1 unchanged sentence
Disclosure Controls and Procedures
−Removed: Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, the Chief Executive Officer of the Company and the Chief Financial Officer of the Company, have concluded that the Company’s disclosure controls and procedures are effective as of June 27, 2020 .
+Added: Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, the Chief Executive Officer of the Company and the Chief Financial Officer of the Company, have concluded that the Company’s disclosure controls and procedures are effective as of July 3, 2021.
Management’s Report on Internal Control over Financial Reporting
2 unchanged sentences
Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control — Integrated Framework in 2013.
−Removed: Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June 27, 2020 and concluded that it is effective.
−Removed: The Company’s independent auditors have issued an audit report on the Company's internal control over financial reporting as of June 27, 2020 as included elsewhere herein.
+Added: Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of July 3, 2021 and concluded that it is effective.
+Added: The Company’s independent auditors have issued an audit report on the Company's internal control over financial reporting as of July 3, 2021 as included elsewhere herein.
Changes in Internal Control over Financial Reporting
−Removed: During the first quarter of fiscal 2020, the Company adopted ASU 2016-02.
−Removed: As such, the Company implemented new controls and modifications to existing accounting processes related to lease accounting.
−Removed: These changes include the upgrade to a new lease accounting system and introduction of processes to evaluate and account for lease contracts under the new accounting standard.
−Removed: During the second quarter of fiscal 2019, the Company completed the first phase of its ERP implementation, SAP’s S4/HANA, migrating the global finance functions for Corporate, Coach and Stuart Weitzman.
−Removed: The second phase of this implementation which was the finance and supply chain functions were implemented for Kate Spade during the third quarter of fiscal 2019.
−Removed: Furthermore, the supply chain functions for Coach and Stuart Weitzman followed during fiscal 2020.
−Removed: As a result of the implementations, there were certain changes to processes and procedures, which resulted in changes to the Company’s internal control over financial reporting.
−Removed: The implementation of SAP’s S4/HANA is expected to strengthen the financial controls by automating certain manual processes and standardizing business processes and reporting across the organization.
−Removed: The Company will continue to evaluate and monitor the internal controls over financial reporting during this period of change and will continue to evaluate the operating effectiveness of related key controls.
−Removed: For a discussion of risks related to the implementation of new systems, see Part I, Item 1A, Risk Factors herein.
−Removed: Other than the lease accounting standards adoption and ERP system implementation noted above, there were no other changes in our internal control over financial reporting during the fiscal year ended June 27, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
−Removed: We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the Covid-19 pandemic.
−Removed: We are continually monitoring and assessing Covid-19 as it relates to our internal controls.
+Added: There were no changes in internal control over financial reporting that occurred during the fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
+Added: We have not experienced any material impact to our internal controls over financial reporting, despite the fact that most of our Corporate employees continue to work remotely due to the Covid-19 pandemic.
+Added: We will continue to evaluate and monitor the impact of Covid-19 on our internal controls.
+Added: Refer to item 1A.
+Added: “Risk Factors,” for further information regarding the risks to our business associated with Covid-19.
OTHER INFORMATION
12 unchanged sentences
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
−Removed: Financial Statements and Financial Statement Schedules.
+Added: (a) Financial Statements and Financial Statement Schedules.
Refer to “Index to Financial Statements” appearing herein.
+Added: (b) Exhibits.
Refer to the exhibit index which is included herein.
1 unchanged sentence
TAPESTRY, INC.
−Removed: August 13, 2020
+Added: August 19, 2021 By:
/s/ Joanne C.
−Removed: Interim Chief Executive Officer
+Added: Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated below on August 19, 2021.
+Added: Signature Title
/s/ Joanne C.
−Removed: Interim Chief Executive Officer
−Removed: (Principal Executive Officer)
−Removed: /s/ Andrea Shaw Resnick
−Removed: Interim Chief Financial Officer
−Removed: Andrea Shaw Resnick
−Removed: (Principal Financial Officer)
+Added: Crevoiserat Chief Executive Officer
+Added: Crevoiserat (Principal Executive Officer)
+Added: Roe Chief Financial Officer
+Added: Roe (Principal Financial Officer)
/s/ Manesh B.
−Removed: Corporate Controller
−Removed: (Principal Accounting Officer)
−Removed: /s/ Susan Kropf
−Removed: Chair, Board of Directors
−Removed: /s/ Darrell Cavens
+Added: Dadlani Corporate Controller
+Added: Dadlani (Principal Accounting Officer)
+Added: /s/ Susan Kropf Independent Chair, Board of Directors
+Added: Bilbrey Director
+Added: /s/ Darrell Cavens Director
Darrell Cavens
−Removed: /s/ David Denton
−Removed: /s/ Anne Gates
−Removed: /s/ Annabelle Yu Long
+Added: /s/ David Denton Director
+Added: /s/ Anne Gates Director
+Added: /s/ Thomas R.
+Added: Greco Director
+Added: /s/ Pam Lifford Director
+Added: /s/ Annabelle Yu Long Director
Annabelle Yu Long
−Removed: /s/ Ivan Menezes
+Added: /s/ Ivan Menezes Director
TAPESTRY, INC.
16 unchanged sentences
We have audited the accompanying consolidated balance sheets of Tapestry, Inc.
−Removed: and subsidiaries (the "Company") as of June 27, 2020 and June 29, 2019, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended June 27, 2020, and the related notes and the financial statement Schedule II listed in the Index to the Consolidated Financial Statements (collectively referred to as the "financial statements").
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 27, 2020 and June 29, 2019, and the results of its operations and its cash flows for each of the three years in the period ended June 27, 2020, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 27, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 13, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.
+Added: and subsidiaries (the "Company") as of July 3, 2021 and June 27, 2020, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended July 3, 2021, and the related notes and the financial statement Schedule II listed in the Index to the Consolidated Financial Statements (collectively referred to as the "financial statements").
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 3, 2021 and June 27, 2020, and the results of its operations and its cash flows for each of the three years in the period ended July 3, 2021, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of July 3, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 19, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.
Change in Accounting Principle
1 unchanged sentence
2016-02, "Leases (Topic 842)” (“ASC 842”), using the modified retrospective approach.
−Removed: Recently adopted accounting standards - ASC 842 is also communicated as a critical audit matter below.
Basis for Opinion
9 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill and Other Intangible Assets - Kate Spade - Refer to Notes 3 and 15 to the financial statements
3 unchanged sentences
Changes in these assumptions could have a significant impact on either the fair values, the amount of any impairment charge, or both.
−Removed: The carrying value of goodwill associated with the Kate Spade reporting unit was $639.4 million and the carrying value of the Kate Spade indefinite-lived brand intangible asset was $1,300.0 million at June 27, 2020.
−Removed: The fair value of goodwill and the Kate Spade indefinite-lived brand intangible asset exceeded their carrying values by approximately 13% and 35%, respectively.
−Removed: Several factors could impact the Kate Spade brand's ability to achieve expected future cash flows, including continued economic volatility and operational challenges related to the Covid-19 pandemic, the reception of new collections in all channels, the success of international expansion strategies including the direct operation of certain previous distributor and joint venture businesses, the optimization of the store fleet productivity, the impact of promotional activity in department stores, and the simplification of certain corporate overhead structures and other initiatives aimed at increasing profitability of the business.
+Added: The carrying value of goodwill associated with the Kate Spade reporting unit was $640.9 million and the carrying value of the Kate Spade indefinite-lived brand intangible asset was $1,300.0 million at July 3, 2021.
+Added: The fair values of the Kate Spade brand reporting unit and indefinite-lived brand as of the fiscal 2021 testing date exceeded their respective carrying values by approximately 41% and 77%, respectively.
+Added: Several factors could impact the Kate Spade brand's ability to achieve expected
+Added: future cash flows, including continued economic volatility and potential operational challenges related to the Covid-19 pandemic, the reception of new collections in all channels, the success of international expansion strategies, the optimization of the store fleet productivity, the impact of promotional activity in department stores, and other initiatives aimed at increasing profitability of the business.
Given the significant judgments made by management to estimate the fair value of the Kate Spade operations used in both the goodwill and Kate Spade indefinite-lived brand intangible fair value analyses and the difference between their fair values and carrying values, performing auditing procedures to evaluate the reasonableness of management’s judgments regarding the business and valuation assumptions utilized in the valuation model, particularly the forecasts of future revenue growth rates and profit margins and the selection of the discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
3 unchanged sentences
• We evaluated management’s ability to accurately forecast by comparing actual revenue and profit margin results to historical projections.
−Removed: We evaluated management’s revenue and profit margin projections over the projection period with (1) internal communications to management and the board of directors, (2) peer companies, and (3) industry and market conditions.
+Added: • We evaluated management’s revenue and profit margin projections over the projection period by comparing them with (1) internal communications to management and the Board of Directors, (2) peer companies, and (3) industry and market conditions.
+Added: • With the assistance of our fair value specialists, we evaluated the market approach, including evaluating the reasonableness of the selected guideline public companies and the resulting market multiples calculations, as well as benchmarking the selected multiples against these guideline public companies.
• We used the assistance of our fair value specialists to assess the acceptability of the weighting applied to value indications from different valuation techniques.
3 unchanged sentences
Specific to the discount rate, we considered the inputs and calculations, and we developed a range of independent estimates and compared those to the respective discount rates selected by management.
−Removed: Goodwill and Other Intangible Assets - Stuart Weitzman - Refer to Notes 3 and 15 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company’s evaluation of goodwill and indefinite-lived brand intangible assets for impairment involves the comparison of carrying value to their respective fair values.
−Removed: The determination of the fair values requires management to make significant estimates and assumptions related to forecasts of future revenue growth rates and profit margins, as well as discount rates.
−Removed: Changes in these assumptions could have a significant impact on either the fair values, the amount of any impairment charge, or both.
−Removed: During the third quarter of fiscal year 2020, revenue growth rate and profit margin trends continued to decline from those that were forecasted for the Stuart Weitzman brand, which resulted in reductions of both current and future forecasted cash flows.
−Removed: As a result of these conditions, the Company concluded that a triggering event had occurred during the third quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Stuart Weitzman reporting unit and Stuart Weitzman indefinite-lived brand intangible asset.
−Removed: The assessment concluded that the fair values of the Stuart Weitzman reporting unit and Stuart Weitzman indefinite-lived brand intangible asset as of March 28, 2020 did not exceed their respective carrying values.
−Removed: The Company recorded a goodwill impairment charge of approximately $210.7 million related to the Stuart Weitzman reporting unit, and an impairment charge of approximately $267.0 million related to the Stuart Weitzman indefinite-lived brand intangible asset, each resulting in a full impairment.
−Removed: Given the significant judgments made by management to estimate the fair value of the Stuart Weitzman operations used in both the goodwill and indefinite-lived brand intangible fair value analyses and the resulting impairment recorded, performing auditing
−Removed: procedures to evaluate the reasonableness of management’s judgments regarding the business and valuation assumptions utilized in the valuation model, particularly the forecasts of future revenue growth rates and profit margins and the selection of the discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to the projected future revenue growth rates and profit margins and discount rates included the following:
−Removed: We tested the effectiveness of management’s controls over its goodwill and indefinite-lived brand intangible asset impairment evaluations, including controls over the forecasts of future revenue and profit margin, and the selection of the discount rate.
−Removed: We evaluated management’s ability to accurately forecast by comparing actual revenue and profit margin results to historical projections.
−Removed: We evaluated management’s revenue and profit margin projections over the projection period with (1) internal communications to management and the board of directors, (2) peer companies, and (3) industry and market conditions.
−Removed: With the assistance of our fair value specialists, we evaluated the market approach, including evaluating the reasonableness of the selected guideline public companies and the resulting market multiples calculations, as well as benchmarking the selected multiples against these guideline public companies.
−Removed: We used the assistance of our fair value specialists to assess the acceptability of the weighting applied to value indications from different valuation techniques.
−Removed: We used the assistance of our fair value specialists in evaluating the fair value methodology and the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations.
−Removed: Specific to the discount rate, we considered the inputs and calculations, and we developed a range of independent estimates and compared those to the respective discount rates selected by management.
−Removed: We evaluated the reasonableness of the inputs and the mathematical accuracy of the calculation used to calculate the impairment recorded.
−Removed: Recently adopted accounting standards - ASC 842- Incremental Borrowing Rate - Refer to Notes 3 and 11 to the
−Removed: financial statements (also see Change in Accounting Principle explanatory paragraph above)
−Removed: Critical Audit Matter Description
−Removed: The Company adopted the provisions of ASC 842, Leases (“ASC 842”), as of June 30, 2020.
−Removed: The Company recorded lease liabilities for the present value of its lease commitments and corresponding right-of-use (ROU) assets of approximately $2.32 billion and $2.13, respectively, upon adoption.
−Removed: The Company developed estimated collateralized incremental borrowing rates (IBR) for each lease portfolio to present value the lease payments as required by ASC 842 when the discount rate is not implicit in the lease.
−Removed: The determination of an IBR required management to use significant estimates and assumptions including its credit rating, credit spread, and adjustments for the impact of collateral, lease tenors, economic environment and currency.
−Removed: We identified the IBRs used in the adoption of ASC 842 as a critical audit matter because of the significant impact of management’s assumptions and estimates in determining the selected IBRs for each lease portfolio and the related material impact upon the lease liabilities and corresponding right-of-use (ROU) assets recorded upon adoption.
−Removed: Management’s assumptions and estimates used in determining the selected IBRs were the Company’s credit rating, credit spread, and adjustments for the impact of collateral, lease tenors, economic environment and currency.
−Removed: Given these significant judgments made by management in determining the IBRs, performing audit procedures to evaluate the reasonableness of the methods and assumptions related to these assumptions and estimates involved a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to the IBRs used in the adoption of ASC 842 included the following, among others:
−Removed: We tested the effectiveness of controls over the methods and assumptions used by management to estimate the IBRs, including those over the credit rating, credit spreads and adjustments for the impact of collateral, lease tenors, economic environment and currency.
−Removed: With the assistance of our fair value specialists, we evaluated the methods and assumptions used by management to estimate the IBRs and tested the inputs used by management to develop the IBRs as follows:
−Removed: Assessed the reasonableness of the methodology and models used to estimate the IBRs based on the definition
−Removed: and guidance in ASC 842 and other reference materials.
−Removed: Assessed the reasonableness of the significant inputs used to estimate the IBRs by comparing to Company specific benchmarks, comparable companies and other market information:
−Removed: The credit rating ascribed to the Company.
−Removed: The credit spreads applied in determining the IBRs.
−Removed: The collateral, lease tenors, economic environment and currency adjustments applied in determining the IBRs.
/s/ DELOITTE & TOUCHE LLP
6 unchanged sentences
We have audited the internal control over financial reporting of Tapestry, Inc.
−Removed: and subsidiaries (the “Company”) as of June 27, 2020 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 27, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended June 27, 2020, of the Company and our report dated August 13, 2020, expressed an unqualified opinion on those financial statements and financial statement schedule and included an explanatory paragraph regarding the Company’s adoption of Accounting Standards Update ("ASU") No.
−Removed: 2016-02, "Leases (Topic 842)", using the modified retrospective approach.
+Added: and subsidiaries (the “Company”) as of July 3, 2021 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
+Added: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 3, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated financial statements and financial statement schedule as of and for the year ended July 3, 2021, of the Company and our report dated August 19, 2021, expressed an unqualified opinion on those financial statements.
