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Item 9A. Controls and Procedures

2024-05-29 compared with 2023-05-31 · 497 added, 475 removed, 1128 unchanged (46% of the section changed)

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Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a - 15(e) and 15(d) - 15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)) as of April 1, 2023.

Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of April 1, 2023.

Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of March 30, 2024.

Management’s Report on Internal Control over Financial Reporting

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and (B) regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management assessed the effectiveness of our internal control over financial reporting as of April 1, 2023.

Our management assessed the effectiveness of our internal control over financial reporting as of March 30, 2024.

In making this assessment, it used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the 2013 Framework.

Based on this assessment, management has determined that, as of April 1, 2023, our internal control over financial reporting is effective based on those criteria.

The Company’s internal control over financial reporting as of April 1, 2023, as well as the consolidated financial statements, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Based on this assessment, management has determined that, as of March 30, 2024, our internal control over financial reporting is effective based on those criteria.

The Company’s internal control over financial reporting as of March 30, 2024, as well as the consolidated financial statements, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Changes in Internal Control over Financial Reporting

Except as discussed below, there have been no changes in our internal control over financial reporting during the three months ended April 1, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as discussed below, there have been no changes in our internal control over financial reporting during the three months ended March 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

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Other Information

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.

Global Optimization Plan

During the fourth quarter of Fiscal 2024, the Board of Directors of the Company approved a Global Optimization Plan in order to streamline the Company’s operating model, maximize efficiency and support long-term profitable growth.

As part of the Global Optimization Plan, the Company anticipates global headcount reductions and the closure of approximately 100 of its retail stores over the next 18 months.

The Company expects this initiative to generate annualized cost savings of approximately $80 million to $90 million.

The Company also expects to record estimated one-time restructuring charges of approximately $30 million to $40 million, of which approximately $30 million to $35 million will be cash charges related to organizational efficiency initiatives, which consist primarily of severance and employee-related costs.

The Company anticipates that up to $5 million of the restructuring charges will be related to lease termination and other store closure costs.

During Fiscal 2024, the Company closed 7 of its retail stores which have been incorporated into the Global Optimization Plan.

Net restructuring expenses recorded in connection with the Global Optimization Plan during Fiscal 2024 was $ 26 million, of which $ 22 million were related to organizational efficiency initiatives consisting primarily of severance and employee-related costs and $ 4 million of lease termination and other store closure costs.

This disclosure is intended to satisfy the requirements of Item 2.05 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.

2024 Annual Meeting of Shareholders

On May 22, 2024, the Board of Directors of the Company determined that the Company’s 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”) will be held on Wednesday, September 4, 2024.

The time and location of the 2024 Annual Meeting will be as set forth in the Company’s proxy statement for the 2024 Annual Meeting to be filed with the SEC.

Because the date of the 2024 Annual Meeting differs by more than 30 days from the anniversary date of the prior year annual meeting, which was held on Wednesday, August 2, 2023, pursuant to the Company’s Memorandum and Articles of Association (the “Memorandum”) and the rules and regulations of the SEC, shareholders who intend to present a proposal at the 2024 Annual Meeting or who intend to nominate a director are required to provide the Company with notice of such proposal or nomination no later than June 10, 2024, which the Company believes is a reasonable time before it expects to begin to print and send its proxy materials.

Notice must be sent to the Company’s principal executive office at 90 Whitfield Street, 2nd Floor, United Kingdom W1T 4EZ Attn:

Corporate Secretary.

Additionally, shareholders must comply with other applicable requirements contained in Regulations 69, 70 and 71 of the Memorandum, the rules and regulations of the SEC and other applicable law.

The Company reserves the right to reject, rule out of order or take other appropriate action with respect to any proposal or nomination that does not comply with these and other applicable requirements contained in its Memorandum and applicable laws.

In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Board’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act by July 6, 2024.

This disclosure is intended to satisfy the requirements of Item 5.08 of Form 8-K.

Rule 10b5-1 Trading Arrangements

During the quarterly period ended March 30, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2023, which is incorporated herein by reference.

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2024, which is incorporated herein by reference.

Executive Compensation

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2023, which is incorporated herein by reference.

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2024, which is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of April 1, 2023 regarding compensation plans under which the Company’s equity securities are authorized for issuance:

The following table sets forth information as of March 30, 2024 regarding compensation plans under which the Company’s equity securities are authorized for issuance:

Equity Compensation Plan Information

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Certain Relationships, Related Transactions and Director Independence

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2023, which is incorporated herein by reference.

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2024, which is incorporated herein by reference.

Principal Accountant Fees and Services

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2023, which is incorporated herein by reference.

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2024, which is incorporated herein by reference.

Exhibits and Financial Statement Schedules

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

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.

Consolidated Balance Sheets as of March 30, 2024 and April 1, 2023.

Consolidated Statements of Operations and Comprehensive (Loss) Income for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022.

Consolidated Statements of Cash Flows for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022.

Notes to Consolidated Financial Statements for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022.

EXHIBIT INDEX

Document Description

Agreement and Plan of Merger, dated as of August 10, 2023, by and among Capri Holdings Limited, Tapestry, Inc.

and Sunrise Merger Sub, Inc.

(included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No.

001-35368), filed on August 10, 2023 and incorporated herein by reference).

Stock Purchase Agreement, dated as of September 24, 2018, by and among Allegra Donata Versace Beck, Donatella Versace, Santo Versace, Borgo Luxembourg S.À R.L., Blackstone GPV Capital Partners (Mauritius) VI-D FDI Ltd., Blackstone GPV Tactical Partners (Mauritius)-N Ltd.

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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.

Amendment to Amended and Restated Memorandum and Articles of Association of Capri Holdings, effective May 24, 2023 (included as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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.

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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 Annual Incentive Plan

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).

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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).

Document Description

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.

Edwards, Jr., dated as of May 30, 2023 (included as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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

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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).

McDonough, dated as of May 30, 2023 (included as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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

and Cedric Wilmotte.

and Cedric Wilmotte (included as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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

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

and Jenna Hendricks, dated as of May 30, 2023 (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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).

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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.

Edwards, Jr., dated as of May 30, 2023 (included as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

Change in Control Continuity Agreement by and between Capri Holdings Limited and Jenna Hendricks, dated as of May 30, 2023 (included as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

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

McDonough, dated as of May 30, 2023.

McDonough, dated as of May 30, 2023 (included as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2023 (File No.

001-35368), filed on May 31, 2023 and incorporated herein by reference).

Change in Control Continuity Agreement by and between Capri Holdings Limited and Cedric Wilmotte, dated as of August 9, 2023.

Form of Special Bonus Award Agreement (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 (File No.

001-35368), filed on November 9, 2023 and incorporated herein by reference).

Letter Agreement, dated as of December 15, 2023, by and between Capri Holdings Limited and Jenna A.

Hendricks (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

001-35368), filed on December 18, 2023 and incorporated herein by reference).

List of subsidiaries of Capri Holdings Limited.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Capri Holdings Limited Clawback Policy.

101.1 Interactive Data Files.

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Opinion on the Financial Statements

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.

We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of March 30, 2024 and April 1, 2023, and the related consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 30, 2024, 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 March 30, 2024 and April 1, 2023, and the results of its operations and its cash flow for each of the three years in the period ended March 30, 2024, 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 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.

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 March 30, 2024, 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 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Goodwill and Indefinite-lived Intangible Assets

Description of the Matter At April 1, 2023, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled $1.3 billion and $1.2 billion, respectively.

Description of the Matter At March 30, 2024, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled $ 1.106 billion and $ 884 million, respectively.

As discussed in Note 3 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 2024 annual impairment test, the Company recorded a goodwill impairment charge of $ 192 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.

The Company also recognized an impairment charge of $ 297 million associated with the Jimmy Choo and Versace indefinite-lived retail and wholesale brand name intangible assets.

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.

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In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.

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, 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).

The significant assumptions used include estimated future cash flows directly related to the future operation of the stores (including sales and expense growth rates) and the discount rate used to determine fair value.

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.

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.

We also tested controls over management’s review of the significant assumptions described above.

Our testing of the Company’s impairment measurement included, among other procedures, evaluating the significant assumptions and operating data used to calculate the estimated future cash flows and to determine the fair value of the store long lived asset groups.

For a sample of retail stores, we tested the completeness and accuracy of the data used by the Company in its analyses and we compared the significant assumptions used to determine the forecasted cash flows to historical results of the retail stores, current industry and economic trends and inquired of the Company’s executives to understand the business initiatives supporting the assumptions in the future cash flows.

