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Item 1A. Risk Factors

2026-08-13 compared with 2025-08-14 · 155 added, 100 removed, 330 unchanged (44% of the section changed)

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Risks Related to Macroeconomic Conditions

We face risks associated with potential changes to international trade agreements and the imposition of additional tariffs on importing our products.

Most of our imported products are subject to tariffs, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that we may import into the U.S.

and other countries or may impact the cost of such products.

To maximize opportunities, we rely on free trade agreements and other supply chain initiatives and, as a result, we are subject to government regulations and restrictions with respect to our cross-border activity.

Additionally, we are subject to government regulations relating to importation activities, including related to U.S.

Customs and Border Protection ("CBP") enforcement actions.

The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or the detention of our goods by CBP for any reason, could have a material adverse effect on our business, results of operations and financial condition.

There has been significant reform in U.S.

trade policy following the change in U.S.

presidential administration in January 2025.

International trade disputes as well as changes and uncertainty regarding international trade and trade policies, including the imposition or threat of the imposition of new or increased tariffs or other trade restrictions on goods from the countries where our manufacturers are located, could result in a materially adverse impact to our business.

During fiscal 2025, the primary manufacturers of Coach products were located in Vietnam, Cambodia, the Philippines and India, and the primary manufacturers of Kate Spade products were located in Vietnam, Cambodia, mainland China, and the Philippines.

Increased tariffs or other trade restrictions against these countries, as well as any tariffs or other trade restrictions implemented by these countries in retaliation, could limit our ability to manufacture products in countries that have the labor and technical expertise needed.

Further, such tariffs or other trade restrictions could require us to absorb costs or try to pass costs onto consumers, which could materially impact our revenue and profitability.

In addition, any negative perception of or sentiments towards the U.S., whether in response to changes in tariffs, trade policy or otherwise, could impact the perception of our Company.

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

Economic conditions, such as an economic recession, downturn, periods of inflation or uncertainty, could materially adversely affect our financial condition, results of operations and consumer purchases of discretionary items.

Our results can be impacted by a number of macroeconomic factors, including but not limited to:

consumer confidence and spending levels, tax rates, levels of unemployment, consumer credit availability, pandemics, natural disasters, raw material costs, fuel and energy costs, bank failures, market volatility, global factory production, supply chain operations, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls, shopping centers and online.

consumer confidence and spending levels, tax rates, levels of unemployment, consumer credit availability, tariffs and trade restrictions, pandemics, natural disasters, raw material costs, fuel and energy costs, bank failures, market volatility, global factory production, supply chain operations, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls, shopping centers and online.

Many of our products can be considered discretionary items for consumers.

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Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.

We face risks associated with potential changes to international trade and policy agreements and the imposition of additional tariffs on importing our products.

Most of our imported products are subject to tariffs, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that we may import into the U.S.

and other countries or may impact the cost of such products.

Additionally, we are subject to government regulations relating to importation activities, including related to U.S.

Customs and Border Protection ("CBP") enforcement actions.

The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or the detention of our goods by CBP or other customs authorities, could have a material adverse effect on our business, results of operations and financial condition.

During fiscal 2026, the primary manufacturers of Coach products were located in Vietnam, Cambodia, the Philippines and India, and the primary manufacturers of Kate Spade products were located in Vietnam, Cambodia, the Philippines, and Bangladesh.

Further, we have developed strategies to mitigate the impact of additional tariffs;

however, these strategies may not be effective, which could adversely affect our business, financial condition and results of operations.

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs collected under the International Emergency Economic Powers Act ("IEEPA") were invalid.

Court of International Trade subsequently ordered refunds for qualifying customs entries.

CBP has established a phased administrative process for submitting refund claims for certain IEEPA tariffs.

The Company paid approximately $117 million in IEEPA tariffs.

During the fourth quarter of fiscal 2026, we received cash refunds related to the previously paid IEEPA tariffs of $2.1 million.

In addition, as of June 27, 2026, we determined that the receipt of the remaining refunds of the previously paid IEEPA tariffs was probable.

We estimate the amount of the probable refund to be $114.7 million, which was recorded as a receivable.

Although the Company believes collection of the IEEPA tariffs is probable based on currently available information, the timing of cash receipts is dependent upon the execution of the refund process by the CBP and the U.S.

Treasury Department.

Following the Supreme Court's decision, the U.S.

Administration announced a 10% global tariff under Section 122 of the Trade Act of 1974 which became effective February 24, 2026, for a period of up to 150 days, which expired on July 24, 2026.

On May 7, 2026, the CIT ruled the Section 122 tariffs were invalid.

The government has appealed the ruling and the Company is awaiting a decision from the U.S.

Court of Appeals.

On July 23, 2026, the U.S.

Administration announced the final remedy in

the Section 301 investigations relating to forced labor practices, imposing new tariff rates ranging from 10% to 12.5% on most imports from certain countries, effective upon the expiration of the temporary Section 122 tariffs.

Supreme Court’s ruling did not impact any of the recently imposed tariffs, under either Section 122, Section 301, or Section 338 of the various trade statutes, nor does it prohibit the imposition of future tariffs through alternative trade authorities available to the U.S.

administration.

