Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 27, 2014 | Jan. 23, 2015 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 27-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | COH | |
Entity Registrant Name | COACH INC | |
Entity Central Index Key | 1116132 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 275,831,049 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 27, 2014 | Jun. 28, 2014 |
In Millions, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $836.30 | $591.90 |
Short-term investments | 228.6 | 276.7 |
Trade accounts receivable, less allowances of $1.6 million and $1.4 million, respectively | 228.5 | 198.6 |
Inventories | 447.2 | 526.2 |
Deferred income taxes | 99.2 | 112.6 |
Other current assets | 107.6 | 149.2 |
Total current assets | 1,947.40 | 1,855.20 |
Property and equipment, net | 684 | 713.9 |
Long-term investments | 464.6 | 484.5 |
Goodwill | 315.5 | 361.4 |
Other assets | 205.7 | 248.1 |
Total assets | 3,617.20 | 3,663.10 |
Current Liabilities: | ||
Accounts payable | 160.5 | 153.9 |
Accrued liabilities | 534.9 | 518.7 |
Current debt | 20 | 140.5 |
Total current liabilities | 715.4 | 813.1 |
Other liabilities | 383.8 | 429.4 |
Total liabilities | 1,099.20 | 1,242.50 |
See Note 14 on commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock: (authorized 25.0 million shares; $0.01 par value per share) none issued | 0 | 0 |
Common stock: (authorized 1,000.0 million shares; $0.01 par value per share) issued and outstanding 275.7 million and 274.4 million shares, respectively | 2.8 | 2.7 |
Additional paid-in-capital | 2,688.40 | 2,646.10 |
Accumulated deficit | -102.9 | -219.5 |
Accumulated other comprehensive loss | -70.3 | -8.7 |
Total stockholders' equity | 2,518 | 2,420.60 |
Total liabilities and stockholders' equity | $3,617.20 | $3,663.10 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 27, 2014 | Jun. 28, 2014 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $1.60 | $1.40 |
Preferred stock, authorized (shares) | 25 | 25 |
Preferred stock, par value (USD per share) | $0.01 | $0.01 |
Preferred stock, issued (shares) | 0 | 0 |
Common stock, authorized (shares) | 1,000 | 1,000 |
Common stock, par value (USD per share) | $0.01 | $0.01 |
Common stock, issued (shares) | 275.7 | 274.4 |
Common stock, outstanding (shares) | 275.7 | 274.4 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 |
Income Statement [Abstract] | ||||
Net sales | $1,219.40 | $1,419.60 | $2,258.20 | $2,570.40 |
Cost of sales | 379.4 | 436.9 | 702.8 | 761.1 |
Gross profit | 840 | 982.7 | 1,555.40 | 1,809.30 |
Selling, general and administrative expenses | 564.6 | 546.7 | 1,100.20 | 1,051.70 |
Operating income | 275.4 | 436 | 455.2 | 757.6 |
Interest income, net | 0.4 | 1.9 | 1.1 | 3.6 |
Income before provision for income taxes | 275.8 | 437.9 | 456.3 | 761.2 |
Provision for income taxes | 92.3 | 140.5 | 153.7 | 245.9 |
Net income | $183.50 | $297.40 | $302.60 | $515.30 |
Net income per share: | ||||
Basic (USD per share) | $0.67 | $1.07 | $1.10 | $1.84 |
Diluted (USD per share) | $0.66 | $1.06 | $1.09 | $1.82 |
Shares used in computing net income per share | ||||
Basic (shares) | 275.6 | 279.1 | 275.3 | 280.2 |
Diluted (shares) | 276.5 | 281.5 | 276.4 | 283 |
Cash dividends declared per common share (USD per share) | $0.34 | $0.34 | $0.68 | $0.68 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $183.50 | $297.40 | $302.60 | $515.30 |
Other comprehensive (loss), net of tax: | ||||
Net unrealized gains (losses) on cash flow hedging derivatives | 3.8 | 4.5 | 7.6 | -0.6 |
Net unrealized (losses) on available-for-sale investments | -1.1 | -0.8 | -1.6 | -0.7 |
Foreign currency translation adjustments | -37.4 | -21.2 | -67.6 | -10.7 |
Other comprehensive (loss), net of tax | -34.7 | -17.5 | -61.6 | -12 |
Comprehensive income | $148.80 | $279.90 | $241 | $503.30 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $302.60 | $515.30 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 89.8 | 92.9 |
Provision for bad debt | 0.5 | 0.6 |
Share-based compensation | 44.3 | 43 |
Excess tax shortfall (benefit) from share-based compensation | 4.8 | -2.7 |
Transformation and other related charges; sale of Reed Krakoff business | 27.7 | -0.9 |
Deferred income taxes | 18.6 | 27.3 |
Other non-cash credits, net | -11.2 | -6.1 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | -42.1 | -55.3 |
Inventories | 48.7 | -21 |
Accounts payable | 10.7 | -48 |
Accrued liabilities | 28.8 | 50.5 |
Other liabilities | -10.2 | 6.5 |
Other balance sheet changes, net | 70.6 | -37.6 |
Net cash provided by operating activities | 583.6 | 564.5 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of interest in equity method investment | -64.8 | -41.3 |
Acquisitions, net of cash acquired | 0 | -2 |
Purchases of property and equipment | -79.6 | -106.7 |
Loans to related parties | 0 | 0.5 |
Purchases of investments | -51.5 | -375.3 |
Proceeds from maturities and sales of investments | 182.8 | 1.8 |
Net cash used in investing activities | -13.1 | -523 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividend payments | -185.6 | -189.8 |
Repurchase of common stock | 0 | -349.9 |
Repayment of debt | -0.5 | -0.5 |
Proceeds from share-based awards | 12.4 | 39.3 |
Borrowings under revolving credit facility | 230 | 150 |
Repayment of revolving credit facility | -350 | -150 |
Taxes paid to net settle share-based awards | -12.4 | -37.9 |
Excess tax (shortfall) benefit from share-based compensation | -4.8 | 2.7 |
Acquisition-related payment of contingent consideration | -3.8 | 0 |
Net cash used in financing activities | -314.7 | -536.1 |
Effect of changes in foreign exchange rates on cash and cash equivalents | -11.4 | 0 |
Increase (decrease) in cash and cash equivalents | 244.4 | -494.6 |
Cash and cash equivalents at beginning of period | 591.9 | 1,062.80 |
Cash and cash equivalents at end of period | 836.3 | 568.2 |
Supplemental information: | ||
Cash paid for income taxes | 67.8 | 128.4 |
Cash paid for interest | $1.20 | $0.50 |
Nature_of_Operations
Nature of Operations | 6 Months Ended |
Dec. 27, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations |
Coach, Inc. (the "Company") is a leading New York design house of modern luxury accessories and lifestyle collections. The Company’s primary product offerings, manufactured by third-party suppliers, include women’s and men’s bags, women’s and men’s small leather goods, business cases, footwear, ready-to-wear including outerwear, watches, weekend and travel accessories, scarves, sunwear, fragrance, jewelry, travel bags and other lifestyle products. Coach’s products are sold through its North America and International reportable segments. The North America segment includes sales to North American consumers through Coach-operated stores (including the Internet), and sales to wholesale customers and distributors. The International segment includes sales to consumers through Coach-operated stores (including the Internet) and concession shop-in-shops in Japan and mainland China, Coach-operated stores and concession shop-in-shops in Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany and Italy, as well as sales to wholesale customers and distributors in approximately 40 countries. The Company also records sales generated in ancillary channels including licensing and disposition. |
Basis_of_Presentation_and_Orga
Basis of Presentation and Organization | 6 Months Ended |
Dec. 27, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Organization | Basis of Presentation and Organization |
Interim Financial Statements | |
These interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and are unaudited. In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position, income, comprehensive income and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") have been condensed or omitted from this report as is permitted by the SEC's rules and regulations. However, the Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended June 28, 2014. | |
The results of operations, cash flows and comprehensive income for the three and six months ended December 27, 2014 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 27, 2015 ("fiscal 2015"). | |
Basis of Consolidation | |
These unaudited interim condensed consolidated financial statements present the consolidated financial position, income, comprehensive income and cash flows of the Company, including all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Fiscal Periods | |
The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2015 will be a 52-week period. Fiscal 2014 ended on June 28, 2014 and was also a 52-week period ("fiscal 2014"). The second quarter of fiscal 2015 ended on December 27, 2014 and was a 13-week period. The second quarter of fiscal 2014 ended on December 28, 2013 and was also a 13-week period. | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates. | |
Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for customer returns and markdowns; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; the valuation of stock-based compensation awards and related estimated forfeiture rates; and reserves for restructuring, among others. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Dec. 27, 2014 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," which provides a single, comprehensive revenue recognition model for all contracts with customers, and contains principles to determine the measurement of revenue and timing of when it is recognized. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2018. The Company is currently evaluating this guidance, but does not expect its adoption to have a material effect on its consolidated financial statements. |
Transformation_and_Other_Actio
Transformation and Other Actions | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
Transformation and Other Actions | Transformation and Other Actions | |||||||||||||||||||||||
Transformation Charges | ||||||||||||||||||||||||
During the fourth quarter of fiscal 2014, Coach announced a multi-year strategic plan to transform the brand and reinvigorate growth. This multi-faceted, multi-year transformation plan (the "Transformation Plan") includes key operational and cost measures , including: (i) the investment in capital improvements in stores and wholesale locations during fiscal 2015 and through fiscal 2017; (ii) the optimization and streamlining of our organizational model as well as the closure of underperforming North American stores in fiscal 2015; (iii) the realignment of inventory levels to reflect the Company's elevated product strategy beginning in fiscal 2014; (iv) the investment in incremental advertising costs to further promote this new strategy starting in fiscal 2015; and (v) the significant scale-back of promotional events, particularly within the outlet Internet sales site which started in fiscal 2014. | ||||||||||||||||||||||||
The Company expects to incur pre-tax charges of approximately $250 million to $300 million, in total, under the Transformation Plan. In the fourth quarter of fiscal 2014, the Company recorded charges of $131.5 million under this plan. During the quarter ended December 27, 2014, the Company incurred transformation-related charges of $20.1 million, ($14.4 million after-tax, or $0.05 per diluted share). For the six months ended December 27, 2014, the Company incurred transformation-related charges of $57.2 million, ($41.1 million after-tax, or $0.15 per diluted share). For the three and six months ended December 27, 2014 the charges recorded in selling, general and administrative ("SG&A") expenses were $19.1 million and $52.2 million, respectively, and primarily relate to the Company's North America business. The charges recorded in cost of sales for the three and six months ended December 27, 2014 were $1.0 million and $5.0 million, respectively, and primarily relate to the Company's North America business. | ||||||||||||||||||||||||
A summary of charges and related liabilities under the Company's Transformation Plan are as follows (in millions): | ||||||||||||||||||||||||
Inventory-Related Charges(1) | Impairment(2) | Store-Related Costs(3) | Organizational Efficiency Costs(4) | Other(5) | Total | |||||||||||||||||||
Balance at June 29, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Fiscal 2014 charges | 82.2 | 35.5 | 12.2 | 1 | 0.6 | 131.5 | ||||||||||||||||||
Cash payments | — | — | — | — | — | — | ||||||||||||||||||
Non-cash adjustments | (66.8 | ) | (35.5 | ) | (6.7 | ) | — | — | (109.0 | ) | ||||||||||||||
Balance at June 28, 2014 | $ | 15.4 | $ | — | $ | 5.5 | $ | 1 | $ | 0.6 | $ | 22.5 | ||||||||||||
Fiscal 2015 charges | 3 | — | 26.3 | 23.9 | 4 | 57.2 | ||||||||||||||||||
Cash payments | (15.0 | ) | — | (1.5 | ) | (13.0 | ) | (4.1 | ) | (33.6 | ) | |||||||||||||
Non-cash adjustments | (3.0 | ) | — | (21.8 | ) | (2.8 | ) | (0.1 | ) | (27.7 | ) | |||||||||||||
Balance at December 27, 2014 | $ | 0.4 | $ | — | $ | 8.5 | $ | 9.1 | $ | 0.4 | $ | 18.4 | ||||||||||||
(1) | Inventory-related charges, recorded within cost of sales, primarily relate to reserves for the donation and destruction of certain on-hand inventory and future non-cancelable inventory purchase commitments. | |||||||||||||||||||||||
(2) | Impairment charges, recorded within SG&A expenses, were based on discounted expected cash flows within certain impacted retail stores, and resulted in the reduction of the net carrying value of store-related long-lived assets to their estimated fair value. | |||||||||||||||||||||||
(3) | Store-related costs, recorded within SG&A expenses, relate to store closure costs which include accelerated depreciation charges associated with store assets that the Company will no longer benefit from as a result of the Transformation Plan, as well as lease termination and store employee severance costs. | |||||||||||||||||||||||
(4) | Organizational efficiency charges, recorded within SG&A expenses, primarily relate to the severance and related costs of corporate employees. | |||||||||||||||||||||||
(5) | Other charges comprise of consulting costs and the write-down of certain assets that will not be placed into service by the Company, which are recorded within SG&A expenses and certain freight and handling costs incurred related to the destruction of inventory which are recorded within cost of sales. | |||||||||||||||||||||||
The above charges were recorded as corporate unallocated expenses within the Company's condensed consolidated statements of income. | ||||||||||||||||||||||||
The Company expects to incur additional pre-tax charges of approximately $60 million to $110 million, primarily during the remainder of fiscal 2015, in connection with the Transformation Plan. These costs will primarily consist of store-related costs and organizational efficiency charges. | ||||||||||||||||||||||||
Sale of Reed Krakoff Business | ||||||||||||||||||||||||
In the first quarter of fiscal 2014, the Company sold the Reed Krakoff business, involving the sale of the equity interests of Reed Krakoff LLC and certain assets, including the Reed Krakoff brand name and related intellectual property rights, to Reed Krakoff International LLC ("Buyer"). The sale was pursuant to the Asset Purchase and Sale Agreement dated July 29, 2013 (the "Purchase Agreement") with Buyer and Reed Krakoff, the Company’s former President and Executive Creative Director. Coach recorded a cost method investment of $3.3 million, which is included in Long-term investments in the condensed consolidated balance sheet at December 27, 2014. | ||||||||||||||||||||||||
In connection with the Purchase Agreement, Mr. Krakoff’s resignation from Coach and the closing of the sale, Mr. Krakoff waived his right to receive compensation, salary, bonuses, equity vesting and certain other benefits. The Company recorded a loss of $2.7 million during the first quarter of fiscal 2014 related to the sale, which is recorded in SG&A expenses on the condensed consolidated statements of income. |
Acquisitions
Acquisitions | 6 Months Ended |
Dec. 27, 2014 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions |
On July 1, 2013 (fiscal 2014), the Company became the 100% owner of its European joint venture by purchasing Hackett Limited’s 50% interest in the joint venture, enabling Coach to assume direct control and consolidate its European retail business. The joint venture included 18 retail locations in Spain, Portugal, Great Britain, France, Ireland and Germany. The results of the acquired business have been included in the condensed consolidated financial statements since the date of acquisition within the International segment. The purchase price consisted of cash payments of approximately $15.1 million and the forgiveness of a loan from Coach to Hackett Limited of approximately $18.0 million. The allocation of the purchase price resulted in goodwill of $14.8 million, which is not tax deductible. Unaudited pro forma information related to this acquisition is not included, as the impact of this transaction is not material to the condensed consolidated results of the Company. | |