We involved our internal valuation specialists to assist in evaluating the fair value of certain operating lease right-of-use assets, which included assessing the estimated market rental rates of these leases by comparing them to rental rates for comparable leases and evaluating the applied discount rate.

/s/ ERNST & YOUNG LLP

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Opinion on Internal Control over Financial Reporting

We have audited Capri Holdings Limited and subsidiaries’ 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) (the COSO criteria).

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 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.

We have audited Capri Holdings Limited and subsidiaries’ internal control over financial reporting as of March 30, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Capri Holdings Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 30, 2024, 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 March 30, 2024 and April 1, 2023, the related consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 30, 2024, and the related notes and our report dated May 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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650,000,000 shares authorized;

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

226,271,074 shares issued and 116,629,634 outstanding at March 30, 2024;

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

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

Treasury shares, at cost ( 109,641,440 shares at March 30, 2024 and 106,819,205 shares at April 1, 2023)

( 5,458 ) ( 5,351 )

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In millions, except share and per share data)

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2024 April 1,

2022 March 27,

2023 April 2,

Total revenue $ 5,170 $ 5,619 $ 5,654

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Impairment of assets 575 142 73

Restructuring and other charges 16 42 32

Restructuring and other expense 33 16 42

Total operating expenses 3,580 3,045 2,841

Income from operations 679 903 19

(Loss) income from operations ( 241 ) 679 903

Other income, net ( 1 ) ( 3 ) ( 2 )

Interest expense (income), net 6 24 ( 18 )

Foreign currency loss (gain) 10 8 ( 20 )

Income before provision for income taxes 648 915 3

Provision for income taxes 29 92 66

Net income (loss) 619 823 ( 63 )

Net income (loss) attributable to noncontrolling interest 3 1 ( 1 )

Net income (loss) attributable to Capri $ 616 $ 822 $ ( 62 )

Foreign currency loss 37 10 8

(Loss) income before (benefit) provision for income taxes ( 283 ) 648 915

(Benefit) provision for income taxes ( 54 ) 29 92

Net (loss) income ( 229 ) 619 823

Net income attributable to noncontrolling interest — 3 1

Net (loss) income attributable to Capri $ ( 229 ) $ 616 $ 822

Weighted average ordinary shares outstanding:

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Diluted 117,014,420 134,002,480 152,497,907

Net income (loss) per ordinary share attributable to Capri:

Net (loss) income per ordinary share attributable to Capri:

Basic $ ( 1.96 ) $ 4.65 $ 5.49

Diluted $ ( 1.96 ) $ 4.60 $ 5.39

Statements of Comprehensive Income (Loss):

Net income (loss) $ 619 $ 823 $ ( 63 )

Statements of Comprehensive (Loss) Income:

Net (loss) income $ ( 229 ) $ 619 $ 823

Foreign currency translation adjustments 4 ( 41 ) 127

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

Comprehensive income (loss) 572 960 ( 82 )

Net income (loss) attributable to noncontrolling interest 3 1 ( 1 )

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

Comprehensive (loss) income ( 215 ) 572 960

Net income attributable to noncontrolling interest — 3 1

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

Comprehensive income (loss) attributable to Capri $ 569 $ 960 $ ( 81 )

Comprehensive (loss) income attributable to Capri $ ( 215 ) $ 569 $ 960

See accompanying notes to consolidated financial statements.

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Comprehensive

Income (Loss) Retained

Income Retained

Earnings Total Equity of Capri Non-controlling

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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 )

Vesting of restricted awards, net of forfeitures 1,456 — — — — — — — — —

Exercise of employee share options 447 — 3 — — — — 3 — 3

Share based compensation expense — — 70 — — — — 70 — 70

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

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 income — — — — — — 822 822 1 823

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

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

Balance as of 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

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

Net loss — — — — — — ( 229 ) ( 229 ) — ( 229 )

Other comprehensive income — — — — — 14 — 14 — 14

Total comprehensive loss — — — — — — — ( 215 ) — ( 215 )

Vesting of restricted awards, net of forfeitures 2,091 — — — — — — — — —

Exercise of employee share options 14 — 1 — — — — 1 — 1

Share based compensation expense — — 72 — — — — 72 — 72

Repurchase of ordinary shares — — — ( 2,822 ) ( 107 ) — — ( 107 ) — ( 107 )

Balance at March 30, 2024 226,271 — 1,417 ( 109,641 ) $ ( 5,458 ) $ 161 $ 5,479 $ 1,599 $ 1 $ 1,600

See accompanying notes to consolidated financial statements.

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2024 April 1,

2022 March 27,

2023 April 2,

Cash flows from operating activities

Net income (loss) $ 619 $ 823 $ ( 63 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net (loss) income $ ( 229 ) $ 619 $ 823

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 188 179 193

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Changes to lease related balances, net ( 102 ) ( 99 ) ( 142 )

Foreign currency losses (gains) 28 — ( 15 )

Foreign currency losses 29 28 —

Other non-cash charges 3 7 10

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Capital expenditures ( 189 ) ( 226 ) ( 131 )

Cash paid for asset/business acquisitions, net of cash acquired — — ( 13 )

Settlement of net investment hedges 409 189 —

Net cash provided by (used in) investing activities 183 58 ( 124 )

Settlement of hedges 54 409 189

Net cash (used in) provided by investing activities ( 135 ) 183 58

Cash flows from financing activities

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Effect of exchange rate changes on cash and cash equivalents ( 17 ) ( 94 ) ( 24 )

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 51 ) 84 ( 62 )

Beginning of period 256 172 234

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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 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 fiscal years ending on March 30, 2024 and April 1, 2023 (“Fiscal 2024” and “Fiscal 2023”, respectively) contain 52 weeks, whereas the fiscal year ending April 2, 2022 (“Fiscal 2022”) contains 53 weeks.

The Company’s Fiscal 2025 is a 52-week period ending March 29, 2025.

Merger Agreement

On August 10, 2023, Capri entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tapestry, Inc., a Maryland corporation (“Tapestry”), and Sunrise Merger Sub, Inc., a British Virgin Islands business company limited by shares and a direct wholly owned subsidiary of Tapestry (“Merger Sub”).

The Merger Agreement provides that, among other things and on the terms and subject to the conditions set forth therein, Tapestry will acquire Capri in an all-cash transaction by means of a merger of Merger Sub with and into Capri (the “Merger”), with Capri surviving the Merger as a wholly owned subsidiary of Tapestry.

For additional information related to the Merger Agreement, please refer to Capri’s Definitive Proxy Statement on Schedule 14A filed with the U.S.

Securities and Exchange Commission (the “SEC”) on September 20, 2023, as well as the supplemental disclosures contained in Capri’s Current Report on Form 8-K filed with the SEC on October 17, 2023.

In connection with Tapestry’s pending acquisition of Capri, on April 22, 2024, the U.S.

Federal Trade Commission (“FTC”) filed a lawsuit in the United States District Court for the Southern District of New York against Tapestry and the Company seeking to block the Merger, claiming that the Merger would violate Section 7 of the Clayton Act and that the Merger Agreement and the Merger constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined.

The Company believes the FTC’s claims are without merit, and the Company, together with Tapestry, intend to vigorously defend the lawsuit.

Summary of Significant Accounting Policies

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The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed.

The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts, credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes, goodwill, intangible assets, operating lease right-of-use assets and property and equipment, along with the estimated useful lives assigned to these assets.

The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes, goodwill, intangible assets, operating lease right-of-use assets and property and equipment, along with the estimated useful lives assigned to these assets.

Actual results could differ from those estimates.

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Sales taxes collected from retail customers are presented on a net basis and, as such, are excluded from revenue.

To arrive at net sales for wholesale revenue, gross sales are reduced by provisions for estimated future returns, based on current expectations, as well as trade discounts, markdowns,

allowances, operational chargebacks, and certain cooperative selling expenses.

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 1, 2023, April 2, 2022, and March 27, 2021 (in millions):

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

These estimates are based on factors such 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 March 30, 2024, April 1, 2023, and April 2, 2022 (in millions):

of Year Amounts

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Total Sales Reserves:

Fiscal Year Ended March 30, 2024 $ 95 $ 378 $ ( 394 ) $ 79

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

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

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

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing the Company’s trademarks at rates specified in the license agreements.

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Loyalty Program

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

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

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

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Advertising and Marketing Costs

Advertising and marketing costs are generally expensed when the advertisement is first exhibited and are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss).

Advertising and marketing expense was $ 412 million, $ 374 million and $ 329 million in Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.

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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).

