What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-08-13 compared with 2025-08-14 · 232 added, 207 removed, 353 unchanged (55% of the section changed)

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When used herein, the terms "the Company," "Tapestry," "we," "us" and "our" refer to Tapestry, Inc., including consolidated subsidiaries.

References to "Coach," "Stuart Weitzman," "Kate Spade" or "kate spade new york" refer only to the referenced brand.

References to "Coach," "Kate Spade" or "kate spade new york" refer only to the referenced brand.

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the accompanying consolidated financial statements and notes thereto to help provide an understanding of our results of operations, financial condition and liquidity.

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• Global Economic Conditions and Industry Trends.

This section includes a discussion on global economic conditions and industry trends that affect comparability that are important in understanding results of operations and financial conditions, and in anticipating future trends.

• Results of Operations .

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Tapestry, Inc.

is a house of iconic accessories and lifestyle brands.

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

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

We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to harness the power of an inclusive culture.

Individually, our brands are iconic.

Together, we can stretch what’s possible.

The Company has three reportable segments:

is a global house of iconic accessories and lifestyle brands uniting the magic of Coach and kate spade new york.

Together, we stretch what’s possible – advancing brands further than they could go alone, expanding their reach to new geographies and generations.

Inspired by our consumers, we create experiences and products that build lasting brand love and elevate everyday life.

The Company has two reportable segments:

• Coach - Includes global sales of primarily Coach brand products to customers through our DTC, wholesale and licensing businesses.

• Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through our DTC, wholesale and licensing businesses.

• Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through our DTC, wholesale and licensing businesses.

Our success does not depend solely on the performance of a single business channel, geographic area or brand.

2028 Growth Strategy

In the first quarter of fiscal 2026, the Company introduced its 2028 growth strategy (“Amplify”), which focuses on four key pillars:

• Build Emotional Connections with Consumers:

The Company aims to drive new customer acquisition, with a focus on Gen Z consumers entering the market to build brand love and lifetime value.

• Fueling Fashion Innovation & Product Excellence:

The Company aims to lead with handbags and leathergoods with targeted lifestyle expansion in footwear.

• Delivering Compelling Experiences to Drive Global Growth:

The Company aims to sustain growth in North America and accelerate momentum in international markets, prioritizing Greater China and Europe.

• Ignite the Power of Our People:

The Company aims to future-proof growth by continuing to develop a consumer-obsessed culture that is agile and always looking forward.

Stuart Weitzman Business Divestiture

On February 16, 2025, the Company entered into a Purchase Agreement with Caleres to sell the Stuart Weitzman Business (as defined below).

The Purchaser acquired certain assets and liabilities of the Company's global business of designing, manufacturing, promotion, marketing, production, distribution, sales and licensing of Stuart Weitzman branded products (the "Stuart Weitzman Business") for total cash consideration of $105.0 million (the "Purchase Price"), subject to customary adjustments for cash, indebtedness, net working capital and transaction expenses.

On February 16, 2025, the Company entered into a sale and purchase agreement (the “Purchase Agreement”) with Caleres, Inc.

(the “Purchaser”) to sell the Stuart Weitzman Business (as defined below).

The sale was completed on August 4, 2025 (the "Stuart Weitzman Business Divestiture").

Refer to Note 5, "Acquisitions and Divestitures," and Note 21, "Subsequent Events," for further information.

The Purchaser acquired certain assets and liabilities of the Company's global business of designing, manufacturing, promotion, marketing, production, distribution, sales and licensing of Stuart Weitzman branded products (the "Stuart Weitzman Business") for a final aggregate purchase price of $109.1 million, which included customary adjustments for net working capital and indebtedness.

Effective in the first quarter of fiscal 2026, following the Stuart Weitzman Business Divestiture, the Company's reportable segments are Coach and Kate Spade.

Refer to Note 5, "Acquisitions and Divestitures" for further information.

Capri Holdings Limited Acquisition

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In order to finance the Capri Acquisition, on November 27, 2023, the Company issued $4.50 billion of U.S.

dollar-denominated senior unsecured notes (the "Capri Acquisition USD Senior Notes") and €1.50 billion of Euro-denominated senior unsecured notes (the "Capri Acquisition EUR Senior Notes" and, together with the Capri Acquisition USD Senior Notes, the "Capri Acquisition Senior Notes") which, together with the $1.40 billion of delayed draw unsecured term loan facilities (the "Capri Acquisition Term Loan Facilities") executed on August 30, 2023, complete the expected financing for the Capri Acquisition.

dollar-denominated senior unsecured notes and €1.50 billion of Euro-denominated senior unsecured notes (the "Capri Acquisition Senior Notes") which, together with the $1.40 billion of delayed draw unsecured term loan facilities (the "Capri Acquisition Term Loan Facilities") executed on August 30, 2023, completed the expected financing for the Capri Acquisition.

On April 22, 2024, the FTC filed a complaint against the Company and Capri in the United States District Court for the Southern District of New York seeking to enjoin the consummation of the Capri Acquisition, and on October 24, 2024, the Court issued its Opinion and Order granting the FTC's request for a preliminary injunction of the Merger, pending an administrative trial on the merits which was scheduled to begin on December 9, 2024.

On October 28, 2024, the Company and Capri filed a Notice of Appeal with respect to the October 24, 2024 Opinion and Order.

On November 6, 2024, the United States Court of Appeals for the Second Circuit entered an order setting an expedited briefing schedule for the appeal of the decision of the United States District Court of the Southern District of New York granting the preliminary injunction of the merger.

On November 13, 2024, the Parties entered into a Termination Agreement (the “Termination Agreement”), pursuant to which the Parties agreed to terminate the Merger Agreement, including all schedules and exhibits thereto and all ancillary agreements contemplated thereby or entered pursuant thereto (the “Termination Date”), effective immediately.

Pursuant to the Termination Agreement, the Company agreed to reimburse Capri for its expenses in an amount equal to $45.1 million in cash on November 14, 2024.

The Parties also agreed to release each other from claims, demands, damages, actions, causes of action and liability relating to or arising out of the Merger Agreement and the transactions contemplated therein or thereby.

Following termination of the Merger Agreement, the Parties and the FTC filed a stipulation withdrawing the appeal to the United States Court of Appeals for the Second Circuit on November 19, 2024 and the Second Circuit dismissed the appeal on November 20, 2024.

The Parties and the FTC also filed a Joint Motion to dismiss the complaint in the administrative trial on November 15, 2024 and the FTC dismissed the complaint on December 4, 2024.

On November 25, 2024, due to the termination of the Merger Agreement and pursuant to the terms of the indenture governing the Capri Acquisition Senior Notes, as supplemented, the Company redeemed all outstanding Capri Acquisition Senior Notes at a redemption price of 101% of the aggregate principal amount of such Capri Acquisition Senior Notes, plus accrued and unpaid interest to, but excluding, the date of redemption.

In addition, the Capri Acquisition Term Loan Facilities were terminated concurrently with the execution of the Termination Agreement on November 13, 2024.

Refer to Note 5, "Acquisitions and Divestitures" and Note 12, "Debt" for further information.

2025 Growth Strategy

In the first quarter of fiscal 2023, the Company introduced the 2025 growth strategy, future speed, designed to amplify and extend the competitive advantages of its brands, with a focus on four strategic priorities:

• Building Lasting Customer Relationships:

The Company's brands aim to leverage Tapestry’s transformed business model to drive customer lifetime value through a combination of increased customer acquisition, retention and reactivation.

