What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-05-31 compared with 2022-06-01 · 466 added, 428 removed, 1137 unchanged (44% of the section changed)

16 unchanged sentences

We are currently undertaking a major, multi-year ERP implementation to upgrade our information technology platforms and systems worldwide.

The implementation is occurring in phases over multiple years.

We have launched the Michael Kors Finance functionality on the ERP system in North America in the first quarter of Fiscal 2023.

The implementation is occurring in phases over several years.

We have launched the finance functionality of the ERP system in certain regions starting in Fiscal 2023.

As a result of this multi-year implementation, we expect certain changes to our processes and procedures, which in turn, could result in changes to our internal control over financial reporting.

2 unchanged sentences

Other Information

As previously announced, the Board of Directors of the Company approved a retail store optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet.

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

The Company closed a total of 167 of its retail stores, with 66 and 101 stores having closed during Fiscal 2022 and Fiscal 2021, respectively.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $14 million, of which $9 million and $5 million was recorded during Fiscal 2022 and Fiscal 2021, respectively.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program were $3 million during the three months ended April 2, 2022.

Amendment to Amended and Restated Memorandum and Articles of Association

The Board of Directors of the Company approved an amendment to clauses 2 and 3 of the Company’s amended and restated Memorandum and Articles of Association (the “Amendment to the Memorandum”), effective May 24, 2023, reflecting a change of the Company’s registered agent and registered office from Vistra Corporate Services Centre to Conyers Trust

Company (BVI) Limited.

A copy of the Amendment to the Memorandum is attached as Exhibit 3.2 to this Annual Report on Form 10-K and incorporated herein by reference.

This disclosure is intended to satisfy the requirements of Item 5.03 of Form 8-K.

Compensatory Arrangements of Certain Officers

On May 30, 2023, the Company and Michael Kors (USA), Inc.

(together with the Company, the “Company Parties”) entered into an amended and restated employment agreement with each of Thomas J.

Edwards, Jr., Jenna A.

Hendricks and Krista A.

McDonough (the “Employment Agreements”).

The material changes to the Employment Agreements from the executive officers’ prior employment agreements include:

(i) providing that upon a termination of employment by the Company Parties without “cause” (and other than by reason of death or disability) or by the executive officer for “good reason”, in addition to the existing severance entitlements under the prior employment agreement, the executive officer would be entitled to a pro rata annual cash incentive award for the year in which the date of termination occurs based on the actual level of performance;

(ii) updating the definitions of “cause” and “good reason”;

and (iii) updating the restrictive covenants to reflect the most current such covenants used in the equity awards under the Company’s Third Amended and Restated Omnibus Incentive Plan.

In addition, on May 30, 2023, each of Mr.

Edwards and Msmes.

Hendricks and McDonough entered into a Change in Control Continuity Agreement with the Company (the “CIC Agreements”), which provides for an initial two-year term that will renew automatically for additional years commencing on the first anniversary of the effective date and each annual anniversary thereafter, unless notice of nonrenewal is provided.

The payments and benefits provided under the CIC Agreements are “double trigger” and are not payable upon a termination of the executive officer’s employment for “cause,” by a resignation by an executive officer without “good reason” or any termination of an executive officer’s employment prior to a “change in control” of the Company.

Defined terms referenced in this description of the CIC Agreements have the meaning given to them in such agreements.

The severance protections under the CIC Agreements become effective on a change in control of the Company and remain in effect for a two-year protected period thereafter.

During such two-year period, the executive officer would generally be entitled to compensation and benefits consistent with those applicable prior to the change in control, and if the executive officer’s employment is terminated by the Company without cause (and other than by reason of death or disability) or by the executive officer for good reason, the executive officer would be entitled to receive the following payments and benefits, subject to an effective release of claims against the Company and its affiliates:

(i) an amount equal to two times the sum of the executive officer’s annual base salary and target annual cash incentive;

(ii) a prorated target bonus for the portion of the Company’s fiscal year elapsed prior to the date of termination;

(iii) a payment equal to the cost of the monthly COBRA premiums for group health care plan coverage for a period of 24 months;

and (iv) outplacement services up to a maximum cost of $25,000.

If the executive officer’s employment is terminated during the protected period following a change in control due to death or disability, the executive officer would not be entitled to the benefits described above, but would be entitled to receive a prorated bonus based on the executive officer’s target annual bonus opportunity and death or disability benefits not less than those provided prior to the change in control.

The payments and benefits under the CIC Agreements will be reduced to the extent that they would be subject to an excise tax under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, unless the executive officer would be better off on an after-tax basis receiving all such payments and benefits and paying his or her own excise tax.

The CIC Agreements do not provide for an excise tax gross-up and include perpetual confidentiality and non-disparagement covenants, and non-solicitation covenants that apply while the executive officer is employed and for two years thereafter.

The foregoing summary is qualified in its entirety by reference to the Employment Agreements and the CIC Agreements, copies of which are filed herewith as Exhibits 10.11, 10.13, 10.16, 10.21, 10.22 and 10.23 and incorporated herein by reference.

This disclosure is intended to satisfy the requirements of Item 5.02(e) of Form 8-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

11 unchanged sentences

Total 3,576,840 $ 43.98 6,169,920

(1) Reflects share options and restricted stock units issued under the Company’s Amended and Restated Omnibus Incentive Plan.

(1) Reflects share options and restricted stock units issued under the Company’s Third Amended and Restated Omnibus Incentive Plan (or predecessor plan).

(2) Represents the weighted average exercise price of outstanding share awards only.

7 unchanged sentences

Report of Independent Registered Public Accounting Firm - Ernst & Young LLP (PCAOB ID No.

Consolidated Balance Sheets as of April 2, 2022 and March 27, 2021.

Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.

Consolidated Statements of Cash Flows for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.

Notes to Consolidated Financial Statements for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.

Consolidated Balance Sheets as of April 1, 2023 and April 2, 2022.

Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

Consolidated Statements of Cash Flows for the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

Notes to Consolidated Financial Statements for the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

EXHIBIT INDEX

4 unchanged sentences

Amended and Restated Memorandum and Articles of Association of Capri Holdings Limited (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 31, 2018 and incorporated herein by reference).

Amendment to Amended and Restated Memorandum and Articles of Association of Capri Holdings, effective May 24, 2023.

Specimen of Ordinary Share Certificate of Capri Holdings Limited (included as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 (File No.

001-35368), filed on May 29, 2019 and incorporated herein by reference).

Shareholders Agreement, dated as of July 11, 2011, among Michael Kors Holdings Limited and certain shareholders of Michael Kors Holdings Limited (included as Exhibit 10.2 to the Company’s Registration Statement on Form F-1, as amended (File No.

333-178282), filed on December 2, 2011 and incorporated herein by reference).

Indenture, dated as of October 20, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited, the subsidiary guarantors party thereto and U.S.

5 unchanged sentences

333-178282), filed on December 2, 2011 and incorporated herein by reference).

Amended and Restated Michael Kors (USA), Inc.

Stock Option Plan (included as Exhibit 10.4 to the Company’s Registration Statement on Form F-1, as amended (File No.

333-178282), filed on December 2, 2011 and incorporated herein by reference).

Amendment No.

1 to the Amended and Restated Michael Kors (USA), Inc.

Share Option Plan (included as Exhibit 4.9 to the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2012, filed on June 12, 2012 and incorporated herein by reference).

Document Description

Capri Holdings Limited Second Amended and Restated Omnibus Incentive Plan (included as Annex A to the Company’s Definitive Proxy Statement on Schedule 14A (File No.

001-35368), filed on July 22, 2020 and incorporated herein by reference).

Capri Holdings Limited Third Amended and Restated Omnibus Incentive Plan (included as Annex B to the Company’s Definitive Proxy Statement on Schedule 14A (File No.

001-35368), filed on June 16, 2022 and incorporated herein by reference).

Fifth Amended and Restated Employment Agreement, dated as of March 7, 2022, by and among Michael Kors (USA), Inc., Capri Holdings Limited and John D.

Idol (included as Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 2, 2022 (File No.

001-35368), filed on June 1, 2022 and incorporated herein by reference).

Executive Bonus Program (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013 filed on August 8, 2013 and incorporated herein by reference).

Document Description

Form of Employee Non-Qualified Option Award Agreement (included as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).

2 unchanged sentences

Form of Independent Director Restricted Stock Unit Award Agreement (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).

Aircraft Time Sharing Agreement, dated November 24, 2014, by and between Michael Kors (USA), Inc.

and John Idol (included as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).

Employment Agreement, dated as of April 17, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and Thomas J.

(included as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2017, filed on May 31, 2017 and incorporated herein by reference).

Aircraft Time Sharing Agreement, effective as of December 20, 2022, by and between Michael Kors (USA), Inc.

and John Idol (included as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2022, filed on February 8, 2023 and incorporated herein by reference).

Amended and Restated Employment Agreement by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Thomas J.

Edwards, Jr., dated as of May 30, 2023.

Capri Holdings Limited Deferred Compensation Plan (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

001.35368), filed on November 14, 2019 and incorporated herein by reference).

Employment Agreement between Michael Kors (USA), Inc.

and Krista McDonough made as of October 1, 2016 (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020 (File No 001-35368), filed on July 8, 2020 and incorporated herein by reference).

Amended and Restated Employment Agreement by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Krista A.

McDonough, dated as of May 30, 2023.

Employment Agreement, dated as of March 30, 2020, by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Daniel Purefoy (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021, filed on May 26, 2021 and incorporated herein by reference).

Employment Agreement, dated as of August 24, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Joshua Schulman (included as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).

Separation Agreement (“ Agreement ”), by and between Joshua Schulman, Capri Holdings Limited (“ Capri ”), and Michael Kors (USA), Inc., dated March 7, 2022.

Employment Agreement, effective as of June 1, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Jenna Hendricks.

Employment Agreement dated January 23, 2023, by and between Michael Kors (USA), Inc.

and Cedric Wilmotte.

Amended and Restated Employment Agreement by and among Capri Holdings Limited, Michael Kors (USA), Inc.

and Jenna Hendricks, dated as of May 30, 2023.

Suspension of Rights Agreement, dated as of September 23, 2021, to the Third Amended and Restated Credit Agreement, dated as of November 15, 2018 among, Michael Kors (USA), Inc., Capri Holdings Limited, the Foreign Subsidiary Borrowers party to the Credit Agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders thereto and the other parties party thereto (included as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).

Revolving Credit Agreement, dated as of July 1, 2022 among Capri Holdings Limited, Michael Kors (USA), Inc., the foreign subsidiary borrowers party thereto, the guarantors party thereto, the financial institutions party thereto as lenders and issuing banks and JPMorgan Chase Bank, N.A., as administrative agent (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

001-35368), filed on July 1, 2022 and incorporated herein by reference).

Term Facility Agreement by and among Gianni Versace S.r.l., as borrower, Intesa Sanpaolo S.p.A., Banca Nazionale Del Lavoro S.p.A.

and UniCredit S.p.A., as arrangers and lenders, and Intesa Sanpaolo S.p.A., as agent, dated as of December 5, 2022 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

001-35368), filed on December 6, 2022 and incorporated herein by reference).