Subsequent to the end of the second quarter of Fiscal 2015, on January 5, 2015, the Company entered into a Purchase Agreement (the "Purchase Agreement") with Stuart Weitzman Topco LLC ("Topco") and Stuart Weitzman Intermediate LLC ("Stuart Weitzman"), a wholly owned subsidiary of Topco. Refer to Note 17 herein for further information. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 6 Months Ended | |||
Dec. 27, 2014 | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||
The change in the carrying amount of the Company’s goodwill, all of which is included within the International reportable segment, is as follows (in millions): | ||||
Total | ||||
Balance at June 28, 2014 | $ | 361.4 | ||
Foreign exchange impact | (45.9 | ) | ||
Balance at December 27, 2014 | $ | 315.5 | ||
At December 27, 2014 and June 28, 2014, the Company’s intangible assets, which are not subject to amortization, consisted of $9.8 million of trademarks which are recorded within Other assets on the condensed consolidated balance sheets. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | ||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity | ||||||||||||||||||||||
A reconciliation of stockholders' equity is presented below (in millions, except per share data): | |||||||||||||||||||||||
Shares of | Common Stock | Additional | Accumulated | Accumulated | Total | ||||||||||||||||||
Common | Paid-in- | Deficit | Other | Stockholders' | |||||||||||||||||||
Stock | Capital | Comprehensive | Equity | ||||||||||||||||||||
Loss | |||||||||||||||||||||||
Balance at June 29, 2013 | 281.9 | $ | 2.8 | $ | 2,520.50 | $ | (101.9 | ) | $ | (12.2 | ) | $ | 2,409.20 | ||||||||||
Net income | — | — | — | 515.3 | — | 515.3 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (12.0 | ) | (12.0 | ) | |||||||||||||||
Shares issued for stock options and employee benefit plans | 2.3 | 0.1 | 1.3 | — | — | 1.4 | |||||||||||||||||
Share-based compensation | — | — | 52.8 | — | — | 52.8 | |||||||||||||||||
Excess tax benefit from share-based compensation | — | — | 2.7 | — | — | 2.7 | |||||||||||||||||
Repurchase and retirement of common stock | (6.6 | ) | (0.1 | ) | — | (349.9 | ) | — | (350.0 | ) | |||||||||||||
Dividends declared ($0.6750 per share) | — | — | — | (188.7 | ) | — | (188.7 | ) | |||||||||||||||
Balance at December 28, 2013 | 277.6 | $ | 2.8 | $ | 2,577.30 | $ | (125.2 | ) | $ | (24.2 | ) | $ | 2,430.70 | ||||||||||
Balance at June 28, 2014 | 274.4 | $ | 2.7 | $ | 2,646.10 | $ | (219.5 | ) | $ | (8.7 | ) | $ | 2,420.60 | ||||||||||
Net income | — | — | — | 302.6 | — | 302.6 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (61.6 | ) | (61.6 | ) | |||||||||||||||
Shares issued for stock options and employee benefit plans | 1.3 | 0.1 | — | — | — | 0.1 | |||||||||||||||||
Share-based compensation | — | — | 47.1 | — | — | 47.1 | |||||||||||||||||
Excess tax shortfall from share-based compensation | — | — | (4.8 | ) | — | — | (4.8 | ) | |||||||||||||||
Dividends declared ($0.6750 per share) | — | — | — | (186.0 | ) | — | (186.0 | ) | |||||||||||||||
Balance at December 27, 2014 | 275.7 | $ | 2.8 | $ | 2,688.40 | $ | (102.9 | ) | $ | (70.3 | ) | $ | 2,518.00 | ||||||||||
The components of accumulated other comprehensive (loss) income ("AOCI"), as of the dates indicated, are as follows (in millions): | |||||||||||||||||||||||
Unrealized | Unrealized | Cumulative | Other(2) | Total | |||||||||||||||||||
Gains (Losses) | (Losses) | Translation | |||||||||||||||||||||
on Cash | Gains | Adjustment | |||||||||||||||||||||
Flow | on Available- | ||||||||||||||||||||||
Hedges(1) | for-Sale | ||||||||||||||||||||||
Securities | |||||||||||||||||||||||
Balances at June 29, 2013 | $ | 3.7 | $ | (1.3 | ) | $ | (11.6 | ) | $ | (3.0 | ) | $ | (12.2 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 3.3 | (0.7 | ) | (10.7 | ) | — | (8.1 | ) | |||||||||||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 3.9 | — | — | — | 3.9 | ||||||||||||||||||
Net current-period other comprehensive (loss) income | (0.6 | ) | (0.7 | ) | (10.7 | ) | — | (12.0 | ) | ||||||||||||||
Balances at December 28, 2013 | $ | 3.1 | $ | (2.0 | ) | $ | (22.3 | ) | $ | (3.0 | ) | $ | (24.2 | ) | |||||||||
Balances at June 28, 2014 | $ | 0.6 | $ | 1.8 | $ | (9.2 | ) | $ | (1.9 | ) | $ | (8.7 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications | 9.4 | (1.6 | ) | (67.6 | ) | — | (59.8 | ) | |||||||||||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 1.8 | — | — | — | 1.8 | ||||||||||||||||||
Net current-period other comprehensive income (loss) | 7.6 | (1.6 | ) | (67.6 | ) | — | (61.6 | ) | |||||||||||||||
Balances at December 27, 2014 | $ | 8.2 | $ | 0.2 | $ | (76.8 | ) | $ | (1.9 | ) | $ | (70.3 | ) | ||||||||||
(1) | The ending balances of AOCI related to cash flow hedges are net of tax of ($4.6) million and ($3.1) million as of December 27, 2014 and December 28, 2013, respectively. The amounts reclassified from AOCI are net of tax of ($1.0) million and ($2.5) million as of December 27, 2014 and December 28, 2013, respectively. | ||||||||||||||||||||||
-2 | The components of Other include the accumulated loss on the Company's minimum pension liability adjustment and an investment in an auction rate security of ($1.9) million and $0 million, respectively, as of December 27, 2014 and ($2.0) million and ($1.0) million, respectively, as of December 28, 2013. As of December 27, 2014 and December 28, 2013 the balances of AOCI are net of tax of $1.5 million and $2.1 million, respectively. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Earnings Per Share | Earnings per Share | |||||||||||||||
Basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share is calculated similarly but includes potential dilution from the exercise of stock options and restricted stock units ("RSUs") and any other potentially dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method. | ||||||||||||||||
The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted net income per share: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 27, | December 28, | 27-Dec-14 | 28-Dec-13 | |||||||||||||
2014 | 2013 | |||||||||||||||
(millions, except per share data) | ||||||||||||||||
Net income | $ | 183.5 | $ | 297.4 | $ | 302.6 | $ | 515.3 | ||||||||
Total weighted-average basic shares outstanding | 275.6 | 279.1 | 275.3 | 280.2 | ||||||||||||
Effect of dilutive securities | 0.9 | 2.4 | 1.1 | 2.8 | ||||||||||||
Total weighted-average diluted shares | 276.5 | 281.5 | 276.4 | 283 | ||||||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.67 | $ | 1.07 | $ | 1.1 | $ | 1.84 | ||||||||
Diluted | $ | 0.66 | $ | 1.06 | $ | 1.09 | $ | 1.82 | ||||||||
Earnings per share amounts have been calculated based on unrounded numbers. Options to purchase shares of the Company's common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income per common share. In addition, the Company has outstanding RSUs that are issuable only upon the achievement of certain performance goals. Performance-based RSUs ("PRSUs") are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any applicable market condition modifiers) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. As of December 27, 2014 and December 28, 2013, there were approximately 12.1 million and 4.1 million, respectively, of additional shares issuable upon exercise of anti-dilutive options and contingent vesting of PRSUs, which were excluded from the diluted share calculations |
Sharebased_Compensation
Share-based Compensation | 6 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Share-based Compensation | Share-based Compensation | |||||||||||||||
The following table shows the total compensation cost and the related tax benefits recognized for share-based compensation plans in the condensed consolidated statements of income for the periods indicated: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 27, 2014(1) | December 28, | December 27, 2014(1) | December 28, 2013(2) | |||||||||||||
2013 | ||||||||||||||||
(millions) | ||||||||||||||||
Share-based compensation expense | $ | 22.5 | $ | 25.5 | $ | 47.1 | $ | 52.8 | ||||||||
Income tax benefit related to share-based compensation expense | 7 | 7.9 | 14.3 | 16.4 | ||||||||||||
(1) | During the three and six months ended December 27, 2014, the Company incurred approximately $0.1 million and $2.8 million of share-based compensation expense, respectively, that are related to organizational efficiency costs under the Company's Transformation Plan as a result of the accelerated vesting of certain awards. See Note 4 herein, for more information. Approximately $1.1 million of income tax benefit is associated with the share-based compensation expense for the six months ended December 27, 2014. | |||||||||||||||
(2) | Approximately $9.8 million of share-based compensation expense (and approximately $3.8 million of income tax benefit) are related to the sale of the Reed Krakoff business and restructuring and transformation recognized by the Company in the first quarter of fiscal 2014. | |||||||||||||||
Stock Options | ||||||||||||||||
A summary of stock option activity under the Coach stock option plans during the six months ended December 27, 2014 is as follows: | ||||||||||||||||
Number of | Weighted-Average | |||||||||||||||
Options | Exercise Price per Option | |||||||||||||||
Outstanding | ||||||||||||||||
(millions) | ||||||||||||||||
Outstanding at June 28, 2014 | 11.7 | $ | 44.21 | |||||||||||||
Granted | 4 | 36.23 | ||||||||||||||
Exercised | (0.5 | ) | 21.7 | |||||||||||||
Forfeited or expired | (0.5 | ) | 50.18 | |||||||||||||
Outstanding at December 27, 2014 | 14.7 | 42.57 | ||||||||||||||
Vested and expected to vest at December 27, 2014 | 13.9 | 42.45 | ||||||||||||||
Exercisable at December 27, 2014 | 8.6 | 42.94 | ||||||||||||||
At December 27, 2014, $35.1 million of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.1 years. | ||||||||||||||||
The weighted-average grant-date fair value of individual options granted during the first six months of fiscal 2015 and fiscal 2014 was $6.40 and $10.02, respectively. The total intrinsic value of options exercised during the first six months of fiscal 2015 and fiscal 2014 was $7.0 million and $22.3 million, respectively. | ||||||||||||||||
The total cash received from these option exercises was $10.8 million for the first six months of fiscal 2015 and $36.8 million for the first six months of fiscal 2014. The actual tax benefit realized from these option exercises was $2.7 million and $8.3 million, respectively. | ||||||||||||||||
Service-based Restricted Stock Unit Awards | ||||||||||||||||
A summary of RSU activity during the six months ended December 27, 2014 is as follows: | ||||||||||||||||
Number of | Weighted- | |||||||||||||||
Non-vested | Average Grant- | |||||||||||||||
RSUs | Date Fair Value | |||||||||||||||
per RSU | ||||||||||||||||
(millions) | ||||||||||||||||
Non-vested at June 28, 2014 | 3.2 | $ | 54.68 | |||||||||||||
Granted | 1.7 | 36.21 | ||||||||||||||
Vested | (1.1 | ) | 56.67 | |||||||||||||
Forfeited | (0.3 | ) | 50.16 | |||||||||||||
Non-vested at December 27, 2014 | 3.5 | 45.29 | ||||||||||||||
At December 27, 2014, $100.1 million of total unrecognized compensation cost related to non-vested RSU awards is expected to be recognized over a weighted-average period of 1.1 years. | ||||||||||||||||
The weighted-average grant-date fair value per share of RSU awards granted during the first six months of fiscal 2015 and fiscal 2014 was $36.21 and $53.44, respectively. The total fair value of RSUs vested during the first six months of fiscal 2015 and fiscal 2014 was $39.9 million and $72.5 million, respectively. | ||||||||||||||||
Performance-based Restricted Stock Unit Awards | ||||||||||||||||
A summary of PRSU activity, during the six months ended December 27, 2014 is as follows: | ||||||||||||||||
Number of | Weighted- | |||||||||||||||
Non-vested | Average Grant- | |||||||||||||||
PRSUs | Date Fair Value | |||||||||||||||
per PRSU | ||||||||||||||||
(millions) | ||||||||||||||||
Non-vested at June 28, 2014 | 0.9 | $ | 44.6 | |||||||||||||
Granted | 0.4 | 36.25 | ||||||||||||||
Change due to performance condition achievement | (0.1 | ) | 54.67 | |||||||||||||
Vested(1) | — | 58.34 | ||||||||||||||
Forfeited(1) | — | 48.5 | ||||||||||||||
Non-vested at December 27, 2014 | 1.2 | 41.36 | ||||||||||||||
-1 | During the first six months of fiscal 2015, less than 0.1 million PRSU's vested or forfeited, individually and in the aggregate. | |||||||||||||||
At December 27, 2014, $22.3 million of total unrecognized compensation cost related to non-vested PRSU awards is expected to be recognized over a weighted-average period of 1.3 years. | ||||||||||||||||
Included in the non-vested amount at December 27, 2014 are approximately 0.7 million PRSU awards that are based on performance criteria which compares the Company's total stockholder return over the performance period to the total stockholder return of the companies included in the Standard and Poor's 500 Index. There were no awards granted during the first six months of fiscal 2015 with this performance criteria. | ||||||||||||||||
The weighted-average grant-date fair value per share of PRSU awards granted during the first six months of fiscal 2015 and fiscal 2014 was $36.25 and $31.84, respectively. The total fair value of shares vested during the first six months of fiscal 2015 and fiscal 2014 was $0.7 million and $23.1 million, respectively. | ||||||||||||||||
In the first six months of fiscal 2015 and 2014, the cash tax benefit realized for the tax deductions from all service and performance-based RSUs were $18.0 million and $31.6 million, respectively. |
Debt
Debt | 6 Months Ended |
Dec. 27, 2014 | |
Long-term Debt, Unclassified [Abstract] | |
Debt | Debt |
The Company has a $700.0 million revolving credit facility with certain lenders and JP Morgan Chase Bank, N.A. as the administrative agent (the "JP Morgan facility"). During the first quarter of fiscal 2015, the Company amended the JP Morgan facility, extending the maturity date to September 9, 2019. The JP Morgan facility is available to be used for general corporate purposes of the Company and its subsidiaries. At Coach’s request and lenders’ consent, revolving commitments of the JP Morgan facility may be increased to $1.0 billion. As of December 27, 2014 and June 28, 2014, there was $20.0 million and $140.0 million outstanding on the JP Morgan facility. Due to the short-term nature of this borrowing, the fair value approximates carrying value. | |
Borrowings under the JP Morgan Facility bear interest at a rate per annum equal to, at Coach’s option, either (a) a rate based on the rates applicable for deposits in the interbank market for U.S. dollars or the applicable currency in which the loans are made plus an applicable margin or (b) an alternate base rate (which is a rate equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1% or (iii) the Adjusted LIBO Rate for a one month Interest Period on such day plus 1%). Additionally, Coach pays a commitment fee on the average daily unused amount of the JP Morgan Facility. At December 27, 2014, the commitment fee was 9 basis points. | |
Coach Japan, a wholly owned subsidiary of the Company, maintains credit facilities with several Japanese financial institutions to provide funding for working capital and general corporate purposes, allowing a total maximum borrowing capacity of 5.3 billion yen, or approximately $44 million, as of December 27, 2014. Interest is based on the Tokyo Interbank rate plus a margin of 25 to 30 basis points. During fiscal 2014 and through the second quarter of fiscal 2015, there were no borrowings under these facilities. | |
Coach Shanghai Limited, a wholly owned subsidiary of the Company, maintains a credit facility to provide funding for working capital and general corporate purposes, allowing a total maximum borrowing capacity of 63.0 million Chinese renminbi, or approximately $10 million, as of December 27, 2014. Interest is based on the People's Bank of China rate. During fiscal 2014 and through the second quarter of fiscal 2015, there were no borrowings under this facility. | |
Both the Coach Japan and Coach Shanghai Limited credit facilities can be terminated at any time by the respective financial institutions, and there is no guarantee that they will be available to the Company in future periods. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||||||||||
