Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 29, 2018 | Jan. 25, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 29, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | TPR | |
Entity Registrant Name | TAPESTRY, INC. | |
Entity Central Index Key | 1,116,132 | |
Current Fiscal Year End Date | --06-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 289,978,011 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 1,237 | $ 1,243.4 |
Short-term investments | 258.2 | 6.6 |
Trade accounts receivable, less allowances of $4.2 and $1.5, respectively | 360.5 | 314.1 |
Inventories | 732.4 | 673.8 |
Prepaid expenses | 86.9 | 82.6 |
Income tax receivable | 58.1 | 25.8 |
Other current assets | 95.4 | 86.3 |
Total current assets | 2,828.5 | 2,432.6 |
Property and equipment, net | 896 | 885.4 |
Long-term investments | 0.1 | 0 |
Goodwill | 1,503.4 | 1,484.3 |
Intangible assets | 1,721.9 | 1,732.9 |
Deferred income taxes | 31.8 | 24.3 |
Other assets | 137.6 | 118.8 |
Total assets | 7,119.3 | 6,678.3 |
Current Liabilities: | ||
Accounts payable | 299.1 | 264.3 |
Accrued liabilities | 781.3 | 673.2 |
Current debt | 0.7 | 0.7 |
Total current liabilities | 1,081.1 | 938.2 |
Long-term debt | 1,601 | 1,599.9 |
Deferred income taxes | 243.1 | 206.2 |
Long-term income taxes payable | 233.3 | 222.4 |
Other liabilities | 472.4 | 467 |
Total liabilities | 3,630.9 | 3,433.7 |
See Note 16 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 1.0 billion shares; $0.01 par value per share) issued and outstanding - 290.0 million and 288.0 million shares, respectively | 2.9 | 2.9 |
Additional paid-in-capital | 3,256.3 | 3,205.5 |
Retained earnings | 320.7 | 119 |
Accumulated other comprehensive income (loss) | (91.5) | (82.8) |
Total stockholders' equity | 3,488.4 | 3,244.6 |
Total liabilities and stockholders' equity | $ 7,119.3 | $ 6,678.3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 4.2 | $ 1.5 |
Preferred stock, authorized (shares) | 25,000,000 | 25,000,000 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued (shares) | 0 | 0 |
Common stock, authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, issued (shares) | 290,000,000 | 288,000,000 |
Common stock, outstanding (shares) | 290,000,000 | 288,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,800.8 | $ 1,785 | $ 3,182 | $ 3,073.9 |
Cost of sales | 597.3 | 608.8 | 1,043.4 | 1,134.8 |
Gross profit | 1,203.5 | 1,176.2 | 2,138.6 | 1,939.1 |
Selling, general and administrative expenses | 822.8 | 829.8 | 1,600.2 | 1,614.5 |
Operating income (loss) | 380.7 | 346.4 | 538.4 | 324.6 |
Interest expense, net | 13.2 | 22.2 | 26.3 | 42.7 |
Income before provision for income taxes | 367.5 | 324.2 | 512.1 | 281.9 |
Provision for income taxes | 112.7 | 261 | 135 | 236.4 |
Net income | $ 254.8 | $ 63.2 | $ 377.1 | $ 45.5 |
Net income per share: | ||||
Basic (USD per share) | $ 0.88 | $ 0.22 | $ 1.30 | $ 0.16 |
Diluted (USD per share) | $ 0.88 | $ 0.22 | $ 1.29 | $ 0.16 |
Shares used in computing net income per share: | ||||
Basic (shares) | 289.9 | 284.5 | 289.3 | 283.8 |
Diluted (shares) | 291 | 286.4 | 291.4 | 286.5 |
Cash dividends declared per common share (USD per share) | $ 0.3375 | $ 0.3375 | $ 0.675 | $ 0.675 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 254.8 | $ 63.2 | $ 377.1 | $ 45.5 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized (losses) gains on cash flow hedging derivatives, net | (3.2) | (1) | 1.3 | (4.1) |
Unrealized gains on available-for-sale investments, net | 0.1 | 0.3 | 0.1 | 0.5 |
Foreign currency translation adjustments | (0.3) | 9.7 | (10.1) | 18.2 |
Other comprehensive (loss) income, net of tax | (3.4) | 9 | (8.7) | 14.6 |
Comprehensive income (loss) | $ 251.4 | $ 72.2 | $ 368.4 | $ 60.1 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | ||
Net income | $ 377.1 | $ 45.5 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 126.3 | 126.3 |
Provision for bad debt | 3.2 | 0.5 |
Share-based compensation | 43.1 | 38.5 |
Integration and restructuring activities | 6.2 | 117.2 |
Deferred income taxes | 31 | (94.6) |
Other non-cash charges, net | (3.8) | (3.6) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (34.2) | 14 |
Inventories | (42.1) | 12.5 |
Accounts payable | 12.6 | (92) |
Accrued liabilities | 95.2 | 4.9 |
Other liabilities | 40.3 | 233.4 |
Other assets | (55.9) | 28.4 |
Net cash provided by operating activities | 599 | 431 |
CASH FLOWS USED IN INVESTING ACTIVITIES | ||
Acquisitions, net of cash acquired | (37.7) | (2,320.2) |
Purchases of investments | (286.2) | (3) |
Proceeds from maturities and sales of investments | 34.8 | 461.2 |
Purchases of property and equipment | (116.4) | (126.5) |
Net cash used in investing activities | (405.5) | (1,988.5) |
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES | ||
Dividend payments | (194.9) | (191) |
Proceeds from issuance of debt | 0 | 1,100 |
Proceeds from share-based awards | 30.8 | 60.3 |
Taxes paid to net settle share-based awards | (23.7) | (29.3) |
Net cash (used in) provided by financing activities | (187.8) | 940 |
Effect of exchange rate changes on cash and cash equivalents | (12.1) | 9.6 |
Net decrease in cash and cash equivalents | (6.4) | (607.9) |
Cash and cash equivalents at beginning of period | 1,243.4 | 2,672.9 |
Cash and cash equivalents at end of period | 1,237 | 2,065 |
Supplemental information: | ||
Cash paid for income taxes, net | 102.3 | 46.5 |
Cash paid for interest | 32.3 | 20.3 |
Noncash investing activity - property and equipment obligations | $ 42.1 | $ 40.4 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Dec. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS Tapestry, Inc. (the "Company") is a leading New York-based house of modern luxury accessories and lifestyle brands. Tapestry owns the Coach, Kate Spade and Stuart Weitzman brands. The Company’s primary product offerings, manufactured by third-party suppliers, include women’s and men’s bags, small leather goods, footwear, ready-to-wear including outerwear, watches, weekend and travel accessories, scarves, eyewear, fragrance, jewelry and other lifestyle products. The Coach segment includes global sales of Coach brand products to customers through Coach operated stores, including the Internet and concession shop-in-shops, sales to wholesale customers and through independent third party distributors. The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors. The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, sales to wholesale customers and through numerous independent third party distributors. |
Basis of Presentation and Organ
Basis of Presentation and Organization | 6 Months Ended |
Dec. 29, 2018 | |
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 Securities and Exchange Commission ("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, results of operations, comprehensive income (loss) 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 for the year ended June 30, 2018 ("fiscal 2018") and other filings filed with the SEC. The results of operations, cash flows and comprehensive income for the six months ended December 29, 2018 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 29, 2019 ("fiscal 2019 "). During the second quarter of fiscal 2019, the Company acquired designated assets of its Kate Spade distributor in Singapore and Malaysia. During the first quarter of fiscal 2019, the Company acquired designated assets of its Stuart Weitzman distributor in Southern China and of its Kate Spade distributor in Australia. During the first quarter of 2018, the Company completed its acquisition of Kate Spade & Company ("Kate Spade"). During the third quarter of fiscal 2018, the Company acquired designated assets of its Stuart Weitzman distributor in Northern China, entered into an agreement to take operational control of the KS China Co., Limited and KS HMT Co., Limited joint ventures ("Kate Spade Joint Ventures") that operate in mainland China, Hong Kong, Macau and Taiwan in which the Company has 50% interest, and acquired designated assets of its Coach distributor in Australia and New Zealand. The results of operations of each acquired entity have been included in the condensed consolidated financial statements since the respective date of each acquisition. Fiscal Periods The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2019 will be a 52-week period. Fiscal 2018 ended on June 30, 2018 and was also a 52-week period. The second quarter of fiscal 2019 ended on December 29, 2018 and the second quarter of fiscal 2018 ended on December 30, 2017 . These were 13-week periods. 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 condensed consolidated financial statements and footnotes thereto. Actual results could differ from estimates in amounts that may be material to the financial statements. Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for the realizability of inventory; customer returns, end-of-season markdowns and operational chargebacks; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes (including the impacts of the new tax legislation) and related uncertain tax positions; accounting for business combinations; the valuation of stock-based compensation awards and related expected forfeiture rates; reserves for restructuring; and reserves for litigation and other contingencies, amongst others. Principles of Consolidation These unaudited interim condensed consolidated financial statements include the accounts of the Company and all 100% owned and controlled subsidiaries. All intercompany transactions and balances are eliminated in consolidation. Reclassifications Certain reclassifications have been made to the prior periods' financial information in order to conform to the current period's presentation. Beginning in fiscal 2019, the Company changed its expense reporting to more closely align with the organizational structure and management of the business. Accordingly, certain Selling, general and administrative ("SG&A") expenses that were reported within our reportable segments in fiscal 2018 are now reflected as Corporate expenses. Refer to Note 17, "Segment Information," for further information. In addition, certain prior year costs related to compensation of the supply chain function for Kate Spade have been reclassified to conform to the current year presentation. These costs amounted to $5.4 million for the fiscal year ended June 30, 2018 and have been reclassified from SG&A expenses to Cost of sales within the Company's Condensed Consolidated Statements of Operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PROUNOUNCEMENTS Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, " Revenue from Contracts with Customers " ("ASU 2014-09"), 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 model supersedes most existing revenue recognition guidance, and also requires enhanced revenue-related disclosures. The FASB has also issued several related ASUs which provide additional implementation guidance and clarify the requirements of the model. The Company adopted ASU 2014-09 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach. The cumulative effect of initially applying the new standard did not result in a change to opening Retained earnings. Prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Effects of adoption include balance sheet presentation changes including presentation of estimated returned products and refund liabilities on a gross basis, as well as an increase in deferred revenue related to current year licensing contract activity due to a change in the method of recognizing sales-based royalties. These balance sheet presentation changes resulted in an increase of $13.7 million to Other current assets, a decrease of $0.6 million to Accounts receivable and an increase of $15.5 million to Accrued liabilities as of December 29, 2018 . Furthermore, the adoption changed the income statement classification of certain items, primarily related to cooperative advertising allowances and other consideration provided to wholesale customers. The following table compares the reported results in fiscal 2019 under the new standard to the amounts that would have been reported if the standard had not been adopted: Three Months Ended December 29, 2018 Six Months Ended December 29, 2018 As Reported Impact of Adoption Balances Excluding Adoption As Reported Impact of Adoption Balances Excluding Adoption (millions) Net sales $ 1,800.8 $ (1.5 ) $ 1,802.3 $ 3,182.0 $ (3.7 ) $ 3,185.7 Cost of sales 597.3 0.6 596.7 1,043.4 0.7 1,042.7 Gross profit 1,203.5 (2.1 ) 1,205.6 2,138.6 (4.4 ) 2,143.0 Selling, general and administrative expenses 822.8 (1.2 ) 824.0 1,600.2 (2.0 ) 1,602.2 Operating income (loss) $ 380.7 $ (0.9 ) $ 381.6 $ 538.4 $ (2.4 ) $ 540.8 For further information regarding revenue from contracts with customers, refer to Note 4, "Revenue." In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"). This ASU requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to a third party. The Company adopted ASU 2016-16 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach, which resulted in a cumulative adjustment of $20.2 million to its opening Retained earnings balance. Overall, the adoption of ASU 2016-16 did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, " Leases (Topic 842), " which is intended to increase transparency and comparability among companies that enter into leasing arrangements. This ASU requires recognition of lease assets and lease liabilities on the balance sheet for all leases, as well as a retrospective recognition and measurement of existing impacted leases. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2020. Early adoption is permitted. In July 2018, the FASB issued ASU 2018-11, with targeted improvements to the guidance including an additional transition method for the new standard. As a result, the new standard may be applied with a retrospective approach to each prior reporting period or with the initial application at the adoption with a cumulative-effect adjustment in the opening balance of Retained earnings, with various optional practical expedients. The Company is currently performing a comprehensive evaluation of the impact of adopting this guidance on its consolidated financial statements and notes thereto. The Company has selected a single global software solution to manage and account for all leases, which is currently being implemented. The Company anticipates it will elect the package of practical expedients intended to ease transition whereby the Company need not assess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The Company also anticipates electing the hindsight practical expedient that allows the Company to use hindsight in determining the lease term and in assessing impairment during the look back period, and the short-term lease exemption, which allows the Company to continue to treat short-term leases as operating leases under “Leases (Topic 840).” Furthermore, the Company has determined that it will apply the provisions of ASU 2018-11 with the initial application at the adoption date with a cumulative effect adjustment in the opening balance of Retained earnings in the first quarter of fiscal 2020. The Company expects the guidance will result in a significant increase to long-term assets and liabilities on its consolidated balance sheets and does not expect it to have a material impact on the consolidated statements of operations. This guidance is not expected to have a material impact on the Company's liquidity. In August 2018, the FASB issued ASU No. 2018-13, " Fair Value Measurement (Topic 820) " ("ASU 2018-13"), which is intended to improve the effectiveness of fair value disclosures. The ASU removes or modifies certain disclosure requirements related to fair value information, as well as adds new disclosure requirements for Level 3 fair value measurements. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. The company is currently in the process of evaluating the impact that adopting ASU 2018-13 will have on its consolidated financial statements and notes thereto, however, does not expect a material impact resulting from this guidance. In August 2018, the FASB issued ASU No. 2018-15, " Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) " ("ASU 2018-15"), which is intended to clarify the accounting for implementation costs of cloud computing arrangements which are deemed to be a service contract rather than a software license. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. The company is currently in the process of evaluating the impact that adopting ASU 2018-15 will have on its consolidated financial statements and notes thereto. |
