Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Termination of the Agreement and Plan of Merger
As previously disclosed, on August 10, 2023, Capri entered into an Agreement and Plan of Merger with Tapestry, Inc., a Maryland corporation, and Sunrise Merger Sub, Inc., a British Virgin Islands business company limited by shares and a direct wholly owned subsidiary of Tapestry. The Merger Agreement provides that, among other things and on the terms and subject to the conditions set forth therein, Tapestry would acquire Capri in an all-cash transaction by means of a merger of Merger Sub with and into Capri, with Capri surviving the Merger as a wholly owned subsidiary of Tapestry.
The Merger had been approved by the boards of directors of Capri and Tapestry and by the shareholders of Capri. Completion of the Merger was subject to, among other customary conditions, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Company received regulatory approval from all countries except for the United States. In connection with Tapestry’s proposed acquisition of Capri, on April 22, 2024, the U.S. FTC filed a lawsuit in the United States District Court for the Southern District of New York (the “District Court”) 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 constituted unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined. The preliminary injunction hearing concluded in September 2024, and on October 24, 2024, the District Court granted the FTC's motion for a preliminary injunction to enjoin the Merger pending the completion of the FTC's in-house administrative proceeding. On October 28, 2024, Tapestry and Capri jointly filed a notice of appeal to the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”).
On November 13, 2024, the parties to the Merger Agreement entered into a termination agreement pursuant to which they agreed to terminate the Merger Agreement, effective immediately. In connection with the termination, consistent with the Merger Agreement, Tapestry agreed to reimburse the Company approximately $45 million in cash for certain expenses on November 14, 2024. The parties to the Merger Agreement also agreed to release each other and their related parties from any and all liability, claims, rights, actions, causes of action, suits, liens, obligations, accounts, debts, demands, agreements, promises, liabilities, controversies, costs, charges, damages, expenses and fees (including attorney’s, financial advisor’s or other fees) in connection with, arising out of or related to the Merger Agreement or the transactions contemplated therein or thereby. On November 15, 2024, Capri and Tapestry stipulated to the dismissal of the appeal to the Second Circuit. On December 4, 2024, the FTC’s in-house administrative proceeding was dismissed without prejudice.
Our Business
Capri Holdings Limited is a global fashion luxury group consisting of iconic, founder-led brands Versace, Jimmy Choo and Michael Kors. Our commitment to glamorous style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve.
Our Versace brand has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style. Founded in 1978 in Milan, Versace is known for its iconic and unmistakable style and unparalleled craftsmanship. Over the past several decades, the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of ready-to-wear, accessories, footwear, eyewear, watches, jewelry, fragrance and home furnishing. Versace’s design team is led by Donatella Versace, who has been the brand’s Artistic Director for over 20 years. Versace distributes its products through a worldwide distribution network, which includes boutiques in some of the world’s most fashionable cities, its e-commerce sites, as well as through the most prestigious department and specialty stores worldwide.
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Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessory brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as men’s luxury shoes and accessories. In addition, certain categories, such as fragrances and eyewear, are produced under licensing agreements. Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the brand since its inception in 1996. Jimmy Choo products are chic, glamorous and instinctively seductive. The brand offers classic and timeless luxury products, alongside innovative collections that are intended to set and lead fashion trends. Jimmy Choo is represented through its global store network, its e-commerce sites, as well as through the most prestigious department and specialty stores worldwide.
Our Michael Kors brand was launched over 40 years ago by Michael Kors, a world renowned designer, whose vision has taken the Company from its beginnings as an American luxury sportswear house to a global accessories, ready-to-wear, and footwear company with a global distribution network that has presence in over 100 countries through Company-operated retail stores and e-commerce sites, leading department stores, specialty stores and select licensing partners. Michael Kors is a highly recognized luxury fashion brand in the Americas and Europe with growing brand awareness in other international markets. Michael Kors features distinctive designs, materials and craftsmanship that combines stylish elegance and a sporty attitude. Michael Kors offers three primary collections: the Michael Kors Collection line, the MICHAEL Michael Kors line and the Michael Kors Mens line. The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried by select retail stores, our e-commerce sites, as well as in the finest luxury department stores in the world. MICHAEL Michael Kors has a strong focus on accessories, in addition to offering ready-to-wear and footwear. We have also been developing our men’s business in recognition of the significant opportunity afforded by the Michael Kors brand’s established fashion authority and the expanding men’s market. Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image.
Certain Factors Affecting Financial Condition and Results of Operations
Impairment losses. During the third quarter of Fiscal 2025, we identified impairment indicators due to the termination of the Merger Agreement, the decline in our share price, continued softening of consumer demand for fashion luxury goods globally and the continuing decline in operating results during the third quarter impacting all three of our brands. As we determined that it was more likely than not that the fair values of certain reporting units and/or brands were below their carrying amounts, we performed an interim impairment test during the third quarter of Fiscal 2025. As a result of our impairment assessment, we recorded $671 million of impairment charges related to our Jimmy Choo and Versace goodwill and intangible assets during the three and nine months ended December 28, 2024. It is possible that our conclusions regarding impairment or recoverability of goodwill or other intangible assets could change in future periods. Such changes could result in future impairment charges of goodwill or other intangible assets and such amounts could be significant. See Item 1A. Risk Factors “We may incur significant goodwill and/or intangible asset impairment charges with respect to one or more of our brands which could have a material adverse impact on our results of operations and financial condition.”
Macroeconomic conditions and inflationary pressures. Global economic conditions and the related impact on levels of consumer spending worldwide impacted our business in the first nine months of Fiscal 2025, and are likely to continue to impact our business and the luxury accessories, footwear and apparel industry overall for the foreseeable future. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on stock market declines and uncertainty, home prices, credit availability and consumer debt levels, concerns of a global banking crisis, political instability due to war or other geopolitical factors, including the presidential change in the U.S., and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have created a challenging retail environment, which is expected to continue in the near term. Purchases of discretionary luxury items, such as the accessories, footwear and apparel that we produce, tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty which could negatively affect our financial condition and results of operations.
