What changed in this filing

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Item 1A. Risk Factors

2026-05-27 compared with 2025-05-28 · 136 added, 118 removed, 338 unchanged (43% of the section changed)

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Risks Related to Macroeconomic Conditions

The accessories, footwear and apparel industries are heavily influenced by general macroeconomic cycles that affect consumer spending and a prolonged period of depressed consumer spending could have a material adverse effect on our business, results of operations and financial condition.

Global economic conditions and the related impact on levels of consumer spending worldwide have impacted, and are likely to continue to impact, our business and the accessories, footwear and apparel industry overall.

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 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 accessories, footwear and apparel industries are heavily influenced by general macroeconomic cycles that affect consumer spending and a prolonged period of depressed consumer spending could materially adversely affect demand for our products, pricing dynamics and our ability to manage inventory levels and margins.

Global economic conditions and the related impact on levels of consumer spending worldwide, particularly for luxury goods, have adversely affected our business and may continue to do so.

Inflation, higher fuel and energy costs, rising commodity prices for leather, textiles and other raw materials used in our products, tariffs imposed on imported goods, disruptions to global shipping routes, including the Red Sea corridor, resulting from the conflicts in the Middle East, and reduced consumer confidence have increased our cost of goods sold and may reduce demand for our products.

Because our products are produced outside of the United States, these conditions affect both our supply chain costs and our ability to maintain gross margins.

Prolonged or worsening macroeconomic conditions could disproportionately affect demand for our products, particularly where consumers are price sensitive.

In addition, when disposable income is lower we may experience lower store traffic or have to increase our promotional activity.

Other factors that could depress consumer spending and negatively impact our business include extreme weather conditions and natural disasters, pandemics or other public health crisis (including prior events such as 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 materially adversely affect demand for our products, pricing dynamics and our ability to manage inventory levels and margins.

Risks Related to Our Industry

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• maintaining and growing market share;

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• developing quality and differentiated products that appeal to consumers;

• establishing and maintaining acceptable relationships with retail customers;

• establishing and maintaining acceptable relationships with our customers;

• pricing products appropriately;

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Competition, along with other factors such as consolidation, changes in consumer spending patterns and a highly promotional retail selling environment, could also result in significant pricing pressure.

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.

These factors may cause us to reduce our sales prices to our wholesale 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.

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We operate on a global basis, with approximately 47% of our total revenue from operations outside of the United States during Fiscal 2026.

As a result, we are subject to the risks of doing business internationally, including:

• political or civil unrest, including protests and other civil disruption;

• unforeseen public health crises, such as pandemic and epidemic diseases, including COVID-19 and any variants thereof;

• economic instability and unsettled regional and global conflicts (such as the current war in Ukraine), which may negatively affect consumer spending by foreign tourists and local consumers in the various regions where we operate;

• laws, regulations and policies of foreign governments (including sanctions and retaliatory actions by the United States, European Union and others);

Our international operations expose us to risks related to:

• geopolitical events or other political or civil unrest, including protests and other civil disruption;

• unforeseen public health crises, such as pandemic and epidemic diseases, including prior events such as COVID-19 and any variants thereof;

• economic instability and unsettled regional and global conflicts (such as the current war in Ukraine and the Middle East conflict), which may negatively affect consumer spending by foreign tourists and local consumers in the various regions where we operate;

• regulatory developments and policies of the United States or foreign governments (including sanctions and retaliatory actions by the United States, European Union and others);

• potential negative consequences from changes in taxation policies;

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• acts of terrorism, military actions or other conditions over which we have no control;

• foreign consumer behavior and demand dynamics, including changing economic and consumer conditions and shifts in domestic spending priorities, which could adversely affect demand for discretionary products in certain markets.

In addition, we pursue selective international expansion in a number of countries around the world and through a number of channels.

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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.

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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 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.

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 or supply chain diligence requirements 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.

In addition, all of our products sold in the U.S.

are imported from foreign countries including Vietnam, Cambodia, Indonesia and Bangladesh, where the primary manufacturers of Michael Kors products are located, and are therefore subject to changes in U.S.

and international trade policies.

Trade actions, including tariffs, safeguard measures, quotas, or other import restrictions, may be imposed, modified, challenged, or replaced from time to time under various legal authorities, and the scope, duration, and applicability of such measures can be unpredictable.