Basis for Opinion
19 unchanged sentences
CONSOLIDATED BALANCE SHEETS
+Added: 2021 June 27,
Current Assets:
Cash and cash equivalents $ 2,007.7 $ 1,426.3
−Removed: Short-term investments
−Removed: Trade accounts receivable, less allowances of $15.9 and $4.4, respectively
+Added: Trade accounts receivable, less allowances for credit losses of $ 4.2 and $ 15.9 , respectively
+Added: Inventories 734.8 736.9
Income tax receivable 254.6 46.0
4 unchanged sentences
Operating lease right-of-use assets 1,496.6 1,757.0
−Removed: Long-term investments
+Added: Goodwill 1,297.3 1,301.1
Intangible assets 1,373.4 1,379.4
−Removed: Deferred income taxes
+Added: Other assets 161.7 158.4
+Added: Total assets $ 8,382.4 $ 7,924.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
3 unchanged sentences
Current portion of operating lease liabilities 319.4 388.8
+Added: Current debt — 711.5
Total current liabilities 1,425.8 1,742.1
2 unchanged sentences
Deferred income taxes 203.9 155.1
−Removed: Long-term income taxes payable
Other liabilities 376.8 362.9
17 unchanged sentences
Fiscal Year Ended
+Added: 2021 June 27,
+Added: 2020 June 29,
(millions, except per share data)
+Added: Net sales $ 5,746.3 $ 4,961.4 $ 6,027.1
Cost of sales 1,664.4 1,722.1 1,973.4
+Added: Gross profit 4,081.9 3,239.3 4,053.7
Other selling, general and administrative expenses 3,113.9 3,312.4 3,234.0
7 unchanged sentences
Net income (loss) per share:
+Added: Basic $ 3.00 $ ( 2.34 ) $ 2.22
+Added: Diluted $ 2.95 $ ( 2.34 ) $ 2.21
Shares used in computing net income (loss) per share:
+Added: Basic 277.9 278.6 289.4
+Added: Diluted 283.0 278.6 290.8
Cash dividends declared per common share $ — $ 1.013 $ 1.350
3 unchanged sentences
Fiscal Year Ended
+Added: 2021 June 27,
+Added: 2020 June 29,
Net income (loss) $ 834.2 $ ( 652.1 ) $ 643.4
1 unchanged sentence
Unrealized gains (losses) on cash flow hedging derivatives, net
+Added: ( 1.8 ) 5.6 ( 5.9 )
Unrealized gains (losses) on available-for-sale investments, net — 0.5 ( 0.5 )
6 unchanged sentences
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
−Removed: Shares of Common Stock
−Removed: Additional Paid-in-Capital
−Removed: Retained Earnings / (Accumulated Deficit)
−Removed: Accumulated Other Comprehensive Income (Loss)
−Removed: Total Stockholders' Equity
+Added: Shares of Common Stock Common Stock Additional Paid-in-Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity
(millions, except per share data)
−Removed: Balance at July 1, 2017
+Added: Balance at June 30, 2018 288.0 $ 2.9 $ 3,205.5 $ 119.0 $ ( 82.8 ) $ 3,244.6
Net income (loss) — — — 643.4 — 643.4
2 unchanged sentences
Share-based compensation — — 88.0 — — 88.0
−Removed: Additional paid-in-capital as part of purchase consideration
+Added: Repurchase and retirement of common stock ( 3.4 ) — — ( 100.0 ) — ( 100.0 )
Dividends declared ($ 1.350 per share)
+Added: — — — ( 391.0 ) — ( 391.0 )
+Added: Cumulative adjustment from adoption of new accounting standards — — — 20.2 — 20.2
Balance at June 29, 2019 286.8 2.9 3,302.1 291.6 ( 83.2 ) 3,513.4
5 unchanged sentences
Dividends declared ($ 1.013 per share)
−Removed: Cumulative adjustment from adoption of new accounting standards (see Note 3)
+Added: — — — ( 283.5 ) — ( 283.5 )
+Added: Cumulative adjustment from adoption of new accounting standards — — — ( 48.8 ) — ( 48.8 )
Balance at June 27, 2020 276.2 2.8 3,358.5 ( 992.7 ) ( 92.2 ) 2,276.4
3 unchanged sentences
Share-based compensation — — 74.9 — — 74.9
−Removed: Repurchase of common stock
−Removed: Dividends declared ($1.013 per share)
−Removed: Cumulative adjustment from adoption of new accounting standards (see Note 3)
−Removed: Balance at June 27, 2020
+Added: Balance at July 3, 2021 279.5 $ 2.8 $ 3,487.0 $ ( 158.5 ) $ ( 72.0 ) $ 3,259.3
See accompanying Notes.
2 unchanged sentences
Fiscal Year Ended
+Added: 2021 June 27,
+Added: 2020 June 29,
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
9 unchanged sentences
Changes to lease related balances, net ( 125.6 ) 73.1 —
+Added: Gain on sale of building ( 13.2 ) — —
+Added: Gain on deferred purchase price ( 12.5 ) — —
Other non-cash charges, net 21.4 2.3 ( 5.5 )
1 unchanged sentence
Trade accounts receivable ( 9.6 ) 61.9 25.7
+Added: Inventories 32.2 ( 58.6 ) ( 104.7 )
Other liabilities ( 16.8 ) ( 37.8 ) ( 55.8 )
1 unchanged sentence
Accrued liabilities 140.3 7.6 ( 28.8 )
+Added: Other assets ( 223.1 ) 38.3 ( 69.2 )
Net cash provided by operating activities 1,323.7 407.0 792.4
4 unchanged sentences
Proceeds from maturities and sales of investments 1.8 462.1 159.0
−Removed: Acquisition of lease rights, net of proceeds
+Added: Proceeds from sale of building 23.9 — —
Net cash (used in) provided by investing activities ( 91.0 ) 44.3 ( 574.2 )
3 unchanged sentences
Proceeds from revolver — 700.0 —
−Removed: Proceeds from issuance of debt, net of discount
Repayment of debt ( 11.5 ) — —
Proceeds from share-based awards 61.2 4.3 35.3
+Added: Repayment of revolving credit facility ( 700.0 ) — —
Taxes paid to net settle share-based awards ( 7.5 ) ( 14.9 ) ( 27.0 )
16 unchanged sentences
(the "Company") is a leading New York-based house of modern luxury accessories and lifestyle brands.
−Removed: Tapestry owns the Coach, Kate Spade and Stuart Weitzman brands.
−Removed: The Company’s primary product offerings, manufactured by third-party suppliers, include women’s and men’s bags, small leather goods, footwear, ready-to-wear including outerwear, watches, weekend and travel accessories, scarves, eyewear, fragrance, jewelry and other lifestyle products.
−Removed: The Coach segment includes global sales of Coach products to customers through Coach operated stores, including the Internet and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors.
−Removed: The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors.
−Removed: The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, sales to wholesale customers and through numerous independent third party distributors.
+Added: Our global house of brands unites the magic of Coach, kate spade new york and Stuart Weitzman.
+Added: Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies.
+Added: We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse.
+Added: Individually, our brands are iconic.
+Added: Together, we can stretch what’s possible.
+Added: The Coach segment includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors.
+Added: The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors.
+Added: The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including e-commerce sites, sales to wholesale customers and through numerous independent third party distributors.
BASIS OF PRESENTATION AND ORGANIZATION
1 unchanged sentence
Unless otherwise stated, references to years in the financial statements relate to fiscal years.
−Removed: The fiscal years ended June 27, 2020 (“fiscal 2020”), June 29, 2019 (“fiscal 2019”) and June 30, 2018 (“fiscal 2018”) were 52-week periods.
+Added: The fiscal year ended July 3, 2021 (“fiscal 2021”) was a 53-week period.
+Added: The fiscal years ended June 27, 2020 (“fiscal 2020”) and June 29, 2019 (“fiscal 2019”) were 52-week periods.
The fiscal year ending July 2, 2022 (“fiscal 2022”) will be a 52-week period.
Covid-19 Pandemic
−Removed: The outbreak of a novel strain of coronavirus ("Covid-19") continues to grow worldwide, impacting a significant majority of the regions in which we operate.
+Added: The outbreak of a novel strain of coronavirus ("Covid-19") continues to impact a significant majority of the regions in which we operate.
In March 2020, the outbreak was labeled a global pandemic by the World Health Organization.
−Removed: National, state and local governments have responded to the Covid-19 pandemic in a variety of ways, including, but not limited to, by declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), requiring individuals to stay at home, and in most cases, ordering non-essential businesses to close or limit operations.
−Removed: The Company had temporarily closed the majority of its directly operated stores globally for some period of time to help reduce the spread of Covid-19.
−Removed: As of the end of the fiscal year, the vast majority of the Company's stores had been re-opened for either in-store or pick-up service.
−Removed: Many of the Company's wholesale partners also closed their bricks and mortar stores as required by government orders during the third and fourth quarter.
−Removed: The global Covid-19 pandemic continues to evolve and the full extent to which it will impact the Company - including unforeseen increased costs to the Company's business - will depend on future developments, which are highly uncertain and cannot be predicted, including the ultimate duration, severity and geographic spread of the virus and the success of actions to contain the virus or treat its impact, among others.
−Removed: While the full magnitude of the effects on the Company's business is difficult to predict at this time, the Covid-19 pandemic has and is expected to continue to have a material adverse impact on the Company's business, financial condition, results of operations and cash flows for the foreseeable future.
−Removed: The Company believes that cash flows from operations, access to the credit and capital markets and our credit lines, on-hand cash and cash equivalents and our investments provide adequate funds to support our operating, capital, and debt service requirements for fiscal 2021 and beyond.
+Added: National, state and local governments responded to the Covid-19 pandemic in a variety of ways, including, but not limited to, declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), requiring individuals to stay at home, and in most cases, ordering non-essential businesses to close or limit operations.
+Added: The Company had temporarily closed the majority of its directly operated stores globally for some period of time to help reduce the spread of Covid-19 during fiscal 2020.
+Added: The vast majority of the Company's stores re-opened for either in-store or pick-up service and have continued to operate since then, however, some store locations have experienced temporary re-closures or are operating under tighter restrictions in compliance with local government regulation.
+Added: Many of the Company's wholesale and licensing partners also closed their bricks and mortar stores as required by government orders during the third and fourth quarters of fiscal 2020, and while the majority of stores have reopened, they have also been subject to temporary re-closures and tighter capacity restrictions operating in compliance with the rules of certain local governments.
+Added: The global Covid-19 pandemic is continuously evolving and the extent to which this impacts the Company - including unforeseen increased costs to the Company's business - will depend on future developments, which are highly uncertain and cannot be predicted, including the ultimate duration, severity and geographic resurgence of the virus and the success of actions to contain the virus, including variants of the novel strain, or treat its impact, among others.
+Added: As the full magnitude of the effects on the Company's business is difficult to predict at this time, the Covid-19 pandemic has and may continue to have a material adverse impact on the Company's business, financial condition, results of operations and cash flows for the foreseeable future.
+Added: The Company believes that cash flows from operations, access to the credit and capital markets and our credit lines, on-hand cash and cash equivalents and our investments provide adequate funds to support our operating, capital, and debt service requirements.
+Added: There can be no assurance, however, that any such capital will be available to the Company on acceptable terms or at all.
The Company could experience other potential adverse impacts as a result of the Covid-19 pandemic, including, but not limited to, further charges from adjustments to the carrying amount of goodwill and other intangible assets, long-lived asset impairment charges, reserves for uncollectible accounts receivable and reserves for the realizability of inventory.
−Removed: In addition, the negative impacts of the Covid-19 pandemic could result in the establishment of additional valuation allowances in certain jurisdictions.
−Removed: In response to the Covid-19 pandemic, the Company has taken actions to reinforce its liquidity and financial flexibility.
−Removed: Specific actions include:
−Removed: suspending its quarterly dividend and all share repurchases for the foreseeable future, actively reducing non-essential SG&A expense, reducing in its corporate and retail workforce, reducing corporate compensation, tightly managing inventory and reducing capital expenditures.
−Removed: Furthermore, the Company borrowed $ 700 million under its $ 900 million definitive credit agreement, as entered on October 24, 2019 ("Revolving Credit Facility") as a precautionary measure.
−Removed: If stores are required to close again for an extended period of time due to a "second wave" of increased infections, its liquidity may continue to be negatively impacted and it may need to draw additional funds from our Revolving Credit Facility or seek additional sources of financing, which may or may not be available.
−Removed: On May 19, 2020, the Company entered into Amendment No.
−Removed: 1 (the “Amendment”) to the Revolving Credit Facility, which sets
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: forth the modifications pertaining to the leverage ratio financial covenant required.
+Added: In response to the Covid-19 pandemic, the Company took actions to reinforce its liquidity and financial flexibility.
+Added: Specific actions included:
+Added: suspending its quarterly dividend and all share repurchases, actively reducing non-essential SG&A expense, reducing its corporate and retail workforce, temporarily reducing corporate compensation, tightly managing inventory and reducing capital expenditures.
+Added: During the second quarter of fiscal 2021, compensation resumed normal levels.
+Added: Subsequent to the fiscal 2021 year end, the Company’s Board of Directors approved the reinstatement of the Company's shareholder return program and declared a quarterly dividend of $ 0.25 per common share payable on September 27, 2021.
+Added: The Company also intends to repurchase approximately $ 500.0 million worth of stock in fiscal 2022, of which $ 600.0 million is remaining under its current authorization.
+Added: If stores are required to close again for an extended period of time due to a resurgence of increased infections, the Company's liquidity may be negatively impacted.
+Added: Furthermore, in fiscal 2020, the Company borrowed $ 700 million under its $ 900 million definitive credit agreement, as entered into on October 24, 2019 ("Revolving Credit Facility") as a precautionary measure.
+Added: The $ 700 million borrowed was fully repaid in fiscal 2021.
+Added: On May 19, 2020, the Company entered into Amendment No.
+Added: 1 (the “Amendment”) to the Revolving Credit Facility, which sets forth the modifications pertaining to the leverage ratio financial covenant required.
Refer to Note 13, "Debt", for additional information regarding the Company's outstanding notes payable and applicable amendments.
18 unchanged sentences
The Company may terminate or limit the stock repurchase program at any time.
−Removed: The total amount of common stock repurchase price allocated to accumulated deficit as of June 27, 2020 was $ 299.9 million .
−Removed: Reclassifications
−Removed: Certain reclassifications have been made to the prior periods' financial information in order to conform to the current period's presentation.
−Removed: Beginning in fiscal 2020, the Company presented the impact of foreign currency gains and losses within Other expense (income) within its Consolidated Statements of Operations.
−Removed: Accordingly, foreign currency gains and losses that were reported within Selling, general and administrative expenses ("SG&A") in fiscal 2019 are now reflected within Other expense (income).
SIGNIFICANT ACCOUNTING POLICIES
8 unchanged sentences
Dividend and interest income are recognized when earned.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
Additionally, GAAP requires the consolidation of all entities for which a Company has a controlling voting interest and all variable interest entities (“VIEs”) for which a Company is deemed to be the primary beneficiary.
1 unchanged sentence
(i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with disproportionately few voting rights.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
Concentration of Credit Risk
4 unchanged sentences
The Company believes no significant concentration of credit risk exists with respect to these investments and accounts receivable.
−Removed: The Company holds inventory that is sold through retail and wholesale distribution channels, including e-commerce sites.
+Added: The Company holds inventory that is sold through retail, including e-commerce, and wholesale distribution channels.
Substantially all of the Company's inventories are comprised of finished goods, and are reported at the lower of cost or net realizable value.
6 unchanged sentences
Buildings are depreciated over 40 years and building improvements are depreciated over ten to 40 years.
−Removed: Machinery and equipment are depreciated over lives of five to seven years , furniture and fixtures are depreciated over lives of three to ten years , and software and computer equipment is depreciated over lives of three to seven years .
+Added: Machinery and equipment are depreciated over lives of five to seven years , furniture and fixtures are depreciated over lives of three to ten years , and software and computer equipment is generally depreciated over lives of three to seven years .
Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease terms.
1 unchanged sentence
Valuation of Long-Lived Assets
−Removed: Long-lived assets, such as property and equipment and right-of-use assets are evaluated for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable.
+Added: Long-lived assets, such as property and equipment and right-of-use ("ROU") assets are evaluated for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable.
In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the related asset group and its eventual disposition.
8 unchanged sentences
Refer to Note 4, "Acquisitions," for detailed disclosures related to our acquisitions.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
Goodwill and Other Intangible Assets
4 unchanged sentences
This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth rates.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analysis using a quantitative approach.
10 unchanged sentences
Operating Leases
−Removed: As discussed in “Recent Accounting Pronouncements” herein, the Company adopted Accounting Standards Update ("ASU") No.
−Removed: 2016-02, "Leases (Topic 842)" ("ASU 2016-02") and related ASUs at the beginning of fiscal 2020.
−Removed: The Company leases retail space, office space, warehouse facilities, distribution centers, storage space, machinery, equipment and certain other items under operating leases.
+Added: The Company leases retail space, office space, warehouse facilities, fulfillment centers, storage space, machinery, equipment and certain other items under operating leases.
These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction.
−Removed: In determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist.
+Added: In determining the lease term used in the lease ROU asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist.
When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability.
10 unchanged sentences
Asset retirement obligations represent legal obligations associated with the retirement of a tangible long-lived asset.
−Removed: The Company’s asset retirement obligations are primarily associated with leasehold improvements in which the Company is contractually obligated to remove at the end of a lease to comply with the lease agreement.
+Added: The Company’s asset retirement obligations are primarily associated with leasehold improvements in which the Company is
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: contractually obligated to remove at the end of a lease to comply with the lease agreement.
When such an obligation exists, the Company recognizes an asset retirement obligation at the inception of a lease at its estimated fair value.
5 unchanged sentences
Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services.
−Removed: The amount of revenue recognized is the amount of consideration to which the Company expects to be entitled, including estimation of sale terms
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: that may create variability in the consideration.
+Added: The amount of revenue recognized is the amount of consideration to which the Company expects to be entitled, including estimation of sale terms that may create variability in the consideration.
Revenue subject to variability is constrained to an amount which will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
Retail store and concession shop-in-shop revenues are recognized at the point-of-sale, when the customer obtains physical possession of the products.
−Removed: Internet revenue from sales of products ordered through the Company’s e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers.
−Removed: Retail and internet revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience.
+Added: Digital revenue from sales of products ordered through the Company’s e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers.
+Added: Retail and digital revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience.
Payment is due at the point of sale.
10 unchanged sentences
Cost of Sales
−Removed: Cost of sales consists of inventory costs and other related costs such as reserves for inventory realizability and shrinkage, destruction costs, damages and replacements.
+Added: Cost of sales consists of inventory costs and other related costs such as reserves for inventory realizability and shrinkage, damages and replacements.