Accordingly, uncertainty with respect to tariffs remains ongoing, and U.S.

import tariffs and international trade arrangements will continue to change, potentially without warning and to an extent or duration that is difficult to predict.

Changing tariff rates and shifting trade policies have created significant uncertainty for suppliers, consumers, and us, and our efforts to mitigate the impacts of tariffs are time-consuming and costly and may not be effective.

In addition, any negative perception of or sentiment towards the U.S., whether in response to changes in tariffs, trade policy or otherwise, could impact the perception of our Company.

Risks Related to our Business and our Industry

We face risks associated with operating in international markets.

We operate on a global basis, with approximately 40.0% of our net sales coming from operations outside of United States for fiscal year 2025.

We operate on a global basis, with approximately 41.3% of our net sales coming from operations outside of the United States for fiscal year 2026.

While geographic diversity helps to reduce the Company’s exposure to risks in any one country, we are subject to risks associated with international operations, including, but not limited to:

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• public health crises, such as pandemics and epidemic diseases;

• changes to the U.S.'s participation in, withdrawal out of, renegotiation of certain international trade agreements or other major trade related issues, including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas and retaliatory tariffs, trade sanctions, new or onerous trade restrictions, embargoes and other stringent government controls;

• changes to U.S.

participation in, withdrawal from, or renegotiation of certain international trade agreements or other major trade-related issues, including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas and retaliatory tariffs, trade sanctions, new or onerous trade restrictions, embargoes and other stringent government controls;

• changes in exchange rates for foreign currencies, which may adversely affect the retail prices of our products, result in decreased international consumer demand, or increase our supply costs in those markets, with a corresponding negative impact on our gross margin rates;

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

• disruptions or delays in shipments whether due to port congestion, logistics carrier disruption (including as a result of labor disputes), militant attacks on commercial shipping vessels in the Red Sea, other shipping capacity constraints or other factors, which has and may continue to result in significantly increased inbound freight costs and increased in-transit times;

• disruptions or delays in shipments whether due to port congestion, logistics carrier disruption (including as a result of labor disputes), other shipping capacity constraints or other factors, which have resulted and may continue to result in significantly increased inbound freight costs and increased in-transit times;

• loss or disruption of key manufacturing or fulfillment sites or extended closure of such sites due to unexpected factors;

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• product quality issues;

• the conflict in the Middle East;

• political unrest, protests and other civil disruption;

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The success of our business depends on our ability to retain the value of our brands and respond to changing consumer preferences and fashion trends in a timely manner.

Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by unique brand purposes, distinctive products, and differentiated customer experiences across business channels and geographies.

Each of our brands is unique and independent, while sharing a commitment to innovation and authenticity defined by unique brand purposes, distinctive products, and differentiated customer experiences across business channels and geographies.

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

Furthermore, our brands’ communications, product lines and experiences are subject to rapidly changing fashion trends and consumer preferences, including the increasing shift to digital brand engagement and social media communication.

Furthermore, our brands’ communications, product lines and experiences are subject to rapidly changing fashion trends and consumer preferences,

including the increasing shift to digital brand engagement and social media communication.

If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing campaigns that appeal to our target consumers, our sales and results of operations may be negatively impacted.

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Our ability to create new products and to sustain existing products is affected by whether we can successfully anticipate and respond to consumer preferences and fashion trends.

The failure to develop and launch successful new products or to rationalize our assortment appropriately could hinder the growth of our business.

The failure to develop and launch successful new products or to rationalize our assortment appropriately, including through our efforts to harmonize select products between our retail and outlet channels, could hinder the growth of our business.

Also, any delay in the development or launch of a new product could result in our company not being the first to bring product to market, which could compromise our competitive position.

Our success also depends in part on our and our executive leadership team's ability to execute on our plans and strategies for each of our brands and for Tapestry, as a multi-brand enterprise.

Even if our products, marketing campaigns, consumer experiences and environments do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely

impact the growth of our brands and the Tapestry multi-brand portfolio, and our overall business, financial condition, and results of operations.

The growth of our business depends on the successful execution of our global omni-channel expansion efforts and our ability to execute our digital and e-commerce priorities.

Our success and growth depend on the continued development of our omni-channel presence for each of our brands globally, leaning into global digital opportunities for each brand, along with select bricks and mortar expansion.

If our products, marketing campaigns, consumer experiences and environments do not meet changing customer preferences and/or fail to stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact the growth of our brands and the Tapestry multi-brand portfolio, and our overall business, financial condition, and results of operations.

The growth of our business depends on the successful execution of our global omni-channel expansion efforts and our ability to execute our digital and e-commerce priorities and our multi-channel strategies.

Our success and growth depend on the continued development of our omni-channel presence for each of our brands globally, pursuing global digital opportunities for each brand, along with select bricks and mortar expansion, renovation, and modernization efforts.

Our bricks and mortar strategies may require upfront investment, may temporarily disrupt store operations and may not generate the expected increases in traffic, sales, productivity or profitability.

With respect to international expansion, our brands may not be well-established or widely sold in some of these markets, and we may have limited experience operating directly or working with our partners there.

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See “Our business is subject to the risks inherent in global sourcing activities” for additional risks related to our fulfillment networks.