The Company categorizes its assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. The three levels of the hierarchy are defined as follows: | ||||||||||||||||||||||||
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||||||||||
Level 2 — Observable inputs other than quoted prices included in Level 1. Level 2 inputs include quoted prices for identical assets or liabilities in non-active markets, quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for substantially the full term of the asset or liability. | ||||||||||||||||||||||||
Level 3 — Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or liability. | ||||||||||||||||||||||||
The following table shows the fair value measurements of the Company’s assets and liabilities at December 27, 2014 and June 28, 2014 (in millions): | ||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
December 27, | June 28, | December 27, | June 28, | December 27, | June 28, | |||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash equivalents(1) | $ | 64 | $ | 1.2 | $ | 95.2 | $ | 45.1 | $ | — | $ | — | ||||||||||||
Short-term investments: | ||||||||||||||||||||||||
Time deposits(2) | — | — | — | 75.1 | — | — | ||||||||||||||||||
Government securities - U.S.(2) | 27.6 | 42 | — | — | — | — | ||||||||||||||||||
Corporate debt securities - U.S.(2) | — | — | 78.1 | 25.4 | — | — | ||||||||||||||||||
Corporate debt securities - non U.S.(2) | — | — | 54.8 | 34.6 | — | — | ||||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||
Asset backed securities(3) | — | — | 0.5 | 1.1 | — | — | ||||||||||||||||||
Government securities - U.S.(3) | 40.5 | 55.3 | — | — | — | — | ||||||||||||||||||
Corporate debt securities - U.S.(3) | — | — | 97.1 | 144.9 | — | — | ||||||||||||||||||
Corporate debt securities - non U.S.(3) | — | — | 77.3 | 98.8 | — | — | ||||||||||||||||||
Derivative Assets: | ||||||||||||||||||||||||
Zero-cost collar options(4) | — | — | 10.5 | 0.4 | — | — | ||||||||||||||||||
Forward contracts and cross currency swaps(4) | — | — | 0.3 | 0.1 | — | — | ||||||||||||||||||
Total | $ | 132.1 | $ | 98.5 | $ | 413.8 | $ | 425.5 | $ | — | $ | — | ||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||
Zero-cost collar options(4) | $ | — | $ | — | $ | — | $ | 0.6 | $ | — | $ | — | ||||||||||||
Forward contracts and cross currency swaps(4) | — | — | — | 0.3 | — | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | 0.9 | $ | — | $ | — | ||||||||||||
(1) | Cash equivalents consist of money market funds and time deposits with maturities of three months or less at the date of purchase. Due to their short term maturity, management believes that their carrying value approximates fair value. | |||||||||||||||||||||||
(2) | Short-term available-for-sale investments are recorded at fair value, which approximates their carrying value, and are primarily based upon quoted vendor or broker priced securities in active markets. Short-term held to maturity investments are recorded at amortized cost, which approximates fair value. | |||||||||||||||||||||||
(3) | Fair value is primarily determined using vendor or broker priced securities in active markets. These securities have maturity dates between calendar years 2015 and 2017. | |||||||||||||||||||||||
(4) | The fair value of these hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk. | |||||||||||||||||||||||
Non-Financial Assets and Liabilities | ||||||||||||||||||||||||
The Company’s non-financial instruments, which primarily consist of goodwill and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions. | ||||||||||||||||||||||||
Adverse changes in future market conditions or weaker operating results compared to our expectations could result in losses or a potential impairment charge if the Company is unable to recover the carrying value of certain assets. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 6 Months Ended | ||||||||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities | ||||||||||||||||||||||||||||
Substantially all of the Company’s transactions involving international parties, excluding international consumer sales, are denominated in U.S. dollars, which limits the Company’s exposure to the transactional effects of foreign currency exchange rate fluctuations. However, the Company is exposed to foreign currency exchange risk related to its foreign operating subsidiaries’ U.S. dollar-denominated inventory purchases and various cross-currency intercompany and related party loans. Coach uses derivative financial instruments to manage these risks. These derivative transactions are in accordance with the Company’s risk management policies. Coach does not enter into derivative transactions for speculative or trading purposes. | |||||||||||||||||||||||||||||
The Company records all derivative contracts at fair value on the condensed consolidated balance sheet. The fair values of foreign currency derivatives are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the Company’s credit risk. Judgment is required of management in developing estimates of fair value. The use of different market assumptions or methodologies could affect the estimated fair value. | |||||||||||||||||||||||||||||
For derivative instruments that qualify for hedge accounting, the effective portion of changes in the fair value of these instruments is either (i) offset against the changes in fair value of the hedged assets or liabilities through earnings or (ii) recognized as a component of AOCI until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows, respectively. | |||||||||||||||||||||||||||||
Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative that is designated as a hedge, the Company documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, as well as how hedge effectiveness will be assessed over the term of the instrument. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis. | |||||||||||||||||||||||||||||
To the extent that a derivative designated as a cash flow hedge is not considered to be effective, any change in its fair value related to such ineffectiveness is immediately recognized in earnings as a foreign currency gain (loss). If it is determined that a derivative instrument has not been highly effective, and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are recognized in earnings as a foreign currency gain (loss). Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative previously recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the original hedging strategy, unless the forecasted transaction is no longer probable of occurring, in which case the accumulated amount is immediately recognized in earnings as a foreign currency gain (loss). | |||||||||||||||||||||||||||||
As a result of the use of derivative instruments, the Company may be exposed to the risk that the counterparties to such contacts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings, among other factors. | |||||||||||||||||||||||||||||
The fair values of the Company’s derivative instruments are recorded on its condensed consolidated balance sheets on a gross basis. For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item being hedged, primarily within cash from operating activities. | |||||||||||||||||||||||||||||
Hedging Portfolio | |||||||||||||||||||||||||||||
The Company enters into derivative contracts primarily to reduce its risks related to exchange rate fluctuations on U.S. dollar-denominated inventory purchases and various cross-currency intercompany loans. To the extent its derivative contracts designated as cash flow hedges are highly effective in offsetting changes in the value of the hedged items, the related gains (losses) are initially deferred in AOCI and subsequently recognized in the condensed consolidated statements of income as follows: | |||||||||||||||||||||||||||||
• | Zero-cost collars - These derivatives are primarily executed by two of the Company’s businesses outside of the United States (Coach Japan and Coach Canada), and are recognized as part of the cost of the inventory purchases being hedged within cost of sales, when the related inventory is sold to a third party. Current maturity dates range from January 2015 to December 2015. | ||||||||||||||||||||||||||||
• | Cross currency swaps - These derivatives relate to intercompany loans, and are recognized as a foreign currency gain (loss) generally in the period in which the related payments being hedged are revalued or settled. | ||||||||||||||||||||||||||||
Forward foreign currency exchange contracts, designated as fair value hedges and associated with intercompany and other contractual obligations, are recognized within foreign currency gains (losses) generally in the period in which the related payments being hedged are revalued. Current maturity dates are in January 2015. | |||||||||||||||||||||||||||||
The following tables provide information related to the Company’s derivatives as of December 27, 2014 and June 28, 2014: | |||||||||||||||||||||||||||||
Notional Value | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||
Designated Derivative Hedging Instruments(1) | December 27, | June 28, | Balance Sheet Classification | December 27, | June 28, | Balance Sheet Classification | December 27, | June 28, | |||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
C - Inventory purchases | $ | 110.5 | $ | 90.2 | Other Current Assets | $ | 10.5 | $ | 0.4 | Accrued Liabilities | $ | — | $ | (0.6 | ) | ||||||||||||||
CCS - Intercompany loans | — | 4.8 | Other Current Assets | — | 0.1 | — | — | — | |||||||||||||||||||||
FC - Intercompany Loans | 23.5 | 8.4 | Other Current Assets | 0.3 | — | — | — | — | |||||||||||||||||||||
FC - Contractual Obligations(2) | — | 4 | — | — | — | Accrued Liabilities | — | (0.3 | ) | ||||||||||||||||||||
Total Hedges | $ | 134 | $ | 107.4 | $ | 10.8 | $ | 0.5 | $ | — | $ | (0.9 | ) | ||||||||||||||||
(1) | C =ero-cost Collars; CCS =ross Currency Swaps; FC =orward foreign currency exchange contracts | ||||||||||||||||||||||||||||
(2) | Contractual obligations at the end of fiscal 2014 consisted of a $4.0 million payment due to Shinsegae International, related to the acquisition of the domestic retail business in South Korea. | ||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives | |||||||||||||||||||||||||||||
(Effective Portion) | |||||||||||||||||||||||||||||
Three Months Ended(1) | Six Months Ended(2) | ||||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
December 27, | December 28, | December 27, | December 28, | ||||||||||||||||||||||||||
Designated Cash Flow Hedges: | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
C - Inventory purchases | $ | 4.9 | $ | 6.7 | $ | 9.4 | $ | 5.3 | |||||||||||||||||||||
CCS - Intercompany loans | — | (1.5 | ) | — | (2.0 | ) | |||||||||||||||||||||||
Total | $ | 4.9 | $ | 5.2 | $ | 9.4 | $ | 3.3 | |||||||||||||||||||||
(1) | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($2.7) million and ($4.1) million, respectively. | ||||||||||||||||||||||||||||
(2) | For the six months ended December 27, 2014 and December 28, 2013, the amounts above are net of tax of ($5.2) million and ($3.2) million, respectively. | ||||||||||||||||||||||||||||
Amount of Net Gain Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||||||||
(Effective Portion) | |||||||||||||||||||||||||||||
Three Months Ended(1) | Six Months Ended(2) | ||||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
December 27, | December 28, | December 27, | December 28, | Income Statement | |||||||||||||||||||||||||
Designated Cash Flow Hedges: | 2014 | 2013 | 2014 | 2013 | Classification | ||||||||||||||||||||||||
C - Inventory Purchases | $ | 1 | $ | 0.6 | $ | 1.8 | $ | 3.9 | Cost of sales | ||||||||||||||||||||
(1) | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($0.6) million and ($0.5) million, respectively. | ||||||||||||||||||||||||||||
(2) | For the six months ended December 27, 2014 and December 28, 2013, the amounts above are net of tax of ($1.0) million and ($2.5) million, respectively. | ||||||||||||||||||||||||||||
During the six months ended December 27, 2014 and December 28, 2013, there were no material gains or losses recognized in income due to hedge ineffectiveness. | |||||||||||||||||||||||||||||
For forward foreign currency exchange contracts that are designated as fair value hedges, the gain (loss) on the derivative as well as the offsetting gain (loss) on the hedged item attributable to the hedged risk, both of which are recorded within SG&A expenses, resulted in an immaterial net impact to the Company's statement of operations. | |||||||||||||||||||||||||||||
The Company expects $8.2 million of net derivative gains included in accumulated other comprehensive income at December 27, 2014 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in foreign currency exchange rates. |
Investments
Investments | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||
Investments | Investments | |||||||||||||||||||||||
The following table summarizes the Company’s investments, all of which are denominated in U.S. dollars, recorded within the condensed consolidated balance sheets as of December 27, 2014 and June 28, 2014: | ||||||||||||||||||||||||
27-Dec-14 | 28-Jun-14 | |||||||||||||||||||||||
Short-term | Long-term | Total | Short-term | Long-term | Total | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Available-for-sale investments: | ||||||||||||||||||||||||
Government securities - U.S.(1) | $ | 27.6 | $ | 40.5 | $ | 68.1 | $ | 42 | $ | 55.3 | $ | 97.3 | ||||||||||||
Corporate debt securities - U.S.(1) | 78.1 | 97.1 | 175.2 | 25.4 | 144.9 | 170.3 | ||||||||||||||||||
Corporate debt securities - non-U.S.(1) | 54.8 | 77.3 | 132.1 | 34.6 | 98.8 | 133.4 | ||||||||||||||||||
Asset backed securities(2) | — | 0.5 | 0.5 | — | 1.1 | 1.1 | ||||||||||||||||||
Available-for-sale investments, total | $ | 160.5 | $ | 215.4 | $ | 375.9 | $ | 102 | $ | 300.1 | $ | 402.1 | ||||||||||||
Held to maturity: | ||||||||||||||||||||||||
Government securities - U.S.(3) | $ | 15.9 | $ | — | $ | 15.9 | $ | 18.2 | $ | — | $ | 18.2 | ||||||||||||
Corporate debt securities - U.S.(3) | 24.3 | — | 24.3 | 33.5 | — | 33.5 | ||||||||||||||||||
Corporate debt securities - non-U.S.(3) | 24.2 | — | 24.2 | 24.4 | — | 24.4 | ||||||||||||||||||
Commercial paper(3) | 3.7 | — | 3.7 | 23.5 | — | 23.5 | ||||||||||||||||||
Other: | ||||||||||||||||||||||||
Time deposits(4) | — | — | — | 75.1 | — | 75.1 | ||||||||||||||||||
Other(5) | — | 249.2 | 249.2 | — | 184.4 | 184.4 | ||||||||||||||||||
Total Investments | $ | 228.6 | $ | 464.6 | $ | 693.2 | $ | 276.7 | $ | 484.5 | $ | 761.2 | ||||||||||||
(1) | These securities have maturity dates between calendar years 2015 and 2017 and are recorded at fair value. | |||||||||||||||||||||||
(2) | The security matures during calendar year 2016. | |||||||||||||||||||||||
(3) | These securities have maturity dates of less than one year and are recorded at amortized cost which approximates fair value. | |||||||||||||||||||||||
(4) | These time deposits have original maturities greater than 3 months and are recorded at fair value. | |||||||||||||||||||||||
(5) | Primarily relates to the equity method investment related to an equity interest in an entity formed during fiscal 2013 for the purpose of developing a new office tower in Manhattan (the "Hudson Yards joint venture"), with the Company owning less than 43% of the joint venture, and the Reed Krakoff cost method investment. As of December 27, 2014, the Company has recorded $245.9 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. As of June 28, 2014, the Company has recorded $181.1 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. The Hudson Yards joint venture is determined to be a VIE primarily due to the fact that it has insufficient equity to finance its activities without additional subordinated financial support from its two joint venture partners. Coach is not considered the primary beneficiary of the entity primarily because the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. The Company’s maximum loss exposure is limited to the committed capital. Refer to Note 14, "Commitments and Contingencies" for further information. | |||||||||||||||||||||||
The amortized cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities are presented below as of December 27, 2014 and June 28, 2014: | ||||||||||||||||||||||||
December 27, 2014 | ||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Government securities - U.S. | $ | 68 | $ | 0.1 | $ | — | $ | 68.1 | ||||||||||||||||
Corporate debt securities - U.S. | 175 | 0.4 | (0.2 | ) | 175.2 | |||||||||||||||||||
Corporate debt securities - non-U.S. | 132.2 | 0.1 | (0.2 | ) | 132.1 | |||||||||||||||||||