Selling, General and Administrative ("SG&A") Expenses
5 unchanged sentences
executive, finance, human resources, legal and information systems departments, as well as corporate headquarters occupancy costs, consulting fees and software expenses.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
Shipping and Handling
2 unchanged sentences
The balance of the Company's transportation-related costs related to its distribution network is included in SG&A expenses rather than in Cost of sales.
−Removed: The amount previously recorded as shipping and handling costs in fiscal 2019 has been corrected in the current year disclosure to exclude other costs.
−Removed: Advertising costs include expenses related to direct marketing activities, such as direct mail pieces, digital and other media and production costs.
+Added: Advertising costs include expenses related to direct marketing activities, such as digital and other media and production costs.
In fiscal 2021, fiscal 2020 and fiscal 2019, advertising expenses for the Company totaled $ 395.2 million, $ 238.0 million and $ 247.1 million, respectively, and are included in SG&A expenses.
Advertising costs are generally expensed when the advertising first appears.
−Removed: Cash Paid for Interest
−Removed: Cash paid for interest includes cash paid for interest related to the Company's Revolving Credit Facility, Senior Notes, and Note Payable and was $ 68.1 million , $ 64.1 million and $ 63.0 million in fiscal 2020 , fiscal 2019 and fiscal 2018 , respectively, and is disclosed as supplemental information on the Consolidated Statement of Cash Flows.
−Removed: The amount previously reported as cash paid for interest in fiscal 2019 has been corrected in the current year disclosure.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
Share-Based Compensation
6 unchanged sentences
Changes in the assumptions used to determine the Black-Scholes value could result in significant changes in the Black-Scholes value.
−Removed: For stock options and share unit awards, the Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates.
+Added: The Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates.
The Company estimates the forfeiture rate based on historical experience as well as expected future behavior.
15 unchanged sentences
Refer to Note 16, "Income Taxes," herein for further discussion on the Company's income taxes.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
Derivative Instruments
2 unchanged sentences
However, the Company is exposed to foreign currency exchange risk related to its foreign operating subsidiaries’ U.S.
−Removed: dollar-denominated inventory transactions and various cross-currency intercompany loans.
+Added: dollar-denominated inventory transactions and various cross-currency intercompany loans and payables.
The Company uses derivative financial instruments to manage these risks.
5 unchanged sentences
The use of different market assumptions or methodologies could affect the estimated fair value.
−Removed: For derivative instruments that qualify for hedge accounting, the changes in the fair value of these instruments is either (i) offset against the changes in fair value of the hedged assets or liabilities through earnings or (ii) recognized as a component of
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: accumulated other comprehensive income (loss) ("AOCI") until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows, respectively.
+Added: For derivative instruments that qualify for hedge accounting, the changes in the fair value of these instruments is either (i) offset against the changes in fair value of the hedged assets or liabilities through earnings or (ii) recognized as a component of accumulated other comprehensive income (loss) ("AOCI") until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows, respectively.
Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged.
8 unchanged sentences
Hedging Portfolio
−Removed: The Company enters into forward currency contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated inventory transactions, as well as various cross-currency intercompany loans.
+Added: The Company enters into forward currency contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated inventory transactions, as well as various cross-currency intercompany loans and payables.
To the extent its derivative contracts designated as cash flow hedges are highly effective in offsetting changes in the value of the hedged items, the related gains (losses) are initially deferred in AOCI and subsequently recognized in the Consolidated Statements of Operations as part of the cost of the inventory purchases being hedged within cost of sales, when the related inventory is sold to a third party.
1 unchanged sentence
Forward foreign currency exchange contracts designated as fair value hedges and associated with intercompany and other contractual obligations are recognized within foreign currency gains (losses) generally in the period in which the related balances being hedged are revalued.
−Removed: Current maturity dates are in July 2020, and such contracts are typically renewed upon maturity if the related balance has not been settled.
+Added: Most current maturity dates are in August 2021, and such contracts are typically renewed upon maturity if the related balance has not been settled.
Foreign Currency
2 unchanged sentences
dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the weighted-average exchange rates for the period.
−Removed: The resulting translation adjustments are included in the Consolidated Statements of Comprehensive Income as a component of other comprehensive income (loss) (“OCI”) and in the Consolidated Statements of Equity within AOCI.
+Added: The resulting translation adjustments are included
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: in the Consolidated Statements of Comprehensive Income as a component of other comprehensive income (loss) (“OCI”) and in the Consolidated Statements of Equity within AOCI.
The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency in earnings.
2 unchanged sentences
Recently Adopted Accounting Pronouncements
−Removed: During the first quarter of fiscal 2020, the Company adopted Accounting Standards Update ("ASU") No.
−Removed: 2016-02, " Leases (Topic 842)" ("ASU 2016-02") and related ASUs.
−Removed: This ASU requires recognition of lease assets and lease liabilities on the balance sheet for all leases other than short-term leases.
−Removed: The Company elected the package of practical expedients intended to ease transition whereby the Company need not reassess as of the adoption date (1) whether contracts are or contain leases, (2) the lease classification for any existing leases and (3) initial direct costs for any existing leases.
−Removed: The Company also elected the practical expedient to combine non-lease components and lease components for real estate leases.
−Removed: The Company applied the provisions of ASU No.
−Removed: 2018-11, " Leases (Topic 842):
−Removed: Targeted Improvements " ("ASU 2018-11"), allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: The effects of the adoption on selected line items within the Company's Consolidated Balance Sheet as of June 30, 2019 were as follows:
−Removed: June 29, 2019
−Removed: June 30, 2019
−Removed: As Reported under ASC 840
−Removed: ASC 842 Adjustments
−Removed: As Reported under ASC 842
−Removed: Current Assets:
−Removed: Prepaid expenses (1)
−Removed: Other current assets (1)
−Removed: Long-term Assets:
−Removed: Operating lease right-of-use assets (1)
−Removed: Intangible assets (1)
−Removed: Deferred income tax assets (3)
−Removed: Other assets and long-term investments (1)
−Removed: Current Liabilities:
−Removed: Accrued liabilities (1)(3)
−Removed: Operating lease liabilities (2)
−Removed: Long-term Liabilities:
−Removed: Long-term debt
−Removed: Operating lease liabilities (2)
−Removed: Deferred income tax liabilities (3)
−Removed: Other liabilities (1)(3)
−Removed: Stockholder's Equity:
−Removed: Retained earnings (accumulated deficit) (3)
−Removed: Upon adoption, the Company recognized operating lease right-of-use ("ROU") assets on the Consolidated Balance Sheet.
−Removed: In conjunction with this recognition, the Company reclassified amounts to lease right-of-use assets including:
−Removed: prepaid rent from prepaid expenses;
−Removed: key money and lease right intangibles from current and long-term other assets;
−Removed: deferred rent, lease incentives, unfavorable lease right liability and other accrued rent from current and long-term other liabilities.
−Removed: In addition, upon adoption in the first quarter of fiscal 2020, the Company recognized initial ROU asset balances of $ 2.13 billion on its Consolidated Balance Sheet.
−Removed: Upon adoption, the Company recognized lease liabilities of $ 2.32 billion on the Consolidated Balance Sheet, which were recorded within Current and Long-term lease liabilities.
−Removed: Upon adoption, the Company recognized a cumulative adjustment of $ 63.7 million , net of tax, decreasing the opening balance of Retained earnings, related to right-of-use asset impairment charges for certain of the Company’s stores where it was previously determined that the carrying value of assets was not recoverable.
−Removed: This adjustment was partially offset by ($ 14.8 ) million , net of tax, of increases to retained earnings to recognize deferred gains resulting from real estate transactions.
−Removed: In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
−Removed: 2014-09, " Revenue from Contracts with Customers ," which provides a single, comprehensive revenue recognition model for all contracts with customers, and contains principles to determine the measurement of revenue and timing of when it is recognized.
−Removed: The model supersedes most existing revenue recognition guidance, and also requires enhanced revenue-related disclosures.
−Removed: The FASB has also issued several related ASUs which provide additional implementation guidance and clarify the requirements of the model.
−Removed: The Company adopted ASU 2014-09 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach.
−Removed: The cumulative effect of initially applying the new standard did not result in a change to opening Retained earnings.
−Removed: Prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
−Removed: Effects of adoption include balance sheet presentation changes including presentation of estimated returned products and refund liabilities on a gross basis, as well as an increase in deferred revenue related to current year licensing contract activity due to a change in the method of recognizing sales-based royalties.
−Removed: These balance sheet presentation changes resulted in an increase of $ 7.4 million to Other current assets, an increase of $ 2.3 million to Accrued liabilities and a decrease of $ 5.1 million to Accounts
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: receivable as of June 29, 2019.
−Removed: Furthermore, the adoption changed the income statement classification of certain items, primarily related to cooperative advertising allowances and other consideration provided to wholesale customers.
−Removed: The following table compares the reported results in fiscal 2019 under the new standard to the amounts that would have been reported if the standard had not been adopted:
−Removed: Impact of Adoption
−Removed: Balances Excluding Adoption
−Removed: Cost of sales
−Removed: Selling, general and administrative expenses
−Removed: Operating income
−Removed: For further information regarding revenue from contracts with customers, refer to Note 5, "Revenue."
−Removed: In October 2016, the FASB issued ASU No.
−Removed: 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16").
−Removed: This ASU requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to a third party.
−Removed: The Company adopted ASU 2016-16 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach, which resulted in a cumulative adjustment of $ 20.2 million to its opening Retained earnings balance.
−Removed: Overall, the adoption of ASU 2016-16 did not have a material impact on the Company's consolidated financial statements.
−Removed: Recently Issued Accounting Pronouncements Not Yet Adopted
−Removed: In August 2018, the FASB issued ASU No.
+Added: In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2018-13, "Fair Value Measurement (Topic 820)" ("ASU 2018-13"), which is intended to improve the effectiveness of fair value disclosures.
The ASU removes or modifies certain disclosure requirements related to fair value information, as well as adds new disclosure requirements for Level 3 fair value measurements.
−Removed: The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021.
−Removed: Early adoption is permitted.
−Removed: The Company does not currently expect that the adoption of ASU 2018-13 will have a material impact on its consolidated financial statements.
+Added: The Company adopted ASU 2018-13 as of the beginning of Fiscal 2021.
+Added: The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements and notes thereto.
In August 2018, the FASB issued ASU No.
2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)" ("ASU 2018-15"), which is intended to clarify the accounting for implementation costs of cloud computing arrangements which are deemed to be a service contract rather than a software license.
−Removed: The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021.
−Removed: Early adoption is permitted.
−Removed: The Company does not currently expect that the adoption of ASU 2018-15 will have a material impact on its consolidated financial statements.
+Added: The Company adopted ASU 2018-15 as of the beginning of Fiscal 2021 on a prospective basis.
+Added: The adoption of ASU 2018-15 did not have a material impact on the Company's consolidated financial statements and notes thereto.
In June 2016, the FASB issued ASU No.
−Removed: 2016-13, “ Measurement of Credit Losses on Financial Instruments ” (“ASU 2016-13”), which requires companies to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables.
−Removed: The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics.
−Removed: The requirement of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021.
−Removed: Early adoption is permitted.
−Removed: The Company does not currently expect that the adoption of ASU 2016-13 will have a material impact on its consolidated financial statements.
+Added: 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), and subsequent clarifying updates, which requires companies to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables.
+Added: The standard requires upfront recognition of an allowance for credit losses expected to be incurred over an asset's contractual life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability.
+Added: The Company adopted ASU 2016-13 as of the beginning of Fiscal 2021 using the modified retrospective basis.
+Added: The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements and notes thereto.
+Added: In February 2016, the FASB issued ASU No.
+Added: 2016-02, "Leases (Topic 842)," which the Company adopted in its entirety on June 30, 2019.
+Added: This ASU requires recognition of lease assets and lease liabilities on the balance sheet for all leases other than short-term leases.
+Added: The Company applied the provisions of ASU No.
+Added: 2018-11, "Leases (Topic 842):
+Added: Targeted Improvements" ("ASU 2018-11"), allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.
+Added: Refer to Note 11, "Leases" for further discussion and related disclosures on leases.
+Added: Recently Issued Accounting Pronouncements Not Yet Adopted
+Added: The Company has considered all new accounting pronouncements and have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition or cash flows based on current information.
Fiscal 2019 Acquisitions
2 unchanged sentences
The aggregate purchase consideration for the acquisitions was $ 47.8 million, $ 44.0 million of which was cash consideration and the remaining is related to non-cash consideration.
−Removed: Of the $ 44.0 million of cash consideration, $ 43.5 million was paid during fiscal 2019 and the remaining will be paid in the future.
+Added: Of the $ 44.0 million of cash consideration, $ 43.5 million was paid during fiscal 2019 and $ 0.5 million was paid during fiscal 2020.
Of the total purchase consideration of $ 47.8 million, $ 21.8 million of net assets were recorded at their fair values.
The excess of the purchase consideration over the fair value of the net assets acquired was recorded as non-tax deductible goodwill in the amount of $ 26.0 million, of which $ 13.3 million was assigned to the Stuart Weitzman segment and $ 12.7 million was assigned to the Kate Spade segment.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
The results of the operations of each acquired entity have been included in the consolidated financial statements since the respective date of each acquisition.
The pro forma results are not presented for these acquisitions as they are immaterial.
−Removed: Fiscal 2018 Acquisitions
−Removed: Kate Spade & Company Acquisition
−Removed: On July 11, 2017, the Company completed its acquisition of Kate Spade & Company for $ 18.50 per share in cash for a total of $ 2.40 billion .
−Removed: As a result, Kate Spade became a wholly owned subsidiary of the Company.
−Removed: The aggregate cash paid in connection with the acquisition of Kate Spade was $ 2.39 billion (or $ 2.32 billion net of cash acquired).
−Removed: Consideration also includes $ 5.3 million as a result of the conversion of previously granted unvested equity awards held by Kate Spade employees.
−Removed: The Company funded the acquisition through cash on-hand, as well as debt proceeds.
−Removed: Refer to Note 13, "Debt", for information regarding the Company's outstanding debt.
−Removed: The Company accounted for the acquisition of Kate Spade under the acquisition method of accounting for business combinations.
−Removed: Accordingly, the cost was allocated to the underlying net assets based on their respective fair values.
−Removed: The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill, which consists largely of the synergies expected from the acquisition.
−Removed: The purchase price allocation for the assets acquired and liabilities assumed is complete.
−Removed: The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:
−Removed: Assets Acquired and Liabilities Assumed
−Removed: Fair Value At Acquisition Date
−Removed: Measurement Period Adjustments
−Removed: Adjusted Fair Value
−Removed: Cash and cash equivalents
−Removed: Trade accounts receivable
−Removed: Inventories (1)
−Removed: Prepaid expenses and other current assets
−Removed: Property and equipment
−Removed: Goodwill (2)(3)
−Removed: Brand intangible asset (4)
−Removed: Other intangible assets (5)
−Removed: Total assets acquired
−Removed: Accounts payable and accrued liabilities
−Removed: Deferred income taxes (6)
−Removed: Other liabilities (7)
−Removed: Total liabilities assumed
−Removed: Total purchase price
−Removed: Cash acquired
−Removed: Total purchase price, net of cash acquired
−Removed: (1) Included a step-up adjustment of $ 67.5 million , which was amortized over 4 months.
−Removed: (2) The majority of the goodwill balance is not deductible for tax purposes.
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: The Company assigned $ 324.0 million of goodwill associated with the Kate Spade acquisition to Coach brand reporting units based upon the analysis of expected synergies, including the allocation of corporate synergies to the brands.
−Removed: Refer to Note 15, "Goodwill and Other Intangible Assets," for further information.
−Removed: The brand intangible asset, of which the majority is not deductible for tax purposes, was valued based on the multi-period excess earnings method.
−Removed: (5) The components of other intangible assets included favorable lease rights of $ 72.2 million (amortized over the remainder of the underlying lease terms), customer relationships of $ 45.0 million (amortized over 15 years) and order backlog of $ 2.0 million (amortized over 6 months).
−Removed: Favorable lease rights were valued based on a comparison of market participant information and Company-specific lease terms.
−Removed: The customer relationship intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with the existing base of customers as of the acquisition date, factoring in expected attrition of the existing base.
−Removed: The order backlog intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with open customer orders as of the acquisition date.
−Removed: The Company acquired $ 200.1 million of net deferred tax assets related to Kate Spade historical federal and state net operating losses, net of a $ 39.3 million valuation allowance, which the Company expects to be able to utilize.
−Removed: The deferred tax adjustments resulting from the step-up in basis of acquired assets, most notably the brand intangible asset, resulted in an overall deferred tax liability.
−Removed: Includes an adjustment for unfavorable lease rights of $ 49.5 million (amortized over the remainder of the underlying lease terms).
−Removed: The operational results of Kate Spade for the post-acquisition period from July 11, 2017 to June 29, 2019 are included in the Company’s accompanying Consolidated Statement of Operations for the year ended June 29, 2019.
−Removed: Refer to Note 18, "Segment Information," for the operating results of the Kate Spade business.
