What changed in this filing

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Item 1A. Risk Factors

2025-05-28 compared with 2024-05-29 · 176 added, 201 removed, 280 unchanged (57% of the section changed)

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Risks are listed in the categories where they primarily apply, but other categories may also apply.

Risks Related to the Merger

We are subject to litigation challenging the Merger, including the lawsuit by the U.S.

FTC attempting to block the pending Merger, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs and otherwise have a material adverse impact on our business and our share price.

On April 22, 2024, the U.S.

FTC filed a lawsuit to attempt to block the pending Merger (the “FTC Lawsuit”), and we announced that Capri intends to vigorously defend the case alongside Tapestry in working toward completing the Merger.

While the pending Merger has received regulatory approval from all other jurisdictions where such approval is required, including, but not limited to, the European Union, Japan and China, U.S.

regulatory approval remains an outstanding condition to closing the Merger.

We cannot predict with certainty whether and when U.S.

regulatory approval will be obtained, and the Court in the FTC Lawsuit may decide to issue an injunction that prevents the Merger from being consummated.

Additionally, there can be no assurance that if regulatory clearance is obtained, it will not result in the imposition of conditions, limitations, obligations or restrictions that have the direct or indirect effect of preventing the completion of the Merger, reducing the anticipated benefits of the Merger, or result in the delay or abandonment of the Merger.

Upon termination of the Merger Agreement for failure to receive regulatory approval, our remedy may be limited to the recovery of certain expenses, and we may have incurred other substantial costs that cannot be recouped.

If the FTC Lawsuit successfully enjoins the pending Merger, it could have a material adverse impact on our business and our share price.

In addition, in connection with the Merger Agreement, a number of complaints have been filed in federal and state court as individual actions, which we refer to collectively as the “Complaints”.

The Complaints allege that the preliminary proxy statement filed by Capri on September 8, 2023 in connection with the Merger Agreement (the “Preliminary Proxy”) or the definitive proxy statement filed by Capri on September 20, 2023 (the “Definitive Proxy,” and together with the Preliminary Proxy, the “Merger Proxy”), as applicable, misrepresents and/or omits certain purportedly material information.

The Complaints also assert violations of Sections 14(a) and 20(a) of the U.S.

Securities Exchange Act of 1934, as amended, and Rule 14a-9 promulgated thereunder against Capri and the Board of Directors.

The Complaints seek, among other things:

(i) an injunction enjoining the consummation of the Merger and the other transactions contemplated by the Merger Agreement;

(ii) rescission or rescissory damages in the event the Merger and the other transactions contemplated by the Merger Agreement are consummated;

(iii) direction that defendants account for all damages suffered as a result of any wrongdoing;

(iv) costs of the action, including plaintiffs’ attorneys’ and expert fees and expenses;

and (v) other relief the court may deem just and proper.

In addition to the Complaints, purported shareholders of Capri have sent demand letters (which we refer to as the “Demands,” and together with the Complaints, the “Matters”) alleging similar deficiencies regarding the disclosures made in the Merger Proxy.

However, in order to avoid the risk that the Matters delay or otherwise adversely affect the Merger, and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Capri provided supplemental disclosures to the Merger Proxy in Capri's Current Report on Form 8-K, filed with the SEC on October 17, 2023.

Capri management believes that the Matters are without merit.

Capri cannot provide assurance regarding the outcomes of the Matters and may be subject to additional demands or filed actions.

If additional similar complaints or demands are filed or sent, absent new or significantly different allegations, Capri will not necessarily disclose such additional filings or demands.

If dismissals are not obtained or a settlement is not reached, these lawsuits could prevent or delay completion of Merger and/or result in substantial costs to us.

The pendency of the Merger could adversely affect our business, financial results and operations.

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, with Capri surviving the Merger as a wholly owned subsidiary of Tapestry.

The pendency of the Merger and any announcements relating to the Merger could cause disruptions in and create uncertainty surrounding our business, including by affecting our relationships with our existing and future customers, vendors and employees, which could have a significant negative impact on

our future revenues and results of operations, regardless of whether the Merger is completed.

In particular, we could potentially lose important personnel as a result of the departure of employees who decide to pursue other opportunities in light of the pending Merger.

In addition, management and financial resources have been diverted and will continue to be diverted towards the completion of the Merger, which could have a negative impact on our future revenues and/or results of operations.

We are also subject to restrictions, without the consent of Tapestry, on the conduct of our business prior to the consummation of the Merger as provided in the Merger Agreement, including, among other things, certain restrictions on our ability to make certain capital expenditures, make investments and acquisitions, enter into certain contracts, open store locations, sell, transfer or dispose of our assets and incur indebtedness.

These restrictions could prevent us from pursuing otherwise attractive business opportunities, result in our inability to respond effectively and/or timely to competitive pressures, industry developments and future opportunities, and otherwise have a significant negative impact on our future revenues and/or results of operations.

Failure to complete the pending Merger could adversely affect our business and the market price of our ordinary shares.

There is no assurance that the closing of the Merger will occur.

Consummation of the Merger is subject to various conditions, including the receipt of certain regulatory approvals, and certain other conditions.

We cannot predict with certainty whether and when any of these conditions will be satisfied.

Also, subject to limited exceptions, either Tapestry or we may terminate the Merger Agreement if the Merger has not been consummated on or before August 10, 2024 (subject to two automatic three-month extensions, the “Outside Date”);

provided that this right to terminate the Merger Agreement will not be available to any party whose failure to fulfill or perform any obligation or covenant under the Merger Agreement has been a principal cause of the failure of the Merger to be consummated by the Outside Date and such action or failure to act constitutes a material breach of the Merger Agreement.

If the Merger is not consummated, and there are no other parties willing and able to acquire us at a price of $57 per share or higher or on other terms acceptable to us, our share price will likely decline.

We have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the pending Merger, as well as the direction of management resources towards the Merger, for which we will have received little or no benefit if the closing of the Merger does not occur.

A failed transaction may result in negative publicity and a negative impression of us in the investment community.

If the Merger is not consummated, there can be no assurance that any other transaction acceptable to us will be offered and our business, prospects or results of operations may be adversely affected.

Upon termination of the Merger Agreement, our remedy may be limited to reimbursement of certain expenses or we may not be entitled to receive any reimbursement.