Asset backed securities | 0.5 | — | — | 0.5 | ||||||||||||||||||||
Total | $ | 375.7 | $ | 0.6 | $ | (0.4 | ) | $ | 375.9 | |||||||||||||||
June 28, 2014 | ||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Government securities - U.S. | $ | 97.2 | $ | 0.1 | $ | — | $ | 97.3 | ||||||||||||||||
Corporate debt securities - U.S. | 169.3 | 1 | — | 170.3 | ||||||||||||||||||||
Corporate debt securities - non-U.S. | 132.7 | 0.7 | — | 133.4 | ||||||||||||||||||||
Asset backed securities | 1.1 | — | — | 1.1 | ||||||||||||||||||||
Total | $ | 400.3 | $ | 1.8 | $ | — | $ | 402.1 | ||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 27, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
In April 2013, the Company entered into a joint venture agreement with Related Companies, L.P. to develop a new office tower in Manhattan in the Hudson Yards district. The formation of the Hudson Yards joint venture serves as a financing vehicle for the construction project. Construction of the new building has commenced, and upon expected completion of the office tower, the Company will retain a condominium interest serving as its new corporate headquarters. | |
During the three and six months ended December 27, 2014, the Company invested $35.9 million and $64.8 million in the joint venture, respectively. Since the formation of the Hudson Yards joint venture, the Company has invested $245.9 million in the joint venture. | |
The Company expects to further invest approximately $284 million into the joint venture, with approximately $91 million estimated to be invested during the remainder of fiscal 2015, depending on construction progress. Substantially all of the investment will be made by the end of fiscal 2016. In addition to its investment in the joint venture, Coach is directly investing in a portion of the design and build-out of the new corporate headquarters. During the first six months of fiscal 2015, $1.2 million was included in capital expenditures and the Company expects to incur approximately $187 million of capital expenditures over the remaining period of construction. | |
Subsequent to the end of the second quarter of Fiscal 2015, on January 5, 2015, the Company entered into a Purchase Agreement with Stuart Weitzman Topco LLC and Stuart Weitzman Intermediate LLC, a wholly owned subsidiary of Topco. Refer to Note 17 herein for further information. | |
In the ordinary course of business, Coach is a party to several pending legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, Coach’s General Counsel and management are of the opinion that the final outcome will not have a material effect on Coach’s financial position, results of operations or cash flows. |
Segment_Information
Segment Information | 6 Months Ended | |||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Segment Information | Segment Information | |||||||||||||||||||
The Company operates its business in five operating segments aggregated into two reportable segments: | ||||||||||||||||||||
• | North America, which includes sales to North American consumers through Company-operated stores, including the Internet, and sales to wholesale customers. | |||||||||||||||||||
• | International, which includes sales to consumers through Coach-operated stores (including the Internet) and concession shop-in-shops in Japan and mainland China, Coach-operated stores and concession shop-in-shops in Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany and Italy, as well as sales to wholesale customers and distributors in approximately 40 countries. | |||||||||||||||||||
Transformation-related charges incurred by the Company as described in Note 4, herein, are included as corporate unallocated expenses. The following table summarizes segment performance for the three and six months ended December 27, 2014 and December 28, 2013 (in millions): | ||||||||||||||||||||
North | International | Other(1) | Corporate | Total | ||||||||||||||||
America | Unallocated | |||||||||||||||||||
Three Months Ended December 27, 2014 | ||||||||||||||||||||
Net sales | $ | 784.6 | $ | 420.5 | $ | 14.3 | $ | — | $ | 1,219.40 | ||||||||||
Gross profit | 502.1 | 322.4 | 9.7 | 5.8 | 840 | |||||||||||||||
Operating income (loss) | 296.3 | 128.4 | 7 | (156.3 | ) | 275.4 | ||||||||||||||
Income (loss) before provision for income taxes | 296.3 | 128.4 | 7 | (155.9 | ) | 275.8 | ||||||||||||||
Depreciation and amortization expense(2) | 16.5 | 16 | — | 22.9 | 55.4 | |||||||||||||||
Additions to long-lived assets | 18.9 | 13 | — | 7.3 | 39.2 | |||||||||||||||
Three Months Ended December 28, 2013 | ||||||||||||||||||||
Net sales | $ | 983 | $ | 424.6 | $ | 12 | $ | — | $ | 1,419.60 | ||||||||||
Gross profit | 627.6 | 330.9 | 9.8 | 14.4 | 982.7 | |||||||||||||||
Operating income (loss) | 404.5 | 141.1 | 8.5 | (118.1 | ) | 436 | ||||||||||||||
Income (loss) before provision for income taxes | 404.5 | 141.1 | 8.5 | (116.2 | ) | 437.9 | ||||||||||||||
Depreciation and amortization expense | 19.3 | 13.7 | — | 14.9 | 47.9 | |||||||||||||||
Additions to long-lived assets | 25.6 | 23.8 | — | 11.4 | 60.8 | |||||||||||||||
Six Months Ended December 27, 2014 | ||||||||||||||||||||
Net sales | $ | 1,418.30 | $ | 801.5 | $ | 38.4 | $ | — | $ | 2,258.20 | ||||||||||
Gross profit | 910.1 | 617.8 | 21.1 | 6.4 | 1,555.40 | |||||||||||||||
Operating income (loss) | 517.8 | 246.4 | 16.3 | (325.3 | ) | 455.2 | ||||||||||||||
Income (loss) before provision for income taxes | 517.8 | 246.4 | 16.3 | (324.2 | ) | 456.3 | ||||||||||||||
Depreciation and amortization expense(2) | 29.5 | 31.7 | — | 50.7 | 111.9 | |||||||||||||||
Additions to long-lived assets | 38.9 | 26.9 | — | 13.8 | 79.6 | |||||||||||||||
Six Months Ended December 28, 2013 | ||||||||||||||||||||
Net sales | $ | 1,761.30 | $ | 789.6 | $ | 19.5 | $ | — | $ | 2,570.40 | ||||||||||
Gross profit | 1,138.00 | 623.5 | 16.3 | 31.5 | 1,809.30 | |||||||||||||||
Operating income (loss) | 704.1 | 271.2 | 14.1 | (231.8 | ) | 757.6 | ||||||||||||||
Income (loss) before provision for income taxes | 704.1 | 271.2 | 14.1 | (228.2 | ) | 761.2 | ||||||||||||||
Depreciation and amortization expense | 37.3 | 26.8 | — | 28.8 | 92.9 | |||||||||||||||
Additions to long-lived assets | 51.9 | 37.8 | — | 17 | 106.7 | |||||||||||||||
-1 | Other, which is not a reportable segment, consists of sales generated in ancillary channels including licensing and disposition. | |||||||||||||||||||
(2) | Depreciation and amortization expense includes $8.6 million and $21.8 million of transformation-related charges, for the three and six months ended December 27, 2014, respectively. These charges are recorded as corporate unallocated expenses. | |||||||||||||||||||
The following is a summary of all costs not allocated in the determination of segment operating income performance: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
27-Dec-14 | 28-Dec-13 | December 27, | December 28, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(millions) | ||||||||||||||||||||
Inventory-related costs(1) | $ | 5.8 | $ | 14.4 | $ | 6.4 | $ | 31.5 | ||||||||||||
Advertising, marketing and design(2) | (63.5 | ) | (64.5 | ) | (117.4 | ) | (117.9 | ) | ||||||||||||
Administration and information systems(2)(3) | (80.5 | ) | (43.7 | ) | (179.3 | ) | (100.5 | ) | ||||||||||||
Distribution and customer service(2) | (18.1 | ) | (24.3 | ) | (35.0 | ) | (44.9 | ) | ||||||||||||
Total corporate unallocated costs | $ | (156.3 | ) | $ | (118.1 | ) | $ | (325.3 | ) | $ | (231.8 | ) | ||||||||
(1) | Inventory-related costs consist of production variances and transformation-related costs, and are recorded within cost of sales. During the three months ended December 27, 2014 production variances were $6.8 million and transformation-related costs were ($1.0) million. During the six months ended December 27, 2014 production variances were $11.4 million and transformation-related costs were ($5.0) million. There were no transformation and/or other-related charges during the three and six months ended December 28, 2013. | |||||||||||||||||||
(2) | Costs recorded within SG&A expenses. | |||||||||||||||||||
(3) | During the three and six months ended December 27, 2014 transformation-related costs recorded within SG&A expenses were ($19.1) million and ($52.2) million, respectively. The Company also recorded approximately ($3.5) million in acquisition-related expenses for the three month ended December 27, 2014. There was no transformation and/or other-related charges during the three and six months ended December 28, 2013. |
Stock_Repurchase_Program
Stock Repurchase Program | 6 Months Ended |
Dec. 27, 2014 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program |
Purchases of Coach’s common stock are made from time to time, subject to market conditions and at prevailing market prices, through open market purchases. Under Maryland law, Coach’s state of incorporation, treasury shares are not allowed. As a result, all repurchased shares are retired when acquired. The Company may terminate or limit the stock repurchase program at any time. | |
During the first six months of fiscal 2015, the Company did not repurchase any shares. During the second quarter of fiscal 2014, the Company repurchased and retired 3.3 million shares, or $175.0 million at an average cost of $52.99 per share. For the six months ended December 28, 2013, the Company repurchased and retired 6.6 million shares, or $350.0 million at an average cost of $53.08. | |
As of December 27, 2014, Coach had $836.7 million remaining in the stock repurchase program. |
Subsequent_Event
Subsequent Event | 6 Months Ended |
Dec. 27, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event |
Subsequent to the end of the second quarter of fiscal 2015, on January 5, 2015, the Company entered into a Purchase Agreement with Stuart Weitzman Topco LLC and Stuart Weitzman Intermediate LLC, a wholly owned subsidiary of Topco. Under the terms of the Purchase Agreement, Coach has agreed to purchase all of the equity interests of Stuart Weitzman Intermediate LLC, a luxury footwear company and the parent of Stuart Weitzman Holdings, LLC, from Topco for approximately $530 million in cash, subject to customary purchase price adjustments, as well as a potential earnout of up to $14.7 million annually in cash over the next three calendar years based on the achievement of certain revenue targets. The Purchase Agreement also contains a catch-up provision that provides that if the revenue targets are missed in any one year but are surpassed in succeeding years then amounts for past years become due upon surpassing targets in succeeding years. The total amount payable under the earn-out will not exceed $44 million. | |
The Purchase Agreement includes customary representations and warranties and covenants relating to the operations of business prior to the closing of the transaction. The closing is currently expected to occur in the fourth quarter of fiscal 2015, and is subject to the satisfaction of customary closing conditions. The Purchase Agreement is subject to termination under certain circumstances, including that both parties will have the right to terminate the Purchase Agreement if the closing has not occurred by May 25, 2015 or upon a material breach by the other party of the Purchase Agreement that is not cured within twenty days' notice to the other party. | |
During the second quarter of fiscal 2015, the Company has incurred approximately $3.5 million in acquisition-related costs, recorded within SG&A expenses. |
Basis_of_Presentation_and_Orga1
Basis of Presentation and Organization Basis of Presentation and Organization (Policies) | 6 Months Ended |
Dec. 27, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Basis of Consolidation |
These unaudited interim condensed consolidated financial statements present the consolidated financial position, income, comprehensive income and cash flows of the Company, including all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Fiscal Period | Fiscal Periods |
The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2015 will be a 52-week period. Fiscal 2014 ended on June 28, 2014 and was also a 52-week period ("fiscal 2014"). The second quarter of fiscal 2015 ended on December 27, 2014 and was a 13-week period. The second quarter of fiscal 2014 ended on December 28, 2013 and was also a 13-week period. | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates. | |
Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for customer returns and markdowns; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; the valuation of stock-based compensation awards and related estimated forfeiture rates; and reserves for restructuring, among others. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," which provides a single, comprehensive revenue recognition model for all contracts with customers, and contains principles to determine the measurement of revenue and timing of when it is recognized. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2018. The Company is currently evaluating this guidance, but does not expect its adoption to have a material effect on its consolidated financial statements. |
Transformation_and_Other_Actio1
Transformation and Other Actions (Tables) | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
Summary of Charges and Related Liabilities Under the Company's Transformation Plan | A summary of charges and related liabilities under the Company's Transformation Plan are as follows (in millions): | |||||||||||||||||||||||
Inventory-Related Charges(1) | Impairment(2) | Store-Related Costs(3) | Organizational Efficiency Costs(4) | Other(5) | Total | |||||||||||||||||||
Balance at June 29, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Fiscal 2014 charges | 82.2 | 35.5 | 12.2 | 1 | 0.6 | 131.5 | ||||||||||||||||||
Cash payments | — | — | — | — | — | — | ||||||||||||||||||
Non-cash adjustments | (66.8 | ) | (35.5 | ) | (6.7 | ) | — | — | (109.0 | ) | ||||||||||||||
Balance at June 28, 2014 | $ | 15.4 | $ | — | $ | 5.5 | $ | 1 | $ | 0.6 | $ | 22.5 | ||||||||||||
Fiscal 2015 charges | 3 | — | 26.3 | 23.9 | 4 | 57.2 | ||||||||||||||||||
Cash payments | (15.0 | ) | — | (1.5 | ) | (13.0 | ) | (4.1 | ) | (33.6 | ) | |||||||||||||
Non-cash adjustments | (3.0 | ) | — | (21.8 | ) | (2.8 | ) | (0.1 | ) | (27.7 | ) | |||||||||||||
Balance at December 27, 2014 | $ | 0.4 | $ | — | $ | 8.5 | $ | 9.1 | $ | 0.4 | $ | 18.4 | ||||||||||||
(1) | Inventory-related charges, recorded within cost of sales, primarily relate to reserves for the donation and destruction of certain on-hand inventory and future non-cancelable inventory purchase commitments. | |||||||||||||||||||||||
(2) | Impairment charges, recorded within SG&A expenses, were based on discounted expected cash flows within certain impacted retail stores, and resulted in the reduction of the net carrying value of store-related long-lived assets to their estimated fair value. | |||||||||||||||||||||||
(3) | Store-related costs, recorded within SG&A expenses, relate to store closure costs which include accelerated depreciation charges associated with store assets that the Company will no longer benefit from as a result of the Transformation Plan, as well as lease termination and store employee severance costs. | |||||||||||||||||||||||
(4) | Organizational efficiency charges, recorded within SG&A expenses, primarily relate to the severance and related costs of corporate employees. | |||||||||||||||||||||||
(5) | Other charges comprise of consulting costs and the write-down of certain assets that will not be placed into service by the Company, which are recorded within SG&A expenses and certain freight and handling costs incurred related to the destruction of inventory which are recorded within cost of sales. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 6 Months Ended | |||
Dec. 27, 2014 | ||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Change in Carrying Value of Goodwill | The change in the carrying amount of the Company’s goodwill, all of which is included within the International reportable segment, is as follows (in millions): | |||
Total | ||||
Balance at June 28, 2014 | $ | 361.4 | ||
Foreign exchange impact | (45.9 | ) | ||
Balance at December 27, 2014 | $ | 315.5 | ||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 6 Months Ended | ||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||
Schedule of Stockholders Equity | A reconciliation of stockholders' equity is presented below (in millions, except per share data): | ||||||||||||||||||||||
Shares of | Common Stock | Additional | Accumulated | Accumulated | Total | ||||||||||||||||||
Common | Paid-in- | Deficit | Other | Stockholders' | |||||||||||||||||||