• Fueling Fashion Innovation & Product Excellence:

The Company aims to drive sustained growth in core handbags and small leathergoods, while accelerating gains in footwear and lifestyle products.

• Delivering Compelling Omni-Channel Experiences:

The Company aims to extend its omni-channel leadership to meet the customer wherever they shop, delivering growth online and in stores.

• Powering Global Growth:

The Company aims to support balanced growth across regions, prioritizing North America and China, its largest markets, while capitalizing on opportunities in under-penetrated geographies such as Southeast Asia and Europe.

The Company's next investor day will be held in September 2025, during which the Company will present its latest long-term growth strategy.

Refer to Note 5, "Acquisitions and Divestitures" for further information.

GLOBAL ECONOMIC CONDITIONS AND INDUSTRY TRENDS

Current Trends and Outlook

The environment in which we operate is subject to a number of different factors driving global consumer spending.

Consumer preferences, macroeconomic conditions, foreign currency fluctuations and geopolitical events continue to impact overall levels of consumer travel and spending on discretionary items, with inconsistent patterns across business channels and geographies.

We will continue to monitor the below trends and evaluate and adjust our operating strategies and cost management opportunities to mitigate the related impact on our results of operations, while remaining focused on the long-term growth of our business and protecting the value of our brands.

For a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations, see Part I, Item 1A.

"Risk Factors".

Current Macroeconomic Conditions and Outlook

Currency volatility, geopolitical instability and political uncertainty, such as the impact of policies implemented and that may be implemented by the U.S.

Presidential Administration, including, but not limited to, changes to trade agreements, tax legislation or duty rates may also contribute to a worsening of the macroeconomic environment or adversely impact our business.

During fiscal 2026, the macroeconomic environment remained challenging and volatile.

While certain organizations that monitor the global economy continue to forecast growth, these projections remain subject to uncertainty and have fluctuated in recent periods.

Recent forecasts reflect the current volatile environment, including the continuation of trade tensions, financial market volatility, inflationary pressure and the negative economic impacts of geopolitical instability in certain regions of the world.

Import Tariffs

During the second half of fiscal 2025, the U.S.

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are imported from countries in which these tariffs were announced.

As a result of the Company's actions to accelerate inventory purchases and based on current trends of the business, we did not experience a meaningful negative impact to our results of operations in fiscal 2025.

At the time of this report, the Company estimates a projected tariff and trade policy impact of approximately 230 basis points to operating margin in fiscal 2026 after consideration of mitigating actions.

In addition, there could be further impact to our results of operations in fiscal 2026 and beyond depending on the outcome of trade negotiations.

The Company is prepared to take actions to mitigate this negative impact as changes in trade relations, economic and monetary policies are made clear.

The macroeconomic environment remained challenging and volatile during fiscal 2025.

Several organizations that monitor the world’s economy, including the International Monetary Fund, continue to forecast growth in the global economy.

Some of these organizations have recently revised the forecast slightly upwards since the third quarter of fiscal 2025.

The forecast is below the historical growth average and is reflective of the current volatile environment, including escalation of trade tensions, tighter monetary and fiscal policies which have continued to moderate inflation, financial market volatility and the negative economic impacts of geopolitical instability in certain regions of the world.

Additionally, during the first quarter of fiscal 2026, the President of the United States issued an executive order removing the de minimis exemption for low value shipments imported into the U.S.

for all countries beginning August 29, 2025.

As a result of these changes in the tariff landscape, during fiscal 2026 the Company's gross margin was negatively impacted by approximately 130 basis points on an adjusted basis.

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 ("CIT") subsequently ordered refunds for qualifying customs entries, including applicable interest.

Customs and Border Protection ("CBP") 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, the Company received cash refunds related to the previously paid IEEPA tariffs of $2.1 million, of which $2.0 million was recognized as a reduction to Cost of sales and $0.1 million as a reduction to Selling, general and administrative expenses.

In addition, as of June 27, 2026, the Company applied the loss recovery model and determined that the receipt of the remaining refunds of the previously paid but not received IEEPA tariffs was probable.

Company estimates the amount of the probable refund to be $114.7 million, of which $96.2 million was recognized as a reduction to Cost of sales, $9.5 million was recorded as Accrued liabilities and $9.0 million was applied as a reduction to tariffs that remained in Inventory.

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.

The outlook for future trade policy remains uncertain.

The Company continues to monitor these developments, assess their potential impact on its business and implement mitigation strategies where possible.

Conflict in the Middle East

The conflict in the Middle East, which began during the third quarter of fiscal 2026, has contributed to heightened geopolitical uncertainty, including impacts to global supply chains and energy prices.

The Company does not have directly operated stores in the Middle East and has a minimal distributor business which represented less than 1% of the Company’s total Net sales for fiscal 2026 and fiscal 2025.

While the Company has not experienced a material impact to its operations or financial results, the Company continues to closely monitor the situation and the potential impact it may have on consumer sentiment in the Middle East and other geographies across the globe.

Foreign Exchange Impact

In fiscal 2026, the U.S.

Dollar has continued to fluctuate as compared to foreign currencies in regions where we conduct our business.

During fiscal 2025, this trend has resulted in impacts to our business including, but not limited to, decreased Net sales of $13.4 million, no impact to gross margin and approximately 20 basis point negative impact to operating margin.

In response to the current environment, the Company is closely monitoring changes and continues to take strategic actions considering near-term exigencies and remains committed to maintaining the health of the brands and business.

Fiscal 2025 Impairment

During the fourth quarter of fiscal 2025, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis.

The assessment concluded that the fair values of the Kate Spade reporting unit and indefinite-lived brand intangible asset did not exceed their respective carrying values due to a reduction in both current and future expected cash flows, which includes an estimated impact of cost increases due to changes in tariff and trade policies.

As a result, the Company recorded $244.1 million of impairment charges to goodwill for the Kate Spade reporting unit and $610.7 million of impairment charges to indefinite-lived brand intangible assets during the fourth quarter of fiscal 2025.

Refer to "Critical Accounting Policies and Estimates," herein, for further information.

Dollar continued to fluctuate as compared to foreign currencies in regions where we conduct our business.

During fiscal 2026, this trend has resulted in impacts to our business including, but not limited to, increased Net sales of $58.7 million, and a negative impact of approximately 10 basis points to both gross margin and operating margin.

Tax Legislation

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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 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.

We continue to monitor these global economic conditions and industry trends in order to evaluate and adjust our operating strategies and cost management opportunities to mitigate the related impact on our results of operations, while remaining focused on the long-term growth of our business and protecting the value of our brands.

For a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations, see Part I, Item 1A.

"Risk Factors."