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.

Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income were $ 259 million, $ 270 million and $ 236 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.

Shipping and handling costs charged to customers are included in total revenue.

COVID-19 Related Government Assistance and Subsidies

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.

During Fiscal 2023 and Fiscal 2022, the Company recorded $ 6 million and $ 10 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.

The Company did no t record any amount related to government assistance and subsidies in Fiscal 2024.

Cash, Cash Equivalents and Restricted Cash

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

Included in the Company’s cash and cash equivalents as of 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:

Included in the Company’s cash and cash equivalents as of March 30, 2024 and April 1, 2023 are credit card receivables of $ 28 million and $ 22 million, respectively, which generally settle within two to three business days.

A reconciliation of cash, cash equivalents and restricted cash as of March 30, 2024 and April 1, 2023 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:

Fiscal Years Ended

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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.

The combined total of raw materials and work in process recorded on the Company’s consolidated balance sheets as of March 30, 2024 and April 1, 2023 were $ 45 million and $ 47 million, respectively.

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

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The Company’s inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations.

Our historical estimates of these adjustments have not differed materially from actual results.

The Company’s historical estimates of these adjustments have not differed materially from actual results.

Store Pre-opening Costs

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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.

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

Maintenance and repairs are charged to expense as incurred.

The Company capitalizes, in property and equipment, direct costs incurred during the application development stage and the implementation stage for developing, purchasing or otherwise acquiring software for its internal use.

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The Company’s impairment testing is based on its best estimate of the future operating cash flows.

If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, the Company would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset.

If the sum of the estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, the Company would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset.

The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of real estate market fair values.

As such, these estimates may differ from actual results and are affected by future market and economic conditions.

During Fiscal 2023, Fiscal 2022 and Fiscal 2021, the Company recorded impairment charges of $ 36 million, $ 83 million and $ 158 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations.

During Fiscal 2024, Fiscal 2023 and Fiscal 2022, the Company recorded impairment charges of $ 88 million, $ 36 million and $ 83 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of retail store locations.

Please refer to Note 8 and Note 14 for additional information.

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The Company performs an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist.

In the absence of any impairment indicators, goodwill, for the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year.

In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year.

Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

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When performing a qualitative test, the Company assesses various factors, including industry and market conditions, macroeconomic conditions and performance of its businesses.

If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is performed to determine if impairment is required.

If the results of the qualitative assessment indicate that it is more likely than not that the goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is

performed to determine if impairment is required.

The Company may also elect to perform a quantitative analysis of goodwill and its indefinite-lived intangible assets initially rather than using a qualitative approach.

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If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference.

These valuations are affected by certain estimates, including future revenue growth rates, future operating expense growth rates, gross margins and discount rates.

These valuations are affected by certain estimates, including future revenue growth rates, future operating expense growth rates, gross margins, discount rates and market multiples.

Future events could cause us to conclude that impairment indicators exist and goodwill may be impaired.

When performing a quantitative impairment assessment of our brand intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the “relief from royalty” method, assuming that a third-party would be willing to pay a royalty in lieu of ownership for this intangible asset.

When performing a quantitative impairment assessment of brand intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the “relief from royalty” method, assuming that a third-party would be willing to pay a royalty in lieu of ownership for this intangible asset.

This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates.

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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 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.

The Company performed its annual goodwill and indefinite-lived intangible asset 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 fair values.

Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo Licensing reporting unit goodwill as the fair value was significantly higher than the related carrying value.

Further, the Company concluded that the fair value of the Jimmy Choo Retail and Wholesale reporting unit goodwill and Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts and the Company recorded impairment.

These impairment charges were primarily related to a decline in revenue expectations driven by a softening demand globally for fashion luxury goods.

Accordingly, the Company recorded goodwill impairment charges of $ 192 million related to the Jimmy Choo Retail and Wholesale reporting units.

The Jimmy Choo Retail reporting unit’s goodwill balance was fully impaired and the Jimmy Choo Wholesale reporting unit had a remaining goodwill balance of $ 81 million.

The Company also recorded impairment charges of $ 70 million related to the Jimmy Choo Retail and Wholesale brand intangible assets that have remaining balances of $ 152 million and $ 63 million, respectively.

The impairment charges were recorded within impairment of assets on the Company’s consolidated statements of operations and comprehensive (loss) income for the fiscal year ended March 30, 2024.

Further, based on the results of these assessments, the Company determined that there was no impairment for the Versace Retail and Licensing reporting units, as the fair values of these reporting units significantly exceeded the related carrying amounts.

Also, there was no impairment for the Versace Wholesale reporting unit as its fair value was approximately 3 % higher than the carrying value which has a goodwill balance of $ 284 million.

Additionally, the fair value of the Versace Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts.

These impairment charges were primarily related to a slowdown in revenue driven by softening demand globally for fashion luxury goods.

During Fiscal 2024, the Company recorded $ 227 million related to the Versace Retail and Wholesale brand intangible assets that have remaining balances of $ 507 million and $ 162 million, respectively.

The impairment charges were recorded within impairment of assets on the Company’s consolidated statements of operations and comprehensive (loss) income for the fiscal year ended March 30, 2024.

In Fiscal 2023, the Company recorded impairment charges of $ 82 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $ 24 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.

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

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

See Note 9 for information relating to the Company’s annual impairment analysis performed during the fourth quarter of Fiscal 2024, Fiscal 2023 and Fiscal 2022.

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.

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 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 charges to goodwill and/or other indefinite-lived intangible assets.

The Company uses a combination of third-party insurance coverage and self-insurance programs, including a wholly-owned captive insurance entity, to mitigate 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 certain claims.

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

Foreign currency income and loss 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 on the Company’s consolidated statements of operations and comprehensive (loss) income.

Derivative Financial Instruments

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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).

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

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

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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 different currencies.

The Company also uses 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):

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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.

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

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

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.

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 on the Company’s consolidated statements of operations and comprehensive (loss) income, which will offset the earnings impact of the original transaction being hedged.

If the fair value hedge is terminated and the underlying intercompany loans are settled, the accumulated other comprehensive income (“AOCI”) remaining from the hedge at the time of termination will be reclassified to foreign currency loss on the Company’s consolidated statements of operations and comprehensive (loss) income.

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.

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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.

The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors.

The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors.

Changes in the required valuation allowance are recorded in income in the period such determination is made.

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The Company records interest expense and penalties payable to relevant tax authorities as income tax expense.

On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases.

The Company adopted the new standard recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.

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 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.

Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through April 2028.

The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring initiatives, as defined in Note 11.

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Deferred financing fees associated with the Company’s Revolving Credit Facilities are primarily recorded within other assets in the Company’s consolidated balance sheets.

Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are primarily recorded as an offset to long-term debt in the Company’s consolidated balance sheets.

Deferred financing

fees and unamortized discounts associated with the Company’s other borrowings are primarily recorded as an offset to long-term debt in the Company’s consolidated balance sheets.

See Note 12 for additional information.

Net Income (Loss) per Share

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 RSUs or any other potentially dilutive instruments, including share option grants, were converted or exercised into ordinary shares.

Net (Loss) Income per Share

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

Diluted net (loss) income 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.

Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.

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

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

Fiscal Years Ended

2024 April 1,

2022 March 27,

Net income (loss) attributable to Capri $ 616 $ 822 $ ( 62 )

2023 April 2,

Net (loss) income attributable to Capri $ ( 229 ) $ 616 $ 822

Basic weighted average shares 117,014,420 132,532,009 149,724,675

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Diluted weighted average shares 117,014,420 134,002,480 152,497,907

Basic net income (loss) per share (1)

Basic net (loss) income per share (1)

$ ( 1.96 ) $ 4.65 $ 5.49

Diluted net income (loss) per share (1)

Diluted net (loss) income per share (1)

$ ( 1.96 ) $ 4.60 $ 5.39

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

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.

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

Diluted net loss per share attributable to Capri for Fiscal 2024 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.

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

Noncontrolling Interest

9 unchanged sentences

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

Recently Issued Accounting Pronouncements

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.

Supplier Finance Programs

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

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

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

Early adoption is permitted.

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

The amendments require a buyer in a supplier finance program to disclose sufficient information about the program to allow users of the 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 do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs.

The Company adopted the update in the first quarter of Fiscal 2024 on a retrospective basis, except for the requirement to disclose rollforward information, which will be effective for the Company in the first quarter of Fiscal 2025 on a prospective basis.

See Note 12 for the Company’s disclosures relating to this update.

Recently Issued Accounting Pronouncements

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

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”.