Revenue Revenue
Revenue Revenue | 6 Months Ended |
Dec. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including the Internet. The Company also generates revenue from royalties related to licensing its trademarks, as well as sales in ancillary channels. In all cases, revenue is recognized upon the transfer of control of the promised products or services to the customer, which may be at a point in time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to be entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which will not result in a significant reversal in future periods when the contingency that creates variability is resolved. The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical possession of the products. Internet revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers. Retail and Internet revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience. Payment is due at the point of sale. Gift cards issued by the Company are recorded as a liability until redeemed by the customer, at which point revenue is recognized. The company also uses historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in proportion to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed property. The Company recognizes revenue within the wholesale channel at the time title passes and risk of loss is transferred to customers, which is generally at the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Payment is generally due 30 to 90 days after shipment. Wholesale revenue is recorded net of estimates for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other consideration provided to the customer. Discounts are based on contract terms with the customer, while cooperative advertising allowances and other consideration may be based on contract terms or negotiated on a case by case basis. Returns and markdowns generally require approval from the Company and are estimated based on historical trends, current season results and inventory positions at the wholesale locations, current market and economic conditions as well as, in select cases, contractual terms. The Company's historical estimates of these variable amounts have not differed materially from actual results. The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks. These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned once the minimum royalty threshold is achieved. Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods bearing the licensed trademarks during the period, which may differ from the amount of revenue recorded during the period thereby generating a contract asset or liability. Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents approximately 1% of total net sales in the three months ended December 29, 2018 . The Company has elected a practical expedient not to disclose the remaining performance obligations that are unsatisfied as of the end of the period related to contracts with an original duration of one year or less and variable consideration related to sales-based royalty arrangements. There are no other contracts with transaction price allocated to remaining performance obligations other than future minimum royalties as discussed above, which are not material. Other practical expedients elected by the Company include (i) assuming no significant financing component exists for any contract with a duration of one year or less, (ii) accounting for shipping and handling as a fulfillment activity within SG&A expense regardless of the timing of the shipment in relation to the transfer of control and (iii) excluding sales and value added tax from the transaction price. Disaggregated Net Sales The following table disaggregates the Company's net sales into geographies that depict how economic factors may impact the revenues and cash flows for the periods presented. Each geography presented includes net sales related to the Company's directly operated channels, global travel retail business and to wholesale customers, including distributors, in locations within the specified geographic area. North America Greater China (1) Other Asia (2) Other (3) Total (millions) Three Months Ended December 29, 2018 Coach $ 759.5 $ 202.4 $ 224.2 $ 62.5 $ 1,248.6 Kate Spade 349.6 12.6 40.0 26.2 428.4 Stuart Weitzman 75.8 24.2 6.3 17.5 123.8 Total $ 1,184.9 $ 239.2 $ 270.5 $ 106.2 $ 1,800.8 Three Months Ended December 30, 2017 Coach $ 774.0 $ 191.9 $ 201.8 $ 61.9 $ 1,229.6 Kate Spade 369.4 0.1 35.9 29.3 434.7 Stuart Weitzman 87.7 7.6 4.9 20.5 120.7 Total $ 1,231.1 $ 199.6 $ 242.6 $ 111.7 $ 1,785.0 Six Months Ended December 29, 2018 Coach $ 1,304.1 $ 363.5 $ 415.1 $ 126.6 $ 2,209.3 Kate Spade 607.2 23.8 75.1 47.7 753.8 Stuart Weitzman 124.6 39.1 12.2 43.0 218.9 Total $ 2,035.9 $ 426.4 $ 502.4 $ 217.3 $ 3,182.0 Six Months Ended December 30, 2017 Coach $ 1,301.4 $ 350.8 $ 375.2 $ 125.9 $ 2,153.3 Kate Spade 586.7 0.3 67.3 49.2 703.5 Stuart Weitzman 144.2 16.6 8.0 48.3 217.1 Total $ 2,032.3 $ 367.7 $ 450.5 $ 223.4 $ 3,073.9 (1) Greater China includes mainland China, Hong Kong, Macau and Taiwan. (2) Other Asia includes Japan, Australia, New Zealand, South Korea, Thailand and other countries within Asia. (3) Other sales primarily represents sales in Europe, the Middle East and licensing. Deferred Revenue Deferred revenue results from cash payments received or receivable from customers prior to the transfer of the promised goods or services, and is primarily related to unredeemed gift cards, net of breakage which has been recognized, as well as sales-based royalty payments received. The balance of such amounts as of December 29, 2018 and June 30, 2018 was $31.8 million and $29.1 million , respectively, which were primarily recorded within Accrued liabilities on the Company's Condensed Consolidated Balance Sheets and are generally expected to be recognized as revenue within a year. For the six months ended December 29, 2018 , net sales of $11.9 million were recognized from amounts recorded as deferred revenue as of June 30, 2018 . |
Integration and Acquisition Cos
Integration and Acquisition Costs | 6 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
Integration and Acquisition Costs | INTEGRATION AND ACQUISITION COSTS During the three and six months ended December 29, 2018 , the Company incurred integration costs of $15.2 million and $34.7 million , respectively. The charges recorded in cost of sales for the three and six months ended December 29, 2018 were $3.5 million and $4.1 million , respectively. Of the amount recorded to cost of sales, $0.0 million and $2.0 million was recorded in the Coach segment, $2.5 million and $1.1 million was recorded in the Kate Spade segment and $1.0 million and $1.0 million was recorded in the Stuart Weitzman segment, respectively. The charges recorded to SG&A expenses for the three and six months ended December 29, 2018 were $11.7 million and $30.6 million , respectively. Of the amount recorded to SG&A expenses, $0.6 million and $12.1 million was recorded in the Stuart Weitzman segment, $7.4 million and $11.4 million was recorded within Corporate and $3.7 million and $7.1 million was recorded in the Kate Spade segment, respectively. Of the total costs of $15.2 million , $4.8 million were non-cash charges related to purchase accounting adjustments and asset write-offs. Of the total costs of $34.7 million , $6.2 million were non-cash charges related to purchase accounting adjustments, organization-related costs and asset write-offs. The Company estimates that it will incur approximately $ 45-55 million in pre-tax charges, of which the majority are expected to be cash charges, for the remainder of fiscal 2019. During the three and six months ended December 30, 2017 , the Company incurred integration and acquisition-related costs of $61.4 million and $248.9 million , respectively. The charges recorded in cost of sales for the three and six months ended December 30, 2017 were $18.4 million and $106.8 million , respectively. The charges recorded to cost of sales were primarily recorded in the Kate Spade segment. The charges recorded in SG&A expenses for the three and six months ended December 30, 2017 were $43.0 million and $142.1 million , respectively. Of the amount recorded to SG&A expenses, $29.7 million and $97.5 million was recorded in the Kate Spade segment, $12.4 million and $42.8 million was recorded within Corporate and $0.9 million and $1.8 million was recorded in the Stuart Weitzman segment, respectively. Of the total costs of $248.9 million , $117.2 million were non-cash charges related to purchase accounting adjustments, inventory, organization-related costs and asset write-offs. Refer to Note 7, "Acquisitions," for more information. A summary of the integration and acquisition charges is as follows: Three Months Ended Six Months Ended December 29, December 30, December 29, December 30, (millions) Purchase accounting adjustments (1) $ 3.4 $ 18.2 $ 5.4 $ 70.2 Acquisition costs (2) 0.7 0.8 0.7 40.7 Inventory-related charges (3) — 0.3 (1.4 ) 37.9 Contractual payments (4) 0.1 14.7 7.2 50.6 Organization-related costs (5) 5.5 13.7 5.8 27.7 Other (6) 5.5 13.7 17.0 21.8 Total $ 15.2 $ 61.4 $ 34.7 $ 248.9 (1) Purchase accounting adjustments were primarily related to the short-term impact of the amortization of fair value adjustments. (2) Acquisition costs were primarily related to deal fees associated with the acquisition. (3) Inventory-related charges were primarily related to reserves for the destruction of certain on-hand inventory and non-cancelable inventory purchase commitments related to raw materials. (4) Contractual payments were primarily related to contract termination charges for the three and six months ended December 29, 2018. For the three and six months ended December 30, 2017, these payments were primarily related to severance and related costs as a result of pre-existing agreements with certain Kate Spade executives which became effective upon the closing of the acquisition. (5) Organization-related costs were primarily related to severance charges. (6) Other charges were primarily related to professional fees and asset write-offs. |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Dec. 29, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | RESTRUCTURING ACTIVITIES Operational Efficiency Plan During the fourth quarter of fiscal 2016, the Company announced a plan (the “Operational Efficiency Plan”) to enhance organizational efficiency, update core technology platforms and optimize international supply chain and office locations. The Operational Efficiency Plan was adopted as a result of a strategic review of the Company’s corporate structure which focused on creating an agile and scalable business model. During the three and six months ended December 30, 2017 , the Company incurred charges of $3.5 million and $6.6 million , respectively, primarily due to technology infrastructure costs and organizational efficiency costs. Total cumulative charges incurred under the Operational Efficiency Plan were $87.4 million . These charges were recorded as Corporate expenses within SG&A expenses within the Company's Condensed Consolidated Statements of Operations. The plan was concluded at the end of fiscal 2018. There were no remaining liabilities under the Company's Operational Efficiency Plan as of December 29, 2018 . The balance of $1.4 million as of June 30, 2018 is included within Accrued liabilities on the Company's Condensed Consolidated Balance Sheets. |
Acquisitions
Acquisitions | 6 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Fiscal 2019 Acquisitions Distributor Acquisitions During the six months ended December 29, 2018 , the Company acquired designated assets of its Stuart Weitzman distributor in Southern China and of its Kate Spade distributor in Australia, Malaysia and Singapore. The aggregate purchase consideration for the acquisitions was $39.7 million , all of which is cash consideration. Of the cash consideration, $37.7 million was paid during the first six months of fiscal 2019 and the remaining $2.0 million will be paid in the future. Of the total purchase consideration of $39.7 million , $18.6 million of net assets were recorded at their fair values. The excess of the purchase consideration over the fair value of the net assets acquired was recorded as non-tax deductible goodwill in the amount of $21.1 million , of which $8.4 million was assigned to the Stuart Weitzman segment and $12.7 million was assigned to the Kate Spade segment. The purchase price allocation for these assets acquired and liabilities assumed is substantially complete, however may be subject to change as additional information is obtained during the acquisition measurement period. The pro forma results are not presented for these acquisitions as they are immaterial. Fiscal 2018 Acquisitions Kate Spade and Company Acquisition On July 11, 2017, the Company completed its acquisition of Kate Spade & Company for $18.50 per share for a total purchase price of $2.40 billion . As a result, Kate Spade became a wholly owned subsidiary of the Company. The aggregate cash paid in connection with the acquisition of Kate Spade was $2.39 billion (or $2.32 billion net of cash acquired). Consideration also included $5.3 million as a result of the conversion of unvested equity awards held by Kate Spade employees. The Company funded the acquisition through cash on-hand, as well as debt proceeds as described in Note 12, "Debt." The Company accounted for the acquisition of Kate Spade under the acquisition method of accounting for business combinations. Accordingly, the cost was allocated to the underlying net assets based on their respective fair values. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill, which consists largely of the synergies expected from the acquisition. The purchase price allocation for the assets acquired and liabilities assumed is complete. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date: Assets Acquired and Liabilities Assumed Fair Value at Acquisition Date Measurement Period Adjustments Adjusted Fair Value (millions) Cash and cash equivalents $ 71.8 $ — $ 71.8 Trade accounts receivable 62.8 — 62.8 Inventories (1) 310.1 — 310.1 Prepaid expenses and other current assets 33.9 (1.2 ) 32.7 Property and equipment 175.5 — 175.5 Goodwill (2)(3) 916.1 (16.1 ) 900.0 Brand intangible asset (4) 1,300.0 — 1,300.0 Other intangible assets (5) 119.2 — 119.2 Other assets 59.0 11.1 70.1 Total assets acquired 3,048.4 (6.2 ) 3,042.2 Accounts payable and accrued liabilities 233.3 — 233.3 Deferred income taxes (6) 333.0 (7.3 ) 325.7 Other liabilities (7) 84.8 1.1 85.9 Total liabilities assumed 651.1 (6.2 ) 644.9 Total purchase price 2,397.3 — 2,397.3 Less: Cash acquired (71.8 ) — (71.8 ) Total purchase price, net of cash acquired $ 2,325.5 $ — $ 2,325.5 (1) Included a step-up adjustment of $67.5 million , which was amortized over 4 months . (2) The majority of the goodwill balance is not deductible for tax purposes. (3) The Company assigned $324.0 million of goodwill associated with the Kate Spade acquisition to Coach brand reporting units based upon the analysis of expected synergies, including the allocation of corporate synergies to the brands. (4) The brand intangible asset, of which the majority is not deductible for tax purposes, was valued based on the multi-period excess earnings method. (5) The components of other intangible assets included favorable lease rights of $72.2 million (amortized over the remainder of the underlying lease terms), customer relationships of $45.0 million (amortized over 15 years) and order backlog of $2.0 million (amortized over 6 months). Favorable lease rights were valued based on a comparison of market participant information and Company-specific lease terms. The customer relationship intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with the existing base of customers as of the acquisition date, factoring in expected attrition of the existing base. The order backlog intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with open customer orders as of the acquisition date. (6) The Company acquired $200.1 million of net deferred tax assets related to Kate Spade historical federal and state net operating losses, net of a $39.3 million valuation allowance, which the Company expects to be able to utilize. The deferred tax adjustments resulting from the step-up in basis of acquired assets, most notably the brand intangible asset, resulted in an overall deferred tax liability. (7) Included an adjustment for unfavorable lease rights of $49.5 million (amortized over the remainder of the underlying lease terms). Distributor Acquisitions and Kate Spade Joint Ventures Operational Control During the third quarter of fiscal 2018, the Company acquired designated assets of its Stuart Weitzman distributor in Northern China, entered into an agreement to take operational control of the Kate Spade Joint Ventures that operate in mainland China, Hong Kong, Macau and Taiwan in which the Company has 50% interest, and acquired designated assets of its Coach distributor in Australia and New Zealand. The aggregate purchase consideration for the three acquisitions was $153.7 million , of which $106.9 million is cash consideration and the remaining is related to non-cash consideration. Of the cash consideration, $61.5 million (or $55.6 million net of cash acquired) was paid during fiscal 2018 and the remaining will be paid in the future. Of the total purchase consideration of $153.7 million , $50.0 million of net assets were recorded at their fair values, and the excess of the purchase consideration over the fair value of the net assets acquired was recorded as non-tax deductible goodwill in the amount of $103.7 million . Of this amount, $52.8 million , $49.3 million and $1.6 million were assigned to the Company's Kate Spade, Stuart Weitzman and Coach segments, respectively. During the fourth quarter of fiscal 2018, there were measurement period adjustments of $2.3 million and $0.5 million , related to the Kate Spade and Stuart Weitzman segments, respectively, which decreased Goodwill. The purchase price allocation for these assets acquired and liabilities assumed is substantially complete, however may be subject to change as additional information is obtained during the acquisition measurement period. The pro forma results are not presented for these acquisitions as they are immaterial. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Dec. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The change in the carrying amount of the Company’s goodwill by segment is as follows: Coach Kate Spade Stuart Weitzman Total (millions) Balance at June 30, 2018 $ 654.8 $ 627.0 $ 202.5 $ 1,484.3 Foreign exchange impact 2.6 (1.9 ) (2.7 ) (2.0 ) Acquisition of goodwill (1) — 12.7 8.4 21.1 Balance at December 29, 2018 $ 657.4 $ 637.8 $ 208.2 $ 1,503.4 (1) Refer to Note 7, "Acquisitions," for further information. Intangible Assets Intangible assets consist of the following: December 29, 2018 June 30, 2018 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.5 $ (20.7 ) $ 79.8 $ 100.5 $ (17.3 ) $ 83.2 Order backlog — — — 2.0 (2.0 ) — Favorable lease rights 97.0 (31.7 ) 65.3 97.3 (24.4 ) 72.9 Total intangible assets subject to amortization 197.5 (52.4 ) 145.1 199.8 (43.7 ) 156.1 Intangible assets not subject to amortization: Trademarks and trade names 1,576.8 — 1,576.8 1,576.8 — 1,576.8 Total intangible assets $ 1,774.3 $ (52.4 ) $ 1,721.9 $ 1,776.6 $ (43.7 ) $ 1,732.9 As of December 29, 2018 , the expected amortization expense for intangible assets is as follows: Amortization Expense (millions) Remainder of fiscal 2019 $ 10.9 Fiscal 2020 19.7 Fiscal 2021 18.1 Fiscal 2022 16.1 Fiscal 2023 15.1 Fiscal 2024 13.4 Fiscal 2025 and thereafter 51.8 Total $ 145.1 The expected amortization expense above reflects remaining useful lives ranging from approximately 11.3 to 13.5 years for customer relationships and the remaining lease terms ranging from approximately 1 month to 16.3 years for favorable lease rights. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 29, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY A reconciliation of stockholders' equity is presented below: Shares of Common Stock Common Stock Additional Paid-in- Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity (millions, except per share data) Balance at July 1, 2017 281.9 $ 2.8 $ 2,978.3 $ 107.7 $ (86.9 ) $ 3,001.9 Net loss — — — (17.7 ) — (17.7 ) Other comprehensive income — — — — 5.6 5.6 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 2.3 — 17.5 — — 17.5 Share-based compensation — — 23.3 — — 23.3 Additional paid-in-capital as part of purchase consideration — — 5.3 — — 5.3 Dividends declared ($0.3375 per share) — — — (95.9) — (95.9) Balance at September 30, 2017 284.2 $ 2.8 $ 3,024.4 $ (5.9 ) $ (81.3 ) $ 2,940.0 Net income — — — 63.2 — 63.2 Other comprehensive income — — — — 9.0 9.0 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 0.6 — 12.6 — — 12.6 Share-based compensation — — 20.7 — — 20.7 Dividends declared ($0.3375 per share) — — — (96.1 ) — (96.1 ) Balance at December 30, 2017 284.8 $ 2.8 $ 3,057.7 $ (38.8 ) $ (72.3 ) $ 2,949.4 Balance at June 30, 2018 288.0 $ 2.9 $ 3,205.5 $ 119.0 $ (82.8 ) $ 3,244.6 Net income — — — 122.3 — 122.3 Other comprehensive loss — — — — (5.3 ) (5.3 ) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 1.8 — 3.2 — — 3.2 Share-based compensation — — 22.4 — — 22.4 Dividends declared ($0.3375 per share) — — — (97.8 ) — (97.8 ) Cumulative adjustment from adoption of new accounting standard (see Note 3) — — — 20.2 — 20.2 Balance at September 29, 2018 289.8 $ 2.9 $ 3,231.1 $ 163.7 $ (88.1 ) $ 3,309.6 Net income — — — 254.8 — 254.8 Other comprehensive loss — — — — (3.4 ) (3.4 ) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 0.2 — 3.7 — — 3.7 Share-based compensation — — 21.5 — — 21.5 Dividends declared ($0.3375 per share) — — — (97.8 ) — (97.8 ) Balance at December 29, 2018 290.0 $ 2.9 $ 3,256.3 $ 320.7 $ (91.5 ) $ 3,488.4 The components of accumulated other comprehensive income (loss) ("AOCI"), as of the dates indicated, are as follows: Unrealized Gains (Losses) on Cash Flow Hedging Derivatives (1) Unrealized (Losses) Gains on Available- for-Sale Investments Cumulative Translation Adjustment Other (2) Total (millions) Balances at July 1, 2017 $ 3.0 $ (0.4 ) $ (89.1 ) $ (0.4 ) $ (86.9 ) Other comprehensive (loss) income before reclassifications (1.5 ) 0.6 18.2 — 17.3 Less: income reclassified from accumulated other comprehensive income to earnings 2.6 0.1 — — 2.7 Net current-period other comprehensive (loss) income (4.1 ) 0.5 18.2 — 14.6 Balances at December 30, 2017 $ (1.1 ) $ 0.1 $ (70.9 ) $ (0.4 ) $ (72.3 ) Balances at June 30, 2018 $ 1.4 $ — $ (85.3 ) $ 1.1 $ (82.8 ) Other comprehensive income (loss) before reclassifications 1.4 0.1 (10.1 ) — (8.6 ) Less: losses reclassified from accumulated other comprehensive income to earnings 0.1 — — — 0.1 Net current-period other comprehensive income (loss) 1.3 0.1 (10.1 ) — (8.7 ) Balances at December 29, 2018 $ 2.7 $ 0.1 $ (95.4 ) $ 1.1 $ (91.5 ) (1) The ending balances of AOCI related to cash flow hedges are net of tax of ($1.5) million and ($1.1) million as of December 29, 2018 and December 30, 2017 , respectively. The amounts reclassified from AOCI are net of tax of ($0.3) million and ($1.5) million as of December 29, 2018 and December 30, 2017 , respectively. (2) Other represents the accumulated loss on the Company's minimum pension liability adjustment. The balances at December 29, 2018 and December 30, 2017 are net of tax of $0.6 million and $0.2 million, respectively. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Dec. 29, 2018 | |
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 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 earnings per share: Three Months Ended Six Months Ended December 29, December 30, December 29, December 30, (millions, except per share data) Net income $ 254.8 $ 63.2 $ 377.1 $ 45.5 Weighted-average basic shares 289.9 284.5 289.3 283.8 Dilutive securities: Effect of dilutive securities 1.1 1.9 2.1 2.7 Weighted-average diluted shares 291.0 286.4 291.4 286.5 Net income per share: Basic $ 0.88 $ 0.22 $ 1.30 $ 0.16 Diluted $ 0.88 $ 0.22 $ 1.29 $ 0.16 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 restricted stock unit awards that are issuable only upon the achievement of certain performance goals. Performance-based restricted stock unit awards are included in the computation of diluted shares only to the extent that the underlying performance conditions (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 29, 2018 and December 30, 2017 , there were 7.8 million and 5.1 million , respectively, of additional shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based restricted stock unit awards, which were excluded from the diluted share calculations. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Dec. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | SHARE-BASED COMPENSATION The following table shows the total compensation cost charged against income for share-based compensation plans and the related tax benefits recognized in the Company's Condensed Consolidated Statements of Operations for the periods indicated: Three Months Ended Six Months Ended December 29, 2018 (1) December 30, 2017 (1) December 29, 2018 (1) December 30, 2017 (1) (millions) Share-based compensation expense $ 21.5 $ 20.7 $ 43.9 $ 44.0 Income tax benefit related to share-based compensation expense 4.0 4.3 8.2 11.9 (1) During the three and six months ended December 29, 2018 , the Company incurred $0.4 million and $0.8 million of share-based compensation expense related to integration, respectively. During the three and six months ended December 30, 2017 , the Company incurred $2.2 million and $4.7 million of share-based compensation expense related to integration, respectively. During the three months ended December 30, 2017 , there was no share-based compensation expense under the Operational Efficiency Plan. There was $0.8 million of share-based compensation expense incurred under the Operational Efficiency Plan for the six months ended December 30, 2017 . Stock Options A summary of stock option activity during the six months ended December 29, 2018 is as follows: Number of Options Outstanding (millions) Outstanding at June 30, 2018 12.5 Granted 1.5 Exercised (0.8 ) Forfeited or expired (0.2 ) Outstanding at December 29, 2018 13.0 The weighted-average grant-date fair value of options granted during the six months ended December 29, 2018 and December 30, 2017 was $9.77 and $7.71 , respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions: December 29, December 30, Expected term (years) 5.0 5.1 Expected volatility 30.3 % 28.3 % Risk-free interest rate 3.1 % 1.8 % Dividend yield 3.1 % 3.3 % Service-based Restricted Stock Unit Awards ("RSUs") A summary of service-based RSU activity during the six months ended December 29, 2018 is as follows: Number of Non-vested RSUs (millions) Non-vested at June 30, 2018 3.5 Granted 1.6 Vested (1.4 ) Forfeited (0.1 ) Non-vested at December 29, 2018 3.6 The weighted-average grant-date fair value of share awards granted during the six months ended December 29, 2018 and December 30, 2017 was $50.85 and $41.08 , respectively. Performance-based Restricted Stock Unit Awards ("PRSUs") A summary of PRSU activity during the six months ended December 29, 2018 is as follows: Number of Non-vested PRSUs (millions) Non-vested at June 30, 2018 0.9 Granted 0.3 Change due to performance condition achievement (0.1 ) Vested (0.2 ) Forfeited — Non-vested at December 29, 2018 0.9 The PRSU awards included in the non-vested amount are based on certain Company-specific financial metrics. The effect of the change due to performance condition on the non-vested amount is recognized at the conclusion of the performance period, which may occur before or at the time the award vests. The weighted-average grant-date fair value per share of PRSU awards granted during the six months ended December 29, 2018 and December 30, 2017 was $50.89 and $41.22 , respectively. |
Debt
Debt | 6 Months Ended |
Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table summarizes the components of the Company’s outstanding debt: December 29, June 30, 2018 (millions) Current debt: Capital lease obligations $ 0.7 $ 0.7 Total current debt $ 0.7 $ 0.7 Long-term debt: 4.250% Senior Notes due 2025 $ 600.0 $ 600.0 3.000% Senior Notes due 2022 400.0 400.0 4.125% Senior Notes due 2027 600.0 600.0 Note Payable 11.4 11.4 Capital lease obligations 6.0 6.0 Total long-term debt 1,617.4 1,617.4 Less: Unamortized discount and debt issuance costs on Senior Notes (16.4 ) (17.5 ) Total long-term debt, net $ 1,601.0 $ 1,599.9 During the three and six months ended December 29, 2018 , the Company recognized interest expense related to its debt of $16.6 million and $33.4 million , respectively. During the three and six months ended December 30, 2017 , the Company recognized interest expense related to its debt of $25.3 million and $49.7 million , respectively. Revolving Credit Facility On May 30, 2017, the Company entered into a definitive credit agreement whereby Bank of America, N.A., as administrative agent, the other agents party thereto, and a syndicate of banks and financial institutions have made available to the Company a $900.0 million revolving credit facility, including sub-facilities for letters of credit, with a maturity date of May 30, 2022 (the “Revolving Credit Facility”). The Revolving Credit Facility replaced the Company’s previously existing revolving credit facility under the Amendment and Restatement Agreement, dated as of March 18, 2015, by and between the Company, certain lenders and JPMorgan Chase Bank, N.A., as administrative agent. The Revolving Credit Facility may be used to finance the working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes of the Company and its subsidiaries (which may include commercial paper back-up). Letters of credit and swing line loans may be issued under the Revolving Credit Facility as described below. There were no outstanding borrowings on the Revolving Credit Facility as of December 29, 2018 . Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at the Borrowers’ option, either (a) an alternate base rate (which is a rate equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1% or (iii) the Adjusted LIBO Rate for a one month Interest Period on such day plus 1% ) or (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars or the applicable currency in which the loans are made plus, in each case, an applicable margin. The applicable margin will be determined by reference to a grid, as defined in the Credit Agreement, based on the ratio of (a) consolidated debt plus 600% of consolidated lease expense to (b) consolidated EBITDAR. Additionally, the Company pays a commitment fee at a rate determined by the reference to the aforementioned pricing grid. 4.250% Senior Notes due 2025 On March 2, 2015, the Company issued $600.0 million aggregate principal amount of 4.250% senior unsecured notes due April 1, 2025 at 99.445% of par (the “2025 Senior Notes”). Interest is payable semi-annually on April 1 and October 1 beginning October 1, 2015. Prior to January 1, 2025 ( 90 days prior to the scheduled maturity date), the Company may redeem the 2025 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2025 Senior Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been payable in respect of the 2025 Senior Notes calculated as if the maturity date of the 2025 Senior Notes was January 1, 2025 (not including any portion of payments of interest accrued to the date of redemption), discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate (as defined in the indenture for the 2025 Senior Notes) plus 35 basis points, plus, in the case of each of (1) and (2), accrued and unpaid interest to the redemption date. On and after January 1, 2025 ( 90 days prior to the scheduled maturity date), the Company may redeem the 2025 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to 100% of the principal amount of the 2025 Senior Notes to be redeemed, plus accrued and unpaid interest to the redemption date. 3.000% Senior Notes due 2022 On June 20, 2017, the Company issued $400.0 million aggregate principal amount of 3.000% senior unsecured notes due July 15, 2022 at 99.505% of par (the "2022 Senior Notes"). Interest is payable semi-annually on January 15 and July 15 beginning January 15, 2018. Prior to June 15, 2022 (one month prior to the scheduled maturity date), the Company may redeem the 2022 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2022 Senior Notes to be redeemed or (2) as determined by a Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been payable in respect of the 2022 Senior Notes calculated as if the maturity date of the 2022 Senior Notes was June 15, 2022 (not including any portion of payments of interest accrued to the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the Prospectus Supplement) plus 25 basis points, plus, in the case of each of (1) and (2), accrued and unpaid interest to the redemption date. 4.125% Senior Notes due 2027 On June 20, 2017, the Company issued $600.0 million aggregate principal amount of 4.125% senior unsecured notes due July 15, 2027 at 99.858% of par (the "2027 Senior Notes"). Interest is payable semi-annually on January 15 and July 15 beginning January 15, 2018. Prior to April 15, 2027 (the date that is three months prior to the scheduled maturity date), the Company may redeem the 2027 Senior Notes in whole or in part, at its option at any time or from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2027 Senior Notes to be redeemed or (2) as determined by a Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been payable in respect of the 2027 Senior Notes calculated as if the maturity date of the 2027 Senior Notes was April 15, 2027 (not including any portion of payments of interest accrued to the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the Prospectus Supplement) plus 30 basis points, plus, in the case of each of (1) and (2), accrued and unpaid interest to the redemption date. At December 29, 2018 and June 30, 2018 , the total fair value of the 2025, 2022 and 2027 Senior Notes was $1.52 billion and $1.56 billion , respectively, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy. Note Payable As a result of taking operational control of the Kate Spade Joint Ventures, the Company has an outstanding Note Payable of $11.4 million as of both December 29, 2018 and June 30, 2018 to the other partner of the Kate Spade Joint Ventures, to be paid in fiscal 2021. Capital Lease Obligations As a result of the Company's sale-leaseback agreement for its office building in North Bergen, NJ, the Company has total capital lease obligations of $0.7 million recorded within Current debt and $6.0 million recorded within Long-term debt on the Company's Condensed Consolidated Balance Sheets as of both December 29, 2018 and June 30, 2018 . The remaining lease obligations will be amortized through May 1, 2025. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 29, 2018 | |