Refunds or relief from tariffs or duties, where available, are subject to administrative review, timing delays, and changes in interpretation or enforcement, and there can be no assurance that such amounts will be recovered, or recovered in a timely manner, which could adversely affect operating income and cash flows.

Countries where our products are manufactured or sold may implement retaliatory measures or impose additional restrictions in response to changes in U.S.

trade policy.

While we seek to mitigate the impact of trade measures through sourcing strategies, free trade agreements and other supply chain initiatives where available, increased tariffs or other trade restrictions or uncertainty regarding their application, 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.

Such measures may also force us to increase prices, absorb higher costs, or adjust sourcing arrangements, any of which could materially adversely affect our revenue, profitability, results of operations or financial condition.

Following the U.S.

Supreme Court's February 2026 decision which held that tariffs imposed under IEEPA were unlawful, we are entitled to a refund of approximately $65 million in IEEPA tariffs previously paid to U.S.

Customs and Border Protection.

As of March 28, 2026, we intended to recover all the IEEPA Tariffs previously paid and has recorded an IEEPA Tariff refund receivable of $65 million.

We have refund claims with CBP and expect to recover the full amount, though actual timing and amounts are subject to completion of CBP's refund process and involve inherent risks, including delays in government processing, administrative offsets, appeals of court orders directing refunds, or changes in law or policy affecting the refund process.

In addition, in response to the U.S.

Supreme Court's decision, the U.S.

President issued an executive order imposing tariffs pursuant to Section 122 of the Trade Act of 1974 for 150 days, effective on February 24, 2026.

The outlook on further trade policy actions is unclear, and these actions have led to significant volatility and uncertainty in global markets.

Uncertainty regarding the scope, duration and administration of trade measures, including the timing and recoverability of tariff refunds or relief where applicable, has in the past contributed to, and may in the future continue to contribute to, variability in costs and cash flows.

We are also subject to risks related to compliance with existing and evolving laws, regulations and enforcement actions related to forced labor, human rights, and supply chain transparency.

Compliance with such requirements often requires extensive due diligence, documentation and traceability across multiple tiers of our supply chain, including suppliers over whom we have limited visibility or control.

CBP has intensified enforcement of import laws including with respect to withhold release orders and seizures or detainments of shipments where it believes that goods may have been produced, wholly or in part, with forced labor or other prohibited labor practices.

The failure by us or our suppliers to meet applicable requirements could result in shipment delays, detentions, exclusions or seizures, supply chain disruptions, increased costs, loss of inventory, potential penalties or reputational harm, any of which could materially affect product availability, revenue or margins or otherwise materially adversely affect our business, results of operations or financial condition.

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

As a company engaged in sourcing on a global scale, we are subject to the risks inherent in such activities, including, but not limited to:

• pandemics, epidemics and health-related concerns, including related to COVID-19 or variants thereof;

• pandemics, epidemics and health-related concerns, including prior events such as COVID-19 or variants thereof;

• political or labor instability, labor shortages (stemming from labor disputes or otherwise), or increases in costs of labor or production in countries where manufacturing contractors and suppliers are located;

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• disruptions, delays or reductions in shipments, including port delays and congestion, and/or capacity constraints on transportation of goods or at our factories;

• significant increase in freight, shipping and other logistics costs, including as a result of disruptions at ports of entry;

• political or military conflict (such as the current war in Ukraine);

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• significant increase in fuel, freight, shipping and other logistics costs or increased transit times, including as a result of disruptions at ports of entry or international shipping routes (including the Red Sea corridor and other routes impacted by the conflicts in the Middle East);

• political or military conflict (such as the war in Ukraine or the conflicts in the Middle East);

• heightened terrorism security concerns;

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• imposition of regulations, quotas and safeguards relating to imports and our ability to adjust in a timely manner to changes in trade regulations;

• increases in the costs of fuel (including volatility in the price of oil), travel and transportation (including vessel and freight);

• increases in the costs of fuel (including volatility in the price of oil), travel and transportation (including vessel and freight) (including increases in such costs related to the conflicts in the Middle East);

• imposition of duties, taxes and other charges on imports;

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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.

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 21% 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 have completed a re-platforming of 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

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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.

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

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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.

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.

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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.

These challenges could lead to the need to extend payment terms, larger outstanding accounts receivable balances, delays in

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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.

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.

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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.