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending 2025, and subsequent interim periods, with early adoption permitted.

The Company is evaluating the impact of adopting this ASU on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”, to enhance transparency and decision usefulness of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on a prospective basis, with early adoption permitted.

The Company is evaluating the impact of adopting this ASU on the consolidated financial statements and related disclosures.

Revenue Recognition

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

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

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).

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

Revenue is recognized when the gift card is redeemed or upon “breakage” for the estimated portion of gift cards that are not expected to be redeemed.

Revenue is recognized when a gift card is redeemed or upon “breakage” for the estimated portion of gift cards that are not expected to be redeemed.

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

The 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 $ 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.

The contract liability related to gift cards, net of estimated “breakage,” was $ 15 million and $ 14 million as of March 30, 2024 and April 1, 2023, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

Loyalty Program .

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

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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.

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.

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If the Company expects the minimum guaranteed amounts to exceed amounts calculated based on actual sales, the guaranteed minimums are recognized ratably over the contractual year to which they relate.

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

As of April 1, 2023, contractually guaranteed minimum fees from the Company’s license agreements expected to be recognized as revenue during future periods were as follows (in millions):

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

As of March 30, 2024, contractually guaranteed minimum fees from the Company’s license agreements expected to be recognized as revenue during future periods were as follows (in millions):

Contractually Guaranteed Minimum Fees

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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 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.

The refund liability recorded as of March 30, 2024 and April 1, 2023 was $ 48 million and $ 54 million, respectively, and the related asset for the right to recover returned product as of March 30, 2024 and April 1, 2023 was $ 14 million and $ 17 million, respectively.

Contract Balances

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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.

Total contract liabilities were $ 23 million and $ 36 million as of March 30, 2024 and April 1, 2023, respectively.

During Fiscal 2024 and Fiscal 2023, the Company recognized $ 30 million and $ 13 million in revenue, respectively, relating to contract liabilities that existed at April 1, 2023 and April 2, 2022 , respectively.

There were no material contract assets recorded as of March 30, 2024 and April 1, 2023.

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

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2024 April 1,

2022 March 27,

Versace revenue - the Americas $ 408 $ 408 $ 201

Versace revenue - EMEA 468 425 276

Versace revenue - Asia 230 255 241

2023 April 2,

Versace - the Americas $ 338 $ 408 $ 408

Versace - EMEA 444 468 425

Versace - Asia 248 230 255

Total Versace revenue 1,030 1,106 1,088

Jimmy Choo revenue - the Americas 196 175 102

Jimmy Choo revenue - EMEA 255 229 146

Jimmy Choo revenue - Asia 182 209 170

Jimmy Choo - the Americas 176 196 175

Jimmy Choo - EMEA 266 255 229

Jimmy Choo - Asia 176 182 209

Total Jimmy Choo revenue 618 633 613

Michael Kors revenue - the Americas 2,616 2,627 1,869

Michael Kors revenue - EMEA 819 835 607

Michael Kors revenue - Asia 445 491 448

Michael Kors - the Americas 2,298 2,616 2,627

Michael Kors - EMEA 791 819 835

Michael Kors - Asia 433 445 491

Total Michael Kors revenue 3,522 3,880 3,953

Total revenue - the Americas 3,220 3,210 2,172

Total revenue - EMEA 1,542 1,489 1,029

Total revenue - Asia 857 955 859

Total - the Americas 2,812 3,220 3,210

Total - EMEA 1,501 1,542 1,489

Total - Asia 857 857 955

Total revenue $ 5,170 $ 5,619 $ 5,654

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

Balance Sheet Location April 1,

The following table presents supplemental balance sheet information related to leases (in millions):

Balance Sheet Location March 30,

2024 April 1,

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Operating leases Long-term portion of operating lease liabilities $ 1,452 $ 1,348

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

The components of net lease costs for the fiscal year ended March 30, 2024 and April 1, 2023 were as follows (in millions):

Consolidated Statement of Operations and

Comprehensive Income (Loss) Location April 1,

Comprehensive (Loss) Income Location March 30,

2024 April 1,

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Sublease income Selling, general and administrative expenses ( 7 ) ( 9 )

Sublease income (2)

Restructuring and other charges — ( 5 )

Total lease cost, net $ 599 $ 574

(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 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.

For the fiscal year ended March 30, 2024, there were no rent concessions due to COVID-19.

For the fiscal year ended April 1, 2023, rent concessions due to COVID-19 were $ 14 million.

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

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Rent concessions due to COVID-19 — 14

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 1, 2023 and April 2, 2022:

2024 April 1,

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Weighted average discount rate 4.3 % 3.3 %

At April 1, 2023, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):

At March 30, 2024, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):

Fiscal 2025 $ 464

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Total lease liabilities $ 1,852

At April 1, 2023, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):

At March 30, 2024, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):

Fiscal 2025 $ 10

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Total sublease income $ 40

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.

Additionally, the Company had approximately $ 55 million and $ 139 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of March 30, 2024 and April 1, 2023, respectively.

See Note 3 for additional information on the Company’s accounting policies related to leases.

6 unchanged sentences

Total receivables, net $ 332 $ 369

(1) As of April 1, 2023 and April 2, 2022, $ 96 million and $ 83 million, respectively, of trade receivables were insured.

(1) As of March 30, 2024 and April 1, 2023, $ 102 million and $ 96 million, respectively, of trade receivables were insured.

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

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

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

Allowance for credit losses was $ 13 million and $ 8 million as of March 30, 2024 and April 1, 2023, respectively.

The Company had credit losses of $ 6 million, $ 5 million and $ 7 million, respectively, for Fiscal 2024, Fiscal 2023 and Fiscal 2022.

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Total property and equipment, net $ 579 $ 552

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.

Depreciation and amortization of property and equipment for the fiscal years ended March 30, 2024, April 1, 2023, and April 2, 2022 totaled $ 143 million, $ 135 million and $ 144 million, respectively.

During Fiscal 2024, Fiscal 2023 and Fiscal 2022, the Company recorded property and equipment impairment charges of $ 11 million, $ 3 million and $ 7 million, respectively, primarily related to the Company’s retail store locations.

See Note 13 for additional information.

See Note 14 for information related to property and equipment impairment charges.

Intangible Assets and Goodwill

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

April 1, 2023 April 2, 2022

March 30, 2024 April 1, 2023

Amount Accumulated

1 unchanged sentence

Amount Accumulated

Amortization/Impairment Net Carry Amount

Amortization/Impairment Net Carrying Amount

Definite-lived intangible assets:

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Total intangible assets, excluding goodwill $ 2,278 $ 884 $ 1,394 $ 2,269 $ 541 $ 1,728

(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.

(1) The year-over-year change in net carrying amount reflects an impairment charge of $ 70 million and foreign currency translation of $ 8 million for the fiscal year ended March 30, 2024.

For the fiscal year ended April 1, 2023, the Company recorded impairment charges of $ 24 million.

(2) The year-over-year change in net carrying amount reflects an impairment charge of $ 227 million and foreign currency translation of $ 3 million for the fiscal year ended March 30, 2024.

There were no impairment charges for the fiscal year ended April 1, 2023.

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.

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Customer relationships are generally amortized over five to eighteen years .

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.

Amortization expense for the Company’s definite-lived intangibles was $ 45 million, $ 44 million and $ 49 million, respectively, for each of the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022.

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.

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Fiscal 2030 and thereafter 291

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

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

Versace Jimmy Choo Michael Kors Total

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

4 unchanged sentences

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

Impairment charges (1)

— ( 192 ) — ( 192 )

Foreign currency translation

Balance at March 30, 2024 $ 853 $ 133 $ 120 $ 1,106

(1) The Company recorded impairment charges of $ 192 million during Fiscal 2024 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.

As of March 30, 2024, the Company had accumulated impairment charges of $ 539 million related to its 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.

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

During the fourth quarter of Fiscal 2024, the Company performed its annual goodwill and indefinite-lived intangible asset impairment analysis.

The Company performed its goodwill impairment assessment for its Michael Kors reporting units using a qualitative assessment.

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

The Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for both 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 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 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.

The Company performed its annual goodwill and indefinite-lived intangible asset impairment analysis for both 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 an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate their fair values.

Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo Licensing reporting unit goodwill and Versace reporting units goodwill 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 and Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts and recorded impairment charges.

These impairment charges were primarily related to a continued decline in revenue trends from prior expectations.

Additionally, the Versace Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts.

These impairment charges were primarily related to a slowdown in revenue driven predominantly by softening demand globally for fashion luxury goods.