Stock | Capital | Comprehensive | Equity | ||||||||||||||||||||
Loss | |||||||||||||||||||||||
Balance at June 29, 2013 | 281.9 | $ | 2.8 | $ | 2,520.50 | $ | (101.9 | ) | $ | (12.2 | ) | $ | 2,409.20 | ||||||||||
Net income | — | — | — | 515.3 | — | 515.3 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (12.0 | ) | (12.0 | ) | |||||||||||||||
Shares issued for stock options and employee benefit plans | 2.3 | 0.1 | 1.3 | — | — | 1.4 | |||||||||||||||||
Share-based compensation | — | — | 52.8 | — | — | 52.8 | |||||||||||||||||
Excess tax benefit from share-based compensation | — | — | 2.7 | — | — | 2.7 | |||||||||||||||||
Repurchase and retirement of common stock | (6.6 | ) | (0.1 | ) | — | (349.9 | ) | — | (350.0 | ) | |||||||||||||
Dividends declared ($0.6750 per share) | — | — | — | (188.7 | ) | — | (188.7 | ) | |||||||||||||||
Balance at December 28, 2013 | 277.6 | $ | 2.8 | $ | 2,577.30 | $ | (125.2 | ) | $ | (24.2 | ) | $ | 2,430.70 | ||||||||||
Balance at June 28, 2014 | 274.4 | $ | 2.7 | $ | 2,646.10 | $ | (219.5 | ) | $ | (8.7 | ) | $ | 2,420.60 | ||||||||||
Net income | — | — | — | 302.6 | — | 302.6 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (61.6 | ) | (61.6 | ) | |||||||||||||||
Shares issued for stock options and employee benefit plans | 1.3 | 0.1 | — | — | — | 0.1 | |||||||||||||||||
Share-based compensation | — | — | 47.1 | — | — | 47.1 | |||||||||||||||||
Excess tax shortfall from share-based compensation | — | — | (4.8 | ) | — | — | (4.8 | ) | |||||||||||||||
Dividends declared ($0.6750 per share) | — | — | — | (186.0 | ) | — | (186.0 | ) | |||||||||||||||
Balance at December 27, 2014 | 275.7 | $ | 2.8 | $ | 2,688.40 | $ | (102.9 | ) | $ | (70.3 | ) | $ | 2,518.00 | ||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive (loss) income ("AOCI"), as of the dates indicated, are as follows (in millions): | ||||||||||||||||||||||
Unrealized | Unrealized | Cumulative | Other(2) | Total | |||||||||||||||||||
Gains (Losses) | (Losses) | Translation | |||||||||||||||||||||
on Cash | Gains | Adjustment | |||||||||||||||||||||
Flow | on Available- | ||||||||||||||||||||||
Hedges(1) | for-Sale | ||||||||||||||||||||||
Securities | |||||||||||||||||||||||
Balances at June 29, 2013 | $ | 3.7 | $ | (1.3 | ) | $ | (11.6 | ) | $ | (3.0 | ) | $ | (12.2 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 3.3 | (0.7 | ) | (10.7 | ) | — | (8.1 | ) | |||||||||||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 3.9 | — | — | — | 3.9 | ||||||||||||||||||
Net current-period other comprehensive (loss) income | (0.6 | ) | (0.7 | ) | (10.7 | ) | — | (12.0 | ) | ||||||||||||||
Balances at December 28, 2013 | $ | 3.1 | $ | (2.0 | ) | $ | (22.3 | ) | $ | (3.0 | ) | $ | (24.2 | ) | |||||||||
Balances at June 28, 2014 | $ | 0.6 | $ | 1.8 | $ | (9.2 | ) | $ | (1.9 | ) | $ | (8.7 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications | 9.4 | (1.6 | ) | (67.6 | ) | — | (59.8 | ) | |||||||||||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 1.8 | — | — | — | 1.8 | ||||||||||||||||||
Net current-period other comprehensive income (loss) | 7.6 | (1.6 | ) | (67.6 | ) | — | (61.6 | ) | |||||||||||||||
Balances at December 27, 2014 | $ | 8.2 | $ | 0.2 | $ | (76.8 | ) | $ | (1.9 | ) | $ | (70.3 | ) | ||||||||||
(1) | The ending balances of AOCI related to cash flow hedges are net of tax of ($4.6) million and ($3.1) million as of December 27, 2014 and December 28, 2013, respectively. The amounts reclassified from AOCI are net of tax of ($1.0) million and ($2.5) million as of December 27, 2014 and December 28, 2013, respectively. | ||||||||||||||||||||||
-2 | The components of Other include the accumulated loss on the Company's minimum pension liability adjustment and an investment in an auction rate security of ($1.9) million and $0 million, respectively, as of December 27, 2014 and ($2.0) million and ($1.0) million, respectively, as of December 28, 2013. As of December 27, 2014 and December 28, 2013 the balances of AOCI are net of tax of $1.5 million and $2.1 million, respectively. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Reconciliation of Weighted-average Shares Outstanding and Calculation of Basic and Diluted Net Income Per Share | The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted net income per share: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 27, | December 28, | 27-Dec-14 | 28-Dec-13 | |||||||||||||
2014 | 2013 | |||||||||||||||
(millions, except per share data) | ||||||||||||||||
Net income | $ | 183.5 | $ | 297.4 | $ | 302.6 | $ | 515.3 | ||||||||
Total weighted-average basic shares outstanding | 275.6 | 279.1 | 275.3 | 280.2 | ||||||||||||
Effect of dilutive securities | 0.9 | 2.4 | 1.1 | 2.8 | ||||||||||||
Total weighted-average diluted shares | 276.5 | 281.5 | 276.4 | 283 | ||||||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.67 | $ | 1.07 | $ | 1.1 | $ | 1.84 | ||||||||
Diluted | $ | 0.66 | $ | 1.06 | $ | 1.09 | $ | 1.82 | ||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Dec. 27, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table shows the total compensation cost and the related tax benefits recognized for share-based compensation plans in the condensed consolidated statements of income for the periods indicated: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 27, 2014(1) | December 28, | December 27, 2014(1) | December 28, 2013(2) | |||||||||||||
2013 | ||||||||||||||||
(millions) | ||||||||||||||||
Share-based compensation expense | $ | 22.5 | $ | 25.5 | $ | 47.1 | $ | 52.8 | ||||||||
Income tax benefit related to share-based compensation expense | 7 | 7.9 | 14.3 | 16.4 | ||||||||||||
(1) | During the three and six months ended December 27, 2014, the Company incurred approximately $0.1 million and $2.8 million of share-based compensation expense, respectively, that are related to organizational efficiency costs under the Company's Transformation Plan as a result of the accelerated vesting of certain awards. See Note 4 herein, for more information. Approximately $1.1 million of income tax benefit is associated with the share-based compensation expense for the six months ended December 27, 2014. | |||||||||||||||
(2) | Approximately $9.8 million of share-based compensation expense (and approximately $3.8 million of income tax benefit) are related to the sale of the Reed Krakoff business and restructuring and transformation recognized by the Company in the first quarter of fiscal 2014. | |||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | A summary of stock option activity under the Coach stock option plans during the six months ended December 27, 2014 is as follows: | |||||||||||||||
Number of | Weighted-Average | |||||||||||||||
Options | Exercise Price per Option | |||||||||||||||
Outstanding | ||||||||||||||||
(millions) | ||||||||||||||||
Outstanding at June 28, 2014 | 11.7 | $ | 44.21 | |||||||||||||
Granted | 4 | 36.23 | ||||||||||||||
Exercised | (0.5 | ) | 21.7 | |||||||||||||
Forfeited or expired | (0.5 | ) | 50.18 | |||||||||||||
Outstanding at December 27, 2014 | 14.7 | 42.57 | ||||||||||||||
Vested and expected to vest at December 27, 2014 | 13.9 | 42.45 | ||||||||||||||
Exercisable at December 27, 2014 | 8.6 | 42.94 | ||||||||||||||
Schedule of Nonvested Share Activity | A summary of PRSU activity, during the six months ended December 27, 2014 is as follows: | |||||||||||||||
Number of | Weighted- | |||||||||||||||
Non-vested | Average Grant- | |||||||||||||||
PRSUs | Date Fair Value | |||||||||||||||
per PRSU | ||||||||||||||||
(millions) | ||||||||||||||||
Non-vested at June 28, 2014 | 0.9 | $ | 44.6 | |||||||||||||
Granted | 0.4 | 36.25 | ||||||||||||||
Change due to performance condition achievement | (0.1 | ) | 54.67 | |||||||||||||
Vested(1) | — | 58.34 | ||||||||||||||
Forfeited(1) | — | 48.5 | ||||||||||||||
Non-vested at December 27, 2014 | 1.2 | 41.36 | ||||||||||||||
-1 | During the first six months of fiscal 2015, less than 0.1 million PRSU's vested or forfeited, individually and in the aggregate. | |||||||||||||||
A summary of RSU activity during the six months ended December 27, 2014 is as follows: | ||||||||||||||||
Number of | Weighted- | |||||||||||||||
Non-vested | Average Grant- | |||||||||||||||
RSUs | Date Fair Value | |||||||||||||||
per RSU | ||||||||||||||||
(millions) | ||||||||||||||||
Non-vested at June 28, 2014 | 3.2 | $ | 54.68 | |||||||||||||
Granted | 1.7 | 36.21 | ||||||||||||||
Vested | (1.1 | ) | 56.67 | |||||||||||||
Forfeited | (0.3 | ) | 50.16 | |||||||||||||
Non-vested at December 27, 2014 | 3.5 | 45.29 | ||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair Value Measurements of Assets and Liabilities | The following table shows the fair value measurements of the Company’s assets and liabilities at December 27, 2014 and June 28, 2014 (in millions): | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
December 27, | June 28, | December 27, | June 28, | December 27, | June 28, | |||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash equivalents(1) | $ | 64 | $ | 1.2 | $ | 95.2 | $ | 45.1 | $ | — | $ | — | ||||||||||||
Short-term investments: | ||||||||||||||||||||||||
Time deposits(2) | — | — | — | 75.1 | — | — | ||||||||||||||||||
Government securities - U.S.(2) | 27.6 | 42 | — | — | — | — | ||||||||||||||||||
Corporate debt securities - U.S.(2) | — | — | 78.1 | 25.4 | — | — | ||||||||||||||||||
Corporate debt securities - non U.S.(2) | — | — | 54.8 | 34.6 | — | — | ||||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||
Asset backed securities(3) | — | — | 0.5 | 1.1 | — | — | ||||||||||||||||||
Government securities - U.S.(3) | 40.5 | 55.3 | — | — | — | — | ||||||||||||||||||
Corporate debt securities - U.S.(3) | — | — | 97.1 | 144.9 | — | — | ||||||||||||||||||
Corporate debt securities - non U.S.(3) | — | — | 77.3 | 98.8 | — | — | ||||||||||||||||||
Derivative Assets: | ||||||||||||||||||||||||
Zero-cost collar options(4) | — | — | 10.5 | 0.4 | — | — | ||||||||||||||||||
Forward contracts and cross currency swaps(4) | — | — | 0.3 | 0.1 | — | — | ||||||||||||||||||
Total | $ | 132.1 | $ | 98.5 | $ | 413.8 | $ | 425.5 | $ | — | $ | — | ||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||
Zero-cost collar options(4) | $ | — | $ | — | $ | — | $ | 0.6 | $ | — | $ | — | ||||||||||||
Forward contracts and cross currency swaps(4) | — | — | — | 0.3 | — | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | 0.9 | $ | — | $ | — | ||||||||||||
(1) | Cash equivalents consist of money market funds and time deposits with maturities of three months or less at the date of purchase. Due to their short term maturity, management believes that their carrying value approximates fair value. | |||||||||||||||||||||||
(2) | Short-term available-for-sale investments are recorded at fair value, which approximates their carrying value, and are primarily based upon quoted vendor or broker priced securities in active markets. Short-term held to maturity investments are recorded at amortized cost, which approximates fair value. | |||||||||||||||||||||||
(3) | Fair value is primarily determined using vendor or broker priced securities in active markets. These securities have maturity dates between calendar years 2015 and 2017. | |||||||||||||||||||||||
(4) | The fair value of these hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk. |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||
Dec. 27, 2014 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following tables provide information related to the Company’s derivatives as of December 27, 2014 and June 28, 2014: | ||||||||||||||||||||||||||||
Notional Value | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||
Designated Derivative Hedging Instruments(1) | December 27, | June 28, | Balance Sheet Classification | December 27, | June 28, | Balance Sheet Classification | December 27, | June 28, | |||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
C - Inventory purchases | $ | 110.5 | $ | 90.2 | Other Current Assets | $ | 10.5 | $ | 0.4 | Accrued Liabilities | $ | — | $ | (0.6 | ) | ||||||||||||||
CCS - Intercompany loans | — | 4.8 | Other Current Assets | — | 0.1 | — | — | — | |||||||||||||||||||||
FC - Intercompany Loans | 23.5 | 8.4 | Other Current Assets | 0.3 | — | — | — | — | |||||||||||||||||||||
FC - Contractual Obligations(2) | — | 4 | — | — | — | Accrued Liabilities | — | (0.3 | ) | ||||||||||||||||||||
Total Hedges | $ | 134 | $ | 107.4 | $ | 10.8 | $ | 0.5 | $ | — | $ | (0.9 | ) | ||||||||||||||||
(1) | C =ero-cost Collars; CCS =ross Currency Swaps; FC =orward foreign currency exchange contracts | ||||||||||||||||||||||||||||
(2) | Contractual obligations at the end of fiscal 2014 consisted of a $4.0 million payment due to Shinsegae International, related to the acquisition of the domestic retail business in South Korea. | ||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives | |||||||||||||||||||||||||||||
(Effective Portion) | |||||||||||||||||||||||||||||
Three Months Ended(1) | Six Months Ended(2) | ||||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
December 27, | December 28, | December 27, | December 28, | ||||||||||||||||||||||||||
Designated Cash Flow Hedges: | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
C - Inventory purchases | $ | 4.9 | $ | 6.7 | $ | 9.4 | $ | 5.3 | |||||||||||||||||||||
CCS - Intercompany loans | — | (1.5 | ) | — | (2.0 | ) | |||||||||||||||||||||||
Total | $ | 4.9 | $ | 5.2 | $ | 9.4 | $ | 3.3 | |||||||||||||||||||||
(1) | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($2.7) million and ($4.1) million, respectively. | ||||||||||||||||||||||||||||
(2) | For the six months ended December 27, 2014 and December 28, 2013, the amounts above are net of tax of ($5.2) million and ($3.2) million, respectively. | ||||||||||||||||||||||||||||
Amount of Net Gain Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||||||||
(Effective Portion) | |||||||||||||||||||||||||||||
Three Months Ended(1) | Six Months Ended(2) | ||||||||||||||||||||||||||||
(millions) | |||||||||||||||||||||||||||||
December 27, | December 28, | December 27, | December 28, | Income Statement | |||||||||||||||||||||||||
Designated Cash Flow Hedges: | 2014 | 2013 | 2014 | 2013 | Classification | ||||||||||||||||||||||||
C - Inventory Purchases | $ | 1 | $ | 0.6 | $ | 1.8 | $ | 3.9 | Cost of sales | ||||||||||||||||||||
(1) | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($0.6) million and ($0.5) million, respectively. | ||||||||||||||||||||||||||||
(2) | For the six months ended December 27, 2014 and December 28, 2013, the amounts above are net of tax of ($1.0) million and ($2.5) million, respectively. |
Investments_Tables
Investments (Tables) | 6 Months Ended | |||||||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||
Summary of Investments | The following table summarizes the Company’s investments, all of which are denominated in U.S. dollars, recorded within the condensed consolidated balance sheets as of December 27, 2014 and June 28, 2014: | |||||||||||||||||||||||
27-Dec-14 | 28-Jun-14 | |||||||||||||||||||||||
Short-term | Long-term | Total | Short-term | Long-term | Total | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Available-for-sale investments: | ||||||||||||||||||||||||
Government securities - U.S.(1) | $ | 27.6 | $ | 40.5 | $ | 68.1 | $ | 42 | $ | 55.3 | $ | 97.3 | ||||||||||||
Corporate debt securities - U.S.(1) | 78.1 | 97.1 | 175.2 | 25.4 | 144.9 | 170.3 | ||||||||||||||||||
Corporate debt securities - non-U.S.(1) | 54.8 | 77.3 | 132.1 | 34.6 | 98.8 | 133.4 | ||||||||||||||||||
Asset backed securities(2) | — | 0.5 | 0.5 | — | 1.1 | 1.1 | ||||||||||||||||||
Available-for-sale investments, total | $ | 160.5 | $ | 215.4 | $ | 375.9 | $ | 102 | $ | 300.1 | $ | 402.1 | ||||||||||||
Held to maturity: | ||||||||||||||||||||||||
Government securities - U.S.(3) | $ | 15.9 | $ | — | $ | 15.9 | $ | 18.2 | $ | — | $ | 18.2 | ||||||||||||
Corporate debt securities - U.S.(3) | 24.3 | — | 24.3 | 33.5 | — | 33.5 | ||||||||||||||||||
Corporate debt securities - non-U.S.(3) | 24.2 | — | 24.2 | 24.4 | — | 24.4 | ||||||||||||||||||
Commercial paper(3) | 3.7 | — | 3.7 | 23.5 | — | 23.5 | ||||||||||||||||||
Other: | ||||||||||||||||||||||||
Time deposits(4) | — | — | — | 75.1 | — | 75.1 | ||||||||||||||||||
Other(5) | — | 249.2 | 249.2 | — | 184.4 | 184.4 | ||||||||||||||||||
Total Investments | $ | 228.6 | $ | 464.6 | $ | 693.2 | $ | 276.7 | $ | 484.5 | $ | 761.2 | ||||||||||||
(1) | These securities have maturity dates between calendar years 2015 and 2017 and are recorded at fair value. | |||||||||||||||||||||||
(2) | The security matures during calendar year 2016. | |||||||||||||||||||||||