Luxury goods trends and demand for our accessories and related merchandise . Our performance is affected by trends in the luxury goods industry, global consumer spending, macroeconomic factors, overall levels of consumer travel and spending on discretionary items as well as shifts in demographics and changes in lifestyle preferences. We have experienced, and may continue to experience, material reductions in revenues across our brands and regions driven predominantly by softening demand globally for fashion luxury goods as well as Versace and Michael Kors’ brand repositioning efforts. If demand for global fashion luxury goods continues to soften and/or if we do not correctly gauge consumer needs and fashion trends and respond appropriately, our future results of operations may be materially impacted.
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Foreign currency fluctuation. Our consolidated operations are impacted by the relationships between our reporting currency, the United States dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the United States dollar, primarily the Euro, the British Pound, the Chinese Renminbi and the Japanese Yen, among others. We continue to expect volatility in the global foreign currency exchange rates, which may have a negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the United States dollar.
Disruptions or delays in shipping and distribution and other supply chain constraints . Any disruptions in our shipping and distribution network, including port congestion, vessel availability, container shortages and temporary factory closures, could have a negative impact on our results of operations. These disruptions include the recent attacks on commercial shipping vessels in the Red Sea that have led to disruption and instability in global supply chains, which have resulted in shipment delays. These shipping disruptions have also resulted in, and may continue to result in, increased freight costs. See Item 1A — “Risk Factors” — “We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods” and “Our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments” of our Annual Report on Form 10-K for the fiscal year ended March 30, 2024 for additional discussion.
Costs of manufacturing, tariffs and import regulations. Our industry is subject to volatility in costs related to certain raw materials used in the manufacturing of our products. This volatility applies primarily to costs driven by commodity prices, which can increase or decrease dramatically over a short period of time. In addition, our costs may be impacted by sanction tariffs imposed on our products due to changes in trade terms. We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation. We are also subject to government import regulations, including United States Customs and Border Protection (“CBP”) withhold release orders. The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition. If additional tariffs or trade restrictions are implemented by the United States or other countries, the cost of our products could increase which could adversely affect our business. In addition, commodity prices and tariffs may have an adverse impact on our revenues, results of operations and cash flows. We use commercially reasonable efforts to mitigate these effects by sourcing our products as efficiently as possible and diversifying the countries where we produce. In addition, manufacturing labor costs are also subject to degrees of volatility based on local and global economic conditions. We use commercially reasonable efforts to source from localities that suit our manufacturing standards and result in more favorable labor driven costs of our product.
Implementing and updating information technology systems. During Fiscal 2024, we began implementing a new state of the art e-commerce platform across certain of our brands which was completed in Fiscal 2025. While the new platform is designed to improve the user experience and enhance consumer engagement, the transition created unanticipated challenges which negatively impacted our results of operations. The continued implementation of this platform may also negatively impact our future results of operations. See Item 1A — “Risk Factors” — “A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition” of our Annual Report on Form 10-K for the fiscal year ended March 30, 2024 for additional discussion.
Segment Information
We operate in three reportable segments, which are as follows:
Versace
We generate revenue through the sale of Versace luxury accessories, ready-to-wear and footwear through directly operated Versace boutiques throughout North America (United States and Canada), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania), as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of the Versace Jeans Couture product line, fragrances, watches, eyewear and home furnishings.
Jimmy Choo
We generate revenue through the sale of Jimmy Choo luxury goods through directly operated Jimmy Choo retail and outlet stores throughout the Americas (United States, Canada and Latin America), certain parts of EMEA and certain parts of Asia, through our e-commerce sites, as well as through wholesale sales of luxury goods to distribution partners (including
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geographic licensing arrangements that allow third parties to use the Jimmy Choo tradename in connection with retail and/or wholesale sales of Jimmy Choo branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated through product licensing agreements, which allow third parties to use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of products, including fragrances and eyewear.
Michael Kors
We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce, through which we sell our products, as well as licensed products bearing our name, directly to consumers throughout the Americas, certain parts of EMEA and certain parts of Asia. Our Michael Kors e-commerce business includes e-commerce sites in the United States, Canada, EMEA and Asia. We also sell Michael Kors products directly to department stores, primarily located across the Americas and EMEA, to specialty stores and travel retail shops in the Americas, Europe and Asia, and to our geographic licensees in certain parts of EMEA, Asia and Brazil. In addition, revenue is generated through product and geographic licensing arrangements, which allow third parties to use the Michael Kors brand name and trademarks in connection with the manufacturing and sale of products, including watches, jewelry, fragrances and eyewear, as well as through geographic licensing arrangements, which allow third parties to use the Michael Kors tradename in connection with the retail and/or wholesale sales of our Michael Kors branded products in specific geographic regions.
Unallocated Corporate Expenses
In addition to the reportable segments discussed above, we have certain corporate costs that are not directly attributable to our brands and, therefore, are not allocated to segments. Such costs primarily include certain administrative, corporate occupancy, shared service and information technology systems expenses, including system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including Merger related expenses, impairment charges and restructuring and other income (expense). The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. The following table presents our total revenue and income from operations by segment for the three and nine months ended December 28, 2024 and December 30, 2023 (in millions):
Three Months Ended Nine Months Ended
December 28,
2024 December 30,
2023 December 28,
2024 December 30,
2023
Total revenue:
Versace $ 193 $ 227 $ 613 $ 766
Jimmy Choo 159 166 472 481
Michael Kors 909 1,034 2,322 2,700
Total revenue $ 1,261 $ 1,427 $ 3,407 $ 3,947
Income (loss) from operations:
Versace $ (21) $ (14) $ (41) $ 24
Jimmy Choo (6) 4 (7) 11
Michael Kors 147 219 309 518
Total segment income from operations 120 209 261 553
Less: Corporate expenses
(51) (68) (178) (210)
Impairment of assets (1)
(675) (6) (718) (26)
Merger related income (costs) 14 (8) (1) (12)
Restructuring and other income (expense) 2 (5) — (3)
Total (loss) income from operations $ (590) $ 122 $ (636) $ 302
(1) Impairment of assets during the nine months ended December 28, 2024 includes $617 million, $83 million and $18 million of impairment charges related to the Versace, Jimmy Choo and Michael Kors reportable segments, respectively. Impairment of assets during the three and nine months ended December 30, 2023 primarily related to operating lease right-of-use assets at certain Versace and Michael Kors store locations.