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 Company does not have any Level 3 investments. The following table shows the fair value measurements of the Company’s financial assets and liabilities at December 29, 2018 and June 30, 2018 : Level 1 Level 2 December 29, June 30, December 29, June 30, (millions) Assets: Cash equivalents (1) $ 521.9 $ 592.5 $ 0.4 $ 0.4 Short-term investments : Time deposits (2) — — 0.6 0.6 Commercial paper (2) — — 20.6 — Government securities - U.S. (2) 100.0 — — — Corporate debt securities - U.S. (2) — — 89.7 — Corporate debt securities - non U.S. (2) — — 38.8 — Other — — 8.5 6.0 Long-term investments : Government securities - non U.S. 0.1 — — — Derivative Assets : Inventory-related instruments (3) — — 4.1 5.6 Intercompany loan hedges (3) — — — 0.3 Liabilities: Derivative liabilities : Inventory-related instruments (3) — — 3.0 2.3 Intercompany loan hedges (3) — — 0.3 0.1 (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 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. (3) 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. Refer to Note 12, "Debt," for the fair value of the Company's outstanding debt instruments. Non-Financial Assets and Liabilities The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions. Refer to Note 7, "Acquisitions," for further discussion of the approaches used in valuing acquired assets and assumed liabilities. |
Investments
Investments | 6 Months Ended |
Dec. 29, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS The following table summarizes the Company’s U.S. dollar-denominated investments, recorded within the Company's Condensed Consolidated Balance Sheets as of December 29, 2018 and June 30, 2018 : December 29, June 30, 2018 Short-term Long-term Total Short-term Long-term Total (millions) Available-for-sale investments: Commercial paper (1) $ 20.6 $ — $ 20.6 $ — $ — $ — Government securities - U.S. (2) 100.0 — 100.0 — — — Government securities - non-U.S. — 0.1 0.1 — Corporate debt securities - U.S. (2) 89.7 — 89.7 — — — Corporate debt securities - non-U.S. (2) 38.8 — 38.8 — — — Available-for-sale investments, total $ 249.1 $ 0.1 $ 249.2 $ — $ — $ — Other: Time deposits (1) 0.6 — 0.6 0.6 — 0.6 Other 8.5 — 8.5 6.0 — 6.0 Total Investments $ 258.2 $ 0.1 $ 258.3 $ 6.6 $ — $ 6.6 (1) These securities have original maturities greater than three months and are recorded at fair value. (2) These securities as of December 29, 2018 have maturity dates between calendar years 2018 and 2019 and are recorded at fair value. There were no material gross unrealized gains or losses on available-for-sale investments as of the periods ended December 29, 2018 and June 30, 2018 . |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”) was enacted. The Tax Legislation significantly revises the U.S. tax code by (i) lowering the U.S federal statutory income tax rate from 35% to 21% , (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries ("Transition Tax"), (iv) requiring current inclusion of global intangible low taxed income (“GILTI”) of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax (“BEAT”) provision, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, (vii) enacting a beneficial rate to be applied against Foreign Derived Intangible Income ("FDII") and (viii) limiting deductibility of interest and executive compensation expense, among other changes. The Tax Legislation includes substantial changes to the taxation of foreign income, effectively converting the U.S. to a territorial income tax regime. Notable changes include that foreign earnings after December 31, 2017 will generally be eligible for a 100% dividends received deduction. However, companies are subject to the BEAT and GILTI provisions, which would increase the Company's effective tax rate, and the FDII provision, which would decrease the effective tax rate. The Company has decided to account for GILTI in the period in which it is incurred and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the three and six months ended December 29, 2018. As a result, during the three and six months ended December 29, 2018, the Company recorded approximately $10.5 million and $14.3 million , respectively, to Provision for income taxes related to the GILTI and FDII provisions. During fiscal 2018, the Company recorded charges of $178.2 million within its income tax provision in connection with the Tax Legislation, of which $266.0 million related to the mandatory transition tax and $(87.8) million related to the revaluation of the Company's deferred tax assets and liabilities. The Company applied the guidance in SEC Staff Accounting Bulletin ("SAB") 118 when accounting for the effects of the Tax Legislation for the twelve-month period following the date of the enactment. As of December 29, 2018, the Company completed the accounting for the enactment date income tax effects of the Tax Legislation under Accounting Standards Codification ("ASC") 740, Income Taxes, for the measurement of deferred tax assets and liabilities and one-time transition tax. In fiscal 2019, the Company recorded additional charges of $34.1 million , of which $32.1 million related to the mandatory transition tax and $2.0 million related to the revaluation of the Company's deferred tax assets and liabilities. The effect of these adjustments on the effective tax rate for the three and six months ended December 29, 2018 was an increase of 9.3% and 6.6% , respectively. The following table presents the expected timing of income tax payments related to the Transition Tax expected to be recognized by the Company as of December 29, 2018: Transition Tax Payments (millions) Remainder of fiscal 2019 $ 3.2 Fiscal 2020 23.3 Fiscal 2021 23.3 Fiscal 2022 23.3 Fiscal 2023 43.8 Fiscal 2024 58.3 Fiscal 2025 72.9 Total $ 248.1 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Letters of Credit The Company had standby letters of credit, surety bonds and bank guarantees totaling $38.3 million and $35.1 million outstanding at December 29, 2018 and June 30, 2018 , respectively. The agreements, which expire at various dates through calendar 2039, primarily collateralize the Company's obligation to third parties for duty, leases, insurance claims and materials used in product manufacturing. The Company pays certain fees with respect to these instruments that are issued. Tax Legislation The Tax Legislation requires the Company to pay a one-time tax, or Transition Tax on previously unremitted earnings of certain non-U.S. subsidiaries. The Company expects to pay the remaining $248.1 million related to the Transition Tax for the remainder of fiscal 2019 through fiscal 2025. Refer to Note 15, "Income Taxes," for more information related to the impact of the Tax Legislation. Other The Company had other contractual cash obligations as of December 29, 2018 related to debt repayments. Refer to Note 12, "Debt," for further information. In the ordinary course of business, the Company is a party to several pending legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company's general counsel and management are of the opinion that the final outcome will not have a material effect on the Company’s cash flow, results of operations or financial position. |
Segment Information
Segment Information | 6 Months Ended |
Dec. 29, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company has three reportable segments: • Coach - Includes global sales of Coach brand products to customers through Coach operated stores, including the Internet and concession shop-in-shops, sales to wholesale customers and through independent third party distributors. • Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors. • Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, sales to wholesale customers and through numerous independent third party distributors. Beginning in fiscal 2019, the Company changed its expense reporting to more closely align with the organizational structure and management of the business. Accordingly, certain SG&A expenses that were previously reported within our reportable segments are now reflected in Corporate expense. The costs primarily relate to employee costs within shared functional groups. The following table recasts segment reporting for the three and six months ended December 30, 2017 . The following table summarizes segment performance for the three and six months ended December 29, 2018 and December 30, 2017 : Coach Kate Stuart Weitzman Corporate (1) Total (millions) Three Months Ended December 29, 2018 Net sales $ 1,248.6 $ 428.4 $ 123.8 $ — $ 1,800.8 Gross profit 860.1 272.4 71.0 — 1,203.5 Operating income (loss) 378.5 89.2 11.2 (98.2 ) 380.7 Income (loss) before provision for income taxes 378.5 89.2 11.2 (111.4 ) 367.5 Depreciation and amortization expense (2) 33.6 16.0 3.9 12.6 66.1 Additions to long-lived assets (3) 16.0 18.9 2.2 24.1 61.2 Three Months Ended December 30, 2017 Net sales $ 1,229.6 $ 434.7 $ 120.7 $ — $ 1,785.0 Gross profit 846.0 256.8 73.4 — 1,176.2 Operating income (loss) 368.2 54.8 21.8 (98.4 ) 346.4 Income (loss) before provision for income taxes 368.2 54.8 21.8 (120.6 ) 324.2 Depreciation and amortization expense (2) 32.4 19.8 4.0 9.8 66.0 Additions to long-lived assets (3) 44.8 7.1 2.5 23.2 77.6 Six Months Ended December 29, 2018 Net sales $ 2,209.3 $ 753.8 $ 218.9 $ — $ 3,182.0 Gross profit 1,539.8 480.1 118.7 — 2,138.6 Operating income (loss) 609.4 134.0 (7.2 ) (197.8 ) 538.4 Income (loss) before provision for income taxes 609.4 134.0 (7.2 ) (224.1 ) 512.1 Depreciation and amortization expense (2) 67.1 28.6 8.1 23.7 127.5 Additions to long-lived assets (3) 33.3 38.6 3.8 40.7 116.4 Six Months Ended December 30, 2017 Net sales $ 2,153.3 $ 703.5 $ 217.1 $ — $ 3,073.9 Gross profit 1,478.1 331.6 129.4 — 1,939.1 Operating income (loss) 576.3 (68.5 ) 30.7 (213.9 ) 324.6 Income (loss) before provision for income taxes 576.3 (68.5 ) 30.7 (256.6 ) 281.9 Depreciation and amortization expense (2) 70.5 30.2 8.0 22.8 131.5 Additions to long-lived assets (3) 73.9 14.0 3.2 35.4 126.5 (1) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a brand. These costs primarily include administration and certain information systems expense. Furthermore, certain integration and acquisition costs as well as costs under the Operational Efficiency Plan as described in Note 5, "Integration and Acquisition Costs," and Note 6, "Restructuring Activities," respectively, are included within Corporate. (2) Depreciation and amortization expense includes $0.8 million and $1.2 million of integration and acquisition costs for the three and six months ended December 29, 2018 . Depreciation and amortization expense includes $2.2 million and $5.2 million of integration and acquisition costs for the three and six months ended December 30, 2017, respectively. These charges are recorded within the Kate Spade segment. Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments. (3) Additions to long-lived assets for the reportable segments primarily includes store assets as well as assets that support a specific brand. Corporate additions include all other assets which include a combination of Corporate assets, as well as assets that may support all segments. As such, depreciation expense for these assets may be subsequently allocated to a reportable segment. |
Headquarters Transactions
Headquarters Transactions | 6 Months Ended |
Dec. 29, 2018 | |
Leases [Abstract] | |
Headquarters Transactions | HEADQUARTERS TRANSACTIONS Sublease Agreement During the first quarter in fiscal 2018, the Company entered into a Sublease (the "Sublease"), as sublandlord, with The Guardian Life Insurance Company of America, a New York mutual insurance company ("Guardian"), as subtenant, pursuant to which the Company has agreed to sublease to Guardian three floors of the Company's leased space at 10 Hudson Yards, New York, NY, consisting of approximately 148,813 square feet of office space. The term of the Sublease expires on June 29, 2036 (the "Expiration Date"). The rent commencement date under the Sublease is estimated to occur on February 1, 2019. Under the terms of the Sublease, and assuming a rent commencement date of February 1, 2019, Guardian has agreed to pay monthly base rent to the Company of approximately $0.8 million from March 1, 2019 through June 30, 2019 and monthly base rent ranging from approximately $1.1 million to $1.3 million depending on the period from July 1, 2019 through the Expiration Date. In addition to monthly base rent, Guardian has agreed to pay to the Company Guardian’s proportionate share of increases in payments in lieu of taxes and taxes over the tax year commencing July 1, 2019, as well as Guardian’s proportionate share of increases in operating expenses over the operating year commencing January 1, 2019. Subject to certain customary conditions set forth in the Sublease, the Company has agreed to reimburse Guardian for certain subtenant improvements in an amount equal to $80.00 per rentable square foot, or approximately $11.9 million in the aggregate, subject to a deduction equal to $10.00 per rentable square foot, or approximately $1.5 million in the aggregate, for work previously performed by or on behalf of the Company. |
Basis of Presentation and Org_2
Basis of Presentation and Organization (Policies) | 6 Months Ended |
Dec. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Periods | Fiscal Periods The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2019 will be a 52-week period. Fiscal 2018 ended on June 30, 2018 and was also a 52-week period. The second quarter of fiscal 2019 ended on December 29, 2018 and the second quarter of fiscal 2018 ended on December 30, 2017 . These were 13-week periods. |
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 condensed consolidated financial statements and footnotes thereto. Actual results could differ from estimates in amounts that may be material to the financial statements. Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for the realizability of inventory; customer returns, end-of-season markdowns and operational chargebacks; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes (including the impacts of the new tax legislation) and related uncertain tax positions; accounting for business combinations; the valuation of stock-based compensation awards and related expected forfeiture rates; reserves for restructuring; and reserves for litigation and other contingencies, amongst others. |