−Removed: The following pro forma information has been prepared as if the Kate Spade acquisition and the related debt financing had occurred as of the beginning of fiscal 2017.
−Removed: These adjustments include the removal of certain historical amounts.
−Removed: The pro forma amounts reflect the combined historical operational results for Tapestry and Kate Spade, after giving effect to adjustments related to the impact of purchase accounting, transaction costs and financing.
−Removed: The pro forma financial information is not indicative of the operational results that would have been obtained had the transactions actually occurred as of that date, nor is it necessarily indicative of the Company’s future operational results.
−Removed: The following adjustments have been made:
−Removed: Depreciation and amortization expenses related to the fair value adjustments to Kate Spade's property and equipment and intangible assets have been reflected in the year ended June 30, 2018.
−Removed: Short-term purchase accounting amortization has been excluded from the pro forma amounts due to the non-recurring nature.
−Removed: Transaction costs in the year ended June 30, 2018 have been excluded from the pro forma amounts due to their non-recurring nature.
−Removed: Interest expense of debt issued to finance the acquisition, including amortization of deferred financing fees, has been reflected in the year ended June 30, 2018.
−Removed: Historical interest expense for Kate Spade has been removed.
−Removed: The tax effects of the pro forma adjustments at an estimated statutory rate of 40.0 % .
−Removed: Earnings per share amounts are calculated using unrounded numbers and the Company's historical weighted average shares outstanding.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Fiscal Year Ended
−Removed: (millions, except per share data)
−Removed: Pro forma Net sales (1)
−Removed: Pro forma Net income (1)
−Removed: Pro forma Net income per share:
−Removed: The pro forma results for the year ended June 30, 2018 include revenue and operating income from the pre-combination period in fiscal 2018.
−Removed: Distributor Acquisitions and Kate Spade Joint Ventures Operational Control
−Removed: During the third quarter of fiscal 2018, the Company acquired designated assets of its Stuart Weitzman distributor in Northern China, entered into an agreement to obtain operational control of the Kate Spade Joint Ventures that operate in Greater China in which the Company has 50 % interest, and acquired designated assets of its Coach distributor in Australia and New Zealand.
−Removed: The aggregate purchase consideration for the three acquisitions was $ 153.7 million , of which $ 106.9 million will be paid in cash and the remaining is related to non-cash consideration.
−Removed: Of the cash consideration, $ 61.5 million (or $ 55.6 million net of cash acquired) was paid during fiscal 2018, $ 2.5 million was paid during fiscal 2019 and the remaining will be paid in the future.
−Removed: Of the total purchase consideration of $ 153.7 million , $ 50.0 million of net assets were recorded at their fair values, and the excess of the purchase consideration over the fair value of the net assets acquired was recorded as non-tax deductible goodwill in the amount of $ 103.7 million .
−Removed: Of this amount, $ 52.8 million , $ 49.3 million and $ 1.6 million were recorded to the Company's Kate Spade, Stuart Weitzman and Coach segments, respectively.
−Removed: During the fourth quarter of fiscal 2018, there were measurement period adjustments of $ 2.3 million and $ 0.5 million , related to the Kate Spade and Stuart Weitzman segments, respectively, which decreased Goodwill.
−Removed: Refer to Note 15, "Goodwill and Other Intangible Assets," for further information.
−Removed: The results of the operations of each acquired entity have been included in the consolidated financial statements since the respective date of each acquisition.
−Removed: The pro forma results are not presented for these acquisitions as they are immaterial.
−Removed: The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including the Internet.
+Added: The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including e-commerce sites.
The Company also generates revenue from royalties related to licensing its trademarks, as well as sales in ancillary channels.
4 unchanged sentences
The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical possession of the products.
−Removed: Internet revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers.
−Removed: Retail and Internet revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience.
+Added: Digital revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers.
+Added: Retail and digital revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience.
Payment is due at the point of sale.
1 unchanged sentence
The Company also uses historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in proportion to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed property.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons.
12 unchanged sentences
Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods bearing the licensed trademarks during the period, which may differ from the amount of revenue recorded during the period thereby generating a contract asset or liability.
−Removed: Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents approximately 1 % of total net sales in the fiscal year ended June 27, 2020 .
+Added: Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents approximately 1 % of total net sales in the fiscal year ended July 3, 2021.
The Company has elected a practical expedient not to disclose the remaining performance obligations that are unsatisfied as of the end of the period related to contracts with an original duration of one year or less or variable consideration related to sales-based royalty arrangements.
6 unchanged sentences
Each geography presented includes net sales related to the Company's directly operated channels, global travel retail business and to wholesale customers, including distributors, in locations within the specified geographic area.
−Removed: North America
−Removed: Greater China (1)
+Added: North America Greater China (1)
Other Asia (2)
+Added: Coach $ 2,466.3 $ 930.6 $ 666.3 $ 189.9 $ 4,253.1
+Added: Kate Spade 936.7 55.2 134.7 83.4 1,210.0
Stuart Weitzman 139.4 108.3 4.0 31.5 283.2
+Added: Total $ 3,542.4 $ 1,094.1 $ 805.0 $ 304.8 $ 5,746.3
+Added: Coach $ 2,015.5 $ 600.8 $ 691.0 $ 218.4 $ 3,525.7
+Added: Kate Spade 889.4 48.3 141.6 70.2 1,149.5
Stuart Weitzman 146.2 81.2 18.3 40.5 286.2
+Added: Total $ 3,051.1 $ 730.3 $ 850.9 $ 329.1 $ 4,961.4
+Added: Coach $ 2,401.6 $ 779.8 $ 836.0 $ 253.5 $ 4,270.9
+Added: Kate Spade 1,067.4 52.9 157.8 88.7 1,366.8
Stuart Weitzman 216.3 80.2 23.6 69.3 389.4
+Added: Total $ 3,685.3 $ 912.9 $ 1,017.4 $ 411.5 $ 6,027.1
(1) Greater China includes mainland China, Hong Kong SAR, Macao SAR and Taiwan.
(2) Other Asia includes Japan, Australia, New Zealand, South Korea, Thailand and other countries within Asia.
−Removed: Other sales primarily represents sales in Europe, the Middle East and royalties related to licensing.
+Added: (3) Other sales primarily represents sales in Europe, the Middle East and royalties earned from the Company's licensing partners.
Deferred Revenue
1 unchanged sentence
Additional deferred revenue may result from sales-based royalty payments received or receivable which exceed the revenue recognized during the contractual period.
−Removed: The balance of such amounts as of June 27, 2020 and June 29, 2019 was $ 28.1 million and $ 27.5 million , respectively, which were primarily recorded within Accrued liabilities on the Company's Consolidated Balance Sheets and are generally expected to be recognized as revenue within a year.
−Removed: For the fiscal year ended June 27, 2020 , net sales of $ 12.3 million were recognized from amounts recorded as deferred revenue as of June 29, 2019 .
+Added: The balance of such amounts as of July 3, 2021 and June 27, 2020 was $ 32.4 million and $ 28.1 million, respectively, which were primarily recorded within Accrued liabilities on the Company's Consolidated Balance Sheets and are generally expected to be recognized as revenue within a year.
+Added: For the fiscal year ended July 3, 2021, net sales of $ 12.5 million were recognized from amounts recorded as deferred revenue as of June 27, 2020.
For the fiscal year ended June 27, 2020, net sales of $ 12.3 million were recognized from amounts recorded as deferred revenue as of June 29, 2019.
−Removed: During the fiscal year ended June 27, 2020 , the Company incurred integration and acquisition-related costs of $ 12.9 million .
−Removed: The charges recorded in cost of sales for the fiscal year ended June 27, 2020 were $ 5.6 million .
−Removed: Of the amount recorded to cost of sales for the fiscal year ended June 27, 2020 , $ 4.3 million was recorded within the Stuart Weitzman segment, $ 1.2 million was recorded within the Kate Spade segment and $ 0.1 million was recorded within the Coach segment.
−Removed: The charges recorded in SG&A
+Added: The Company did no t incur integration costs during the fiscal year ended July 3, 2021.
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: expenses for the fiscal year ended June 27, 2020 were $ 7.3 million .
−Removed: Of the amount recorded to SG&A expenses for the fiscal year ended June 27, 2020 , $ 8.7 million was recorded within Corporate, $ 0.5 million was recorded within the Coach segment, $ 0.1 million was recorded within the Kate Spade segment and a reduction of expense of $ 2.0 million was recorded within the Stuart Weitzman segment.
−Removed: Of the total costs of $ 12.9 million , $ 2.6 million were non-cash charges related to inventory, organization-related costs and purchase accounting adjustments.
During the fiscal year ended June 27, 2020, the Company incurred integration and acquisition-related costs of $ 12.9 million.
The charges recorded in Cost of sales for the fiscal year ended June 27, 2020 were $ 5.6 million.
−Removed: Of the amount recorded to cost of sales for the fiscal year ended June 29, 2019 , $ 6.3 million was recorded within the Kate Spade segment, $ 19.6 million was recorded within the Stuart Weitzman segment and $ 1.9 million was recorded within the Coach segment.
+Added: Of the amount recorded to cost of sales for the fiscal year ended June 27, 2020, $ 4.3 million was recorded within the Stuart Weitzman segment, $ 1.2 million was recorded within the Kate Spade segment and $ 0.1 million was recorded within the Coach segment.
The charges recorded in SG&A expenses for the fiscal year ended June 27, 2020 were $ 7.3 million.
−Removed: Of the amount recorded to SG&A expenses for the fiscal year ended June 29, 2019 , $ 14.5 million was recorded in the Kate Spade segment, $ 30.0 million was recorded within Corporate, $ 15.0 million was recorded within the Stuart Weitzman segment and $ 7.1 million was recorded within the Coach segment.
−Removed: Of the total costs of $ 94.4 million , $ 32.5 million were non-cash charges related to inventory, organization-related costs and asset write-offs.
+Added: Of the amount recorded to SG&A expenses for the fiscal year ended June 27, 2020, $ 8.7 million was recorded within Corporate, $ 0.5 million was recorded within the Coach segment, $ 0.1 million was recorded within the Kate Spade segment and a reduction of expense of $ 2.0 million was recorded within the Stuart Weitzman segment.
+Added: Of the total costs of $ 12.9 million, $ 2.6 million were non-cash charges related to inventory, organization-related costs and purchase accounting adjustments.
Refer to Note 4, "Acquisitions," for more information.
−Removed: A summary of the integration and acquisition charges is as follows:
+Added: A summary of the integration charges for the fiscal year ended June 27, 2020 is as follows:
Fiscal Year Ended
+Added: June 27, 2020
Purchase accounting adjustments (1)
−Removed: Acquisition costs (2)
Inventory-related charges (2)
−Removed: Contractual payments (4)
(1) Purchase accounting adjustments primarily relate to the short-term impact of the amortization of fair value adjustments.
−Removed: Acquisition costs primarily relate to deal fees associated with the acquisitions.
(2) Inventory-related charges primarily relate to inventory reserves for the fiscal year ended June 27, 2020.
−Removed: For the fiscal year ended June 29, 2019, these charges primarily relate to one-time write-off of inventory.
−Removed: For the fiscal year ended June 29, 2019, contractual payments primarily relate to contract termination charges.
(3) Other primarily relates to professional fees, severance charges, asset write-offs and inventory true-up.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
RESTRUCTURING ACTIVITIES
−Removed: A description of significant restructuring and other activities and their related costs is included below.
Acceleration Program
−Removed: The Company is undergoing a review of its business under its multi-year growth agenda.
+Added: The Company has implemented a strategic growth plan after undergoing a review of its business under its multi-year growth agenda.
This multi-faceted, multi-year strategic growth plan (the "Acceleration Program") reflects:
1 unchanged sentence
(ii) select store closures as the Company optimizes its fleet (including store closure costs incurred as the Company exits certain regions in which it currently operates);
−Removed: and (iii) professional fees and compensation costs incurred as a result of the development and execution of the Company's comprehensive strategic initiatives aimed at increasing profitability.
+Added: and (iii) professional fees and share-based compensation costs incurred as a result of the development and execution of the Company's comprehensive strategic initiatives aimed at increasing profitability.
Under the Acceleration Program, the Company expects to incur total pre-tax charges of approximately $ 205 - $ 220 million.
The Acceleration Program is expected to be substantially complete by the end of fiscal 2022.
−Removed: Under the Acceleration Program, the Company incurred charges of $ 87.0 million during the fourth quarter of fiscal 2020, of which $ 8.4 million was recorded within cost of sales and $ 78.6 million was recorded within SG&A expenses.
+Added: Under the Acceleration Program, the Company incurred charges of $ 89.6 million during the fiscal year ended July 3, 2021, all of which was recorded within SG&A expenses.
+Added: Of the $ 89.6 million recorded within SG&A expenses, $ 65.8 million was recorded within Corporate, $ 21.9 million was recorded within the Coach segment, $ 4.4 million was recorded within the Kate Spade segment and a reduction of expense of $ 2.5 million was recorded within the Stuart Weitzman segment.
+Added: During the fiscal year ended June 27, 2020, the Company incurred charges of $ 87.0 million, of which $ 8.4 million was recorded within Cost of sales and $ 78.6 million was recorded within SG&A expenses.
Of the $ 8.4 million recorded within cost of sales, $ 8.4 million was recorded within the Stuart Weitzman segment.
7 unchanged sentences
Liability balance as of June 27, 2020 $ 24.9 $ 0.5 $ 2.9 $ 28.3
+Added: Fiscal 2021 charges $ 16.6 $ 5.9 $ 67.1 $ 89.6
+Added: Cash payments ( 38.2 ) ( 11.9 ) ( 36.6 ) ( 86.7 )
+Added: Non-cash charges — 5.8 ( 10.9 ) ( 5.1 )
+Added: Liability balance as of July 3, 2021 $ 3.3 $ 0.3 $ 22.5 $ 26.1
(1) Organization-related charges, recorded within SG&A expenses, primarily relates to severance and other related costs.
−Removed: Store closure charges represent lease termination penalties, removal or modification of lease assets and liabilities established in connection with the adoption of the new lease accounting standard, establishing inventory reserves, accelerated depreciation and severance.
−Removed: Other charges, recorded within SG&A, primarily relates to professional fees incurred related to the Acceleration Program.
−Removed: The Company expects to incur approximately $ 100 - $ 115 million in additional charges under its the Acceleration Program, of which the majority is estimated to be cash and mostly expected to be recorded in fiscal 2021.
+Added: (2) Store closure charges represent lease termination penalties, removal or modification of lease assets and liabilities, establishing inventory reserves, accelerated depreciation and severance.
+Added: (3) Other charges, recorded within SG&A, primarily relates to professional fees and share-based compensation.
+Added: The Company expects to incur approximately $ 30 - $ 45 million in additional charges under its the Acceleration Program in fiscal 2022.
TAPESTRY, INC.
3 unchanged sentences
Unrealized Gains (Losses) on Cash Flow Hedging Derivatives (1)
−Removed: Unrealized Gains (Losses) on Available-for-Sale Investments
−Removed: Cumulative Translation Adjustment
+Added: Unrealized Gains (Losses) on Available-for-Sale Investments Cumulative Translation Adjustment Other Total
Balances at June 29, 2019 $ ( 4.5 ) $ ( 0.5 ) $ ( 79.9 ) $ 1.7 $ ( 83.2 )
Other comprehensive income (loss) before reclassifications
+Added: ( 2.6 ) — ( 13.4 ) — ( 16.0 )
amounts reclassified from accumulated other comprehensive income (loss)
+Added: ( 8.2 ) ( 0.5 ) — 1.7 ( 7.0 )
Net current-period other comprehensive income (loss) 5.6 0.5 ( 13.4 ) ( 1.7 ) ( 9.0 )
1 unchanged sentence
Other comprehensive income (loss) before reclassifications
+Added: ( 6.6 ) — 22.0 — 15.4
amounts reclassified from accumulated other comprehensive income (loss)
+Added: ( 4.8 ) — — — ( 4.8 )
Net current-period other comprehensive income (loss) ( 1.8 ) — 22.0 — 20.2
−Removed: Balances at June 27, 2020
−Removed: The ending balances of AOCI related to cash flow hedges are net of tax of $( 0.2 ) million and $( 1.3 ) million as of June 27, 2020 and June 29, 2019 , respectively.
−Removed: The amounts reclassified from AOCI are net of tax of $ 4.2 million and $( 1.0 ) million as of June 27, 2020 and June 29, 2019 , respectively.
−Removed: Other represents the accumulated loss on the Company's minimum pension liability adjustment.
−Removed: The balance at June 29, 2019 is net of tax of $ 0.5 million .
−Removed: There was no remaining balance at June 27, 2020 .
+Added: Balances at July 3, 2021 $ ( 0.7 ) $ — $ ( 71.3 ) $ — $ ( 72.0 )
+Added: (1) The ending balances of AOCI related to cash flow hedges are net of tax of $ 0.3 million and $( 0.2 ) million as of July 3, 2021 and June 27, 2020, respectively.
+Added: The amounts reclassified from AOCI are net of tax of $ 0.1 million and $ 4.2 million as of July 3, 2021 and June 27, 2020, respectively.