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The following table presents our global network of retail stores by brand:
As of
December 28,
2024 December 30,
2023
Number of full price retail stores (including concessions):
Versace 174 170
Jimmy Choo 168 180
Michael Kors 435 493
777 843
Number of outlet stores:
Versace 60 63
Jimmy Choo 56 57
Michael Kors 312 307
428 427
Total number of retail stores 1,205 1,270
The following table presents our retail stores by geographic location:
As of As of
December 28, 2024 December 30, 2023
Versace Jimmy Choo Michael Kors Versace Jimmy Choo Michael Kors
Store count by region:
The Americas 46 44 292 44 43 308
EMEA 56 65 150 61 69 171
Asia 132 115 305 128 125 321
234 224 747 233 237 800
Key Consolidated Performance Indicators and Statistics
We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions):
Three Months Ended Nine Months Ended
December 28,
2024 December 30,
2023 December 28,
2024 December 30,
2023
Total revenue $ 1,261 $ 1,427 $ 3,407 $ 3,947
Gross profit as a percent of total revenue 64.4 % 65.0 % 64.4 % 65.2 %
(Loss) income from operations $ (590) $ 122 $ (636) $ 302
(Loss) income from operations as a percent of total revenue (46.8) % 8.5 % (18.7) % 7.7 %
Seasonality
We experience certain effects of seasonality with respect to our business. We generally experience greater sales during our third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during our first fiscal quarter.
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important to the portrayal of our results of operations and financial condition and that require our most difficult, subjective and complex judgments to make estimates about the effect of matters that are inherently uncertain. In applying such policies, we must use certain assumptions that are based on our informed judgments, assessments of probability and best estimates. Estimates, by their nature, are subjective and are based on analysis of available information, including current and historical factors and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis. While our significant accounting policies are detailed in Note 3 to the accompanying consolidated financial statements, our critical accounting policies are disclosed, in full, in the MD&A section of our Annual Report on Form 10-K for the fiscal year ended March 30, 2024. There have been no significant changes to our critical accounting policies and estimates since March 30, 2024.
Goodwill and Other Intangible Assets
We perform our annual impairment assessment of goodwill and intangible assets during the fourth quarter of each fiscal year, or whenever impairment indicators exist. During the third quarter of Fiscal 2025, we identified impairment indicators due to the reduction of our share price following the termination of the Merger Agreement, continued softening of consumer demand for fashion luxury goods globally and the continuing decline in operating results during the third quarter impacting all three of our brands. As a result of these factors, we concluded that impairment indicators existed during the third quarter of Fiscal 2025, resulting in the need to perform an interim impairment assessment of goodwill and intangible assets.
We performed our goodwill impairment assessment for our Michael Kors reporting units using a qualitative assessment. Based on the results of our qualitative impairment assessment, we concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying values and, therefore, were not impaired. We performed a 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. We also performed a quantitative impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values.
Based on the results of these assessments, we determined there was no impairment for the Jimmy Choo Licensing reporting unit goodwill as the fair value exceeded the related carrying value. However, we concluded that the fair value of the Jimmy Choo Wholesale reporting unit goodwill and Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts and we recorded impairment. These impairment charges were primarily related to a decline in revenue driven predominantly by softening demand globally for fashion luxury goods, as well as, Versace’s recent efforts to reposition the brand by placing a greater emphasis on luxury and craftsmanship. Accordingly, we recorded goodwill impairment charges of $66 million related to the Jimmy Choo Wholesale reporting unit that has a remaining balance of $26 million. The Jimmy Choo Retail reporting unit’s goodwill balance was fully impaired during Fiscal 2024. We also recorded impairment charges of $15 million related to the Jimmy Choo Retail and Wholesale brand intangible assets that have remaining balances of $147 million and $52 million, respectively. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the period ended December 28, 2024.
Further, based on the results of these assessments, we determined that there was no impairment for the Versace Licensing reporting unit goodwill as the fair value exceeded the related carrying value. However, the fair value of the Versace Retail and Wholesale reporting units goodwill and Retail and Wholesale brand indefinite-lived intangible assets did not exceed their related carrying amounts. These impairment charges were primarily related to a decline in revenue driven predominantly by softening demand globally for fashion luxury goods as well as Versace’s recent efforts to reposition the brand to place a greater emphasis on luxury and craftsmanship. Accordingly, we recorded goodwill impairment charges of $364 million related to the Versace Retail and Wholesale reporting units goodwill that have remaining balances of $97 million and $22 million, respectively. We also recorded impairment charges of $216 million related to the Versace Retail and Wholesale brand intangible assets that have remaining balances of $351 million and $85 million, respectively. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the period ended December 28, 2024.
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It is possible that our conclusions regarding impairment or recoverability of goodwill or other intangible assets could change in future periods if, for example, (i) our 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 our reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other intangible assets.