Parent Company Guarantee by and among Capri Holdings Limited, as guarantor, Banca Nazionale del Lavoro S.p.A., Intesa Sanpaolo S.p.A.

and UniCredit S.p.A., dated as of December 5, 2022 (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.

001-35368), filed on December 6, 2022 and incorporated herein by reference).

Change in Control Continuity Agreement by and between Capri Holdings Limited and Thomas J.

Edwards, Jr., dated as of May 30, 2023.

Change in Control Continuity Agreement by and between Capri Holdings Limited and Jenna Hendricks, dated as of May 30, 2023.

Change in Control Continuity Agreement by and between Capri Holdings Limited and Krista A.

McDonough, dated as of May 30, 2023.

List of subsidiaries of Capri Holdings Limited.

2 unchanged sentences

Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.

Document Description

Certification of Chief Executive Officer pursuant to 18 U.S.C.

7 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Idol Chairman, Chief Executive Officer and Director (Principal Executive Officer) June 1, 2022

Idol Chairman, Chief Executive Officer and Director (Principal Executive Officer) May 31, 2023

/s/ Thomas J.

Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) June 1, 2022

/s/ Marilyn Crouther Director June 1, 2022

Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) May 31, 2023

/s/ Marilyn Crouther Director May 31, 2023

Marilyn Crouther

/s/ Robin Freestone Director June 1, 2022

/s/ Robin Freestone Director May 31, 2023

Robin Freestone

/s/ Judy Gibbons Director June 1, 2022

/s/ Ann Korologos Director June 1, 2022

Ann Korologos

/s/ Judy Gibbons Director May 31, 2023

/s/ Mahesh Madhavan Director May 31, 2023

Mahesh Madhavan

/s/ Stephen F.

Reitman Director June 1, 2022

/s/ Jane Thompson Director June 1, 2022

Reitman Director May 31, 2023

/s/ Jane Thompson Director May 31, 2023

Jane Thompson

/s/ Jean Tomlin Director June 1, 2022

/s/ Jean Tomlin Director May 31, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of April 2, 2022 and March 27, 2021, and the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended April 2, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 2, 2022 and March 27, 2021, and the results of its operations and its cash flow for each of the three years in the period ended April 2, 2022, in conformity with the U.S.

We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of April 1, 2023 and April 2, 2022, and the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended April 1, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 1, 2023 and April 2, 2022, and the results of its operations and its cash flow for each of the three years in the period ended April 1, 2023, in conformity with the U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of April 2, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated June 1, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of April 1, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 31, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

As discussed in Note 2 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis, or whenever impairment indicators exist.

As a result of the Company’s 2023 annual impairment test, the Company recorded a goodwill impairment charge of $82 million associated with its Jimmy Choo Retail and Wholesale reporting units.

The Company also recognized an impairment charge of $24 million associated with the Jimmy Choo indefinite-lived retail brand name intangible asset.

Auditing the Company’s annual impairment assessments was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units for goodwill and the fair value of indefinite-lived brand name intangible assets.

8 unchanged sentences

Impairment of Retail Store Long-Lived assets

Description of the Matter As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets, which primarily include property and equipment and operating lease right-of-use assets at retail stores, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable.

During the year ended April 2, 2022, the Company recognized an impairment charge of $83 million related to the long-lived assets.

Description of the Matter As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets, which primarily include property, plant, and equipment and operating lease right-of-use assets at retail stores, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable.

During the year ended April 1, 2023, the Company recognized an impairment charge of $36 million related to its long-lived assets.

Auditing the Company’s impairment assessment of retail store long-lived assets was complex and highly judgmental due to the significant estimation required in determining the future cash flows used to assess recoverability of each retail store long-lived asset group (undiscounted) and determining the fair value (discounted).

1 unchanged sentence

Significant assumptions used in determining the fair value of certain operating lease right-of-use assets include the current market rent and discount rate for the remaining lease term of the related stores.

These assumptions are subjective in nature and are affected by expectations about future

market or economic conditions.

These assumptions are subjective in nature and are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the retail store long-lived assets impairment process, including, determining the undiscounted future cash flows of the stores and the fair value of the long-lived assets (including those related to operating leases) for the stores that were deemed to be impaired.

11 unchanged sentences

In our opinion, Capri Holdings Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of April 1, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 2, 2022 and March 27, 2021, the related consolidated statements of operations and comprehensive income (loss) , shareholders’ equity and cash flows for each of the three years in the period ended April 2, 2022, and the related notes and our report dated June 1, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 1, 2023 and April 2, 2022, the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended April 1, 2023, and the related notes and our report dated May 31, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

19 unchanged sentences

(In millions, except share data)

2022 March 27,

2023 April 2,

Current assets

30 unchanged sentences

224,166,250 shares issued and 117,347,045 outstanding at April 1, 2023;

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

Treasury shares, at cost ( 79,161,330 shares at April 2, 2022 and 67,942,926 shares at March 27, 2021)

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

Treasury shares, at cost ( 106,819,205 shares at April 1, 2023 and 79,161,330 shares at April 2, 2022)

( 5,351 ) ( 3,987 )

11 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

7 unchanged sentences

Total operating expenses 3,045 2,841 2,578

Income (loss) from operations 903 19 ( 192 )

Income from operations 679 903 19

Other income, net ( 3 ) ( 2 ) ( 7 )

Interest (income) expense, net ( 18 ) 43 18

Interest expense (income), net 24 ( 18 ) 43

Foreign currency loss (gain) 10 8 ( 20 )

Income (loss) before provision for income taxes 915 3 ( 215 )

Income before provision for income taxes 648 915 3

Provision for income taxes 29 92 66

11 unchanged sentences

Foreign currency translation adjustments ( 41 ) 127 ( 15 )

Net gain (loss) on derivatives 10 ( 4 ) ( 4 )

Net (loss) gain on derivatives ( 6 ) 10 ( 4 )

Comprehensive income (loss) 572 960 ( 82 )

13 unchanged sentences

Shares Amounts Shares Amounts

Balance at March 30, 2019,

as previously reported 216,051 $ — $ 1,011 ( 65,119 ) $ ( 3,223 ) $ ( 66 ) $ 4,707 $ 2,429 $ 3 $ 2,432

Adoption of accounting standard (ASU 2106-02) — — — — — — ( 152 ) ( 152 ) — ( 152 )

Balance as of March 28, 2020 217,320 $ — $ 1,085 ( 67,894 ) $ ( 3,325 ) $ 75 $ 4,332 $ 2,167 $ 1 $ 2,168

Net loss — — — — — — ( 62 ) ( 62 ) ( 1 ) ( 63 )

Other comprehensive income — — — — — 141 — 141 — 141

Other comprehensive loss — — — — — ( 19 ) — ( 19 ) — ( 19 )

Total comprehensive loss — — — — — — — ( 81 ) ( 1 ) ( 82 )

3 unchanged sentences

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

Adjustment of redeemable non-controlling interests to redemption value — — 4 — — — — 4 $ — 4

Other — — — — — — — — ( 1 ) ( 1 )

Balance as of March 27, 2021 219,223 — 1,158 ( 67,943 ) ( 3,326 ) 56 4,270 2,158 ( 1 ) 2,157

Net loss — — — — — — ( 62 ) ( 62 ) ( 1 ) ( 63 )

Other comprehensive loss — — — — — ( 19 ) — ( 19 ) — ( 19 )

Total comprehensive loss — — — — — — — ( 81 ) ( 1 ) ( 82 )

Net income — — — — — — 822 822 1 823

Other comprehensive income (loss) — — — — — 138 — 138 ( 1 ) 137

Total comprehensive income — — — — — — — 960 — 960

Vesting of restricted awards, net of forfeitures 2,336 — — — — — — — — —

2 unchanged sentences

Repurchase of ordinary shares — — — ( 11,218 ) ( 661 ) — — ( 661 ) — ( 661 )

Other — — — — — — — — ( 1 ) ( 1 )

Balance at March 27, 2021 219,223 — 1,158 ( 67,943 ) ( 3,326 ) $ 56 4,270 2,158 ( 1 ) 2,157

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

Net income — — — — — — 616 616 3 619

Other comprehensive income (loss) — — — — — 138 — 138 ( 1 ) 137

Other comprehensive loss — — — — — ( 47 ) — ( 47 ) — ( 47 )

Total comprehensive income — — — — — — — 569 3 572

3 unchanged sentences

Repurchase of ordinary shares — — — ( 27,658 ) ( 1,364 ) — — ( 1,364 ) — ( 1,364 )

Other — — — — — — — — ( 1 ) ( 1 )

Balance at April 1, 2023 224,166 — 1,344 ( 106,819 ) $ ( 5,351 ) $ 147 $ 5,708 $ 1,848 $ 1 $ 1,849

4 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

5 unchanged sentences

Impairment of assets 142 83 316

Credit losses 7 ( 3 ) 29

Deferred income taxes ( 101 ) ( 57 ) ( 70 )

Changes to lease related balances, net ( 99 ) ( 142 ) ( 112 )

Amortization of deferred financing costs 6 6 8

Tax (benefit) deficit on exercise of share options ( 4 ) 4 2

Foreign currency (gains) losses — ( 15 ) 11

Foreign currency losses (gains) 28 — ( 15 )

Other non-cash charges 7 10 7

21 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 94 ) ( 24 ) 12

Net (decrease) increase in cash, cash equivalents and restricted cash ( 62 ) ( 358 ) 420

Net increase (decrease) in cash, cash equivalents and restricted cash 84 ( 62 ) ( 358 )

Beginning of period 172 234 592

19 unchanged sentences

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

The fiscal years ending on March 27, 2021 and March 28, 2020 (“Fiscal 2021” and “Fiscal 2020”, respectively) contain 52 weeks, whereas the fiscal year ending April 2, 2022 (“Fiscal 2022”) contain 53 weeks.

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

The fiscal years ending on April 1, 2023 and March 27, 2021 (“Fiscal 2023” and “Fiscal 2021”, respectively) contain 52 weeks, whereas the fiscal year ending April 2, 2022 (“Fiscal 2022”) contains 53 weeks.

The Company’s Fiscal 2024 is a 52-week period ending March 30, 2024.

Summary of Significant Accounting Policies

18 unchanged sentences

These estimates are based on such factors as historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.

The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 (in millions):

The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended April 1, 2023, April 2, 2022, and March 27, 2021 (in millions):

of Year Amounts

3 unchanged sentences

Fiscal Year Ended April 1, 2023 $ 92 $ 400 $ ( 397 ) $ 95

Fiscal Year Ended March 27, 2021 166 313 ( 381 ) 98

Fiscal Year Ended April 2, 2022 98 333 ( 339 ) 92

Fiscal Year Ended March 27, 2021 166 313 ( 381 ) 98

15 unchanged sentences

Shipping and Handling

Freight-in expenses are recorded as part of cost of goods sold, along with product costs and other costs to acquire inventory.

Inbound freight expenses are recorded as part of cost of goods sold, along with product costs and other costs to acquire inventory.

The costs of preparing products for sale, including warehousing expenses, are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss).

Selling, general and administrative expenses also include the costs of shipping products to the Company’s e-commerce customers.