We may also incur significant goodwill and/or intangible asset impairment charges with respect to one or more of our reporting units if the Merger is not consummated.

The occurrence of any of these events individually or in combination could have a material adverse impact on our results of operations and our share price.

Risks Related to Macroeconomic Conditions

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Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have created a challenging retail environment.

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.

Purchases of discretionary luxury items, such as the accessories, footwear and apparel that we sell, tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty.

Other factors that could depress consumer spending include extreme weather conditions and natural disasters, pandemics (like COVID-19), high levels of unemployment, fluctuating foreign currency rates and increased taxation.

Reduced consumer confidence and adversely impacted consumer spending patterns in any of the regions in which we operate could adversely affect our business, results of operations and financial condition.

The COVID-19 pandemic may adversely affect our business and results of operations.

The COVID-19 pandemic caused significant disruption to the global economy, consumer spending and behavior, tourism and to financial markets and negatively impacted our business during fiscal years 2020 through 2023.

Although the impact of the COVID-19 pandemic during fiscal 2024 has generally been less significant than those experienced in prior fiscal years, we cannot predict the extent to which the COVID-19 pandemic may again impact our business, financial condition, and results of

The impact of regulations imposed in the future in response to the COVID-19 pandemic or other public health crises, could materially impact or disrupt our business and limit our ability to fully operate in the ordinary course, which could negatively impact our financial results.

Risks Related to Our Business

Risks Related to Our Industry

We may not be able to respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition.

The accessories, footwear and apparel industries have historically been subject to rapidly changing fashion trends and consumer preferences.

We believe that our success is largely dependent on the images of our brands and our ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, sustainability production, merchandising and pricing of products.

We believe that our success is largely dependent on the images of our brands and our ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, sustainable production, merchandising and pricing of products.

Any misstep in product quality or design, executive leadership, customer services, unfavorable publicity or excessive product discounting could negatively affect the image or our brands with our customers.

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• optimizing retail and supply chain capabilities;

• determining size and location of retail and department store selling space;

• determining the size and location of retail and department store selling space;

• protecting intellectual property.

In addition, some of our competitors may be significantly larger and more diversified than us and may have significantly greater financial, technological, manufacturing, sales, marketing and distribution resources than we do.

Their capabilities in these areas may enable them to better withstand periodic downturns in the accessories, footwear and apparel industries (including as a result of recent inflationary pressures and other macroeconomic factors), compete more effectively on the basis of price and production and more quickly develop new products.

The general availability of manufacturing contractors and agents also allows new entrants easy access to the markets in which we compete, which may increase the number of our competitors and adversely affect our competitive position and our business.

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These factors may cause us to reduce our sales prices to our wholesale customers and retail consumers, which could cause our gross margins to decline if we are unable to appropriately manage inventory levels and/or otherwise offset price reductions with comparable reductions in our operating costs.

If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our

profitability may decline, which could have a material adverse effect on our business, results of operations and financial condition.

Our business could suffer as a result of reductions in our wholesale channel and/or consolidations, liquidations, restructurings and other ownership changes by our wholesale partners.

We have experienced and may continue to experience a decline in sales in our wholesale channel.

Reductions in the amount of merchandise purchased from us by our wholesale partners or an increase in order cancellations by our wholesale partners could further reduce our revenues and have a material adverse effect on our profitability.

In addition, many of our wholesale customers have experienced, and may continue to experience, liquidity constraints or other financial difficulties.

These challenges could lead to the need to extend payment terms, larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increases in excess inventory, increases in credit losses and reduced cash flows.

The retail industry has also experienced a great deal of consolidation and other ownership changes over the past several years and a number of wholesale accounts were forced to file bankruptcy or undergo restructurings.

We expect that the risk of consolidation, bankruptcy, restructurings or reorganizations by department stores and other retailers will continue to exist for the foreseeable future.

This could result in store closings by our wholesale customers, which would decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our brands.

In addition, such consolidation, bankruptcy or other changes with respect to our wholesale customers could decrease our opportunities in the market, increase our reliance on a smaller number of large wholesale customers and decrease our negotiating strength with our wholesale customers, which could have a material adverse effect on our business, results of operations and financial condition.

Additionally, certain of our wholesale customers, particularly those located in the United States, have become highly promotional and have aggressively marked down their merchandise.

We expect that such markdowns may continue to be exacerbated because of the current macroeconomic environment.

Such promotional activity could negatively impact our business.

The departure of key employees or our failure to attract and retain qualified personnel could have a material adverse effect on our business.

We depend on the services and management experience of executive officers who have substantial experience and expertise in our business as well as key employees involved in our design and marketing operations, including our creative officers for each of our brands, Ms.

Donatella Versace, Ms.

Sandra Choi and Mr.

Michael Kors.

Although we have entered into employment agreements with our executive officers and other key employees, we may not be able to retain the services of such individuals in the future, which may be disruptive to, or cause uncertainty in, our business and future strategic direction, particularly if we fail to ensure a smooth transition and effective transfer of knowledge.

Any such disruption or uncertainty could generate a negative public perception and/or have a material adverse impact on our results of operations, financial condition, and the market price of our ordinary shares.

Competition for qualified personnel in the fashion industry is intense and turnover in the industry for retail associates is generally high.

Competitors may use aggressive tactics to recruit our employees.

Our ability to attract, develop, motivate and retain employees is influenced by our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates.

Additionally, our ability to meet our labor needs while also controlling costs is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and overtime regulations.

If we are unable to attract, develop, motivate and retain talented employees with the necessary skills and experience, or if changes to our organizational structure, operating results or business model adversely affect morale, hiring and/or retention, we may not achieve our objectives and our results of operations could be adversely impacted.

In addition, the announcement and pendency of the Merger could cause disruptions in and create uncertainty surrounding

our business, including affecting our relationships with our existing and future employees, regardless of whether the Merger is

In particular, we could potentially lose important personnel as a result of the departure of employees who decide to

pursue other opportunities in light of the pending transaction.

If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability may decline, which could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Our Business

We face risks associated with operating globally.

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Changes in any one or more of these factors could result in lower revenues, increased costs and negatively impact our business, results of operations and financial condition.

Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries and, as a result, sales of our product may not be successful, or the gross margins on those sales may not be in line with those we currently anticipate.

Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in

these countries and, as a result, sales of our product may not be successful, or the gross margins on those sales may not be in line with those we currently anticipate.

There can be no assurance that any or all of these events will not have a material adverse effect on our business, results of operations and financial condition.

Our retail stores are heavily dependent on the ability and desire of consumers to travel and shop and a decline in consumer traffic could have a negative effect on our comparable store sales and store profitability resulting in impairment charges, which could have a material adverse effect on our business, results of operations and financial condition.

Reduced travel resulting from economic conditions (including a recession or inflationary pressures), fuel shortages, increased fuel prices, travel restrictions, travel concerns and other circumstances, including adverse weather conditions, disease pandemics (including COVID-19), epidemics and other health-related concerns, war, terrorist attacks or the perceived threat of war or terrorist attacks, or unsettled regional and global conflicts (such as the current war in Ukraine) could have a material adverse effect on us, particularly if such events impact our customers’ desire to travel to our retail stores.

In addition, other factors that could impact consumer traffic at our retail stores include:

(i) the location of the mall or the location of a particular store within the mall;

(ii) the other tenants occupying space at the mall;

(iii) vacancies or extended store closures within the mall;

(iv) increased competition in areas where the malls are located;

(v) the amount of advertising and promotional dollars spent on attracting consumers to the malls;

and (vi) a shift toward online shopping.

A decline in consumer traffic could have a negative effect on our comparable store sales and/or average sales per square foot and store profitability.

If our retail stores underperform due to declining consumer traffic or otherwise and our expected future cash flows of the related underlying retail store asset do not exceed such asset’s carrying value, we may incur store impairment charges.

A decline in future comparable store sales and/or store profitability or failure to meet market expectations or the occurrence of impairment charges relating to our retail store fleet could have a material adverse effect on our business, results of operations and financial condition.

If we are unable to effectively execute our e-commerce business strategy and provide a reliable digital experience for our customers, our reputation and operating results may be harmed.

E-commerce represents approximately 18% of our net revenues and has been our fastest growing business over the last several years.

The success of our e-commerce business depends, in part, on third-parties and factors over which we have limited control, including changing consumer preferences and buying trends relating to e-commerce usage, both domestically and abroad, and promotional or other advertising initiatives employed by our wholesale customers or other third-parties on their e-commerce sites.

Any failure on our part, or on the part of our third-party digital partners, to provide attractive, reliable, secure, efficient and user-friendly e-commerce platforms could negatively impact our consumers’ shopping experience, resulting in reduced website traffic, reduced conversion, diminished loyalty to our brands and lost sales.

In addition, if there is a change in consumer behavior such that customers shift to utilizing e-commerce more than, or even instead, of traditional brick-and-mortar stores, and we or our wholesale partners are unable to attract consumers who previously made in-store purchases to our digital commerce channels, our financial and operating results may be negatively affected.

The success of our business also depends on our ability to continue to develop and maintain a reliable digital experience for our customers.

We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets and other devices.

We also use social media to interact with our customers and enhance their shopping experience.

Our inability to develop and continuously improve our digital brand engagement could negatively affect our ability to compete with other brands, which could adversely impact our business, results of operations and financial condition.

In addition, we must keep current with competitive technology trends, including the use of new or improved technology and services, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications, among others.

Since e-commerce growth is critical to our overall growth strategy, we plan to accelerate our e-commerce and omni-channel development and we are also in the process of re-platforming our brands’ e-commerce sites to expand our global capabilities.

Implementing new or improved digital systems, services or technologies, such as new or improved e-commerce platforms, may increase our costs, cause delays in or hinder our ability to continually deliver a reliable or seamless digital experience for our customers, or cause us not to succeed in increasing sales or attracting consumers.

Our failure to successfully respond to these risks and uncertainties might adversely affect the sales in our e-commerce business, as well as damage our reputation and brands.

Additionally, the success of our e-commerce business and the satisfaction of our consumers depend on their timely receipt of our products.

The efficient flow of our products requires that our company-operated and third-party operated distribution facilities have adequate capacity to support the current level of e-commerce operations as well as any anticipated increased levels that may follow from the growth of our e-commerce business.

Transportation shortages, labor shortages and port congestion as well as disruptions in factory production in certain countries where we source our products may delay inventory orders and impact product availability in our channels, including our e-commerce sites, which could result in customer dissatisfaction, and have an adverse effect on our business and harm our reputation.

Our business is subject to risks associated with importing products, and the imposition or threat of imposition of new or additional duties, tariffs or trade restrictions could have a material adverse effect on our business, results of operations and financial condition.

There are risks inherent to importing our products.

Virtually all of our imported products are subject to duties which may impact the cost of such products.

In April 2025, the U.S.

Government announced tariffs on imports from select countries.

The majority of the Company's products sold in the U.S.

are imported from countries in which these tariffs were announced, including Vietnam, Cambodia, Indonesia and Bangladesh, where the primary manufacturers of Michael Kors products are located.

In addition, retaliatory tariffs may be implemented by countries where our manufacturers are located and/or countries to which we ship our products may impose safeguard quotas to limit the quantity of products that may be imported.

Where we can, we rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation.

Increased tariffs or other trade restrictions against countries where our products are manufactured, and/or any tariffs or other trade restrictions implemented by these countries in retaliation, could limit our ability to manufacture products in countries that have the labor and technical expertise needed and we may not be able to find alternative sourcing options in a timely manner or at all.

In addition, such tariffs or other trade restrictions could require us to incur significant costs or cause us to increase the price charged to consumers for our products, either of which could materially impact our revenue and profitability.

Our ability to navigate any uncertainty, changes or expansion in tariffs or other trade restrictions could have a material negative impact on our business, results of operations and financial condition.

We are also subject to government regulations relating to importation activities, including related to CBP withhold release orders and detainments.

If CBP detains shipments of our goods pursuant to a withhold release order they may not release our goods immediately or at all which could materially impact our U.S.

business or result in potential violations of customs and trade laws.

Our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments.

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Any of the foregoing could materially and adversely affect our ability to produce or deliver our products and, as a result, have a material adverse effect on our business, financial condition and results of operations.

Our business may be subject to increased costs and a decline in profitability as a result of increasing pressure on margins if we misjudge the demand for our products.

Our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns.

If we misjudge the market for our products or demand for our products is impacted by other factors, such as inflationary pressures, political instability or COVID-19, we may be faced with significant excess inventories for some products and missed opportunities for other products.