SHARE-BASED COMPENSATION
1 unchanged sentence
The following table shows the total compensation cost charged against income for these plans and the related tax benefits recognized in the Consolidated Statements of Operations:
+Added: 2021 June 27,
+Added: 2020 June 29,
Share-based compensation expense (1)
+Added: $ 74.9 $ 66.9 $ 88.0
Income tax benefit related to share-based compensation expense 12.9 13.8 16.2
+Added: (1) During the fiscal year ended July 3, 2021, the Company incurred $ 10.8 million of share-based compensation expense related to its Acceleration Program.
During the fiscal year ended June 27, 2020, the Company incurred $ 9.8 million of share-based compensation expense related to its organization-related and integration activities and $ 4.0 million of share-based compensation expense related to its Acceleration Program.
−Removed: During the fiscal year ended June 29, 2019 and June 30, 2018 , the Company incurred $ 3.2 million and $ 6.0 million of share-based compensation expense related to integration efforts, respectively.
−Removed: There were no share-based compensation expense under the Operational Efficiency Plan in fiscal years ended June 27, 2020 or June 29, 2019 .
−Removed: During the fiscal year ended June 30, 2018 , the Company incurred $ 0.8 million of share-based compensation expense under the Company's Operational Efficiency Plan, respectively, primarily as a result of the accelerated vesting of certain awards.
+Added: During the fiscal year ended June 29, 2019, the Company incurred $ 3.2 million of share-based compensation expense related to its integration efforts.
Refer to Note 6, "Integration," and Note 7, "Restructuring Activities," for further information.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
Stock-Based Plans
−Removed: The Company maintains the Amended and Restated 2010 Stock Incentive Plan to award stock options and shares to certain members of management and the outside members of its Board of Directors (“Board”).
+Added: The Company maintains the Amended and Restated Tapestry, Inc.
+Added: 2018 Stock Incentive Plan to award stock options and shares to certain members of management and the outside members of its Board of Directors (“Board”).
The Company maintains the 2010 Stock Incentive Plan for awards granted prior to the establishment of the 2018 Stock Incentive Plan.
These plans were approved by the Company's stockholders.
−Removed: The exercise price of each stock option equals 100 % of the market price of the Company's stock on the date of grant and generally has a maximum term of 10 years .
+Added: The exercise price of each stock option equals 100 % of the market price
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: of the Company's stock on the date of grant and generally has a maximum term of 10 years.
Stock options and service based share awards that are granted as part of the annual compensation process generally vest ratably over four years .
2 unchanged sentences
Stock Options
−Removed: A summary of stock option activity during the fiscal year ended June 27, 2020 is as follows:
−Removed: Options Outstanding
−Removed: Price per Option
+Added: A summary of stock option activity during the fiscal year ended July 3, 2021 is as follows:
+Added: Options Outstanding Weighted-
+Added: Price per Option Weighted-
+Added: (in years) Aggregate
+Added: (millions) (millions)
Outstanding at June 27, 2020 15.0 $ 37.62
+Added: Granted 1.6 18.04
+Added: Exercised ( 1.9 ) 32.09
Forfeited or expired ( 1.4 ) 38.56
−Removed: Outstanding at June 27, 2020
−Removed: Vested and expected to vest at June 27, 2020
−Removed: Exercisable at June 27, 2020
+Added: Outstanding at July 3, 2021 13.3 35.99 5.8 $ 135.8
+Added: Vested and expected to vest at July 3, 2021 12.8 36.43 5.5 125.8
+Added: Exercisable at July 3, 2021 8.0 43.73 4.1 32.8
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions:
+Added: 2021 June 27,
+Added: 2020 June 29,
Expected term (years) 5.1 5.1 5.1
6 unchanged sentences
Treasury issue as of the date of the grant.
−Removed: Dividend yield is based on the current expected annual dividend per share and the Company’s stock price.
+Added: Dividend yield is based on the expected annual dividend per share and the Company’s stock price as of the grant date.
The weighted-average grant-date fair value of options granted during fiscal 2021, fiscal 2020 and fiscal 2019 was $ 7.54 , $ 3.83 and $ 6.74 , respectively.
1 unchanged sentence
The total cash received from option exercises was $ 58.1 million, $ 0.1 million and $ 30.7 million in fiscal 2021, fiscal 2020 and fiscal 2019, respectively, and the cash tax benefit realized for the tax deductions from these option exercises was $ 3.7 million, $ 0.0 million and $ 2.6 million, respectively.
−Removed: At June 27, 2020 , $ 17.0 million of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.4 years .
+Added: At July 3, 2021, $ 16.3 million of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.4 years.
TAPESTRY, INC.
1 unchanged sentence
Service-based Restricted Stock Unit Awards (“RSUs”)
−Removed: A summary of service-based RSU activity during the year ended June 27, 2020 is as follows:
+Added: A summary of service-based RSU activity during the year ended July 3, 2021 is as follows:
+Added: RSUs Weighted-
Average Grant- Date Fair Value per RSU
Non-vested at June 27, 2020 4.9 $ 29.72
−Removed: Non-vested at June 27, 2020
−Removed: At June 27, 2020 , $ 83.3 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.4 years .
+Added: Granted 4.8 16.40
+Added: Vested ( 1.7 ) 32.71
+Added: Forfeited ( 0.7 ) 22.65
+Added: Non-vested at July 3, 2021 7.3 21.11
+Added: At July 3, 2021, $ 90.4 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.3 years.
The weighted-average grant-date fair value of share awards granted during fiscal 2021, fiscal 2020 and fiscal 2019 was $ 16.40 , $ 21.31 and $ 49.13 , respectively.
2 unchanged sentences
The Company grants PRSUs to key executives, the vesting of which is subject to the executive’s continuing employment and the Company's achievement of certain performance goals.
−Removed: A summary of PRSU activity during the fiscal year ended June 27, 2020 is as follows:
+Added: A summary of PRSU activity during the fiscal year ended July 3, 2021 is as follows:
+Added: PRSUs Weighted-
Average Grant- Date Fair Value per PRSU
Non-vested at June 27, 2020 0.8 $ 32.68
+Added: Granted 0.9 16.83
Change due to performance condition achievement ( 0.4 ) 21.50
−Removed: Non-vested at June 27, 2020
−Removed: At June 27, 2020 , $ 0.2 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 0.3 years .
+Added: Vested ( 0.2 ) 41.00
+Added: Forfeited ( 0.1 ) 20.63
+Added: Non-vested at July 3, 2021 1.0 20.82
+Added: At July 3, 2021, $ 13.9 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 0.7 years.
The weighted-average grant-date fair value per share of PRSU awards granted during fiscal 2021, fiscal 2020 and fiscal 2019 was $ 16.83 , $ 21.43 and $ 49.78 , respectively.
The total fair value of awards that vested during fiscal 2021, fiscal 2020 and fiscal 2019 was $ 3.7 million, $ 8.3 million and $ 9.7 million, respectively.
−Removed: During the fiscal years ended June 27, 2020 and June 29, 2019 , the Company granted 0.6 million shares (with a fair value of $ 12.9 million ) and 0.3 million shares (with a fair value of $ 12.3 million ) of common stock to executives, respectively.
−Removed: The shares are subject to a three-year cliff vesting, subject to the employee's continuing employment and the Company's achievement of the performance goals established at the beginning of the performance period.
+Added: PRSUs are subject to a two-year and three-year cliff vesting contingent on the employee's continuing employment and the Company's achievement of the performance goals established at the beginning of the performance period.
The fair value of the PRSU's is based on the price of the Company's common stock on the date of grant.
In fiscal 2021, fiscal 2020 and fiscal 2019, the cash tax benefit realized for the tax deductions from all RSUs (service and performance-based) was $ 6.2 million, $ 8.8 million and $ 16.6 million, respectively.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
Employee Stock Purchase Plan
Under the 2001 Employee Stock Purchase Plan, eligible employees are permitted to purchase a limited number of Company common shares at 85 % of market value.
−Removed: Under this plan, the Company sold 0.2 million , 0.2 million and 0.1 million shares to employees in fiscal 2020 , fiscal 2019 and fiscal 2018 , respectively.
+Added: Under this plan, the Company sold 0.2 million, 0.2 million and 0.2 million
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: shares to employees in fiscal 2021, fiscal 2020 and fiscal 2019, respectively.
Compensation expense is calculated for the fair value of employees’ purchase rights using the Black-Scholes model and the following weighted-average assumptions:
Fiscal Year Ended
+Added: 2021 June 27,
+Added: 2020 June 29,
Expected term (years) 0.5 0.5 0.5
5 unchanged sentences
The following table summarizes the Company’s primarily U.S.
−Removed: dollar-denominated investments, recorded within the Consolidated Balance Sheets as of June 27, 2020 and June 29, 2019 :
−Removed: June 27, 2020
−Removed: June 29, 2019
−Removed: Available-for-sale investments:
−Removed: Commercial paper (1)
−Removed: Government securities – U.S.
−Removed: Corporate debt securities – U.S.
−Removed: Corporate debt securities – non-U.S.
−Removed: Available-for-sale investments, total
+Added: dollar-denominated investments, recorded within the Consolidated Balance Sheets as of July 3, 2021 and June 27, 2020:
+Added: July 3, 2021 June 27, 2020
+Added: Short-term (2)
+Added: Long-term Total Short-term (2)
+Added: Long-term Total
Time deposits (1)
+Added: 0.7 — 0.7 0.7 — 0.7
+Added: Other 7.4 0.1 7.5 7.4 0.1 7.5
Total Investments $ 8.1 $ 0.1 $ 8.2 $ 8.1 $ 0.1 $ 8.2
(1) These securities have original maturities greater than three months and are recorded at fair value.
−Removed: These securities as of June 29, 2019 had maturity dates between calendar years 2019 and 2020 and were recorded at fair value.
−Removed: There were no material gross unrealized gains or losses on available-for-sale investments as of the periods ended June 27, 2020 and June 29, 2019 .
+Added: (2) Short-term investments are presented within Other current assets on the Consolidated Balance Sheets.
+Added: There were no material gross unrealized gains or losses on available-for-sale investments as of the periods ended July 3, 2021 and June 27, 2020.
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: The Company leases retail space, office space, warehouse facilities, distribution centers, storage space, machinery, equipment and certain other items under operating leases.
+Added: The Company leases retail space, office space, warehouse facilities, fulfillment centers, storage space, machinery, equipment and certain other items under operating leases.
The Company's leases have initial terms ranging from 1 to 20 years and may have renewal or early termination options ranging from 1 to 10 years.
−Removed: These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction.
+Added: These leases may also include rent escalation clauses or lease incentives.
In determining the lease term used in the lease ROU asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist.
13 unchanged sentences
ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.
−Removed: The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheet as of June 27, 2020 :
−Removed: June 27, 2020
−Removed: Location Recorded on Balance Sheet
−Removed: Operating leases
−Removed: Operating lease right-of-use assets
−Removed: Finance leases
−Removed: Property and equipment, net
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheet as of July 3, 2021 and June 27, 2020 :
+Added: July 3, 2021 June 27, 2020 Location Recorded on Balance Sheet
+Added: Operating leases $ 1,496.6 $ 1,757.0 Operating lease right-of-use assets
+Added: Finance leases 2.6 3.3 Property and equipment, net
Total lease assets $ 1,499.2 $ 1,760.3
Operating leases:
−Removed: Current lease liabilities
−Removed: Current lease liabilities
−Removed: Long-term lease liabilities
−Removed: Long-term lease liabilities
+Added: Current lease liabilities $ 319.4 $ 388.8 Current lease liabilities
+Added: Long-term lease liabilities 1,525.9 1,799.8 Long-term lease liabilities
Total operating lease liabilities $ 1,845.3 $ 2,188.6
Finance leases:
−Removed: Current lease liabilities
−Removed: Accrued liabilities
−Removed: Long-term lease liabilities
−Removed: Other liabilities
+Added: Current lease liabilities $ 1.0 $ 0.9 Accrued liabilities
+Added: Long-term lease liabilities 3.4 4.4 Other liabilities
Total finance lease liabilities $ 4.4 $ 5.3
Total lease liabilities $ 1,849.7 $ 2,193.9
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: The following table summarizes the composition of net lease costs, primarily recorded within SG&A expenses on the Company's Consolidated Statement of Operations for the fiscal year ended June 27, 2020 :
+Added: The following table summarizes the composition of net lease costs, primarily recorded within SG&A expenses on the Company's Consolidated Statement of Operations for the fiscal year ended July 3, 2021 and June 27, 2020 :
Fiscal Year Ended
−Removed: June 27, 2020
+Added: July 3, 2021 June 27, 2020
Finance lease cost:
9 unchanged sentences
(1) Interest on lease liabilities is recorded within Interest expense, net on the Company's Consolidated Statement of Operations.
−Removed: (2) Rent concessions negotiated related to Covid-19 are recorded in variable lease expense and were not material in fiscal 2020.
−Removed: (3) Operating lease right-of-use impairment includes charges under the Acceleration Program.
+Added: (2) Rent concessions negotiated related to Covid-19 are recorded in variable lease expense.
+Added: (3) Operating lease right-of-use impairment includes charges under the Acceleration Program for the year ended July 3, 2021.
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: The following table summarizes certain cash flow information related to the Company's leases for the fiscal year ended June 27, 2020 :
+Added: The following table summarizes certain cash flow information related to the Company's leases for the fiscal year ended July 3, 2021 and June 27, 2020 :
Fiscal Year Ended
−Removed: June 27, 2020
+Added: July 3, 2021 June 27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
5 unchanged sentences
Right-of-use assets obtained in exchange for finance lease liabilities — —
−Removed: The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheet as of June 27, 2020 :
−Removed: June 27, 2020
−Removed: Operating Leases
−Removed: Finance Leases
+Added: The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheet as of July 3, 2021 :
+Added: Operating Leases Finance Leases Total
+Added: Fiscal 2022 $ 389.4 $ 1.4 $ 390.8
+Added: Fiscal 2023 335.6 1.4 337.0
+Added: Fiscal 2024 280.7 1.4 282.1
+Added: Fiscal 2025 225.6 1.3 226.9
+Added: Fiscal 2026 184.9 — 184.9
Fiscal 2027 and thereafter 791.6 — 791.6
2 unchanged sentences
Total lease liabilities $ 1,845.3 $ 4.4 $ 1,849.7
−Removed: The future minimum fixed sublease receipts under non-cancelable operating lease agreements as of June 27, 2020 are as follows:
−Removed: June 27, 2020
+Added: The future minimum fixed sublease receipts under non-cancelable operating lease agreements as of July 3, 2021 are as follows:
+Added: Fiscal 2022 $ 15.2
+Added: Fiscal 2023 13.8
+Added: Fiscal 2024 14.2
+Added: Fiscal 2025 14.8
+Added: Fiscal 2026 14.8
Fiscal 2027 and thereafter 157.2
2 unchanged sentences
Notes to Consolidated Financial Statements (Continued)
−Removed: The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating leases and finance leases recorded on the Consolidated Balance Sheet as of June 27, 2020 :
−Removed: June 27, 2020
+Added: The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating leases and finance leases recorded on the Consolidated Balance Sheet as of July 3, 2021 and June 27, 2020 :
+Added: July 3, 2021 June 27, 2020
Weighted average remaining lease term (years):
4 unchanged sentences
Finance leases 11.3 % 11.3 %
−Removed: Additionally, the Company had an immaterial amount of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of June 27, 2020 .
−Removed: As reported under the previous accounting standard, the following table provides a summary of future minimum rental payments under non-cancelable operating leases, as of June 29, 2019:
−Removed: June 29, 2019
−Removed: Subsequent to 2024
−Removed: Total minimum future rental payments
+Added: Additionally, the Company had an immaterial amount of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of July 3, 2021.
FAIR VALUE MEASUREMENTS
8 unchanged sentences
Notes to Consolidated Financial Statements (Continued)
−Removed: The following table shows the fair value measurements of the Company’s financial assets and liabilities at June 27, 2020 and June 29, 2019 :
+Added: The following table shows the fair value measurements of the Company’s financial assets and liabilities at July 3, 2021 and June 27, 2020:
+Added: Level 1 Level 2
+Added: 2021 June 27,
+Added: 2021 June 27,
Cash equivalents (1)
+Added: $ 662.0 $ 596.4 $ 0.4 $ 0.3
Short-term investments:
Time deposits (2)
−Removed: Commercial paper (2)
−Removed: Government securities - U.S.
−Removed: Corporate debt securities - U.S.
−Removed: Corporate debt securities - non U.S.
+Added: Other — — 7.4 7.4
Long-term investments:
+Added: Other — — 0.1 0.1
Derivative Assets:
Inventory-related instruments (3)
−Removed: Intercompany loan hedges (3)
+Added: Intercompany loans and payables (3)
Derivative liabilities:
Inventory-related instruments (3)
−Removed: Intercompany loan hedges (3)
+Added: $ — $ — $ 1.2 $ 1.3
+Added: Intercompany loans and payables (3)
(1) Cash equivalents consist of money market funds and time deposits with maturities of three months or less at the date of purchase.
4 unchanged sentences
Non-Financial Assets and Liabilities
−Removed: The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value.
