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Item 9A. Controls and Procedures

2023-08-17 compared with 2022-08-18 · 360 added, 389 removed, 1176 unchanged (39% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

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 2, 2022.

We have evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the fiscal year covered by this annual report.

Based on that evaluation, our principal executive and principal financial officers have concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of the fiscal year-end covered by this Annual Report on Form 10-K.

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.

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 2, 2022 and concluded that it is effective.

The Company’s independent auditors have issued an audit report on the Company's internal control over financial reporting as of July 1, 2023 as included elsewhere herein.

Changes in Internal Control over Financial Reporting

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.

We have not experienced any material impact to our internal controls over financial reporting, despite the fact that most of our Corporate employees have worked remotely during the fiscal year due to the Covid-19 pandemic.

We will continue to evaluate and monitor the impact of Covid-19 on our internal controls.

Refer to item 1A.

“Risk Factors,” for further information regarding the risks to our business associated with Covid-19.

There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2023 that were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

There was no adoption, modification or termination of any Rule 10b5-1 plan or other trading arrangements by our directors and officers during the quarter ended July 1, 2023.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the 2022 Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the 2023 Annual Meeting of Stockholders (the "2023 Proxy Statement") and such information is incorporated by reference herein.

The 2023 Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

EXECUTIVE COMPENSATION

The information regarding executive and director compensation set forth in the Proxy Statement for the 2022 Annual Meeting of Stockholders is incorporated herein by reference.

The information required by this Item will be included in the 2023 Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

2 unchanged sentences

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required to be included by Item 13 of Form 10-K will be included in the Proxy Statement for the 2022 Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information required by this Item will be included in the 2023 Proxy Statement, and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated herein by reference to the sections entitled “Fees For Audit and Other Services” and “Audit Committee Pre-Approval Policy” in the Proxy Statement for the 2022 Annual Meeting of Stockholders.

The information required by this Item will be included in the 2023 Proxy Statement, and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and Financial Statement Schedules.

Refer to “Index to Financial Statements” appearing herein.

(b) Exhibits.

Refer to the exhibit index which is included herein.

(a) The following documents are filed as part of this report:

(1) Financial Statements.

For a list of financial statements filed as part of this report refer to “Index to Consolidated Financial Statements and Supplementary Information” which appears following the signature page below.

(2) Financial Statement Schedules:

Schedule II - Valuation and Qualifying Accounts

All other financial statement schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto included in this Form 10-K.

(3) Exhibits:

In reviewing agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements.

The agreements contain representations, warranties, covenants and conditions by or of each of the parties to the applicable agreement.

These representations, warranties, covenants and conditions have been made solely for the benefit of the other parties to the applicable agreement and:

(i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

(ii) may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

(iii) may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors, or under federal securities law;

(iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.

Additional information about the Company may be found elsewhere in this report and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

Exhibit Description

2.1 Agreement and Plan of Merger, dated as of August 10, 2023, by and among Tapestry, Inc., Sunrise Merger Sub, Inc.

and Capri Holdings Limited, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on August 10, 2023 (File No.

3.1 Articles of Incorporation, dated June 1, 2000, which is incorporated herein by reference from Exhibit 3.1 of to the Registrant's Registration Statement on Form S-1 filed on June 16, 2000

3.2 Articles Supplementary of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on May 9, 2001

3.3 Articles of Amendment of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on May 9, 2001

3.4 Articles of Amendment of Coach, Inc., dated May 3, 2002, which is incorporated by reference from Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2002

3.5 Articles of Amendment of Coach, Inc., dated February 1, 2005, which is incorporated by reference from Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on February 2, 2005

3.6 Articles of Amendment to Charter of Tapestry, Inc., effective as of October 31, 2017, which is incorporated by reference from Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on October 31, 2017

3.7 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

3.8 Bylaws of Tapestry, Inc., effective as of April 12, 2023, which is incorporated herein by reference from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on April 13, 2023

4.1 Specimen Certificate for Common Stock of Tapestry, Inc.

which is incorporated by reference from Exhibit 4.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 2018, filed on August 16, 2018

Exhibit Description

4.2 Indenture, dated as of March 2, 2015, between Coach, Inc.

Bank National Association, as trustee, which is incorporated herein by reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 2, 2015

4.3 First Supplemental Indenture, dated as of March 2, 2015, relating to the 4.250% senior unsecured notes due 2025, between Coach, Inc.

Bank National Association, as trustee, which is incorporated herein by reference from Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on March 2, 2015

4.4 Form of 4.250% senior unsecured notes due 2025 (included in the First Supplemental Indenture), which is incorporated herein by reference from Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on March 2, 2015

4.5 Second Supplemental Indenture, dated as of June 20, 2017, relating to the 3.000% senior unsecured notes due 2022, between Coach, Inc.

Bank National Association, as trustee, which is incorporated by reference from Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on June 20, 2017

4.6 Third Supplemental Indenture, dated as of June 20, 2017, relating to the 4.125% senior unsecured notes due 2027, between Coach, Inc.

Bank National Association, as trustee, which is incorporated by reference from Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on June 20, 2017

4.7 Form of 3.000% senior unsecured notes due 2022 (included in the Second Supplemental Indenture), which is incorporated by reference from Exhibit 4.3 to the Registrant's Current Report on Form 8-K, filed on June 20, 2017

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

4.9 Indenture, dated as of December 1, 2021, between the Company and U.S.

Bank National Association, as trustee, which is incorporated herein by reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on December 1, 2021

4.10 First Supplemental Indenture, dated as of December 1, 2021, relating to the 3.050% senior unsecured notes due 2032, between the Company and U.S.

Bank National Association, as trustee, which is incorporated by reference from Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on December 1, 2021

4.11 Form of 3.050% senior unsecured notes due 2032 (included in the First Supplemental Indenture), which is incorporated by reference from Exhibit 4.3 to the Registrant’s Current Report on Form 8-K, filed on December 1, 2021

4.12 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

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

10.2† Amended and Restated Tapestry, Inc.

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

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

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

10.5† Amendment to the Coach, Inc.

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

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

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

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

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

Exhibit Description

Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 20, 2017), which is incorporated herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2017 Annual Meeting of the Stockholders, filed on September 29, 2017

10.11† Tapestry Inc.

2018 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2018 Annual Meeting of Stockholders, filed on September 28, 2018

10.12† Form of Stock Option Grant Notice and Agreement under the Tapestry, Inc.

2018 Stock Incentive Plan, which is incorporated herein by reference from Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019

10.13† Form of Restricted Stock Unit Award Grant Notice and Agreement under the Tapestry, Inc.

2018 Stock Incentive Plan, which is incorporated herein by reference from Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019

10.14† Form of Performance Restricted Stock Unit Agreement Grant Notice and Agreement under the Tapestry, Inc.

2018 Stock Incentive Plan, which is incorporated herein by reference from Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019

10.15† Form of Stock Option Grant Notice and Agreement for Outside Directors under the Tapestry, Inc.

2018 Stock Incentive Plan, which is incorporated by reference from Exhibit 10.3 to the Registrant's Quarterly Report on Form-Q for the period ended December 29, 2018

10.16† Form of Restricted Stock Unit Grant Notice and Agreement for Outside Directors under the Tapestry, Inc.

2018 Stock Incentive Plan, which is incorporated by reference from Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the period ended December 29, 2018

10.17† Tapestry, Inc.

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

10.18† Letter Agreement, dated June 22, 2015, between Coach, Inc.

and Todd Kahn, which is incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on June 22, 2015

Letter Agreement, dated August 11, 2016, between Coach Inc.