RESULTS OF OPERATIONS

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SG&A expenses 4,314.6 53.9 4,873.9 69.5 (559.3) (11.5)

Operating income (loss) 415.0 5.9 1,140.1 17.1 (725.1) (63.6)

Operating income (loss) 1,914.4 23.9 415.0 5.9 1,499.4 NM

Loss on extinguishment of debt — — 120.1 1.7 (120.1) NM

Interest expense, net 55.2 0.7 85.4 1.2 (30.2) (35.4)

Other expense (income) (6.6) (0.1) 3.2 — (9.8) NM

Income (loss) before provision for income taxes 216.1 3.1 1,011.9 15.2 (795.8) (78.7)

Provision for income taxes 32.9 0.5 195.9 2.9 (163.0) (83.2)

Net income (loss) 183.2 2.6 816.0 12.2 (632.8) (77.6)

Other expense (income) (1.4) — (6.6) (0.1) 5.2 79.1

Income (loss) before provision for income taxes 1,860.6 23.2 216.1 3.1 1,644.5 NM

Provision (benefit) for income taxes 332.9 4.2 32.9 0.5 300.0 NM

Net income (loss) 1,527.7 19.1 183.2 2.6 1,344.5 NM

Net income (loss) per share:

Basic $ 0.84 $ 3.56 $ (2.72) (76.3)

Diluted $ 0.82 $ 3.50 $ (2.68) (76.5)

Basic $ 7.49 $ 0.84 $ 6.65 NM

Diluted $ 7.27 $ 0.82 $ 6.45 NM

NM - Not meaningful

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Items Affecting Comparability

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs Impairment Non-GAAP Basis

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs IEEPA Tariff Refund Distribution Network Optimization Costs Non-GAAP Basis

(Excluding Items)

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In fiscal 2026, the Company incurred charges as follows:

• Acquisition and Divestiture Costs - Includes costs related to the terminated Capri Acquisition and the Stuart Weitzman Business Divestiture.

These charges include:

◦ Capri Acquisition Costs:

Total pre-tax charges of $268.4 million primarily related to:

▪ Loss on extinguishment of debt - $119.4 million primarily related to redemption premiums, as well as unamortized debt issuance costs and discounts, as a result of the redemption of the Capri Acquisition Senior Notes in fiscal 2025 due to the termination of the Capri Acquisition agreement;

▪ SG&A expenses - $88.8 million primarily related to expense reimbursement payment made to Capri and professional fees recorded;

▪ Interest expense, net - $60.2 million of financing related charges which primarily includes the net impact of the Capri Acquisition Senior Notes;

◦ Stuart Weitzman Business Divestiture Costs :

Total pre-tax charges of $23.7 million primarily due to the loss on business held for sale, professional fees, share-based compensation expense and store impairment.

• Organizational Efficiency Costs - Total pre-tax charges of $17.2 million primarily related to severance costs and technology costs.

• Impairment - Total pre-tax charges of $854.8 million primarily due to impairment charges on the indefinite-lived brand intangible asset and goodwill for Kate Spade.

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

These actions taken together negatively impacted operating income by $984.5 million, increased Loss on extinguishment of debt by $119.4 million, increased interest expense by $60.2 million and reduced the provision for income tax by $213.1 million resulting in a net decrease in net income by $951.0 million or $4.28 per diluted share.

• Acquisition and Divestiture Costs - Total pre-tax charges of $10.9 million related to the Stuart Weitzman Business Divestiture primarily due to professional fees and severance costs, partially offset by income from the transition services agreement ("TSA").

• Organizational Efficiency Costs - Total pre-tax charges of $29.0 million primarily related to technology costs and severance costs.

• IEEPA Tariff Refund - Total pre-tax income of $98.3 million related to recognized IEEPA tariff refunds which were related to products sold in fiscal 2026 net of estimated liabilities.

• Distribution Network Optimization Costs - Total pre-tax charges of $9.8 million primarily related to costs to transition from our Ohio fulfillment center to a third-party facility in Pennsylvania.

These actions taken together positively impacted operating income by $48.6 million and increased the provision for income tax by $2.9 million resulting in a net increase in net income by $45.7 million or $0.22 per diluted share.

Supplemental Segment Data

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Items Affecting Comparability

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs Impairment Non-GAAP Basis

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs IEEPA Tariff Refund Distribution Network Optimization Costs Non-GAAP Basis

(Excluding Items)

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Stuart Weitzman 7.7 7.7 — — — —

Gross Profit $ 6,229.0 $ 7.7 $ — $ 98.2 $ — $ 6,123.1

Fiscal Year Ended June 27, 2026

Items Affecting Comparability

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs IEEPA Tariff Refund Distribution Network Optimization Costs Non-GAAP Basis

(Excluding Items)

Coach $ 2,971.0 $ — $ 1.3 $ — $ — $ 2,969.7

Kate Spade 719.1 — 6.4 — 8.6 704.1

Stuart Weitzman 8.7 8.7 — — — —

Corporate 615.8 9.9 21.3 (0.1) 1.2 583.5

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Items Affecting Comparability

(As Reported) Acquisition Costs Non-GAAP Basis

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs Impairment Non-GAAP Basis

(Excluding Items)

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In fiscal 2025, the Company incurred charges as follows:

• Acquisition Costs - Total pre-tax charges of $226.6 million attributable to the Capri Acquisition.

• Acquisition and Divestiture Costs - Includes costs related to the terminated Capri Acquisition and the Stuart Weitzman Business Divestiture.

These charges include:

◦ Interest expense, net :

$116.7 million of financing related charges, which primarily includes the net impact of the Capri Acquisition Senior Notes, and the financing fees of the unsecured bridge loan facility in an aggregate principal amount of up to $8.00 billion;

◦ SG&A expenses :

$109.9 million primarily related to professional fees recorded within Corporate.

These actions taken together negatively impacted Operating income by $109.9 million, increased Interest expense, net by $116.7 million and reduced the Provision for income taxes by $42.4 million, resulting in a net decrease in Net income by $184.2 million, or $0.79 per diluted share.

◦ Capri Acquisition Costs:

Total pre-tax charges of $268.4 million primarily related to:

▪ SG&A expenses - $88.8 million primarily related to expense reimbursement payment made to Capri and professional fees recorded;

▪ Interest expense, net - $60.2 million of financing related charges which primarily includes the net impact of the Capri Acquisition Senior Notes;

◦ Stuart Weitzman Business Divestiture Costs :

Total pre-tax charges of $23.7 million primarily due to the loss on business held for sale, professional fees, share-based compensation expense and store impairment.

• Organizational Efficiency Costs - Total pre-tax charges of $17.2 million primarily related to severance costs and technology costs.

• Impairment - Total pre-tax charges of $854.8 million primarily due to impairment charges on the indefinite-lived brand intangible asset and goodwill for Kate Spade.

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

Supplemental Segment Data

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Items Affecting Comparability

(As Reported) Acquisition Costs Non-GAAP Basis

(As Reported) Acquisition and Divestiture Costs Organizational Efficiency Costs Impairment Non-GAAP Basis

(Excluding Items)

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All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.

Stuart Weitzman Business Divestiture

Effective in the first quarter of fiscal 2026, following the Stuart Weitzman Business Divestiture on August 4, 2025, the Company's reportable segments are Coach and Kate Spade.

In fiscal 2026, prior to the completion of the sale on August 4, 2025, Stuart Weitzman Net sales were $14.6 million, Gross profit was $7.7 million and SG&A expenses were $8.7 million resulting in an Operating loss of $1.0 million.

These results were considered as items affecting comparability in fiscal 2026.

In fiscal 2025, Stuart Weitzman Net sales were $215.1 million, Gross profit was $118.4 million and SG&A expenses were $133.8 million resulting in an Operating loss of $15.4 million.

Excluding items affecting comparability, Stuart Weitzman Net sales were $215.1 million, Gross profit was $118.4 million and SG&A expenses were $133.2 million resulting in an Operating loss of $14.8 million in fiscal 2025.

Fiscal Year Ended Variance

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Net sales in fiscal 2026 increased 14.2% or $993.5 million to $8.00 billion.