Principles of Consolidation | Principles of Consolidation These unaudited interim condensed consolidated financial statements include the accounts of the Company and all 100% owned and controlled subsidiaries. All intercompany transactions and balances are eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior periods' financial information in order to conform to the current period's presentation. Beginning in fiscal 2019, the Company changed its expense reporting to more closely align with the organizational structure and management of the business. Accordingly, certain Selling, general and administrative ("SG&A") expenses that were reported within our reportable segments in fiscal 2018 are now reflected as Corporate expenses. Refer to Note 17, "Segment Information," for further information. In addition, certain prior year costs related to compensation of the supply chain function for Kate Spade have been reclassified to conform to the current year presentation. These costs amounted to $5.4 million for the fiscal year ended June 30, 2018 and have been reclassified from SG&A expenses to Cost of sales within the Company's Condensed Consolidated Statements of Operations. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, " Revenue from Contracts with Customers " ("ASU 2014-09"), 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 model supersedes most existing revenue recognition guidance, and also requires enhanced revenue-related disclosures. The FASB has also issued several related ASUs which provide additional implementation guidance and clarify the requirements of the model. The Company adopted ASU 2014-09 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach. The cumulative effect of initially applying the new standard did not result in a change to opening Retained earnings. Prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Effects of adoption include balance sheet presentation changes including presentation of estimated returned products and refund liabilities on a gross basis, as well as an increase in deferred revenue related to current year licensing contract activity due to a change in the method of recognizing sales-based royalties. These balance sheet presentation changes resulted in an increase of $13.7 million to Other current assets, a decrease of $0.6 million to Accounts receivable and an increase of $15.5 million to Accrued liabilities as of December 29, 2018 . Furthermore, the adoption changed the income statement classification of certain items, primarily related to cooperative advertising allowances and other consideration provided to wholesale customers. The following table compares the reported results in fiscal 2019 under the new standard to the amounts that would have been reported if the standard had not been adopted: Three Months Ended December 29, 2018 Six Months Ended December 29, 2018 As Reported Impact of Adoption Balances Excluding Adoption As Reported Impact of Adoption Balances Excluding Adoption (millions) Net sales $ 1,800.8 $ (1.5 ) $ 1,802.3 $ 3,182.0 $ (3.7 ) $ 3,185.7 Cost of sales 597.3 0.6 596.7 1,043.4 0.7 1,042.7 Gross profit 1,203.5 (2.1 ) 1,205.6 2,138.6 (4.4 ) 2,143.0 Selling, general and administrative expenses 822.8 (1.2 ) 824.0 1,600.2 (2.0 ) 1,602.2 Operating income (loss) $ 380.7 $ (0.9 ) $ 381.6 $ 538.4 $ (2.4 ) $ 540.8 For further information regarding revenue from contracts with customers, refer to Note 4, "Revenue." In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"). This ASU requires recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to a third party. The Company adopted ASU 2016-16 beginning in the first quarter of fiscal 2019 utilizing the modified retrospective approach, which resulted in a cumulative adjustment of $20.2 million to its opening Retained earnings balance. Overall, the adoption of ASU 2016-16 did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, " Leases (Topic 842), " which is intended to increase transparency and comparability among companies that enter into leasing arrangements. This ASU requires recognition of lease assets and lease liabilities on the balance sheet for all leases, as well as a retrospective recognition and measurement of existing impacted leases. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2020. Early adoption is permitted. In July 2018, the FASB issued ASU 2018-11, with targeted improvements to the guidance including an additional transition method for the new standard. As a result, the new standard may be applied with a retrospective approach to each prior reporting period or with the initial application at the adoption with a cumulative-effect adjustment in the opening balance of Retained earnings, with various optional practical expedients. The Company is currently performing a comprehensive evaluation of the impact of adopting this guidance on its consolidated financial statements and notes thereto. The Company has selected a single global software solution to manage and account for all leases, which is currently being implemented. The Company anticipates it will elect the package of practical expedients intended to ease transition whereby the Company need not assess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The Company also anticipates electing the hindsight practical expedient that allows the Company to use hindsight in determining the lease term and in assessing impairment during the look back period, and the short-term lease exemption, which allows the Company to continue to treat short-term leases as operating leases under “Leases (Topic 840).” Furthermore, the Company has determined that it will apply the provisions of ASU 2018-11 with the initial application at the adoption date with a cumulative effect adjustment in the opening balance of Retained earnings in the first quarter of fiscal 2020. The Company expects the guidance will result in a significant increase to long-term assets and liabilities on its consolidated balance sheets and does not expect it to have a material impact on the consolidated statements of operations. This guidance is not expected to have a material impact on the Company's liquidity. In August 2018, the FASB issued ASU No. 2018-13, " Fair Value Measurement (Topic 820) " ("ASU 2018-13"), which is intended to improve the effectiveness of fair value disclosures. The ASU removes or modifies certain disclosure requirements related to fair value information, as well as adds new disclosure requirements for Level 3 fair value measurements. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. The company is currently in the process of evaluating the impact that adopting ASU 2018-13 will have on its consolidated financial statements and notes thereto, however, does not expect a material impact resulting from this guidance. In August 2018, the FASB issued ASU No. 2018-15, " Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) " ("ASU 2018-15"), which is intended to clarify the accounting for implementation costs of cloud computing arrangements which are deemed to be a service contract rather than a software license. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods, which for the Company is the first quarter of fiscal 2021. Early adoption is permitted. The company is currently in the process of evaluating the impact that adopting ASU 2018-15 will have on its consolidated financial statements and notes thereto. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table compares the reported results in fiscal 2019 under the new standard to the amounts that would have been reported if the standard had not been adopted: Three Months Ended December 29, 2018 Six Months Ended December 29, 2018 As Reported Impact of Adoption Balances Excluding Adoption As Reported Impact of Adoption Balances Excluding Adoption (millions) Net sales $ 1,800.8 $ (1.5 ) $ 1,802.3 $ 3,182.0 $ (3.7 ) $ 3,185.7 Cost of sales 597.3 0.6 596.7 1,043.4 0.7 1,042.7 Gross profit 1,203.5 (2.1 ) 1,205.6 2,138.6 (4.4 ) 2,143.0 Selling, general and administrative expenses 822.8 (1.2 ) 824.0 1,600.2 (2.0 ) 1,602.2 Operating income (loss) $ 380.7 $ (0.9 ) $ 381.6 $ 538.4 $ (2.4 ) $ 540.8 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated Net Sales The following table disaggregates the Company's net sales into geographies that depict how economic factors may impact the revenues and cash flows for the periods presented. Each geography presented includes net sales related to the Company's directly operated channels, global travel retail business and to wholesale customers, including distributors, in locations within the specified geographic area. North America Greater China (1) Other Asia (2) Other (3) Total (millions) Three Months Ended December 29, 2018 Coach $ 759.5 $ 202.4 $ 224.2 $ 62.5 $ 1,248.6 Kate Spade 349.6 12.6 40.0 26.2 428.4 Stuart Weitzman 75.8 24.2 6.3 17.5 123.8 Total $ 1,184.9 $ 239.2 $ 270.5 $ 106.2 $ 1,800.8 Three Months Ended December 30, 2017 Coach $ 774.0 $ 191.9 $ 201.8 $ 61.9 $ 1,229.6 Kate Spade 369.4 0.1 35.9 29.3 434.7 Stuart Weitzman 87.7 7.6 4.9 20.5 120.7 Total $ 1,231.1 $ 199.6 $ 242.6 $ 111.7 $ 1,785.0 Six Months Ended December 29, 2018 Coach $ 1,304.1 $ 363.5 $ 415.1 $ 126.6 $ 2,209.3 Kate Spade 607.2 23.8 75.1 47.7 753.8 Stuart Weitzman 124.6 39.1 12.2 43.0 218.9 Total $ 2,035.9 $ 426.4 $ 502.4 $ 217.3 $ 3,182.0 Six Months Ended December 30, 2017 Coach $ 1,301.4 $ 350.8 $ 375.2 $ 125.9 $ 2,153.3 Kate Spade 586.7 0.3 67.3 49.2 703.5 Stuart Weitzman 144.2 16.6 8.0 48.3 217.1 Total $ 2,032.3 $ 367.7 $ 450.5 $ 223.4 $ 3,073.9 (1) Greater China includes mainland China, Hong Kong, Macau and Taiwan. (2) Other Asia includes Japan, Australia, New Zealand, South Korea, Thailand and other countries within Asia. (3) Other sales primarily represents sales in Europe, the Mid |
Integration and Acquisition C_2
Integration and Acquisition Costs (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | A summary of the integration and acquisition charges is as follows: Three Months Ended Six Months Ended December 29, December 30, December 29, December 30, (millions) Purchase accounting adjustments (1) $ 3.4 $ 18.2 $ 5.4 $ 70.2 Acquisition costs (2) 0.7 0.8 0.7 40.7 Inventory-related charges (3) — 0.3 (1.4 ) 37.9 Contractual payments (4) 0.1 14.7 7.2 50.6 Organization-related costs (5) 5.5 13.7 5.8 27.7 Other (6) 5.5 13.7 17.0 21.8 Total $ 15.2 $ 61.4 $ 34.7 $ 248.9 (1) Purchase accounting adjustments were primarily related to the short-term impact of the amortization of fair value adjustments. (2) Acquisition costs were primarily related to deal fees associated with the acquisition. (3) Inventory-related charges were primarily related to reserves for the destruction of certain on-hand inventory and non-cancelable inventory purchase commitments related to raw materials. (4) Contractual payments were primarily related to contract termination charges for the three and six months ended December 29, 2018. For the three and six months ended December 30, 2017, these payments were primarily related to severance and related costs as a result of pre-existing agreements with certain Kate Spade executives which became effective upon the closing of the acquisition. (5) Organization-related costs were primarily related to severance charges. (6) Other charges were primarily related to professional fees and asset write-offs. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date: Assets Acquired and Liabilities Assumed Fair Value at Acquisition Date Measurement Period Adjustments Adjusted Fair Value (millions) Cash and cash equivalents $ 71.8 $ — $ 71.8 Trade accounts receivable 62.8 — 62.8 Inventories (1) 310.1 — 310.1 Prepaid expenses and other current assets 33.9 (1.2 ) 32.7 Property and equipment 175.5 — 175.5 Goodwill (2)(3) 916.1 (16.1 ) 900.0 Brand intangible asset (4) 1,300.0 — 1,300.0 Other intangible assets (5) 119.2 — 119.2 Other assets 59.0 11.1 70.1 Total assets acquired 3,048.4 (6.2 ) 3,042.2 Accounts payable and accrued liabilities 233.3 — 233.3 Deferred income taxes (6) 333.0 (7.3 ) 325.7 Other liabilities (7) 84.8 1.1 85.9 Total liabilities assumed 651.1 (6.2 ) 644.9 Total purchase price 2,397.3 — 2,397.3 Less: Cash acquired (71.8 ) — (71.8 ) Total purchase price, net of cash acquired $ 2,325.5 $ — $ 2,325.5 (1) Included a step-up adjustment of $67.5 million , which was amortized over 4 months . (2) The majority of the goodwill balance is not deductible for tax purposes. (3) The Company assigned $324.0 million of goodwill associated with the Kate Spade acquisition to Coach brand reporting units based upon the analysis of expected synergies, including the allocation of corporate synergies to the brands. (4) The brand intangible asset, of which the majority is not deductible for tax purposes, was valued based on the multi-period excess earnings method. (5) The components of other intangible assets included favorable lease rights of $72.2 million (amortized over the remainder of the underlying lease terms), customer relationships of $45.0 million (amortized over 15 years) and order backlog of $2.0 million (amortized over 6 months). Favorable lease rights were valued based on a comparison of market participant information and Company-specific lease terms. The customer relationship intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with the existing base of customers as of the acquisition date, factoring in expected attrition of the existing base. The order backlog intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with open customer orders as of the acquisition date. (6) The Company acquired $200.1 million of net deferred tax assets related to Kate Spade historical federal and state net operating losses, net of a $39.3 million valuation allowance, which the Company expects to be able to utilize. The deferred tax adjustments resulting from the step-up in basis of acquired assets, most notably the brand intangible asset, resulted in an overall deferred tax liability. (7) Included an adjustment for unfavorable lease rights of $49.5 million (amortized over the remainder of the underlying lease terms). |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Carrying Amount of Goodwill by Segment | The change in the carrying amount of the Company’s goodwill by segment is as follows: Coach Kate Spade Stuart Weitzman Total (millions) Balance at June 30, 2018 $ 654.8 $ 627.0 $ 202.5 $ 1,484.3 Foreign exchange impact 2.6 (1.9 ) (2.7 ) (2.0 ) Acquisition of goodwill (1) — 12.7 8.4 21.1 Balance at December 29, 2018 $ 657.4 $ 637.8 $ 208.2 $ 1,503.4 (1) Refer to Note 7, "Acquisitions," for further information. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following: December 29, 2018 June 30, 2018 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.5 $ (20.7 ) $ 79.8 $ 100.5 $ (17.3 ) $ 83.2 Order backlog — — — 2.0 (2.0 ) — Favorable lease rights 97.0 (31.7 ) 65.3 97.3 (24.4 ) 72.9 Total intangible assets subject to amortization 197.5 (52.4 ) 145.1 199.8 (43.7 ) 156.1 Intangible assets not subject to amortization: Trademarks and trade names 1,576.8 — 1,576.8 1,576.8 — 1,576.8 Total intangible assets $ 1,774.3 $ (52.4 ) $ 1,721.9 $ 1,776.6 $ (43.7 ) $ 1,732.9 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: December 29, 2018 June 30, 2018 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.5 $ (20.7 ) $ 79.8 $ 100.5 $ (17.3 ) $ 83.2 Order backlog — — — 2.0 (2.0 ) — Favorable lease rights 97.0 (31.7 ) 65.3 97.3 (24.4 ) 72.9 Total intangible assets subject to amortization 197.5 (52.4 ) 145.1 199.8 (43.7 ) 156.1 Intangible assets not subject to amortization: Trademarks and trade names 1,576.8 — 1,576.8 1,576.8 — 1,576.8 Total intangible assets $ 1,774.3 $ (52.4 ) $ 1,721.9 $ 1,776.6 $ (43.7 ) $ 1,732.9 |