Outbound freight expenses are recorded as part of selling, general and administrative expenses and include the costs of shipping products to the Company’s e-commerce customers.

Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss) were $ 270 million, $ 236 million and $ 160 million for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

1 unchanged sentence

COVID-19 Related Government Assistance and Subsidies

During Fiscal 2022 and Fiscal 2021, the Company recorded $ 10 million and $ 37 million, respectively, related to government assistance and subsidies.

There was no government assistance or subsidies recorded in Fiscal 2020.

During Fiscal 2023, Fiscal 2022 and Fiscal 2021, the Company recorded $ 6 million, $ 10 million and $ 37 million, respectively, related to government assistance and subsidies.

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

1 unchanged sentence

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 April 2, 2022 and March 27, 2021 are credit card receivables of $ 18 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 April 2, 2022 and March 27, 2021 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:

Included in the Company’s cash and cash equivalents as of April 1, 2023 and April 2, 2022 are credit card receivables of $ 22 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 April 1, 2023 and April 2, 2022 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:

Fiscal Years Ended

2022 March 27, 2021

2023 April 2,

Reconciliation of cash, cash equivalents and restricted cash

2 unchanged sentences

Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 256 $ 172

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 recorded on the Company’s consolidated balance sheets as of April 2, 2022 and March 27, 2021 were $ 31 million and $ 28 million, respectively.

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

The combined total of raw materials and work in process recorded on the Company’s consolidated balance sheets as of April 1, 2023 and April 2, 2022 were $ 47 million and $ 31 million, respectively.

Inventories are stated at the lower of cost or net realizable value.

14 unchanged sentences

Leasehold improvements are amortized using the straight-line method over the shorter of the estimated remaining useful lives of the related assets or the remaining lease term, including highly probable renewal periods.

The Company includes all depreciation and amortization expense as a component of total operating expenses, as the underlying long-lived assets are not directly or indirectly related to bringing the Company’s products to their existing location and condition.

Maintenance and repairs are charged to expense in the year incurred.

41 unchanged sentences

During the fourth quarter of Fiscal 2023, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for each brand.

Based on qualitative impairment assessment of the Michael Kors reporting units, the Company concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired.

Based on a qualitative impairment assessment of the Michael Kors reporting units, the Company concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired.

The Company elected to perform quantitative impairment analyses for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of reporting units.

The Company also elected to perform an impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values.

Based on the results of these assessments, the Company concluded that the fair values of the Jimmy Choo and Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

The Company also elected to perform a quantitative impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values.

The Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair value of each brands’ reporting units.

The Company also elected to perform a quantitative impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values.

Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo licensing reporting unit and Jimmy Choo wholesale brand indefinite-lived intangible asset and Versace reporting units or brand intangible assets, as the fair values of the reporting units and the brand intangible assets exceeded the related carrying amounts.

However, the Company concluded that the fair value of the Jimmy Choo retail and wholesale reporting units goodwill, along with the Jimmy Choo retail brand indefinite-lived intangible assets, did not exceed their related carrying amounts.

The resulting impairment charges were primarily related to a higher discount rate in the current year driven by higher risk-free rates.

Accordingly, the Company recorded impairment charges of $ 82 million related to the Jimmy Choo retail and wholesale reporting units goodwill and $ 24 million related to the Jimmy Choo retail brand intangible assets during Fiscal 2023.

The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended April 1, 2023.

In Fiscal 2022, the Company did no t incur any impairment charges.

In Fiscal 2021, the Company recorded impairment charges of $ 94 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $ 69 million related to the Jimmy Choo brand intangible assets.

The Company recorded impairment charges of $ 171 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $ 180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020.

The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal years ended March 27, 2021 and March 28, 2020.

The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended March 27, 2021.

See Note 8 for information relating to the Company’s annual impairment analysis performed during the fourth quarter of Fiscal 2023, Fiscal 2022 and Fiscal 2021.

It is possible that the Company’s conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) the Company’s businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of the Company’s reporting units change, among other factors.

It is possible that the Company’s conclusions regarding impairment or recoverability of goodwill or other indefinite-lived intangible assets could change in future periods if, for example, (i) the Company’s businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of the Company’s reporting units change, among other factors.

Such changes could result in a future impairment charge of goodwill or other indefinite-lived intangible assets.

The Company uses a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation and employee-related health care benefits.

The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from claims.

The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from certain claims.

Self-insurance claims filed and claims incurred but not reported are accrued based upon management’s estimates of the discounted cost for self-insured claims incurred using actuarial assumptions, historical loss experience, actual payroll and other data.

10 unchanged sentences

The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted stock units (“RSUs”) and performance-based RSUs.

These fair values are recognized as

expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.

These fair values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.

Foreign Currency Translation and Transactions

3 unchanged sentences

The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other comprehensive income.

Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency (gain) loss on the Company’s consolidated statements of operations and comprehensive income (loss).

Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive income (loss).

Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions.

The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currencies for certain transactions.

The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions.

The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions.

The Company employs these forward contracts to hedge the Company’s cash flows, as they relate to transactions denominated in foreign currencies.

Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated.

1 unchanged sentence

The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges.

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.

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

The changes in the fair value for contracts designated as cash flow hedges are 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 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 (gain) loss in the Company’s consolidated statements of operations and comprehensive income (loss).

If the hedge is no longer expected to be highly effective, 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 (gain) in the Company’s consolidated statements of operations and comprehensive income (loss).

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.

2 unchanged sentences

The aforementioned forward contracts generally have a term of no more than 12 months.

The period of these contracts is directly related to the foreign transaction they are intended to hedge.

The period of these contracts is directly related to the transactions they are intended to hedge.

Net Investment Hedges

The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its United States dollar and these foreign currencies.

The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between different currencies.

The Company has elected the spot method of designating these contracts under 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 expense in the Company’s consolidated statements of operations and comprehensive income (loss).

The net gain or loss on the net investment hedge is reported within foreign currency translation income (loss) (“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 expense (income), net in the Company’s consolidated statements of operations and comprehensive income (loss).

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

During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries.

The early termination of these hedges resulted in the Company receiving $ 296 million in cash during the fourth quarter of Fiscal 2020.

During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the United States dollar and these currencies.

As of April 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 United States dollar and these currencies.

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 expense 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 (loss).

Fair Value Hedges

When a cross-currency swap is designated as a fair value hedge and qualifies as highly effective, the fair value hedge will be recorded at fair value each period on the Company’s consolidated balance sheets, with the difference resulting from the changes in the spot rate recognized in foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive income (loss), which will offset the earnings impact of the original transaction being hedged for.

Deferred income tax assets and liabilities provide for temporary differences between the tax bases and financial reporting bases of the Company’s assets and liabilities using the tax rates and laws in effect for the periods in which the differences are expected to reverse.

The Company periodically assesses the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards are dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction.

The Company periodically reviews the recoverability of its deferred tax assets and provides valuation allowances, as deemed necessary, to reduce deferred tax assets to amounts that more-likely-than-not will be realized.

9 unchanged sentences

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 ten 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 January 2026.

The Company’s leases generally have terms of up to ten years , generally require fixed rent payments 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 August 2027.

The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring initiatives, as defined in Note 10.

24 unchanged sentences

The Company’s basic net income (loss) per ordinary share is calculated by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period.

Diluted net income (loss) per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and RSUs, were exercised or converted into ordinary shares.

Diluted net income (loss) per ordinary share reflects the potential dilution that would occur if RSUs or any other potentially dilutive instruments, including share option grants, were converted or exercised into ordinary shares.

These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods.

2 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

2 unchanged sentences

Weighted average dilutive share equivalents:

Share options and restricted stock units, and performance restricted stock units 2,773,232 — —

Share options, restricted stock units, and performance restricted stock units 1,470,471 2,773,232 —

Diluted weighted average shares 134,002,480 152,497,907 150,453,568

5 unchanged sentences

Share equivalents of 457,722 shares, 360,378 shares and 3,658,959 shares, for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively, have been excluded from the above calculation due to their anti-dilutive effect.

Diluted net loss per share attributable to Capri for Fiscal 2021 and Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.

Diluted net loss per share attributable to Capri for Fiscal 2021 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.

Noncontrolling Interest

The Company has an ownership interest in the Michael Kors Latin American joint venture, MK (Panama) Holdings, S.A.

and subsidiaries of 75 %, an ownership interest in the Jimmy Choo EMEA joint venture JC Gulf Trading LLC of 49 %, an ownership interest in the Jimmy Choo Macau joint venture J.

and subsidiaries of 75 %, an ownership interest in the Jimmy Choo EMEA joint venture JC Gulf Trading LLC of 49 % and an ownership interest in the Jimmy Choo Macau joint venture J.

Choo (Macau) Co.

Limited of 70 % and a 50 % ownership interest in J.

Choo Russia J.V.

Limited and its subsidiary.

Limited of 70 %.

Recently Adopted Accounting Pronouncements

6 unchanged sentences

The Company has considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have 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

In March 2020, the Financial Accounting Standards Board 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.

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 April 2, 2022, 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.

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.

Revenue Recognition

6 unchanged sentences

The Company has chosen to apply the practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations that have an expected duration of 12 months or less.

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

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).

Retail revenue is recognized when control of the product is transferred at the point of sale at Company owned stores, including concessions.

For e-commerce transactions, control is transferred and revenue is recognized when products are delivered to the customer, net of estimated returns.

For e-commerce transactions, control is transferred and revenue is recognized when products are delivered to the customer.

To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns.

6 unchanged sentences

The Company anticipates that substantially all of its outstanding gift cards will be redeemed within the next 12 months.

The contract liability related to gift cards, net of estimated “breakage,” was $ 13 million and $ 12 million as of April 2, 2022 and March 27, 2021, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

The contract liability related to gift cards, net of estimated “breakage,” was $ 14 million and $ 13 million as of April 1, 2023 and April 2, 2022, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

Loyalty Program .

3 unchanged sentences

The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia.

The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia and South America.

Wholesale revenue is recognized net of estimates for sales

returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers.

The Company also has arrangements where its products are sold to geographic

licensees in certain parts of EMEA, Asia and South America.

Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers.

To arrive at net sales for wholesale, gross sales are reduced by provisions for estimated future returns, as well as trade discounts, markdowns, allowances, operational chargebacks and certain cooperative selling expenses.

20 unchanged sentences

Sales Returns

For the sale of goods with a right of return, the Company recognizes revenue for the consideration to which it expects to be entitled and a refund liability for the amount it expects to refund to its customers within accrued expenses and other current liabilities.

For the sale of goods with a right of return, the Company recognizes revenue for the consideration for which it expects to be entitled and a refund liability for the amount it expects to refund to its customers within accrued expenses and other current liabilities.

The refund liability is estimated based on management’s review of historical and current customer returns for its retail and wholesale customers, estimated future returns, adjusted for non-resalable products.

1 unchanged sentence

The Company recognizes an asset with a corresponding adjustment to cost of sales for the right to recover the products from its retail and wholesale customers.

The refund liability recorded as of April 2, 2022 and March 27, 2021 was $ 52 million and $ 46 million, respectively, and the related asset for the right to recover returned product as of April 2, 2022 and March 27, 2021 was $ 15 million and $ 14 million, respectively.