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

10.21 Lease Agreement, dated as of August 1, 2016, by and between Coach, Inc.

and Legacy Yards Tenant LP, 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

10.22 Amended and Restated Development Agreement, dated as of August 1, 2016, by and between ERY Developer LLC and Coach Legacy Yards LLC, which is incorporated by reference from Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the period ended October 1, 2016

10.23 Termination and Release of the Coach Guaranty, dated as of August 1, 2016, by and between Podium Fund Tower C SPV LLC and ERY Developer LLC, which is incorporated by reference from Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the period ended October 1, 2016

10.24 Sublease, dated as of September 13, 2017 between Coach, Inc.

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.

10.25† 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

10.26† Tapestry, Inc.

Severance Pay Plan for Vice Presidents and Above, Amended and Restated effective May 9, 2019, 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 29, 2019

10.27† Tapestry, Inc.

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

10.28† Amended & Restated Tapestry Inc.

2018 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2019 Annual Meeting of Stockholders, filed on September 27, 2019

10.29 Credit Agreement, dated as of October 24, 2019, by and among Tapestry, Inc., Bank of America, N.A.

as Administrative Agent, JPMorgan Chase Bank, N.A.

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

Exhibit Description

Letter Agreement, dated January 28, 2020, between the Registrant and Liz Fraser, which is incorporated herein by reference from Exhibit 10.33 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021.

10.31 Amendment No.

1, dated May 19, 2020, to the Credit Agreement, dated as of October 24, 2019 by and among Tapestry, Inc., Bank of America, N.A.

as Administrative Agent, JPMorgan Chase Bank, N.A.

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

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

Second Amended and Restated Tapestry Inc.

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

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

10.35 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

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

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

10.38 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.

as Administrative Agent, JPMorgan Chase Bank, N.A.

and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party thereto, which is incorporated herein by reference from Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021

10.39 Credit Agreement dated as of May 11, 2022, among Tapestry, Inc., the foreign subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, and Bank of America, N.A.

as administrative agent, incorporated by reference from Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed on May 12, 2022

Letter Agreement, dated August 4, 2022, between the Registrant and Scott Roe, incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on August 4, 2022

21.1* List of Subsidiaries of Tapestry, Inc.

23.1* Consent of Deloitte & Touche LLP

31.1* Rule 13(a)-14(a)/15(d)-14(a) Certification of the Company's Chief Executive Officer

31.2* Rule 13(a)-14(a)/15(d)-14(a) Certification of the Company's Chief Financial Officer

32.1* Section 1350 Certification of the Company's Chief Executive Officer

32.2* Section 1350 Certification of the Company's Chief Financial Officer

101.INS* Inline 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.

101.SCH* Inline XBRL Taxonomy Extension Schema Document

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

† Management contract or compensatory plan or arrangement.

FORM 10-K SUMMARY

1 unchanged sentence

TAPESTRY, INC.

August 18, 2022 By:

August 17, 2023

/s/ Joanne C.

19 unchanged sentences

Greco Director

/s/ Alan Lau Director

/s/ Pam Lifford Director

1 unchanged sentence

Annabelle Yu Long

/s/ Ivan Menezes Director

TAPESTRY, INC.

37 unchanged sentences

Changes in these assumptions could have a significant impact on either the fair values, the amount of any impairment charge, or both.

The fair values of the Kate Spade brand reporting unit and indefinite-lived brand as of the fiscal 2022 testing date exceeded their respective carrying values by approximately 50% and 90%, respectively.

The fair values of the Kate Spade brand reporting unit and indefinite-lived brand, which are included in the Company's goodwill and intangible asset balances, respectively, as of the fiscal 2023 testing date exceeded their respective carrying values by approximately 20% and 40%, respectively.

Several factors could impact the Kate Spade brand's ability to achieve expected future cash flows, including the optimization of the store fleet productivity, the success of international expansion strategies, the impact of promotional activity, continued economic volatility and potential operational challenges related to the macroeconomic factors, the reception of new collections in all channels, and other initiatives aimed at increasing profitability of the business.

business and valuation assumptions utilized in the valuation model, particularly the forecasts of future cash flows and growth rates 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.

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 cash flows and growth rates 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.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the projected future cash flows and growth rates and discount rates included the following:

• 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.

• We evaluated management’s ability to accurately forecast by comparing actual revenue and profit margin results to historical projections.

• 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.

• 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.

• We used the assistance of our fair value specialists to assess the acceptability of the implied equity premium.

• We tested the effectiveness of management’s controls over its Kate Spade goodwill and indefinite-lived brand intangible asset impairment evaluations, including controls over the forecasts of future Kate Spade revenue and profit margin, and the selection of the discount rate.

• We evaluated management’s ability to accurately forecast by comparing Kate Spade actual revenue and profit margin results to historical projections.

• We evaluated management’s Kate Spade 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.

• With the assistance of our fair value specialists, we evaluated the Kate Spade 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 for Kate Spade.

• We used the assistance of our fair value specialists to assess the acceptability of the implied equity premium for Kate Spade.

With respect to the market value of equity, we tested the calculations used in developing the respective market value of equity.

• 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.

• We used the assistance of our fair value specialists in evaluating the Kate Spade fair value methodology and the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations.

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.

77 unchanged sentences

Fiscal Year Ended

2021 June 27,

(millions, except per share data)

2 unchanged sentences

Gross profit 4,714.9 4,650.4 4,081.9

Other selling, general and administrative expenses 3,474.6 3,113.9 3,312.4

Impairment of goodwill and intangible assets — — 477.7

Selling, general and administrative expenses 3,542.5 3,474.6 3,113.9

Operating income (loss) 1,172.4 1,175.8 968.0

15 unchanged sentences

Fiscal Year Ended

2021 June 27,

Net income (loss) $ 936.0 $ 856.3 $ 834.2

3 unchanged sentences

Unrealized gains (losses) on available-for-sale investments, net 0.5 ( 0.5 ) —

Change in pension liability, net — — ( 1.7 )

Foreign currency translation adjustments ( 56.7 ) ( 96.8 ) 22.0

11 unchanged sentences

Share-based compensation — — 74.9 — — 74.9

Repurchase and retirement of common stock ( 11.9 ) ( 0.1 ) — ( 299.9 ) — ( 300.0 )

Dividends declared ($ 1.013 per share)

— — — ( 283.5 ) — ( 283.5 )

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

Balance at July 3, 2021 279.5 2.8 3,487.0 ( 158.5 ) ( 72.0 ) 3,259.3

Net income (loss) — — — 856.3 — 856.3

2 unchanged sentences

Share-based compensation — — 89.4 — — 89.4

Repurchase of common stock ( 42.0 ) ( 0.4 ) — ( 1,599.6 ) — ( 1,600.0 )

Dividends declared ($ 1.00 per share)

— — — ( 264.4 ) — ( 264.4 )

Balance at July 2, 2022 241.2 2.4 3,620.2 ( 1,166.2 ) ( 170.9 ) 2,285.5

3 unchanged sentences

Share-based compensation — — 78.8 — — 78.8

Repurchase of common stock ( 42.0 ) ( 0.4 ) — ( 1,599.6 ) — ( 1,600.0 )

Repurchase of common stock, including excise tax ( 17.8 ) ( 0.2 ) — ( 703.3 ) — ( 703.5 )

Dividends declared ($ 1.20 per share)

5 unchanged sentences

Fiscal Year Ended

2021 June 27,

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES

Net income (loss) $ 936.0 $ 856.3 $ 834.2

Adjustments to reconcile net income to net cash provided by operating activities:

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

Depreciation and amortization 182.2 195.3 218.7

4 unchanged sentences

Acceleration program charges — 14.8 5.1

Integration and restructuring activities — — 14.0

Deferred income taxes 41.2 29.9 52.6

10 unchanged sentences

Other assets ( 58.7 ) ( 20.2 ) ( 223.1 )

Net cash provided by operating activities 853.2 1,323.7 407.0

CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES

Net cash provided by (used in) operating activities 975.2 853.2 1,323.7

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES

Purchases of property and equipment ( 184.2 ) ( 93.9 ) ( 116.0 )

2 unchanged sentences

Proceeds from sale of building — — 23.9

Net cash (used in) provided by investing activities ( 253.6 ) ( 91.0 ) 44.3

CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES

Settlement of net investment hedge 41.9 — —

Net cash provided by (used in) investing activities 5.7 ( 253.6 ) ( 91.0 )

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES

Payment of dividends ( 283.3 ) ( 264.4 ) —

Repurchase of common stock ( 703.5 ) ( 1,600.0 ) —

Proceeds from revolver — — 700.0

Proceeds from debt, net of discount 998.5 — —

Proceeds from issuance of debt, net of discount — 998.5 —

Payment of initial debt costs — ( 4.6 ) —

5 unchanged sentences

Other financing activity ( 1.1 ) ( 1.0 ) ( 8.2 )

Net cash (used in) provided by financing activities ( 1,778.1 ) ( 666.0 ) 5.9

Net cash provided by (used in) financing activities ( 1,035.9 ) ( 1,778.1 ) ( 666.0 )

Effect of exchange rate changes on cash and cash equivalents ( 8.7 ) ( 39.4 ) 14.7

(Decrease) increase in cash and cash equivalents ( 1,217.9 ) 581.4 457.1

Net (decrease) increase in cash and cash equivalents ( 63.7 ) ( 1,217.9 ) 581.4

Cash and cash equivalents at beginning of year 789.8 2,007.7 1,426.3

9 unchanged sentences

Tapestry, Inc.

(the "Company") is a leading New York-based house of accessible luxury accessories and lifestyle brands.

(the "Company") is a leading New York-based house of iconic accessories and lifestyle brands.

Our global house of brands unites the magic of Coach, kate spade new york and Stuart Weitzman.

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Together, we can stretch what’s possible.

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.

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.

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.

The Coach segment includes global sales of primarily Coach brand products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors.

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 and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors.

The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites and through independent third-party distributors.

BASIS OF PRESENTATION AND ORGANIZATION

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The fiscal year ended July 1, 2023 (“fiscal 2023”) was a 52-week period.

The fiscal year ended July 3, 2021 (“fiscal 2021”) was a 53-week period and the fiscal year ended June 27, 2020 (“fiscal 2020”) was a 52-week period.

The fiscal year ending July 1, 2023 (“fiscal 2023”) will be a 52-week period.

The fiscal year ended July 2, 2022 (“fiscal 2022”) was a 52-week period and the fiscal year ended July 3, 2021 (“fiscal 2021”) was a 53-week period.

The fiscal year ending June 29, 2024 (“fiscal 2024”) will be a 52-week period.

Covid-19 Pandemic

The outbreak of a novel strain of coronavirus ("Covid-19") continues to impact a significant majority of the regions in which we operate, resulting in significant global business disruptions.

The widespread impact of Covid-19 resulted in temporary closures of directly operated stores globally, as well as at our wholesale and licensing partners starting in fiscal 2020.

Since then, certain directly operated stores and the stores of our wholesale and licensing partners have experienced temporary re-closures or are operating under tighter restrictions in compliance with local government regulation.

Covid-19 has also resulted in ongoing supply chain challenges, such as logistic constraints, the temporary closure of certain third-party manufacturers and increased freight costs.

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 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.

As the full magnitude of the effects on the Company's business is difficult to predict, 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.

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.

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.

Starting in fiscal 2020, in response to the Covid-19 pandemic, the Company took actions to reinforce its liquidity and financial flexibility.

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.

Refer to Part I, Item 1A.

"Risk Factors" herein.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities.

Such disruptions continued during the first half of fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic.

Starting in December 2022, certain government restrictions were lifted in the region and business trends have improved.

The Company continues to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto.

Actual results could differ from estimates in amounts that may be material to the financial statements.

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All intercompany transactions and balances are eliminated in consolidation.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Share Repurchases

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Purchases of the Company's common stock are executed through open market purchases, including through purchase agreements under Rule 10b5-1.

Effective January 1, 2023, the Company is subject to a 1% excise tax on net share repurchases as part of the Inflation Reduction Act of 2022, which is recorded in Retained earnings as part of Stockholders' Equity.

SIGNIFICANT ACCOUNTING POLICIES

17 unchanged sentences

The Company believes no significant concentration of credit risk exists with respect to these investments and accounts receivable.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Company holds inventory that is sold through retail, including e-commerce, and wholesale distribution channels.

3 unchanged sentences

A decrease in product demand due to changing customer tastes, buying patterns or increased competition could impact the Company's evaluation of its inventory and additional reserves might be required.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Property and Equipment, Net

3 unchanged sentences

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 .

Implementation costs eligible for capitalization related to cloud computing arrangements that are a service contract are recorded within Prepaid expenses and Other non-current assets in the Consolidated Balance Sheets and amortized as Selling, general and administrative ("SG&A") expense in the Consolidated Statement of Operations over the term of the associated hosting arrangement.

Implementation costs eligible for capitalization related to cloud computing arrangements that are a service contract are recorded within Prepaid expenses and Other assets in the Consolidated Balance Sheets and amortized as Selling, general and administrative ("SG&A") expense in the Consolidated Statement of Operations over the term of the associated hosting arrangement.

Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease terms.

19 unchanged sentences

Determination of the fair value of a reporting unit and intangible asset is based on management's assessment, considering independent third-party appraisals when necessary.

Furthermore, this determination is judgmental in nature and often involves the use of significant estimates and assumptions, which may include projected future cash flows, discount rates, growth rates,

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

and determination of appropriate market comparables and recent transactions.

These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge.

1 unchanged sentence

The Company determined that there was no impairment in fiscal 2023 or fiscal 2022.

In fiscal 2020, the Company recorded a goodwill impairment charge of $ 210.7 million related to the Stuart Weitzman reporting unit and an impairment charge of $ 267.0 million related to the Stuart Weitzman indefinite-lived brand.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Operating Leases

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Retail store and concession shop-in-shop revenues are recognized at the point-of-sale, when the customer obtains physical possession of the products.

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

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Retail and digital revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience.

3 unchanged sentences

The Company's historical estimates of these variable amounts have not differed materially from actual results.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks.

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Shipping and Handling

Shipping and handling costs incurred were $ 230.8 million, $ 178.6 million and $ 128.1 million in fiscal 2022, fiscal 2021 and fiscal 2020, respectively, and are included in SG&A expenses.

Shipping and handling costs for delivery of products to consumers were $ 217.0 million, $ 230.8 million and $ 178.6 million in fiscal 2023, fiscal 2022 and fiscal 2021, respectively, and are included in SG&A expenses.

The Company includes inbound product-related transportation costs from manufacturers within Cost of sales.

3 unchanged sentences

Advertising costs are generally expensed when the advertising first appears.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Share-Based Compensation

8 unchanged sentences

The Company estimates the forfeiture rate based on historical experience as well as expected future behavior.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Company grants performance-based share awards to key executives, the vesting of which is subject to the executive’s continuing employment and the Company's or individual's achievement of certain performance goals.