Reduced travel resulting from economic conditions (including a recession or inflationary pressures), fuel shortages, increased fuel prices (related to the conflicts in the Middle East), travel restrictions, travel concerns and other circumstances, including adverse weather conditions, disease pandemics (including prior events such as 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 war in Ukraine and the conflicts in the Middle East) 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:

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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.

In addition, inaccurate demand forecasting or delayed reaction to trend changes may extend inventory holding periods and negatively affect cash flows and gross margins.

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.

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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.

We perform impairment assessments of goodwill and indefinite-lived intangible assets on an annual basis or whenever impairment indicators exist.

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

In the absence of any impairment indicators, goodwill and indefinite-lived intangible assets are assessed for impairment during the fourth quarter of each fiscal year.

If the testing performed indicates that impairment exists, we are required to record impairment charges for the difference between the carrying value of the goodwill or intangible assets and the implied fair value of the goodwill and/or intangible assets in the period the determination is made.

Goodwill and intangible asset impairment charges have in the past been, and could in the future be, significant.

It is also 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.

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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 are subject to risks associated with leasing retail space subject to long-term and non-cancelable leases.

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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 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.

For example, as of March 28, 2026, 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 $949 million through Fiscal 2031 and approximately $318 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.

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While we believe we conduct appropriate due diligence before entering into agreements with these third-party service providers, the failure of any of these third-parties to provide the expected services, provide them on a timely basis or to provide them at the prices we expect could disrupt or harm our business.

Any significant interruption in the operations of these outsource service providers, including as a result of changes in social, political, and economic conditions, and those resulting from military conflicts or other hostilities, that result in the disruptions of business where these outsource providers are located, could also have an adverse effect on our business.

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outsource providers are located, could also have an adverse effect on our business.

Furthermore, we may be unable to provide these services ourselves in the future or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.

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Our inability to promptly replace manufacturing contractors or third-party sourcing agents that terminate their relationships with us or cease to provide high quality products in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition and impact the cost and availability of our goods.

Our business is exposed to foreign currency exchange rate fluctuations.

Our business is exposed to foreign currency exchange rate fluctuations and our use of foreign currency hedging instruments may not fully mitigate our exposure to exchange rate fluctuations and could materially adversely affect our financial condition and results of operations.

Our results of operations for our international subsidiaries are exposed to foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into United States dollar during financial statement consolidation.

If the United States dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions could impact our consolidated results of operations.

In addition, we have intercompany notes amongst certain of our non-United States subsidiaries, which may be denominated in a currency other than the functional currency of a particular reporting entity.

In addition, we have had in the past, and may again in the future have, intercompany notes amongst certain of our non-United States subsidiaries, which may be denominated in a currency other than the functional currency of a particular reporting entity.

As a result of using a currency other than the functional currency of the related subsidiary, results of these operations may be adversely affected during times of significant fluctuation between the functional currency of that subsidiary and the denomination currency of the note.

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 and no hedging strategy can completely insulate us from foreign currency exchange risk.

As of March 28, 2026, we have $3.5 billion of hedges outstanding to hedge our net investment in Swiss Franc denominated subsidiaries with contract maturity dates between March 2027 and May 2045, and $2.364 billion of fixed-to-fixed cross-currency hedges outstanding related to our net investment in Euro denominated subsidiaries with contract maturity dates between December 2027 and July 2031.

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.

Certain of these net investment hedge contracts are supported by credit support annexes which provide for collateral exchange if the fair value of a derivative contract exceeds a certain threshold, with the earliest effective date being June 2030.

Adverse movements in foreign currency exchange rates or interest rates could result in significant collateral posting requirements in the future, which could negatively affect our liquidity, reduce cash available for operations and capital allocation, or require us to obtain additional financing on unfavorable terms.

In addition, market disruptions, regulatory or accounting changes, counterparty defaults, or early termination events could increase the cost of maintaining or replacing these

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hedges or limit their effectiveness, which could adversely affect our results of operations, financial condition and cash flows.

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.

Refer to Item 7A.

- “Quantitative and Qualitative Disclosures about Market Risk” for additional information related to the impact of foreign currency exchange rate changes and our foreign currency hedging instruments.

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 and the Japanese Yen, among others.

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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.

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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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Our IT systems and e-commerce websites may be subject to damage and/or interruption from power outages, computer, network and telecommunications failures, malicious software, such as viruses and malware, attacks by “hackers”, security breaches, usage errors or misconduct by our employees and bad acts by our customers and website visitors which could materially adversely affect our business.