(3) | These securities have maturity dates of less than one year and are recorded at amortized cost which approximates fair value. | |||||||||||||||||||||||
(4) | These time deposits have original maturities greater than 3 months and are recorded at fair value. | |||||||||||||||||||||||
(5) | Primarily relates to the equity method investment related to an equity interest in an entity formed during fiscal 2013 for the purpose of developing a new office tower in Manhattan (the "Hudson Yards joint venture"), with the Company owning less than 43% of the joint venture, and the Reed Krakoff cost method investment. As of December 27, 2014, the Company has recorded $245.9 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. As of June 28, 2014, the Company has recorded $181.1 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. The Hudson Yards joint venture is determined to be a VIE primarily due to the fact that it has insufficient equity to finance its activities without additional subordinated financial support from its two joint venture partners. Coach is not considered the primary beneficiary of the entity primarily because the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. The Company’s maximum loss exposure is limited to the committed capital. Refer to Note 14, "Commitments and Contingencies" for further information. | |||||||||||||||||||||||
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Available-for-sale Securities | The amortized cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale securities are presented below as of December 27, 2014 and June 28, 2014: | |||||||||||||||||||||||
December 27, 2014 | ||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Government securities - U.S. | $ | 68 | $ | 0.1 | $ | — | $ | 68.1 | ||||||||||||||||
Corporate debt securities - U.S. | 175 | 0.4 | (0.2 | ) | 175.2 | |||||||||||||||||||
Corporate debt securities - non-U.S. | 132.2 | 0.1 | (0.2 | ) | 132.1 | |||||||||||||||||||
Asset backed securities | 0.5 | — | — | 0.5 | ||||||||||||||||||||
Total | $ | 375.7 | $ | 0.6 | $ | (0.4 | ) | $ | 375.9 | |||||||||||||||
June 28, 2014 | ||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Government securities - U.S. | $ | 97.2 | $ | 0.1 | $ | — | $ | 97.3 | ||||||||||||||||
Corporate debt securities - U.S. | 169.3 | 1 | — | 170.3 | ||||||||||||||||||||
Corporate debt securities - non-U.S. | 132.7 | 0.7 | — | 133.4 | ||||||||||||||||||||
Asset backed securities | 1.1 | — | — | 1.1 | ||||||||||||||||||||
Total | $ | 400.3 | $ | 1.8 | $ | — | $ | 402.1 | ||||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | |||||||||||||||||||
Dec. 27, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Summary of Segment Information | The following table summarizes segment performance for the three and six months ended December 27, 2014 and December 28, 2013 (in millions): | |||||||||||||||||||
North | International | Other(1) | Corporate | Total | ||||||||||||||||
America | Unallocated | |||||||||||||||||||
Three Months Ended December 27, 2014 | ||||||||||||||||||||
Net sales | $ | 784.6 | $ | 420.5 | $ | 14.3 | $ | — | $ | 1,219.40 | ||||||||||
Gross profit | 502.1 | 322.4 | 9.7 | 5.8 | 840 | |||||||||||||||
Operating income (loss) | 296.3 | 128.4 | 7 | (156.3 | ) | 275.4 | ||||||||||||||
Income (loss) before provision for income taxes | 296.3 | 128.4 | 7 | (155.9 | ) | 275.8 | ||||||||||||||
Depreciation and amortization expense(2) | 16.5 | 16 | — | 22.9 | 55.4 | |||||||||||||||
Additions to long-lived assets | 18.9 | 13 | — | 7.3 | 39.2 | |||||||||||||||
Three Months Ended December 28, 2013 | ||||||||||||||||||||
Net sales | $ | 983 | $ | 424.6 | $ | 12 | $ | — | $ | 1,419.60 | ||||||||||
Gross profit | 627.6 | 330.9 | 9.8 | 14.4 | 982.7 | |||||||||||||||
Operating income (loss) | 404.5 | 141.1 | 8.5 | (118.1 | ) | 436 | ||||||||||||||
Income (loss) before provision for income taxes | 404.5 | 141.1 | 8.5 | (116.2 | ) | 437.9 | ||||||||||||||
Depreciation and amortization expense | 19.3 | 13.7 | — | 14.9 | 47.9 | |||||||||||||||
Additions to long-lived assets | 25.6 | 23.8 | — | 11.4 | 60.8 | |||||||||||||||
Six Months Ended December 27, 2014 | ||||||||||||||||||||
Net sales | $ | 1,418.30 | $ | 801.5 | $ | 38.4 | $ | — | $ | 2,258.20 | ||||||||||
Gross profit | 910.1 | 617.8 | 21.1 | 6.4 | 1,555.40 | |||||||||||||||
Operating income (loss) | 517.8 | 246.4 | 16.3 | (325.3 | ) | 455.2 | ||||||||||||||
Income (loss) before provision for income taxes | 517.8 | 246.4 | 16.3 | (324.2 | ) | 456.3 | ||||||||||||||
Depreciation and amortization expense(2) | 29.5 | 31.7 | — | 50.7 | 111.9 | |||||||||||||||
Additions to long-lived assets | 38.9 | 26.9 | — | 13.8 | 79.6 | |||||||||||||||
Six Months Ended December 28, 2013 | ||||||||||||||||||||
Net sales | $ | 1,761.30 | $ | 789.6 | $ | 19.5 | $ | — | $ | 2,570.40 | ||||||||||
Gross profit | 1,138.00 | 623.5 | 16.3 | 31.5 | 1,809.30 | |||||||||||||||
Operating income (loss) | 704.1 | 271.2 | 14.1 | (231.8 | ) | 757.6 | ||||||||||||||
Income (loss) before provision for income taxes | 704.1 | 271.2 | 14.1 | (228.2 | ) | 761.2 | ||||||||||||||
Depreciation and amortization expense | 37.3 | 26.8 | — | 28.8 | 92.9 | |||||||||||||||
Additions to long-lived assets | 51.9 | 37.8 | — | 17 | 106.7 | |||||||||||||||
-1 | Other, which is not a reportable segment, consists of sales generated in ancillary channels including licensing and disposition. | |||||||||||||||||||
(2) | Depreciation and amortization expense includes $8.6 million and $21.8 million of transformation-related charges, for the three and six months ended December 27, 2014, respectively. These charges are recorded as corporate unallocated expenses. | |||||||||||||||||||
Summary of Common Costs Not Allocated | The following is a summary of all costs not allocated in the determination of segment operating income performance: | |||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
27-Dec-14 | 28-Dec-13 | December 27, | December 28, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(millions) | ||||||||||||||||||||
Inventory-related costs(1) | $ | 5.8 | $ | 14.4 | $ | 6.4 | $ | 31.5 | ||||||||||||
Advertising, marketing and design(2) | (63.5 | ) | (64.5 | ) | (117.4 | ) | (117.9 | ) | ||||||||||||
Administration and information systems(2)(3) | (80.5 | ) | (43.7 | ) | (179.3 | ) | (100.5 | ) | ||||||||||||
Distribution and customer service(2) | (18.1 | ) | (24.3 | ) | (35.0 | ) | (44.9 | ) | ||||||||||||
Total corporate unallocated costs | $ | (156.3 | ) | $ | (118.1 | ) | $ | (325.3 | ) | $ | (231.8 | ) | ||||||||
(1) | Inventory-related costs consist of production variances and transformation-related costs, and are recorded within cost of sales. During the three months ended December 27, 2014 production variances were $6.8 million and transformation-related costs were ($1.0) million. During the six months ended December 27, 2014 production variances were $11.4 million and transformation-related costs were ($5.0) million. There were no transformation and/or other-related charges during the three and six months ended December 28, 2013. | |||||||||||||||||||
(2) | Costs recorded within SG&A expenses. | |||||||||||||||||||
(3) | During the three and six months ended December 27, 2014 transformation-related costs recorded within SG&A expenses were ($19.1) million and ($52.2) million, respectively. The Company also recorded approximately ($3.5) million in acquisition-related expenses for the three month ended December 27, 2014. There was no transformation and/or other-related charges during the three and six months ended December 28, 2013. |
Nature_of_Operations_Details
Nature of Operations (Details) | 6 Months Ended |
Dec. 27, 2014 | |
country | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries with sales to wholesale customers and distributors (countries) | 40 |
Transformation_and_Other_Actio2
Transformation and Other Actions (Narrative) (Details) (2014 Transformation Plan, USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Jun. 28, 2014 | Dec. 27, 2014 | Jun. 28, 2014 |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $20.10 | $131.50 | $57.20 | $131.50 |
Restructuring and transformation related charges, after tax | 14.4 | 41.1 | ||
Restructuring and transformation related charges per diluted share | $0.05 | $0.15 | ||
Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 19.1 | 52.2 | ||
Cost of Sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1 | 5 | ||
Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related costs, expected to be incurred | 250 | 250 | ||
Restructuring and transformation expected cost remaining | 60 | 60 | ||
Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related costs, expected to be incurred | 300 | 300 | ||
Restructuring and transformation expected cost remaining | $110 | $110 |
Transformation_and_Other_Actio3
Transformation and Other Actions Transformation and Other Actions (Details) (2014 Transformation Plan, USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Jun. 28, 2014 | Dec. 27, 2014 | Jun. 28, 2014 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | $22.50 | $0 | ||||||
Restructuring charges | 20.1 | 131.5 | 57.2 | 131.5 | ||||
Cash payments | -33.6 | 0 | ||||||
Non-cash adjustments | -27.7 | -109 | ||||||
Balance at end of period | 18.4 | 22.5 | 18.4 | 22.5 | ||||
Inventory-Related Charges | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | 15.4 | [1] | 0 | [1] | ||||
Restructuring charges | 3 | [1] | 82.2 | [1] | ||||
Cash payments | -15 | [1] | 0 | [1] | ||||
Non-cash adjustments | -3 | [1] | -66.8 | [1] | ||||
Balance at end of period | 0.4 | [1] | 15.4 | [1] | 0.4 | [1] | 15.4 | [1] |
Impairment | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | 0 | [2] | 0 | [2] | ||||
Restructuring charges | 0 | [2] | 35.5 | [2] | ||||
Cash payments | 0 | [2] | 0 | [2] | ||||
Non-cash adjustments | 0 | [2] | -35.5 | [2] | ||||
Balance at end of period | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] |
Store-Related Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | 5.5 | [3] | 0 | [3] | ||||
Restructuring charges | 26.3 | [3] | 12.2 | [3] | ||||
Cash payments | -1.5 | [3] | 0 | [3] | ||||
Non-cash adjustments | -21.8 | [3] | -6.7 | [3] | ||||
Balance at end of period | 8.5 | [3] | 5.5 | [3] | 8.5 | [3] | 5.5 | [3] |
Organizational Efficiency Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | 1 | [4] | 0 | [4] | ||||
Restructuring charges | 23.9 | [4] | 1 | [4] | ||||
Cash payments | -13 | [4] | 0 | [4] | ||||
Non-cash adjustments | -2.8 | [4] | 0 | [4] | ||||
Balance at end of period | 9.1 | [4] | 1 | [4] | 9.1 | [4] | 1 | [4] |
Other | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Balance at beginning of period | 0.6 | [5] | 0 | [5] | ||||
Restructuring charges | 4 | [5] | 0.6 | [5] | ||||
Cash payments | -4.1 | [5] | 0 | [5] | ||||
Non-cash adjustments | -0.1 | [5] | 0 | [5] | ||||
Balance at end of period | $0.40 | [5] | $0.60 | [5] | $0.40 | [5] | $0.60 | [5] |
[1] | Inventory-related charges, recorded within cost of sales, primarily relate to reserves for the donation and destruction of certain on-hand inventory and future non-cancelable inventory purchase commitments. | |||||||
[2] | Impairment charges, recorded within SG&A expenses, were based on discounted expected cash flows within certain impacted retail stores, and resulted in the reduction of the net carrying value of store-related long-lived assets to their estimated fair value. | |||||||
[3] | Store-related costs, recorded within SG&A expenses, relate to store closure costs which include accelerated depreciation charges associated with store assets that the Company will no longer benefit from as a result of the Transformation Plan, as well as lease termination and store employee severance costs. | |||||||
[4] | Organizational efficiency charges, recorded within SG&A expenses, primarily relate to the severance and related costs of corporate employees. | |||||||
[5] | Other charges comprise of consulting costs and the write-down of certain assets that will not be placed into service by the Company, which are recorded within SG&A expenses and certain freight and handling costs incurred related to the destruction of inventory which are recorded within cost of sales. |
Transformation_and_Other_Actio4
Transformation and Other Actions - Sale of Reed Krakoff Business (Narrative) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Sep. 28, 2013 | Dec. 27, 2014 | Jun. 28, 2014 |
Restructuring Cost and Reserve [Line Items] | |||
Loss on disposition of business | $2.70 | ||
Reed Krakoff | |||
Restructuring Cost and Reserve [Line Items] | |||
Cost method investments | $3.30 | $3.30 |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Jul. 01, 2013 | Dec. 27, 2014 |
Business Acquisition [Line Items] | ||
Ownership percentage | 43.00% | |
European Joint Venture | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 100.00% | |
Percentage of domestic retail businesses acquired | 50.00% | |
Number of retail locations (stores) | 18 | |
Aggregate purchase prices, net of cash acquired | $15.10 | |
Loan forgiven | 18 | |
Purchase price allocation, goodwill | $14.80 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Change in Carrying Value of Goodwill) (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Jun. 28, 2014 |
28-Jun-14 | $361.40 | |
27-Dec-14 | 315.5 | 361.4 |
International | ||
28-Jun-14 | 361.4 | |
Foreign exchange impact | -45.9 | |
27-Dec-14 | $315.50 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Narrative) (Details) (Trademarks, USD $) | Dec. 27, 2014 | Jun. 28, 2014 |
In Millions, unless otherwise specified | ||
Trademarks | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets not subject to amortization | $9.80 | $9.80 |
Stockholders_Equity_Stockholde
Stockholders' Equity (Stockholders' Equity) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 |
Beginning balance | $2,420.60 | $2,409.20 | ||
Net income | 183.5 | 297.4 | 302.6 | 515.3 |
Other comprehensive loss | -34.7 | -17.5 | -61.6 | -12 |
Shares issued for stock options and employee benefit plans | 0.1 | 1.4 | ||
Share-based compensation | 47.1 | 52.8 | ||
Excess tax benefit from share-based compensation | -4.8 | 2.7 | ||
Repurchase and retirement of common stock | -3,300,000 | 0 | -6,600,000 | |
Repurchase and retirement of common stock | -175 | -350 | ||
Dividends declared | -186 | -188.7 | ||
Cash dividends declared per common share (USD per share) | $0.34 | $0.34 | $0.68 | $0.68 |
Ending balance | 2,518 | 2,430.70 | 2,518 | 2,430.70 |
Common Stock | ||||
Beginning balance (shares) | 274,400,000 | 281,900,000 | ||
Beginning balance | 2.7 | 2.8 | ||
Shares issued for stock options and employee benefit plans | 1,300,000 | 2,300,000 | ||
Shares issued for stock options and employee benefit plans | 0.1 | 0.1 | ||
Repurchase and retirement of common stock | -6,600,000 | |||
Repurchase and retirement of common stock | -0.1 | |||
Ending balance (shares) | 275,700,000 | 277,600,000 | 275,700,000 | 277,600,000 |
Ending balance | 2.8 | 2.8 | 2.8 | 2.8 |
Additional Paid-in- Capital | ||||
Beginning balance | 2,646.10 | 2,520.50 | ||
Shares issued for stock options and employee benefit plans | 1.3 | |||
Share-based compensation | 47.1 | 52.8 | ||
Excess tax benefit from share-based compensation | -4.8 | 2.7 | ||
Ending balance | 2,688.40 | 2,577.30 | 2,688.40 | 2,577.30 |
Accumulated Deficit | ||||
Beginning balance | -219.5 | -101.9 | ||
Net income | 302.6 | 515.3 | ||
Repurchase and retirement of common stock | -349.9 | |||
Dividends declared | -186 | -188.7 | ||
Ending balance | -102.9 | -125.2 | -102.9 | -125.2 |
Accumulated Other Comprehensive Loss | ||||
Beginning balance | -8.7 | -12.2 | ||
Other comprehensive loss | -61.6 | -12 | ||
Ending balance | ($70.30) | ($24.20) | ($70.30) | ($24.20) |
Stockholders_Equity_Accumulate
Stockholders' Equity (Accumulated Other Comprehensive Loss) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 | ||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Accumulated other comprehensive (loss) income, beginning balance | ($8.70) | ($12.20) | ||||||
Other comprehensive income (loss) before reclassifications | -59.8 | -8.1 | ||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 1.8 | 3.9 | ||||||
Other comprehensive (loss), net of tax | -34.7 | -17.5 | -61.6 | -12 | ||||
Accumulated other comprehensive (loss) income, ending balance | -70.3 | -24.2 | -70.3 | -24.2 | ||||
Unrealized Gains (Losses) on Cash Flow Hedges, tax | 92.3 | 140.5 | 153.7 | 245.9 | ||||
Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Unrealized Gains (Losses) on Cash Flow Hedges, tax | -1 | -2.5 | ||||||
Gains (Losses) on Cash Flow Hedges | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Accumulated other comprehensive (loss) income, beginning balance | 0.6 | [1] | 3.7 | [1] | ||||