25 unchanged sentences

The Company records all derivative contracts at fair value on the Consolidated Balance Sheets.

The fair values of foreign currency derivatives are based on the forward curves of the specific indices upon which settlement is based and include an

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

adjustment for the Company’s credit risk.

The fair values of foreign currency derivatives are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the Company’s credit risk.

Judgment is required of management in developing estimates of fair value.

5 unchanged sentences

The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

If it is determined that a derivative instrument has not been highly effective, and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are recognized in earnings within foreign currency gains (losses).

7 unchanged sentences

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.

Current maturity dates range from July 2022 to June 2023.

Current maturity dates range from July 2023 to March 2025.

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.

9 unchanged sentences

Foreign currency transaction gains and losses also include amounts realized on the settlement of certain intercompany loans with foreign subsidiaries.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes".

The ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in Topic 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill.

The Company adopted ASU 2019-12 as of the beginning of fiscal 2022.

The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements and notes thereto.

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)", which is intended to enhance the transparency of supplier finance programs.

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

The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2022, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2024.

Early adoption is permitted.

The Company does not expect that the adoption of ASU 2022-04 will have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company has considered all new accounting pronouncements and has 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.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including e-commerce sites.

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Revenue for contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned once the minimum royalty threshold is achieved.

Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods bearing

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

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.

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.

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 1, 2023.

2 unchanged sentences

Other practical expedients elected by the Company include (i) assuming no significant financing component exists for any contract with a duration of one year or less, (ii) accounting for shipping and handling as a fulfillment activity within SG&A expense regardless of the timing of the shipment in relation to the transfer of control and (iii) excluding sales and value added tax from the transaction price.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Disaggregated Net Sales

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(1) Greater China includes mainland China, Taiwan, Hong Kong SAR and Macao SAR.

(2) Other Asia includes Japan, Malaysia, Australia, New Zealand, South Korea, Singapore and other countries within Asia.

(2) Other Asia includes Japan, Malaysia, Australia, New Zealand, Singapore, South Korea, and other countries within Asia.

(3) Other sales primarily represents sales in Europe, the Middle East and royalties earned from the Company's licensing partners.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Deferred Revenue

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For the fiscal year ended July 1, 2023, net sales of $ 23.5 million were recognized from amounts recorded as deferred revenue as of July 2, 2022.

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 July 2, 2022, net sales of $ 16.8 million were recognized from amounts recorded as deferred revenue as of July 3, 2021.

TAPESTRY, INC.

2 unchanged sentences

Acceleration Program

Starting in fiscal 2020, the Company embarked on a strategic growth plan after undergoing a review of its business under its multi-year growth agenda.

During fiscal 2020, the Company embarked on 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:

2 unchanged sentences

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.

Since inception in fiscal 2020, the Company incurred total pre-tax charges of $ 219.4 million.

The Company does not expect to incur further expenses related to the Acceleration Program in fiscal 2023.

Under the Acceleration Program, the Company incurred charges of $ 42.8 million during the fiscal year ended July 2, 2022, all of which was recorded within SG&A expenses.

Of the $ 42.8 million recorded within SG&A expenses, $ 26.6 million was recorded within Corporate, $ 6.7 million was recorded within the Coach segment, $ 5.9 million was recorded within the Kate Spade segment and $ 3.6 million was recorded within the Stuart Weitzman segment.

Since inception in fiscal 2020 until the completion of the program in fiscal 2022, the Company incurred total pre-tax charges of $ 219.4 million.

The Company did not incur any charges related to the Acceleration Program in fiscal 2023.

During the fiscal year ended July 2, 2022, the Company incurred charges of $ 42.8 million, all of which was recorded within SG&A expenses .

Of the $ 42.8 million recorded within SG&A, $ 26.6 million was recorded within Corporate, $ 6.7 million was recorded within the Coach segment, $ 5.9 million was recorded within the Kate Spade segment and $ 3.6 million was recorded within the Stuart Weitzman segment.

During the fiscal year ended July 3, 2021, the Company incurred charges of $ 89.6 million, all of which was recorded within SG&A expenses .

Of the $ 89.6 million recorded within SG&A, $ 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.

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Liability balance as of July 2, 2022 $ 1.1 $ 0.2 $ 5.5 $ 6.8

Fiscal 2023 charges $ — $ — $ — $ —

Cash payments ( 1.1 ) ( 0.2 ) ( 5.5 ) ( 6.8 )

Non-cash charges — — — —

Liability balance as of July 1, 2023 $ — $ — $ — $ —

(1) Organization-related charges, recorded within SG&A expenses, primarily relates to severance and other related costs.

(2) Store closure charges represent lease termination penalties, removal or modification of lease assets and liabilities, establishing inventory reserves, accelerated depreciation and severance.

(3) Other charges, recorded within SG&A, primarily relates to share-based compensation and professional fees.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

(2) Store closure charges represent lease termination penalties, removal or modification of lease assets and liabilities, establishing inventory reserves, accelerated depreciation and severance.

(3) Other charges, recorded within SG&A, primarily relates to share-based compensation and professional fees.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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Unrealized Gains (Losses) on Available-for-Sale Investments Cumulative Translation Adjustment (2)

Balances at June 27, 2020 $ 1.1 $ — $ ( 93.3 ) $ ( 92.2 )

Balances at July 3, 2021

$ ( 0.7 ) $ — $ ( 71.3 ) $ ( 72.0 )

Other comprehensive income (loss) before reclassifications

4 unchanged sentences

Balances at July 2, 2022

$ ( 2.3 ) $ ( 0.5 ) $ ( 168.1 ) $ ( 170.9 )

Other comprehensive income (loss) before reclassifications

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Balances at July 1, 2023

$ 34.9 $ — $ ( 224.8 ) $ ( 189.9 )

(1) The ending balances of AOCI related to cash flow hedges are net of tax of $( 2.9 ) million and $ 0.9 million as of July 1, 2023 and July 2, 2022, respectively.

The amounts reclassified from AOCI are net of tax of $ 1.1 million and $ 0.8 million as of July 1, 2023 and July 2, 2022, respectively.

(2) As of July 2, 2022, OCI before reclassifications includes a net loss of $ 7.6 million related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations.

The ending balances of AOCI related to net investment hedges are net of tax of $( 11.4 ) million as of July 2, 2022 and as the Company began entering into net investment hedges in Fiscal 2022, there was no balance as of July 3, 2021.

(2) The ending balances of AOCI related to foreign currency translation adjustments includes a loss of $ 55.7 million and $ 7.6 million, net of tax of $( 0.8 ) million and $( 11.4 ) million, as of July 1, 2023 and July 2, 2022, respectively, related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign

SHARE-BASED COMPENSATION

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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:

2021 June 27,

July 1, 2023 July 2, 2022 July 3, 2021

Share-based compensation expense (1)

1 unchanged sentence

Income tax benefit related to share-based compensation expense 12.9 15.2 12.9

(1) During the fiscal year ended July 2, 2022, the Company incurred $ 17.2 million of share-based compensation expense related to its Acceleration Program.

(1) There was no share-based compensation expense under the Acceleration program during fiscal year ended July 1, 2023.

During the fiscal year ended July 2, 2022, the Company incurred $ 17.2 million of share-based compensation expense related to 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.

During the fiscal year ended July 3, 2021, the Company incurred $ 10.8 million of share-based compensation expense related to its Acceleration Program.