The refund liability recorded as of April 1, 2023 and April 2, 2022 was $ 54 million and $ 52 million, respectively, and the related asset for the right to recover returned product as of April 1, 2023 and April 2, 2022 was $ 17 million and $ 15 million, respectively.

Contract Balances

The Company’s contract liabilities are recorded within accrued expenses and other current liabilities and other long-term liabilities in its consolidated balance sheets depending on the short- or long-term nature of the payments to be recognized.

Company’s contract liabilities primarily consist of gift card liabilities, advanced payments from product licensees and loyalty program liabilities.

Total contract liabilities were $ 30 million and $ 18 million as of April 2, 2022 and March 27, 2021, respectively.

During Fiscal 2022 and Fiscal 2021, the Company recognized $ 10 million and $ 9 million in revenue, respectively, relating to contract liabilities that existed at March 27, 2021 and March 28, 2020 , respectively.

There were no material contract assets recorded as of April 2, 2022 and March 27, 2021.

The Company’s contract liabilities primarily consist of gift card liabilities, advanced payments from product licensees and loyalty program liabilities.

Total contract liabilities were $ 36 million and $ 30 million as of April 1, 2023 and April 2, 2022, respectively.

During Fiscal 2023 and Fiscal 2022, the Company recognized $ 13 million and $ 10 million in revenue, respectively, relating to contract liabilities that existed at April 2, 2022 and March 27, 2021 , respectively.

There were no material contract assets recorded as of April 1, 2023 and April 2, 2022.

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

2 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

17 unchanged sentences

Balance Sheet Location April 1,

2022 March 27,

2023 April 2,

Operating leases Operating lease right-of-use assets $ 1,330 $ 1,358

1 unchanged sentence

Operating leases Long-term portion of operating lease liabilities $ 1,348 $ 1,467

The components of net lease costs for the fiscal year ended April 2, 2022 and March 27, 2021 were as follows (in millions):

The components of net lease costs for the fiscal year ended April 1, 2023 and April 2, 2022 were as follows (in millions):

Consolidated Statement of Operations and

Comprehensive Income (Loss) Location April 1,

2022 March 27,

2023 April 2,

Operating lease cost Selling, general and administrative expenses $ 405 $ 410

2 unchanged sentences

Short-term lease cost Selling, general and administrative expenses 8 16

Sublease income Selling, general and administrative expenses ( 9 ) ( 3 )

Sublease income (2)

Restructuring and other charges — ( 5 )

Sublease income Selling, general and administrative expenses ( 3 ) ( 2 )

Total lease cost, net $ 574 $ 553

(1) The Company elected to account for rent concessions negotiated in connection with COVID-19 as if it were contemplated as part of the existing contract and these concessions are recorded as variable lease expense.

As of the fiscal year ended April 2, 2022 and March 27, 2021, rent concessions due to COVID-19 were $ 15 million and $ 52 million, respectively.

As of the fiscal year ended April 1, 2023 and April 2, 2022, rent concessions due to COVID-19 were $ 14 million and $ 15 million, respectively.

(2) The Company recorded sublease income related to certain leases in connection with the Capri Retail Store Optimization plan.

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

2022 March 27,

2023 April 2,

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

3 unchanged sentences

Rent concessions due to COVID-19 14 15

The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheets as of April 2, 2022 and March 27, 2021:

2022 March 27,

2023 April 2,

Operating leases:

17 unchanged sentences

Fiscal 2028 4

Thereafter 10

Total sublease income $ 36

Additionally, the Company had approximately $ 49 million and $ 23 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of April 2, 2022 and March 27, 2021, respectively.

Additionally, the Company had approximately $ 139 million and $ 49 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of April 1, 2023 and April 2, 2022, respectively.

See Note 2 for additional information on the Company’s accounting policies related to leases.

1 unchanged sentence

Receivables, net consist of (in millions):

2022 March 27,

2023 April 2,

Trade receivables (1)

2 unchanged sentences

Total receivables, net $ 369 $ 434

(1) As of April 2, 2022 and March 27, 2021, $ 83 million and $ 81 million, respectively, of trade receivables were insured.

(1) As of April 1, 2023 and April 2, 2022, $ 96 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 and $ 25 million as of April 2, 2022 and March 27, 2021, respectively, including the impact related to COVID-19.

The Company had credit loss of $ 7 million, $( 3 ) million and $ 29 million, respectively, for Fiscal 2022, Fiscal 2021 and Fiscal 2020.

Allowance for credit losses was $ 8 million and $ 10 million as of April 1, 2023 and April 2, 2022, respectively.

The Company had credit losses of $ 5 million, $ 7 million and $( 3 ) million, respectively, for Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Concentration of Credit Risk, Major Customers and Suppliers

10 unchanged sentences

The Company also has relationships with various agents who source finished goods with numerous contractors on behalf of its Michael Kors brand.

For Fiscal 2022, Fiscal 2021 and Fiscal 2020, one agent sourced approximately 24 %, 26 % and 26 %, respectively, of Michael Kors finished goods, based on unit volume.

For Fiscal 2023, Fiscal 2022 and Fiscal 2021, one agent sourced approximately 15 %, 14 % and 15 %, respectively, of Michael Kors finished goods, based on dollar volume.

Property and Equipment, net

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

2022 March 27,

2023 April 2,

Leasehold improvements $ 577 $ 575

Furniture and fixtures 218 350

Computer equipment and software 237 212

Furniture and fixtures 216 218

Equipment 106 81

3 unchanged sentences

accumulated depreciation and amortization ( 784 ) ( 790 )

( 790 ) ( 1,271 )

Subtotal 462 410

1 unchanged sentence

Total property and equipment, net $ 552 $ 476

(1) During the fiscal year ended April 2, 2022, the Company wrote off $ 552 million of fully depreciated assets and related accumulated depreciation for assets which were no longer in service.

Depreciation and amortization of property and equipment for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 totaled $ 144 million, $ 165 million and $ 200 million, respectively.

Depreciation and amortization of property and equipment for the fiscal years ended April 1, 2023, April 2, 2022, and March 27, 2021 totaled $ 135 million, $ 144 million and $ 165 million, respectively.

During Fiscal 2023, Fiscal 2022 and Fiscal 2021, the Company recorded property and equipment impairment charges of $ 3 million, $ 7 million and $ 23 million, respectively, primarily related to the Company’s retail store locations.

2 unchanged sentences

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

April 2, 2022 March 27, 2021

April 1, 2023 April 2, 2022

Amount Accumulated

Amortization Net Carrying Amount Gross

Amortization/Impairment Net Carrying Amount Gross

Amount Accumulated

Amortization Net Carry Amount

Amortization/Impairment Net Carry Amount

Definite-lived intangible assets:

10 unchanged sentences

Total intangible assets, excluding goodwill $ 2,269 $ 541 $ 1,728 $ 2,324 $ 477 $ 1,847

(1) The year-over-year change in net carrying amount reflects an impairment charge of $ 24 million and foreign currency translation of $ 20 million for the fiscal year ended April 1, 2023.

There was no impairment charge for the fiscal year ended April 2, 2022.

(2) The year-over-year change in net carrying amount reflects foreign currency translation for the fiscal year ended April 1, 2023.

As of April 2, 2022, the Company had accumulated impairment charges of $ 249 million related to the Jimmy Choo brand intangible assets.

Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the former licensing agreement.

1 unchanged sentence

Customer relationships are generally amortized over five to eighteen years .

Amortization expense for the Company’s definite-lived intangibles was $ 49 million, $ 47 million and $ 49 million, respectively, for each of the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.

Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.

Amortization expense for the Company’s definite-lived intangibles was $ 44 million, $ 49 million and $ 47 million, respectively, for each of the fiscal years ended April 1, 2023, April 2, 2022 and March 27, 2021.

Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life as they are essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.

Estimated amortization expense for each of the next five years is as follows (in millions):

5 unchanged sentences

Fiscal 2029 and thereafter 333

The future amortization expense above reflects weighted-average estimated remaining useful lives of nineteen years for reacquired rights, one year for trademarks and eleven years for customer relationships.

The future amortization expense above reflects weighted-average estimated remaining useful lives of eighteen years for reacquired rights and ten years for customer relationships.

The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):

1 unchanged sentence

Balance at March 27, 2021 $ 933 $ 445 $ 120 $ 1,498

Foreign currency translation

( 59 ) ( 21 ) — ( 80 )

Balance at April 2, 2022 874 424 120 1,418

Impairment charges (1)

1 unchanged sentence

Foreign currency translation

Balance at March 27, 2021 933 445 120 1,498

Foreign currency translation

( 17 ) ( 26 ) — ( 43 )

Balance at April 1, 2023 $ 857 $ 316 $ 120 $ 1,293

(1) The Company recorded impairment charges of $ 94 million during Fiscal 2021 related to the Jimmy Choo wholesale and licensing reporting units.

(1) The Company recorded impairment charges of $ 82 million during Fiscal 2023 related to the Jimmy Choo retail and wholesale reporting units.

As of April 1, 2023, the Company had accumulated impairment charges of $ 347 million related to Jimmy Choo reporting units.

The Company’s goodwill and the Versace and Jimmy Choo brands are not subject to amortization but are evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist.

4 unchanged sentences

The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values.

Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo and Versace reporting units or brand intangible assets, as the fair values of the reporting units and the brand intangible assets exceeded the related carrying amounts.

Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo Licensing reporting unit goodwill or Wholesale brand intangible assets and Versace reporting units goodwill or brand intangible assets, as the fair values of the reporting units and the brand intangible assets exceeded the related carrying amounts.

However, the Company concluded that the fair value of the Jimmy Choo Retail and Wholesale reporting units goodwill, along with the Jimmy Choo Retail brand indefinite-lived intangible assets did not exceed their related carrying amounts.

These impairment charges were primarily related to a higher discount rate in the current year driven by higher risk-free rates.

Accordingly, the Company recorded goodwill impairment charges of $ 82 million related to the Jimmy Choo Retail and Wholesale reporting units and $ 24 million related to the Jimmy Choo Retail brand intangible assets during Fiscal 2023.

The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended April 1, 2023.

In Fiscal 2022, the Company did no t incur any impairment charges.

In Fiscal 2021, the Company recorded goodwill impairment charges of $ 94 million related to the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units and impairment charges of $ 69 million related to the Jimmy Choo brand intangible assets.

In Fiscal 2020, the Company recorded goodwill impairment charges of $ 171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and impairment charges of $ 180 million related to the Jimmy Choo brand intangible assets.

The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal year ended March 27, 2021.

See Note 13 for additional information.

1 unchanged sentence

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

2022 March 27,

2023 April 2,

Prepaid taxes $ 105 $ 86

Other accounts receivables 17 13

Prepaid contracts 22 15

Interest receivable related to net investment hedges 13 12

Interest receivable related to hedges 10 13

Other accounts receivables 10 17

Total prepaid expenses and other current assets $ 195 $ 192

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

2022 March 27,

Other taxes payable $ 61 $ 46

2023 April 2,

Return liabilities $ 54 $ 52

Accrued capital expenditures 33 39

Other taxes payable 32 61

Accrued advertising and marketing 26 21

Accrued rent (1)

Advance royalties 18 7

Accrued interest 16 10

Gift and retail store credits 14 17

2 unchanged sentences

Accrued purchases and samples 8 11

Accrued interest 10 10

Charitable donations (2)

Restructuring liability 1 9

Total accrued expenses and other current liabilities $ 314 $ 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 April 2, 2022 and 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 April 2, 2022 which was funded during the third quarter ended December 31, 2022.