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Results of Operations
Comparison of the three months ended December 28, 2024 with the three months ended December 30, 2023
The following table details the results of our operations for the three months ended December 28, 2024 and December 30, 2023, and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):
Three Months Ended $ Change % Change % of Total Revenue for
the Three Months Ended
December 28,
2024 December 30,
2023 December 28,
2024 December 30,
2023
Statements of Operations Data:
Total revenue $ 1,261 $ 1,427 $ (166) (11.6) %
Cost of goods sold 449 499 (50) (10.0) % 35.6 % 35.0 %
Gross profit 812 928 (116) (12.5) % 64.4 % 65.0 %
Selling, general and administrative expenses 680 749 (69) (9.2) % 53.9 % 52.5 %
Depreciation and amortization 49 46 3 6.5 % 3.9 % 3.2 %
Impairment of assets 675 6 669 NM 53.5 % 0.4 %
Restructuring and other (income) expense (2) 5 (7) NM (0.2) % 0.4 %
Total operating expenses 1,402 806 596 73.9 % NM 56.5 %
(Loss) income from operations (590) 122 (712) NM (46.8) % 8.5 %
Interest (income) expense, net (8) 1 (9) NM (0.6) % 0.1 %
Foreign currency loss (gain) 23 (2) 25 NM 1.8 % (0.1) %
(Loss) income before income taxes (605) 123 (728) NM (48.0) % 8.6 %
(Benefit) provision for income taxes (59) 18 (77) NM (4.7) % 1.3 %
Net (loss) income (546) 105 (651) NM
Less: Net income attributable to noncontrolling interest 1 — 1 NM
Net (loss) income attributable to Capri $ (547) $ 105 $ (652) NM
NM Not meaningful
Total Revenue
Total revenue decreased $166 million, or 11.6%, to $1.261 billion for the three months ended December 28, 2024, compared to $1.427 billion for the three months ended December 30, 2023, which included net unfavorable foreign currency effects of approximately $4 million, as a result of the strengthening of the United States dollar compared to the Euro and Japanese Yen for the three months ended December 28, 2024. On a constant currency basis, our total revenue decreased $162 million, or 11.4%. The decrease is primarily attributable to an overall slowdown in demand for luxury fashion goods globally, as well as the result of certain strategic initiatives previously put in place at Versace and Michael Kors that did not perform as expected.
Three Months Ended % Change
(in millions) December 28,
2024 December 30,
2023 $ Change As
Reported Constant
Currency
Versace $ 193 $ 227 $ (34) (15.0) % (15.0) %
Jimmy Choo 159 166 (7) (4.2) % (4.2) %
Michael Kors 909 1,034 (125) (12.1) % (11.7) %
Total revenue $ 1,261 $ 1,427 $ (166) (11.6) % (11.4) %
• Versace revenues decreased $34 million, or 15.0%, to $193 million on both a reported and constant currency basis for the three months ended December 28, 2024, compared to $227 million for the three months ended
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December 30, 2023, primarily due to softening demand globally for fashion luxury goods along with Versace’s recent efforts to reposition the brand to place a greater emphasis on luxury and craftsmanship.
• Jimmy Choo revenues decreased $7 million, or 4.2%, to $159 million on both a reported and constant currency basis for the three months ended December 28, 2024, compared to $166 million for the three months ended December 30, 2023, primarily attributable to lower revenues in Asia and the Americas partially offset by higher revenues in EMEA.
• Michael Kors revenue decreased $125 million, or 12.1%, to $909 million for the three months ended December 28, 2024, compared to $1.034 billion for the three months ended December 30, 2023, which included unfavorable foreign currency effects of $4 million. On a constant currency basis, revenue decreased $121 million, or 11.7%, primarily due to softening demand globally for fashion luxury goods, as well as the result of certain strategic initiatives previously put in place at Michael Kors that did not perform as expected.
Gross Profit
Gross profit decreased $116 million, or 12.5%, to $812 million for the three months ended December 28, 2024, compared to $928 million for the three months ended December 30, 2023, which included net unfavorable foreign currency effects of $2 million. Gross profit as a percentage of total revenue was 64.4% and 65.0% for the three months ended December 28, 2024 and December 30, 2023, respectively. The gross profit margin decrease was primarily related to lower full price sell-throughs for the three months ended December 28, 2024, as compared to the three months ended December 30, 2023.
Total Operating Expenses
Total operating expenses increased $596 million, or 73.9%, to $1.402 billion for the three months ended December 28, 2024, compared to $806 million for the three months ended December 30, 2023. Our operating expenses included a net favorable foreign currency impact of approximately $1 million. Total operating expenses increased to 111.2% as a percentage of total revenue for the three months ended December 28, 2024, compared to 56.5% for the three months ended December 30, 2023. The components that comprise total operating expenses are explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $69 million, or 9.2%, to $680 million for the three months ended December 28, 2024, compared to $749 million for the three months ended December 30, 2023, primarily due to decreased retail store costs, marketing spend and unallocated corporate expenses for the three months ended December 28, 2024.
As a percentage of total revenue, selling, general and administrative expenses increased to 53.9% for the three months ended December 28, 2024, compared to 52.5% for the three months ended December 30, 2023, primarily due to deleveraging of expenses on lower revenues for the three months ended December 28, 2024.
Unallocated corporate expenses, which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment, decreased $17 million, or 25.0%, to $51 million for the three months ended December 28, 2024 as compared to $68 million for the three months ended December 30, 2023, primarily due to a decrease in professional fees and information technology costs related to certain Capri transformation projects which are now complete.
Impairment of Assets
For the three months ended December 28, 2024, we recognized asset impairment charges of $675 million primarily related to the impairment of the Jimmy Choo Wholesale and Versace Retail and Wholesale reporting units’ goodwill and Versace and Jimmy Choo brand intangible assets. For the three months ended December 30, 2023, we recognized asset impairment charges of $6 million primarily related to operating lease right-of-use assets at certain Versace and Michael Kors store locations. See Note 12 to the accompanying consolidated financial statements for additional information.
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Restructuring and Other (Income) Expense
During the three months ended December 28, 2024, we recorded income of $2 million primarily related to gains on lease terminations partially offset by severance and store closure costs. During the three months ended December 30, 2023, we recorded expenses of $5 million primarily related to equity awards associated with the acquisition of Versace. See Note 9 to the accompanying consolidated financial statements for additional information.
Restructuring and other (income) expense is not evaluated as part of our reportable segments’ results (See Segment Information above for additional information).
(Loss) Income from Operations
As a result, loss from operations was $590 million for three months ended December 28, 2024, compared to income from operations of $122 million for the three months ended December 30, 2023. Loss from operations as a percentage of total revenue was 46.8% for the three months ended December 28, 2024, compared to income from operations of 8.5% for the three months ended December 30, 2023. See Segment Information above for a reconciliation of our segment operating income to total operating (loss) income.