Refer to Note 5, "Restructuring Activities," for further information.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Stock-Based Plans

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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”).

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

maintains the 2010 Stock Incentive Plan for awards granted prior to the establishment of the 2018 Stock Incentive Plan.

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.

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Vested and expected to vest at July 1, 2023

8.6 34.08 5.3 89.1

Exercisable at July 1, 2023 5.8 36.52 4.1 49.3

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:

2021 June 27,

Expected term (years) 4.9 5.0 5.1

33 unchanged sentences

Change due to performance condition achievement 0.8 17.35

Vested ( 1.7 ) 17.09

Forfeited — —

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Fiscal Year Ended

2021 June 27,

Expected term (years) 0.5 0.5 0.5

16 unchanged sentences

— — — 55.2 — 55.2

Available-for-sale investments, total $ 154.2 $ — $ 154.2 $ — $ — $ —

Total Available-for-sale investments $ — $ — $ — $ 154.2 $ — $ 154.2

Time deposits (1)

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(1) These securities have original maturities greater than three months and are recorded at fair value.

(2) These securities as of July 2, 2022 have maturity dates during fiscal 2023 and are recorded at fair value.

(2) These securities as of period end have maturity dates during their respective following fiscal years and are recorded at fair value.

(3) Long-term investments are presented within Other assets on the Consolidated Balance Sheets.

There were no material gross unrealized gains or losses on available-for-sale investments as of the periods ended July 2, 2022 and July 3, 2021.

There were no material gross realized and unrealized gains or losses on available-for-sale investments as of the periods ended July 1, 2023 and July 2, 2022.

TAPESTRY, INC.

20 unchanged sentences

Notes to Consolidated Financial Statements (Continued)

The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheet as of July 2, 2022 and July 3, 2021 :

July 2, 2022 July 3, 2021 Location Recorded on Balance Sheet

The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheets as of July 1, 2023 and July 2, 2022 :

July 1, 2023 July 2, 2022 Location Recorded on the Consolidated Balance Sheets

Operating leases $ 1,378.7 $ 1,281.6 Operating lease right-of-use assets

2 unchanged sentences

Operating leases:

Current lease liabilities $ 288.7 $ 319.4 Current lease liabilities

Long-term lease liabilities 1,282.3 1,525.9 Long-term lease liabilities

Current lease liabilities $ 297.5 $ 288.7 Current portion of operating lease liabilities

Long-term lease liabilities 1,333.7 1,282.3 Long-term operating lease liabilities

Total operating lease liabilities $ 1,631.2 $ 1,571.0

19 unchanged sentences

(2) Rent concessions negotiated related to Covid-19 are recorded in variable lease cost.

(3) Operating lease right-of-use impairment includes charges under the Acceleration Program for the year ended July 3, 2021.

TAPESTRY, INC.

10 unchanged sentences

Right-of-use assets obtained in exchange for finance lease liabilities — —

The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheet as of July 2, 2022 :

The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheets as of July 1, 2023 :

Operating Leases Finance Leases Total

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Notes to Consolidated Financial Statements (Continued)

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 2, 2022 and July 3, 2021 :

July 1, 2023 July 2, 2022

6 unchanged sentences

Additionally, the Company had approximately $ 11.0 million of future payment obligations related to executed lease agreements for which the related lease had not yet commenced as of July 1, 2023.

This obligation primarily relates to a lease agreement for a fulfillment center to be located in Las Vegas, Nevada.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

3 unchanged sentences

Fair Value Fair Value

July 2, 2022 July 3, 2021 Balance Sheet Classification July 2, 2022 July 3, 2021 Balance Sheet Classification July 2, 2022 July 3, 2021

July 1, 2023 July 2, 2022 Classification on the Consolidated Balance Sheets July 1, 2023 July 2, 2022 Classification on the Consolidated Balance Sheets July 1, 2023 July 2, 2022

FC - Inventory purchases (1)

10 unchanged sentences

Notes to Consolidated Financial Statements (Continued)

The following tables provides the pretax impact of gains and losses from the Company's designated derivative instruments on its Consolidated Financial Statements for the fiscal years ended July 2, 2022, July 3, 2021 and June 27, 2020:

Amount of Gain (Loss) Recognized in OCI on Derivatives

Fiscal Year Ended

July 2, 2022 July 3, 2021 June 27, 2020

July 1, 2023 July 2, 2022 July 3, 2021

Cash flow hedges:

1 unchanged sentence

$ 34.7 $ ( 5.6 ) $ ( 7.2 )

Cash flow hedges, total $ ( 5.6 ) $ ( 7.2 ) $ ( 7.9 )

Fair value hedges:

Intercompany liabilities & loans (2)

Fair value hedges, total $ — $ — $ —

Total cash flow hedges $ 34.7 $ ( 5.6 ) $ ( 7.2 )

Net investment hedges ( 58.7 ) 3.8 0.0

Other, total $ 3.8 $ — $ —

Total other $ ( 58.7 ) $ 3.8 $ 0.0

Total hedges $ ( 24.0 ) $ ( 1.8 ) $ ( 7.2 )

2 unchanged sentences

Classification Fiscal Year Ended

July 2, 2022 July 3, 2021 June 27, 2020

July 1, 2023 July 2, 2022 July 3, 2021

Cash flow hedges:

2 unchanged sentences

Total hedges $ ( 6.3 ) $ ( 3.4 ) $ ( 4.9 )

(1) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships.

For forward foreign currency exchange contracts that are designated as fair value hedges, both the gain (loss) on the derivative as well as the offsetting gain (loss) on the hedged item attributable to the hedged risk are recorded within Other expense (income) on the Company's Consolidated Statement of Operations.

3 unchanged sentences

This results in the cross-currency basis spread being excluded from the assessment of hedge effectiveness, and recorded as incurred as a reduction in interest expense in the Company’s consolidated statements of operations.

Accordingly, the Company recorded net interest income of $ 2.2 million during Fiscal 2022.

Accordingly, the Company recorded net interest income of $ 28.5 million and $ 2.2 million during fiscal 2023 and fiscal 2022, respectively.

FAIR VALUE MEASUREMENTS

23 unchanged sentences

Net investment hedges (3)

— — 13.1 47.8

Intercompany loans and payables (3)

3 unchanged sentences

Net investment hedges (3)

— — 90.5 44.0

Intercompany loans and payables (3)

15 unchanged sentences

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.

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.

Refer to Note 14, "Goodwill and Other Intangible Assets" for further information.

The following table summarizes the components of the Company’s outstanding debt:

Current Debt:

$ 25.0 $ 31.2

Total Current Debt $ 25.0 $ 31.2

4 unchanged sentences

4.250 % Senior Notes due 2025

Total Long-Term Debt 1,643.8 1,668.8

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$ 1.25 Billion Revolving Credit Facility and $ 500.0 Million Term Loan

On May 11, 2022, the Company financed and replaced the $ 900.0 Million Revolving Credit Facility by entering into a new credit facility that (i) includes an increased revolving credit facility (the “$ 1.25 Billion Revolving Credit Facility”) from $ 900.0 million to $ 1.25 billion, (ii) includes an unsecured $ 500.0 million Term Loan (the “Term Loan”) and (iii) redefines certain terms within the replaced Revolving Credit Facility (see “$ 900.0 Million Revolving Credit Facility” below).

On May 11, 2022, 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 $ 1.25 billion revolving credit facility (the “$ 1.25 Billion Revolving Credit Facility”) and an unsecured $ 500.0 million Term Loan (the “Term Loan”).