We are undergoing a multi-year Enterprise Resource Planning (“ERP”) implementation.

The implementation of the ERP will require a significant investment in human and financial resources.

Implementing new systems also carries substantial risk, including failure to operate as designed, failure to properly integrate with other systems, potential loss of data or information, cost overruns, implementation delays and disruption of operations.

Third-party vendors are also relied upon to design, program, maintain and service our ERP implementation program.

Any failures of these vendors to properly deliver their services could similarly have a material adverse effect on our business.

In addition, any disruptions or malfunctions affecting our ERP implementation plan could cause critical information upon which we rely to be delayed, defective, corrupted, inadequate, inaccessible or lost or otherwise cause delays or disruptions to our operations, and we may have to make significant investments to fix or replace impacted systems.

The increasing use of AI by us and our third-party partners may present operational, legal, regulatory and reputational risks, including those related to data quality, intellectual property, transparency and complying with evolving laws and standards.

If we are unable to effectively adopt and integrate AI technologies into our operations, supply chain, and consumer-facing platforms at the pace of our competitors, our competitive position, operating efficiency, and ability to meet evolving consumer expectations could be adversely affected.

The rapid pace of AI development may also require significant investment, and there can be no assurance that our AI initiatives will achieve the intended benefits or keep pace with industry adoption.

Risks Related to Environmental, Social and Governance Issues

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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.

Discrepancies between disclosed ESG targets or progress and actual outcomes may expose us to securities litigation, regulatory enforcement or consumer protection claims.

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

Such proposed and/or enacted regulations include expanded disclosure requirements regarding GHG emissions and other climate-related information, including disclosure of climate-related risks and independent auditors providing some level of attestation to the accuracy of such disclosures.

Evolving product safety, environmental, and chemical‑regulation requirements, including restrictions on certain chemicals may require changes to materials, suppliers, testing procedures or product assortments and could increase costs or limit availability of certain products.

In addition, environmental and product‑lifecycle regulations, including extended producer responsibility regimes for packaging and other materials, may impose additional fees, reporting, take‑back, or recycling obligations that could increase compliance costs and operational complexity.

Our ability to comply with any such new ESG and/or climate laws and regulations may lead to increased costs and operational complexity and/or we may be required to divert costs and resources in order to comply with ESG frameworks, and legal, legislative and regulatory requirements.

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Our business, including our retail, distribution and manufacturing operations, is susceptible to the physical and transitional risks associated with climate change and other environmental impacts that could negatively affect our business and operations.

For example, the acute and chronic physical risks of climate change, such as increased severity of extreme weather events, changes in weather and precipitation patterns and/or rising temperatures and sea levels may (i) cause potential disruptions to our retail stores, distribution centers and corporate facilities or those facilities of our wholesale customers, licensees or suppliers, (ii) adversely impact global supply chains, including the availability and cost of raw materials, (iii) negatively affect the ability of our manufacturers to fulfill our orders timely and/or to our specifications, (iv) cause shipping disruptions and/or (v) lead to higher freight costs.

For example, the acute and chronic physical risks of climate change, such as increased severity of extreme weather

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events, changes in weather and precipitation patterns and/or rising temperatures and sea levels may (i) cause potential disruptions to our retail stores, distribution centers and corporate facilities or those facilities of our wholesale customers, licensees or suppliers, (ii) adversely impact global supply chains, including the availability and cost of raw materials, (iii) negatively affect the ability of our manufacturers to fulfill our orders timely and/or to our specifications, (iv) cause shipping disruptions and/or (v) lead to higher freight costs.

An increase in extreme weather conditions could also result in more frequent damage and/or closures of our stores and distribution centers (or facilities of our wholesale customers, licensees or suppliers), adversely impact retail traffic, consumers’ disposable income levels or spending habits on discretionary items, or otherwise disrupt business operations in the communities in which we or our partners operate, any of which could result in lost sales or higher costs.

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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

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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.

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.

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.

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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.

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

We continue to monitor developments and their impact on our tax provision in accordance with where we earn our income globally.

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.

As a result of the three year cumulative loss at a consolidated level, the Company recorded a full valuation allowance for the vast majority of 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.

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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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We require our independent manufacturing contractors to operate in compliance with applicable laws, rules and regulations regarding working conditions, employment practices and environmental compliance, as well as our Supplier Code of Conduct and other compliance policies under our Factory Social and Environmental Compliance Program.