We have in the past been, and may in the future be, forced to rely on markdowns, promotional sales, donations or other write-offs to dispose of excess, slow-moving inventory, which may negatively impact our gross margin, overall profitability and efficacy of our brands.

In addition, increases in our costs, such as raw materials, labor or freight, could negatively impact our gross margin, and we may not be able to offset such cost increases through pricing measures or other means.

The departure of key employees or our failure to attract and retain qualified personnel could have a material adverse effect on our business.

Competition for qualified personnel in the fashion industry is intense and turnover in the industry for retail associates is generally high.

Competitors may use aggressive tactics to recruit our employees.

Our inability to execute on our standalone growth strategies or cost reduction measures could have a material adverse effect on our business, results of operations and financial condition.

The long-term growth of our business depends on the successful execution of our strategic initiatives.

Our long-term strategy involves growing and revitalizing our brands, particularly Michael Kors and Versace.

Our achievement of revenue and profitability growth will depend largely upon our ability to offer trendsetting and innovative products, increase brand engagement and optimize customer experience.

We cannot assure you that we can execute successfully any of these actions or deliver growth and profitability for our brands.

Our success and growth also depends on the continued development of our omni-channel presence for each of our brands globally along with continued bricks and mortar expansion in select international regions, notably Greater China.

If we are unable to successfully execute our business strategies, our business, results of operations and financial condition could be materially adversely affected.

Achievement of our growth strategy may also require investment in new capabilities, distribution channels and technologies.

These investments may result in short-term costs without accompanying current revenues and, therefore, may be dilutive to our earnings in the short term.

These investments may result in short-term costs without accompanying near-term revenues and, therefore, may be dilutive to our earnings in the short term.

There can be no assurance regarding the timing of or extent to which we will realize the anticipated benefits of these investments and other costs, if at all.

We may be required to take impairment charges with respect to one or more of our brands.

We are required to test goodwill, brand and other intangible assets acquired as a result of acquisitions for impairment.

If the carrying value of goodwill and intangible assets exceed the related fair value, we would be required to record an impairment charge for the difference, and such charge could be significant.

For example, in Fiscal 2024 we recorded impairment charges of $227 million and $262 million related to Versace and Jimmy Choo, respectively.

Impairment charges could have a material impact on our financial results.

In addition, we previously announced, or may in the future announce, cost reduction measures designed to streamline the Company’s operating model, maximize efficiency and support long-term profitable growth.

We may not achieve the desired cost savings from these initiatives which could impact our profitability.

If we are unable to effectively execute our e-commerce business strategy and provide a reliable digital experience for our customers, our reputation and operating results may be harmed.

E-commerce represents approximately 19% of our net revenues and has been our fastest growing business over the last several years.

In addition, if there is a change in consumer behavior such that customers shift to utilizing e-commerce more than, or even instead of, traditional brick-and-mortar stores, and we or our wholesale partners are unable to attract consumers who previously made in-store purchases to our digital commerce channels, our financial and operating results may be negatively affected.

The success of our business also depends on our ability to continue to develop and maintain a reliable digital experience for our customers.

We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets and other devices.

We also use social media to interact with our customers and enhance their shopping experience.

Since e-commerce growth is critical to our overall growth strategy, we plan to accelerate our e-commerce and omni-channel development and we have completed a re-platforming our brands’ e-commerce sites to expand our global capabilities.

Our failure to successfully respond to these risks and uncertainties might adversely affect the sales in our e-commerce business, as well as damage our reputation and brands.

Additionally, the success of our e-commerce business and the satisfaction of our consumers depend on their timely receipt of our products.

Our business could suffer as a result of reductions in our wholesale channel and/or consolidations, liquidations, restructurings and other ownership changes by our wholesale partners.

We have experienced and may continue to experience a decline in sales in our wholesale channel.

In addition, many of our wholesale customers have experienced, and may continue to experience, liquidity constraints or other financial difficulties.

We expect that the risk of consolidation, bankruptcy, restructurings or reorganizations by department stores and other retailers will

continue to exist for the foreseeable future.

Additionally, certain of our wholesale customers, particularly those located in the United States, have become highly promotional and have aggressively marked down their merchandise.

We expect that such markdowns may continue to be exacerbated because of the current macroeconomic environment.

Such promotional activity could negatively impact our business.

In addition, other factors that could impact consumer traffic at our retail stores include:

(i) the location of the mall or the location of a particular store within the mall;

(ii) the other tenants occupying space at the mall;

(iii) vacancies or extended store closures within the mall;

(iv) increased competition in areas where the malls are located;

(v) the amount of advertising and promotional dollars spent on attracting consumers to the malls;

and (vi) a shift toward online shopping.

A decline in consumer traffic could have a negative effect on our comparable store sales and/or average sales per square foot and store profitability.

Our business may be subject to increased costs and a decline in profitability as a result of increasing pressure on margins if we misjudge the demand for our products.

If we misjudge the market for our products or demand for our products is impacted by external factors, we may be faced with significant excess inventories of some products and missed opportunities for other products.

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.

If the carrying value of the reporting units for one or more of our brands exceeds the related fair value, we are required to record impairment charges for the difference, and those impairment charges could be significant.

During the third quarter of Fiscal 2025, the Company 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 the Company’s brands.

As a result of the Company’s impairment assessment, the Company recorded $671 million of impairment charges, related to our Jimmy Choo and Versace goodwill and intangible assets during the fiscal year ended March 29, 2025.

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 future impairment charges of goodwill or other intangible assets and such amounts could be significant, which could have a material adverse impact on our results of operations and financial condition.

Our current and future licensing and joint venture arrangements may not be successful and may make us susceptible to the actions of third-parties over whom we have limited control.

We have entered into a select number of product licensing agreements with companies that produce and sell, under our trademarks, products requiring specialized expertise.

We have also entered into a number of select licensing agreements pursuant to which we have granted third-parties certain rights to distribute and sell our products in certain geographical areas and have a number of joint ventures.

In the future, we may enter into additional licensing and/or joint venture arrangements.

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• maintain customer relationships.

The geographic areas subject to our licensing agreements could also be impacted by geopolitical risks.

If a licensee of one of our brands were to experience liquidity constraints or other financial difficulties, we may experience larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, and/or a reduction in royalty or similar revenue.