Other comprehensive income (loss) before reclassifications | 9.4 | [1] | 3.3 | [1] | ||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 1.8 | [1] | 3.9 | [1] | ||||
Other comprehensive (loss), net of tax | 7.6 | [1] | -0.6 | [1] | ||||
Accumulated other comprehensive (loss) income, ending balance | 8.2 | [1] | 3.1 | [1] | 8.2 | [1] | 3.1 | [1] |
Unrealized (Losses) Gains on Available- for-Sale Securities | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Accumulated other comprehensive (loss) income, beginning balance | 1.8 | -1.3 | ||||||
Other comprehensive income (loss) before reclassifications | -1.6 | -0.7 | ||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 0 | 0 | ||||||
Other comprehensive (loss), net of tax | -1.6 | -0.7 | ||||||
Accumulated other comprehensive (loss) income, ending balance | 0.2 | -2 | 0.2 | -2 | ||||
Cumulative Translation Adjustment | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Accumulated other comprehensive (loss) income, beginning balance | -9.2 | -11.6 | ||||||
Other comprehensive income (loss) before reclassifications | -67.6 | -10.7 | ||||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 0 | 0 | ||||||
Other comprehensive (loss), net of tax | -67.6 | -10.7 | ||||||
Accumulated other comprehensive (loss) income, ending balance | -76.8 | -22.3 | -76.8 | -22.3 | ||||
Other | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Accumulated other comprehensive (loss) income, beginning balance | -1.9 | [2] | -3 | [2] | ||||
Other comprehensive income (loss) before reclassifications | 0 | [2] | 0 | [2] | ||||
Less: gains reclassified from accumulated other comprehensive income to earnings | 0 | [2] | 0 | [2] | ||||
Other comprehensive (loss), net of tax | 0 | [2] | 0 | [2] | ||||
Accumulated other comprehensive (loss) income, ending balance | -1.9 | [2] | -3 | [2] | -1.9 | [2] | -3 | [2] |
Unrealized Gains (Losses) on Cash Flow Hedges, tax | 1.5 | 2.1 | ||||||
ASC 715 adjustment and minimum pension liability | -1.9 | -2 | -1.9 | -2 | ||||
Cumulative effect of adoption of ASC 320-10-35-17 | 0 | -1 | 0 | -1 | ||||
Accumulated Other Comprehensive Loss | ||||||||
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract] | ||||||||
Other comprehensive (loss), net of tax | -61.6 | -12 | ||||||
Unrealized Gains (Losses) on Cash Flow Hedges, tax | ($4.60) | ($3.10) | ||||||
[1] | The ending balances of AOCI related to cash flow hedges are net of tax of ($4.6) million and ($3.1) million as of DecemberB 27, 2014 and DecemberB 28, 2013, respectively. The amounts reclassified from AOCI are net of tax of ($1.0) million and ($2.5) million as of DecemberB 27, 2014 and DecemberB 28, 2013, respectively. | |||||||
[2] | The components of Other include the accumulated loss on the Company's minimum pension liability adjustment and an investment in an auction rate security of ($1.9) million and $0 million, respectively, as of DecemberB 27, 2014 and ($2.0) million and ($1.0) million, respectively, as of DecemberB 28, 2013. As of DecemberB 27, 2014 and DecemberB 28, 2013 the balances of AOCI are net of tax of $1.5 million and $2.1 million, respectively. |
Earnings_Per_Share_Reconciliat
Earnings Per Share (Reconciliation of Weighted Average Shares Outstanding and Calculation of Basic and Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 |
Earnings Per Share [Abstract] | ||||
Net income | $183.50 | $297.40 | $302.60 | $515.30 |
Total weighted-average basic shares (shares) | 275.6 | 279.1 | 275.3 | 280.2 |
Effect of dilutive securities (shares) | 0.9 | 2.4 | 1.1 | 2.8 |
Total weighted-average diluted shares (shares) | 276.5 | 281.5 | 276.4 | 283 |
Net income per share: | ||||
Basic (USD per share) | $0.67 | $1.07 | $1.10 | $1.84 |
Diluted (USD per share) | $0.66 | $1.06 | $1.09 | $1.82 |
Earnings_Per_Share_AntiDilutiv
Earnings Per Share (Anti-Dilutive Impact on Diluted Earnings per Share) (Details) | 6 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 |
Earnings Per Share [Abstract] | ||
Options to purchase shares of common stock excluded from the computation of diluted earnings per share | 12.1 | 4.1 |
Sharebased_Compensation_Total_
Share-based Compensation (Total Compensation Cost and Related Tax Benefits (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $22.50 | [1] | $25.50 | $47.10 | [1] | $52.80 | [2] |
Income tax benefit related to share-based compensation expense | 7 | [1] | 7.9 | 14.3 | [1] | 16.4 | [2] |
2014 Transformation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | 0.1 | 2.8 | |||||
Income tax benefit related to share-based compensation expense | 1.1 | ||||||
Sale of Reed Krakoff Business; Restructuring and Transformation | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | 9.8 | ||||||
Income tax benefit related to share-based compensation expense | $3.80 | ||||||
[1] | During the three and six months ended DecemberB 27, 2014, the Company incurred approximately $0.1 million and $2.8 million of share-based compensation expense, respectively, that are related to organizational efficiency costs under the Company's Transformation Plan as a result of the accelerated vesting of certain awards. | ||||||
[2] | Approximately $9.8 million of share-based compensation expense (and approximately $3.8 million of income tax benefit) are related to the sale of the Reed Krakoff business and restructuring and transformation recognized by the Company in the first quarter of fiscal 2014. |
Sharebased_Compensation_Summar
Share-based Compensation (Summary of Option Activity) (Details) (USD $) | 6 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 |
Number of Options Outstanding | |
Beginning balance (shares) | 11.7 |
Granted (shares) | 4 |
Exercised (shares) | -0.5 |
Forfeited or expired (shares) | -0.5 |
Ending balance (shares) | 14.7 |
Vested and expected to vest (shares) | 13.9 |
Exercisable (shares) | 8.6 |
Weighted-Average Exercise Price per Option | |
Beginning balance (USD per share) | $44.21 |
Granted (USD per share) | $36.23 |
Exercised (USD per share) | $21.70 |
Forfeited or expired (USD per share) | $50.18 |
Ending balance (USD per share) | $42.57 |
Vested and expected to vest (USD per share) | $42.45 |
Exercisable (USD per share) | $42.94 |
Sharebased_Compensation_Narrat
Share-based Compensation - (Narrative) (Details) (USD $) | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Jun. 28, 2014 |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Awards that are based on performance criteria | 14.7 | 11.7 | |
Stock Options | |||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Total unrecognized compensation cost related to non-vested stock options | $35.10 | ||
Options outstanding, weighted average remaining contractual term | 1 year 1 month | ||
Weighted-average grant-date fair value of options granted | $6.40 | $10.02 | |
Total intrinsic value of options exercised | 7 | 22.3 | |
Total cash received from option exercises | 10.8 | 36.8 | |
Actual tax benefit realized for the tax deductions from these option exercises | 2.7 | 8.3 | |
Restricted Stock Unit Awards ("RSU") [Member] | |||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Actual tax benefit realized for the tax deductions from these option exercises | 18 | 31.6 | |
Performance-based Restricted Stock Unit Awards (PRSU) | |||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Weighted-average grant-date fair value of options granted | $36.25 | $31.84 | |
Total unrecognized compensation cost related to non-vested awards | 22.3 | ||
Total fair value of shares vested | 0.7 | 23.1 | |
Expected term (years) | 1 year 3 months | ||
Service-based Restricted Stock Units | |||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Weighted-average grant-date fair value of options granted | $36.21 | $53.44 | |
Total unrecognized compensation cost related to non-vested awards | 100.1 | ||
Total unrecognized compensation costs related to non-vested awards, weighted average recognition period | 1 year 1 month | ||
Total fair value of shares vested | $39.90 | $72.50 | |
Total Stockholder Return Performance Restricted Stock Units | |||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||
Awards that are based on performance criteria | 0.7 |
Sharebased_Compensation_Summar1
Share-based Compensation (Summary of Non-vested Service-Based Restricted Stock Unit Activity) (Details) (USD $) | 6 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 27, 2014 | |
Service-based Restricted Stock Units | ||
Number of Non-vested Options | ||
Beginning balance (shares) | 3.2 | |
Granted (shares) | 1.7 | |
Vested less than 0.1 million (shares) | -1.1 | |
Forfeited less than 0.1 million (shares) | -0.3 | |
Ending balance (shares) | 3.5 | |
Weighted- Average Grant- Date Fair Value | ||
Beginning balance (USD per share) | $54.68 | |
Granted (USD per share) | $36.21 | |
Vested (USD per share) | $56.67 | |
Forfeited (USD per share) | $50.16 | |
Ending balance (USD per share) | $45.29 | |
Performance-based Restricted Stock Unit Awards (PRSU) | ||
Number of Non-vested Options | ||
Beginning balance (shares) | 0.9 | |
Granted (shares) | 0.4 | |
Change due to performance condition achievement | -0.1 | |
Vested less than 0.1 million (shares) | -0.1 | [1] |
Forfeited less than 0.1 million (shares) | -0.1 | [1] |
Ending balance (shares) | 1.2 | |
Weighted- Average Grant- Date Fair Value | ||
Beginning balance (USD per share) | $44.60 | |
Granted (USD per share) | $36.25 | |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments OtherThan Options Changed Due To Performance Condition In Period Weighted Average Grant Date Fair Value | $54.67 | |
Vested (USD per share) | $58.34 | [1] |
Forfeited (USD per share) | $48.50 | [1] |
Ending balance (USD per share) | $41.36 | |
[1] | During the first six months of fiscal 2015, less than 0.1 million PRSU's vested or forfeited, individually and in the aggregate. |
Debt_Narrative_Details
Debt (Narrative) (Details) | Dec. 27, 2014 | Jun. 28, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 27, 2014 |
Jp Morgan Chase Bank Na | Jp Morgan Chase Bank Na | Jp Morgan Chase Bank Na | Jp Morgan Chase Bank Na | Japan | Japan | Japan | Japan | Coach Shanghai Limited | Coach Shanghai Limited | |
USD ($) | USD ($) | Federal Funds Rate | London Interbank Offered Rate (LIBOR) | USD ($) | JPY (¥) | Minimum | Maximum | USD ($) | CNY | |
Tokyo Interbank Rate | Tokyo Interbank Rate | |||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility, maximum borrowing capacity | $700,000,000 | $44,000,000 | ¥ 5,300,000,000 | $10,000,000 | 63,000,000 | |||||
Credit facility can be expanded to maximum amount | 1,000,000,000 | |||||||||
Letters of credit amount outstanding | $20,000,000 | $140,000,000 | $0 | $0 | ||||||
Commitment fee, current (basis points) | 0.09% | |||||||||
Variable rate | 0.50% | 1.00% | 0.25% | 0.30% |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value Measurements of Assets and Liabilities) (Details) (USD $) | Dec. 27, 2014 | Jun. 28, 2014 | ||
In Millions, unless otherwise specified | ||||
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | $64 | [1] | $1.20 | [1] |
Total assets | 132.1 | 98.5 | ||
Total liability | 0 | 0 | ||
Level 1 | Time Deposits | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 1 | Government Securities | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 27.6 | [2] | 42 | [2] |
Level 1 | Government Securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 40.5 | [3] | 55.3 | [3] |
Level 1 | Corporate debt securities - U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 1 | Corporate debt securities - U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 1 | Corporate debt securities - non-U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 1 | Corporate debt securities - non-U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 1 | Asset backed securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 1 | Zero-Cost Collar Options | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [4] | 0 | [4] |
Derivative liabilities | 0 | [4] | 0 | [4] |
Level 1 | Forward Contracts and Cross Currency Swaps | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [4] | 0 | [4] |
Derivative liabilities | 0 | [4] | 0 | [4] |
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | 95.2 | [1] | 45.1 | [1] |
Total assets | 413.8 | 425.5 | ||
Total liability | 0 | 0.9 | ||
Level 2 | Time Deposits | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 75.1 | [2] |
Level 2 | Government Securities | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 2 | Government Securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 2 | Corporate debt securities - U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 78.1 | [2] | 25.4 | [2] |
Level 2 | Corporate debt securities - U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 97.1 | [3] | 144.9 | [3] |
Level 2 | Corporate debt securities - non-U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 54.8 | [2] | 34.6 | [2] |
Level 2 | Corporate debt securities - non-U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 77.3 | [3] | 98.8 | [3] |
Level 2 | Asset backed securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0.5 | [3] | 1.1 | [3] |
Level 2 | Zero-Cost Collar Options | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 10.5 | [4] | 0.4 | [4] |
Derivative liabilities | 0 | [4] | 0.6 | [4] |
Level 2 | Forward Contracts and Cross Currency Swaps | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0.3 | [4] | 0.1 | [4] |
Derivative liabilities | 0 | [4] | 0.3 | [4] |
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | 0 | [1] | 0 | [1] |
Total assets | 0 | 0 | ||
Total liability | 0 | 0 | ||
Level 3 | Time Deposits | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 3 | Government Securities | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 3 | Government Securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 3 | Corporate debt securities - U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 3 | Corporate debt securities - U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 3 | Corporate debt securities - non-U.S. | Short-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [2] | 0 | [2] |
Level 3 | Corporate debt securities - non-U.S. | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 3 | Asset backed securities | Long-term investments: | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | [3] | 0 | [3] |
Level 3 | Zero-Cost Collar Options | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [4] | 0 | [4] |
Derivative liabilities | 0 | [4] | 0 | [4] |
Level 3 | Forward Contracts and Cross Currency Swaps | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | [4] | 0 | [4] |
Derivative liabilities | $0 | [4] | $0 | [4] |
[1] | Cash equivalents consist of money market funds and time deposits with maturities of three months or less at the date of purchase. Due to their short term maturity, management believes that their carrying value approximates fair value. | |||
[2] | Short-term available-for-sale investments are recorded at fair value, which approximates their carrying value, and are primarily based upon quoted vendor or broker priced securities in active markets. Short-term held to maturity investments are recorded at amortized cost, which approximates fair value. | |||
[3] | Fair value is primarily determined using vendor or broker priced securities in active markets. These securities have maturity dates between calendar years 2015 and 2017. | |||
[4] | The fair value of these hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterpartybs or Companybs credit risk. |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Fair Value of Derivatives Designated as Hedging Instruments) (Details) (USD $) | Dec. 27, 2014 | Jun. 28, 2014 | ||
In Millions, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ||||
Contractual Obligation | $4 | |||
Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Value | 134 | [1] | 107.4 | [1] |
Designated as Hedging Instrument | Other Current Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Assets | 10.8 | [1] | 0.5 | [1] |
Designated as Hedging Instrument | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liabilities | 0 | [1] | -0.9 | [1] |
Designated as Hedging Instrument | Zero-Cost Collars | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Value | 110.5 | [1] | 90.2 | [1] |
Designated as Hedging Instrument | Zero-Cost Collars | Other Current Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Assets | 10.5 | [1] | 0.4 | [1] |
Designated as Hedging Instrument | Zero-Cost Collars | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liabilities | 0 | [1] | -0.6 | [1] |
Designated as Hedging Instrument | Currency Swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Value | 0 | [1] | 4.8 | [1] |