Accordingly, the Company recorded goodwill impairment charges of $ 192 million related to the Jimmy Choo Retail and Wholesale reporting units, $ 70 million related to the Jimmy Choo Retail and Wholesale brand intangible assets and $ 227 million related to the Versace Retail and Wholesale brand intangible assets during Fiscal 2024.

In total, $ 489 million of impairment was recorded related to goodwill and indefinite lived intangible assets within impairment of assets on the Company’s consolidated statement of operations and comprehensive (loss) income for the fiscal year ended March 30, 2024.

In Fiscal 2023, 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 brand intangible assets.

The impairment charges were recorded within impairment of assets on the Company’s consolidated statement of operations and comprehensive (loss) income 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.

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 14 for additional information.

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Prepaid taxes $ 88 $ 105

Prepaid contracts 22 15

Interest receivable related to hedges 42 10

Prepaid contracts 21 22

Other accounts receivables 8 10

6 unchanged sentences

Accrued advertising and marketing 29 26

Restructuring liability 22 1

Professional services 18 14

Accrued rent (1)

Advance royalties 18 7

Accrued interest 17 16

Accrued purchases and samples 16 8

Gift and retail store credits 15 14

Professional services 14 15

Advance royalties 4 18

Accrued litigation 4 12

Accrued purchases and samples 8 11

Charitable donations (2)

Total accrued expenses and other current liabilities $ 310 $ 314

(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 which was funded during the third quarter ended December 31, 2022.

Restructuring and Other Charges

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.

Restructuring and Other Expense

Restructuring Charges - Global Optimization Plan

During Fiscal 2024, the Company closed 7 of its retail stores which have been incorporated into the Global Optimization Plan.

The below table presents a roll forward of the Company’s restructuring liability related to its Global Optimization Plan (in millions):

Severance and benefit costs Lease-related and other costs Total

Balance at April 1, 2023

Additions charged to expense 22 2 (1)

Payments ( 1 ) ( 1 ) ( 2 )

Balance at March 30, 2024

$ 21 $ 1 $ 22

(1) Excludes $ 2 million of impairment charges related to operating lease right-of-use assets recorded within restructuring and other expense on the consolidated statement of operations and comprehensive (loss) income for the fiscal year ended March 30, 2024.

Other Charges

During Fiscal 2024, the Company recorded net costs of $ 7 million primarily related to expenses for equity awards associated with the acquisition of Versace and severance for certain employees, partially offset by a $ 10 million gain on the sale of a long-lived corporate asset.

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 2022, the Company recorded costs of $ 33 million primarily relating to equity awards associated with the acquisition of Versace and the closure of certain corporate locations.

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 closing a total of 66 stores during Fiscal 2022.

Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $ 9 million during Fiscal 2022.

There were no charges related to the Capri Retail Store Optimization Program in Fiscal 2023.

Debt Obligations

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Senior Notes due 2024 (1)

2018 Term Loan — 497

Total debt 1,724 1,829

Unamortized debt issuance costs 1 2

Unamortized discount on senior notes — 1

Total carrying value of debt 1,723 1,827

1 unchanged sentence

Total long-term debt $ 1,261 $ 1,822

(1) As of March 30, 2024, the Senior Notes, due in November 2024, are recorded within short-term debt on the Company’s consolidated balance sheets.

Senior Revolving Credit Facility

17 unchanged sentences

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

The 2022 Credit Facility provides for an annual administration fee and a commitment fee equal to 7.5 basis points to 17.5 basis points per annum, which was 15.0 basis points as of April 1, 2023.

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 March 30, 2024.

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

6 unchanged sentences

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

As of 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.

The Company had $ 764 million and $ 874 million of borrowings outstanding under the 2022 Revolving Credit Facility as of March 30, 2024 and April 1, 2023, respectively.

In addition, stand-by letters of credit of $ 2 million and $ 3 million were outstanding as of March 30, 2024 and April 1, 2023, respectively.

At March 30, 2024 and April 1, 2023, the amount available for future borrowings under the 2022 Revolving Credit Facility were $ 734 million and $ 623 million, respectively.

The Company had $ 5 million and $ 6 million of deferred financing fees related to Revolving Credit Facilities as of March 30, 2024 and April 1, 2023, respectively, and are recorded within other assets in the Company’s consolidated balance sheets.

Versace Term Loan

11 unchanged sentences

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.

As of March 30, 2024, the carrying value of the Versace Term Loan was $ 485 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 March 30, 2024, 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.

(the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $ 450 million aggregate principal amount senior notes due in 2024 (the “Senior Notes”), pursuant to an exemption from registration under the Securities Act of 1933, as amended.

(the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $ 450 million aggregate principal amount senior notes due November 1, 2024 (the “Senior Notes”), pursuant to an exemption from registration under the Securities Act of 1933, as amended.

The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, the subsidiary guarantors party thereto and U.S.

1 unchanged sentence

The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.

As of April 1, 2023, the Senior Notes bear interest at a rate of 4.250 % per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes.

As of March 30, 2024, the Senior Notes bear interest at a rate of 4.250 % per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes.

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

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

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.

As of March 30, 2024, the carrying value of the Senior Notes is $ 450 million, which is recorded within short-term debt in the Company’s consolidated balance sheets.

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

Supplier Financing Program

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.

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

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

The Company’s obligations, including the amount due and scheduled payment dates, which generally do not exceed 90 days, are not impacted by a suppliers’ decision to participate in this program.

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

The amount outstanding under this program as of 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.

The amount outstanding under this program as of March 30, 2024 and April 1, 2023 was $ 11 million and $ 4 million, respectively and is presented as short-term debt in the Company’s consolidated balance sheets.

Japan Credit Facility

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.

As of March 30, 2024, 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.

with a revolving credit line of up to ¥ 1.0 billion (approximately $ 8 million).

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

with a revolving credit line of up to ¥ 1.0 billion ($ 7 million).

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 March 30, 2024 and April 1, 2023, 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).

As of March 30, 2024, 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 February 2025 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 ($ 6 million), which includes bank guarantees of up to 20 million Hong Kong dollars ($ 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).

As of March 30, 2024 and April 1, 2023, there were no borrowings outstanding under the HK HSBC Credit Facility.

As of March 30, 2024, 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 November 2024.

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

As of March 30, 2024 and April 1, 2023, there were 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).

As of March 30, 2024, 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 August 2024.

The China HSBC Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 65 million ($ 9 million), which includes a revolving loan of RMB 35 million ($ 5 million), an overdraft facility with a credit line of RMB 10 million ($ 1 million) and a non-financial bank guarantee facility of RMB 20 million ($ 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 March 30, 2024 and April 1, 2023, there were no borrowings outstanding under the China HSBC Credit Facility.

As of March 30, 2024, 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 January 2025.

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

As of March 30, 2024 and April 1, 2023, there were no borrowings outstanding under the China SCB Credit Facility.

Versace Facilities

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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 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.

As of March 30, 2024, 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.

As of March 30, 2024, 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 Credit Facilities provide Versace with a swing line of credit of up to € 25 million ($ 26 million), with interest set by Unicredit or Intesa on the date of borrowing.

As of March 30, 2024 and April 1, 2023, there were no borrowings outstanding under the Versace Credit Facility.

As of March 30, 2024, 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 1, 2023 and April 2, 2022, there were no borrowings outstanding under the Versace BNP Credit Facility.

The Versace BNP Credit Facility provides Versace with a swing line of

credit of up to € 20 million ($ 22 million), which includes a bank guarantee of € 5 million ($ 5 million), with interest set by BNP Paribas on the date of borrowing.

As of March 30, 2024 and April 1, 2023, there were no borrowings outstanding under the Versace BNP Credit Facility.

As of March 30, 2024, there were no bank guarantees outstanding under this facility.

Commitments and Contingencies

The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $ 35 million at April 1, 2023, including $ 3 million in letters of credit issued under the Revolving Credit Facility.

The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $ 32 million at March 30, 2024, including $ 2 million in letters of credit issued under the Revolving Credit Facility.

Other Commitments

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.

As of March 30, 2024, the Company also has other contractual commitments aggregating $ 2.396 billion, which consist of inventory purchase commitments of $ 582 million, debt obligations of $ 1.724 billion and other contractual obligations of $ 90 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.

Long-term Employment Contract

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In the ordinary course of business, the Company is party to various legal proceedings and claims.

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

Refer to Item 3.

Legal Proceedings for additional information.

Fair Value Measurements

7 unchanged sentences

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

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:

At March 30, 2024 and April 1, 2023, the fair values of the Company’s derivative contracts were determined using broker quotations, which were calculations derived from observable market information:

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

The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate.

