plan, bringing the remaining availability under the Company’s existing share repurchase program to $ 250 million.

The program may be suspended or discontinued at any time.

On November 9, 2022, the Company announced that its Board of Directors approved a new share repurchase program of up to $ 1 billion of its outstanding ordinary shares, providing additional capacity to return cash to shareholders over the longer term.

This new two-year program will replace the Company’s existing $ 1 billion share repurchase program which had $ 250 million of availability remaining.

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

The program may be suspended or discontinued at any time.

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