Restructuring and Other Charges

Capri Retail Store Optimization Program

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

The Company closed a total of 167 of its retail stores, with 66 and 101 stores having closed during Fiscal 2022 and Fiscal 2021, respectively.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $ 14 million, of which $ 9 million and $ 5 million was recorded during Fiscal 2022 and Fiscal 2021,

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

Additions charged to expense (1)

Payments ( 1 ) ( 5 ) ( 6 )

Balance at April 2, 2022

(1) Excludes $ 10 million of impairment charges related to operating lease right-of-use assets partially offset by a net credit of $ 5 million related to gains on certain lease terminations during Fiscal 2022.

Other Restructuring Charges

In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company incurred charges of $ 15 million primarily relating to severance for an executive officer and the closure of certain corporate locations during Fiscal 2022.

In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company incurred charges of $ 8 million primarily relating to the closure of certain corporate locations during Fiscal 2021.

The Company recorded costs of $ 18 million and $ 19 million during Fiscal 2022 and Fiscal 2021, respectively, for equity awards associated with the acquisition of Versace.

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.

The Company closed a total of 167 stores, with 66 and 101 stores closed during Fiscal 2022 and Fiscal 2021, respectively.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $ 14 million, of which $ 9 million and $ 5 million was recorded during Fiscal 2022 and Fiscal 2021, respectively.

Other Charges

During Fiscal 2023, the Company recorded costs of $ 16 million primarily relating to equity awards associated with the acquisition of Versace.

During Fiscal 2022 the Company recorded costs of $ 33 million, primarily relating to equity awards associated with the acquisition of Versace, severance related to an executive officer and the closure of certain corporate locations.

During Fiscal 2021, the Company recorded costs of $ 27 million, primarily relating to equity awards associated with the acquisition of Versace and the closure of certain corporate locations.

Debt Obligations

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

2022 March 27,

Term Loan $ 497 $ 870

2023 April 2,

Revolving Credit Facilities $ 874 $ 175

Versace Term Loan 488 —

Senior Notes due 2024

Revolving Credit Facility 175 —

2018 Term Loan — 497

Total debt 1,829 1,164

5 unchanged sentences

Senior Revolving Credit Facility

The Company’s credit facility (the “2018 Credit Facility”) provides for a $ 1 billion revolving credit facility (the “Revolving Credit Facility”), which may be denominated in United States dollars.

The Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to $ 75 million and swing loans of up to $ 75 million.

The 2018 Credit Facility also provides for a $ 1.6 billion term loan facility (the “2018 Term Loan Facility”).

The 2018 Term Loan Facility is divided into two tranches, with the second tranche maturing in December 2023, which requires a quarterly payment of $ 24 million.

As of March 27, 2021, the Company has fully paid off the first tranche of the 2018 Term Loan Facility.

Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, for loans denominated in United States dollars, 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 the one-month London Interbank Offered Rate adjusted for

statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the Company’s public debt ratings;

Borrowings under the 2018 Term Loan Facility bear interest, at the Company’s option, at (a) the alternate base rate plus an applicable margin based on the Company’s public debt ratings;

or (b) the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt ratings.

On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated 2018 Credit Facility, dated as of November 15, 2018, with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “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 1.0 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-United States dollar (i.e.

Pounds Sterling, Euro, Swiss Francs and Japanese Yen) currency LIBOR rate tenors under the 2018 Credit Facility after December 31, 2021 given that non-United States dollar LIBOR will no longer be published after that date.

The Revolving Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10 % to 0.25 % per annum, based on the Company’s public debt ratings, applied to the average daily unused amount of the Revolving Credit Facility.

The 2018 Term Loan Facility provides for a commitment fee equal to 0.10 % to 0.25 % per annum, based on the Company’s public debt ratings, applied to the undrawn amount of the 2018 Term Loan Facility, from January 6, 2019 until the term loans are fully drawn or the commitments under the 2018 Term Loan Facility terminate or expire.

Loans under the 2018 Credit Facility may be repaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than the customary breakage costs with respect to loans bearing interest based on Adjusted LIBOR or the Canadian Dollar Offered Rate.

As per the reinstatement election date of May 27, 2021, the Company will be required to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00.

Such leverage ratio is calculated based on the ratio of consolidated total indebtedness plus the capitalized amount of all operating lease liabilities presented on our consolidated balance sheets to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters.

Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash charges, subject to certain additions and deductions.

The 2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type.

As of April 2, 2022 and the date these financial statements were issued, the Company was in compliance with all covenants related to the 2018 Credit Facility.

The 2018 Credit Facility contains events of default customary for financings of this type, including, but not limited to, payment of 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 2018 Credit Facility to be in full force and effect, and changes of control.

If such an event of default occurs, the lenders under the 2018 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2018 Credit Facility, subject to “certain funds” limitations in connection with the transaction governing the 2018 Term Loan Facility.

As of April 2, 2022, the Company had $ 175 million of borrowings outstanding under the Revolving Credit Facility, which were recorded within long-term debt in its consolidated balance sheets.

As of March 27, 2021, the Company had no borrowings outstanding under the Revolving Credit Facility.

In addition, stand-by letters of credit of $ 21 million and $ 27 million were outstanding as of April 2, 2022 and March 27, 2021, respectively.

At April 2, 2022 and March 27, 2021, the amount available for future borrowings under the Revolving Credit Facility were $ 804 million and $ 973 million, respectively.

As of March 27, 2021, the Company had $ 230 million available for future borrowings under the 364 Day Facility, which was terminated as of May 25, 2021.

As of April 2, 2022, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $ 495 million, net of debt issuance costs of $ 2 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 values of borrowings outstanding under the 2018 Term Loan Facility were $ 865 million, net of debt issuance costs of $ 5 million, $ 97 million of which was recorded within short-term debt while $ 768 million was recorded within long-term debt in the Company’s consolidated balance sheets.

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 Secured Overnight Financing Rate (“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 April 1, 2023.

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 April 1, 2023, the Company had $ 874 million 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 $ 3 million and $ 21 million were outstanding as of April 1, 2023 and April 2, 2022, respectively.

At April 1, 2023, the amount available for future borrowings under the 2022 Revolving Credit Facility was $ 623 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 April 1, 2023, the Company no longer had an outstanding balance related to the 2018 Term Loan.

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

The Company had $ 6 million and $ 3 million of deferred financing fees related to Revolving Credit Facilities as of April 1, 2023 and April 2, 2022, respectively, and are recorded within other assets in the Company’s consolidated balance sheets.

As of April 2, 2022, the Company had $ 2 million of deferred financing fees related to the 2018 Term Loan, which are recorded within long-term debt in the Company’s consolidated balance sheets.

Versace Term Loan

On December 5, 2022, Gianni Versace S.r.l., a wholly owned subsidiary of Capri Holdings Limited, entered into a credit facility with Intesa Sanpaolo S.p.A., Banco Nazionale del Lavoro S.p.A., and UniCredit S.p.A., as arrangers and lenders, and Intesa Sanpaolo S.p.A., as agent, which provides a senior unsecured term loan (the “Versace Term Loan”) in an aggregate principal amount of € 450 million (approximately $ 488 million).

The Versace Term Loan is not subject to amortization and matures on December 5, 2025.

The Company provides an unsecured guaranty of the Versace Term Loan.

The Versace Term Loan bears interest at a rate per annum equal to the greater of EURIBOR for the applicable interest period and zero, plus a margin of 1.35 %.

The Versace Term Loan may be prepaid without premium or penalty other than customary “breakage” costs.

The Versace Term Loan 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.

The Versace Term Loan also includes covenants that limit additional financial indebtedness, liens, acquisitions, loans and guarantees, restricted payments and mergers of GIVI Holding S.r.l., Gianni Versace S.r.l.

and their respective subsidiaries.

The Versace Term Loan 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 material financial indebtedness, certain events of bankruptcy or insolvency, illegality or repudiation of any loan document under the Versace Term Loan or any failure thereof 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 Versace Term Loan would be entitled to take various actions, including, but not limited to, accelerating amounts outstanding under the Versace Term Loan.

As of April 1, 2023, the carrying value of the Versace Term Loan was $ 487 million, net of $ 1 million of deferred financing fees, which was recorded within long-term debt in the Company’s consolidated balance sheets.

As of April 1, 2023, and the date these financial statements were issued, the Company was in compliance with all covenants related to the 2022 Credit Facility and the Versace Term Loan.

On October 20, 2017, Michael Kors (USA), Inc.

5 unchanged sentences

Interest on the Senior Notes is payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2018.

See Note 20 for additional information.

The Senior Notes are unsecured and are guaranteed by the Company and its existing and future subsidiaries that guarantee or are borrowers under the 2022 Credit Facility (subject to certain exceptions, including subsidiaries organized in China).

4 unchanged sentences

These covenants are subject to important limitations and exceptions, as per the Indenture.

As of April 2, 2022 and March 27, 2021, the carrying value of the Senior Notes was $ 448 million and $ 447 million, respectively, net of issuance costs and unamortized discount, which were recorded within long-term debt in the Company’s consolidated balance sheets.

As of April 1, 2023 and April 2, 2022, the carrying value of the Senior Notes was $ 449 million and $ 448 million, respectively, net of issuance costs and unamortized discount of $ 1 million and $ 2 million, respectively, which were recorded within long-term debt in the Company’s consolidated balance sheets.

Supplier Financing Program

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

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.

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 April 2, 2022 and March 27, 2021 was $ 21 million and $ 17 million, respectively and is presented as short-term debt in the Company’s consolidated balance sheets.

The amount outstanding under this program as of April 1, 2023 and April 2, 2022 was $ 4 million and $ 21 million, respectively and is presented as short-term debt in the Company’s consolidated balance sheets.

Japan Credit Facility

In Fiscal 2021, the Company’s subsidiary in Japan renewed a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion.

The Japan Credit Facility is in effect through November 2022.

As of April 1, 2023, the Company’s subsidiary in Japan had a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion.

The Japan Credit Facility is in effect until the Company’s decides to terminate the revolving line of credit.

The Japan Credit Facility provides Michael Kors Japan K.K.

1 unchanged sentence

The Japan Credit Facility bears interest at a rate posted by the Bank plus 0.300 % two business days prior to the date of borrowing or the date of interest renewal.

As of April 2, 2022 the Company had no borrowings outstanding under the Japan Credit Facility and $ 9 million borrowings outstanding as of March 27, 2021, which were recorded within short-term debt in the Company’s consolidated balance sheets.

Hong Kong Credit Facility

In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through January 2023 subject to the bank’s discretion.

The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong dollar (approximately $ 13 million), which includes bank guarantees of up to 20 million HKD (approximately $ 3 million).

Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong dollar and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 200 basis points.

As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the HK Credit Fac ility.

As of April 2, 2022, bank guarantees supported by this facility were 1 million Hong Kong dollar (less than $ 1 million).

China Credit Facility

In January 2019, the Company’s subsidiary in China, MKTSCL, entered into a short-term credit facility (“China Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months.

The China Credit Facility is in effect through October 2022.

The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 65 million (approximately $ 10 million), which includes a revolving loan of RMB 35 million (approximately $ 5 million), an overdraft facility with a credit line of RMB 10 million (approximately $ 2 million) and a non-financial bank guarantee facility of RMB 20 million (approximately $ 3 million) or its equivalent in another currency, at lender’s discretion.

Borrowings under the China Credit Facility bear interest at plus 0.42 % of the applicable People’s Bank of China’s benchmark lending rate at the time of borrowing.

As of April 2, 2022 and March 27, 2021, the Company had no borrowings outstanding under the China Credit Facility.

As of April 1, 2023 and April 2, 2022, there were no borrowings outstanding under the Japan Credit Facility.

Hong Kong Credit Facilities

As of April 1, 2023, the Company’s Hong Kong subsidiary, Michael Kors (HK) Limited and Subsidiaries (“MKHKL”), had an uncommitted credit facility (“HK HSBC Credit Facility”) with HSBC Bank (“HSBC”), which may be used to fund general working capital needs of MKHKL through January 2024 subject to HSBC’s discretion.

The HK Credit Facility provides MKHKL with a revolving line of credit of up to 50 million Hong Kong dollars (approximately $ 6 million), which includes bank guarantees of up to 20 million Hong Kong dollars (approximately $ 3 million).

Borrowings under the HK HSBC Credit Facility must be made in increments of at least 5 million Hong Kong dollars and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 200 basis points.

As of April 1, 2023 and April 2, 2022, there were no borrowings outstanding under the HK HSBC Credit Fac ility.

As of April 1, 2023, bank guarantees supported by this facility were 4 million Hong Kong dollars (approximately $ 1 million).

As of April 1, 2023, the Company’s Hong Kong subsidiary, MKHKL, had a short-term credit facility (“HK SCB Credit Facility”) with Standard Charter Bank (“SCB”), which may be used to fund general working capital needs, not to exceed 12 months.

The HK SCB Credit Facility is in effect through January 2024.

The HK SCB Credit Facility provides MKHKL with a revolving loan of up to 20 million Hong Kong dollars (approximately $ 3 million).

Borrowings under the HK SCB Credit Facility bear interest at 1.5 % per annum at the time of borrowing.

As of April 1, 2023, the Company had no borrowings outstanding under the HK SCB Credit Facility.

China Credit Facilities

As of April 1, 2023, the Company’s subsidiary in China, Michael Kors Trading (Shanghai) Company Limited (“MKTSCL”), had a short-term credit facility (“China HSBC Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months.

The China Credit Facility is in effect through January 2024.

The China HSBC Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 65 million (approximately $ 9 million), which includes a revolving loan of RMB 35 million (approximately $ 5 million), an overdraft facility with a credit line of RMB 10 million (approximately $ 1 million) and a non-financial bank guarantee facility of RMB 20 million (approximately $ 3 million) or its equivalent in another currency, at lender’s discretion.

Borrowings under the China HSBC Credit Facility bear interest at

plus 0.42 % of the applicable People’s Bank of China’s benchmark lending rate at the time of borrowing.

As of April 1, 2023 and April 2, 2022, the Company had no borrowings outstanding under the China HSBC Credit Facility.

As of April 1, 2023, the Company’s subsidiary in China, MKTSCL, had a short-term credit facility (“China SCB Credit Facility”) with SCB, which may be used to fund general working capital needs, not to exceed 12 months.

The China SCB Credit Facility is in effect through April 2024.

The China SCB Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 30 million (approximately $ 4 million), which includes a revolving loan of RMB 20 million (approximately $ 3 million) and a bank guarantee with a sublimit of the revolving loan of RMB 10 million (approximately $ 1 million).

Borrowings under the China SCB Credit Facility bear interest at plus 0.15 % of the applicable People’s Bank of China’s benchmark lending rate at the time of borrowing.

As of April 1, 2023 and April 2, 2022, the Company had no borrowings outstanding under the China SCB Credit Facility.

Versace Facilities

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.

During Fiscal 2022, the Company's subsidiary, GIVI Holding S.r.l.

(“GIVI”), 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 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.

In June 2019, the Company’s subsidiary, Versace, entered into two uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace.

The Versace Credit Facilities provide Versace with a swing line of credit of up to € 32 million (approximately $ 35 million), with interest set by the bank on the date of borrowing.

As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.

In November 2018, Versace entered into an overdraft facility (“Versace Overdraft Facility”), which may be used for general working capital needs of Versace.

The overdraft facility provided Versace with a line of credit of up to € 5 million (approximately $ 6 million).

During the second quarter of Fiscal 2022, the Versace Overdraft Facility was terminated.

As of March 27, 2021, there were no borrowings outstanding under the Versace Overdraft Facility.

In January 2018, Versace entered into an uncommitted short-term credit facility (“Versace Credit Facility”), which may be used for general working capital needs of Versace.

The Versace Credit Facility provides Versace with a swing line of credit of up to € 20 million (approximately $ 22 million), which includes a bank guarantee of € 4 million (approximately $ 5 million), with interest set by the bank on the date of borrowing.

As of April 1, 2023, the outstanding balance was $ 11 million, with $ 1 million and $ 10 million recorded within short-term debt and long-term debt, respectively, in the Company’s consolidated balance sheets, respectively.

As of April 1, 2023, the Company’s subsidiary, Gianni Versace S.r.l.

(“Versace”), had two uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace.

The Versace Credit Facilities are in effect until Unicredit or Intesa decides to terminate the credit facilities.

The Versace Credit Facilities provide Versace with a swing line of credit of up to € 25 million (approximately $ 27 million), with interest set by Unicredit or Intesa on the date of borrowing.

As of April 1, 2023 and April 2, 2022, there were no borrowings outstanding under the Versace Credit Facility.

As of April 1, 2023, Versace had an uncommitted short-term credit facility with BNP Paribas (“Versace BNP Credit Facility”), which may be used for general working capital needs of Versace.

The Versace BNP Credit Facility is in effect until BNP Paribas decides to terminate the credit facility.

The Versace BNP Credit Facility provides Versace with a swing line of credit of up to € 20 million (approximately $ 22 million), which includes a bank guarantee of € 5 million (approximately $ 5 million), with interest set by BNP Paribas on the date of borrowing.

As of April 1, 2023, bank guarantees outstanding under this facility were € 4 million (approximately $ 4 million).

As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.

As of April 1, 2023 and April 2, 2022, there were no borrowings outstanding under the Versace BNP Credit Facility.

Commitments and Contingencies

1 unchanged sentence

Other Commitments

As of April 2, 2022, the Company also has other contractual commitments aggregating $ 2.288 billion, which consist of inventory purchase commitments of $ 1.016 billion, debt obligations of $ 1.164 billion and other contractual obligations of $ 108 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.

As of April 1, 2023, the Company also has other contractual commitments aggregating $ 2.729 billion, which consist of inventory purchase commitments of $ 775 million, debt obligations of $ 1.829 billion and other contractual obligations of $ 125 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.

Long-term Employment Contract

13 unchanged sentences

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

At April 2, 2022 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 April 1, 2023 and April 2, 2022, the fair value 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 of 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 values of net investment hedges and fair value hedges 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.

See Note 14 for further detail.

1 unchanged sentence

Fair value at April 1, 2023, using:

Fair value at March 27, 2021, using:

Fair value at April 2, 2022, using:

Quoted prices

12 unchanged sentences

Net investment hedges — 36 — — 37 —

Interest rate swaps — — — — 1 —

Fair value hedges — 3 — — — —

Total derivative liabilities $ — $ 39 $ — $ — $ 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):

April 2, 2022 March 27, 2021

April 1, 2023 April 2, 2022

Carrying Value Estimated

Fair Value Carrying Value Estimated

Revolving Credit Facilities $ 874 $ 874 $ 175 $ 175

Versace Term Loan $ 487 $ 481 $ — $ —

Senior Notes due 2024 $ 449 $ 435 $ 448 $ 451

2018 Term Loan $ — $ — $ 495 $ 490

Revolving Credit Facilities $ 175 $ 175 $ — $ —

The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value.

4 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.

See Note 2 for additional information.

The following table details the carrying values and fair values of the Company’s assets that have been impaired (in millions):

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

Goodwill $ 681 $ 599 $ 82

Operating Lease Right-of-Use Assets

$ 209 $ 133 $ 76

Brands 224 200 24

Property and Equipment

1 unchanged sentence

Operating Lease Right-of-Use Assets $ 209 $ 133 $ 76

Goodwill 319 225 94

Brands 407 338 69

Property and Equipment 12 5 7

1 unchanged sentence

Operating Lease Right-of-Use Assets $ 326 $ 191 $ 135

Brands 547 367 180

Goodwill 319 225 94

Brands 407 338 69

Property and Equipment 30 7 23

4 unchanged sentences

Forward Foreign Currency Exchange Contracts

The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions.

The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currencies for certain of its transactions.

The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to certain forecasted inventory purchases by using forward foreign currency exchange contracts.

2 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.

Due to an other-than-insignificant financing element for certain of these modifications, $ 31 million of net interest cash receipts during Fiscal 2022 related to these contracts were classified as financing activities in the Company’s consolidated statements of cash flows.

During the third and fourth quarter of Fiscal 2022, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1.5 billion and $ 2.475 billion, respectively.

The modification of these hedges resulted in the Company receiving $ 59 million and $ 130 million in cash during the third and fourth quarter of Fiscal 2022, respectively.

These amounts are classified within investing activities in the Company’s consolidated statements of cash flows.

Under the term of these contracts, the Company will exchange the semi-annual fixed rate payments on United States denominated debt for fixed rate payments of 0 % to 3.565 % in Euros and 0 % to 3.408 % 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 March 2024 and February 2051.

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 2024.

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 amounts 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 amounts of $ 4 billion.

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

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

During the third quarter of Fiscal 2023, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of € 1 billion (approximately $ 1.07 billion) to hedge its net investment in GBP denominated subsidiaries (the “GBP/EUR Net Investment Hedges”).

Under the terms of these contracts, the Company will exchange the semi-annual fixed rate payments on GBP denominated debt for fixed rate payments of 0 % in Euro.

These contracts have maturity dates between November 2024 and November 2027 and are designated as net investment hedges.

As of April 1, 2023, 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 United States 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.

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 (loss).

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 (income) in the Company’s consolidated statements of operations and comprehensive income (loss).

Accordingly, the Company recorded interest income of $ 38 million, $ 63 million and $ 16 million, respectively, during Fiscal 2023, Fiscal 2022 and Fiscal 2021.

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

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 (loss).

During Fiscal 2022 and Fiscal 2021, the Company recorded an immaterial amount of interest expense related to this agreement.

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 April 2, 2022 and March 27, 2021 (in millions):

Fair Value Hedges

The Company is exposed to transaction risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany loans which will impact earnings on a consolidated basis.