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 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.

The fair value of hedges is included in prepaid expenses and other current assets, other assets, accrued expenses and other current liabilities, and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company and based on the maturity date of each individual hedge contract to classify as either short-term or long-term assets or liabilities.

See Note 15 for further detail.

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

Fair value at April 1, 2023, using:

Fair value at March 30, 2024, using:

Fair value at April 1, 2023, using:

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Derivative assets:

Forward foreign currency exchange contracts $ — $ — $ — $ — $ 4 $ —

Net investment hedges $ — $ 12 $ — $ — $ 1 $ —

Undesignated derivative contracts — — — — 4 —

Total derivative assets $ — $ 12 $ — $ — $ 1 $ —

Derivative liabilities:

Forward foreign currency exchange contracts $ — $ — $ — $ — $ — $ —

Net investment hedges $ — $ 88 $ — $ — $ 36 $ —

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Total derivative liabilities $ — $ 88 $ — $ — $ 39 $ —

The Company’s long-term debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values.

The fair value of the Company’s long-term debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics.

Borrowings under revolving credit agreements, if outstanding, are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments.

The Company’s debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values.

The fair value of the Company’s debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics.

Borrowings under revolving credit facilities, if outstanding, are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments.

See Note 12 for detailed information related to carrying values of the Company’s outstanding debt.

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 1, 2023 April 2, 2022

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

March 30, 2024 April 1, 2023

Carrying Value Estimated

3 unchanged sentences

Senior Notes due 2024 $ 450 $ 441 $ 449 $ 435

2018 Term Loan $ — $ — $ 495 $ 490

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

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

Brands $ 1,181 $ 884 $ 297

Goodwill 549 357 192

Operating Lease Right-of-Use Assets

Brands 224 200 24

Property and Equipment

Total $ 1,924 $ 1,347 $ 577

Goodwill $ 681 $ 599 $ 82

Operating Lease Right-of-Use Assets 100 67 33

Brands 224 200 24

Property and Equipment 4 1 3

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

Goodwill 319 225 94

Brands 407 338 69

Property and Equipment 12 5 7

Total $ 221 $ 138 $ 83

(1) Includes $ 10 million and $ 5 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program during Fiscal 2022 and Fiscal 2021, respectively.

(1) Includes $ 2 million of impairment charges that were recorded within restructuring and other charges related the Company’s Global Optimization Plan during Fiscal 2024 and $ 10 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program during Fiscal 2022.

There were no impairment charges related to goodwill or indefinite-lived intangible assets in Fiscal 2022.

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The Company does not enter into derivative contracts for trading or speculative purposes.

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

As of March 30, 2024, there were no forward foreign currency exchange contracts outstanding.

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 $ 1.094 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.

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

During the first quarter of Fiscal 2024, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 2.5 billion to hedge its net investment in Swiss Franc (“CHF”) denominated subsidiaries.

During the third quarter of Fiscal 2024, the Company modified these fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 2.5 billion to utilize additional CHF capacity and further hedge its investment in CHF denominated subsidiaries.

Under the terms of these contracts, the Company will exchange semi-annual fixed rate payments on United States dollar notional amounts for fixed rate payments of 0.0 %.

The increase in interest received from the CHF notional amounts will be offset by interest expense related to the financing component of this modification.

These contracts have maturity dates between September 2024 and June 2028 and are designated as net investment hedges.

As of March 30, 2024, the Company had $ 2.5 billion of hedges outstanding related to its net investment in CHF denominated subsidiaries.

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 exchange Euro floating rate payments based on EURIBOR for the United States dollar floating rate amounts based on SOFR CME Term over the life of the agreement.

The fixed rate component of semi-annual Euro payments range from 1.149 % to 1.215 %.

These contracts have maturity dates between May 2028 and August 2030 and are designated as net investment hedges.

As of March 30, 2024, the Company had $ 1 billion float-to-float cross-currency hedges outstanding related to its net investment in Euro denominated subsidiaries.

During the first quarter of Fiscal 2024, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with an aggregate notional amount of $ 350 million to hedge its net investment in Euro denominated subsidiaries.

Under the terms of these contracts, the Company will exchange the semi-annual fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0 % in Euro.

These contracts have maturity dates between January 2027 and April 2027 and have been designated as net investment hedges.

As of March 30, 2024, the Company had $ 350 million of fixed-to-fixed cross-currency hedges outstanding related to its net investment in Euro denominated subsidiaries.

As of April 1, 2023, the Company had € 1 billion of hedges outstanding to hedge its net investment in British Pound (“GBP”) denominated subsidiaries (the “GBP/EUR Net Investment Hedges”).

During the first quarter of Fiscal 2024, the Company entered into an additional fixed-to-fixed cross-currency swap agreement with an aggregate notional amount of € 150 million GBP/EUR Net Investment Hedges.

During the fourth quarter of Fiscal 2024, the Company terminated all of its GBP/EUR Net Investment Hedges of € 1.150 billion ($ 1.241 billion).

The termination of these swaps resulted in the Company receiving $ 24 million in cash during the fourth quarter of Fiscal 2024.

As of April 1, 2023, the Company had $ 294 million of hedges outstanding to hedge its net investment in Japanese Yen denominated subsidiaries (the “JPY Hedges”).

During the fourth quarter of Fiscal 2024, the Company terminated all of its JPY Hedges of $ 294 million.

The termination of these swaps resulted in the Company receiving $ 6 million in cash during the fourth quarter of Fiscal 2024.

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

Accordingly, the Company recorded interest income of $ 95 million, $ 38 million and $ 63 million, respectively, during Fiscal 2024, Fiscal 2023 and Fiscal 2022.

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

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

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):

To manage the foreign currency exchange rate risk related to these balances, the Company had previously entered into cross-currency swap agreements to hedge its exposure in GBP denominated subsidiaries (the “GBP Fair Value Hedge”) on Euro denominated intercompany loans.

As of April 1, 2023, the Company had € 1 billion of GBP Fair Value Hedge on Euro denominated intercompany loans.

During the fourth quarter of Fiscal 2024, the underlying intercompany loan was settled and the Company terminated the GBP Fair Value Hedge of € 1 billion ($ 1.093 billion).

The terminations of these swaps resulted in the Company receiving $ 25 million in cash during the fourth quarter of Fiscal 2024.

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 on the Company’s consolidated statements of operations and comprehensive (loss) income, which will offset the earnings impact of the underlying transaction being hedged.

In the fourth quarter of Fiscal 2024, the Company settled its Euro denominated intercompany loan and recognized a $ 14 million of foreign currency loss within the Company’s consolidated statements of operations and comprehensive (loss) income from AOCI.

The Company recorded a foreign currency gain of $ 28 million and $ 4 million in foreign currency loss within the Company’s consolidated statements of operations and comprehensive (loss) income during Fiscal 2024 and Fiscal 2023, respectively, from the GBP Fair Value Hedge which offset translation losses from the underlying transaction.

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 March 30, 2024 and April 1, 2023 (in millions):

Notional Amounts Assets Liabilities

2024 April 1,

2022 April 1,

2023 April 2,

2023 March 30,

2024 April 1,

2023 March 30,

2024 April 1,

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

Designated net investment hedges $ 3,850 $ 1,378 $ 12 (1)

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

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

Undesignated derivative contracts (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.

Total hedges $ 3,850 $ 2,462 $ 12 $ 1 $ 88 $ 39

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

(2) As of March 30, 2024, the Company recorded $ 3 million within accrued expenses and current liabilities and $ 85 million within other long-term liabilities in the Company’s consolidated balance sheets.

(3) Recorded within other long-term liabilities in the Company’s consolidated balance sheets.

(4) Primarily includes undesignated hedges of inventory purchases.

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 1, 2023 and April 2, 2022 would be as follows (in millions):

Forward Currency Exchange Contracts Net Investment

The Company records and presents the fair value 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 March 30, 2024 and April 1, 2023 would be as follows (in millions):

Net Investment

Hedges Fair Value Hedges

2024 April 1,

2022 April 1,

2023 April 2,

2022 April 1,

2023 March 30,

2024 April 1,

6 unchanged sentences

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

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

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

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

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 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

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 fair value hedges (in millions):

Fiscal Year Ended March 30, 2024 Fiscal Year Ended April 1, 2023 Fiscal Year Ended April 2, 2022

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

Designated forward foreign currency exchange contracts $ — $ 8 $ 11

1 unchanged sentence

Designated fair value hedges $ ( 8 ) $ ( 6 ) $ —

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

The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income (loss) related to the designated forward foreign currency exchange contracts (in millions):

The following tables summarize the pre-tax impact of the gains and losses within the consolidated statements of operations and comprehensive (loss) income related to the designated forward foreign currency exchange contracts and the designated fair value hedges (in millions):

Fiscal Year Ended

1 unchanged sentence

Accumulated OCI Location of (Gains) Losses Recognized

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

March 30, 2024 April 1, 2023 April 2, 2022

Designated forward foreign currency exchange contracts $ ( 4 ) $ ( 14 ) $ 1 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.