Excluding the impact of foreign currency, net sales increased by 5.3% or $352.9 million.

• Coach Net Sales increased 9.9% or $503.2 million to $5.60 billion in fiscal 2025.

Excluding the impact of foreign currency, net sales increased 10.1% or $514.5 million.

This increase in net sales was primarily due to an increase of $445.0 million in DTC sales as a result of an increase in both e-commerce and store sales, mainly driven by North America, Europe and Greater China.

The increase in net sales was also attributed to a $89.4 million increase in wholesale sales, mainly driven by North America and Greater China.

Excluding the impact of the Stuart Weitzman Business and foreign currency, net sales increased by 16.7% or $1.14 billion.

• Coach Net Sales increased 23.5% or $1.32 billion to $6.91 billion in fiscal 2026.

Excluding the impact of foreign currency, net sales increased 22.5% or $1.26 billion.

This increase in net sales was primarily due to an increase of $1.09 billion in DTC sales, mainly driven by North America, Greater China, and Europe.

• Kate Spade Net Sales decreased 10.2% or $122.2 million to $1.07 billion in fiscal 2026.

Excluding the impact of foreign currency, net sales decreased 10.5% or $126.2 million.

This decrease in net sales was due to a decrease of $148.7 million in DTC sales as a result of lower store and to a lesser extent, e-commerce sales.

The decrease in DTC sales was partially offset by an increase of $10.2 million in wholesale sales.

• Stuart Weitzman Net Sales decreased 10.9% or $26.4 million to $215.1 million in fiscal 2025.

Excluding the impact of foreign currency, net sales decreased 10.9% or $26.4 million.

This decrease in net sales was primarily due to a decrease of $120.3 million in DTC sales.

Fiscal Year Ended

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Amount % of Net Sales Amount % of Net Sales Amount %

Coach $ 4,372.5 78.1 % $ 3,875.4 76.1 % $ 497.1 12.8 %

$ 5,512.2 79.7 % $ 4,372.5 78.1 % $ 1,139.7 26.1 %

Kate Spade (2)

709.1 66.0 798.0 66.7 (88.9) (11.1)

Stuart Weitzman 7.7 52.3 118.4 55.1 (110.7) (93.5)

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Gross margin in fiscal 2026 increased 240 basis points to 77.8% as compared to 75.4% in fiscal 2025.

This increase in Gross margin was primarily attributed to net pricing improvements.

Excluding items affecting comparability, gross margin increased 120 basis points to 76.6% in fiscal 2026 from 75.4% in fiscal 2025, which includes a 60 basis point benefit from the divestiture of Stuart Weitzman.

The remaining 60 basis point increase in Gross margin was primarily attributed to net pricing improvements and favorable brand mix, partially offset by the impact of higher tariffs.

Refer to "Global Economic Conditions and Industry Trends" for further information.

The Company includes inbound product-related transportation costs from our service providers within Cost of sales.

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for this reason, our gross margins may not be comparable to that of entities that include all costs related to their distribution network in Cost of sales.

Selling, General and Administrative Expenses

(1) Excluding items affecting comparability, Gross profit increased 24.6% or $1.07 billion to $5.45 billion in fiscal 2026 as compared to $4.37 billion in fiscal 2025.

Gross margin increased 70 basis points to 78.8% in fiscal 2026 as compared to 78.1% in fiscal 2025.

(2) Excluding items affecting comparability, Gross profit decreased 15.2% or $121.1 million to $676.9 million in fiscal 2026 as compared to $798.0 million in fiscal 2025.

Gross margin decreased 370 basis points to 63.0% in fiscal 2026 as compared to 66.7% in fiscal 2025.

Selling, General and Administrative Expenses ("SG&A")

Fiscal Year Ended

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Amount % of Net Sales Amount % of Net Sales Amount %

Coach $ 2,497.2 44.6 % $ 2,224.3 43.7 % $ 272.9 12.3 %

$ 2,971.0 43.0 % $ 2,497.2 44.6 % $ 473.8 19.0 %

Kate Spade (2)

1,567.2 NM 738.6 55.3 828.6 NM

719.1 66.9 1,567.2 NM (848.1) (54.1)

Stuart Weitzman 8.7 59.3 133.8 62.2 (125.1) (93.5)

133.8 62.2 164.1 68.0 (30.3) (18.5)

Corporate (3)(4)

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Tapestry $ 4,314.6 53.9 $ 4,873.9 69.5 $ (559.3) (11.5)

SG&A expenses increased 30.0% or $1.12 billion to $4.87 billion in fiscal 2025 as compared to $3.75 billion in fiscal 2024.

As a percentage of net sales, SG&A expenses increased to 69.5% during fiscal 2025 as compared to 56.2% during fiscal 2024.

Excluding items affecting comparability of $984.5 million in fiscal 2025, SG&A expenses increased 6.9% or $249.9 million to $3.89 billion from $3.64 billion in fiscal 2024.

SG&A as a percentage of net sales increased 90 basis points to 55.4% as compared to 54.5% in fiscal 2024.

This increase in SG&A as a percentage of net sales was primarily due to higher marketing spend and higher compensation costs driven by accrued incentive compensation, partially offset by leverage of fixed costs on higher net sales.

(1) In fiscal 2025, Kate Spade incurred charges affecting comparability of $860.5 million.

Excluding those items affecting comparability, SG&A expenses decreased 4.3% or $31.9 million to $706.7 million in fiscal 2025 as compared to $738.6 million in fiscal 2024.

SG&A as a percentage of net sales increased 380 basis points to 59.1% in fiscal 2025 as compared to 55.3% in fiscal 2024.

(2) In fiscal 2025, Stuart Weitzman incurred charges affecting comparability of $0.6 million.

Excluding those items affecting comparability, SG&A expenses decreased 18.9% or $30.9 million to $133.2 million in fiscal 2025 as compared to $164.1 million in fiscal 2024.

SG&A as a percentage of net sales decreased 610 basis points to 61.9% in fiscal 2025 as compared to 68.0% in fiscal 2024.

(3) In fiscal 2025, Corporate incurred charges affecting comparability of $122.6 million.

Excluding those items affecting comparability, SG&A expenses increased 7.9% or $40.6 million to $553.1 million in fiscal 2025 as compared to $512.5 million in fiscal 2024.

SG&A expenses decreased 11.5% or $559.3 million to $4.31 billion in fiscal 2026 as compared to $4.87 billion in fiscal 2025.

As a percentage of net sales, SG&A expenses decreased to 53.9% during fiscal 2026 as compared to 69.5% during fiscal 2025.

Excluding items affecting comparability in fiscal 2026, SG&A expenses increased 9.5% or $367.9 million to $4.26 billion from $3.89 billion in fiscal 2025.

SG&A as a percentage of net sales decreased approximately 210 basis points to 53.3% compared to 55.4% in fiscal 2025, which includes a 20 basis point benefit from the divestiture of Stuart Weitzman.

The remaining basis point decrease in SG&A as a percentage of net sales was primarily due to leverage of fixed costs on higher net sales and lower distribution costs, partially offset by higher marketing spend.

(1) Excluding items affecting comparability, SG&A expenses increased 19.0% or $473.3 million to $2.97 billion in fiscal 2026 as compared to $2.50 billion in fiscal 2025.

SG&A as a percentage of net sales decreased approximately 170 basis points to 42.9% in fiscal 2026 as compared to 44.6% in fiscal 2025.