To manage the exchange rate risk related to these balances, during the fourth quarter of Fiscal 2023, the Company entered into fair value cross-currency swap agreements to hedge its exposure in GBP denominated subsidiaries (the “GBP Fair Value Hedge”) on a Euro denominated intercompany loan.

As of April 1, 2023, the total notional values of outstanding fair value cross-currency swaps related to these loans were € 1 billion (approximately $ 1.08 billion).

Under the term of these contracts, the Company will exchange the semi-annual fixed rate payments on GBP denominated debt for fixed rate payments of 0 % in Euro.

These contracts have maturity dates between March 2025 and March 2026 and are designated as fair value hedges.

Accordingly, the Company recorded a foreign currency gain of $ 4 million during Fiscal 2023.

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 April 1, 2023 and April 2, 2022 (in millions):

Notional Amounts Assets Liabilities

2022 March 27,

2023 April 2,

2022 March 27,

2022 April 1,

2022 March 27,

2023 April 2,

2022 April 1,

2023 April 2,

Designated forward foreign currency exchange contracts $ — $ 119 $ — $ 4 (1)

Designated net investment hedge 4,194 3,194 44 (3)

Designated interest rate swap — 500 — — — (4)

Designated net investment hedges 1,378 4,194 1 (2)

Designated fair value hedges 1,084 — — — 3 (3)

Total designated hedges 2,462 4,313 1 48 39 37

Undesignated derivative contracts (4)

38 13 4 — — —

Total $ 2,462 $ 4,351 $ 1 $ 52 $ 39 $ 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 above 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 and with the same banks, the resulting impact as of April 2, 2022 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 and with the same banks, the resulting impact as of April 1, 2023 and April 2, 2022 would be as follows (in millions):

Forward Currency Exchange Contracts Net Investment

Hedges Interest Rate Swap

2022 March 27,

Hedges Fair Value Hedges

2023 April 2,

2022 March 27,

2022 April 1,

2022 March 27,

2023 April 2,

2022 April 1,

2023 April 2,

Assets subject to master netting arrangements

8 unchanged sentences

Upon discontinuation of the hedge, such amounts remain in CTA until the related net 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 (loss).

The net gain or loss on cross-currency swap contracts designated as fair value hedges and associated with cross-currency intercompany loans are recognized within foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive income (loss) generally in the period in which the related balances being hedged are revalued.

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):

Fiscal Year Ended April 2, 2022 Fiscal Year Ended March 27, 2021 Fiscal Year Ended March 28, 2020

Pre-Tax Gains Recognized in OCI Pre-Tax Losses Recognized in OCI Pre-Tax Gains Recognized in OCI

Fiscal Year Ended April 1, 2023 Fiscal Year Ended April 2, 2022 Fiscal Year Ended March 27, 2021

Pre-Tax Gains/(Losses) Recognized in OCI Pre-Tax Gains Recognized in OCI Pre-Tax (Losses) Recognized in OCI

Designated forward foreign currency exchange contracts $ 8 $ 11 $ ( 2 )

Designated net investment hedges $ 338 $ 435 $ ( 263 )

Designated fair value hedges $ ( 6 ) $ — $ —

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

1 unchanged sentence

Fiscal Year Ended

Pre-Tax Losses (Gains) Reclassified from

Accumulated OCI Location of Losses (Gains) Recognized

April 2, 2022 March 27, 2021 March 28, 2020

Designated forward currency exchange contracts $ 1 $ ( 2 ) $ ( 10 ) Cost of goods sold

Pre-Tax (Gains) Losses Reclassified from

Accumulated OCI Location of (Gains) Losses Recognized

April 1, 2023 April 2, 2022 March 27, 2021

Designated forward foreign currency exchange contracts $ ( 14 ) $ 1 $ ( 2 ) Cost of goods sold

The Company expects that substantially all of the amounts 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.

Undesignated Hedges

During Fiscal 2022 and Fiscal 2021, a gain of $ 2 million and a loss of $ 1 million, respectively, were recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income (loss) as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.

During Fiscal 2020, the Company recognized an immaterial amount of net gains.

During Fiscal 2023, Fiscal 2022 and Fiscal 2021, a gain of $ 2 million, a gain of $ 2 million and a loss of $ 1 million, respectively, were recognized within foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income (loss) as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.

Shareholders’ Equity

1 unchanged sentence

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 Fiscal 2022, the Company purchased 11,014,541 shares with a fair value of $ 650 million through open market transactions.

During Fiscal 2021, the Company did not purchase any shares through open market transactions.

As of April 2, 2022, the remaining availability under the Company’s share repurchase program was $ 500 million.

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.

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 was permitted, from time to time, to 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 Board of Directors 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 was permitted, from time to time, to 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 November 9, 2022, the Company announced that its Board of Directors approved a new share repurchase program (the “Existing Share Repurchase Plan”) 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 replaced the Fiscal 2023 Plan which had $ 250 million of availability remaining.

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.

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 Fiscal 2023, the Company purchased 27,356,549 shares with a fair value of $ 1.350 billion through open market transactions.

During Fiscal 2022, the Company purchased 11,014,541 shares with a fair value of $ 650 million through open market transactions.

As of April 1, 2023, the remaining availability under the Company’s existing share repurchase program was $ 400 million.

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

During Fiscal 2023 and Fiscal 2022, the Company withheld 301,326 shares and 203,863 shares, respectively, with a fair value of $ 14 million and $ 11 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

3 unchanged sentences

Income (Loss) (1)

Net Income (Loss) on

Net Gain (Loss) on

Derivatives (2)

1 unchanged sentence

Balance at March 28, 2020 $ 72 $ 3 $ 75

Other comprehensive income before reclassifications 145 5 150

amounts reclassified from AOCI to earnings — 9 9

Other comprehensive income (loss), net of tax 145 ( 4 ) 141

Balance at March 28, 2020 72 3 75

Other comprehensive loss before reclassifications ( 15 ) ( 2 ) ( 17 )

6 unchanged sentences

Balance at April 2, 2022 184 10 194

(1) Foreign currency translation adjustments for Fiscal 2022 primarily include a $ 321 million gain, net of taxes of $ 114 million, primarily relating to the Company’s net investment hedges, and a net $ 210 million translation loss.

Foreign currency translation adjustments for Fiscal 2021 include a $ 199 million loss, net of taxes of $ 63 million, primarily relating to the Company’s net investment hedges, a net $ 189 million translation gain and a net loss of $ 8 million on intra-entity transactions that are of a long-term investment nature.

Foreign currency translation gains for Fiscal 2020 include a $ 219 million gain, net of taxes of $ 45 million, relating to the Company's net investment hedges, a $ 60 million translation loss relating to the Jimmy Choo business, a $ 10 million translation loss relating to the Versace business and a net gain of $ 6 million, on intra-entity transactions that are of a long-term investment nature.

Other comprehensive (loss) income before reclassifications ( 41 ) 8 ( 33 )

amounts reclassified from AOCI to earnings — 14 14

Other comprehensive loss, net of tax ( 41 ) ( 6 ) ( 47 )

Balance at April 1, 2023 $ 143 $ 4 $ 147

(1) Foreign currency translation adjustments for Fiscal 2023 primarily include a net $ 266 million translation loss, partially offset by a $ 224 million gain, net of taxes of $ 114 million, primarily relating to the Company’s net investment hedges.

Foreign currency translation adjustments for Fiscal 2022 include a $ 321 million gain, net of taxes of $ 114 million, primarily relating to the Company’s net investment hedges, and a net $ 210 million translation loss.

Foreign currency translation gains for Fiscal 2021 include a $ 199 million loss, net of taxes of $ 63 million, primarily relating to the Company's net investment hedges, a net $ 189 million translation gain and a net loss of $ 8 million on intra-entity transactions that are of a long-term investment nature.

(2) Reclassified amounts 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 (loss).

5 unchanged sentences

As of April 1, 2023, 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 restricted stock units (“RSUs”), and other equity awards, and authorizes a total issuance of up to 18,846,000 ordinary shares.

The Incentive Plan allows for grants of share options, restricted shares and restricted stock units (“RSUs”), and other equity awards, and authorizes a total issuance of up to 22,471,000 ordinary shares after amendments in August 2022.

At April 1, 2023, there were 6,169,920 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 grant

date, and those issued under the Incentive Plan generally expire seven years from the grant date.

See Note 20 for additional information.

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

Share Options

Share options are generally exercisable at the fair market value on the date of grant and vest on a pro-rata basis over a four year service period.

Share options are generally granted with exercise prices equal to the fair market value on the date of grant.

Generally, options vest on a pro-rata basis over a four year service period.

The following table summarizes the share options activity during Fiscal 2023, and information about options outstanding at April 1, 2023:

3 unchanged sentences

(in millions)

Outstanding at March 27, 2021

Outstanding at April 2, 2022

355,448 $ 57.54

8 unchanged sentences

229,675 $ 63.33 1.84 $ 0.1

There were 46,954 unvested options and 308,494 vested options outstanding at April 2, 2022.

There were no unvested options and 229,675 vested options outstanding at April 1, 2023.

The total intrinsic value of options exercised during Fiscal 2023 and Fiscal 2022 was $ 0.2 million and $ 7 million, respectively.

The cash received from options exercised during Fiscal 2023 and Fiscal 2022 was $ 6 million and $ 17 million, respectively.

As of April 2, 2022, the remaining unrecognized share-based compensation expense for unvested share options was less than $ 1 million, which is expected to be recognized over the related weighted-average period of approximately 0.2 years.

As of April 1, 2023, there was no remaining unrecognized share-based compensation expense for unvested share options.

There were no options granted during Fiscal 2023, Fiscal 2022 or Fiscal 2021.

16 unchanged sentences

Date Fair Value

Unvested at March 27, 2021

Unvested at April 2, 2022

3,827,700 $ 38.65 210,192 $ 34.25

11 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

6 unchanged sentences

The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands.

Capri’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions, which are aggregated in the “Non-United States” information captioned below.

Capri’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions are aggregated in the “Non-United States” information captioned below.

Income (loss) before provision for income taxes consisted of the following (in millions):

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

1 unchanged sentence

Non-United States 563 668 59

Total income (loss) before provision for income taxes $ 915 $ 3 $ ( 215 )

Total income before provision for income taxes $ 648 $ 915 $ 3

The provision for income taxes was as follows (in millions):

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

2 unchanged sentences

Non-United States 46 (1) 98 81

Total current 150 136 83

Total current provision for income taxes 130 150 136

United States - Federal ( 40 ) 24 (2) ( 37 )

1 unchanged sentence

Non-United States ( 55 ) ( 89 ) (3) ( 29 )

Total deferred ( 58 ) ( 70 ) ( 73 )

Total deferred provision for income taxes ( 101 ) ( 58 ) ( 70 )

Total provision for income taxes $ 29 $ 92 $ 66

(1) Includes a $ 35 million current tax benefit due to a release of income tax reserves in the United States.

(2) Impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization.

(1) Primarily relates to the remeasurement of an Asia income tax reserve.

(2) Reflects the impact of a United States tax accounting method change with respect to cost capitalization.