Schedule of Expected Amortization Expense | As of December 29, 2018 , the expected amortization expense for intangible assets is as follows: Amortization Expense (millions) Remainder of fiscal 2019 $ 10.9 Fiscal 2020 19.7 Fiscal 2021 18.1 Fiscal 2022 16.1 Fiscal 2023 15.1 Fiscal 2024 13.4 Fiscal 2025 and thereafter 51.8 Total $ 145.1 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of Stockholders Equity | A reconciliation of stockholders' equity is presented below: Shares of Common Stock Common Stock Additional Paid-in- Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity (millions, except per share data) Balance at July 1, 2017 281.9 $ 2.8 $ 2,978.3 $ 107.7 $ (86.9 ) $ 3,001.9 Net loss — — — (17.7 ) — (17.7 ) Other comprehensive income — — — — 5.6 5.6 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 2.3 — 17.5 — — 17.5 Share-based compensation — — 23.3 — — 23.3 Additional paid-in-capital as part of purchase consideration — — 5.3 — — 5.3 Dividends declared ($0.3375 per share) — — — (95.9) — (95.9) Balance at September 30, 2017 284.2 $ 2.8 $ 3,024.4 $ (5.9 ) $ (81.3 ) $ 2,940.0 Net income — — — 63.2 — 63.2 Other comprehensive income — — — — 9.0 9.0 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 0.6 — 12.6 — — 12.6 Share-based compensation — — 20.7 — — 20.7 Dividends declared ($0.3375 per share) — — — (96.1 ) — (96.1 ) Balance at December 30, 2017 284.8 $ 2.8 $ 3,057.7 $ (38.8 ) $ (72.3 ) $ 2,949.4 Balance at June 30, 2018 288.0 $ 2.9 $ 3,205.5 $ 119.0 $ (82.8 ) $ 3,244.6 Net income — — — 122.3 — 122.3 Other comprehensive loss — — — — (5.3 ) (5.3 ) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 1.8 — 3.2 — — 3.2 Share-based compensation — — 22.4 — — 22.4 Dividends declared ($0.3375 per share) — — — (97.8 ) — (97.8 ) Cumulative adjustment from adoption of new accounting standard (see Note 3) — — — 20.2 — 20.2 Balance at September 29, 2018 289.8 $ 2.9 $ 3,231.1 $ 163.7 $ (88.1 ) $ 3,309.6 Net income — — — 254.8 — 254.8 Other comprehensive loss — — — — (3.4 ) (3.4 ) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 0.2 — 3.7 — — 3.7 Share-based compensation — — 21.5 — — 21.5 Dividends declared ($0.3375 per share) — — — (97.8 ) — (97.8 ) Balance at December 29, 2018 290.0 $ 2.9 $ 3,256.3 $ 320.7 $ (91.5 ) $ 3,488.4 |
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) ("AOCI"), as of the dates indicated, are as follows: Unrealized Gains (Losses) on Cash Flow Hedging Derivatives (1) Unrealized (Losses) Gains on Available- for-Sale Investments Cumulative Translation Adjustment Other (2) Total (millions) Balances at July 1, 2017 $ 3.0 $ (0.4 ) $ (89.1 ) $ (0.4 ) $ (86.9 ) Other comprehensive (loss) income before reclassifications (1.5 ) 0.6 18.2 — 17.3 Less: income reclassified from accumulated other comprehensive income to earnings 2.6 0.1 — — 2.7 Net current-period other comprehensive (loss) income (4.1 ) 0.5 18.2 — 14.6 Balances at December 30, 2017 $ (1.1 ) $ 0.1 $ (70.9 ) $ (0.4 ) $ (72.3 ) Balances at June 30, 2018 $ 1.4 $ — $ (85.3 ) $ 1.1 $ (82.8 ) Other comprehensive income (loss) before reclassifications 1.4 0.1 (10.1 ) — (8.6 ) Less: losses reclassified from accumulated other comprehensive income to earnings 0.1 — — — 0.1 Net current-period other comprehensive income (loss) 1.3 0.1 (10.1 ) — (8.7 ) Balances at December 29, 2018 $ 2.7 $ 0.1 $ (95.4 ) $ 1.1 $ (91.5 ) (1) The ending balances of AOCI related to cash flow hedges are net of tax of ($1.5) million and ($1.1) million as of December 29, 2018 and December 30, 2017 , respectively. The amounts reclassified from AOCI are net of tax of ($0.3) million and ($1.5) million as of December 29, 2018 and December 30, 2017 , respectively. (2) Other represents the accumulated loss on the Company's minimum pension liability adjustment. The balances at December 29, 2018 and December 30, 2017 are net of tax of $0.6 million and $0.2 million, respectively. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted-average Shares Outstanding and Calculation of Basic and Diluted Earnings Per Share | The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted earnings per share: Three Months Ended Six Months Ended December 29, December 30, December 29, December 30, (millions, except per share data) Net income $ 254.8 $ 63.2 $ 377.1 $ 45.5 Weighted-average basic shares 289.9 284.5 289.3 283.8 Dilutive securities: Effect of dilutive securities 1.1 1.9 2.1 2.7 Weighted-average diluted shares 291.0 286.4 291.4 286.5 Net income per share: Basic $ 0.88 $ 0.22 $ 1.30 $ 0.16 Diluted $ 0.88 $ 0.22 $ 1.29 $ 0.16 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation Cost Charged Against Income and Related Tax Benefits for Share-based Compensation Plans | The following table shows the total compensation cost charged against income for share-based compensation plans and the related tax benefits recognized in the Company's Condensed Consolidated Statements of Operations for the periods indicated: Three Months Ended Six Months Ended December 29, 2018 (1) December 30, 2017 (1) December 29, 2018 (1) December 30, 2017 (1) (millions) Share-based compensation expense $ 21.5 $ 20.7 $ 43.9 $ 44.0 Income tax benefit related to share-based compensation expense 4.0 4.3 8.2 11.9 (1) During the three and six months ended December 29, 2018 , the Company incurred $0.4 million and $0.8 million of share-based compensation expense related to integration, respectively. During the three and six months ended December 30, 2017 , the Company incurred $2.2 million and $4.7 million of share-based compensation expense related to integration, respectively. During the three months ended December 30, 2017 , there was no share-based compensation expense under the Operational Efficiency Plan. There was $0.8 million of share-based compensation expense incurred under the Operational Efficiency Plan for the six months ended December 30, 2017 . |
Summary of Stock Option Activity | A summary of stock option activity during the six months ended December 29, 2018 is as follows: Number of Options Outstanding (millions) Outstanding at June 30, 2018 12.5 Granted 1.5 Exercised (0.8 ) Forfeited or expired (0.2 ) Outstanding at December 29, 2018 13.0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions: December 29, December 30, Expected term (years) 5.0 5.1 Expected volatility 30.3 % 28.3 % Risk-free interest rate 3.1 % 1.8 % Dividend yield 3.1 % 3.3 % |
Service-based Restricted Stock Unit Awards (RSU) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of RSU Activity | A summary of service-based RSU activity during the six months ended December 29, 2018 is as follows: Number of Non-vested RSUs (millions) Non-vested at June 30, 2018 3.5 Granted 1.6 Vested (1.4 ) Forfeited (0.1 ) Non-vested at December 29, 2018 3.6 |
Performance-based Restricted Stock Unit Awards (PRSU) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of RSU Activity | A summary of PRSU activity during the six months ended December 29, 2018 is as follows: Number of Non-vested PRSUs (millions) Non-vested at June 30, 2018 0.9 Granted 0.3 Change due to performance condition achievement (0.1 ) Vested (0.2 ) Forfeited — Non-vested at December 29, 2018 0.9 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |
Summary of the Components of Outstanding Debt | The following table summarizes the components of the Company’s outstanding debt: December 29, June 30, 2018 (millions) Current debt: Capital lease obligations $ 0.7 $ 0.7 Total current debt $ 0.7 $ 0.7 Long-term debt: 4.250% Senior Notes due 2025 $ 600.0 $ 600.0 3.000% Senior Notes due 2022 400.0 400.0 4.125% Senior Notes due 2027 600.0 600.0 Note Payable 11.4 11.4 Capital lease obligations 6.0 6.0 Total long-term debt 1,617.4 1,617.4 Less: Unamortized discount and debt issuance costs on Senior Notes (16.4 ) (17.5 ) Total long-term debt, net $ 1,601.0 $ 1,599.9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Assets and Liabilities | The following table shows the fair value measurements of the Company’s financial assets and liabilities at December 29, 2018 and June 30, 2018 : Level 1 Level 2 December 29, June 30, December 29, June 30, (millions) Assets: Cash equivalents (1) $ 521.9 $ 592.5 $ 0.4 $ 0.4 Short-term investments : Time deposits (2) — — 0.6 0.6 Commercial paper (2) — — 20.6 — Government securities - U.S. (2) 100.0 — — — Corporate debt securities - U.S. (2) — — 89.7 — Corporate debt securities - non U.S. (2) — — 38.8 — Other — — 8.5 6.0 Long-term investments : Government securities - non U.S. 0.1 — — — Derivative Assets : Inventory-related instruments (3) — — 4.1 5.6 Intercompany loan hedges (3) — — — 0.3 Liabilities: Derivative liabilities : Inventory-related instruments (3) — — 3.0 2.3 Intercompany loan hedges (3) — — 0.3 0.1 (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 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. (3) 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. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | The following table summarizes the Company’s U.S. dollar-denominated investments, recorded within the Company's Condensed Consolidated Balance Sheets as of December 29, 2018 and June 30, 2018 : December 29, June 30, 2018 Short-term Long-term Total Short-term Long-term Total (millions) Available-for-sale investments: Commercial paper (1) $ 20.6 $ — $ 20.6 $ — $ — $ — Government securities - U.S. (2) 100.0 — 100.0 — — — Government securities - non-U.S. — 0.1 0.1 — Corporate debt securities - U.S. (2) 89.7 — 89.7 — — — Corporate debt securities - non-U.S. (2) 38.8 — 38.8 — — — Available-for-sale investments, total $ 249.1 $ 0.1 $ 249.2 $ — $ — $ — Other: Time deposits (1) 0.6 — 0.6 0.6 — 0.6 Other 8.5 — 8.5 6.0 — 6.0 Total Investments $ 258.2 $ 0.1 $ 258.3 $ 6.6 $ — $ 6.6 (1) These securities have original maturities greater than three months and are recorded at fair value. (2) These securities as of December 29, 2018 have maturity dates between calendar years 2018 and 2019 and are recorded at fair value. |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Expected Income Tax Payments To Be Made | The following table presents the expected timing of income tax payments related to the Transition Tax expected to be recognized by the Company as of December 29, 2018: Transition Tax Payments (millions) Remainder of fiscal 2019 $ 3.2 Fiscal 2020 23.3 Fiscal 2021 23.3 Fiscal 2022 23.3 Fiscal 2023 43.8 Fiscal 2024 58.3 Fiscal 2025 72.9 Total $ 248.1 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Dec. 29, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Performance | The following table summarizes segment performance for the three and six months ended December 29, 2018 and December 30, 2017 : Coach Kate Stuart Weitzman Corporate (1) Total (millions) Three Months Ended December 29, 2018 Net sales $ 1,248.6 $ 428.4 $ 123.8 $ — $ 1,800.8 Gross profit 860.1 272.4 71.0 — 1,203.5 Operating income (loss) 378.5 89.2 11.2 (98.2 ) 380.7 Income (loss) before provision for income taxes 378.5 89.2 11.2 (111.4 ) 367.5 Depreciation and amortization expense (2) 33.6 16.0 3.9 12.6 66.1 Additions to long-lived assets (3) 16.0 18.9 2.2 24.1 61.2 Three Months Ended December 30, 2017 Net sales $ 1,229.6 $ 434.7 $ 120.7 $ — $ 1,785.0 Gross profit 846.0 256.8 73.4 — 1,176.2 Operating income (loss) 368.2 54.8 21.8 (98.4 ) 346.4 Income (loss) before provision for income taxes 368.2 54.8 21.8 (120.6 ) 324.2 Depreciation and amortization expense (2) 32.4 19.8 4.0 9.8 66.0 Additions to long-lived assets (3) 44.8 7.1 2.5 23.2 77.6 Six Months Ended December 29, 2018 Net sales $ 2,209.3 $ 753.8 $ 218.9 $ — $ 3,182.0 Gross profit 1,539.8 480.1 118.7 — 2,138.6 Operating income (loss) 609.4 134.0 (7.2 ) (197.8 ) 538.4 Income (loss) before provision for income taxes 609.4 134.0 (7.2 ) (224.1 ) 512.1 Depreciation and amortization expense (2) 67.1 28.6 8.1 23.7 127.5 Additions to long-lived assets (3) 33.3 38.6 3.8 40.7 116.4 Six Months Ended December 30, 2017 Net sales $ 2,153.3 $ 703.5 $ 217.1 $ — $ 3,073.9 Gross profit 1,478.1 331.6 129.4 — 1,939.1 Operating income (loss) 576.3 (68.5 ) 30.7 (213.9 ) 324.6 Income (loss) before provision for income taxes 576.3 (68.5 ) 30.7 (256.6 ) 281.9 Depreciation and amortization expense (2) 70.5 30.2 8.0 22.8 131.5 Additions to long-lived assets (3) 73.9 14.0 3.2 35.4 126.5 (1) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a brand. These costs primarily include administration and certain information systems expense. Furthermore, certain integration and acquisition costs as well as costs under the Operational Efficiency Plan as described in Note 5, "Integration and Acquisition Costs," and Note 6, "Restructuring Activities," respectively, are included within Corporate. (2) Depreciation and amortization expense includes $0.8 million and $1.2 million of integration and acquisition costs for the three and six months ended December 29, 2018 . Depreciation and amortization expense includes $2.2 million and $5.2 million of integration and acquisition costs for the three and six months ended December 30, 2017, respectively. These charges are recorded within the Kate Spade segment. Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments. (3) Additions to long-lived assets for the reportable segments primarily includes store assets as well as assets that support a specific brand. Corporate additions include all other assets which include a combination of Corporate assets, as well as assets that may support all segments. As such, depreciation expense for these assets may be subsequently allocated to a reportable segment. |
Basis of Presentation and Org_3
Basis of Presentation and Organization (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Kate Spade Joint Ventures | Corporate Joint Venture | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 50.00% | |
Selling, General and Administrative Expenses | ||
Business Acquisition [Line Items] | ||
Prior period reclassification adjustment | $ (5.4) | |
Cost of Sales | ||
Business Acquisition [Line Items] | ||
Prior period reclassification adjustment | $ 5.4 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 29, 2018 | Jun. 30, 2018 | |
Accounting Standards Update 2016-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative adjustment from adoption of new accounting standard | $ 20.2 | |
Cumulative effect on retained earnings | $ 20.2 | |
Other current assets | Accounting Standards Update 2014-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative adjustment from adoption of new accounting standard | 13.7 | |
Accounts receivable | Accounting Standards Update 2014-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative adjustment from adoption of new accounting standard | (0.6) | |
Accured liabilities | Accounting Standards Update 2014-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative adjustment from adoption of new accounting standard | $ 15.5 |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements (New Accounting Adoption Effect) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | $ 1,800.8 | $ 1,785 | $ 3,182 | $ 3,073.9 |
Cost of sales | 597.3 | 608.8 | 1,043.4 | 1,134.8 |
Gross profit | 1,203.5 | 1,176.2 | 2,138.6 | 1,939.1 |
Selling, general and administrative expenses | 822.8 | 829.8 | 1,600.2 | 1,614.5 |
Operating income (loss) | 380.7 | $ 346.4 | 538.4 | $ 324.6 |
As Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | 1,800.8 | 3,182 | ||
Cost of sales | 597.3 | 1,043.4 | ||
Gross profit | 1,203.5 | 2,138.6 | ||
Selling, general and administrative expenses | 822.8 | 1,600.2 | ||
Operating income (loss) | 380.7 | 538.4 | ||
Impact of Adoption | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | (1.5) | (3.7) | ||
Cost of sales | 0.6 | 0.7 | ||
Gross profit | (2.1) | (4.4) | ||
Selling, general and administrative expenses | (1.2) | (2) | ||
Operating income (loss) | (0.9) | (2.4) | ||
Balances Excluding Adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | 1,802.3 | 3,185.7 | ||
Cost of sales | 596.7 | 1,042.7 | ||
Gross profit | 1,205.6 | 2,143 | ||
Selling, general and administrative expenses | 824 | 1,602.2 | ||
Operating income (loss) | $ 381.6 | $ 540.8 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 29, 2018 | Dec. 29, 2018 | Jun. 30, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred revenue, current | $ 31.8 | $ 31.8 | $ 29.1 |
Deferred revenue, revenue recognized | $ (11.9) | ||
Minimum | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Payment terms | 30 days | ||
Maximum | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Payment terms | 90 days | ||
Licensing business | Net sales | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Percentage of revenue | 1.00% |
Revenue (Disaggregated Sales) (
Revenue (Disaggregated Sales) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,800.8 | $ 1,785 | $ 3,182 | $ 3,073.9 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,184.9 | 1,231.1 | 2,035.9 | 2,032.3 |
Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 239.2 | 199.6 | 426.4 | 367.7 |
Other Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 270.5 | 242.6 | 502.4 | 450.5 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 106.2 | 111.7 | 217.3 | 223.4 |