If we are unable to effectively execute our e-commerce and digital strategies and provide reliable experiences for our customers across all business channels, our reputation and ability to compete with other brands could suffer, which could adversely impact our business, results of operations and financial condition.

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

We are also engaging in initiatives to harmonize the customer experience between our retail and outlet channels, by bringing select full price products into the outlet channel and enabling a single-cart checkout process for retail and outlet on our Coach brand e-commerce site.

If we are unable to effectively execute our multi-channel strategy, along with our e-commerce and digital strategies, and provide reliable and unified experiences for our customers across all business channels and touchpoints, our reputation and ability to compete with other brands could suffer, which could adversely impact our business, results of operations and financial condition.

We have also made strategic updates to our global product and pricing architecture, which may change consumer shopping behavior and shift demand across channels and geographies.

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

Further, expanding in certain markets may have upfront investment costs that may not be accompanied by sufficient revenues to achieve typical or expected operational and financial performance and therefore may be dilutive to our brands in the short term.

We may also have to compete for talent in international regions as we expand our omni-channel presence.

Consequently, if our global omni-channel expansion plans are unsuccessful, or we are unable to retain and/or attract key personnel, our business, financial condition and results of operations could be materially adversely affected.

Consequently, if our global omni-channel expansion plans, or our product and pricing architecture strategies, are unsuccessful, or we are unable to retain and/or attract key personnel, our business, financial condition and results of operations could be materially adversely affected.

The successful implementation of the Company’s 2028 growth strategy, Amplify, is key to the long-term success of our business.

The Company introduced its 2028 growth strategy, Amplify, in the first quarter of fiscal 2026, which focuses on four key pillars:

(i) Building Emotional Connections with Consumers;

(ii) Fueling Fashion Innovation & Product Excellence;

(iii) Delivering Compelling Experiences to Drive Global Growth;

and (iv) Igniting the Power of Our People.

There is no assurance that we will be able to sustain such efforts in accordance with our plans, that such efforts will result in the intended or otherwise desirable outcomes or that such efforts, even if successfully sustained, will be effective in achieving long-term growth or increased profitability.

Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further information regarding Amplify.

If our incorporation of the initiatives under Amplify falls short, our business, financial condition and results of operations could be materially adversely affected.

Significant competition in our industry could adversely affect our business.

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• protecting our trademarks and design patents;

• identifying and adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; and

• identifying and adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence (“AI”), and machine learning, and competing with AI-enabled shopping tools to help find products, compare prices, and make purchase decisions;

• the ability to withstand prolonged periods of adverse economic conditions or business disruptions.

A failure to compete effectively or to keep pace with rapidly changing consumer preferences, technology and product trends could adversely affect our growth and profitability.

Furthermore, customers are increasingly using AI shopping assistant tools to discover products, compare options, and make purchase decisions.

Use of these AI tools could transform commerce, including in ways that we fail to anticipate, and affect our ability to efficiently attract potential customers to our digital platforms and retain our customer base.

Our success depends, in part, on attracting, developing and retaining qualified employees, including key personnel.

Our business and future success depends heavily on attracting, developing and retaining qualified employees, including our senior management team.

Our business and future success depend heavily on attracting, developing and retaining qualified employees, including our senior management team.

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

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There can be no assurance that these individuals will remain with us or that we will be able to identify and attract suitable successors for these individuals.

The loss of one or more of our key personnel or the direct or indirect consequences of results thereof, or any negative public perception with respect to these individuals or the loss of these individuals, could have a material adverse effect on our business, results of operations and financial condition.

We do not maintain key-person or similar life insurance policies on any of senior management team or other key personnel.

The loss of one or more of our key personnel or the direct or indirect consequences thereof, including any negative public perception with respect to these individuals or their departure, could have a material adverse effect on our business, results of operations and financial condition.

We do not maintain key-person or similar life insurance policies on any of our senior management team or other key personnel.

We must also attract, motivate and retain a sufficient number of qualified retail and fulfillment center employees.

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If we are unable to attract and retain such employees with the necessary skills and experience, we may not achieve our objectives and our results of operations could be adversely impacted.

Additionally, changes to our office environments, the adoption of new work models, and our requirements and/or expectations about when or how often certain employees work on-site or remotely may not meet the expectations of our employees.

As businesses increasingly operate remotely, traditional geographic competition for talent may change in ways that we cannot presently predict.

Additionally, changes to our office environments, the adoption of new work models and AI, and our requirements and/or expectations about when or how often certain employees work on-site or remotely may not meet the expectations of our employees.

Further, any failure to maintain a workforce with the skills and capabilities necessary to support our business and respond to technological change could adversely impact our business, results of operations and financial condition.

If our employment proposition is not perceived as favorable compared to other companies, it could negatively impact our ability to attract and retain our employees.

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One component of our historical growth strategy has been acquisitions, and, consistent with our longer-term capital allocation priorities, our management team expects to maintain M&A flexibility and may from time to time evaluate and consider acquisitions or other strategic investments.

These involve various inherent risks and as a result, the expected benefits, cost savings and synergies may not be realized.

These transactions involve various inherent risks and as a result, the expected benefits, cost savings and synergies may not be realized.

The integration process of any newly acquired company may be complex, costly and time-consuming.