(2) Excluding items affecting comparability, SG&A expenses decreased 0.4% or $2.6 million to $704.1 million in fiscal 2026 as compared to $706.7 million in fiscal 2025.

SG&A as a percentage of net sales increased approximately 640 basis points to 65.5% in fiscal 2026 as compared to 59.1% in fiscal 2025.

(3) Excluding items affecting comparability, SG&A expenses increased 5.5% or $30.4 million to $583.5 million in fiscal 2026 as compared to $553.1 million in fiscal 2025.

(4) Corporate expenses, which are included within SG&A expenses discussed above but are not directly attributable to a reportable segment.

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Coach $ 2,541.2 36.8 % $ 1,875.3 33.5 % $ 665.9 35.5 %

Kate Spade (769.2) (64.3) 132.6 9.9 (901.8) NM

Kate Spade (10.0) (0.9) (769.2) (64.3) 759.2 98.7

Stuart Weitzman (1.0) (7.0) (15.4) (7.1) 14.4 93.4

Corporate (615.8) NA (675.7) NA 59.9 8.9

Tapestry $ 415.0 5.9 $ 1,140.1 17.1 $ (725.1) (63.6)

Operating income decreased $725.1 million to $415.0 million during fiscal 2025 as compared to $1.14 billion in fiscal 2024.

Operating margin was 5.9% in fiscal 2025 as compared to 17.1% in fiscal 2024.

Excluding items affecting comparability of $984.5 million in fiscal 2025, operating income increased $149.5 million to $1.40 billion from $1.25 billion in fiscal 2024;

Tapestry $ 1,914.4 23.9 $ 415.0 5.9 $ 1,499.4 NM

Operating income increased $1.50 billion to $1.91 billion during fiscal 2026 as compared to $415.0 million in fiscal 2025.

Operating margin increased to 23.9% in fiscal 2026 as compared to 5.9% in fiscal 2025.

Excluding items affecting comparability, operating income increased $466.3 million to $1.87 billion in fiscal 2026 from $1.40 billion in fiscal 2025.

Operating margin increased approximately 340 basis points to 23.4% in fiscal 2026 as compared to 20.0% in fiscal 2025, which includes an 80 basis point benefit from the divestiture of Stuart Weitzman.

The remaining increase in operating margin was primarily attributed to a 60 basis point increase in Gross margin and a 200 basis point decrease in SG&A as a percentage of sales.

• Coach Operating Income increased $665.9 million to $2.54 billion in fiscal 2026.

Operating margin increased 330 basis points to 36.8% in fiscal 2026 as compared to 33.5% in fiscal 2025.

Excluding items affecting comparability, operating income increased $600.4 million to $2.48 billion in fiscal 2026 from $1.88 billion in fiscal 2025;

and operating margin increased approximately 230 basis points to 35.8% in fiscal 2026 as compared to 33.5% in fiscal 2025.

This increase in operating margin was primarily attributed to an increase of 210 basis points in gross margin partially offset by 90 basis points increase in SG&A as a percentage of sales.

• Coach Operating Income increased $224.2 million to $1.88 billion in fiscal 2025, resulting in an operating margin increase of 110 basis points to 33.5%, as compared to $1.65 billion and 32.4%, respectively in fiscal 2024.

This increase in operating margin was primarily attributed to:

◦ Gross Margin , increased 200 basis points mainly due to net pricing improvements;

◦ SG&A expenses as a percentage of net sales , increased 90 basis points mainly due to higher marketing spend, partially offset by leverage of fixed costs on higher net sales.

• Kate Spade Operating Loss increased $901.8 million to a loss of $769.2 million in fiscal 2025, resulting in an operating margin of (64.3)%, as compared to income of $132.6 million and 9.9%, respectively in fiscal 2024.

Excluding items affecting comparability, operating income decreased $41.3 million to $91.3 million in fiscal 2025 from $132.6 million in fiscal 2024;

and operating margin decreased 230 basis points to 7.6% in fiscal 2025 as compared to 9.9% in fiscal 2024.

◦ Gross Margin , increased 70 basis points mainly due to net pricing improvements, partially offset by the impact of higher tariffs;

◦ SG&A expenses as a percentage of net sales , decreased approximately 170 basis points mainly due to leverage of fixed costs on higher net sales and lower distribution costs, partially offset by higher marketing spend.

• Kate Spade Operating Loss decreased $759.2 million to a loss of $10.0 million in fiscal 2026.

Operating margin increased to (0.9)% in fiscal 2026 as compared to (64.3)% in fiscal 2025.

Excluding items affecting comparability, operating income decreased $118.5 million to a loss of $27.2 million in fiscal 2026 from income of $91.3 million in fiscal 2025;

and operating margin decreased to (2.5)% in fiscal 2026 as compared to 7.6% in fiscal 2025.

This decrease in operating margin was primarily attributed to:

◦ Gross Margin , increased 150 basis points mainly due to lower duty expenses, lower freight costs and net pricing improvements;

◦ SG&A expenses as a percentage of net sales , increased 380 basis points mainly driven by higher marketing spend, deleverage of fixed costs on lower net sales, partially offset by a decrease in distribution costs.

• Stuart Weitzman Operating Loss decreased $5.8 million to a loss of $15.4 million in fiscal 2025, resulting in an operating margin increase of 170 basis points to (7.1)%, as compared to an operating loss of $21.2 million and operating margin of (8.8)% in fiscal 2024.

Excluding items affecting comparability, operating loss decreased $6.4 million to a loss of $14.8 million in fiscal 2025 from a loss of $21.2 million in fiscal 2024;

and operating margin increased 200 basis points to (6.8)% in fiscal 2025 as compared to (8.8)% in fiscal 2024.

• Corporate Operating Expenses increased 8.6% or $53.3 million to $675.7 million in fiscal 2025.

◦ Gross Margin , decreased 370 basis points mainly due to the impact of higher tariffs and unfavorable channel mix, partially offset by net pricing improvements;

◦ SG&A expenses as a percentage of net sales , increased approximately 640 basis points mainly driven by higher marketing spend and deleverage of fixed costs on lower net sales.

• Corporate Operating Expenses decreased 8.9% or $59.9 million to $615.8 million in fiscal 2026.

Excluding items affecting comparability, Corporate operating expenses increased $30.4 million to $583.5 million from $553.1 million in fiscal 2025.

This increase in operating expenses was due to higher compensation costs driven by accrued incentive compensation and higher professional fees, partially offset by lower occupancy costs.

This increase in operating expenses was primarily due to higher compensation costs.

Loss on Extinguishment of Debt

Loss on extinguishment of debt increased $120.1 million in fiscal 2025 to $120.1 million as compared to $0.0 million in fiscal 2024.

Excluding items affecting comparability, Loss on extinguishment of debt was $0.7 million in fiscal 2025 as compared to $0.0 million in fiscal 2024.

Loss on extinguishment of debt decreased $120.1 million to $0.0 million in fiscal 2026 as compared to $120.1 million in fiscal 2025.

Excluding items affecting comparability, Loss on extinguishment of debt decreased $0.7 million to $0.0 million in fiscal 2026 as compared to $0.7 million in fiscal 2025.

Interest Expense, net

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Excluding items affecting comparability, Interest expense, net increased $30.1 million to $55.3 million from $25.2 million in fiscal 2025.

This increase in net interest expense was mainly due to an increase in interest expense as a result of the issuance of the 2030 and 2035 Senior Notes and borrowings under the Existing Revolving Credit Facility, partially offset by a decrease in interest expense as a result of the repayment of the Term Loan due 2027.