Three Months Ended
(in millions) December 28,
2024 December 30,
2023 $ Change % Change
Income (loss) from operations:
Versace $ (21) $ (14) $ (7) 50.0 %
Jimmy Choo (6) 4 (10) NM
Michael Kors 147 219 (72) (32.9) %
Total segment income from operations $ 120 $ 209 $ (89) (42.6) %
Operating Margin:
Versace (10.9) % (6.2) %
Jimmy Choo (3.8) % 2.4 %
Michael Kors 16.2 % 21.2 %
NM Not meaningful
• Versace recorded a loss from operations of $21 million for the three months ended December 28, 2024, compared to $14 million for the three months ended December 30, 2023. Operating margin decreased from a loss of 6.2% for the three months ended December 30, 2023, to an operating loss of 10.9% for the three months ended December 28, 2024, primarily due to deleveraging of operating expenses on lower revenues compared to the prior year, partially offset by lower marketing expenses.
• Jimmy Choo recorded a loss from operations of $6 million for the three months ended December 28, 2024, compared to income of $4 million for the three months ended December 30, 2023. Operating margin decreased from 2.4% for the three months ended December 30, 2023 to an operating loss of 3.8% for the three months ended December 28, 2024, primarily due to deleveraging of operating expenses on lower revenues.
• Michael Kors recorded income from operations of $147 million for the three months ended December 28, 2024, compared to $219 million for the three months ended December 30, 2023. Operating margin decreased from 21.2% for the three months ended December 30, 2023, to 16.2% for the three months ended December 28, 2024, primarily due to deleveraging of operating expenses on lower revenues compared to the prior year.
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Interest (Income) Expense, net
For the three months ended December 28, 2024, we recognized $8 million of interest income compared to $1 million of interest expense for the three months ended December 30, 2023. The $9 million improvement in interest (income) expense, net, is primarily due to higher interest income from our net investment hedges and lower average borrowings and effective interest rates on our outstanding debt (see Note 10 and Note 13 to the accompanying consolidated financial statements for additional information).
Foreign Currency Loss (Gain)
For the three months ended December 28, 2024, we recognized a net foreign currency loss of $23 million compared to a gain of $2 million for the three months ended December 30, 2023, primarily attributable to the remeasurement of intercompany transactions with certain of our subsidiaries.
(Benefit) Provision for Income Taxes
The benefit for income taxes was $59 million on a pre-tax loss of $605 million for the three months ended December 28, 2024, compared to a provision of $18 million on pre-tax income of $123 million for the three months ended December 30, 2023. Our effective tax rate for the three months ended December 28, 2024 compared to our effective tax rate for the three months ended December 30, 2023 is not a meaningful metric due to the pre-tax loss in the current year and pre-tax income for the prior year. Our effective tax rate differs from the United Kingdom (“U.K.”) federal statutory rate of 25% primarily related to the impact of the non-deductible goodwill impairment charges recorded partially offset by unfavorable geographic mix of earnings and the unfavorable impact of global financing activities due to a net loss for the three months ended December 28, 2024.
Our effective tax rate may fluctuate from time to time due to the effects of changes in United States federal, state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods.
On January 10, 2025, the United States Treasury and the Internal Revenue Service (“IRS”) issued final regulations that address several long-standing issues related to dual consolidated losses and introduce new rules for disregarded payment losses. The changes related to disregarded payment losses could impact how we utilize certain deductions and losses to offset our U.S. income as part of our global financing activities beginning in Fiscal 2027. We will continue to evaluate its impact as further information becomes available.
Net (Loss) Income Attributable to Capri
As a result of the foregoing, our net loss was $547 million for the three months ended December 28, 2024, compared to net income of $105 million for the three months ended December 30, 2023.
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Results of Operations
Comparison of the nine months ended December 28, 2024 with the nine months ended December 30, 2023
The following table details the results of our operations for the nine months ended December 28, 2024 and December 30, 2023, and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):
Nine Months Ended $ Change % Change % of Total Revenue for the Nine Months Ended
December 28,
2024 December 30,
2023 December 28, 2024 December 30, 2023
Statements of Operations Data:
Total revenue $ 3,407 $ 3,947 $ (540) (13.7) %
Cost of goods sold 1,212 1,375 (163) (11.9) % 35.6 % 34.8 %
Gross profit 2,195 2,572 (377) (14.7) % 64.4 % 65.2 %
Selling, general and administrative expenses 1,968 2,102 (134) (6.4) % 57.8 % 53.3 %
Depreciation and amortization 145 139 6 4.3 % 4.3 % 3.5 %
Impairment of assets 718 26 692 NM 21.1 % 0.7 %
Restructuring and other expense — 3 (3) NM — % 0.1 %
Total operating expenses 2,831 2,270 561 24.7 % 83.1 % 57.5 %
(Loss) income from operations (636) 302 (938) NM (18.7) % 7.7 %
Interest (income) expense, net (22) 12 (34) NM (0.6) % 0.3 %
Foreign currency loss 11 16 (5) (31.3) % 0.3 % 0.4 %
(Loss) income before income taxes (625) 274 (899) NM (18.3) % 6.9 %
(Benefit) provision for income taxes (90) 31 (121) NM (2.6) % 0.8 %
Net (loss) income (535) 243 (778) NM
Less: Net income attributable to noncontrolling interest 2 — 2 NM
Net (loss) income attributable to Capri $ (537) $ 243 $ (780) NM
NM Not meaningful
Total Revenue
Total revenue decreased $540 million, or 13.7%, to $3.407 billion for the nine months ended December 28, 2024, compared to $3.947 billion for the nine months ended December 30, 2023, which included net unfavorable foreign currency effects of approximately $17 million, as a result of the strengthening of the United States dollar compared to all major currencies in which we operate for the nine months ended December 28, 2024. On a constant currency basis, our total revenue decreased $523 million, or 13.3%. The decrease is primarily attributable to an overall slowdown in demand for luxury fashion goods globally, as well as the result of certain strategic initiatives previously put in place at Versace and Michael Kors that did not perform as expected.