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Even if the integration of any acquired business is successfully completed, the full expected benefits and synergies of the acquisition may not be realized.

Additional unanticipated costs, which could be material, may also be incurred in the integration of our business and the acquired business.

Additional unanticipated costs, which could be material,

may also be incurred in the integration of our business and the acquired business.

Additionally, the full benefits of an acquisition may not be realized if the combined business does not perform as expected or demand for the combined company’s services does not meet our expectations.

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We may seek to sell one or more lines of our business in an effort to maximize shareholder value, which may adversely affect our business, our reputation, our results of operations and financial position or our stock price.

We continuously evaluate how to best structure our business in an effort to maximize shareholder value, which could include the divestiture of certain of our lines of business, such as our recently completed sale of the Stuart Weitzman Business.

We continuously evaluate how to best structure our business in an effort to maximize shareholder value, which could include the divestiture of certain of our lines of business.

Divestitures are subject to numerous risks and uncertainties, including, among others:

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We cannot provide any assurance that a sale of one or more lines of business will be successful or will not harm our business, our reputation, our results of operations and financial position or our stock price.

Our business may be materially impacted if our fulfillment centers face significant interruptions and operations.

Our business may be materially impacted if our fulfillment centers face significant interruptions in operations.

We are dependent on a limited number of fulfillment centers.

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In North America we maintain fulfillment centers in Florida, Ohio and Nevada, operated by Tapestry.

The Company is in the process of transitioning operations from its Ohio fulfillment center to a third-party facility in Pennsylvania.

This transition involves risks including potential disruptions to order processing and deliveries, increased costs, and reliance on a new third-party operator during and after the transition period.

The Company also has a third-party facility in Canada.

Globally we utilize fulfillment centers in mainland China, the Netherlands, the U.K.

and Spain, owned and operated by third parties, allowing us to better manage the logistics in these regions while reducing costs.

We also utilize local fulfillment

centers, through third parties, in Japan, parts of Greater China, South Korea, Singapore, Malaysia, Canada, Australia, and Mexico.

and Singapore, owned and operated by third parties, allowing us to better manage the logistics in these regions while reducing costs.

We also utilize local fulfillment centers, through third parties, in Japan, parts of Greater China, South Korea, Malaysia and Australia.

The warehousing of the Company’s merchandise, store replenishment and processing direct-to-customer orders is handled by these centers and a prolonged disruption in any center’s operation could materially adversely affect our business and operations.

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

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

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

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

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

Increases in our costs, such as raw materials, labor or freight could negatively impact our gross margin.

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As we outsource functions, we will become more dependent on the third parties performing these functions.

As part of our long-term strategy, we look for opportunities to cost effectively enhance capability of business services.

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

As part of our long-term strategy, we look for opportunities to cost-effectively enhance the capabilities of our business services.

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

We also cannot guarantee that these third parties will not experience a personal data or security breach in the future, which could have a material impact on our operations.

Any significant interruption in the operations of these service providers, including as a result of changes in social, political, and economic conditions, including those resulting from military conflicts or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located, over which we have no control, could also have an adverse effect on our business.

Any significant interruption in the operations of these service providers, whether due to changes in social, political and economic conditions, military conflicts or other hostilities that could disrupt trade from the countries in which our manufacturers or suppliers are located, or other factors over which we have no control, could also have an adverse effect on our business.

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

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Business underperformance in the Company's second fiscal quarter could have a material adverse effect on its full year operating results and result in higher inventories.

addition, fluctuations in net sales, operating income and operating cash flows of the Company in any fiscal quarter may be affected by the timing of wholesale shipments and other events affecting retail sales, including adverse weather conditions or other macroeconomic events.

In addition, fluctuations in net sales, operating income and operating cash flows of the Company in any fiscal quarter may be affected by the timing of wholesale shipments and other events affecting retail sales, including adverse weather conditions or other macroeconomic events.

We rely on our licensing partners to preserve the value of our licenses and the failure to maintain such partners could harm our business.

Our brands currently have multi-year agreements with licensing partners for certain products.

In the future, we may enter into additional licensing arrangements.

The risks associated with our own products also apply to our licensed products, as do unique risks stemming from problems that our licensing partners may experience, including risks associated with each licensing partner’s ability to obtain capital, manage its labor relations, maintain relationships with its suppliers, manage its credit and bankruptcy risks, and maintain customer relationships.

In the future, we may enter additional licensing arrangements.

bankruptcy risks, and maintain customer relationships.

While we maintain significant approval rights over the products produced for us by our licensing partners, any of the foregoing risks, or the inability of any of our licensing partners to execute on the expected design and quality of the licensed products or otherwise exercise operational and financial control over its business, may result in loss of revenue and competitive harm to our operations in the licensed product categories.

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We do not own any of our retail store locations.

The majority of our stores are under non-cancelable, multi-year leases, often with renewal options.

The majority of our stores are under non-cancelable, multi-year leases.

We believe that the majority of the leases we enter into in the future will likely be non-cancelable.

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In addition to our own databases, we use third-party service providers to store, process and transmit this information on our behalf.

Although we contractually require these service providers to implement and use reasonable and adequate security measures and data protection, we cannot control third parties and cannot guarantee that a personal data or security breach will not occur in the future either at their location or within their systems.