In addition, we may be unable to replace any lost licensing agreements on similar economic terms or at all, or we could be delayed in identifying a replacement licensee, which could have a material adverse effect on our business, financial condition and results of operations.

The geographic areas subject to our licensing and joint venture agreements could also be impacted by geopolitical risks.

Any of the foregoing risks, or the inability of any of our partners to successfully market our products or otherwise conduct its business, may result in loss of revenue and competitive harm to our operations in regions or product categories where we have entered into such licensing arrangements.

We rely on our partners to preserve the value of our brands.

Although we attempt to protect our brands through, among other things, approval rights over store location and design, product design, production quality, packaging, merchandising, distribution, advertising and promotion of our stores and products, we may not be able to control the use by our partners of our brand.

The misuse of our brand by a licensing or joint venture partner could have a material adverse effect on our business, results of operations and financial condition.

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We generally cannot cancel these leases or withhold payments at our option, and payments under these operating leases account for a significant portion of our operating costs.

For example, as of March 30, 2024, we were party to operating leases associated with our retail stores that we operate directly throughout the globe, as well as other global corporate facilities, requiring future minimum lease payments aggregating to $1.6 billion through Fiscal 2029 and approximately $600 million thereafter through Fiscal 2044.

For example, as of March 29, 2025, we were party to operating leases associated with our retail stores that we operate directly throughout the globe, as well as other global

corporate facilities, requiring future minimum lease payments aggregating to $1.4 billion through Fiscal 2030 and approximately $501 million thereafter through Fiscal 2044.

Our substantial operating lease obligations could have a material adverse effect on our business, results of operations and financial condition.

In certain cases, as we have done in the past, we may determine that it is no longer economical to operate a retail store subject to a lease or we may seek to generally downsize, consolidate, reposition, relocate or close some of our real estate locations.

In such cases, we may be required to negotiate a lease exit with the applicable landlord or remain obligated under the

applicable lease for, among other things, payment of the base rent for the balance of the lease term.

In such cases, we may be required to negotiate a lease exit with the applicable landlord or remain obligated under the applicable lease for, among other things, payment of the base rent for the balance of the lease term.

In some instances, we may be unable to close an underperforming retail store due to continuous operation clauses in our lease agreements.

In addition, as each of our leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close retail stores in desirable locations.

Our inability to secure desirable retail space or favorable lease terms could impact our ability to grow.

In addition, a significant portion of our leases may expire within a short time frame.

As each of our leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close retail stores in desirable locations and/or may impact future revenue.

Our inability to secure desirable retail space, favorable lease terms or to renew our leases could impact our ability to grow.

Likewise, our obligation to continue making lease payments with respect to leases for closed retail spaces could have a material adverse effect on our business, financial condition and results of operations.

Additionally, due to the volatile economic environment, it may be difficult to determine the fair market value of real estate properties when we are deciding whether to enter into leases or renew expiring leases.

This may impact our ability to manage the profitability of our store locations, or cause impairments of our lease right-of-use assets if market values decline, any of which could have a material adverse effect on our financial condition or results of operations.

This may impact our ability to manage the profitability of our store locations, or cause impairments of our operating lease right-of-use assets if market values decline, any of which could have a material adverse effect on our financial condition or results of operations.

We are dependent on a limited number of distribution facilities.

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We may not be able to implement price increases that fully mitigate the impact of these higher costs and/or any such price increases could have an adverse impact on consumer demand for our products.

In addition, our costs may be impacted by sanction tariffs and customs trade orders which could also impact sourcing and availability of raw materials used by our suppliers in the manufacturing of certain of our products.

Manufacturing labor costs are also subject to volatility based on local and global economic conditions.

Increases in commodity prices, tariffs,

sanctions, customs trade orders and/or manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.

Increases in the cost of raw materials and/or manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.

We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods.

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We continuously monitor our foreign currency exposure and hedge a portion of our foreign subsidiaries’ foreign currency-denominated inventory purchases to minimize the impact of changes in foreign currency exchange rates.

However, we cannot fully anticipate all of our foreign currency exposures and cannot ensure that these hedges will fully offset the impact of foreign currency exchange rate fluctuations.

We use forward foreign exchange contracts and cross-currency swap contracts to hedge material exposure to adverse changes in foreign currency exchange rates.

However, no hedging strategy can completely insulate us from foreign exchange risk.

In addition, because we operate retail stores and concessions in various countries outside of the United States, we are also exposed to market risk from fluctuations in foreign currency exchange rates, primarily the Euro, the British Pound, the Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian dollar, among others.

However, we cannot fully anticipate all of our foreign currency exposures and cannot ensure that these hedges will fully offset the impact of foreign currency exchange rate fluctuations and no hedging strategy can completely insulate us from foreign currency exchange risk.

We also use forward foreign exchange contracts and cross-currency swap contracts to hedge our net investments in foreign operations against future volatility in the exchange rates between different currencies.

We are exposed to risks related to foreign currency exchange rate movements on our net investments in foreign operations due to the volatility in the exchange rates between different functional currencies.

A 10% appreciation or devaluation of the United States dollar compared to the level of foreign currency exchange rates for currencies under contract as of March 29, 2025, would result in a net increase or decrease, respectively, of approximately $365 million in the fair value of these contracts.

A substantial weakening of foreign currencies against the United States dollar could require us to raise our retail prices or reduce our profit margins in various locations outside of the United States.

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Risks Related to Information Technology and Data Security

Privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business.

Privacy breaches and other cybersecurity risks related to our business could negatively affect our reputation, credibility and business.

We are dependent on information technology (“IT”) systems and networks for a significant portion of our direct-to-consumer sales, including our e-commerce sites and retail business credit card transaction authorization and processing.

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We do not, however, control these third-party service providers and cannot guarantee the elimination of electronic or physical computer break-ins or security breaches in the future.

Cyber security breaches, including physical or electronic break-ins, security breaches due to employee error or misconduct, attacks by “hackers,” phishing scams, malicious software programs such as viruses and malware, and other breaches outside of our control, could result in unauthorized access or damage to our IT systems and the IT systems of our third-party service providers.