Nine Months Ended % Change
(in millions) December 28,
2024 December 30,
2023 $ Change As
Reported Constant
Currency
Versace $ 613 $ 766 $ (153) (20.0) % (19.6) %
Jimmy Choo 472 481 (9) (1.9) % (1.5) %
Michael Kors 2,322 2,700 (378) (14.0) % (13.6) %
Total revenue $ 3,407 $ 3,947 $ (540) (13.7) % (13.3) %
• Versace revenues decreased $153 million, or 20.0%, to $613 million for the nine months ended December 28, 2024, compared to $766 million for the nine months ended December 30, 2023, which included unfavorable foreign currency effects of $3 million. On a constant currency basis, revenue decreased $150 million, or 19.6%, primarily due to softening demand globally for fashion luxury goods along with Versace’s recent efforts to reposition the brand to place a greater emphasis on luxury and craftsmanship.
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• Jimmy Choo revenues decreased $9 million, or 1.9%, to $472 million for the nine months ended December 28, 2024, compared to $481 million for the nine months ended December 30, 2023, which included unfavorable foreign currency effects of $2 million. On a constant currency basis, revenue decreased $7 million, or 1.5%, primarily attributable to lower revenues in Asia and the Americas partially offset by higher revenues in EMEA.
• Michael Kors revenues decreased $378 million, or 14.0%, to $2.322 billion for the nine months ended December 28, 2024, compared to $2.700 billion for the nine months ended December 30, 2023, which included unfavorable foreign currency effects of $12 million. On a constant currency basis, revenue decreased $366 million, or 13.6%, primarily due to softening demand globally for fashion luxury goods, as well as the result of certain strategic initiatives previously put in place at Michael Kors that did not perform as expected.
Gross Profit
Gross profit decreased $377 million, or 14.7%, to $2.195 billion for the nine months ended December 28, 2024, compared to $2.572 billion for the nine months ended December 30, 2023, which included net unfavorable foreign currency effects of $7 million. Gross profit as a percentage of total revenue was 64.4% for the nine months ended December 28, 2024, compared to 65.2% for the nine months ended December 30, 2023. The decrease in gross profit margin primarily related to lower full price sell-throughs partially offset by favorable channel mix for the nine months ended December 28, 2024, as compared to the nine months ended December 30, 2023.
Total Operating Expenses
Total operating expenses increased $561 million, or 24.7%, to $2.831 billion for the nine months ended December 28, 2024, compared to $2.270 billion for the nine months ended December 30, 2023. Our operating expenses included a net favorable foreign currency impact of approximately $6 million. Total operating expenses increased to 83.1% as a percentage of total revenue for the nine months ended December 28, 2024, compared to 57.5% for the nine months ended December 30, 2023. The components that comprise total operating expenses are explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $134 million, or 6.4%, to $1.968 billion for the nine months ended December 28, 2024, compared to $2.102 billion for the nine months ended December 30, 2023, primarily due to the timing of marketing spend in the prior year, particularly related to the timing of the Versace fall fashion show, decreased retail store costs and decreased unallocated corporate expenses.
As a percentage of total revenue, selling, general and administrative expenses increased to 57.8% for the nine months ended December 28, 2024, compared to 53.3% for the nine months ended December 30, 2023, primarily due to deleveraging of expenses on lower revenues for the nine months ended December 28, 2024.
Unallocated corporate expenses, which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment, decreased $32 million, or 15.2%, to $178 million for the nine months ended December 28, 2024 as compared to $210 million for the nine months ended December 30, 2023, primarily due to a decrease in professional fees and information technology costs related to certain Capri transformation projects which are now complete.
Impairment of Assets
For the nine months ended December 28, 2024, we recognized asset impairment charges of $718 million primarily related to the impairment of the Jimmy Choo Wholesale and Versace Retail and Wholesale reporting units’ goodwill and Versace and Jimmy Choo brand intangible assets as well as operating lease right-of-use assets at certain Versace and Michael Kors store locations. For the nine months ended December 30, 2023, we recognized asset impairment charges of $26 million primarily related to operating lease right-of-use assets at certain Versace and Michael Kors store locations. See Note 12 to the accompanying consolidated financial statements for additional information.
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Restructuring and Other Expense
During the nine months ended December 28, 2024, we recorded immaterial net restructuring and other expense which was the result of gains on lease terminations fully offset by severance and store closure costs. During the nine months ended December 30, 2023, we recorded expense of $3 million, primarily related to expenses related to 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. See Note 9 to the accompanying consolidated financial statements for additional information.
Restructuring and other expense is not evaluated as part of our reportable segments’ results (see Segment Information above for additional information).
(Loss) Income from Operations
As a result, loss from operations was $636 million for the nine months ended December 28, 2024, compared to income from operations of $302 million for the nine months ended December 30, 2023. Loss from operations as a percentage of total revenue was 18.7% for the nine months ended December 28, 2024, compared to income from operations of 7.7% for the nine months ended December 30, 2023. See Segment Information above for a reconciliation of our segment operating income to total operating (loss) income.
Nine Months Ended
(in millions) December 28,
2024 December 30,
2023 $ Change % Change
Income (loss) from operations:
Versace $ (41) $ 24 $ (65) NM
Jimmy Choo (7) 11 (18) NM
Michael Kors 309 518 (209) (40.3) %
Total segment income from operations $ 261 $ 553 $ (292) (52.8) %
Operating Margin:
Versace (6.7) % 3.1 %
Jimmy Choo (1.5) % 2.3 %
Michael Kors 13.3 % 19.2 %
NM Not meaningful
• Versace recorded a loss from operations of $41 million for the nine months ended December 28, 2024, compared to income of $24 million for the nine months ended December 30, 2023. Operating margin decreased from 3.1% for the nine months ended December 30, 2023, to an operating loss of 6.7% for the nine months ended December 28, 2024, primarily due to deleveraging of operating expenses on lower revenues partially offset by lower marketing expenses compared to the prior year as noted above.
• Jimmy Choo recorded a loss from operations of $7 million for the nine months ended December 28, 2024, compared to income of $11 million for the nine months ended December 30, 2023. Operating margin decreased from 2.3% for the nine months ended December 30, 2023, to an operating loss of 1.5% for the nine months ended December 28, 2024, primarily due to increased retail store costs.