Although we contractually require these service providers to implement and use reasonable and adequate security measures and data protection controls, we cannot control third parties and cannot guarantee that a personal data or security breach will not occur in the future either at their location or within their systems.

We also store all designs, goods specifications, projected sales and distribution plans for our finished products digitally.

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Despite these efforts, however, we may be vulnerable to targeted or random cyber-attacks, personal data or security breaches, acts of vandalism, computer malware, misplaced or lost data, programming and/or human errors, or other similar events.

types, including phishing and other attempts to breach or gain unauthorized access to our systems.

As artificial intelligence becomes increasingly integrated into business systems, concerns about data exposure and privacy risks are intensifying.

Additionally, artificial intelligence is being used to carry out advanced social engineering attacks, increasing potential for harm.

Further, like other companies in the retail industry, during the ordinary course of business, we and our vendors have in the past experienced, and we expect to continue to experience, cyber-attacks of varying degrees and types, including phishing and other attempts to breach or gain unauthorized access to our systems.

As AI becomes increasingly integrated into business systems, concerns about data exposure and privacy risks are intensifying.

Additionally, sophisticated and persistent cybercrime actors are using AI to carry out advanced social engineering attacks, increasing the potential for harm.

As frontier and open-weight AI models advance, they are commoditizing IT vulnerability discovery and exploit development, dramatically increasing the volume of software and IT system risks, including in our critical third-party systems.

We expect these risks to increase significantly over the next year, with the potential for a subset of these risks to materialize into attacks that may negatively affect our business.

To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that cyber-attacks will not have a material impact in the future.

Awareness and sensitivity to personal data breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high.

Awareness of and sensitivity to personal data breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high.

Any misappropriation or unauthorized access to confidential or personal information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees, vendors and investors.

We have been incurring and expect that we will continue to incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new international, federal and state laws governing the unauthorized disclosure, access to, loss, alteration or exfiltration of confidential and personal information which are continuously being enacted and proposed such as the General Data Protection Regulation ("GDPR") in the E.U., the UK GDPR, the California Consumer Privacy Act ("CCPA") as amended by the California Privacy Rights Act ("CPRA"), the Virginia Consumer Data Protection Act ("VCDPA"), the Colorado Privacy Act ("CPA"), the Utah Consumer Privacy Act ("UCPA"), the Connecticut Data Privacy Act ("CTDPA"), the Montana Consumer Data Privacy Act ("MCDPA"), the Washington My Health My Data Act ("WMHMDA"), the Florida Digital Bill of Rights ("FDBR"), the Texas Data Privacy and Security Act ("TDPSA") and other comprehensive and sectoral state privacy laws in the U.S., as well as increased cyber security and privacy protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees and contractors, engaging outside counsel, third-party experts and consultants.

We have been incurring and expect that we will continue to incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new international, federal and state laws governing the unauthorized disclosure, access to, loss, alteration or exfiltration of confidential and personal information which are continuously being enacted and proposed such as the General Data Protection Regulation ("GDPR") in the E.U., the UK GDPR, the California Consumer Privacy Act ("CCPA") as amended by the California Privacy Rights Act ("CPRA"), and other comprehensive and sectoral state privacy laws in the U.S., as well as increased cyber security and privacy protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees and contractors, engaging outside counsel, third-party experts and consultants.

We may also experience loss of revenues resulting from unauthorized use of proprietary information including our intellectual property.

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While we carry cyber liability insurance, such insurance may not cover us with respect to any or all claims or costs associated with such a breach.

In addition, we have e-commerce sites in certain countries throughout the world, including the U.S., Canada, Japan, South Korea, Greater China, Europe, Middle East, Australia and Southeast Asia and have plans for additional e-commerce sites in other parts of the world.

In addition, we have e-commerce sites in certain countries throughout the world, including the U.S., Canada, Japan, South Korea, Greater China, Europe, the Middle East, Australia and Southeast Asia and have plans for additional e-commerce sites in other parts of the world.

Additionally, Tapestry has informational websites in various countries.

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A delay, disruption in, failure of, or inability to upgrade our information technology systems precisely and efficiently could materially adversely affect our business, financial condition or results of operations and cash flow.

We rely heavily on various information and other business systems, including data analytics and machine learning, and artificial intelligence, to manage our operations, including management of our supply chain, point-of-sale processing in our brands’ stores, our online businesses associated with each brand and various other processes and metrics.

We rely heavily on various information and other business systems, including data analytics, machine learning and AI, to manage our operations, including management of our supply chain, products, point-of-sale processing in our brands’ stores, our online businesses associated with each brand and various other processes and metrics.

We are continually evaluating and implementing upgrades and changes to our systems.

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Implementing new systems and upgrading existing systems and data analytics models carries substantial risk, including failure to operate as designed, failure to properly integrate with other systems, failure to accurately capture or report data or metrics, potential loss of confidential and personal information, cost overruns, implementation delays and disruption of operations.

Furthermore, failure of our computer systems due to inadequate system capacity, computer viruses, human error, changes in programming, security and personal data breaches, system upgrades or migration of these services, as well as employee, vendor and consumer privacy concerns and new privacy and security and artificial intelligence laws and global government regulations, individually or in accumulation, could have a material effect on our business, financial condition or results of operations and cash flow.