(3) Includes an Italian valuation allowance reversal during Fiscal 2022.

The Company’s provision for income taxes for the years ended April 2, 2022, March 27, 2021 and March 28, 2020 was different from the amount computed by applying the statutory U.K.

income tax rates to the underlying income (loss) before provision for income taxes as a result of the following (amounts in millions):

The Company’s provision for income taxes for the years ended April 1, 2023, April 2, 2022 and March 27, 2021 was different from the amount computed by applying the statutory U.K.

income tax rates to the underlying income before provision for income taxes as a result of the following (amounts in millions):

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

1 unchanged sentence

statutory tax rate $ 123 19.0 % $ 174 19.0 % 1 19.0 %

Effect of changes in valuation allowances on deferred tax assets ( 67 ) ( 7.3 ) % 24 955.7 % 67 ( 30.9 ) % (2)

Effects of global financing arrangements (2)

Brand tax basis step-up ( 46 ) ( 5.0 ) % — — % — — %

CARES Act tax loss carryback ( 43 ) ( 4.6 ) % — — % — — %

( 78 ) ( 12.1 ) % ( 61 ) ( 6.7 ) % ( 24 ) ( 953.4 ) %

Effect of changes in valuation allowances on deferred tax assets ( 37 ) ( 5.8 ) % ( 67 ) ( 7.3 ) % 24 955.7 %

Liability for uncertain tax positions ( 3 ) ( 0.4 ) % 91 9.9 % 11 414.2 %

Tax rate change impact on deferred items 21 2.1 % 9 351.3 % — — %

State and local income taxes, net of federal benefit 12 1.3 % 5 201.5 % 4 ( 1.9 ) %

Differences in tax effects on foreign income ( 1 ) ( 0.2 ) % 10 1.1 % 13 522.4 %

Withholding tax 5 0.6 % 4 165.0 % 3 ( 1.6 ) %

Share based compensation 3 0.4 % 6 247.7 % 9 ( 4.2 ) %

Non-deductible goodwill impairment 15 2.4 % (3)

— — % 18 700.2 % (3)

Other ( 12 ) ( 1.3 ) % ( 1 ) ( 33.1 ) % (5)

State and local income taxes, net of federal benefit 10 1.5 % 12 1.3 % 5 201.5 %

Share based compensation 6 0.9 % 3 0.4 % 6 247.7 %

Withholding tax 3 0.5 % 5 0.6 % 4 165.0 %

Brand tax basis step-up — — % ( 46 ) ( 5.0 ) % — — %

CARES Act tax loss carryback — — % ( 43 ) ( 4.6 ) % — — %

Tax rate change impact on deferred items — — % 21 2.1 % 9 351.3 %

( 9 ) ( 1.3 ) % ( 7 ) ( 0.7 ) % ( 1 ) ( 33.1 ) %

Effective tax rate $ 29 4.5 % $ 92 10.1 % $ 66 2,590.5 %

(1) Tax rates are calculated using unrounded numbers.

(2) Mainly attributable to valuation allowances established on a portion of non-United States deferred tax assets.

(3) Mainly attributable to pre-tax loss position in Fiscal 2020.

(2) Includes the tax related impacts of hedge terminations in conjunction with global financing arrangements.

(3) Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2023 and Fiscal 2021.

2 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

Deferred tax assets

1 unchanged sentence

Net operating loss carryforwards 115 108

Accrued interest 70 20

Depreciation 61 53

1 unchanged sentence

Inventories 21 26

Accrued interest 20 44

Stock compensation 6 7

Payroll related accruals 3 3

Derivative financial instruments — 32

Total deferred tax assets 785 762

7 unchanged sentences

Net deferred tax liabilities $ ( 212 ) $ ( 192 )

(1) Includes a U.K.

valuation allowance reversal during Fiscal 2023.

(2) Includes an Italian valuation allowance reversal during Fiscal 2022.

(2) Includes a reversal of a Italian brand intangible deferred tax liability.

(3) Includes a reversal of an Italian brand intangible deferred tax liability.

The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured.

The valuation allowance decreased $ 67 million in Fiscal 2022, and increased $ 24 million and $ 94 million in Fiscal 2021 and Fiscal 2020, respectively.

The valuation allowance decreased $ 40 million and $ 67 million in Fiscal 2023 and Fiscal 2022, respectively, and increased $ 24 million in Fiscal 2021.

In certain jurisdictions, the Company increased the valuation allowance by $ 6 million , $ 34 million and $ 56 million and released valuation allowances of $ 46 million, $ 101 million and $ 32 million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

As of April 1, 2023, the Company had non-United States and United States net operating loss carryforwards of $ 581 million, a portion of which will begin to expire in Fiscal 2024.

As of April 2, 2022 and March 27, 2021, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $ 221 million and $ 121 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ 206 million, $ 92 million and $ 82 million as of April 2, 2022, March 27, 2021 and March 28, 2020, respectively.

As of April 1, 2023 and April 2, 2022, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $ 194 million and $ 221 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ 178 million, $ 206 million and $ 92 million as of April 1, 2023, April 2, 2022 and March 27, 2021, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2023, Fiscal 2022 and Fiscal 2021, are presented below (in millions):

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

9 unchanged sentences

(1) Primarily relates to incremental reserves in North America and Europe.

(2) Primarily relates to European tax reserves established in Fiscal 2022.

(3) Primarily relates to the effective settlement of a United States audit.

(4) Primarily relates to releases of North American and European tax reserves.

(2) Primarily relates to North American and European tax reserves established in Fiscal 2023.

(3) Primarily relates to Asia tax reserves.

The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes.

10 unchanged sentences

It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic.

The CARES Act contains numerous income tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

The CARES Act requires the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for income taxes.

However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury or other governing body that may significantly differ from our interpretation of the law, which may

result in a material effect on our business, cash flow, results of operations, or financial conditions.

Retirement Plans

18 unchanged sentences

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

In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine.

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

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

All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating

segment performance.

All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance.

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

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

13 unchanged sentences

COVID-19 related charges (2)

14 ( 42 ) ( 119 )

Impact of war in Ukraine (3)

Restructuring and other charges ( 16 ) ( 42 ) ( 32 )

Total income (loss) from operations $ 903 $ 19 $ ( 192 )

(1) Impairment of assets during Fiscal 2022 include $ 50 million, $ 19 million and $ 4 million of impairment charges related to the Michael Kors, Versace and Jimmy Choo reportable segments, respectively.

Impairment of assets during Fiscal 2021 includes $ 191 million, $ 91 million and $ 34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.

Total income from operations $ 679 $ 903 $ 19

(1) Impairment of assets during Fiscal 2023 include $ 110 million, $ 30 million and $ 2 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.

Impairment of assets during Fiscal 2022 includes $ 50 million, $ 19 million and $ 4 million of impairment charges related to the Michael Kors, Versace and Jimmy Choo reportable segments, respectively.

(2) COVID-19 related charges during Fiscal 2022 primarily include net inventory credits of $ 16 million as a result of better than expected sell-through and severance expense of $ 2 million, respectively.

Net inventory credits during Fiscal 2022 reflected a change in estimate resulting from better than expected sell-through.

(2) COVID-19 related charges during Fiscal 2023, primarily include net inventory credits of $ 9 million.

COVID-19 related charges during Fiscal 2022, primarily include net inventory credits and severance expense of $ 16 million and $ 2 million, respectively.

COVID-19 related charges during Fiscal 2021, primarily include net inventory reserves and severance expense of $ 10 million and $ 24 million, respectively.

COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and credit losses of $ 92 million and $ 25 million, respectively.

Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

3 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

3 unchanged sentences

Michael Kors 95 110 127

Corporate 4 — —

Total depreciation and amortization $ 179 $ 193 $ 212

2 unchanged sentences

Fiscal Years Ended

2022 March 27,

2023 April 2,

2022 March 27,

4 unchanged sentences

Total revenue $ 5,619 $ 5,654 $ 4,060

2022 March 27,

2023 April 2,

2022 March 27,

6 unchanged sentences

(1) Net revenues earned in the United States during Fiscal 2023, Fiscal 2022 and Fiscal 2021 were $ 2.951 billion, $ 2.989 billion and $ 2.016 billion, respectively.

Long-lived assets located in the United States as of April 2, 2022, March 27, 2021 and March 28, 2020 were $ 858 million, $ 942 million and $ 1.060 billion, respectively.

Long-lived assets located in the United States as of April 1, 2023, April 2, 2022 and March 27, 2021 were $ 826 million, $ 858 million and $ 942 million, respectively.

As of April 1, 2023, the Company’s total long-lived assets on its consolidated balance sheet were $ 3.610 billion, of which, $ 1.691 billion related to Versace, $ 1.333 billion related to Michael Kors and $ 586 million related to Jimmy Choo.

1 unchanged sentence

Fiscal Years Ended

Total March 27,

Total April 2,

Total March 27,

7 unchanged sentences

Subsequent Events

Release of Collateral Related to the 2018 Credit Facility

On April 2, 2022, the Company’s senior long-term, unsecured debt was upgraded to investment grade by two of the three specified rating agencies for two consecutive full fiscal quarters, meeting the criteria for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility.

On April 3, 2022, the Company notified the Administrative Agent under its 2018 Credit Facility that it had met the conditions for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility.

The collateral, which consists of substantially all of the assets and certain registered intellectual property of the Company and certain of its subsidiaries, was released effective April 3, 2022.

See Note 11 for additional details regarding the Company’s Credit Facility.

Net Investment Hedges

During the first quarter of Fiscal 2023, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1 billion to hedge its net investment in Euro denominated subsidiaries and Japanese-Yen denominated subsidiaries.

The modification of these hedges resulted in the Company receiving $ 59 million in cash during the first quarter of Fiscal 2023.

These contracts have been designated as net investment hedges.

Senior Notes Credit Rating Upgrade

On April 21, 2022, Moody’s Investor Services upgraded the Company’s credit rating to Baa1 from Baa2 in relation to the Company’s senior unsecured notes.

As a result, as of May 1, 2022 the Senior Notes now bear interest at a fixed rate equal to 4.25 % per year, payable semi-annually.

See Note 11 for additional details regarding the Company’s Senior Notes.

Share Repurchase Program

On June 1, 2022, the Company announced that its Board of Directors has terminated the Company’s existing $ 1.0 billion share repurchase program, with $ 500 million of availability remaining, and authorized a new share repurchase program 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, 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 first quarter of Fiscal 2024, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1.250 billion to hedge its net investment in CHF denominated subsidiaries.

Under the terms of these contracts, the Company will exchange the semi-annual fixed rate payments on CHF denominated debt for fixed rate payments in United States dollars.

These contracts have maturity dates between September 2024 and July 2026 and are designated as net investment hedges.

Float-to-Float Hedges

During the first quarter of Fiscal 2024, the Company entered into multiple float-to-float cross-currency swap agreements with aggregate notional amounts of $ 1 billion to hedge its net investment in Euro denominated subsidiaries.

The company will be making Euro floating rate payments in exchange for receiving United States dollar floating rate amounts over the life of the agreement.

These contracts have maturity dates between May 2028 and August 2030.

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-K

Item 9A. Controls and Procedures