Both the $ 1.25 Billion Revolving Credit Facility and Term Loan (collectively, the “Credit Facilities”) will mature on May 11, 2027.

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Additionally, the Company will pay facility fees, calculated at a rate per annum determined in accordance with the Pricing Grid, on the full amount of the $ 1.25 Billion Revolving Credit Facility, payable quarterly in arrears, and certain fees with respect to letters of credit that are issued.

The $ 1.25 Billion Revolving Credit Facility may be used to finance the working capital needs, capital expenditures, permitted

The $ 1.25 Billion 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 backup).

There were no outstanding borrowings on the $ 1.25 Billion Revolving Credit Facility as of July 1, 2023.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

investments, share purchases, dividends and other general corporate purposes of the Company and its subsidiaries (which may include commercial paper backup).

There were no outstanding borrowings on the $ 1.25 Billion Revolving Credit Facility as of July 2, 2022.

The Term Loan includes up to a two-month delayed draw period from the closing date.

On June 14, 2022 the Company drew down on the Term Loan to satisfy the Company’s remaining obligations under the 3.000 % senior unsecured notes due 2022 and for general corporate purposes.

In the fourth quarter of fiscal 2022 the Company drew down on the Term Loan to satisfy the Company’s remaining obligations under the 3.000 % senior unsecured notes due 2022 and for general corporate purposes.

The Term Loan amortizes in an amount equal to 5.00 % per annum, with payments made quarterly.

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4.250 % Senior Notes due 2025

On June 20, 2017, the Company issued $ 400.0 million aggregate principal amount of 3.000 % senior unsecured notes due July 15, 2022 at 99.505 % of par (the "2022 Senior Notes").

Interest is payable semi-annually on January 15 and July 15 beginning January 15, 2018.

On June 15, 2022 (the “Redemption Date”), the Company utilized the proceeds from the Term Loan to complete the full redemption of $ 400.0 million in aggregate principal amount of the 2022 Senior Notes at a redemption price equal to 100.00 % of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the Redemption Date of $ 5.0 million.

4.250 % Senior Notes due 2025

On March 2, 2015, the Company issued $ 600.0 million aggregate principal amount of 4.250 % senior unsecured notes due April 1, 2025 at 99.445 % of par (the “2025 Senior Notes”).

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At July 2, 2022, the fair value of the 2032, 2027 and 2025 Senior Notes was approximately $ 409.0 million, $ 383.0 million and $ 304.1 million, respectively.

$ 900.0 Million Revolving Credit Facility

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 (“ 900.0 Million Revolving Credit Facility”), including sub-facilities for letters of credit, with a maturity date of October 24, 2024.

The $ 900 Million 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).

Letters of credit and swing line loans may be issued under the $ 900.0 Million Revolving Credit Facility as described below.

Borrowings under the $ 900.0 Million Revolving Credit Facility bear interest at a rate per annum equal to, at the Borrowers’ option, either (a) an alternate base rate (which is a rate equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1% or (iii) the Adjusted LIBO Rate for a one month Interest Period on such day plus 1 %) or (b) a rate based on the rates applicable for deposits in the interbank market for U.S.

Dollars or the applicable currency in which the loans are made plus, in each case, an applicable margin.

The applicable margin will be determined by reference to a grid, as defined in the Credit Agreement, based on the ratio of (a) consolidated debt plus operating lease liability to (b) consolidated EBITDAR.

Additionally, the Company pays a commitment fee at a rate determined by the reference to the aforementioned pricing grid.

On May 19, 2020, the Company entered into Amendment No.

1 (the “Amendment”) to the $ 900.0 Million Revolving Credit Facility under the terms of the Amendment, during the period from the Effective Date until October 2, 2021, the Company must maintain available liquidity of $ 700 million (with available liquidity defined as the sum of unrestricted cash and cash equivalents and available commitments under credit facilities, including the $ 900.0 Million Revolving Credit Facility).

This requirement, among others that the Company was subject to during the period from the Effective Date until the compliance certificate was delivered for the fiscal quarter ending July 3, 2021 (the “Covenant Relief Period”), has been fulfilled.

Going forward, the Company must comply on a quarterly basis with a maximum net leverage ratio of 4.0 to 1.0.

The $ 900 million aggregate commitment amount under the Revolving Credit Facility remained unchanged under the amendment.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

May 11, 2022, the $ 900 Million Revolving Credit Facility was replaced by the $ 1.25 Billion Revolving Credit Facility described above under, "$ 1.25 Billion Revolving Credit Facility and $ 500.0 Million Term Loan".

Capri Holdings Limited Acquisition

Subsequent to the fiscal 2023 year end, on August 10, 2023, the Company entered into an Agreement and Plan of Merger by and among the Company, Sunrise Merger Sub Inc., a direct wholly owned subsidiary of Tapestry, and Capri Holdings Limited.

In addition, on August 10, 2023 the Company entered into a bridge facility commitment letter pursuant to which Bank of America, N.A., BofA Securities, Inc.

and Morgan Stanley Senior Funding, Inc.

committed to provide a $ 8.0 billion 364-day senior unsecured bridge loan facility to finance the acquisition.

The commitment thereunder is subject to customary conditions.

Refer to Note 21, "Subsequent Event", for further information.

Debt Maturities

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The Company pays certain fees with respect to letters of credit that are issued.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Tax Legislation

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Refer to Note 9, "Leases," for a summary of the Company's future minimum rental payments under non-cancelable leases.

The Company is involved in various legal proceedings as both plaintiff and defendant, 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.

As part of Tapestry’s policing program for its intellectual property rights, from time to time, the Company files lawsuits in the U.S.

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.

At any given point in time, Tapestry may have a number of such actions pending.

These actions often result in seizure of counterfeit merchandise and/or out of court settlements with defendants.

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.

Although the Company's litigation as described above is 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.

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.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, such as 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, including wage and hour litigation, with present or former employees.

Although the Company's litigation can result in large monetary awards, such as when a civil jury is allowed to determine compensatory and/or punitive damages, 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.

Capri Holdings Limited Acquisition

Refer to Note 21, "Subsequent Event", for further information.

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.

The Company determined there was no impairment in fiscal 2022 and 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.

During the third quarter of fiscal 2020, profitability trends continued to decline from those that were expected for the Stuart Weitzman brand.

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 the Company's stores and the Company's wholesale partners globally.

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.

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.

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.

The estimated fair value of the Company’s reporting units are based on a weighted average of the income and market approaches.

The income approach is based on estimated discounted future cash flows, while the market approach is based on earnings multiples of selected guideline companies.

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.

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.

The Company determined there was no impairment during the fiscal 2020 annual impairment assessment.

The Company determined there was no impairment in fiscal 2023 and fiscal 2022 based on the annual assessment and no events occurring that would more likely than not reduce the fair value below its carrying amount.

The change in the carrying amount of the Company’s Goodwill by segment is as follows:

Coach Kate Spade Stuart Weitzman (1)

Balance at June 27, 2020 $ 661.7 $ 639.4 $ — $ 1,301.1

Balance at July 3, 2021 $ 656.3 $ 641.0 $ — $ 1,297.3

Foreign exchange impact ( 47.2 ) ( 8.6 ) — ( 55.8 )

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Balance at July 1, 2023 $ 597.5 $ 630.0 $ — $ 1,227.5

(1) Amount is net of accumulated goodwill impairment charges of $ 210.7 million as of July 2, 2022, July 3, 2021 and June 27, 2020.