Furthermore, failure of our computer systems due to inadequate system capacity, computer viruses, human error, changes in programming, security and personal data breaches, system upgrades or migration of these services, as well as employee, vendor and consumer privacy concerns and new privacy, security and AI laws and global government regulations, individually or in the aggregate, could have a material effect on our business, financial condition or results of operations and cash flow.

The development, use, or misuse of AI technologies, and the failure to effectively adopt such technologies, may not be successful and could negatively impact our business.

We are increasingly integrating AI technologies, including generative AI and machine learning, across various aspects of our business, which presents evolving risks that may be difficult to predict or mitigate.

AI technologies may produce inaccurate, biased, or unreliable outputs, cause or contribute to the violation of intellectual property rights, and may be prone to cybersecurity incidents or service interruptions.

If our use of AI technologies produces deficient, inaccurate, controversial, or misleading outputs, or has other unintended consequences, we could be subject to legal liability, regulatory action, and competitive or reputational harm.

Use of AI by our employees or third-party service providers could increase the risk of exposure of our proprietary, confidential, sensitive or personal information.

The use of AI or machine learning technologies by our third-party service providers in their business activities, whether or not known to us, could also expose us to risks, including use of AI tools in violation of agreements with us, use of unauthorized third-party data, inputting our valuable information into AI tools, or deployment of new AI tools without our approval, any of which may give rise to legal or regulatory violations, loss of IP rights, reputational harm, or issues relating to data privacy and data protection.

The regulatory landscape governing AI is rapidly evolving.

Several jurisdictions around the globe, including the European Union and several U.S.

states, have proposed or enacted laws governing AI, including the European Union AI Act and enacted or potential U.S.

federal and state AI legislation.

These obligations and restrictions may lead to regulatory fines or penalties for non-compliance, make it harder for us to conduct our business using AI, require us to change our business practices, or prevent or limit our use of AI.

Further, we may be unable to quickly and successfully adapt to rapid change resulting from advancements in AI and similar technologies, or our competitors may have more success implementing and utilizing these technologies than we do, which could adversely affect our competitive position.

Any of these factors could adversely affect our business, financial condition, and results of operations.

Risks Related to our Indebtedness

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As of June 27, 2026, our consolidated debt was approximately $2.38 billion.

In fiscal year 2025, the Company issued $1.50 billion of senior unsecured notes, consisting of $750.0 million aggregate principal amount of 5.100% senior unsecured notes due March 11, 2030 and $750.0 million aggregate principal amount of 5.500% senior unsecured notes due March 11, 2035.

Also in fiscal year 2025, the Company refinanced and replaced the Company's unsecured revolving facility dated May 11, 2022

(the "Existing Revolving Credit Facility") with a new revolving credit facility (the "Amended Revolving Credit Facility"), dated as of May 22, 2025.

Under the Amended Revolving Credit Facility, the Lenders have made available to the Company a $2.00 billion unsecured revolving credit facility, including sub facilities for letters of credit, with a maturity date of May 22, 2030.

In fiscal 2025, the Company issued $1.50 billion of senior unsecured notes, consisting of $750.0 million aggregate principal amount of 5.100% senior unsecured notes due March 11, 2030 and $750.0 million aggregate principal amount of 5.500% senior unsecured notes due March 11, 2035.

Also in fiscal 2025, the Company refinanced and replaced the Company's unsecured revolving facility dated May 11, 2022 (the "Existing Revolving Credit Facility") with a new revolving credit facility (the "Amended Revolving Credit Facility"), dated as of May 22, 2025.

Under the Amended Revolving Credit Facility, the Lenders have made available to the Company a $2.00 billion unsecured revolving credit facility, including subfacilities for letters of credit, with a maturity date of May 22, 2030.

On July 24, 2025, the Company entered into a commercial paper borrowing program (the "Commercial Paper Program") that provides for the issuance of up to $2.00 billion of unsecured commercial paper notes with maturities up to 365 days.

Borrowings under the Commercial Paper Program are supported by the Amended Revolving Credit Facility and may be used to support the Company's general corporate needs.

The aggregate amount of borrowings outstanding under the Commercial Paper Program and Amended Revolving Credit Facility will not exceed $2.00 billion.

Under the terms of our debt facilities, we must comply with certain restrictions limiting the Company’s ability to, among other things:

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Climate change can lead to physical and transition risks impacting our business.

The physical risks result from climatic events, such as wildfires, storms and floods, whereas transition risks result from policy action taken to transition the economy off of fossil fuels.

The physical risks result from climatic events, such as wildfires, storms and floods, whereas transition risks result

from policy action taken to transition the economy off of fossil fuels.

Increased frequency and/or intensity of extreme weather events (such as storms and floods) due to climate change could also lead to more frequent store and fulfillment center closures, adversely impacting retail traffic and/or consumer's disposable income levels or spending habits on discretionary items, or otherwise disrupt business operations in the communities in which we operate, any of which could result in lost sales or higher costs.

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Stakeholders, including consumers, employees and investors, have increasingly focused on corporate responsibility practices of companies.

Although we have announced our Corporate Responsibility strategy and related goals, there can be no

assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.