Designated fair value hedges $ 14 $ — $ — Foreign currency loss

Undesignated Hedges

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.

During Fiscal 2024, the Company did not have any undesignated forward foreign currency exchange contracts outstanding.

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

Shareholders’ Equity

Share Repurchase Program

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

Subsequently, on November 3, 2021, the Company announced that its Board of Directors had terminated the Company’s existing $ 500 million share repurchase program (the “Prior Plan”), which had $ 250 million of availability remaining at the time, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which the Company 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.

On June 1, 2022, the Company announced its Board of Directors 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.

This new two-year program replaced the Fiscal 2023 Plan.

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

The program may be suspended or discontinued at any time.

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

however, pursuant to the terms of the Merger Agreement, and subject to certain limited exceptions, the Company may not repurchase its ordinary shares other than the acceptance of Company ordinary shares as payment of the exercise price of Company options or for withholding taxes in respect of Company equity awards.

Accordingly, the Company did not repurchase any of its ordinary shares since entering into the Merger Agreement pursuant to the Existing Share

Repurchase Plan, and the Company does not expect to repurchase any of its ordinary shares in connection with the Existing Share Repurchase Plan prior to the Merger or earlier termination of the Merger Agreement.

During Fiscal 2024, the Company purchased 2,637,102 shares with a fair value of $ 100 million through open market transactions.

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

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

As of March 30, 2024, the remaining availability under the Company’s existing share repurchase program was $ 300 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.

3 unchanged sentences

Foreign Currency

Income (Loss) (1)

Gain (Loss) (1)

Net Gain (Loss) on

2 unchanged sentences

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

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

amounts reclassified from AOCI to earnings — 2 2

Other comprehensive loss, net of tax ( 15 ) ( 4 ) ( 19 )

Balance at March 27, 2021 57 ( 1 ) 56

Other comprehensive income before reclassifications 127 10 137

6 unchanged sentences

Balance at April 1, 2023 143 4 147

Other comprehensive income before reclassifications 18 ( 14 ) 4

amounts reclassified from AOCI to earnings — ( 10 ) ( 10 )

Other comprehensive income, net of tax 18 ( 4 ) 14

Balance at March 30, 2024 $ 161 $ — $ 161

(1) Foreign currency translation adjustments for Fiscal 2024 primarily include a net $ 25 million translation gain, partially offset by a $ 7 million loss, net of taxes of $ 2 million, primarily relating to the Company’s net investment hedges.

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).

Foreign currency translation gains 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.

(2) Reclassifications from AOCI into earnings for Fiscal 2024 primarily include a $ 14 million loss related to the Company’s GBP fair value hedge due to the settlement of the associated Euro denominated intercompany loans and are recorded within foreign currency loss in the Company’s consolidated statements of operations and comprehensive (loss) income.

This is partially offset by a $ 4 million gain related to the 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 (loss) income.

Reclassifications from AOCI into earnings for Fiscal 2023 primarily include a $ 14 million gain related to the 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 (loss) income.

Reclassifications from AOCI into earnings for Fiscal 2022 primarily include a $ 1 million loss related to the 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 (loss) income.

All tax effects were not material for the periods presented.

1 unchanged sentence

The Company grants equity awards to certain employees and directors of the Company at the discretion of the Company’s Compensation and Talent Committee.

The Company has two equity plans which includes one stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and an Omnibus Incentive Plan adopted in the third fiscal quarter of Fiscal 2012 and amended and restated with shareholder approval in May 2015 and again in June 2020 (the “Incentive Plan”).

The Company has two equity plans which includes one stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and an Omnibus Incentive Plan adopted in Fiscal 2012 and amended and restated with shareholder approval in May 2015 and again in June 2020 (the “Incentive Plan”).

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

As of April 1, 2023, there were no shares available to grant equity awards under the 2008 Plan.

As of March 30, 2024, 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 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.

At March 30, 2024, there were 4,259,449 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.

Share Options

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

Share options are 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:

The following table summarizes the share options activity during Fiscal 2024, and information about options outstanding at March 30, 2024:

Options Weighted

7 unchanged sentences

Canceled/forfeited ( 23,205 ) $ 49.88

Outstanding at April 1, 2023

Outstanding at March 30, 2024

191,967 $ 65.97 1.16 $ 0.1

Vested or expected to vest at April 1, 2023

Vested or expected to vest at March 30, 2024

191,967 $ 65.97 1.16

Vested and exercisable at April 1, 2023

Vested and exercisable at March 30, 2024

191,967 $ 65.97 1.16 $ 0.1

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.

There were no unvested options and 191,967 vested options outstanding at March 30, 2024.

The total intrinsic value of options exercised during both Fiscal 2024 and Fiscal 2023 were immaterial.

The cash received from options exercised during Fiscal 2024 and Fiscal 2023 was $ 1 million and $ 6 million, respectively.

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

As of March 30, 2024, there was no remaining unrecognized share-based compensation expense for unvested share options.

There were no options granted during Fiscal 2024, Fiscal 2023 or Fiscal 2022.

4 unchanged sentences

time-based RSUs and performance-based RSUs.

Time-based RSUs generally vest in full on the first anniversary of the date of grant for our independent directors, or in equal increments on each of the third or fourth anniversaries of the date of grant (unless the employee is retirement-eligible).

Performance-based RSUs generally vest in full on the second or third anniversary of the date of grant, subject to the employee’s continued employment during the vesting period and only if certain pre-established cumulative performance targets are met.

Time-based RSUs generally vest in full on the first anniversary of the date of grant for the Company’s independent directors, or in equal increments on each of the third or fourth anniversaries of the date of grant (unless the employee is retirement-eligible).

Performance-based RSUs generally vest in full on the third anniversary of the date of grant, subject to the employee’s continued employment during the vesting period and only if certain pre-established performance targets are met.

Expense related to performance-based RSUs is recognized ratably over the performance period, net of forfeitures, based on the probability of attainment of the related performance targets.

14 unchanged sentences

Canceled/forfeited ( 214,734 ) $ 44.84 — $ —

Unvested at April 1, 2023

Unvested at March 30, 2024

2,688,284 $ 41.05 368,932 $ 41.34

The total fair value of service-based RSUs vested during Fiscal 2024, Fiscal 2023 and Fiscal 2022 was $ 87 million, $ 80 million and $ 78 million, respectively.

The total fair value of performance-based RSUs vested during Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $ 7 million, $ 18 million and $ 6 million, respectively.

As of April 1, 2023, the remaining unrecognized share-based compensation expense for unvested service-based and performance-based RSU grants was $ 78 million and $ 5 million, respectively, which is expected to be recognized over the related weighted-average periods of approximately 2.0 years and 2.2 years, respectively.

The total fair value of performance-based RSUs vested during Fiscal 2023 and Fiscal 2022 was $ 7 million and $ 18 million, respectively.

There were no performance-based RSUs vested during Fiscal 2024.

As of March 30, 2024, the remaining unrecognized share-based compensation expense for unvested, service-based and performance-based RSU grants was $ 68 million and $ 5 million, respectively, which is expected to be recognized over the related weighted-average period of approximately 2.4 years and 2.2 years.

Share-Based Compensation Expense

2 unchanged sentences

2024 April 1,

2022 March 27,

2023 April 2,

Share-based compensation expense $ 72 $ 78 $ 85

Tax benefits related to share-based compensation expense

$ 8 $ 14 $ 12

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company estimates forfeitures based on its historical forfeiture rates.

The estimated value of future forfeitures for equity awards as of April 1, 2023 is $ 11 million.

The estimated value of future forfeitures for equity awards as of March 30, 2024 is $ 11 million.

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 are aggregated in the “Non-United States” information captioned below.