(1) Amount is net of accumulated goodwill impairment charges of $ 210.7 million as of July 1, 2023, July 2, 2022 and July 3, 2021.

TAPESTRY, INC.

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Total intangible assets $ 1,410.1 $ ( 50.0 ) $ 1,360.1 $ 1,410.1 $ ( 43.5 ) $ 1,366.6

Amortization expense for the Company’s definite-lived intangible assets was $ 6.5 million and $ 6.6 million for fiscal 2023 and fiscal 2022, respectively.

As of July 1, 2023, the expected amortization expense for intangible assets is as follows:

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Thereafter 17.8

The expected future amortization expense above reflects remaining useful lives ranging from approximately 7.8 years to 10.0 years for customer relationships.

The expected future amortization expense above reflects remaining useful lives ranging from approximately 6.8 to 9.0 for customer relationships.

TAPESTRY, INC.

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Fiscal Year Ended

July 2, 2022 July 3, 2021 June 27, 2020

July 1, 2023 July 2, 2022 July 3, 2021

Amount Percentage Amount Percentage Amount Percentage

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Total income before provision for income taxes $ 1,143.1 100.0 % $ 1,047.0 100.0 % $ 897.3 100.0 %

$ 1,047.0 100.0 % $ 897.3 100.0 % $ ( 624.2 ) 100.0 %

Tax expense at U.S.

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( 61.3 ) ( 5.4 ) ( 49.8 ) ( 4.8 ) ( 94.5 ) ( 10.5 )

Effects of Impairment (4)

— — — — 91.7 ( 14.7 )

Change in state valuation allowance — — — — 11.5 1.3

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federal foreign tax credits generated in fiscal 2021.

(4) This item represents the effective tax rate impact of the Stuart Weitzman Goodwill and indefinite-lived brand intangible impairment activity recorded in fiscal 2020.

Current and deferred tax provision (benefit) was:

Fiscal Year Ended

July 2, 2022 July 3, 2021 June 27, 2020

July 1, 2023 July 2, 2022 July 3, 2021

Current Deferred Current Deferred Current Deferred

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Consolidated Balance Sheets Classification

Deferred income taxes – noncurrent asset 47.9 65.6

Deferred income taxes – noncurrent liability ( 221.7 ) ( 203.9 )

Deferred income taxes – non-current asset 40.4 47.9

Deferred income taxes – non-current liability ( 240.0 ) ( 221.7 )

Net deferred tax (liabilities) assets $ ( 199.6 ) $ ( 173.8 )

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A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:

2021 June 27,

Balance at beginning of fiscal year $ 96.1 $ 111.4 $ 88.5

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As of July 1, 2023 and July 2, 2022, gross interest and penalties payable was $ 10.3 million and $ 8.2 million, respectively, which are included in Other liabilities.

During fiscal 2022, fiscal 2021 and fiscal 2020, the Company recognized gross interest and penalty income of $ 1.5 million, gross interest and penalty expense of $ 0.8 million and gross interest and penalty income of $ 1.2 million, respectively.

During fiscal 2023, fiscal 2022 and fiscal 2021, the Company recognized gross interest and penalty expense of $ 2.3 million, gross interest and penalty income of $ 1.5 million and gross interest and penalty expense of $ 0.8 million, respectively.

The Company files income tax returns in the U.S.

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The Company is currently under U.S.

federal audit for fiscal 2018.

federal audit for fiscal 2018 to 2020.

The IRS is examining carryback claims to fiscal 2014 through fiscal 2019 as part of Joint Committee procedures for tax refund claims.

The Company anticipates that one or more of these audits may be finalized and certain statutes of limitation may expire in the foreseeable future.

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state tax loss carryforwards of $ 706 million and tax loss carryforwards of various foreign jurisdictions of $ 123.9 million.

The state net operating loss carryforwards generally start to expire in fiscal 2023, respectively.

The state net operating loss carryforwards generally start to expire in fiscal 2024.

The majority of the foreign net operating loss can be carried forward indefinitely.

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The Company is permanently reinvested with respect to all other earnings.

The total estimated amount of unremitted earnings of foreign subsidiaries as of July 2, 2022 and July 3, 2021 was $ 747.6 million and $ 1.01 billion, respectively.

The total estimated amount of unremitted earnings of foreign subsidiaries as of July 1, 2023 and July 2, 2022 was $ 835.1 million and $ 747.6 million, respectively.

The Company intends to distribute $ 708.1 million of earnings that were previously subject to U.S.

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state taxes and foreign withholding taxes related to the future distribution.

Based on the Company's current analysis, there is further unrecognized deferred tax liability of approximately $ 2 to $ 4 million on the remaining unremitted earnings.

Based on the Company's current analysis, there is further unrecognized deferred tax liability of approximately $ 2 million to $ 4 million on the remaining unremitted earnings.

TAPESTRY, INC.

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Fiscal 2025 43.5

Fiscal 2025 52.9

Total $ 127.1

DEFINED CONTRIBUTION PLAN

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The Company has three reportable segments:

• 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.

• 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.

• 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.

• Coach - Includes global sales primarily of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors.

• Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers, and through independent third-party distributors.

• Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites and through independent third-party distributors.

In deciding how to allocate resources and assess performance, the Company's chief operating decision maker regularly evaluates operating profit of these segments.

Segment operating profit is the gross profit of the segment less direct expenses of the segment.

Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the chief operating decision maker at the segment level.

The following table summarizes net sales of each of the company's segments for fiscal 2023, fiscal 2022, and fiscal 2021:

Fiscal Year Ended

Segment net sales:

Coach $ 4,960.4 $ 4,921.3 $ 4,253.1

Kate Spade 1,418.9 1,445.5 1,210.0

Stuart Weitzman 281.6 317.7 283.2

Total Net sales:

$ 6,660.9 $ 6,684.5 $ 5,746.3

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

The following table summarizes segment performance for fiscal 2022, fiscal 2021 and fiscal 2020:

Spade Stuart Weitzman Corporate (1)

Net sales $ 4,921.3 $ 1,445.5 $ 317.7 $ — $ 6,684.5

Gross profit (2)

3,553.8 912.0 184.6 — 4,650.4

Operating income (loss) 1,473.9 157.4 1.8 ( 457.3 ) 1,175.8

Income (loss) before provision for income taxes

1,473.9 157.4 1.8 ( 586.1 ) 1,047.0

Depreciation and amortization expense (3)

110.1 48.5 10.3 26.4 195.3

Total assets 2,392.2 2,641.3 269.3 1,962.5 7,265.3

Additions to long-lived assets (4)

52.3 14.2 2.6 92.5 161.6

Net sales $ 4,253.1 $ 1,210.0 $ 283.2 $ — $ 5,746.3

Gross profit (2)

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

1,312.1 108.5 ( 8.6 ) ( 514.7 ) 897.3

Depreciation and amortization expense (3)

The following table summarizes segment operating profit of each of the company's segments and reconciliation to Income (loss) before provision for income taxes for fiscal 2023, fiscal 2022, and fiscal 2021:

Fiscal Year Ended

Segment operating profit (loss):

Coach $ 1,529.9 $ 1,473.9 $ 1,312.1

Kate Spade 115.0 157.4 108.5

Stuart Weitzman ( 6.7 ) 1.8 ( 8.6 )

Total segment operating profit (loss):

$ 1,638.2 $ 1,633.1 $ 1,412.0

Total assets 2,513.5 2,707.3 298.6 2,863.0 8,382.4

Additions to long-lived assets (4)

Unallocated corporate expenses (1)