+Added: The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets, right-of-use assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value.
However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions.
−Removed: Refer to Note 4, "Acquisitions," for further discussion of the approaches used in valuing acquired assets and assumed liabilities.
−Removed: During the fiscal year ended June 27, 2020 , the Company recorded a full impairment of $ 267.0 million to the Stuart Weitzman indefinite-lived brand intangibles, and a full impairment of $ 210.7 million to goodwill pertaining to the Stuart Weitzman reporting unit.
−Removed: Refer to Note 15, "Goodwill and Other Intangible Assets" for further information.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: Furthermore, when the Company evaluates its long-lived assets for impairment, the assessment is performed for the related asset group that represents the lowest level for which identifiable cash flows are independent of the cash flows of other assets.
−Removed: This determination requires a significant amount of judgment, and is dependent on the Company's overall operating strategy.
−Removed: The Company historically grouped select flagship locations with other stores located within the geographic area surrounding the flagship store as the Company believed the assets of the related group benefited from the Company's investments in the flagship location.
−Removed: Beginning in fiscal 2020, the Company began to (i) evaluate select flagship store closures across all brands, (ii) be more selective about new store openings as it focuses on store productivity and (iii) invest more significantly in growing its digital business and capabilities.
−Removed: Following this shift in strategy, during the quarter ended September 28, 2019, the Company determined for these certain flagship locations that the individual store represents the lowest level of independent identifiable cash flows.
−Removed: As a result, the Company identified impairment indicators at certain flagship store locations and recorded lease ROU assets and property and equipment asset impairment charges.
−Removed: In addition, during the third and fourth quarter of fiscal 2020, the Company identified impairment indicators at various store locations globally as a result of the Covid-19 pandemic.
−Removed: The fair value of these assets were determined based on Level 3 measurements.
−Removed: Inputs to these fair value measurements included estimates of the amounts and the timing of the stores' net future discounted cash flows based on historical experience, current trends and market conditions.
+Added: During the fiscal year ended July 3, 2021, the Company recorded $ 12.6 million of impairment charges to reduce the carrying amount of certain store assets within property and equipment, net to their estimated fair values.
During the fiscal year ended June 27, 2020, the Company recorded $ 111.8 million of impairment charges to reduce the carrying amount of certain store assets within property and equipment, net to their estimated fair values.
−Removed: During the fiscal year ended June 29, 2019 , the Company recorded $ 7.4 million of impairment charges to reduce the carrying amount of certain store assets (primarily leasehold improvements at selected retail store locations) within property and equipment, net to their estimated fair values.
+Added: During the fiscal year ended July 3, 2021, the Company recorded $ 48.3 million of impairment charges to reduce the carrying amount of certain operating lease right-of-use assets to their estimated fair values.
During the fiscal year ended June 27, 2020, the Company recorded $ 155.4 million of impairment charges to reduce the carrying amount of certain operating lease right-of-use assets to their estimated fair values.
+Added: The fair value of store assets were determined based on Level 3 measurements.
+Added: Inputs to these fair value measurements included estimates of the amounts and the timing of the stores' net future discounted cash flows based on historical experience, current trends and market conditions.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: During the fiscal year ended June 27, 2020, the Company recorded a full impairment of $ 267.0 million to the Stuart Weitzman indefinite-lived brand intangibles, and a full impairment of $ 210.7 million to goodwill pertaining to the Stuart Weitzman reporting unit.
+Added: Refer to Note 15, "Goodwill and Other Intangible Assets" for further information.
The following table summarizes the components of the Company’s outstanding debt:
+Added: 2021 June 27,
Current Debt:
−Removed: Capital Lease Obligations
Revolving Credit Facility $ — $ 700.0
+Added: Note Payable — 11.5
Total Current Debt $ — $ 711.5
3 unchanged sentences
4.125 % Senior Notes due 2027
−Removed: Capital Lease Obligations
Total Long-Term Debt 1,600.0 1,600.0
3 unchanged sentences
Revolving Credit Facility
−Removed: On October 24, 2019, the Company entered into a definitive credit agreement whereby Bank of America, N.A., as administrative agent, the other agents party thereto, and a syndicate of banks and financial institutions have made available to the Company
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
−Removed: a $ 900.0 million revolving credit facility, including sub-facilities for letters of credit, with a maturity date of October 24, 2024 (the “Revolving Credit Facility”).
+Added: On October 24, 2019, the Company entered into a definitive credit agreement whereby Bank of America, N.A., as administrative agent, the other agents party thereto, and a syndicate of banks and financial institutions have made available to the Company a $ 900.0 million revolving credit facility, including sub-facilities for letters of credit, with a maturity date of October 24, 2024 (the “Revolving Credit Facility”).
The Revolving Credit Facility may be used to finance the working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes of the Company and its subsidiaries (which may include commercial paper back-up).
8 unchanged sentences
In addition, the Amendment provides that during the Covenant Relief Period, if any two of the Company’s three credit ratings are non-investment grade, the Revolving Credit Facility will be guaranteed by the Company’s material domestic subsidiaries and will be subject to liens on accounts receivable, inventory and intellectual property, in each case subject to customary exceptions.
−Removed: The Amendment also contains negative covenants that limit the ability of the Company and its subsidiaries to, among other things, incur certain debt, incur certain liens, dispose of assets, make investments, loans or advances, and engage in share buybacks during the Covenant Relief Period.
+Added: The Amendment also contains negative covenants that limit the ability of the Company and its subsidiaries to, among other things, incur certain debt,
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: incur certain liens, dispose of assets, make investments, loans or advances, and engage in share buybacks during the Covenant Relief Period.
An increased interest rate will be applicable during the Covenant Relief Period when the Company’s gross leverage ratio exceeds 4.0 to 1.0.
1 unchanged sentence
As of June 27, 2020, $ 700.0 million of borrowings were outstanding under the Revolving Credit Facility.
+Added: There was no outstanding borrowing on the Revolving Credit Facility as of July 3, 2021.
4.250 % Senior Notes due 2025
7 unchanged sentences
Prior to June 15, 2022 (one month prior to the scheduled maturity date), the Company may redeem the 2022 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to the greater of (1) 100 % of the principal amount of the 2022 Senior Notes to be redeemed or (2) as determined by a Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been payable in respect of the 2022 Senior Notes calculated as if the maturity date of the 2022 Senior Notes was June 15, 2022 (not including any portion of payments of interest accrued to the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the Prospectus Supplement) plus 25 basis points, plus, in the case of each of (1) and (2), accrued and unpaid interest to the redemption date.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
4.125 % Senior Notes due 2027
2 unchanged sentences
Prior to April 15, 2027 (the date that is three month prior to the scheduled maturity date), the Company may redeem the 2027 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to the greater of (1) 100 % of the principal amount of the 2027 Senior Notes to be redeemed or (2) as determined by a Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been payable in respect of the 2027 Senior Notes calculated as if the maturity date of the 2027 Senior Notes was April 15, 2027 (not including any portion of payments of interest accrued to the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the Prospectus Supplement) plus 30 basis points, plus, in the case of each of (1) and (2), accrued and unpaid interest to the redemption date.
−Removed: At June 27, 2020 , the fair value of the 2025, 2022 and 2027 Senior Notes was approximately $ 576.6 million , $ 393.4 million , and $ 565.0 million , respectively, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy.
+Added: At July 3, 2021, the fair value of the 2025, 2022 and 2027 Senior Notes was approximately $ 651.9 million, $ 407.4 million, and $ 659.3 million, respectively, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy.
At June 27, 2020, the fair value of the 2025, 2022 and 2027 Senior Notes was approximately $ 576.6 million, $ 393.4 million and $ 565.0 million, respectively.
−Removed: As a result of taking operational control of the Kate Spade Joint Ventures, the Company has an outstanding Note Payable of $ 11.5 million and $ 11.4 million as of June 27, 2020 and June 29, 2019 , respectively, to the other partner of the Kate Spade Joint Ventures to be payable in fiscal 2021.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
+Added: As a result of taking operational control of the Kate Spade Joint Ventures, the Company had an outstanding Note Payable of $ 11.5 million as of June 27, 2020, to the other partner of the Kate Spade Joint Venture.
+Added: The Note Payable was fully repaid as of July 3, 2021.
Debt Maturities
−Removed: As of June 27, 2020 , the Company's aggregate debt is approximately $ 2.30 billion , of which $ 711.5 million is due in fiscal 2021, $ 400.0 million is due in fiscal 2023 and $ 1.20 billion is due subsequent to fiscal 2023.
+Added: As of July 3, 2021, the Company's aggregate debt is approximately $ 1.60 billion, of which $ 400 million is due in fiscal 2023, $ 600 million is due in fiscal 2025 and $ 600 million is due in fiscal 2028.
COMMITMENTS AND CONTINGENCIES
Letters of Credit
−Removed: The Company had standby letters of credit, surety bonds and bank guarantees totaling $ 33.3 million and $ 34.5 million outstanding at June 27, 2020 and June 29, 2019 , respectively.
+Added: The Company had standby letters of credit, surety bonds and bank guarantees totaling $ 40.5 million and $ 33.3 million outstanding at July 3, 2021 and June 27, 2020, respectively.
The agreements, which expire at various dates through calendar 2028, primarily collateralize the Company’s obligation to third parties for duty, leases, insurance claims and materials used in product manufacturing.
3 unchanged sentences
subsidiaries.
−Removed: The Company expects to pay approximately $ 155.9 million related to the Transition Tax.
+Added: The Company expects to pay approximately $ 144.0 million related to the remaining obligation on the Transition Tax.
Refer to Note 16, "Income Taxes," for more information related to the impact of the Tax Legislation.
−Removed: The Company had other contractual cash obligations as of June 27, 2020 , including $ 280.4 million related to inventory purchase obligations, $ 17.0 million related to capital expenditure purchase obligations, $ 72.8 million of other purchase obligations, $ 2.31 billion of debt repayments, $ 6.9 million of finance lease obligations and $ 325.0 million of interest payments on the outstanding debt.
+Added: The Company had other contractual cash obligations as of July 3, 2021, including $ 484.8 million related to inventory purchase obligations, $ 28.5 million related to capital expenditure purchase obligations, $ 187.2 million of other purchase obligations, $ 1.60 billion of debt repayments, $ 5.5 million of finance lease obligations and $ 257.6 million of interest payments on the outstanding debt.
Refer to Note 11, "Leases," for a summary of the Company's future minimum rental payments under non-cancelable leases.
−Removed: In the ordinary course of business, the Company is a party to several pending legal proceedings and claims.
−Removed: Although the outcome of such items cannot be determined with certainty, the Company's management believes that the final outcome will not have a material effect on the Company's cash flow, results of operations or financial position.
+Added: The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including proceedings to protect Tapestry, Inc.'s intellectual property rights, litigation instituted by persons alleged to have been injured by advertising claims or upon premises within the Company's control, contract disputes, insurance claims and litigation with present or former employees.
+Added: As part of Tapestry’s policing program for its intellectual property rights, from time to time, the Company files lawsuits in the U.S.
+Added: and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, copyright infringement, unfair competition, trademark dilution and/or state or foreign law claims.
+Added: At any given point in time, Tapestry may have a number of such actions pending.
+Added: These actions often result in seizure of counterfeit merchandise and/or out of court settlements with defendants.
+Added: From time to time, defendants will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of certain of Tapestry’s intellectual properties.
+Added: Although the Company's litigation as described above is routine and incidental to the conduct of Tapestry’s business, such litigation can result in large monetary awards, such as when a civil jury is allowed to determine compensatory and/or punitive damages.
+Added: The Company believes that the outcome of all pending legal proceedings in the aggregate will not have a material effect on the Company's business or consolidated financial statements.
GOODWILL AND OTHER INTANGIBLE ASSETS
The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal year or if an event occurs that would more likely than not reduce the fair value below its carrying amount.
+Added: The Company determined there was no impairment in fiscal 2021 based on the annual assessment and no events occurring that would more likely than not reduce the fair value below its carrying amount.
+Added: During the third quarter of fiscal 2020, profitability trends continued to decline from those that were expected for the Stuart Weitzman brand.
+Added: This reduction in both current and future expected cash flows was exacerbated by the Covid-19 pandemic,
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: During the third quarter of fiscal 2020, profitability trends continued to decline from those that were expected for the Stuart Weitzman brand.
−Removed: This reduction in both current and future expected cash flows was exacerbated by the Covid-19 pandemic, which resulted in a decline in sales driven by full and partial closures of a significant portion of our stores globally.
−Removed: As a result of these conditions, the Company concluded that a triggering event had occurred during the third quarter, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Stuart Weitzman reporting unit and indefinite-lived brand intangible assets.
+Added: which resulted in a decline in sales driven by full and partial closures of a significant portion of the Company's stores and the Company's wholesale partners globally.
+Added: As a result of these macroeconomic conditions, the Company concluded that a triggering event had occurred during the third quarter of fiscal year 2020, resulting in the need to perform a quantitative interim impairment assessment over the Company’s Stuart Weitzman reporting unit and indefinite-lived brand intangible assets.
The assessment concluded that the fair values of the Stuart Weitzman reporting unit and indefinite-lived brand intangible asset as of March 28, 2020 did not exceed their respective carrying values.
−Removed: Accordingly, the Company recorded a goodwill impairment charge of $ 210.7 million related to the Stuart Weitzman reporting unit, resulting in a full impairment, during the third quarter of the fiscal year.
+Added: Accordingly, during the three months ended March 28, 2020, the Company recorded a goodwill impairment charge of $ 210.7 million related to the Stuart Weitzman reporting unit, resulting in a full impairment.
The Company also recorded an impairment charge of $ 267.0 million related to the Stuart Weitzman indefinite-lived brand, resulting in a full impairment.
−Removed: The goodwill and brand intangible impairment charges were recorded within total SG&A expenses on the Company's Consolidated Statement of Operations.
+Added: The goodwill and brand intangible impairment charges were recorded within total SG&A expenses on the Company's Consolidated Statement of Operations for fiscal 2020.
The estimated fair value of the Stuart Weitzman reporting unit was based on a weighted average of the income and market approaches.
1 unchanged sentence
The approach, which qualifies as level 3 in the fair value hierarchy, incorporated a number of significant assumptions and judgments, including, but not limited to, estimated future cash flows, discount rates, income tax rates, terminal growth rates and valuation multiples derived from comparable publicly traded companies.
−Removed: In considering the excess of the fair value over its carrying value for the Coach and Kate Spade reporting units and indefinite-lived brand intangibles, management did not perform an interim assessment for these reporting units.
+Added: In considering the excess of the fair value over its carrying value for the Coach and Kate Spade reporting units and indefinite-lived brand intangibles, management did not perform an interim assessment for these reporting units during the three months ended March 28, 2020.
+Added: The Company determined there was no impairment during the fiscal 2020 annual impairment assessment.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
The change in the carrying amount of the Company’s goodwill by segment is as follows:
−Removed: Stuart Weitzman
−Removed: Balance at June 30, 2018
−Removed: Acquisition of goodwill (1)
−Removed: Foreign exchange impact
+Added: Coach Kate Spade Stuart Weitzman Total
Balance at June 29, 2019 $ 661.8 $ 640.4 $ 214.0 $ 1,516.2
2 unchanged sentences
Balance at June 27, 2020 661.7 639.4 — 1,301.1
−Removed: Refer to Note 4, "Acquisitions," for further information.
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
+Added: Foreign exchange impact ( 5.4 ) 1.6 — ( 3.8 )
+Added: Balance at July 3, 2021 $ 656.3 $ 641.0 $ — $ 1,297.3
Intangible Assets
1 unchanged sentence
Fiscal Year Ended
−Removed: June 27, 2020
−Removed: June 29, 2019
+Added: July 3, 2021 June 27, 2020
+Added: Amount Accum.
+Added: Amount Accum.
Intangible assets subject to amortization:
Customer relationships $ 100.5 $ ( 36.9 ) $ 63.6 $ 100.6 $ ( 31.0 ) $ 69.6
−Removed: Favorable lease rights (1)
Total intangible assets subject to amortization 100.5 ( 36.9 ) 63.6 100.6 ( 31.0 ) 69.6
1 unchanged sentence
Trademarks and trade names (1)
+Added: 1,309.8 — 1,309.8 1,309.8 — 1,309.8
Total intangible assets $ 1,410.3 $ ( 36.9 ) $ 1,373.4 $ 1,410.4 $ ( 31.0 ) $ 1,379.4
−Removed: Refer to Note 3, "Significant Accounting Policies," for further information.
(1) The Company recognized a $ 267.0 million non-cash charge related to the impairment of the Stuart Weitzman indefinite-lived brand in fiscal 2020.
−Removed: As of June 27, 2020 , the expected amortization expense for intangible assets is as follows:
+Added: As of July 3, 2021, the expected amortization expense for intangible assets is as follows:
Amortization Expense
+Added: Fiscal 2022 $ 6.5
+Added: Fiscal 2023 6.5
+Added: Fiscal 2024 6.5
+Added: Fiscal 2025 6.5
+Added: Fiscal 2026 6.5
+Added: Thereafter 31.1
The expected future amortization expense above reflects remaining useful lives ranging from approximately 8.8 years to 11.0 years for customer relationships.