Coach | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,248.6 | 1,229.6 | 2,209.3 | 2,153.3 |
Coach | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 759.5 | 774 | 1,304.1 | 1,301.4 |
Coach | Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 202.4 | 191.9 | 363.5 | 350.8 |
Coach | Other Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 224.2 | 201.8 | 415.1 | 375.2 |
Coach | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 62.5 | 61.9 | 126.6 | 125.9 |
Kate Spade | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 428.4 | 434.7 | 753.8 | 703.5 |
Kate Spade | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 349.6 | 369.4 | 607.2 | 586.7 |
Kate Spade | Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12.6 | 0.1 | 23.8 | 0.3 |
Kate Spade | Other Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 40 | 35.9 | 75.1 | 67.3 |
Kate Spade | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 26.2 | 29.3 | 47.7 | 49.2 |
Stuart Weitzman | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 123.8 | 120.7 | 218.9 | 217.1 |
Stuart Weitzman | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 75.8 | 87.7 | 124.6 | 144.2 |
Stuart Weitzman | Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 24.2 | 7.6 | 39.1 | 16.6 |
Stuart Weitzman | Other Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6.3 | 4.9 | 12.2 | 8 |
Stuart Weitzman | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 17.5 | $ 20.5 | $ 43 | $ 48.3 |
Integration and Acquisition C_3
Integration and Acquisition Costs (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 15.2 | $ 61.4 | $ 34.7 | $ 248.9 |
Restructuring costs | 61.4 | (248.9) | ||
Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 43 | 142.1 | ||
Non-cash charges related to inventory, organization costs and asset write-off | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 117.2 | |||
Kate Spade | Cost of Sales | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 18.4 | 106.8 | ||
Kate Spade | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 29.7 | 97.5 | ||
Stuart Weitzman | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0.9 | 1.8 | ||
Corporate | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 12.4 | $ 42.8 | ||
Kate Spade | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 15.2 | 34.7 | ||
Kate Spade | Cost of Sales | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 3.5 | 4.1 | ||
Kate Spade | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 11.7 | 30.6 | ||
Kate Spade | Non-cash charges related to inventory, organization costs and asset write-off | ||||
Business Acquisition [Line Items] | ||||
Restructuring costs | 4.8 | 6.2 | ||
Kate Spade | Kate Spade | Cost of Sales | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 2.5 | 1.1 | ||
Kate Spade | Kate Spade | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 3.7 | 7.1 | ||
Kate Spade | Stuart Weitzman | Cost of Sales | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 1 | 1 | ||
Kate Spade | Stuart Weitzman | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0.6 | 12.1 | ||
Kate Spade | Coach | Cost of Sales | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0 | 2 | ||
Kate Spade | Corporate | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 7.4 | 11.4 | ||
Minimum | Kate Spade | ||||
Business Acquisition [Line Items] | ||||
Expected integration costs | 45 | 45 | ||
Maximum | Kate Spade | ||||
Business Acquisition [Line Items] | ||||
Expected integration costs | $ 55 | $ 55 |
Integration and Acquisition C_4
Integration and Acquisition Costs (Liabilities Related to Integration and Acquisition of Kate Spade) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 15.2 | $ 61.4 | $ 34.7 | $ 248.9 |
Purchase accounting adjustments | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 3.4 | 18.2 | 5.4 | 70.2 |
Acquisition costs | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0.7 | 0.8 | 0.7 | 40.7 |
Inventory-related charges | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0 | 0.3 | (1.4) | 37.9 |
Contractual payments | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 0.1 | 14.7 | 7.2 | 50.6 |
Organizational-related costs | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 5.5 | 13.7 | 5.8 | 27.7 |
Other integration charges | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 5.5 | $ 13.7 | $ 17 | $ 21.8 |
Restructuring Activities (Narra
Restructuring Activities (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Integration and restructuring activities | $ 6,200,000 | $ 117,200,000 | ||
Accured liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring liability | $ 1,400,000 | |||
Operational Efficiency Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring liability | $ 0 | |||
Operational Efficiency Plan | SG&A expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Integration and restructuring activities | $ 3,500,000 | $ 6,600,000 | ||
Cost incurred to date | $ 87,400,000 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ / shares in Units, $ in Millions | Jul. 11, 2017USD ($)$ / shares | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($)acquisition | Dec. 29, 2018USD ($) | Dec. 30, 2017USD ($) | Jun. 29, 2019USD ($) | Dec. 29, 2018USD ($) |
Business Acquisition [Line Items] | |||||||
Total purchase price, net of cash acquired | $ 37.7 | $ 2,320.2 | |||||
Distributor Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, gross | 39.7 | ||||||
Consideration transferred, cash | 37.7 | ||||||
Assets acquired | 18.6 | $ 18.6 | |||||
Goodwill, not expected tax deductible amount | 21.1 | 21.1 | |||||
Kate Spade | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, gross | $ 2,390 | ||||||
Assets acquired | 3,048.4 | 3,042.2 | 3,042.2 | ||||
Goodwill, not expected tax deductible amount | 916.1 | 900 | 900 | ||||
Purchase price | $ 2,400 | ||||||
Business acquisition, share price (USD per share) | $ / shares | $ 18.50 | ||||||
Total purchase price, net of cash acquired | $ 2,320 | ||||||
Equity interests issuable | 5.3 | ||||||
Inventory step-up adjustment | $ 67.5 | ||||||
Inventory step-up adjustment, amortization period | 4 months | ||||||
Deferred tax asset | $ 200.1 | ||||||
Deferred tax assets, valuation allowance | 39.3 | ||||||
Off-market lease, unfavorable | 49.5 | ||||||
Measurement period adjustment | (16.1) | ||||||
Kate Spade | Favorable lease rights | |||||||
Business Acquisition [Line Items] | |||||||
Intangible asset acquired | 72.2 | ||||||
Kate Spade | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible asset acquired | $ 45 | ||||||
Intangible asset acquired, amortization period | 15 years | ||||||
Kate Spade | Order backlog | |||||||
Business Acquisition [Line Items] | |||||||
Intangible asset acquired | $ 2 | ||||||
Intangible asset acquired, amortization period | 6 months | ||||||
Distributor Acquisitions and Kate Spade Joint Ventures | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, gross | $ 61.5 | ||||||
Consideration transferred, cash | 106.9 | ||||||
Assets acquired | 50 | ||||||
Goodwill, not expected tax deductible amount | 103.7 | ||||||
Purchase price | 153.7 | ||||||
Total purchase price, net of cash acquired | $ 55.6 | ||||||
Number of businesses acquired | acquisition | 3 | ||||||
Corporate Joint Venture | Kate Spade Joint Ventures | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage | 50.00% | ||||||
Stuart Weitzman | Distributor Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | 8.4 | 8.4 | |||||
Stuart Weitzman | Distributor Acquisitions and Kate Spade Joint Ventures | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | $ 49.3 | ||||||
Measurement period adjustment | $ 0.5 | ||||||
Kate Spade | Distributor Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | $ 12.7 | $ 12.7 | |||||
Kate Spade | Distributor Acquisitions and Kate Spade Joint Ventures | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | 52.8 | ||||||
Measurement period adjustment | $ 2.3 | ||||||
Coach | Kate Spade | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | $ 324 | ||||||
Coach | Distributor Acquisitions and Kate Spade Joint Ventures | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, not expected tax deductible amount | $ 1.6 | ||||||
Forecast | Distributor Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business, gross | $ 2 |
Acquisitions (Assets Acquired a
Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - Kate Spade - USD ($) $ in Millions | Jul. 11, 2017 | Dec. 29, 2018 |
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 71.8 | $ 71.8 |
Trade accounts receivable | 62.8 | 62.8 |
Inventories | 310.1 | 310.1 |
Prepaid expenses and other current assets | 33.9 | 32.7 |
Prepaid expenses and other current assets, adjustment | (1.2) | |
Property and equipment | 175.5 | 175.5 |
Goodwill | 916.1 | 900 |
Goodwill, adjustment | (16.1) | |
Brand intangible asset | 1,300 | 1,300 |
Other liabilities asset | 119.2 | 119.2 |
Other assets | 59 | 70.1 |
Other assets, adjustment | 11.1 | |
Total assets acquired | 3,048.4 | 3,042.2 |
Total assets acquired, adjustment | (6.2) | |
Accounts payable and accrued liabilities | 233.3 | 233.3 |
Deferred income taxes | 333 | 325.7 |
Deferred income taxes, adjustment | (7.3) | |
Other liabilities | 84.8 | 85.9 |
Other liabilities, adjustment | 1.1 | |
Total liabilities assumed | 651.1 | 644.9 |
Total liabilities assumed, adjustment | (6.2) | |
Total purchase price | 2,397.3 | 2,397.3 |
Less: Cash acquired | (71.8) | (71.8) |
Total purchase price, net of cash acquired | $ 2,325.5 | $ 2,325.5 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Change in Carrying Value of Goodwill) (Details) $ in Millions | 6 Months Ended |
Dec. 29, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 1,484.3 |
Foreign exchange impact | (2) |
Acquisition of goodwill | 21.1 |
Ending Balance | 1,503.4 |
Coach | |
Goodwill [Roll Forward] | |
Beginning Balance | 654.8 |
Foreign exchange impact | 2.6 |
Acquisition of goodwill | 0 |
Ending Balance | 657.4 |
Kate Spade | |
Goodwill [Roll Forward] | |
Beginning Balance | 627 |
Foreign exchange impact | (1.9) |
Acquisition of goodwill | 12.7 |
Ending Balance | 637.8 |
Stuart Weitzman | |
Goodwill [Roll Forward] | |
Beginning Balance | 202.5 |
Foreign exchange impact | (2.7) |
Acquisition of goodwill | 8.4 |
Ending Balance | $ 208.2 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Indefinite and Finite Lived Assets) (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 |
Intangible assets subject to amortization: | ||
Gross Carrying Amount | $ 197.5 | $ 199.8 |
Accumulated amortization | (52.4) | (43.7) |
Total | 145.1 | 156.1 |
Intangible assets not subject to amortization: | ||
Intangible assets, gross (excluding goodwill) | 1,774.3 | 1,776.6 |
Intangible assets, net (excluding goodwill) | 1,721.9 | 1,732.9 |
Trademarks and trade names | ||
Intangible assets not subject to amortization: | ||
Indefinite-lived intangible assets (excluding goodwill) | 1,576.8 | 1,576.8 |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 100.5 | 100.5 |
Accumulated amortization | (20.7) | (17.3) |
Total | 79.8 | 83.2 |
Order backlog | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 0 | 2 |
Accumulated amortization | 0 | (2) |
Total | 0 | 0 |
Favorable lease rights | ||
Intangible assets subject to amortization: | ||
Gross Carrying Amount | 97 | 97.3 |
Accumulated amortization | (31.7) | (24.4) |
Total | $ 65.3 | $ 72.9 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Future Amortization Expense) (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 |
Expected Amortization Expense For Intangible Assets | ||
Remainder of fiscal 2019 | $ 10.9 | |
Fiscal 2,020 | 19.7 | |
Fiscal 2,021 | 18.1 | |
Fiscal 2,022 | 16.1 | |
Fiscal 2,023 | 15.1 | |
Fiscal 2,024 | 13.4 | |
Fiscal 2025 and thereafter | 51.8 | |
Total | $ 145.1 | $ 156.1 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Narrative) (Details) | 6 Months Ended |
Dec. 29, 2018 | |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 11 years 4 months |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 13 years 6 months |
Favorable lease rights | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 month |
Favorable lease rights | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 16 years 3 months |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Stockholders' Equity) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Dec. 29, 2018 | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance (shares) | 288 | 288 | |||||
Beginning balance | $ 3,309.6 | $ 3,244.6 | $ 2,940 | $ 3,001.9 | $ 3,244.6 | $ 3,001.9 | |
Net loss | 254.8 | 122.3 | 63.2 | (17.7) | 377.1 | 45.5 | |
Other comprehensive (loss) income | (3.4) | (5.3) | 9 | 5.6 | $ (8.7) | 14.6 | |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes | 3.7 | 3.2 | 12.6 | 17.5 | |||
Share-based compensation | 21.5 | 22.4 | 20.7 | 23.3 | |||
Additional paid-in-capital as part of purchase consideration | 5.3 | ||||||
Dividends declared | $ (97.8) | (97.8) | (96.1) | (95.9) | |||
Ending balance (shares) | 290 | 290 | |||||
Ending balance | $ 3,488.4 | $ 3,309.6 | $ 2,949.4 | $ 2,940 | $ 3,488.4 | $ 2,949.4 | |
Cash dividends declared per common share (USD per share) | $ 0.3375 | $ 0.3375 | $ 0.3375 | $ 0.3375 | $ 0.675 | $ 0.675 | |
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance (shares) | 289.8 | 288 | 284.2 | 281.9 | 288 | 281.9 | |
Beginning balance | $ 2.9 | $ 2.9 | $ 2.8 | $ 2.8 | $ 2.9 | $ 2.8 | |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes (shares) | 0.2 | 1.8 | 0.6 | 2.3 | |||
Ending balance (shares) | 290 | 289.8 | 284.8 | 284.2 | 290 | 284.8 | |
Ending balance | $ 2.9 | $ 2.9 | $ 2.8 | $ 2.8 | $ 2.9 | $ 2.8 | |
Additional Paid-in- Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance | 3,231.1 | 3,205.5 | 3,024.4 | 2,978.3 | 3,205.5 | 2,978.3 | |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes | 3.7 | 3.2 | 12.6 | 17.5 | |||
Share-based compensation | 21.5 | 22.4 | 20.7 | 23.3 | |||
Additional paid-in-capital as part of purchase consideration | 5.3 | ||||||
Ending balance | 3,256.3 | 3,231.1 | 3,057.7 | 3,024.4 | 3,256.3 | 3,057.7 | |
Retained Earnings / (Accumulated Deficit) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance | 163.7 | 119 | (5.9) | 107.7 | 119 | 107.7 | |
Net loss | 254.8 | 122.3 | 63.2 | (17.7) | |||
Dividends declared | (97.8) | (97.8) | (96.1) | (95.9) | |||
Ending balance | 320.7 | 163.7 | (38.8) | (5.9) | 320.7 | (38.8) | |
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance | (88.1) | (82.8) | (81.3) | (86.9) | (82.8) | (86.9) | |
Other comprehensive (loss) income | (3.4) | (5.3) | 9 | 5.6 | |||
Ending balance | $ (91.5) | $ (88.1) | $ (72.3) | $ (81.3) | $ (91.5) | $ (72.3) | |
Accounting Standards Update 2016-16 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative adjustment from adoption of new accounting standard | $ 20.2 | ||||||
Accounting Standards Update 2016-16 | Retained Earnings / (Accumulated Deficit) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative adjustment from adoption of new accounting standard | $ 20.2 |
Stockholders' Equity (AOCI) (De
Stockholders' Equity (AOCI) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | $ 3,244.6 | $ 3,001.9 |
Other comprehensive income (loss) before reclassifications | (8.6) | 17.3 |
Less: income (loss) reclassified from accumulated other comprehensive income to earnings | 0.1 | 2.7 |
Net current-period other comprehensive income (loss) | (8.7) | 14.6 |
Ending balance | 3,488.4 | 2,949.4 |
Amounts reclassified from AOCI, tax | (0.3) | (1.5) |
Unrealized (Losses) Gains on Cash Flow Hedging Derivatives | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | 1.4 | 3 |
Other comprehensive income (loss) before reclassifications | 1.4 | (1.5) |
Less: income (loss) reclassified from accumulated other comprehensive income to earnings | 0.1 | 2.6 |
Net current-period other comprehensive income (loss) | 1.3 | (4.1) |
Ending balance | 2.7 | (1.1) |
AOCI related to cash flow hedges, accumulated tax | (1.5) | (1.1) |
Unrealized (Losses) Gains on Available- for-Sale Investments | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | 0 | (0.4) |
Other comprehensive income (loss) before reclassifications | 0.1 | 0.6 |
Less: income (loss) reclassified from accumulated other comprehensive income to earnings | 0 | 0.1 |
Net current-period other comprehensive income (loss) | 0.1 | 0.5 |
Ending balance | 0.1 | 0.1 |
Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | (85.3) | (89.1) |
Other comprehensive income (loss) before reclassifications | (10.1) | 18.2 |