465.8 457.3 444.0

Net sales $ 3,525.7 $ 1,149.5 $ 286.2 $ — $ 4,961.4

Gross profit (2)

Loss on extinguishment of debt — 53.7 —

Unallocated other charges, net (2)

29.3 75.1 70.7

Operating income (loss) 589.4 ( 99.3 ) ( 621.4 ) ( 419.5 ) ( 550.8 )

Income (loss) before provision for income taxes $ 1,143.1 $ 1,047.0 $ 897.3

589.4 ( 99.3 ) ( 621.4 ) ( 492.9 ) ( 624.2 )

The following table summarizes depreciation and amortization expense of each of the company's segments for fiscal 2023, fiscal 2022, and fiscal 2021:

Fiscal Year Ended

Depreciation and amortization expense (3) :

Coach $ 94.7 $ 110.1 $ 102.2

Kate Spade 44.2 48.5 46.8

Stuart Weitzman 10.5 10.3 13.3

Unallocated corporate (1)

32.8 26.4 58.2

Total assets 2,616.6 2,769.2 305.1 2,233.3 7,924.2

Additions to long-lived assets (4)

Total Depreciation and amortization expense:

$ 182.2 $ 195.3 $ 220.5

(1) 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.

(2) 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.

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.

(3) For the fiscal year ended July 3, 2021, depreciation and amortization expense includes $ 1.8 million of Acceleration Program costs, respectively.

For the fiscal year ended June 27, 2020, depreciation and amortization expense included $ 0.4 million of Integration & Acquisition costs as well as impairment charges of $ 44.6 million for Coach, $ 36.0 million for Kate Spade and $ 499.9 million for Stuart Weitzman.

Refer to Note 11, "Fair Value Measurements," and Note 14, "Goodwill and

(1) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a segment.

These costs primarily include administration and certain costs for information systems.

(2) Includes Interest expense, net and Other expense (income).

(3) Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments.

For the fiscal year ended July 3, 2021, depreciation and amortization expense includes $ 1.8 million of Acceleration Program costs.

TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

Other Intangible Assets" for further information.

Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments.

(4) Additions to long-lived assets for the reportable segments primarily include costs for assets that will be capitalized within Property and equipment, net, and costs relating to cloud computing implementation costs.

Cloud computing implementation costs are recognized within Prepaid expenses and Other assets on the Consolidated Balance Sheets.

Brand additions include costs that are specific for the brand and corporate additions include all other assets which includes a combination of Corporate assets, as well as assets that may support all segments.

As such, depreciation expense for these assets may be subsequently allocated to a reportable segment.

The following table summarizes total assets of each of the company's segments for fiscal 2023, fiscal 2022, and fiscal 2021:

Fiscal Year Ended

Segment total assets:

Coach $ 2,272.3 $ 2,392.2 $ 2,513.5

Kate Spade 2,597.3 2,641.3 2,707.3

Stuart Weitzman 235.8 269.3 298.6

Corporate 2,011.4 1,962.5 2,863.0

Total Assets:

$ 7,116.8 $ 7,265.3 $ 8,382.4

The following table shows net sales for each product category represented:

Fiscal Year Ended

July 2, 2022 July 3, 2021 June 27, 2020

July 1, 2023 July 2, 2022 July 3, 2021

Amount % of total net sales Amount % of total net sales Amount % of total net sales

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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.

States Japan Greater

States Greater

Japan Other (3)

Net sales (1)

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(1) Includes net sales from our global travel retail business in locations within the specified geographic area.

(2) Greater China includes mainland China, Taiwan, Hong Kong SAR and Macao SAR.

(3) Other includes sales in Europe, Canada, Malaysia, Australia and New Zealand, South Korea, Singapore, and royalties earned from the Company's licensing partners.

(2) Greater China includes sales in mainland China, Taiwan, Hong Kong SAR and Macao SAR.

(3) Other includes sales in Canada, Europe, Malaysia, Australia and New Zealand, Singapore, South Korea, other countries in Asia, and royalties earned from the Company's licensing partners.

TAPESTRY, INC.

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Fiscal Year Ended

2021 June 27,

(millions, except per share data)

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Diluted $ 3.88 $ 3.17 $ 2.95

(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.

At July 1, 2023, options to purchase 2.1 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 $ 41.65 to $ 56.39 , were greater than the average market price of the common shares.

At July 2, 2022, options to purchase 5.4 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 $ 33.46 to $ 58.54 , 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.

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.

Earnings per share amounts have been calculated based on unrounded numbers.

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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.

As of July 2, 2022, July 3, 2021 and June 27, 2020, there were approximately 6.9 million, 5.0 million, and 16.2 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.

As of July 1, 2023, July 2, 2022 and July 3, 2021, there were approximately 2.7 million, 6.9 million, and 5.0 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

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TAPESTRY, INC.

Notes to Consolidated Financial Statements (Continued)

SUBSEQUENT EVENTS

Merger Agreement

On August 10, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned subsidiary of Tapestry, and Capri Holdings Limited ("Capri").

Under the terms of the Merger Agreement, Tapestry has agreed to acquire any and all of Capri’s ordinary shares (other than (a) Capri’s ordinary Shares that are issued and outstanding immediately prior to the consummation of the acquisition that are owned or held in treasury by the Company or by Capri or any of its direct or indirect subsidiaries and (b) Capri’s ordinary shares that are issued and outstanding immediately prior to the consummation of the acquisition that are held by holders who have properly exercised dissenters’ rights in accordance with, and who have complied with, Section 179 of the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands) in cash at a purchase price of $ 57.00 per share, without interest, subject to any required tax withholding as provided in the Merger Agreement.

The purchase price is expected to be approximately $ 8.5 billion and the transaction is expected to close during calendar year 2024.

Commitment Letter

On August 10, 2023, the Company entered into a bridge facility commitment letter pursuant to which Bank of America, N.A., BofA Securities, Inc.

and Morgan Stanley Senior Funding, Inc.

committed to provide a $ 8.0 billion 364-day senior unsecured bridge loan facility to finance the acquisition.

The commitment thereunder is subject to customary conditions.

TAPESTRY, INC.

Schedule II — Valuation and Qualifying Accounts

For the Fiscal Years Ended July 2, 2022, July 3, 2021 and June 27, 2020

For the Fiscal Years Ended July 1, 2023, July 2, 2022 and July 3, 2021

Balance at Beginning

16 unchanged sentences

Total $ 84.5 $ 65.7 $ ( 50.0 ) $ 100.2

EXHIBITS TO FORM 10-K

(a) Exhibit Table (numbered in accordance with Item 601 of Regulation S-K)

Exhibit Description

1.1 Underwriting Agreement, dated as of November 16, 2021, among the Company and BofA Securities, Inc., HSBC Securities (USA) Inc.

Morgan Securities LLC, as representatives of the several underwriters named therein, which is incorporated herein by reference from Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed on November 17 , 2021

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

3.2 Articles of Incorporation, dated June 1, 2000, which is incorporated herein by reference from Exhibit 3.1 of to the Registrant's Registration Statement on Form S-1 filed on June 16, 2000

3.3 Articles Supplementary of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on May 9, 2001

3.4 Articles of Amendment of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on May 9, 2001

3.5 Articles of Amendment of Coach, Inc., dated May 3, 2002, which is incorporated by reference from Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2002

3.6 Articles of Amendment of Coach, Inc., dated February 1, 2005, which is incorporated by reference from Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on February 2, 2005

3.7 Articles of Amendment to Charter of Tapestry, Inc., effective as of October 31, 2017, which is incorporated by reference from Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on October 31, 2017