• Michael Kors recorded income from operations of $309 million for the nine months ended December 28, 2024, compared to $518 million for the nine months ended December 30, 2023. Operating margin decreased from 19.2% for the nine months ended December 30, 2023, to 13.3% for the nine months ended December 28, 2024, primarily due to deleveraging of operating expenses on lower revenues compared to the prior year partially offset by lower retail store and marketing expenses.
Interest (Income) Expense, net
We recognized $22 million of interest income for the nine months ended December 28, 2024 compared to $12 million of interest expense for the nine months ended December 30, 2023. The $34 million improvement in interest (income) expense, net, is primarily due to higher interest income from our net investment hedges and lower average borrowings and effective interest
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rates on our outstanding debt (see Note 10 and Note 13 to the accompanying consolidated financial statements for additional information).
Foreign Currency Loss
For the nine months ended December 28, 2024 and December 30, 2023, we recognized a net foreign currency loss of $11 million and $16 million, respectively, primarily attributable to the remeasurement of intercompany transactions with certain of our subsidiaries.
(Benefit) Provision for Income Taxes
The benefit for income taxes was $90 million on a pre-tax loss of $625 million for the nine months ended December 28, 2024, compared to a provision of $31 million on pre-tax income of $274 million for the nine months ended December 30, 2023. Our effective tax rate for the nine months ended December 28, 2024 compared to our effective tax rate for the nine months ended December 30, 2023 is not a meaningful metric due to the pre-tax loss in the current year and pre-tax income for the prior year. Our effective tax rate differs from the U.K. federal statutory rate of 25% primarily related to the impact of the non-deductible goodwill impairment charges recorded partially offset by unfavorable geographic mix of earnings and the unfavorable impact of global financing activities due to a net loss for the nine months ended December 28, 2024.
Our effective tax rate may fluctuate from time to time due to the effects of changes in United States federal, state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods.
On January 10, 2025, the United States Treasury and the IRS issued final regulations that address several long-standing issues related to dual consolidated losses and introduce new rules for disregarded payment losses. The changes related to disregarded payment losses could impact how we utilize certain deductions and losses to offset our U.S. income as part of our global financing activities beginning in Fiscal 2027. We will continue to evaluate its impact as further information becomes available.
Net (Loss) Income Attributable to Capri
As a result of the foregoing, our net loss was $537 million for the nine months ended December 28, 2024, compared to net income of $243 million for the nine months ended December 30, 2023.
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Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity are the cash flows generated from our operations, along with borrowings available under our credit facilities (see below discussion regarding “Revolving Credit Facilities”) and available cash and cash equivalents. Our primary use of this liquidity is to fund the ongoing cash requirements, including our working capital needs and capital investments in our business, debt repayments, acquisitions, returns of capital, including share repurchases and other corporate activities. We believe that the cash generated from our operations, together with borrowings available under our revolving credit facilities and 364 Day Term Loan and available cash and cash equivalents, will be sufficient to meet our working capital needs for the next 12 months and beyond, including investments made and expenses incurred in connection with our store opening and renovation plans, investments in corporate and distribution facilities, continued IT system development, e-commerce and marketing initiatives. We spent $101 million on capital expenditures during the nine months ended December 28, 2024.
The Capri transformation program represents a multi-year, multi-project initiative intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining operational and IT transformation projects were paused and we will reassess this program, along with related timing, during Fiscal 2026.
The following table sets forth key indicators of our liquidity and capital resources (in millions):
As of
December 28,
2024 March 30,
2024
Balance Sheet Data:
Cash and cash equivalents $ 356 $ 199
Working capital $ 305 $ (87)
Total assets $ 5,905 $ 6,689
Short-term debt $ 25 $ 462
Long-term debt $ 1,454 $ 1,261
Nine Months Ended
December 28,
2024 December 30,
2023
Cash Flows Provided by (Used In):
Operating activities $ 442 $ 265
Investing activities $ (68) $ (139)
Financing activities $ (212) $ (116)
Effect of exchange rate changes $ (2) $ (11)
Net increase (decrease) in cash and cash equivalents $ 160 $ (1)
Cash Provided by Operating Activities
Net cash provided by operating activities was $442 million during the nine months ended December 28, 2024, as compared to net cash provided by in operating activities of $265 million for the nine months ended December 30, 2023. The increase in net cash provided by operating activities was primarily attributable to timing of payments due to improved management of Accounts Payable and Accounts Receivable in the current year, partially offset by a decrease in our net income after non-cash adjustments.
Cash Used in Investing Activities
Net cash used in investing activities was $68 million during the nine months ended December 28, 2024, as compared to net cash used in investing activities of $139 million during the nine months ended December 30, 2023. The decrease in net cash used in investing activities was primarily attributable the receipt of $42 million related to the settlement of certain net investment hedges and lower capital expenditures of $38 million, partially offset by $9 million of acquisition related payments compared to prior year.
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Cash Used in Financing Activities
Net cash used in financing activities was $212 million during the nine months ended December 28, 2024, as compared to net cash used in financing activities of $116 million during the nine months ended December 30, 2023. The increase in cash used by financing activities of $96 million was primarily attributable to higher debt repayments of $196 million partially offset by a decrease in cash used to repurchase our ordinary shares of $103 million compared to prior year.