Cybersecurity breaches, including physical or electronic break-ins, security breaches due to employee error or misconduct, attacks by “hackers,” phishing scams, malicious software programs such as viruses and malware, and other breaches outside of our control, could result in unauthorized access or damage to our IT systems and the IT systems of our third-party service providers.

Despite our efforts and the efforts of our third-party service providers to secure our and their IT systems, attacks on these systems do occur from time to time.

As the techniques used to obtain unauthorized access to IT systems become more varied

and sophisticated (as cybercriminals are finding new ways to launch their attacks) and if the occurrence of such security breaches becomes more frequent, we and our third-party service providers may be unable to adequately anticipate these techniques and implement appropriate preventative measures.

While we maintain cyber risk insurance to provide some coverage for certain risks associated with cyber security incidents, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cyber security incident.

As the techniques used to obtain unauthorized access to IT systems become more varied and sophisticated (as cybercriminals are finding new ways to launch their attacks) and if the occurrence of such security breaches becomes more frequent, we and our third-party service providers may be unable to adequately anticipate these techniques and implement appropriate preventative measures.

While we maintain cyber risk insurance to provide some coverage for certain risks associated with cybersecurity incidents, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cybersecurity incident.

A significant breach of customer, employee or Company data could damage our reputation, our relationship with customers and our brands, and could result in lost sales, sizable fines, significant breach-notifications and other costs and lawsuits, as well as adversely affect our results of operations.

Additionally, we may incur increased costs and experience a significant strain on our resources to account for implementation of additional required security measures and technologies to protect personal data and confidential information or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential information which are continuously being enacted and proposed, such as the General Data Protection Regulation (“GDPR”) in the EU and the UK, various consumer privacy and data privacy and protection acts in the United States, including, but not limited to, the American Data Privacy and Protection Act, the California Consumer Privacy Act as amended by the California Privacy Rights Act, the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Utah Consumer Privacy Act, the Connecticut Data Privacy Act, the Iowa Consumer Data Protection Act, the Montana Consumer Data Privacy Act, the Oregon Consumer Privacy Act, the Washington MY Health My Data Act, the Florida Digital Bill of Rights, the Texas Data Privacy and Security Act and the Personal Information Protection Law in China.

Lastly, increased scrutiny by federal regulators (such as the FTC) and state attorney generals focused on the retail industry may lead to increased privacy and cyber security costs such as organizational changes, deploying additional personnel, acquiring and implementing enhanced privacy and security technologies on e-commerce sites, mandatory employee training for those handling customer and employee personal data, and engaging third-party experts and consultants, and the unauthorized use of proprietary information may lead to lost revenues.

Additionally, we may incur increased costs and experience a significant strain on our resources to account for the implementation of additional required security measures and technologies to protect personal data and confidential information or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential information which are continuously being enacted and proposed, such as the General Data Protection Regulation (“GDPR”) in the EU and the UK, various consumer privacy and data privacy and protection acts in the United States, including, but not limited to, the California Consumer Privacy Act as amended by the California Privacy Rights Act, and similar comprehensive privacy laws of other states, as well as the Personal Information Protection Law in China.

Lastly, increased scrutiny by federal regulators (such as the FTC) and state attorney generals focused on the retail industry may lead to increased privacy and cybersecurity costs such as organizational changes, deploying additional personnel, acquiring and implementing enhanced privacy and security technologies on e-commerce sites, mandatory employee training for those handling customer and employee personal data, and engaging third-party experts and consultants, and the unauthorized use of proprietary information may lead to lost revenues.

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.

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Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders, customers, employees and regulators have increasingly focused on ESG or “sustainability” practices of companies.

We have a publicly announced global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including, renewable energy, responsible material sourcing, water use and chemical management

and waste reduction.

We have also set science-based targets around greenhouse gas emissions (GHG) reductions.

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It is possible that stakeholders may not be satisfied with our ESG targets, practices or the speed of adoption or that we may not be successful in achieving our goals on the timelines set or at all, which could negatively impact our brands, our reputation, and customer and employee retention.

In addition, we are susceptible to risks associated with changing stakeholder attitudes regarding environmental, social and political issues and consumer perceptions of our position on these issues.

In addition, many jurisdictions in which we and our suppliers operate have begun enacting new ESG and climate legislation and regulations.

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For example, increased climate-related disclosures, increased exposure to litigation resulting from new or additional legal requirements, mandates on our products and services, and substitution of existing products with lower emission options may result in increased operational and administrative compliance costs.

Changing customer behavior, increased costs of raw materials, shifts in customer preferences, increased stakeholder concern and stigmatization of the fashion industry are also climate-related transition risks that could negatively impact us.

Changing customer behavior, increased costs of raw materials, shifts in customer

preferences, increased stakeholder concern and stigmatization of the fashion industry are also climate-related transition risks that could negatively impact us.

Risks Related to Tax, Legal and Regulatory Matters

Our business is subject to risks associated with importing products, and the imposition of additional duties, tariffs or trade restrictions could have a material adverse effect on our business, results of operations and financial condition.

There are risks inherent to importing our products.

Virtually all of our imported products are subject to duties which may impact the cost of such products.

In addition, countries to which we ship our products may impose safeguard quotas to limit the quantity of products that may be imported.

We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation.

Additionally, we are subject to government regulations relating to importation activities, including related to CBP withhold release orders and detainments.

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.

Fluctuations in our tax obligations and changes in tax laws, treaties and regulations may have a material adverse impact on our future effective tax rates and results of operations.

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We record tax expense based on our estimates of taxable income and required reserves for uncertain tax positions in multiple tax jurisdictions.

At any time, there are multiple tax years that are subject to examinations by

various taxing authorities.

At any time, there are multiple tax years that are subject to examinations by various taxing authorities.

The ultimate resolution of these audits and negotiations with taxing authorities may result in a settlement amount that differs from our original estimate.

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Although we believe that these transactions reflect arm’s-length terms and that proper transfer pricing documentation is in place, the transfer prices and conditions may be scrutinized by local tax authorities which could result in additional tax liabilities.

On October 5, 2015, the Organization for Economic Co-operation and Development (“OECD”), an international association of 34 countries, including the United States and United Kingdom, released the final reports from its Base Erosion and Profit Shifting (“BEPS”) Action Plans.

The BEPS recommendations covered a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties.

Future tax reform resulting from this development may result in changes to long-standing tax principles, which could adversely affect our effective tax rate and/or result in higher cash tax liabilities.