4 unchanged sentences
Fiscal Year Ended
−Removed: June 27, 2020
−Removed: June 29, 2019
−Removed: June 30, 2018
+Added: July 3, 2021 June 27, 2020 June 29, 2019
+Added: Amount Percentage Amount Percentage Amount Percentage
Income before provision for income taxes:
United States (1)
+Added: $ 341.0 38.0 % $ ( 496.4 ) 79.5 % $ 335.5 43.8 %
+Added: Foreign 556.3 62.0 ( 127.8 ) 20.5 430.7 56.2
Total income before provision for income taxes
+Added: $ 897.3 100.0 % $ ( 624.2 ) 100.0 % $ 766.2 100.0 %
Tax expense at U.S.
2 unchanged sentences
Effects of foreign operations (2)
+Added: 6.5 0.7 89.8 ( 14.4 ) ( 18.0 ) ( 2.4 )
Transition tax on deferred foreign earnings
+Added: — — — — 7.5 1.0
Re-measurement of deferred taxes
−Removed: Effects of tax credits and acquisition reorganization
+Added: — — — — ( 6.2 ) ( 0.8 )
+Added: Effects of tax credits and reorganization (4)
+Added: ( 94.5 ) ( 10.5 ) ( 28.6 ) 4.6 ( 23.2 ) ( 3.0 )
Effects of Impairment (3)
+Added: — — 91.7 ( 14.7 ) — —
Change in state valuation allowance 11.5 1.3 1.6 ( 0.3 ) 4.4 0.6
+Added: Impact of net operating loss carryback ( 65.4 ) ( 7.3 ) ( 8.3 ) 1.3 — —
+Added: Other, net ( 1.4 ) ( 0.2 ) 8.9 ( 1.4 ) ( 1.3 ) ( 0.2 )
Taxes at effective worldwide rates $ 63.1 7.0 % $ 27.9 ( 4.5 ) % $ 122.8 16.0 %
−Removed: For the fiscal years ended June 27, 2020, June 29, 2019 and June 30, 2018, the United States jurisdiction includes foreign pre-tax earnings allocated to the Company from its interest in a foreign partnership.
−Removed: The Company has chosen to record the future tax associated with GILTI as a period cost, and accordingly, the Company has recorded deferred taxes associated with GILTI in fiscal 2020.
−Removed: This item represents the effective tax rate impact of the SW Goodwill and indefinite-lived brand intangible impairment activity recorded in fiscal 2020.
+Added: (1) The United States jurisdiction includes foreign pre-tax earnings allocated to the Company from its interest in a foreign partnership.
+Added: (2) This includes the tax related to the Global Intangible Low-Taxed Income ("GILTI").
+Added: The Company has elected to account for the tax associated with GILTI as a period cost, and accordingly, the Company has not recorded deferred taxes associated with GILTI.
+Added: (3) This item represents the effective tax rate impact of the Stuart Weitzman Goodwill and indefinite-lived brand intangible impairment activity recorded in fiscal 2020.
+Added: (4) Fiscal 2021 is comprised primarily of $ 60.9 million of U.S.
+Added: federal foreign tax credits generated in fiscal 2021.
+Added: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the Covid-19 pandemic.
+Added: The CARES Act contains numerous tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.
+Added: Of the various provisions, the one most impactful to the Company is the net operating loss carryback.
+Added: The CARES Act requires the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for taxes.
+Added: However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury, or other governing body that may significantly differ from our interpretation of the law, which may result in a material effect on our business, cash flow, results of operations, or financial conditions.
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
Current and deferred tax provision (benefit) was:
Fiscal Year Ended
−Removed: June 27, 2020
−Removed: June 29, 2019
−Removed: June 30, 2018
+Added: July 3, 2021 June 27, 2020 June 29, 2019
+Added: Current Deferred Current Deferred Current Deferred
+Added: Federal $ ( 80.0 ) $ 57.3 $ 74.1 $ ( 88.7 ) $ ( 16.9 ) $ 62.7
+Added: Foreign 63.8 ( 9.4 ) 68.8 ( 30.9 ) 76.7 ( 3.2 )
+Added: State 26.7 4.7 0.7 3.9 28.5 ( 25.0 )
Total current and deferred tax provision (benefit)
−Removed: TAPESTRY, INC.
−Removed: Notes to Consolidated Financial Statements (Continued)
+Added: $ 10.5 $ 52.6 $ 143.6 $ ( 115.7 ) $ 88.3 $ 34.5
The components of deferred tax assets and liabilities were:
+Added: 2021 June 27,
Share-based compensation $ 28.6 $ 33.5
Reserves not deductible until paid 46.4 48.9
−Removed: Deferred lease obligation
Employee benefits 43.6 16.4
1 unchanged sentence
Net operating loss 88.6 108.8
+Added: Other 19.6 47.9
+Added: Inventory 33.0 40.5
Lease liability 418.1 457.8
2 unchanged sentences
Deferred tax assets after valuation allowance $ 612.0 $ 718.1
+Added: Goodwill 85.4 78.5
Other intangibles 303.7 313.7
Property and equipment 20.3 45.2
+Added: Foreign investments 14.4 —
+Added: Right-of-use 324.6 378.2
Prepaid expenses 1.9 1.7
12 unchanged sentences
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
+Added: 2021 June 27,
+Added: 2020 June 29,
Balance at beginning of fiscal year $ 88.5 $ 85.8 $ 75.3
4 unchanged sentences
Decrease due to settlements with taxing authorities ( 0.8 ) ( 5.1 ) ( 1.1 )
−Removed: Increase due to current year acquisitions
Balance at end of fiscal year $ 111.4 $ 88.5 $ 85.8
−Removed: Of the $ 88.5 million ending gross unrecognized tax benefit balance as of June 27, 2020 , $ 61.1 million relates to items which, if recognized, would impact the effective tax rate.
+Added: Of the $ 111.4 million ending gross unrecognized tax benefit balance as of July 3, 2021, $ 98.1 million relates to items which, if recognized, would impact the effective tax rate.
Of the $ 88.5 million ending gross unrecognized tax benefit balance as of June 27, 2020, $ 61.1 million relates to items which, if recognized, would impact the effective tax rate.
−Removed: As of June 27, 2020 and June 29, 2019 , gross interest and penalties payable was $ 10.9 million and $ 12.6 million , respectively, which are included in Other liabilities.
+Added: As of July 3, 2021 and June 27, 2020, gross interest and penalties payable was $ 10.1 million and $ 10.9 million, respectively, which are included in Other liabilities.
During fiscal 2021, fiscal 2020 and fiscal 2019, the Company recognized gross interest and penalty income of $ 0.8 million, gross interest and penalty expense of $ 1.2 million and gross interest and penalty income of $ 0.2 million, respectively.
5 unchanged sentences
The Company is currently under audit in the U.S.
−Removed: for fiscal 2017 and fiscal 2018.
+Added: for fiscal 2018.
The Company anticipates that one or more of these audits may be finalized and certain statutes of limitation may expire in the foreseeable future.
3 unchanged sentences
With respect to all jurisdictions, the Company has made adequate provision for all income tax uncertainties.
−Removed: As of June 27, 2020 , the Company had the following tax loss carryforwards available:
−Removed: federal loss carryforwards of $ 127.7 million , state tax loss carryforwards of $ 810.1 million and tax loss carryforwards of various foreign jurisdictions of $ 131.3 million .
+Added: As of July 3, 2021, the Company had the following tax loss carryforwards available:
+Added: state tax loss carryforwards of $ 705.6 million and tax loss carryforwards of various foreign jurisdictions of $ 211.7 million.
As of June 27, 2020, the Company had the following tax loss carryforwards available:
federal loss carryforwards of $ 127.7 million, state tax loss carryforwards of $ 810.1 million and tax loss carryforwards of various foreign jurisdictions of $ 131.3 million.
−Removed: The federal and state net operating loss carryforwards generally start to expire in 2031 and 2020, respectively.
+Added: The state net operating loss carryforwards generally start to expire in 2021, respectively.
The majority of the foreign net operating loss can be carried forward indefinitely.
−Removed: Deferred tax assets, including the deferred tax assets recognized on these net operating losses, have been reduced by a valuation allowance of $ 39.6 million as of June 27, 2020 and $ 32.9 million as of June 29, 2019 .
+Added: Deferred tax assets, including the deferred tax assets recognized on these net operating losses, have been reduced by a valuation allowance of $ 65.9 million as of July 3, 2021 and $ 39.6 million as of June 27, 2020.
The Company is not permanently reinvested with respect to the earnings of a limited number of foreign entities and has recorded the tax consequences of remitting earnings from these entities.
The Company is permanently reinvested with respect to all other earnings.
−Removed: The total estimated amount of unremitted earnings of foreign subsidiaries as of June 27, 2020 and June 29, 2019 was $ 739.4 million and $ 2.04 billion , respectively.
+Added: The total estimated amount of unremitted earnings of foreign subsidiaries as of July 3, 2021 and June 27, 2020 was $ 1.01 billion and $ 739.4 million, respectively.
The Company intends to distribute $ 556.8 million of earnings that were previously subject to U.S.
1 unchanged sentence
state taxes and foreign withholding taxes related to the future distribution.
−Removed: Based on the Company's current analysis, there is no further unrecognized deferred tax liability related to unremitted earnings.
−Removed: Tax Legislation
−Removed: The Tax Legislation requires the Company to pay a one-time tax, or Transition Tax, on previously unremitted earnings of certain non-US subsidiaries.
−Removed: The Company has elected to pay the Transition Tax in installments.
−Removed: As shown in the table below, the remaining Transition Tax payable is $ 155.9 million and is payable between fiscal 2021 and fiscal 2025.
+Added: Based on the Company's current analysis, there is further unrecognized deferred tax liability of approximately $ 3 to $ 5 million on the remaining unremitted earnings.
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
+Added: Transition Tax
+Added: The Company is required to pay a one-time Transition Tax on previously unremitted earnings of certain non-U.S.
+Added: subsidiaries.
+Added: The Company has elected to pay the Transition Tax in installments.
+Added: As shown in the table below, the remaining Transition Tax payable is $ 144.0 million and is payable between fiscal 2022 and fiscal 2025.
Transition Tax Payments
−Removed: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the Covid-19 pandemic.
−Removed: The CARES Act contains numerous income tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.
−Removed: The CARES Act require the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for income taxes.
−Removed: However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury, or other governing body that may significantly differ from our interpretation of the law, which may result in a material effect on our business, cash flow, results of operations, or financial conditions.
+Added: Fiscal 2022 $ 16.9
+Added: Fiscal 2023 31.8
+Added: Fiscal 2024 42.4
+Added: Fiscal 2025 52.9
+Added: Total $ 144.0
DEFINED CONTRIBUTION PLAN
5 unchanged sentences
The Company has three reportable segments:
−Removed: Coach - Includes global sales of Coach products to customers through Coach operated stores, including the Internet and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors.
−Removed: Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors.
−Removed: Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, sales to wholesale customers and through numerous independent third party distributors.
+Added: • Coach - Includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors.
+Added: • Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors.
+Added: • Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including e-commerce sites, sales to wholesale customers and through numerous independent third party distributors.
In deciding how to allocate resources and assess performance, the Company's chief operating decision maker regularly evaluates the sales and operating income of these segments.
Operating income is the gross margin of the segment less direct expenses of the segment.
−Removed: Beginning in fiscal 2020, the Company presented the impact of foreign currency gains and losses within Other expense (income) within its Consolidated Statements of Operations.
−Removed: Accordingly, foreign currency gains and losses that were reported within Selling, general and administrative expenses ("SG&A") in fiscal 2019 and fiscal 2018 are now reflected within Other expense (income).
TAPESTRY, INC.
3 unchanged sentences
Corporate (2)
+Added: Net sales $ 4,253.1 $ 1,210.0 $ 283.2 $ — $ 5,746.3
Gross profit (3)
+Added: 3,149.0 768.4 164.5 — 4,081.9
Operating income (loss) 1,312.1 108.5 ( 8.6 ) ( 444.0 ) 968.0
Income (loss) before provision for income taxes
+Added: 1,312.1 108.5 ( 8.6 ) ( 514.7 ) 897.3
Depreciation and amortization expense (4)
+Added: 102.2 46.8 13.3 58.2 220.5
+Added: Total assets 2,513.5 2,707.3 298.6 2,863.0 8,382.4
Additions to long-lived assets (5)
+Added: 37.3 13.5 3.4 61.8 116.0
+Added: Net sales $ 3,525.7 $ 1,149.5 $ 286.2 $ — $ 4,961.4
+Added: Gross profit (3)
+Added: 2,411.6 682.9 144.8 — 3,239.3
Operating income (loss) 589.4 ( 99.3 ) ( 621.4 ) ( 419.5 ) ( 550.8 )
Income (loss) before provision for income taxes
+Added: 589.4 ( 99.3 ) ( 621.4 ) ( 492.9 ) ( 624.2 )
Depreciation and amortization expense (4)
+Added: 159.1 97.8 518.8 53.5 829.2
+Added: Total assets 2,616.6 2,769.2 305.1 2,233.3 7,924.2
Additions to long-lived assets (5)
+Added: 75.7 62.0 14.3 54.4 206.4
+Added: Net sales $ 4,270.9 $ 1,366.8 $ 389.4 $ — $ 6,027.1
+Added: Gross profit 2,996.4 863.6 193.7 — 4,053.7
Operating income (loss) 1,148.4 165.4 ( 51.5 ) ( 442.6 ) 819.7
Income (loss) before provision for income taxes
+Added: 1,148.4 165.4 ( 51.5 ) ( 496.1 ) 766.2
Depreciation and amortization expense (4)
+Added: 137.2 63.5 19.4 50.3 270.4
+Added: Total assets 1,945.9 2,596.1 749.4 1,585.9 6,877.3
Additions to long-lived assets (5)
+Added: 85.0 74.2 12.3 102.7 274.2
(1) During fiscal 2019, the Company acquired certain distributors for the Stuart Weitzman and Kate Spade brands.
−Removed: During the first quarter of fiscal 2018, the Company acquired Kate Spade & Company.
−Removed: During the third quarter of fiscal 2018, the Company acquired certain distributors for the Coach and Stuart Weitzman brands and obtained operational control of the Kate Spade Joint Ventures.
−Removed: The operating results of the respective entity have been consolidated commencing on the date of each transaction.
(2) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a brand.
These costs primarily represent administrative and information systems expense.
−Removed: (3) Gross profit reflects charges recorded within Cost of sales of $ 61.9 million within the Coach segment, $ 32.3 million within the Kate Spade segment and $ 9.8 million within the Stuart Weitzman segment for the fiscal year ended June 27, 2020 as a result of establishing inventory reserves directly related to the expected impact of Covid-19 on the Company's future sales projections.
+Added: (3) For the fiscal year ended July 3, 2021, gross profit reflects a reduction of expense recorded within Cost of sales of $ 8.1 million within the Coach segment due to the reversal of raw material reserves, which were established in fiscal 2020 as a result of the projected impact of Covid-19.
+Added: For the fiscal year ended June 27, 2020, gross profit reflects charges recorded within Cost of sales of $ 61.9 million within the Coach segment, $ 32.3 million within the Kate Spade segment and $ 9.8 million within the Stuart Weitzman segment as a result of establishing inventory reserves directly related to the expected impact of Covid-19 on the Company's future sales projections.
The non-cash portion of these charges are presented within Impairment charges on the Consolidated Statement of Cash Flows.
+Added: (4) For the fiscal year ended July 3, 2021, depreciation and amortization expense includes $ 1.8 million of Acceleration Program costs.
+Added: For the fiscal year ended June 27, 2020 and June 29, 2019, depreciation and amortization expense included $ 0.4 million and $ 2.2 million of Integration & Acquisition costs, respectively.
+Added: For the fiscal year ended June 27, 2020,
TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
−Removed: Depreciation and amortization expense includes $ 0.4 million and $ 2.2 million of Integration & Acquisition costs for the fiscal year ended June 27, 2020 and June 29, 2019 , respectively.
−Removed: Depreciation and amortization expense includes impairment charges of $ 44.6 million for Coach, $ 36.0 million for Kate Spade and $ 499.9 million for Stuart Weitzman for the fiscal year ended June 27, 2020 .
+Added: depreciation and amortization expense included impairment charges of $ 44.6 million for Coach, $ 36.0 million for Kate Spade and $ 499.9 million for Stuart Weitzman.
Refer to Note 12, "Fair Value Measurements," and Note 15, "Goodwill and Other Intangible Assets" for further information.