This increase in Interest expense, net was mainly due to an increase in bond interest expense as a result of the issuance of the 2030 and 2035 Senior Notes during fiscal 2025 and lower interest income.

Other Expense (Income)

Other income increased $9.8 million to Other income of $6.6 million in fiscal 2025 as compared to Other expense of $3.2 million in fiscal 2024.

This increase in Other income was related to an increase in foreign exchange gains.

Other income decreased $5.2 million to $1.4 million in fiscal 2026 as compared to $6.6 million in fiscal 2025.

Excluding items affecting comparability, Other income decreased $5.1 million to $1.5 million in fiscal 2026 as compared to $6.6 million in fiscal 2025.

This decrease in Other income was related to a decrease in foreign exchange gains.

Provision (Benefit) for Income Taxes

1 unchanged sentence

Excluding items affecting comparability, the effective tax rate was 18.2% in fiscal 2026 as compared to 17.8% in fiscal 2025.

The decrease in effective tax rate was primarily driven by discrete items recognized in the period, partially offset by geographic mix of earnings.

The increase in effective tax rate was primarily driven by the impact of Pillar Two, partially offset by the lower impact of permanent items due to higher pre-tax income.

Net Income (Loss)

Net income decreased 77.6% or $632.8 million to $183.2 million in fiscal 2025 as compared to a net income of $816.0 million in fiscal 2024.

Net income increased $1.34 billion to $1.53 billion in fiscal 2026 as compared to $183.2 million in fiscal 2025.

Excluding items affecting comparability, net income increased 30.7% or $347.8 million to $1.48 billion in fiscal 2026 from $1.13 billion in fiscal 2025.

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Excluding items affecting comparability, net income per diluted share increased $1.95 to $7.05 in fiscal 2026 from $5.10 in fiscal 2025.

This change was primarily due to higher net income and a decrease in shares outstanding.

This increase was primarily due to higher net income and a decrease in shares outstanding.

FISCAL 2025 COMPARED TO FISCAL 2024

The comparison of fiscal 2024 to 2023 has been omitted from this Form 10-K, but can be referenced in our Form 10-K for the fiscal year ended June 29, 2024, filed on August 15, 2024 within Part II.

"Management's Discussion and Analysis of Financial Conditions and Results of Operations".

The comparison of fiscal 2025 to fiscal 2024 has been omitted from this Form 10-K, but can be referenced in our Form 10-K for the fiscal year ended June 28, 2025, filed on August 14, 2025, within Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

NON-GAAP MEASURES

The Company’s reported results are presented in accordance with GAAP.

The reported SG&A expenses, Operating income, Interest expense, Provision for income taxes, Net income and earnings per diluted share in fiscal 2025 and fiscal 2024 and the reported Loss on extinguishment of debt in fiscal 2025, reflect certain items affecting comparability, including the impact of Acquisition and Divestiture Costs, Organizational Efficiency Costs and Impairment charges.

As a supplement to the Company's reported results, these measures are also reported on a non-GAAP basis to exclude the impact of these items along with a reconciliation to the most directly comparable GAAP measures.

The Company incurred Acquisition and Divestiture Costs which consist of non-recurring acquisition and divestiture costs, primarily financing-related expenses and professional fees from the terminated Capri Acquisition as well as costs related to the Stuart Weitzman Business Divestiture, inclusive of the loss on business held for sale, professional fees, share-based compensation expense and store impairment.

The Company also incurred Organizational Efficiency Costs which consist of non-recurring costs, primarily from various initiatives aimed at streamlining the organization and optimizing processes.

These costs mainly include one-time severance and technology related charges.

Impairment charges incurred by the Company consist of non-recurring impairment costs related to Kate Spade indefinite-lived brand intangible assets and goodwill.

The Company presents certain non-GAAP measures, including segment operating income (loss), segment SG&A expenses, segment gross profit, SG&A expense ratio, operating margin, Operating Income (loss), Loss on extinguishment of debt, Interest expense, Other expense (income), Provision for income taxes, Net income (loss) and Net Income (loss) per diluted common share, which exclude items affecting comparability.

These non-GAAP performance measures were used by management to conduct and evaluate its business during its regular review of operating results for the periods affected.

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The Company’s internal management reporting excluded these items.

In addition, the human resources committee of the Company’s Board uses these non-GAAP measures when setting and assessing achievement of incentive compensation goals.

In addition, the HR Committee of the Company’s Board uses these non-GAAP measures when setting and assessing achievement of incentive compensation goals.

Items affecting comparability in the current or comparable periods, as applicable, include:

• Acquisition and Divestiture Costs - The Company incurred Acquisition and Divestiture items which consist of non-recurring costs related to the Stuart Weitzman Business Divestiture, inclusive of professional fees, one-time severance costs, compensation costs, operating net loss and TSA income as well as financing-related expenses and professional fees from the terminated Capri Acquisition.

• Organizational Efficiency Costs - The Company also incurred Organizational Efficiency Costs which consist of non-recurring costs, primarily from various initiatives aimed at streamlining the organization and optimizing processes.

These costs mainly include one-time technology and severance related charges.

• IEEPA Tariff Refund - The Company recognized refunds of IEEPA tariffs which were related to products sold in fiscal 2026 net of estimated liabilities.

• Distribution Network Optimization Costs - The Company incurred Distribution Network Optimization Costs which consist of non-recurring costs, primarily related to optimizing its distribution centers.

These costs mainly relate to the transition from our Ohio fulfillment center to a third-party facility in Pennsylvania.

• Impairment Charges - The Company incurred Impairment charges which consist of non-recurring impairment costs related to the Kate Spade indefinite-lived brand intangible assets and goodwill.

Reconciliations between the non-GAAP measure and the most directly comparable GAAP measure are included in the Item 7.

"Management’s Discussion and Analysis of Financial Condition and Results of Operations" section where applicable.

The Company operates on a global basis and reports financial results in U.S.

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Net increase (decrease) in cash and cash equivalents $ (125.3) $ (5,018.3) $ 4,893.0

The Company’s cash and cash equivalents decreased by $5.02 billion in fiscal 2025 compared to an increase of $5.42 billion in fiscal 2024, as discussed below.

The Company’s cash and cash equivalents decreased by $125.3 million in fiscal 2026 compared to a decrease of $5.02 billion in fiscal 2025, as discussed below.

Net cash provided by (used in) operating activities

Net cash provided by operating activities decreased $39.0 million primarily due to lower net income of $632.8 million and changes in operating assets and liabilities of $207.2 million partially offset by a higher impact of non-cash adjustments of $801.0 million primarily related to the impairment of goodwill and intangible assets.

The $207.2 million decrease in changes in operating asset and liability balances was primarily driven by the following:

• Inventories were a use of cash of $108.2 million in fiscal 2025 compared to a source of cash of $85.8 million in fiscal 2024, primarily driven by increased inventory purchases for Coach to support continued sales growth and pull forward of inventory receipts.

• Accounts payable were a use of cash of $15.0 million in fiscal 2025 as compared to a source of cash of $49.1 million in fiscal 2024, primarily driven by a decrease in professional fees due to higher spending in the prior year related to the Capri Acquisition and timing of other payments, partially offset by an increase in advertising.

• Accounts receivables were a source of cash of $8.8 million in fiscal 2025 as compared to a use of cash of $37.3 million in fiscal 2024, primarily driven by timing of collections.