The Organization for Economic Cooperation and Development, the European Union and other countries (including countries in which we operate) have committed to enacting substantial changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed in an effort to limit perceived base erosion and profit shifting incentives.

In particular, the OECD’s Pillar Two initiative introduces a 15% global minimum tax applied on a country-by-country basis, for which many jurisdictions have now committed to an effective enactment date for financial year dates starting after January 1, 2024.

These proposals have already been implemented in several jurisdictions in which we operate, and they could negatively impact our effective tax rate as well as increase the tax compliance and reporting costs related to such requirements.

However, based on our initial analysis, the Pillar Two initiative is not projected to have a material impact on our consolidated financial statements.

We will continue to examine and reflect the impact of any changes in future financial statements as applicable.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law by the Biden Administration, with tax provisions primarily focused on implementing a 15% corporate alternative minimum tax on global adjusted financial statement income ("CAMT") and a 1% excise tax on share repurchases.

The CAMT was effective beginning Fiscal 2024 and is not expected to have a material impact on our effective tax rate, however, we will continue to monitor for any potential impact as additional guidance becomes available.

With respect to the 1% excise tax on net share repurchases, this provision of the Inflation Reduction Act was effective on January 1, 2023 and did not have a material impact on our consolidated financial statements.

On December 12, 2022, the European Union member states reached an agreement to implement the Organization for Economic Cooperation and Development’s ("OECD") reform of international taxation known as Pillar Two Global Anti-Base Erosion ("GloBE") Rules, which broadly mirrors certain provisions of the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies.

GloBE has became effective during Fiscal 2025.

Based upon our analysis, the Pillar Two initiatives are not projected to have a material impact on our consolidated financial statements.

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 its 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.

We maintain a valuation allowance for our deferred tax assets where future realization is uncertain, and our inability to fully utilize those assets in future periods may have an adverse impact on our financial condition and results of operations.

We have significant deferred tax assets consisting primarily of net operating losses, reserves and interest expense accruals that are not currently deductible for tax purposes.

As a result of the three year cumulative loss at a consolidated level, the Company recorded a full valuation allowance for its deferred tax assets in Fiscal 2025.

We intend to generate sufficient future income and plan to implement tax planning strategies to utilize these deferred tax assets which may lead to the reversal of all or part of the valuation allowance and a reduction of future income tax expense.

If we are unable to generate sufficient future taxable income or achieve the desired results of our tax planning strategies, we may not be able to realize the full benefit of our deferred tax assets which may have an adverse impact to our financial condition and results of operations in future periods.

If we fail to comply with labor laws or collective bargaining agreements, or if our independent manufacturing contractors fail to use acceptable, ethical business practices, our business and reputation could suffer.

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Our brands enjoy significant worldwide consumer recognition and the generally higher pricing of our products creates additional incentive for counterfeiters to infringe on our brands.

prevent counterfeiting of our brands and other intellectual property infringement will be successful.

We work with customs authorities, law enforcement, legal representatives and brand specialists globally in an effort to prevent the sale of counterfeit products, but we cannot guarantee the extent to which our efforts to prevent counterfeiting of our brands and other intellectual property infringement will be successful.

Such counterfeiting and other intellectual property infringement could dilute our brands and otherwise harm our reputation and business.

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An unfavorable outcome in any proceeding, lawsuit, dispute or claim may have an adverse impact on our business, financial condition and results of operations.

See also “We may be subject to litigation challenging the Merger, and an unfavorable judgment or ruling

in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs.”

We are subject to shareholder litigation relating to the terminated Merger.

On December 23, 2024 and January 28, 2025, two purported shareholders of Capri filed putative class action complaints in the United States District Court for the District of Delaware against Capri, Tapestry and certain of their officers (including John D.

Idol, our Chairman and Chief Executive Officer, and Thomas J.

Edwards, Jr., our Chief Financial and Chief Operating Officer) alleging violations of the federal securities laws based on certain statements by defendants concerning the previously proposed Merger and the FTC’s action to enjoin the Merger.

The Court appointed the lead plaintiff on March 7, 2025, and on May 15, 2025 the lead plaintiff filed an amended complaint (the “Amended Federal Securities Law Complaint”).

The Amended Federal Securities Law Complaint seeks to bring federal securities claims on behalf of a class of all persons who purchased Capri stock and sold Capri puts between August 10, 2023 and October 24, 2024.

We may incur substantial costs defending the Amended Federal Securities Law Complaint, and we cannot provide assurance regarding the outcome of this Amended Federal Securities Law Complaint.

An unfavorable judgment or ruling could result in substantial liability.

We may also be subject to additional demands or filed actions.

Our potential liability to shareholders for federal securities claims or other matters related to the previously terminated Merger may be covered in part by our insurance policies, but we may not always have adequate insurance to defend all claims.

Risks Related to Our Debt

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As of March 29, 2025, our consolidated indebtedness was approximately $1.5 billion.

Our total borrowings as of March 30, 2024 primarily relate to our revolving credit facility of $764 million, Versace term loan of $486 million and senior notes of $450 million.

Our total borrowings as of March 29, 2025 primarily relate to our revolving credit facility of $755 million.

Our ability to make payments on and refinance our debt obligations and to fund planned capital expenditures depends on our ability to generate cash from our operations.

This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

Our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities.

Our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments on our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities.

Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing and negatively impact our ability to enter into new financing arrangements in the future.

We are also subject to restrictions under the Merger Agreement that would limit our ability to incur indebtedness prior to the consummation of the Merger, without the consent of Tapestry.

In addition, our ability to access credit and capital markets in the future as a source of funding, and the borrowing costs associated with such financing, is dependent upon market conditions and our credit rating and outlook.

We are currently rated

investment grade by two of the Company’s three credit rating agencies.

If our investment rating is downgraded in the future, it could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs and potentially increased lease or hedging costs.

If our credit rating is downgraded in the future, it could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs and potentially increased lease or hedging costs.

We may be unable to meet financial covenants in our indebtedness agreements which could result in an event of default and restrictive covenants in such agreements may restrict our ability to pursue our business strategies.

The terms of our indebtedness contain affirmative and negative covenants that impose operating and financial restrictions on us and may restrict our ability to engage in future business opportunities or pursue our strategies.