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

(Loss) income before (benefit) provision for income taxes consisted of the following (in millions):

Fiscal Years Ended

2024 April 1,

2022 March 27,

2023 April 2,

United States $ ( 15 ) $ 85 $ 247

Non-United States ( 268 ) 563 668

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

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

Total (loss) income before (benefit) provision for income taxes $ ( 283 ) $ 648 $ 915

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

Fiscal Years Ended

2024 April 1,

2022 March 27,

2023 April 2,

United States - Federal $ 14 $ 62 $ 36

6 unchanged sentences

Total deferred provision for income taxes ( 187 ) ( 101 ) ( 58 )

Total provision for income taxes $ 29 $ 92 $ 66

(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 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):

Total (benefit) provision for income taxes $ ( 54 ) $ 29 $ 92

(1) Primarily relates to the UK tax restructuring activities in Fiscal 2024.

(2) Primarily relates to the impairment of Jimmy Choo and Versace indefinite-lived intangible assets in Fiscal 2024.

(3) Primarily relates to the remeasurement of an Asian income tax reserve.

(4) Relates to the impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization.

(5) Primarily relates to a valuation allowance reversal in Italy during Fiscal 2022.

The Company’s benefit for income taxes for the year ended March 30, 2024 and provision for income taxes for the years ended April 1, 2023 and April 2, 2022 were different from the amount computed by applying the statutory U.K.

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

Fiscal Years Ended

2024 April 1,

2022 March 27,

Provision for income taxes at the U.K.

2023 April 2,

(Benefit) provision for income taxes at the U.K.

statutory tax rate (2)

$ ( 71 ) 25.0 % $ 123 19.0 % 174 19.0 %

Effects of global financing arrangements (3)

( 28 ) 9.9 % ( 78 ) ( 12.1 ) % ( 61 ) ( 6.7 ) %

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 %

Differences in tax effects on foreign income ( 25 ) 8.8 % ( 1 ) ( 0.2 ) % 10 1.1 %

Liability for uncertain tax positions ( 11 ) 3.9 % ( 3 ) ( 0.4 ) % 91 9.9 %

Effect of changes in valuation allowances on deferred tax assets ( 9 ) 3.1 % ( 37 ) ( 5.8 ) % ( 67 ) ( 7.3 ) %

Non-deductible goodwill impairment (4)

3 unchanged sentences

Withholding tax 5 ( 1.6 ) % 3 0.5 % 5 0.6 %

Merger related costs 4 ( 1.5 ) % — — % — — %

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

1 unchanged sentence

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

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

Other 7 ( 2.3 ) % ( 9 ) ( 1.3 ) % ( 7 ) ( 0.7 ) %

Effective tax rate $ ( 54 ) 19.0 % $ 29 4.5 % $ 92 10.1 %

(1) Tax rates are calculated using unrounded numbers.

(2) The UK statutory tax rate increased from 19% to 25% on April 1, 2023.

(3) 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.

(4) Primarily relates to individually immaterial United States and foreign permanent adjustments.

(4) Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2024.

Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):

8 unchanged sentences

Inventories 23 21

Capitalized research and development 18 —

Stock compensation 4 6

9 unchanged sentences

Net deferred tax liabilities $ ( 10 ) $ ( 212 )

(1) Includes an incremental Swiss valuation allowance recorded during Fiscal 2024.

(2) Includes the impact of the Jimmy Choo and Versace indefinite-lived intangible asset impairment recorded during Fiscal 2024.

(3) Includes a U.K.

valuation allowance reversal during Fiscal 2023.

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

(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 $ 40 million and $ 67 million in Fiscal 2023 and Fiscal 2022, respectively, and increased $ 24 million in Fiscal 2021.

The valuation allowance increased $ 124 million in Fiscal 2024 and decreased $ 40 million and $ 67 million in Fiscal 2023 and Fiscal 2022, respectively.

In certain jurisdictions, the Company increased the valuation allowance by $ 135 million, $ 6 million and $ 34 million and released valuation allowances of $ 11 million, $ 14 million and $ 13 million in Fiscal 2024, Fiscal 2023 and Fiscal 2022, 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 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.

As of March 30, 2024, the Company had non-United States and United States net operating loss carryforwards of $ 1.797 billion, a portion of which will begin to expire in Fiscal 2025.

As of March 30, 2024 and April 1, 2023, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $ 188 million and $ 236 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 $ 173 million, $ 221 million and $ 234 million as of March 30, 2024, April 1, 2023 and April 2, 2022, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2024, Fiscal 2023 and Fiscal 2022, are presented below (in millions):

1 unchanged sentence

2024 April 1,

2022 March 27,

2023 April 2,

Unrecognized tax benefits beginning balance $ 200 $ 221 $ 107

2 unchanged sentences

Decreases related to audit settlements ( 46 ) (1) ( 2 ) ( 13 )

Decreases in prior period positions due to lapses in statute of limitations

( 3 ) ( 3 ) ( 4 )

Decreases related to prior period tax positions

( 16 ) ( 42 ) ( 4 )

Decreases in prior period positions due to lapses in statute of limitations

( 3 ) ( 3 ) ( 3 )

Unrecognized tax benefits ending balance $ 157 $ 200 $ 221

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

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

(3) Primarily relates to Asia tax reserves.

(1) This amount is primarily related to settlements of Italian transfer pricing and Hong Kong corporate income tax audits during Fiscal 2024.

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

Interest and penalties recognized in the consolidated statements of operations and comprehensive income (loss) for Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $ 42 million, $ 28 million and $ 15 million, respectively.

The Company recognized a reduction of $ 11 million interest and penalties in the consolidated statements of operations and comprehensive (loss) income for Fiscal 2024.

The interest and penalties recognized in the consolidated statements of operations and comprehensive (loss) income for Fiscal 2023 and Fiscal 2022 was $ 14 million and $ 13 million, respectively.

The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations.

28 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 and the war in Ukraine.

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

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

3 unchanged sentences

2024 April 1,

2022 March 27,

2023 April 2,

Total revenue:

3 unchanged sentences

Total revenue $ 5,170 $ 5,619 $ 5,654

Income (loss) from operations:

Income from operations:

Versace $ 25 $ 152 $ 185

5 unchanged sentences

( 575 ) ( 142 ) ( 73 )

Merger related costs ( 20 ) — —

COVID-19 related charges (2)

Impact of war in Ukraine (3)

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

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.

Restructuring and other expense (4)

( 33 ) ( 16 ) ( 42 )

Total (loss) income from operations $ ( 241 ) $ 679 $ 903

(1) Impairment of assets during Fiscal 2024 includes $ 283 million, $ 267 million and $ 25 million of impairment charges related to the Versace, Jimmy Choo and Michael Kors reportable segments, respectively.

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

(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.

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) These charges primarily relate to incremental credit losses and inventory reserves which are a direct impact of the war in Ukraine.

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

(4) See Note 11 for details on the Company's restructuring program.

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

1 unchanged sentence

2024 April 1,

2022 March 27,

2023 April 2,

Depreciation and amortization:

4 unchanged sentences

Total depreciation and amortization $ 188 $ 179 $ 193

See Note 8 for the Company’s goodwill by reportable segment.

Total revenue (based on country of origin) and long-lived assets by geographic location are as follows (in millions):

1 unchanged sentence

2024 April 1,

2022 March 27,

2023 April 2,

The Americas (1)

4 unchanged sentences

2024 April 1,

2022 March 27,

2023 April 2,

Long-lived assets:

5 unchanged sentences

(1) Net revenues earned in the United States during Fiscal 2024, Fiscal 2023 and Fiscal 2022 were $ 2.546 billion, $ 2.951 billion and $ 2.989 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.

Long-lived assets located in the United States as of March 30, 2024, April 1, 2023 and April 2, 2022 were $ 993 million, $ 826 million and $ 858 million, respectively.

As of March 30, 2024, the Company’s total long-lived assets on its consolidated balance sheet were $ 3.411 billion, of which, $ 1.650 billion related to Michael Kors, $ 1.220 billion related to Versace and $ 541 million related to Jimmy Choo.

See Note 9 for the Company’s goodwill by reportable segment.

Total revenue by major product category are as follows (in millions):

1 unchanged sentence

Total April 1,

Total March 27,

Total April 2,

Accessories $ 2,570 49.7 % $ 2,826 50.3 % $ 2,901 51.3 %

6 unchanged sentences

Subsequent Events

Net Investment Hedges

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

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.

On April 22, 2024, the U.S.

FTC filed a lawsuit in the United States District Court for the Southern District of New York against Tapestry and Capri seeking to block the Merger, claiming that the Merger would violate Section 7 of the Clayton Act and that the Merger Agreement and the Merger constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined.

The Company believes the FTC’s claims are without merit, and the Company, together with Tapestry, intend to vigorously defend the lawsuit.

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