Net cash provided by operating activities increased $761.9 million primarily due to higher net income of $1.34 billion and changes in operating assets and liabilities of $158.5 million partially offset by a lower impact of non-cash adjustments of $741.1 million primarily related to the impairment of goodwill and intangible assets in the prior year.

The $158.5 million increase in changes in operating asset and liability balances was primarily driven by the following:

• Accounts payable were a source of cash of $131.6 million in fiscal 2026 as compared to a use of cash of $15.0 million in fiscal 2025, primarily driven by an increase in marketing spend and timing of payments compared to the prior year, and lower inventory receipts in the prior year for Kate Spade due to timing.

• Inventories were a source of cash of $35.4 million in fiscal 2026 compared to a use of cash of $108.2 million in fiscal 2025, primarily driven by increased inventory purchases for Coach in the prior year to support sales growth and the strategic decision to pull forward receipts.

• Other assets were a use of cash of $141.5 million in fiscal 2026 compared to a source of cash of $15.2 million in fiscal 2025, primarily driven by the IEEPA tariff refund receivable recorded in the current year and higher prepaid assets when compared to the prior year.

Net cash provided by (used in) investing activities

Net cash provided by investing activities was $914.0 million in fiscal 2025 compared to a use of cash of $1.04 billion in fiscal 2024, resulting in a $1.96 billion increase in net cash provided by investing activities.

Net cash used in investing activities was $218.3 million in fiscal 2026 compared to a source of cash of $914.0 million in fiscal 2025, resulting in a $1.13 billion decrease in net cash provided by investing activities.

The $218.3 million use of cash in fiscal 2026 was primarily due to purchases of property and equipment of $166.0 million, and purchases of investments of $163.0 million partially offset by proceeds from the divestiture of the Stuart Weitzman Business of $109.1 million.

The $914.0 million source of cash in fiscal 2025 was primarily due to proceeds from maturities and sales of investments of $2.92 billion, partially offset by purchases of investments of $1.89 billion, mainly related to the proceeds of the Capri Acquisition Senior Notes.

The $1.04 billion use of cash in fiscal 2024 was primarily due to purchases of investments of $2.71 billion, partially offset by maturities and sales of investments of $1.68 billion, mainly related to the proceeds of the Capri Acquisition Senior Notes.

Net cash provided by (used in) financing activities

Net cash used in financing activities was $7.18 billion in fiscal 2025 as compared to a source of cash of $5.21 billion in fiscal 2024, resulting in a $12.39 billion increase in net cash used in financing activities.

Net cash used in financing activities was $1.86 billion in fiscal 2026 as compared to a use of cash of $7.18 billion in fiscal 2025, resulting in a $5.31 billion decrease in net cash used in financing activities.

The $1.86 billion use of cash in fiscal 2026 was primarily due to repurchases of common stock of $1.55 billion.

The $7.18 billion use of cash in fiscal 2025 was primarily due to the repayment of debt of $7.16 billion, which mainly included the Capri Acquisition Senior Notes, use of cash of $2.02 billion under the Company's accelerated share repurchase program partially offset by proceeds from the issuance of debt of $2.25 billion.

The $5.21 billion source of cash in fiscal 2024 was primarily due to proceeds from the issuance of the Capri Acquisition Senior Notes of $6.09 billion, partially offset by the repayment of the Term Loan due 2027 of $468.8 million, and dividend payments of $321.4 million.

Effect of exchange rate changes on cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents was an increase of $26.3 million as compared to a decrease of $12.2 million in fiscal 2024.

Effect of exchange rate changes on cash and cash equivalents was a decrease of $24.6 million as compared to an increase of $26.3 million in fiscal 2025.

Cash Flows - Fiscal 2025 Compared to Fiscal 2024

The comparison of fiscal 2024 to 2023 has been omitted from this Form 10-K, but can be referenced in our Form 10-K for the fiscal year ended June 29, 2024, filed on August 15, 2024 within Part II.

"Management's Discussion and Analysis of Financial Conditions and Results of Operations" .

Working Capital and Capital Expenditures

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Total Availability Borrowings Outstanding Remaining Availability

Amended Revolving Credit Facility (1)

Amended Revolving Credit Facility and Commercial Paper Program (1)(2)

$ 2,000.0 $ — $ 2,000.0

China Credit Facility (1)(3)

34.9 16.7 18.2

Total $ 2,034.9 $ 16.7 $ 2,018.2

(1) Refer to Note 12, "Debt" for further information on these instruments.

(2) Borrowings under the Commercial Paper Program are supported by the Amended Revolving Credit Facility.

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

(3) The carrying amounts of the China Credit Facility include the impact of changes in the exchange rate of the United States Dollar against the Renminbi.

We believe that our Amended Revolving Credit Facility is adequately diversified with no undue concentrations in any one financial institution.

As of June 28, 2025, there were 18 financial institutions participating in the Amended Revolving Credit Facility, with no one participant maintaining a commitment percentage in excess of 10%.

As of June 27, 2026, there were 18 financial institutions participating in the Amended Revolving Credit Facility, with no one participant maintaining a combined maximum commitment percentage in excess of 10%.

We have no reason to believe, at this time, that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the facility in the event we elect to draw funds in the foreseeable future.

We have the ability to draw on our credit facilities or access other sources of financing options available to us in the credit and capital markets for, among other things, acquisition or integration-related costs, our restructuring initiatives, settlement of a material contingency or a material adverse business or macroeconomic development, as well as for other general corporate business purposes.

We have the ability to draw on our credit facilities or access other financing options available to us in the credit and capital markets for, among other things, acquisition or integration-related costs, our restructuring initiatives, settlement of a material contingency, or a material adverse business or macroeconomic development, as well as for other general corporate business purposes.

Management 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 will provide adequate funds to support our operating, capital and debt service requirements for fiscal 2027 and beyond.

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This future operating performance and cash flow are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond the Company's control.

Commercial Paper Program

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.

As of June 27, 2026, the Company had no borrowings outstanding under the Commercial Paper Program.

Refer to Note 12, "Debt" for further information.

Stuart Weitzman Business Divestiture

On February 16, 2025, the Company entered into a Purchase Agreement to sell the Stuart Weitzman Business for total cash consideration of $105.0 million, subject to customary adjustments.

On February 16, 2025, the Company entered into a Purchase Agreement to sell the Stuart Weitzman Business for a final aggregate purchase price of $109.1 million, which included customary adjustments for net working capital and indebtedness.

The sale was completed on August 4, 2025.

Refer to Note 5, "Acquisitions and Divestitures," and Note 21, "Subsequent Events," for further information.

Refer to Note 5, "Acquisitions and Divestitures" for further information.

IEEPA Tariff Refund

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs collected under the IEEPA were invalid.

The CIT subsequently ordered refunds for qualifying customs entries, including applicable interest.

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

In addition, as of June 27, 2026, the Company applied the loss recovery model and determined that the receipt of the remaining refunds of the previously paid IEEPA tariffs was probable.

The Company estimates the amount of the probable refund to be $114.7 million, of which $96.2 million was recognized as a reduction to Cost of sales, $9.5 million was recorded as Accrued liabilities and $9.0 million was applied as a reduction to tariffs that remained in Inventory.

Supply Chain Finance

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Stock Repurchase Program

On May 12, 2022, the Company announced that its Board of Directors (the "Board") authorized a common stock repurchase program to repurchase up to $1.50 billion of its outstanding common stock (the "2022 Share Repurchase Program").