Less: income (loss) reclassified from accumulated other comprehensive income to earnings | 0 | 0 |
Net current-period other comprehensive income (loss) | (10.1) | 18.2 |
Ending balance | (95.4) | (70.9) |
Other | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | 1.1 | (0.4) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Less: income (loss) reclassified from accumulated other comprehensive income to earnings | 0 | 0 |
Net current-period other comprehensive income (loss) | 0 | 0 |
Ending balance | 1.1 | (0.4) |
AOCI related to cash flow hedges, accumulated tax | 0.6 | 0.2 |
Total | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | (82.8) | (86.9) |
Ending balance | $ (91.5) | $ (72.3) |
Earnings per Share (Reconciliat
Earnings per Share (Reconciliation of Weighted Average Shares Outstanding and Calculation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 29, 2018 | Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Earnings Per Share [Abstract] | ||||||
Net income | $ 254.8 | $ 122.3 | $ 63.2 | $ (17.7) | $ 377.1 | $ 45.5 |
Weighted-average basic shares (shares) | 289.9 | 284.5 | 289.3 | 283.8 | ||
Effect of dilutive securities (shares) | 1.1 | 1.9 | 2.1 | 2.7 | ||
Weighted-average diluted shares (shares) | 291 | 286.4 | 291.4 | 286.5 | ||
Net income per share: | ||||||
Basic (USD per share) | $ 0.88 | $ 0.22 | $ 1.30 | $ 0.16 | ||
Diluted (USD per share) | $ 0.88 | $ 0.22 | $ 1.29 | $ 0.16 |
Earnings Per Share (Anti-Diluti
Earnings Per Share (Anti-Dilutive Impact on Diluted Earnings per Share) (Details) - shares shares in Millions | 6 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Shares excluded from diluted share calculations (shares) | 7.8 | 5.1 |
Share-based Compensation (Total
Share-based Compensation (Total Compensation Cost and Related Tax Benefits) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Share-based compensation expense | $ 21,500,000 | $ 20,700,000 | $ 43,900,000 | $ 44,000,000 |
Income tax benefit related to share-based compensation expense | 4,000,000 | 4,300,000 | 8,200,000 | 11,900,000 |
Integration | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Share-based compensation expense | $ 400,000 | 4,700,000 | $ 800,000 | 2,200,000 |
Operational Efficiency Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 800,000 |
Share-based Compensation (Summa
Share-based Compensation (Summary of Option Activity) (Details) - Stock Options shares in Millions | 6 Months Ended |
Dec. 29, 2018shares | |
Number of Options Outstanding | |
Beginning balance (shares) | 12.5 |
Granted (shares) | 1.5 |
Exercised (shares) | (0.8) |
Forfeited or expired (shares) | (0.2) |
Ending balance (shares) | 13 |
Share-based Compensation (Narra
Share-based Compensation (Narrative) (Details) - $ / shares | 6 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Stock Options | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of awards granted (USD per share) | $ 9.77 | $ 7.71 |
Service-based Restricted Stock Unit Awards (RSU) | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of awards granted (USD per share) | 50.85 | 41.08 |
Performance-based Restricted Stock Unit Awards (PRSU) | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of awards granted (USD per share) | $ 50.89 | $ 41.22 |
Share-based Compensation (Weigh
Share-based Compensation (Weighted-average Assumptions) (Details) - Stock Options | 6 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 5 years | 5 years 1 month 6 days |
Expected volatility | 30.30% | 28.30% |
Risk-free interest rate | 3.10% | 1.80% |
Dividend yield | 3.10% | 3.30% |
Share-based Compensation (Sum_2
Share-based Compensation (Summary of Non-vested Service-Based Restricted Stock Unit Activity) (Details) - Service-based Restricted Stock Unit Awards (RSU) shares in Millions | 6 Months Ended |
Dec. 29, 2018shares | |
Number of Non-vested RSUs | |
Beginning balance (shares) | 3.5 |
Granted (shares) | 1.6 |
Vested (shares) | (1.4) |
Forfeited (shares) | (0.1) |
Ending balance (shares) | 3.6 |
Share-based Compensation (Sum_3
Share-based Compensation (Summary of Non-vested Performance-based Restricted Stock Unit) (Details) - Performance-based Restricted Stock Unit Awards (PRSU) shares in Millions | 6 Months Ended |
Dec. 29, 2018shares | |
Number of Non-vested PRSUs | |
Beginning balance (shares) | 0.9 |
Granted (shares) | 0.3 |
Change due to performance condition achievement (shares) | (0.1) |
Vested (shares) | (0.2) |
Forfeited (shares) | 0 |
Ending balance (shares) | 0.9 |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 | Jun. 20, 2017 | Mar. 02, 2015 |
Current debt: | ||||
Current debt | $ 0.7 | $ 0.7 | ||
Long-term debt: | ||||
Long-term debt | 1,617.4 | 1,617.4 | ||
Less: Unamortized discount and debt issuance costs on Senior Notes | (16.4) | (17.5) | ||
Total long-term debt, net | 1,601 | 1,599.9 | ||
Capital Lease Obligations | ||||
Current debt: | ||||
Current debt | 0.7 | 0.7 | ||
Long-term debt: | ||||
Long-term debt | 6 | 6 | ||
Senior Notes | 4.250% Senior Notes due 2025 | ||||
Long-term debt: | ||||
Long-term debt | $ 600 | 600 | ||
Interest rate, stated percentage | 4.25% | 4.25% | ||
Senior Notes | 3.000% Senior Notes due 2022 | ||||
Long-term debt: | ||||
Long-term debt | $ 400 | 400 | ||
Interest rate, stated percentage | 3.00% | 3.00% | ||
Senior Notes | 4.125% Senior Notes due 2027 | ||||
Long-term debt: | ||||
Long-term debt | $ 600 | 600 | ||
Interest rate, stated percentage | 4.125% | 4.125% | ||
Note Payable | ||||
Long-term debt: | ||||
Long-term debt | $ 11.4 | $ 11.4 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Jun. 20, 2017 | May 30, 2017 | Mar. 02, 2015 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||||||||
Interest expense | $ 16,600,000 | $ 25,300,000 | $ 33,400,000 | $ 49,700,000 | ||||
Long-term debt | 1,601,000,000 | 1,601,000,000 | $ 1,599,900,000 | |||||
Debt, Current | ||||||||
Debt Instrument [Line Items] | ||||||||
Capital lease obligations | 700,000 | 700,000 | 700,000 | |||||
Long-term Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Capital lease obligations | 6,000,000 | 6,000,000 | 6,000,000 | |||||
Revolving Facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 900,000,000 | |||||||
Long-term debt | 0 | $ 0 | ||||||
Revolving Facility | Revolving Facility | Federal Funds Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Revolving Facility | Revolving Facility | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.00% | |||||||
Percentage of lease expense | 600.00% | |||||||
Senior Notes | Fair Value, Inputs, Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, fair value | $ 1,520,000,000 | $ 1,520,000,000 | 1,560,000,000 | |||||
Senior Notes | 4.250% Senior Notes due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 600,000,000 | |||||||
Interest rate, stated percentage | 4.25% | 4.25% | 4.25% | |||||
Debt instrument, issuance amount, percent of par | 99.445% | |||||||
Long-term debt, maturities, redemption period before maturity | 90 days | |||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||
Senior Notes | 4.250% Senior Notes due 2025 | Adjusted Treasury Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.35% | |||||||
Senior Notes | 3.000% Senior Notes due 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 400,000,000 | |||||||
Interest rate, stated percentage | 3.00% | 3.00% | 3.00% | |||||
Debt instrument, issuance amount, percent of par | 99.505% | |||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||
Senior Notes | 3.000% Senior Notes due 2022 | Adjusted Treasury Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.25% | |||||||
Senior Notes | 4.125% Senior Notes due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 600,000,000 | |||||||
Interest rate, stated percentage | 4.125% | 4.125% | 4.125% | |||||
Debt instrument, issuance amount, percent of par | 99.858% | |||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||
Senior Notes | 4.125% Senior Notes due 2027 | Adjusted Treasury Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.30% | |||||||
Corporate Joint Venture | Kate Spade Joint Ventures | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 11,400,000 | $ 11,400,000 | $ 11,400,000 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Measurements of Assets and Liabilities) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 29, 2018 | Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maturity of time deposit | 3 months | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 521.9 | $ 592.5 |
Level 1 | Inventory-related instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Level 1 | Intercompany loan hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Level 1 | Short-term Investments | Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Short-term Investments | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Short-term Investments | Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 100 | 0 |
Level 1 | Short-term Investments | Corporate debt securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Short-term Investments | Corporate debt securities - non U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Short-term Investments | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Long-term investments | Government securities - non-US | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0.1 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0.4 | 0.4 |
Level 2 | Inventory-related instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 4.1 | 5.6 |
Derivative liability | 3 | 2.3 |
Level 2 | Intercompany loan hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0.3 |
Derivative liability | 0.3 | 0.1 |
Level 2 | Short-term Investments | Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0.6 | 0.6 |
Level 2 | Short-term Investments | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 20.6 | 0 |
Level 2 | Short-term Investments | Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | Short-term Investments | Corporate debt securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 89.7 | 0 |
Level 2 | Short-term Investments | Corporate debt securities - non U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 38.8 | 0 |
Level 2 | Short-term Investments | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 8.5 | 6 |
Level 2 | Long-term investments | Government securities - non-US | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Investments (Summary of Investm
Investments (Summary of Investments) (Details) - USD ($) $ in Millions | Dec. 29, 2018 | Jun. 30, 2018 | Dec. 30, 2017 | Jul. 01, 2017 |
Schedule of Investments [Line Items] | ||||
Short-term investments | $ 249.1 | $ 0 | ||
Long-term investments | 0.1 | 0 | ||
Investments | 249.2 | 0 | ||
Cash and cash equivalents | 1,237 | 1,243.4 | $ 2,065 | $ 2,672.9 |
Other short-term investments | 8.5 | 6 | ||
Other investments | 8.5 | 6 | ||
Cash, cash equivalents, and short-term investments | 258.2 | 6.6 | ||
Cash, cash equivalents, and investments | 258.3 | 6.6 | ||
Commercial paper | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments | 20.6 | 0 | ||
Long-term investments | 0 | 0 | ||
Investments | 20.6 | 0 | ||
Government securities - U.S. | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments | 100 | 0 | ||
Long-term investments | 0 | 0 | ||
Investments | 100 | 0 | ||
Government securities - non-US | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments | 0 | |||
Long-term investments | 0.1 | |||
Investments | 0.1 | 0 | ||
Corporate debt securities - U.S. | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments | 89.7 | 0 | ||
Long-term investments | 0 | 0 | ||
Investments | 89.7 | 0 | ||
Corporate debt securities - non U.S. | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments | 38.8 | 0 | ||
Long-term investments | 0 | 0 | ||
Investments | 38.8 | 0 | ||
Time deposits | ||||
Schedule of Investments [Line Items] | ||||
Cash and cash equivalents | $ 0.6 | $ 0.6 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 6 Months Ended | |
Dec. 29, 2018 | Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Maturity of time deposit | 3 months | |
Available-for-sale securities, gross unrealized gain (loss) | $ 0 | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 29, 2018 | Dec. 29, 2018 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ 10.5 | $ 14.3 | |
Impact of tax legislation | 34.1 | $ 178.2 | |
Transition tax, foreign | 32.1 | 266 | |
Re-measurement of deferred taxes | $ 2 | $ (87.8) | |
Tax cuts and jobs act impact, percent | 9.30% | 6.60% |
Income Taxes (Annual Payments)
Income Taxes (Annual Payments) (Details) $ in Millions | Dec. 29, 2018USD ($) |
Income Tax Disclosure [Abstract] | |
Remainder of fiscal 2019 | $ 3.2 |
Fiscal 2,020 | 23.3 |
Fiscal 2,021 | 23.3 |
Fiscal 2,022 | 23.3 |
Fiscal 2,023 | 43.8 |
Fiscal 2,024 | 58.3 |
Fiscal 2,025 | 72.9 |
Total | $ 248.1 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 78 Months Ended | ||
Jun. 28, 2025 | Dec. 29, 2018 | Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Standby letters of credit and bank guarantees | $ 38.3 | $ 35.1 | |
Forecast | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Transition tax | $ 248.1 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 6 Months Ended |
Dec. 29, 2018segment | |
Segment Reporting [Abstract] | |
Reportable segments | 3 |
Segment Information (Summary of
Segment Information (Summary of Segment Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,800.8 | $ 1,785 | $ 3,182 | $ 3,073.9 |
Gross profit | 1,203.5 | 1,176.2 | 2,138.6 | 1,939.1 |
Operating income (loss) | 380.7 | 346.4 | 538.4 | 324.6 |
Income (loss) before provision for income taxes | 367.5 | 324.2 | 512.1 | 281.9 |
Depreciation and amortization expense | 66.1 | 66 | 127.5 | 131.5 |
Additions to long-lived assets | 61.2 | 77.6 | 116.4 | 126.5 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Operating income (loss) | (98.2) | (98.4) | (197.8) | (213.9) |
Income (loss) before provision for income taxes | (111.4) | (120.6) | (224.1) | (256.6) |
Depreciation and amortization expense | 12.6 | 9.8 | 23.7 | 22.8 |
Additions to long-lived assets | 24.1 | 23.2 | 40.7 | 35.4 |
Coach | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,248.6 | 1,229.6 | 2,209.3 | 2,153.3 |
Coach | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,248.6 | 1,229.6 | 2,209.3 | 2,153.3 |
Gross profit | 860.1 | 846 | 1,539.8 | 1,478.1 |
Operating income (loss) | 378.5 | 368.2 | 609.4 | 576.3 |
Income (loss) before provision for income taxes | 378.5 | 368.2 | 609.4 | 576.3 |
Depreciation and amortization expense | 33.6 | 32.4 | 67.1 | 70.5 |
Additions to long-lived assets | 16 | 44.8 | 33.3 | 73.9 |
Kate Spade | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 428.4 | 434.7 | 753.8 | 703.5 |
Depreciation and amortization expense | 0.8 | 2.2 | 1.2 | 5.2 |
Kate Spade | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 428.4 | 434.7 | 753.8 | 703.5 |
Gross profit | 272.4 | 256.8 | 480.1 | 331.6 |
Operating income (loss) | 89.2 | 54.8 | 134 | (68.5) |
Income (loss) before provision for income taxes | 89.2 | 54.8 | 134 | (68.5) |
Depreciation and amortization expense | 16 | 19.8 | 28.6 | 30.2 |
Additions to long-lived assets | 18.9 | 7.1 | 38.6 | 14 |
Stuart Weitzman | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 123.8 | 120.7 | 218.9 | 217.1 |
Gross profit | 71 | 73.4 | 118.7 | 129.4 |
Operating income (loss) | 11.2 | 21.8 | (7.2) | 30.7 |
Income (loss) before provision for income taxes | 11.2 | 21.8 | (7.2) | 30.7 |
Depreciation and amortization expense | 3.9 | 4 | 8.1 | 8 |
Additions to long-lived assets | $ 2.2 | $ 2.5 | $ 3.8 | $ 3.2 |
Headquarters Transactions (Deta
Headquarters Transactions (Details) - Office Building - The Guardian Life Insurance Company of America $ in Millions | Sep. 13, 2017USD ($)$ / ft² | Sep. 29, 2018$ / ft² | Jun. 30, 2019USD ($) | Jun. 29, 2036USD ($) | Sep. 30, 2017ft² |
Sale Leaseback Transaction [Line Items] | |||||
Leased building area (sqft) | ft² | 148,813 | ||||
Tenant improvements expense (usd per sqft) | $ / ft² | 80 | ||||
Tenant improvements expense | $ 11.9 | ||||
Tenant reimbursements (usd per sqft) | $ / ft² | 10 | ||||
Tenant reimbursements | $ 1.5 | ||||
Forecast | |||||
Sale Leaseback Transaction [Line Items] | |||||
Rent expense, sublease rentals per month | $ 0.8 | ||||
Minimum | Forecast | |||||
Sale Leaseback Transaction [Line Items] | |||||
Rent expense, sublease rentals per month | $ 1.1 | ||||
Maximum | Forecast | |||||
Sale Leaseback Transaction [Line Items] | |||||
Rent expense, sublease rentals per month | $ 1.3 |