Designated as Hedging Instrument | Currency Swap | Other Current Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Assets | 0 | [1] | 0.1 | [1] |
Designated as Hedging Instrument | Currency Swap | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liabilities | 0 | [1] | 0 | [1] |
Designated as Hedging Instrument | Intercompany Loans | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Value | 23.5 | [1] | 8.4 | [1] |
Designated as Hedging Instrument | Intercompany Loans | Other Current Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Assets | 0.3 | [1] | 0 | [1] |
Designated as Hedging Instrument | Intercompany Loans | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liabilities | 0 | [1] | 0 | [1] |
Designated as Hedging Instrument | Contractual Obligations | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Value | 0 | [1],[2] | 4 | [1],[2] |
Designated as Hedging Instrument | Contractual Obligations | Other Current Assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Assets | 0 | [1],[2] | 0 | [1],[2] |
Designated as Hedging Instrument | Contractual Obligations | Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative Liabilities | $0 | [1],[2] | ($0.30) | [1],[2] |
[1] | C =ero-cost Collars; CCS =ross Currency Swaps; FC =orward foreign currency exchange contracts | |||
[2] | Contractual obligations at the end of fiscal 2014 consisted of a $4.0 million payment due to Shinsegae International, related to the acquisition of the domestic retail business in South Korea. |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities (Amount of Gain or Loss Reclassified from Accumulated OCI into Income) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Amount of net gain (loss) recognized in OCI on derivatives (effective portion) | $4.90 | [1] | $5.20 | [1] | $9.40 | [2] | $3.30 | [2] |
Derivative instruments gain/loss recognized in other comprehensive income effective portion deferred taxes | -2.7 | -4.1 | -5.2 | -3.2 | ||||
Derivative instruments gain/loss reclassified from accumulated OCI into income effective portion, tax | -0.6 | -0.5 | -1 | -2.5 | ||||
Expected amount of net derivative gains included in accumulated other comprehensive income that will be reclassified into earnings within the next 12 months | 8.2 | 8.2 | ||||||
Cost of Sales | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Amount of net gain (loss) reclassified from accumulated OCI into income (effective portion) | 1 | [3] | 0.6 | [3] | 1.8 | [4] | 3.9 | [4] |
Zero-Cost Collars | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Amount of net gain (loss) recognized in OCI on derivatives (effective portion) | 4.9 | [1] | 6.7 | [1] | 9.4 | [2] | 5.3 | [2] |
Forward Contracts and Cross Currency Swaps | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Amount of net gain (loss) recognized in OCI on derivatives (effective portion) | $0 | [1] | ($1.50) | [1] | $0 | [2] | ($2) | [2] |
[1] | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($2.7) million and ($4.1) million, respectively | |||||||
[2] | For the six months ended DecemberB 27, 2014 and DecemberB 28, 2013, the amounts above are net of tax of ($5.2) million and ($3.2) million, respectively. | |||||||
[3] | For the second quarter of fiscal 2015 and fiscal 2014, the amounts above are net of tax of ($0.6) million and ($0.5) million, respectively. | |||||||
[4] | For the six months ended DecemberB 27, 2014 and DecemberB 28, 2013, the amounts above are net of tax of ($1.0) million and ($2.5) million, respectively. |
Investments_Summary_of_Investm
Investments (Summary of Investments) (Details) (USD $) | Dec. 27, 2014 | Jun. 28, 2014 | ||
In Millions, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | $228.60 | $276.70 | ||
Long-term | 464.6 | 484.5 | ||
Total | 693.2 | 761.2 | ||
Available-for-sale investments: | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 160.5 | 102 | ||
Long-term | 215.4 | 300.1 | ||
Total | 375.9 | 402.1 | ||
Available-for-sale investments: | Government securities - U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 27.6 | [1] | 42 | [1] |
Long-term | 40.5 | [1] | 55.3 | [1] |
Total | 68.1 | [1] | 97.3 | [1] |
Available-for-sale investments: | Corporate debt securities - U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 78.1 | [1] | 25.4 | [1] |
Long-term | 97.1 | [1] | 144.9 | [1] |
Total | 175.2 | [1] | 170.3 | [1] |
Available-for-sale investments: | Corporate debt securities - non-U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 54.8 | [1] | 34.6 | [1] |
Long-term | 77.3 | [1] | 98.8 | [1] |
Total | 132.1 | [1] | 133.4 | [1] |
Available-for-sale investments: | Asset backed securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 0 | [2] | 0 | [2] |
Long-term | 0.5 | [2] | 1.1 | [2] |
Total | 0.5 | [2] | 1.1 | [2] |
Held to maturity: | Government securities - U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 15.9 | [3] | 18.2 | [3] |
Long-term | 0 | [3] | 0 | [3] |
Total | 15.9 | [3] | 18.2 | [3] |
Held to maturity: | Corporate debt securities - U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 24.3 | [3] | 33.5 | [3] |
Long-term | 0 | [3] | 0 | [3] |
Total | 24.3 | [3] | 33.5 | [3] |
Held to maturity: | Corporate debt securities - non-U.S. | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 24.2 | [3] | 24.4 | [3] |
Long-term | 0 | [3] | 0 | [3] |
Total | 24.2 | [3] | 24.4 | [3] |
Held to maturity: | Commercial Paper | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 3.7 | [3] | 23.5 | [3] |
Long-term | 0 | [3] | 0 | [3] |
Total | 3.7 | [3] | 23.5 | |
Other: | Time Deposits | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 0 | [4] | 75.1 | [4] |
Long-term | 0 | [4] | 0 | [4] |
Total | 0 | [4] | 75.1 | [4] |
Other: | Other | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Short-term | 0 | [5] | 0 | [5] |
Long-term | 249.2 | [5] | 184.4 | [5] |
Total | $249.20 | [5] | $184.40 | [5] |
[1] | These securities have maturity dates between calendar years 2015 and 2017 and are recorded at fair value. | |||
[2] | The security matures during calendar year 2016. | |||
[3] | These securities have maturity dates of less than one year and are recorded at amortized cost which approximates fair value. | |||
[4] | These time deposits have original maturities greater than 3 months and are recorded at fair value. | |||
[5] | Primarily relates to the equity method investment related to an equity interest in an entity formed during fiscal 2013 for the purpose of developing a new office tower in Manhattan (the "Hudson Yards joint venture"), with the Company owning less than 43% of the joint venture, and the Reed Krakoff cost method investment. As of DecemberB 27, 2014, the Company has recorded $245.9 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. As of June 28, 2014, the Company has recorded $181.1 million and $3.3 million in the Hudson Yards joint venture and the Reed Krakoff cost method investment, respectively. The Hudson Yards joint venture is determined to be a VIE primarily due to the fact that it has insufficient equity to finance its activities without additional subordinated financial support from its two joint venture partners. Coach is not considered the primary beneficiary of the entity primarily because the Company does not have the power to direct the activities that most significantly impact the entitybs economic performance. The Companybs maximum loss exposure is limited to the committed capital. Refer to Note 14, "Commitments and Contingencies" for further information. |
Investments_Summary_of_Investm1
Investments (Summary of Investments Footnote) (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Jun. 28, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Equity method investment, ownership percentage | 43.00% | |
Minimum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Time deposit, maturity period | 3 months | |
Reed Krakoff | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost method investments | 3.3 | $3.30 |
Hudson Yards | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Equity method investments | 245.9 | $181.10 |
Investments_Availablefor_Sale_
Investments Available-for Sale Securities (Details) (USD $) | Dec. 27, 2014 | Jun. 28, 2014 |
In Millions, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $375.70 | $400.30 |
Gross Unrealized Gains | 0.6 | 1.8 |
Gross Unrealized Losses | -0.4 | 0 |
Estimated Fair Value | 375.9 | 402.1 |
Government securities - U.S. | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 68 | 97.2 |
Gross Unrealized Gains | 0.1 | 0.1 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 68.1 | 97.3 |
Corporate debt securities - U.S. | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 175 | 169.3 |
Gross Unrealized Gains | 0.4 | 1 |
Gross Unrealized Losses | -0.2 | 0 |
Estimated Fair Value | 175.2 | 170.3 |
Corporate debt securities - non-U.S. | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 132.2 | 132.7 |
Gross Unrealized Gains | 0.1 | 0.7 |
Gross Unrealized Losses | -0.2 | 0 |
Estimated Fair Value | 132.1 | 133.4 |
Asset backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 0.5 | 1.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $0.50 | $1.10 |
Commitments_and_Contingencies_
Commitments and Contingencies - (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 27, 2014 | Dec. 28, 2013 | Jun. 28, 2014 |
Commitments and Contingencies Disclosure [Line Items] | ||||
Amount invested in joint venture during the period | $35.90 | $64.80 | ||
Increase in capital expenditures | 79.6 | 106.7 | ||
Hudson Yards | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Equity method investments | 245.9 | 245.9 | 181.1 | |
Joint venture agreement, expected investment amount | 284 | 284 | ||
Increase in capital expenditures | 1.2 | |||
Expected capital expenditures incurred | 187 | 187 | ||
Hudson Yards | Minimum | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Joint venture agreement, additional expected investment in current fiscal year | $91 | $91 |
Segment_Information_Narrative_
Segment Information (Narrative) (Details) | 6 Months Ended |
Dec. 27, 2014 | |
segment | |
store | |
Segment Reporting [Abstract] | |
Operating segments | 5 |
Reportable segments | 2 |
Sales to wholesale customers, number of countries in which entity operates | 40 |
Segment_Information_Summary_of
Segment Information (Summary of Segment Information) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 | ||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $1,219.40 | $1,419.60 | $2,258.20 | $2,570.40 | ||||
Gross profit | 840 | 982.7 | 1,555.40 | 1,809.30 | ||||
Operating income (loss) | 275.4 | 436 | 455.2 | 757.6 | ||||
Income (loss) before provision for income taxes | 275.8 | 437.9 | 456.3 | 761.2 | ||||
Depreciation and amortization expense | 55.4 | [1] | 47.9 | 111.9 | [1] | |||
Depreciation and amortization expense | 92.9 | |||||||
Additions to long-lived assets | 39.2 | 60.8 | 79.6 | 106.7 | ||||
North America | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 784.6 | 983 | 1,418.30 | 1,761.30 | ||||
Gross profit | 502.1 | 627.6 | 910.1 | 1,138 | ||||
Operating income (loss) | 296.3 | 404.5 | 517.8 | 704.1 | ||||
Income (loss) before provision for income taxes | 296.3 | 404.5 | 517.8 | 704.1 | ||||
Depreciation and amortization expense | 16.5 | [1] | 19.3 | 29.5 | [1] | |||
Depreciation and amortization expense | 37.3 | |||||||
Additions to long-lived assets | 18.9 | 25.6 | 38.9 | 51.9 | ||||
International | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 420.5 | 424.6 | 801.5 | 789.6 | ||||
Gross profit | 322.4 | 330.9 | 617.8 | 623.5 | ||||
Operating income (loss) | 128.4 | 141.1 | 246.4 | 271.2 | ||||
Income (loss) before provision for income taxes | 128.4 | 141.1 | 246.4 | 271.2 | ||||
Depreciation and amortization expense | 16 | [1] | 13.7 | 31.7 | [1] | |||
Depreciation and amortization expense | 26.8 | |||||||
Additions to long-lived assets | 13 | 23.8 | 26.9 | 37.8 | ||||
Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 14.3 | [1] | 12 | [1] | 38.4 | [2] | 19.5 | [2] |
Gross profit | 9.7 | [1] | 9.8 | [1] | 21.1 | [2] | 16.3 | [2] |
Operating income (loss) | 7 | [1] | 8.5 | [1] | 16.3 | [2] | 14.1 | [2] |
Income (loss) before provision for income taxes | 7 | [1] | 8.5 | [1] | 16.3 | [2] | 14.1 | [2] |
Depreciation and amortization expense | 0 | [1],[2] | 0 | [2] | 0 | [1],[2] | ||
Depreciation and amortization expense | 0 | [2] | ||||||
Additions to long-lived assets | 0 | 0 | [2] | 0 | [2] | 0 | [2] | |
Corporate Unallocated | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 0 | 0 | 0 | 0 | ||||
Gross profit | 5.8 | 14.4 | 6.4 | 31.5 | ||||
Operating income (loss) | -156.3 | -118.1 | -325.3 | -231.8 | ||||
Income (loss) before provision for income taxes | -155.9 | -116.2 | -324.2 | -228.2 | ||||
Depreciation and amortization expense | 22.9 | [1] | 14.9 | 50.7 | [1] | |||
Depreciation and amortization expense | 28.8 | |||||||
Additions to long-lived assets | 7.3 | 11.4 | 13.8 | 17 | ||||
Transformation-related charges | $8.60 | $21.80 | ||||||
[1] | Depreciation and amortization expense includes $8.6 million and $21.8 million of transformation-related charges, for the three and six months ended December 27, 2014, respectively. These charges are recorded as corporate unallocated expenses. | |||||||
[2] | Other, which is not a reportable segment, consists of sales generated in ancillary channels including licensing and disposition. |
Segment_Information_Summary_of1
Segment Information (Summary of Common Costs Not Allocated) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 27, 2014 | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||||||
Operating income | $275.40 | $436 | $455.20 | $757.60 | ||||
Production Variances | 6.8 | 11.4 | ||||||
Transformation and other-related charges related to inventory | -1 | 0 | -5 | 0 | ||||
Transformation and other-related costs related to administration and information systems | -19.1 | 0 | -52.2 | 0 | ||||
Acquisition-related expenses | -3.5 | |||||||
Corporate Unallocated | ||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||||||
Inventory-related costs | 5.8 | [1] | 14.4 | [1] | 6.4 | [1] | 31.5 | [1] |
Advertising, marketing and design | -63.5 | [2] | -64.5 | [2] | -117.4 | [2] | -117.9 | [2] |
Administration and information systems | -80.5 | [2],[3] | -43.7 | [2],[3] | -179.3 | [2],[3] | -100.5 | [2],[3] |
Distribution and customer service | -18.1 | [2] | -24.3 | [2] | -35 | [2] | -44.9 | [2] |
Operating income | ($156.30) | ($118.10) | ($325.30) | ($231.80) | ||||
[1] | Inventory-related costs consist of production variances and transformation-related costs, and are recorded within cost of sales. During the three months ended DecemberB 27, 2014 production variances were $6.8 million and transformation-related costs were ($1.0) million. During the six months ended DecemberB 27, 2014 production variances were $11.4 million and transformation-related costs were ($5.0) million. There were no transformation and/or other-related charges during the three and six months ended December 28, 2013. | |||||||
[2] | Costs recorded within SG&A expenses. | |||||||
[3] | During the three and six months ended DecemberB 27, 2014 transformation-related costs recorded within SG&A expenses were ($19.1) million and ($52.2) million, respectively. The Company also recorded approximately ($3.5) million in acquisition-related expenses for the three month ended December 27, 2014. There was no transformation and/or other-related charges during the three and six months ended December 28, 2013. |
Stock_Repurchase_Program_Narra
Stock Repurchase Program (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 28, 2013 | Dec. 27, 2014 | Dec. 28, 2013 |
Equity [Abstract] | |||
Common stock repurchased and retired, shares | 3,300,000 | 0 | 6,600,000 |
Common stock repurchased and retired, value | $175 | $350 | |
Common stock repurchased and retired, average cost per share | $52.99 | $53.08 | |
Stock repurchase program, remaining amount authorized for repurchase | $836.70 |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 27, 2014 | Jun. 27, 2015 |
Subsequent Event [Line Items] | ||
Acquisition-related expenses | $3.50 | |
Stuart Weitzman Intermediate LLC | ||
Subsequent Event [Line Items] | ||
Acquisition-related expenses | 3.5 | |
Stuart Weitzman Intermediate LLC | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Cash paid in business acquisition | 530 | |
Contingent consideration, term | 3 years | |
Purchase agreement, material breach curing period | 20 days | |
Revenue Target Earnout | Stuart Weitzman Intermediate LLC | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Maximum amount of annual earnout | 14.7 | |
Maximum contingent consideration payable (received) | $44 |