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

2026 Share Repurchase Program

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.

During the three months ended June 27, 2026, the Company repurchased $300.0 million of common stock.

During the fiscal year ended June 27, 2026, the Company repurchased $1.35 billion of common stock, $238.3 million under the 2022 Share Repurchase Program and $1.11 billion under the 2026 Share Repurchase Program.

As of June 27, 2026, the Company had $1.89 billion of remaining repurchase authorization under the 2026 Share Repurchase Program.

2025 Share Repurchase Program

On November 13, 2024, the Board authorized the Company to repurchase up to $2.00 billion of outstanding shares of its common stock (the "2025 Share Repurchase Program").

Under the 2025 Share Repurchase Program, the Company may repurchase shares on the open market, in privately negotiated transactions or in other transactions, including accelerated share repurchase programs.

On November 21, 2024, the Company entered into accelerated share repurchase agreements (the “ASR Agreements”) with Bank of America, N.A.

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Under the ASR Agreements, the Company paid $2.00 billion to the Dealers and received an initial delivery of 28,363,766 shares of the Company's common stock on November 26, 2024.

The total number of shares purchased by the Company pursuant to the ASR Agreements will be based on the volume-weighted average price ("VWAP") of the Company's common stock on specified dates during the term of each of the ASR Agreements, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR Agreements.

The difference between the initially delivered shares and the total number of shares purchased will be settled in four tranches, no later than the first quarter of fiscal 2026.

During the quarter ended March 29, 2025, the Company cash settled $3.0 million related to 43,094 shares of common stock owed for the settlement of one tranche as a result of the increase in the VWAP of the Company's common stock.

During the quarter ended June 28, 2025, the Company cash settled $3.6 million related to 49,442 shares of common stock of an additional tranche.

As of June 28, 2025, the Company had $800.0 million of additional shares available to be repurchased as authorized under the 2022 Share Repurchase Program and no remaining availability to repurchase shares under the 2025 Share Repurchase Program.

There were no shares repurchased during the three months ended June 28, 2025 under the 2022 Share Repurchase Program and the 2025 Share Repurchase Program.

Final settlement was based on the volume-weighted average price ("VWAP") of the Company's common stock, less a discount, and occurred in four tranches.

During the year ended June 28, 2025 and the quarter ended September 27, 2025, as a result of the increase in the VWAP of the Company's common stock, the Company cash-settled $6.6 million related to 92,536 shares of common stock and $195.7 million related to 1,838,270 shares of common stock, respectively, which completed the agreement.

The average share price for the 28,363,766 shares received under the ASR Agreements was $77.64.

Contractual and Other Obligations

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Inventory purchase obligations 768.2 768.2 — —

353.0 353.0 — — —

Operating lease obligations 2,037.2 368.8 583.8 382.2 702.4

Debt repayment 2,396.6 — 396.6 750.0 1,250.0

2,413.3 16.7 396.6 750.0 1,250.0

Interest on outstanding debt (1)

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Total $ 6,156.4 $ 1,400.9 $ 1,312.4 $ 1,306.1 $ 2,137.0

(1) Includes inventory purchase obligations related to the Stuart Weitzman Business as of June 28, 2025 of $24.6 million.

(2) The principal and interest of the China Credit Facility include the impact of changes in the exchange rate of the United States Dollar against the Renminbi as of June 28, 2025.

(1) Interest on outstanding debt includes fixed interest expenses for unsecured notes.

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We expect to fund these firm commitments with operating cash flows generated in the normal course of business and, if necessary, through availability under our credit facilities or other accessible sources of financing.

Excluded from the above contractual obligations table is the non-current liability for unrecognized tax benefits of $137.5 million as of June 28, 2025, as we cannot make a reliable estimate of the period in which the liability will be settled, if ever.

Excluded from the above contractual obligations table is the non-current liability, including related interest and penalties, for unrecognized tax benefits of $150.0 million as of June 27, 2026, as we cannot make a reliable estimate of the period in which the liability will be settled, if ever.

Besides the firm commitments noted above, the above table excludes other amounts included in current liabilities in the Consolidated Balance Sheets at June 27, 2026 as these items will be paid within one year and certain long-term liabilities not requiring cash payments.

Off-Balance Sheet Arrangements

In addition to the commitments included in the table above, we have outstanding letters of credit, surety bonds and bank guarantees totaling $26.5 million as of June 28, 2025, primarily serving to collateralize our obligation to third parties for duty, leases, insurance claims and materials used in product manufacturing.

In addition to the commitments included in the table above, we have outstanding letters of credit, surety bonds and bank guarantees totaling $38.1 million as of June 27, 2026, primarily serving to collateralize our obligation to third parties for duties, leases, insurance claims and materials used in product manufacturing.

These letters of credit expire at various dates through calendar 2039.

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Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment.

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

The development and selection of the Company’s critical accounting policies and estimates are periodically reviewed with the Audit Committee.

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Revenue Recognition

Revenue is recognized when the Company satisfies its performance obligations by transferring control of promised products or services to its customers, which may be at a point of time or over time.

Revenue is recognized when the Company satisfies its performance obligations by transferring control of promised products or services to its customers, which may be at a point in time or over time.

Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services.

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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.

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.

The Company performs its annual impairment assessment of goodwill as well as brand intangibles during 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 that there was no impairment in fiscal 2026 or fiscal 2024.

During the fourth quarter of fiscal 2025, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis.

Accordingly, the Company recorded $244.1 million of impairment charges to goodwill for the Kate Spade reporting unit during the fourth quarter of the fiscal year.

The Company also recorded an impairment charge of $610.7 million related to the Kate Spade indefinite-lived brand intangible.

The Company determined that there was no impairment in fiscal 2024 or fiscal 2023.

Accordingly, during the fourth quarter of fiscal year 2025, the Company recorded $244.1 million of impairment charges related to goodwill for the Kate Spade reporting unit and $610.7 million of impairment charges related to the Kate Spade indefinite-lived brand intangible.

Based on the annual assessment in fiscal 2026, the fair values of our Kate Spade brand reporting unit and brand intangibles exceeded their respective carrying values by approximately 30%.

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 business channels and other initiatives aimed at increasing profitability of the business.

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Changes in the assumptions used to determine the Black-Scholes value could result in significant changes in the Black-Scholes value.

For stock options and share unit awards, the Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates.

The Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates.

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

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If the performance-based award incorporates a market condition, the grant-date fair value of such award is determined using a pricing model, such as a Monte Carlo Simulation.

A hypothetical 10% change in our stock-based compensation expense would not have a material impact to our fiscal 2025 net income.

A hypothetical 10% change in our stock-based compensation expense would not have had a material impact on our fiscal 2026 net income.

The Company’s effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning strategies available in the various jurisdictions in which the Company operates.

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Although the Company believes that the estimates and assumptions used are reasonable and legally supportable, the final determination of tax audits could be different than that which is reflected in historical tax provisions and recorded assets and liabilities.

Tax authorities periodically audit the Company’s income tax returns, these tax authorities may take a contrary position that could result in a significant impact on the Company's results of operations.

Tax authorities periodically audit the Company’s income tax returns;

these tax authorities may take a contrary position that could result in a significant impact on the Company's results of operations.

Significant management judgment is required in determining the effective tax rate, in evaluating tax positions and in determining the net realizable value of deferred tax assets.

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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 7. Management’s Discussion and Analysis