The Company’s 2022 Credit Facility and the 2022 Versace Credit Facility (of which the Company provides a parent guarantee) requires us to maintain a quarterly maximum permitted net leverage ratio of no greater than 4.0 to 1.0.

The 2022 Credit Facility, the 2022 Versace Credit Facility and the Indenture governing our senior notes also contain certain restrictive covenants, including restrictions on our and certain of our subsidiaries ability to:

Pursuant to our amended and restated credit agreement, dated February 4, 2025 (the "Amended and Restated Credit Agreement"), the obligations under the 2025 Credit Facilities are secured by liens on substantially all of the assets of the Company and its U.S.

subsidiaries that are borrowers and guarantors, excluding real property and other customary exceptions, and substantially all of the registered intellectual property of the Company and its subsidiaries.

The terms of our indebtedness also contain affirmative and negative covenants that impose operating and financial restrictions on us and may restrict our ability to engage in future business opportunities or pursue our strategies.

The Company’s 2025 Credit Facilities requires us to maintain a quarterly maximum permitted net leverage ratio of no greater than 4.0 to 1.0.

The 2025 Credit Facilities also contain certain restrictive covenants, including restrictions on our and certain of our subsidiaries ability to:

• incur additional indebtedness and guarantee indebtedness;

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• make loans and investments, including acquisitions;

• sell assets;

• dispose of assets;

• incur liens;

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A breach of the covenants or restrictions under the documents that govern our indebtedness could result in an event of default under the applicable indebtedness.

Such a default may allow creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.

In addition, an event of default under the credit agreement governing our 2022 Credit Facility or the Versace 2022 Credit Facility would permit the lenders under those credit facilities to terminate all commitments to extend further credit under such facility.

In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

As a result of these restrictions, we may be:

• limited in how we conduct our business;

• unable to raise additional debt or equity financing to operate during general economic or business downturns, including during a recessions or other times of economic uncertainty;

• unable to compete effectively or to take advantage of new business opportunities.

If such an event of default occurs and is continuing, the lenders under the 2025 Credit Facilities would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2025 Credit Facilities (which may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies) and exercising remedies against collateral.

In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not be able to obtain sufficient cash to repay that indebtedness, and if the lenders enforce their security interest in the collateral, the collateral may be sold to recover the related debt.

If one or more of our counterparty financial institutions default on their obligations to us, we may incur significant losses or our financial liquidity could be adversely impacted.

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We believe that this longer-term focus is in the best interests of our Company and our shareholders.

Given the pending Merger, the Company stopped providing investors with forward-looking earnings guidance and withdrew its previously issued guidance.

Actual results may differ from those that have been previously predicted by us, outside investment analysts, or others, our share price could be adversely affected.

On a quarterly basis, we provide investors with forward-looking earnings guidance.

Actual results may differ materially from forward-looking expectations that have been previously provided by us, or predicted by outside investment analysts, or others, and our share price could be adversely affected.

Similarly, any forward-looking guidance that gives effect to the sale of Versace is based on assumptions about future events and conditions which may not materialize as expected.

Investors who rely on these outside predictions when making investment decisions with respect to our securities do so at their own risk.

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If we are unable to conduct share repurchases at expected levels, our share price could be adversely affected.

Pursuant to the terms of the Merger Agreement, and subject to certain limited exceptions, the Company may not repurchase its ordinary shares.

Accordingly, despite having previously had a share repurchase program as a way to return value to its shareholders, the Company has not repurchased any of its ordinary shares since entering into the Merger Agreement, and the Company does not expect to repurchase any of its ordinary shares prior to the Merger or earlier termination of the Merger Agreement.

As a result, the market price of our ordinary shares could be adversely affected.

Despite having previously had a share repurchase program as a way to return value to its shareholders, the Company has not repurchased any of its ordinary shares since June 2023, and the Company does not currently have in place a share repurchase program.

If we are unable to conduct share purchases at expected levels, the market price of our ordinary shares could be adversely affected.

Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting, which could harm our business and cause a decline in the price of our ordinary shares.

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(iii) acts that infringe on the personal rights of the shareholders, such as the right to vote;

(iv) acts where the Company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws of many states in the United States.

and (iv) acts where the Company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws of many states in the United States.

It may be difficult to enforce judgments against us or our executive officers and directors in jurisdictions outside the United States.

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This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.

Risks Related to the Divestiture

The pendency of the proposed sale of Versace or the failure to complete the proposed sale could adversely affect our business and the market price of our ordinary shares.

On April 10, 2025, Capri entered into a Stock Purchase Agreement (the "Purchase Agreement") with Prada S.p.A.

whereby Prada has agreed to acquire certain subsidiaries of Capri which operate Capri's Versace business.

The announcement and pendency of the proposed sale of Versace could cause disruptions in and create uncertainty surrounding our business, including affecting our relationships with our existing and future customers, vendors and employees, which could have a significant negative impact on our future revenues and results of operations, regardless of whether the sale is completed.

In particular, we could potentially lose important personnel as a result of the departure of employees who decide to pursue other opportunities in light of the proposed sale.

In addition, management and financial resources have been diverted and will continue to be diverted towards the completion of the sale, which could have a negative impact on our future revenues and/or results of operations.

We are also subject to restrictions, without the consent of Prada, on the conduct of the Versace business prior to the consummation of the sale as provided in the Purchase Agreement.

These restrictions could potentially hinder Versace's ability to adapt to changing market conditions or take necessary actions to improve performance, and may otherwise have a significant negative impact on Versace's future revenues and/or results of operations.

There is also no assurance that the closing of the sale of Versace to Prada will occur.

Consummation of the sale is subject to various conditions, including (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (b) regulatory approvals having been obtained in other specified jurisdictions outside of the United States, (c) the accuracy of each party’s representations and warranties as of the closing date, subject to materiality qualifications, (d) the absence of a material adverse effect with respect to the Versace business and (e) each party’s performance of its covenants under the Purchase Agreement in all material respects.

Prior to the closing, If the sale of Versace is not consummated, and there are no other parties willing and able to acquire Versace on acceptable to terms, our share price will likely decline.

We have also incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the proposed sale, as well as the diversion of management resources towards the sale, for which we will have received little or no benefit if the closing does not occur.

A failed transaction may also result in negative publicity and a negative impression of us in the investment community.

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 1A. Risk Factors