Although we have announced our Corporate Responsibility strategy and related goals, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals.

Failure to implement our strategy or achieve our goals on a timely basis, or at all, could damage our reputation, causing our investors or consumers to lose confidence in our Company and brands, and negatively impact our operations.

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Further, proposed tax changes that may be enacted in the future could impact our current or future tax structure and effective tax rates.

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

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, with tax provisions primarily focused on implementing a 15% corporate alternative minimum tax (“CAMT”) on global adjusted financial statement income and a 1%

excise tax on share repurchases.

The CAMT was effective at the beginning of fiscal 2024 and did not have a material impact on the Company’s effective tax rate.

On December 12, 2022, the E.U.

member states also reached an agreement to implement the Organization for Economic Co-operation and Development’s (“OECD”) reform of international taxation known as Global Anti-Base Erosion Rules (“GloBE”), which broadly mirrors the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies, which was effective on January 1, 2025.

Based on the countries in which we do business, these changes did not have a material impact in fiscal 2025.

Other countries are also implementing similar legislation with effective dates starting in fiscal 2026, known as Qualifying Domestic Minimum Top-Up Tax ("QDMTT").

On June 26, 2025, the U.S.

Treasury reached an agreement with the other G7 countries regarding the application of GloBE rules to U.S.

member states also reached an agreement to implement the Organization for Economic Co-operation and Development’s (“OECD”) reform of international taxation known as Pillar Two Global Anti-Base Erosion Rules (“GloBE”), which broadly mirrors the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies.

These rules subject multinational companies to three possible tax mechanisms individually known as the Income Inclusion Rule (“IIR”), the Undertaxed Profits Rule (“UTPR”) and the Qualified Domestic Minimum Top-up Tax (“QDMTT”).

The rules became effective on January 1, 2025.

Based on the countries in which we do business, these rule changes started to negatively impact the Company's effective tax rate beginning in fiscal 2026.

On January 5, 2026, the OECD published additional guidance regarding the application of GloBE rules to U.S.

parented multinational enterprises ("U.S.

Most notably, the agreement includes a full exclusion for U.S.

MNEs from the Undertaxed Profits Rule and Income Inclusion Rule, which are two of the three taxing mechanisms under GloBE.

Given that the third mechanism, QDMTT is still in force, it is unclear what impact if any this agreement will have on the Company.

MNEs are likewise excluded from QDMTT, the Company believes QDMTT would have a negative impact on its effective tax rate in fiscal 2026 and beyond.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted.

Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures (reinstating full expensing beginning January 2025), permanent extension of 100% bonus depreciation, and revisions to international tax regimes that more closely align with the original application of Tax Cut Jobs Act of 2017.

The Company is evaluating the financial implications of the OBBBA and will begin reflecting its effects in the first quarter of fiscal 2026.

The Company believes this legislation will not have a material impact on its financial statements but will continue to evaluate as guidance becomes available.

Most notably, the agreement excludes U.S.

MNEs from the UTPR and IIR;

however, QDMTT is still in force based on current legislation.

Based on the jurisdictions in which we operate and our current assessment of the applicable rules, we do not expect these developments to result in a material increase to the Company's effective tax rate in fiscal 2027 compared to fiscal 2026.

Our business is exposed to foreign currency exchange rate fluctuations.

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dollar strengthens against these subsidiaries’ foreign currencies, the translation of their foreign currency denominated transactions may decrease consolidated net sales and profitability.

Furthermore, majority of the Company's purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S.

In order to minimize the impact on earnings related to foreign currency rate movements, we hedge certain cross currency intercompany inventory transactions and foreign currency balance sheet exposures which includes the Company’s cross currency intercompany loan portfolio.

Furthermore, a majority of the Company's purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S.

In order to minimize the impact on earnings related to foreign currency rate movements, we hedge certain cross-currency intercompany inventory transactions and foreign currency balance sheet exposures, including the Company’s cross-currency intercompany loan portfolio.

We cannot ensure, however, that these hedges will fully offset the impact of foreign currency rate movements.

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Such counterfeiting dilutes our brands and can cause harm to our reputation and business.

The growing prevalence of AI technologies may complicate or limit our ability to assert ownership in outputs generated with the assistance of AI.

In addition, trade secret, confidential, or otherwise commercially sensitive information may be inadvertently or intentionally disclosed, including disclosure to unprotected AI systems, which may result in unauthorized use.

Our efforts to enforce our intellectual property rights are from time to time met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights.

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Our trademark applications may face objections from the trademark offices we seek to register them in and may not mature into registrations.

Other parties may seek to invalidate our trademarks or assert violations of their trademarks or other intellectual property and seek to block our sales of certain products.

Other parties may seek to invalidate our trademarks or assert violations of their trademarks or other intellectual property and seek to block our sales of certain products including by alleging that AI systems that we utilize are trained on unlicensed or infringing data.

Unplanned increases in legal and investigative fees and other costs associated with defending our intellectual property rights could result in higher operating expenses.

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In fiscal 2026, the Company returned capital to its shareholders through a quarterly cash dividend of $0.40 per common share, for an annual dividend rate of $1.60 per share, or $326.1 million.

On November 24, 2024, the Company announced that it entered into Accelerated Share Repurchase (“ASR”) agreements to repurchase $2.00 billion shares of Tapestry common stock.