5 unchanged sentences
Fiscal Year Ended
−Removed: June 27, 2020
−Removed: June 29, 2019
−Removed: June 30, 2018 (1)
−Removed: % of total net sales
−Removed: % of total net sales
−Removed: % of total net sales
+Added: July 3, 2021 June 27, 2020 June 29, 2019
+Added: Amount % of total net sales Amount % of total net sales Amount % of total net sales
Women's Handbags $ 2,302.3 40 % $ 1,852.0 37 % $ 2,261.3 38 %
+Added: Men's 769.3 13 688.0 14 862.0 14
Women's Accessories 776.7 14 645.4 13 766.5 13
Other Products 404.8 7 340.3 7 381.1 6
+Added: Total Coach $ 4,253.1 74 % $ 3,525.7 71 % $ 4,270.9 71 %
Women's Handbags $ 681.5 12 % $ 648.9 13 % $ 763.7 13 %
3 unchanged sentences
Stuart Weitzman (1)
+Added: $ 283.2 5 % $ 286.2 6 % $ 389.4 6 %
Total Net sales $ 5,746.3 100 % $ 4,961.4 100 % $ 6,027.1 100 %
−Removed: The Company completed its acquisition of Kate Spade in fiscal 2018.
−Removed: The operating results of the Kate Spade brand have been consolidated in the Company's operating results commencing on July 11, 2017.
(1) The significant majority of sales for the Stuart Weitzman brand is attributable to women's footwear.
4 unchanged sentences
Geographic long-lived asset information is based on the physical location of the assets at the end of each fiscal year and includes property and equipment, net, right of use assets and other assets.
+Added: States Japan Greater
Net sales (1)
+Added: $ 3,365.9 $ 598.9 $ 1,094.1 $ 687.4 $ 5,746.3
Long-lived assets 1,722.2 132.0 125.7 290.8 2,270.7
Net sales (1)
+Added: $ 2,839.7 $ 602.9 $ 730.3 $ 788.5 $ 4,961.4
Long-lived assets 1,933.6 166.0 156.0 379.0 2,634.6
Net sales (1)
+Added: $ 3,395.0 $ 711.9 $ 912.9 $ 1,007.3 $ 6,027.1
Long-lived assets 708.9 90.2 114.2 159.6 1,072.9
1 unchanged sentence
(2) Greater China includes mainland China, Hong Kong SAR, Macao SAR and Taiwan.
−Removed: Other includes sales in Europe, Canada, South Korea, Malaysia, Singapore, Australia and New Zealand and royalties related to licensing.
+Added: (3) Other includes sales in Europe, Canada, South Korea, Malaysia, Singapore, Australia and New Zealand and royalties earned from the Company's licensing partners.
EARNINGS PER SHARE
5 unchanged sentences
Fiscal Year Ended
+Added: 2021 June 27,
+Added: 2020 June 29,
(millions, except per share data)
5 unchanged sentences
Net income (loss) per share:
+Added: Basic $ 3.00 $ ( 2.34 ) $ 2.22
+Added: Diluted $ 2.95 $ ( 2.34 ) $ 2.21
(1) There was no dilutive effect for fiscal year 2020 as the impact of these items would be anti-dilutive as a result of the net loss incurred during the period.
−Removed: At June 27, 2020 , options to purchase 15.0 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $ 15.38 to $ 78.46 , were greater than the average market price of the common shares.
+Added: At July 3, 2021, options to purchase 3.7 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $ 44.97 to $ 78.46 , were greater than the average market price of the common shares.
At June 27, 2020, options to purchase 15.0 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $ 15.38 to $ 78.46 , were greater than the average market price of the common shares.
4 unchanged sentences
Performance-based restricted stock unit awards are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any applicable market condition modifiers) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method.
−Removed: As of June 27, 2020 , June 29, 2019 and June 30, 2018 , there were approximately 16.2 million , 12.6 million , and 4.2 million , respectively, of shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based restricted stock unit awards, which were excluded from the diluted share calculations.
+Added: As of July 3, 2021, June 27, 2020 and June 29, 2019, there were approximately 5.0 million, 16.2 million, and 12.6 million, respectively, of shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based restricted stock unit awards, which were excluded from the diluted share calculations.
RELATED PARTIES
1 unchanged sentence
Payments to this factory represented $ 17.9 million and $ 14.9 million in fiscal 2021 and fiscal 2020, respectively.
−Removed: Amounts payable to this factory were not material at June 27, 2020 or June 29, 2019 .
+Added: Amounts payable to this factory were not material at July 3, 2021 or June 27, 2020.
TAPESTRY, INC.
2 unchanged sentences
The components of certain balance sheet accounts are as follows:
+Added: 2021 June 27,
Property and equipment
9 unchanged sentences
Payroll and employee benefits $ 216.1 $ 60.4
+Added: Accrued rent 20.0 13.7
Accrued income taxes 52.0 100.5
−Removed: Dividends payable
Operating expenses 373.1 336.4
3 unchanged sentences
Gross unrecognized tax benefit 111.4 88.5
+Added: Other 203.2 203.9
Total other liabilities $ 376.8 $ 362.9
+Added: TAPESTRY, INC.
+Added: Notes to Consolidated Financial Statements (Continued)
SUBSEQUENT EVENTS
−Removed: Subsequent to the end of the fiscal year, the Company announced that Jide Zeitlin resigned as the Company’s Chairman, Chief Executive Officer and from the Company's Board of Directors, effective July 20, 2020.
−Removed: Effective July 21, 2020, the Company appointed Joanne Crevoiserat, the Company's Chief Financial Officer, as Interim Chief Executive Officer.
−Removed: The Company also appointed Andrea Shaw Resnick, the Company's Global Head of Investor Relations and Corporate Communications, as Interim Chief Financial Officer.
+Added: Subsequent to the fiscal 2021 year end, the Company’s Board of Directors approved the reinstatement of the Company's shareholder return program and declared a quarterly dividend of $ 0.25 per common share payable on September 27, 2021.
+Added: The Company also intends to repurchase approximately $ 500.0 million worth of stock in fiscal 2022, of which $ 600.0 million is remaining under its current authorization.
TAPESTRY, INC.
Schedule II — Valuation and Qualifying Accounts
−Removed: For the Fiscal Years Ended June 27, 2020 , June 29, 2019 and June 30, 2018
+Added: For the Fiscal Years Ended July 3, 2021, June 27, 2020 and June 29, 2019
Balance at Beginning
−Removed: Additions Charged to Costs and Expenses
−Removed: Other Adjustments (1)
−Removed: Allowances Taken
−Removed: Allowance for bad debts
+Added: of Year Additions Charged to Costs and Expenses Other Adjustments (1)
+Added: Allowances Taken Balance at
+Added: Allowance for credit losses $ 15.9 $ 2.8 $ — $ ( 14.5 ) $ 4.2
Allowance for returns 19.3 18.6 — ( 19.2 ) 18.7
1 unchanged sentence
Valuation allowance 39.6 27.7 ( 1.4 ) 65.9
−Removed: Allowance for bad debts
+Added: Total $ 84.5 $ 65.7 $ — $ ( 50.0 ) $ 100.2
+Added: Allowance for credit losses $ 4.4 $ 26.0 $ — $ ( 14.5 ) $ 15.9
Allowance for returns 10.6 29.1 — ( 20.4 ) 19.3
1 unchanged sentence
Valuation allowance 32.9 9.3 — ( 2.6 ) 39.6
−Removed: Allowance for bad debts
+Added: Total $ 65.7 $ 104.3 $ — $ ( 85.5 ) $ 84.5
+Added: Allowance for credit losses $ 1.5 $ 7.1 $ — $ ( 4.2 ) $ 4.4
Allowance for returns 11.5 20.3 2.8 ( 24.0 ) 10.6
1 unchanged sentence
Valuation allowance 305.9 21.9 — ( 294.9 ) 32.9
−Removed: During the fiscal year ended June 29, 2019 , other adjustments of $ 5.1 million represent the adjustment to the allowance for returns as a result of the adoption of ASU 2014-09, " Revenue from Contracts with Customers ." During the fiscal year ended June 30, 2018, other adjustments of $ 143.9 million represent additions as a result of acquisitions.
+Added: Total $ 335.6 $ 104.2 $ 5.1 $ ( 379.2 ) $ 65.7
+Added: (1) During the fiscal year ended June 29, 2019, other adjustments of $ 5.1 million represent the adjustment to the allowance for returns as a result of the adoption of ASU 2014-09, " Revenue from Contracts with Customers ."
TAPESTRY, INC.
Quarterly Financial Data
−Removed: First Quarter
−Removed: Second Quarter
−Removed: Third Quarter
−Removed: Fourth Quarter
+Added: First Quarter Second Quarter Third Quarter Fourth Quarter
(millions, except per share data)
Fiscal 2021 (1)
+Added: Net sales $ 1,172.2 $ 1,685.4 $ 1,273.3 $ 1,615.4
+Added: Gross profit 830.2 1,173.7 911.9 1,166.1
Net income (loss) 231.7 311.0 91.7 199.8
Net income (loss) per common share:
+Added: Basic $ 0.84 $ 1.12 $ 0.33 $ 0.72
+Added: Diluted $ 0.83 $ 1.11 $ 0.32 $ 0.69
Fiscal 2020 (1)
+Added: Net sales $ 1,357.9 $ 1,816.0 $ 1,072.7 $ 714.8
+Added: Gross profit 914.5 1,209.7 616.2 498.9
Net income (loss) 20.0 298.8 ( 677.1 ) ( 293.8 )
Net income (loss) per common share:
+Added: Basic $ 0.07 $ 1.08 $ ( 2.45 ) $ ( 1.06 )
+Added: Diluted $ 0.07 $ 1.08 $ ( 2.45 ) $ ( 1.06 )
Fiscal 2019 (1)
+Added: Net sales $ 1,381.2 $ 1,800.8 $ 1,331.4 $ 1,513.7
+Added: Gross profit 935.1 1,203.5 915.9 999.2
Net income (loss) 122.3 254.8 117.4 148.9
Net income (loss) per common share:
+Added: Basic $ 0.42 $ 0.88 $ 0.40 $ 0.51
+Added: Diluted $ 0.42 $ 0.88 $ 0.40 $ 0.51
(1) The sum of the quarterly earnings per share may not equal the full-year amount, as the computations of the weighted-average number of common basic and diluted shares outstanding for each quarter and the full year are performed independently.
EXHIBITS TO FORM 10-K
−Removed: Exhibit Table (numbered in accordance with Item 601 of Regulation S-K)
+Added: (a) Exhibit Table (numbered in accordance with Item 601 of Regulation S-K)
+Added: Exhibit Description
3.1 Amended and Restated Bylaws of Tapestry, Inc., effective as of October 31, 2017, which is incorporated herein by reference from Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on October 31, 2017
18 unchanged sentences
4.8 Form of 4.125% senior unsecured notes due 2027 (included in the Third Supplemental Indenture), which is incorporated by reference from Exhibit 4.4 to the Registrant's Current Report on Form 8-K, filed on June 20, 2017
−Removed: Description of Securities
+Added: 4.9 Description of Securities, which is incorporated by reference from Exhibit 4.9 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
+Added: 10.1† Coach, Inc.
Non-Qualified Deferred Compensation Plan for Outside Directors, which is incorporated by reference from Exhibit 10.14 to The Registrant’s Annual Report on Form 10-K for the fiscal year ended June 28, 2003
1 unchanged sentence
2001 Employee Stock Purchase Plan, which is incorporated by reference to Appendix C to the Registrant's Definitive Proxy Statement for the 2016 Annual Meeting of Stockholders filed on September 30, 2016
+Added: 10.3† Coach, Inc.
2004 Stock Incentive Plan, which is incorporated by reference from Appendix A to the Registrant’s Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders, filed on September 29, 2004
+Added: 10.4† Coach, Inc.
2010 Stock Incentive Plan, which is incorporated by reference from Appendix A to the Registrant’s Definitive Proxy Statement for the 2010 Annual Meeting of Stockholders, filed on September 24, 2010
1 unchanged sentence
2010 Stock Incentive Plan, which is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 22, 2014
+Added: 10.6† Coach, Inc.
Amended and Restated 2010 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant’s Definitive Proxy Statement for the 2014 Annual Meeting of Stockholders, filed on September 26, 2014
+Added: Exhibit Description
+Added: 10.7† Coach, Inc.
Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 18, 2015), which is incorporated herein by reference from Appendix B to the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting of Stockholders, filed on September 25, 2015
+Added: 10.8† Coach Inc.
Executive Deferred Compensation Plan, effective as of January 1, 2016, which is incorporated herein by reference from Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
+Added: 10.9† Coach, Inc.
Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 23, 2016), which is incorporated herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2016 Annual Meeting of the Stockholders, filed on September 30, 2016
14 unchanged sentences
2018 Performance-Based Annual Incentive Plan, which is incorporated herein by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on August 10, 2018
−Removed: Letter Agreement, dated February 13, 2013, between Coach, Inc.
−Removed: and Victor Luis, which is incorporated herein by reference from Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2013
10.18† Letter Agreement, dated June 22, 2015, between Coach, Inc.
1 unchanged sentence
Letter Agreement, dated August 11, 2016, between Coach Inc.
−Removed: and Todd Kahn
−Removed: Letter Agreement, dated August 22, 2016, between Coach, Inc.
−Removed: and Victor Luis, which is incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on August 26, 2016
−Removed: Letter Agreement, dated August 22, 2016, between Coach, Inc.
−Removed: and Ian Bickley, which is incorporated by reference from Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed on August 26, 2016
+Added: and Todd Kahn, which is incorporated herein by reference from Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
10.20 Redemption Agreement and Amendment to Limited Liability Company Agreement, dated as of August 1, 2016, by and between Legacy Yards LLC, Coach Legacy Yards LLC and Podium Fund Tower C SPV LLC, which is incorporated by reference from Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the period ended October 1, 2016
7 unchanged sentences
and The Guardian Life Insurance Company of America, a New York mutual insurance company, which is incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on September 14, 2017.
+Added: Exhibit Description
10.26† Letter Agreement, dated May 8, 2019 between the Registrant and Thomas Glaser, which is incorporated herein by reference from Exhibit 10.37 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
4 unchanged sentences
Special Severance Plan, effective August 12, 2019, which is incorporated herein by reference from Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
−Removed: Separation and Mutual Release Agreement, between Tapestry, Inc.
−Removed: and Victor Luis, which is incorporated by reference from Exhibit 10.1 to Tapestry's Current Report on 8-K filed on September 4, 2019
10.30† Letter Agreement, between Tapestry, Inc.
5 unchanged sentences
and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party thereto, incorporated by reference from Exhibit 10.4 to Tapestry’s Quarterly Report on Form 10-Q filed on November 7, 2019
+Added: Letter Agreement, dated January 28, 2020, between the Registrant and Liz Fraser
10.34 Amendment No.
1 unchanged sentence
as Administrative Agent, JPMorgan Chase Bank, N.A.
+Added: and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party thereto, which is incorporated herein by reference from Exhibit 10.37 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
+Added: Letter Agreement, dated July 20, 2020 between the Registrant and Joanne Crevoiserat, which is incorporated herein by reference from Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
+Added: Letter Agreement, dated July 20, 2020 between the Registrant and Andrea Shaw Resnick, which is incorporated herein by reference from Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
+Added: Letter Agreement, dated July 20, 2020 between the Registrant and Todd Kahn, which is incorporated herein by reference from Exhibit 10.40 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
+Added: Second Amended and Restated Tapestry Inc.
+Added: 2018 Stock Incentive Plan, which is incorporated by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders, filed on September 25, 2020
+Added: Letter Agreement, dated October 24, 2020 between the Registrant and Joanne Crevoiserat, incorporated by reference from Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 2020
+Added: First Amendment to Lease, dated as of March 12, 2021, between Legacy Yards Tenant LP, a Delaware limited partnership and Tapestry, Inc., incorporated by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q
+Added: Letter Agreement, dated April 12, 2021, between the Registrant and Todd Kahn, incorporated by reference from Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q
+Added: Letter Agreement, dated April 26, 2021, between the Registrant and Andrea Shaw Resnick, incorporated by reference from Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q
+Added: Letter Agreement, dated April 26, 2021, between the Registrant and Scott Roe, incorporated by reference from Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q
+Added: Waiver, dated August 11, 2021, to the Credit Agreement, dated as of October 24, 2019 by and among Tapestry, Inc., Bank of America, N.A.
+Added: as Administrative Agent, JPMorgan Chase Bank, N.A.
and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party thereto
−Removed: Letter Agreement, dated July 20, 2020 between the Registrant and Joanne Crevoiserat
−Removed: Letter Agreement, dated July 20, 2020 between the Registrant and Andrea Shaw Resnick
−Removed: Letter Agreement, dated July 20, 2020 between the Registrant and Todd Kahn
+Added: Exhibit Description
21.1* List of Subsidiaries of Tapestry, Inc.
2 unchanged sentences
32.1* Section 1350 Certifications
−Removed: XBRL Instance Document
+Added: 101.INS* XBRL Instance Document
the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
−Removed: XBRL Taxonomy Extension Schema Document
−Removed: XBRL Taxonomy Extension Calculation Linkbase Document
−Removed: XBRL Taxonomy Extension Label Linkbase Document
−Removed: XBRL Taxonomy Extension Presentation Linkbase Document
−Removed: XBRL Taxonomy Extension Definition Linkbase Document
+Added: 101.SCH* XBRL Taxonomy Extension Schema Document
+Added: 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
+Added: 101.LAB* XBRL Taxonomy Extension Label Linkbase Document
+Added: 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
+Added: 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
* Filed herewith
1 unchanged sentence
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.