Our staff and third-parties we retain for such purposes periodically visit and monitor the operations of our independent manufacturing contractors to determine compliance.

Our staff and the third-parties we retain for such purposes periodically visit and monitor the operations of our independent manufacturing contractors to determine compliance.

However, we generally do not control these manufacturing contractors or suppliers or their labor, environmental or other business practices.

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We may be unable to protect our trademarks, copyrights and other intellectual property rights, and others may allege that we infringe upon their intellectual property rights.

Our VERSACE, JIMMY CHOO and MICHAEL KORS trademarks, as well as other material trademarks, copyrights and design and patent rights related to the production, marketing and distribution of our products, are important to our success and our competitive position.

Our MICHAEL KORS and JIMMY CHOO trademarks, as well as other material trademarks, copyrights and design and patent rights related to the production, marketing and distribution of our products, are important to our success and our competitive position.

We are susceptible to others imitating our products and infringing on our intellectual property rights in the Americas, EMEA, Asia and elsewhere in the world in both online and offline channels.

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Any adverse claims experience could have a material adverse effect on our results of operations, financial condition and cash flows.

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We are subject to various proceedings, lawsuits, disputes and claims in the ordinary course of business which could have an adverse impact on our business, financial condition and results of operations.

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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.

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.

We are subject to securities class action litigation which could result in significant costs and liability.

We and certain of our present and former officers have been named as defendants in putative securities class action litigation alleging violations of the federal securities laws in connection with statements regarding the previously proposed merger (the “Merger”) with Tapestry, Inc.

(“Tapestry”) and the FTC’s action to enjoin the Merger.

On March 31, 2026, the Court granted our motion to dismiss the amended complaint without prejudice.

On April 30, 2026, plaintiff's filed the First Amended Complaint.

This litigation remains pending.

Defending this litigation, even if ultimately resolved in our favor, is costly and time‑consuming and may divert management’s attention and resources from our business operations.

An adverse outcome could result in substantial monetary damages, which may not be fully covered by available insurance.

We cannot predict the outcome or timing of this matter or its ultimate impact on our business, financial condition or results of operations.

Risks Related to Our Debt

We have incurred a substantial amount of indebtedness, which could adversely affect our financial condition and restrict our ability to incur additional indebtedness or engage in additional transactions.

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

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 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.

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.

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.

Although we have reduced our level of indebtedness, our access to and cost of borrowing, as well as our ability to service or refinance debt, could still be adversely affected by market conditions and other factors.

We utilize indebtedness as part of our capital structure and may incur additional indebtedness in the future.

While we have reduced our outstanding debt levels, our ability to service existing debt, refinance indebtedness or obtain additional financing on favorable terms depends on a number of factors, including our operating performance, cash flows, credit ratings and general economic and market conditions.

A portion of our indebtedness is scheduled to mature in July 2027 and our ability to repay, refinance or extend such obligations depends on our financial results, available liquidity, and access to the credit and capital markets.

If we are unable to refinance or otherwise address these maturities on acceptable terms, our financial condition, results or operation or financial flexibility could be adversely affected.

Our access to the credit and capital markets and the cost of any future borrowings may be adversely affected by deterioration in market conditions, changes in interest rates, tightening of credit markets or a downgrade of our credit ratings or outlook.

Any such developments could limit our financial flexibility, increase borrowing or hedging costs, or restrict our ability to fund capital expenditures, pursue strategic initiatives, or respond to business opportunities, which could adversely affect our results of operations or financial condition.

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.

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• dispose of assets;

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• incur liens;

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In addition, we have significant amounts of cash, cash equivalents and other investments on deposit or in accounts with banks or other financial institutions in the United States and abroad.

We also rely on borrowings under our revolving credit facilities, under which we had $794 million of borrowing capacity as of March 29, 2025.

We also rely on borrowings under our revolving credit facilities, under which we had $1.182 billion of borrowing capacity as of March 28, 2026.

We rely on that borrowing capacity to fund our operations.

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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.

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.

Our share repurchase activity is subject to market conditions, liquidity, and other factors and may be limited, suspended, or discontinued at any time.

If we are unable to conduct share repurchases at expected levels, our share price 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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If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal control over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have an adverse effect on our business and cause a decline in the price of our ordinary shares.

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Rights of shareholders under British Virgin Islands law differ from those under United States law, and, accordingly, our shareholders may have fewer protections.

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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.

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What changed 10-K

Item 1A. Risk Factors