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Debt Facilities
The following table presents a summary of our borrowing capacity and amounts outstanding as of December 28, 2024 and March 30, 2024 (in millions):
As of
December 28,
2024 March 30,
2024
Senior Unsecured Revolving Credit Facility:
Revolving Credit Facility (excluding up to a $500 million accordion feature) (1)
Total availability $ 1,500 $ 1,500
Borrowings outstanding (2)
521 764
Letter of credit outstanding 1 2
Remaining availability $ 978 $ 734
364 Day Term Loan ($450 million) (3)
Borrowings outstanding, net of debt issuance costs (1)
$ 449 $ —
Versace Term Loan (450 Million Euro) (3)
Borrowings outstanding, net of debt issuance costs (4)
$ 468 $ 485
Senior Notes due 2024 (3)
Borrowings outstanding, net of debt issuance costs and discount amortization $ — $ 450
Other Borrowings (4)
$ 41 $ 24
Hong Kong Uncommitted Credit Facility:
Total availability (70 million Hong Kong Dollars) (6)
$ 9 $ 9
Borrowings outstanding — —
Remaining availability (70 million Hong Kong Dollars) $ 9 $ 9
China Uncommitted Credit Facility:
Total availability (75 million Chinese Yuan) (6)
$ 10 $ 10
Borrowings outstanding — —
Total and remaining availability (75 million Chinese Yuan) $ 10 $ 10
Japan Credit Facility:
Total availability (1.0 billion Japanese Yen) $ 6 $ 7
Borrowings outstanding — —
Remaining availability (1.0 billion Japanese Yen) $ 6 $ 7
Versace Uncommitted Credit Facilities:
Total availability (40 million Euro) (6)
$ 42 $ 43
Borrowings outstanding — —
Remaining availability (40 million Euro) $ 42 $ 43
Total borrowings outstanding (1)
$ 1,479 $ 1,723
Total remaining availability $ 1,045 $ 803
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(1) The financial covenant in our 2022 Credit Facility requires us to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.0. As of December 28, 2024 and March 30, 2024, we were in compliance with all covenants related to the agreements then in effect governing our debt. On August 23, 2024, we entered into a first incremental term loan amendment to provide for a $450 million 364 Day Term Loan which utilized the $500 million accordion feature. The $500 million accordion feature was fully available to us as of March 30, 2024. See Note 10 to the accompanying consolidated financial statements for additional information.
(2) As of December 28, 2024 and March 30, 2024, all amounts are recorded as long-term debt on our consolidated balance sheets, besides the Senior Notes, due in November 2024, which are recorded within short-term debt on our consolidated balance sheets as of March 30, 2024.
(3) During the third quarter of Fiscal 2025, we fully utilized our 364 Day Term Loan to repay our $450 million Senior Notes due in November 2024. The 364 Day Term Loan was recorded within long-term debt on our consolidated balance sheets as of December 28, 2024 as it was refinanced as part of the amended and restated revolving credit facility and new term loans entered into on February 4, 2025. See Note 18 to the accompanying consolidated financial statements for additional information.
(4) On December 5, 2022, Gianni Versace S.r.l., our wholly owned subsidiary, entered into a credit facility, which provides a senior unsecured term loan in an aggregate principal amount of €450 million. As of December 28, 2024, all amounts are recorded within long-term debt on our consolidated balance sheets, as it was refinanced as part of the amended and restated revolving credit facility and new term loans entered into on February 4, 2025. See Note 18 to the accompanying consolidated financial statements for additional information. As of March 30, 2024, all amounts are recorded as long-term debt on our consolidated balance sheets.
(5) The balance as of December 28, 2024 consists of $25 million related to our supplier financing program recorded within short-term debt on our consolidated balance sheets, $9 million related to the sale of certain Versace tax receivables, recorded within long-term debt on our consolidated balance sheets and $7 million of other loans recorded as long-term debt on our consolidated balance sheets. The balance as of March 30, 2024 consists of $11 million related to our supplier finance program recorded within short-term debt on our consolidated balance sheets, $11 million related to the sale of certain Versace tax receivables, with $1 million and $10 million recorded within short-term debt and long-term debt, respectively, and $2 million of other loans recorded as long-term debt on our consolidated balance sheets.
(6) The balance as of December 28, 2024 and March 30, 2024 represents the total availability of the credit facility, which excludes bank guarantees.
We believe that our 2022 Credit Facility is adequately diversified with no undue concentration in any one financial institution. As of December 28, 2024, there were 17 financial institutions participating in the facility, with none maintaining a maximum commitment percentage in excess of 10%. We have no reason to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the 2022 Credit Facility.
See Note 10 in the accompanying financial statements and Note 12 in our Fiscal 2024 Annual Report on Form 10-K for detailed information relating to our credit facilities and debt obligations.
Share Repurchase Program
The following table presents our treasury share repurchases during the nine months ended December 28, 2024 and December 30, 2023 (dollars in millions):
Nine Months Ended
December 28,
2024 December 30,
2023
Cost of shares repurchased under share repurchase program $ — $ 100
Fair value of shares withheld to cover tax obligations for vested restricted share awards
4 7
Total cost of treasury shares repurchased $ 4 $ 107
Shares repurchased under share repurchase program — 2,637,102
Shares withheld to cover tax withholding obligations 117,710 185,133
117,710 2,822,235
On November 9, 2022, we announced our Board of Directors approved a two-year share repurchase program (the “Existing Share Repurchase Plan”) to purchase up to $1.0 billion of our outstanding ordinary shares. Share repurchases may be made in open market or privately negotiated transactions and/or pursuant to Rule 10b5-1 trading plans, subject to market
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conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors. However, pursuant to the terms of the Merger Agreement, and subject to certain limited exceptions, we were prohibited from repurchasing our ordinary shares other than the acceptance of our ordinary shares as payment of the exercise price of our options or for withholding taxes with respect of our equity awards. Accordingly, we did not repurchase any of our ordinary shares during the pendency of the Merger Agreement pursuant to the Existing Share Repurchase Plan. The Existing Share Repurchase Plan expired on November 9, 2024.
Contractual Obligations and Commercial Commitments
Please refer to the “Contractual Obligations and Commercial Commitments” disclosure within the “Liquidity and Capital Resources” section of our Fiscal 2024 Form 10-K for a detailed disclosure of our other contractual obligations and commitments as of March 30, 2024.
Off-Balance Sheet Arrangements
We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. Our off-balance sheet commitments relating to our outstanding letters of credit were $29 million at December 28, 2024, including $28 million in letters of credit issued outside of the 2022 Credit Facility. In addition, as of December 28, 2024, bank guarantees of approximately $38 million were supported by our various credit facilities. We do not have any other off-balance sheet arrangements or relationships with entities that are not consolidated into our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Recent Accounting Pronouncements
See Note 3 to the accompanying interim consolidated financial statements for recently issued accounting standards, which may have an impact on our financial statements and/or disclosures upon adoption.
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