In addition to the ASR program, the Company has $800.0 million remaining under its previous share repurchase authorization.

On September 10, 2025, the Company announced that the Board authorized the Company to repurchase up to $3.00 billion of its outstanding common stock (the "2026 Share Repurchase Program"), replacing the 2022 Share Repurchase Program which had $561.7 million of remaining authorization.

The dividend program and the stock repurchase program each require the use of a significant portion of our cash flow.

Our ability to pay dividends and conduct stock repurchases will depend on our ability to generate sufficient cash flows from operations in the future.

This ability may be subject to certain economic, financial, competitive and other factors that are beyond our control.

This ability may be subject to certain economic, financial, competitive and other factors that are

beyond our control.

Our Board may, at its discretion, decrease or entirely discontinue the dividend program at any time.

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If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts or others, our stock price could be adversely affected.

Investors who rely on these predictions when making investment

decisions with respect to our securities do so at their own risk.

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

We take no responsibility for any losses suffered as a result of such changes in our stock price.

We periodically return value to investors through payment of quarterly dividends and common stock repurchases.

On November 24, 2024, the Company announced that it entered into ASR agreements to repurchase $2.00 billion shares of Tapestry common stock.

In addition to the ASR program, the Company has $800.0 million remaining under its previous share repurchase authorization.

The market price of our securities could be adversely affected if our cash dividend rate or common stock repurchase activity differs from investors’ expectations.

Refer to “ If we are unable to pay quarterly dividends or conduct stock repurchases at intended levels, our reputation and stock price may be negatively impacted.

” for additional discussion of our quarterly dividend.

Refer to “If we are unable to pay quarterly dividends or conduct stock repurchases at intended levels, our reputation and stock price may be negatively impacted.” for additional discussion of our quarterly dividend.

Certain provisions of the Company's charter, bylaws and Maryland law may delay or prevent an acquisition of the Company by a third party.

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In addition, the Company's Board may classify or reclassify any unissued shares of common stock or preferred stock and may set the preferences, rights and other terms of the classified or reclassified shares without stockholder approval.

Although the Company's Board has no intention to do so at the present time, it could establish a class or series of preferred stock that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for the Company's common stock or otherwise be in the best interest of the Company's stockholders.

The Company's bylaws provide that nominations of persons for election to the Company's Board and the proposal of business to be considered at an annual meeting of stockholders may be made only in the notice of the meeting, by or at the direction of the Company's Board, by a stockholder who is a stockholder of record as of the record date set by the Company's Board for purposes of determining stockholders entitled to vote at the meeting, at the time of the giving of the notice by the stockholder pursuant to the Company's bylaws and at the time of the meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and has complied with the advance notice procedures of the Company's bylaws or by qualifying stockholders that satisfy the proxy access provisions of the Company’s bylaws.

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The statute permits various exemptions from its provisions, including business combinations that are exempted by our Board prior to the time that the interested stockholder becomes an interested stockholder.

In addition, the Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation (defined as shares of stock which, when aggregated with other shares of stock controlled by the stockholder, entitles the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares of common stock.

As permitted by Maryland law, our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions by any person of our common stock.

Although our bylaws include such a provision, the provision may also be amended or eliminated by our Board at any time in the future.

The Company’s charter provides that, except as may be provided by our Board in setting the terms of any class or series of preferred stock, any vacancy on our Board may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum.

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Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions, including derivative actions, which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company and its directors, officers, other employees, or the Company's stockholders and may discourage lawsuits with respect to such claims.

Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Company to the Company or to the stockholders of the Company, (c) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the Maryland General Corporation Law, the charter or the bylaws of the Company or (d) any action asserting a claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine, shall, to the fullest extent permitted by law, be the Circuit Court for Baltimore City, Maryland (or, if that court does

not have jurisdiction, the United States District court for the District of Maryland, Baltimore Division).

Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Company to the Company or to the stockholders of the Company, (c) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the Maryland General Corporation Law (the “MGCL”), the charter or the bylaws of the Company or (d) any action asserting a claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine, shall, to the fullest extent permitted by law, be the Circuit Court for Baltimore City, Maryland (or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division).

This exclusive forum provision is intended to apply to claims arising under Maryland state law and would not apply to claims brought pursuant to the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or any other claim for which the federal courts have exclusive jurisdiction.

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Our rights and the rights of our stockholders to recover claims against our directors and officers are limited, which could reduce your and our recovery against them if they cause us to incur losses.

Maryland law provides that directors have no liability in their capacity as directors if they perform their duties in good faith, in a manner they reasonably believe to be in the best interest of the corporation and with the care that an ordinarily prudent person in a like position would use under similar circumstances.

Maryland law provides that directors have no liability in their capacity as directors if they perform their duties in good faith, in a manner they reasonably believe to be in the best interests of the corporation and with the care that an ordinarily prudent person in a like position would use under similar circumstances.

As permitted by the MGCL, the Company’s charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:

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Our charter authorizes us, and our bylaws obligate us, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, to pay or reimburse reasonable expenses in advance of final disposition of the proceeding to any of our directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law.

As a result, we and our stockholders may have more limits rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws.

As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors