Cover Page
Cover Page - shares | 3 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-16153 | |
Entity Registrant Name | Tapestry, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-2242751 | |
Entity Address, Address Line One | 10 Hudson Yards | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
City Area Code | 212 | |
Local Phone Number | 946-8400 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | TPR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 229,186,423 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001116132 | |
Current Fiscal Year End Date | --08-15 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 622.1 | $ 726.1 |
Short-term investments | 16.7 | 15.4 |
Trade accounts receivable, less allowances for credit losses of $5.8 and $5.8, respectively | 264.8 | 211.5 |
Inventories | 942.5 | 919.5 |
Income tax receivable | 246.5 | 231.1 |
Prepaid expenses | 161 | 126.3 |
Other current assets | 155.4 | 133.6 |
Total current assets | 2,409 | 2,363.5 |
Property and equipment, net | 539.6 | 564.5 |
Operating lease right-of-use assets | 1,352.1 | 1,378.7 |
Goodwill | 1,218.5 | 1,227.5 |
Intangible assets | 1,358.5 | 1,360.1 |
Deferred income taxes | 38.8 | 40.4 |
Other assets | 226 | 182.1 |
Total assets | 7,142.5 | 7,116.8 |
Current Liabilities: | ||
Accounts payable | 386.5 | 416.9 |
Accrued liabilities | 487.1 | 547.1 |
Current portion of operating lease liabilities | 295.6 | 297.5 |
Current debt | 25 | 25 |
Total current liabilities | 1,194.2 | 1,286.5 |
Long-term debt | 1,629.9 | 1,635.8 |
Long-term operating lease liabilities | 1,296.7 | 1,333.7 |
Deferred income taxes | 284.1 | 240 |
Long-term income taxes payable | 32.6 | 43.5 |
Other liabilities | 289.3 | 299.5 |
Total liabilities | 4,726.8 | 4,839 |
See Note 14 on commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock: (authorized 25.0 million shares; $0.01 par value per share) none issued | 0 | 0 |
Common stock: (authorized 1.0 billion shares; $0.01 par value per share) issued and outstanding - 229.2 million and 227.4 million shares, respectively | 2.3 | 2.3 |
Additional paid-in-capital | 3,670.7 | 3,682.2 |
Retained earnings (accumulated deficit) | (1,102) | (1,216.8) |
Accumulated other comprehensive income (loss) | (155.3) | (189.9) |
Total stockholders' equity | 2,415.7 | 2,277.8 |
Total liabilities and stockholders' equity | $ 7,142.5 | $ 7,116.8 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances for credit losses | $ 5.8 | $ 5.8 |
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) | 229,200,000 | 227,400,000 |
Common stock, outstanding (shares) | 229,200,000 | 227,400,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 1,513.2 | $ 1,506.5 |
Cost of sales | 415.5 | 451.9 |
Gross profit | 1,097.7 | 1,054.6 |
Selling, general and administrative expenses | 844.5 | 800.3 |
Operating income (loss) | 253.2 | 254.3 |
Interest expense, net | 13.3 | 7.4 |
Other expense (income) | 1.4 | 10.7 |
Income (loss) before provision for income taxes | 238.5 | 236.2 |
Provision (benefit) for income taxes | 43.5 | 40.9 |
Net income (loss) | $ 195 | $ 195.3 |
Net income (loss) per share: | ||
Basic (USD per share) | $ 0.85 | $ 0.81 |
Diluted (USD per share) | $ 0.84 | $ 0.79 |
Shares used in computing net income (loss) per share: | ||
Basic (shares) | 228.3 | 241.5 |
Diluted (shares) | 232.5 | 246.8 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 195 | $ 195.3 |
Other comprehensive income (loss), net of tax: | ||
Unrealized gains (losses) on cash flow hedging derivatives, net | 31.3 | 7.7 |
Unrealized gains (losses) on available-for-sale investments, net | 0 | 0.5 |
Foreign currency translation adjustments | 3.3 | (30.2) |
Other comprehensive income (loss), net of tax | 34.6 | (22) |
Comprehensive income (loss) | $ 229.6 | $ 173.3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | ||
Net income (loss) | $ 195 | $ 195.3 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 44.3 | 43.8 |
Provision for bad debt | 0.4 | 0.4 |
Share-based compensation | 19.7 | 15.1 |
Deferred income taxes | 36.6 | (3.2) |
Changes to lease related balances, net | (11.5) | (12.8) |
Other non-cash charges, net | 4.5 | (9.5) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (55.6) | (15.8) |
Inventories | (29.8) | (181.9) |
Accounts payable | (28.4) | 0.9 |
Accrued liabilities | (62) | (134) |
Other liabilities | (8.2) | 42.9 |
Other assets | (29.7) | (111.6) |
Net cash provided by (used in) operating activities | 75.3 | (170.4) |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES | ||
Purchases of investments | (1.9) | (4) |
Proceeds from maturities and sales of investments | 0 | 136.2 |
Purchases of property and equipment | (20.9) | (27.3) |
Settlement of net investment hedge | 0 | 41.9 |
Net cash provided by (used in) investing activities | (22.8) | 146.8 |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES | ||
Payment of dividends | (80.2) | (72.7) |
Repurchase of common stock | 0 | (94.9) |
Payment of debt issuance costs | (31.4) | 0 |
Proceeds from share-based awards | 0.4 | 6.1 |
Repayment of debt | (6.3) | (12.5) |
Taxes paid to net settle share-based awards | (31.6) | (51.9) |
Payments of finance lease liabilities | (0.3) | (0.3) |
Net cash provided by (used in) financing activities | (149.4) | (226.2) |
Effect of exchange rate changes on cash and cash equivalents | (7.1) | (13.5) |
Net (decrease) increase in cash and cash equivalents | (104) | (263.3) |
Cash and cash equivalents at beginning of period | 726.1 | 789.8 |
Cash and cash equivalents at end of period | 622.1 | 526.5 |
Supplemental information: | ||
Cash paid for income taxes, net | 41.9 | 83 |
Cash paid for interest | 27.3 | 26.1 |
Noncash investing activity - property and equipment obligations | $ 10.2 | $ 10.5 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Sep. 30, 2023 | |
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 iconic accessories and lifestyle brands. Our global house of brands unites the magic of Coach, kate spade new york and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible. The Coach segment includes global sales of primarily Coach brand products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors. The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors. The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites and through independent third-party distributors. |
BASIS OF PRESENTATION AND ORGAN
BASIS OF PRESENTATION AND ORGANIZATION | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND ORGANIZATION | BASIS OF PRESENTATION AND ORGANIZATION Interim Financial Statements These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed 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 July 1, 2023 ("fiscal 2023") and other filings filed with the SEC. The results of operations, cash flows and comprehensive income for the three months ended September 30, 2023 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 29, 2024 ("fiscal 2024"). Fiscal Periods The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2024 will be a 52-week period. Fiscal 2023, ended on July 1, 2023, was also a 52-week period. The first quarter of fiscal 2024 ended on September 30, 2023 and the first quarter of fiscal 2023 ended on October 1, 2022, both of which were 13-week periods. Covid-19 Pandemic The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities. Such disruptions continued during the first half of fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic. Starting in December 2022, certain government restrictions were lifted in the region and business trends improved. In the first quarter of fiscal 2024, the Covid-19 pandemic did not materially impact our business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook. Use of Estimates The preparation of financial statements in conformity with 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; asset retirement obligations; customer returns, end-of-season markdowns and operational chargebacks; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes 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. Share Repurchases The Company accounts for stock repurchases by allocating the repurchase price to common stock and retained earnings. Under Maryland law, the Company's state of incorporation, there are no treasury shares. All repurchased shares are authorized but unissued shares and these shares may be issued in the future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. Purchases of the Company's common stock are executed through open market purchases, including through purchase agreements under Rule 10b5-1. Effective January 1, 2023, the Company is subject to a 1% excise tax on net share repurchases as part of the Inflation Reduction Act of 2022, which is recorded in Retained earnings as part of Stockholders' Equity. Supplier Finance Program To improve our working capital efficiency, the Company makes available to certain suppliers a voluntary supply chain finance (“SCF”) program that enables our suppliers to sell their receivables from the Company to a global financial institution on a non-recourse basis at a rate that leverages our credit rating. The Company does not have the ability to refinance or modify payment terms to the global financial institution through the SCF program. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. The Company’s payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, are not impacted by suppliers’ participation in the program. As of September 30, 2023 and July 1, 2023, $285.6 million and $305.4 million, respectively, was related to suppliers eligible to participate in the Company's SCF program and presented within Accounts payable on the Consolidated Balance Sheets. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)", which is intended to enhance the transparency of supplier finance programs. The ASU requires the buyer in a supplier finance program to disclose sufficient information about the program in order to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted ASU 2022-04 as of the beginning of fiscal 2024. The adoption of ASU 2022-04 did not have an impact on the Company's interim condensed consolidated financial statements other than the new disclosure requirements. Refer to Note 2, "Basis of Presentation and Organization", for additional information. Recently Issued Accounting Pronouncements The Company has considered all new accounting pronouncements and have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition or cash flows based on current information. |
REVENUE
REVENUE | 3 Months Ended |
Sep. 30, 2023 | |
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 e-commerce sites. 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. Digital revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers. Retail and digital 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. Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons. Loyalty programs provide the customer a material right to acquire additional products and give rise to the Company having a separate performance obligation. Additionally, certain products sold by the Company include an assurance warranty that is not considered a separate performance obligation. These programs are immaterial individually and in the aggregate. 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 September 30, 2023. 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 or 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 September 30, 2023 Coach $ 686.5 $ 220.3 $ 175.2 $ 75.4 $ 1,157.4 Kate Spade 240.2 10.8 30.6 21.6 303.2 Stuart Weitzman 34.7 13.5 0.4 4.0 52.6 Total $ 961.4 $ 244.6 $ 206.2 $ 101.0 $ 1,513.2 Three Months Ended October 1, 2022 Coach $ 669.1 $ 209.8 $ 167.9 $ 72.5 $ 1,119.3 Kate Spade 254.6 11.0 31.6 24.7 321.9 Stuart Weitzman 42.2 15.1 0.2 7.8 65.3 Total $ 965.9 $ 235.9 $ 199.7 $ 105.0 $ 1,506.5 (1) Greater China includes mainland China, Hong Kong SAR and Macao SAR, and Taiwan. (2) Other Asia includes Japan, Malaysia, Australia, New Zealand, Singapore, South Korea, and other countries within Asia. (3) Other sales primarily represents sales in Europe, the Middle East and royalties earned from the Company's licensing partners. 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 generally comprised of unredeemed gift cards, net of breakage which has been recognized. Additional deferred revenue may result from sales-based royalty payments received or receivable which exceed the revenue recognized during the contractual period. The balance of such amounts as of September 30, 2023 and July 1, 2023 was $40.4 million and $43.0 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 three months ended September 30, 2023, net sales of $14.6 million were recognized from amounts recorded as deferred revenue as of July 1, 2023. For the three months ended October 1, 2022, net sales of $11.5 million were recognized from amounts recorded as deferred revenue as of July 2, 2022. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Capri Holdings Limited Merger Agreement On August 10, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned subsidiary of Tapestry, and Capri Holdings Limited ("Capri"). Under the terms of the Merger Agreement, Tapestry has agreed to acquire any and all of Capri’s ordinary shares (other than (a) Capri’s ordinary Shares that are issued and outstanding immediately prior to the consummation of the acquisition that are owned or held in treasury by the Company or by Capri or any of its direct or indirect subsidiaries and (b) Capri’s ordinary shares that are issued and outstanding immediately prior to the consummation of the acquisition that are held by holders who have properly exercised dissenters’ rights in accordance with, and who have complied with, Section 179 of the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands) in cash at a purchase price of $57.00 per share, without interest, subject to any required tax withholding as provided in the Merger Agreement. The enterprise value is expected to be approximately $8.5 billion and the transaction is expected to close during calendar year 2024 (the "Capri Acquisition"). On October 25, 2023, at a special meeting of Capri's shareholders, Capri's shareholders approved the Merger Agreement and the transactions contemplated thereby. The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of additional permanent financing, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. Refer to Note 11, "Debt," for further information on our existing debt instruments related to the acquisition. In conjunction with the Capri Acquisition, the Company incurred $26.3 million in pre-tax expenses primarily related to professional fees and financing-related expenses during the three months ended September 30, 2023. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2023 | |
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 (1) Total (millions) Balance at July 1, 2023 $ 597.5 $ 630.0 $ — $ 1,227.5 Foreign exchange impact (7.3) (1.7) — (9.0) Balance at September 30, 2023 $ 590.2 $ 628.3 $ — $ 1,218.5 (1) Amount is net of accumulated goodwill impairment charges of $210.7 million as of September 30, 2023 and July 1, 2023. Intangible Assets Intangible assets consist of the following: September 30, 2023 July 1, 2023 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.3 $ (51.6) $ 48.7 $ 100.3 $ (50.0) $ 50.3 Total intangible assets subject to amortization 100.3 (51.6) 48.7 100.3 (50.0) 50.3 Intangible assets not subject to amortization: Trademarks and trade names 1,309.8 — 1,309.8 1,309.8 — 1,309.8 Total intangible assets $ 1,410.1 $ (51.6) $ 1,358.5 $ 1,410.1 $ (50.0) $ 1,360.1 Amortization expense for the Company’s definite-lived intangible assets was $1.6 million and $1.7 million for the three months ended September 30, 2023 and October 1, 2022, respectively. As of September 30, 2023 , the expected amortization expense for intangible assets is as follows: Amortization Expense (millions) Remainder of fiscal 2024 $ 4.9 Fiscal 2025 6.5 Fiscal 2026 6.5 Fiscal 2027 6.5 Fiscal 2028 6.5 Thereafter 17.8 Total $ 48.7 The expected amortization expense above reflects remaining useful lives ranging from approximately 6.5 to 8.8 years for customer relationships. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY A reconciliation of stockholders' equity is presented below: Shares of Common Stock Additional Retained Earnings / (Accumulated Deficit) Accumulated Total (millions, except per share data) Balance at July 2, 2022 241.2 $ 2.4 $ 3,620.2 $ (1,166.2) $ (170.9) $ 2,285.5 Net income (loss) — — — 195.3 — 195.3 Other comprehensive income (loss) — — — — (22.0) (22.0) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 2.7 — (45.8) — — (45.8) Share-based compensation — — 15.1 — — 15.1 Repurchase of common stock (3.0) — — (100.0) — (100.0) Dividends declared ($0.30 per share) — — — (72.7) — (72.7) Balance at October 1, 2022 240.9 $ 2.4 $ 3,589.5 $ (1,143.6) $ (192.9) $ 2,255.4 Shares of Common Stock Additional Retained Earnings / (Accumulated Deficit) Accumulated Total (millions, except per share data) Balance at July 1, 2023 227.4 $ 2.3 $ 3,682.2 $ (1,216.8) $ (189.9) $ 2,277.8 Net income (loss) — — — 195.0 — 195.0 Other comprehensive income — — — — 34.6 34.6 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 1.8 — (31.2) — — (31.2) Share-based compensation — — 19.7 — — 19.7 Repurchase of common stock, including excise tax — — — — — — Dividends declared ($0.35 per share) — — — (80.2) — (80.2) Balance at September 30, 2023 229.2 $ 2.3 $ 3,670.7 $ (1,102.0) $ (155.3) $ 2,415.7 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 Gains Cumulative Translation Adjustment (2) Total (millions) Balances at July 2, 2022 $ (2.3) $ (0.5) $ (168.1) $ (170.9) Other comprehensive income (loss) before reclassifications 6.6 0.5 (30.2) (23.1) Less: amounts reclassified from accumulated other comprehensive income to earnings (1.1) — — (1.1) Net current-period other comprehensive income (loss) 7.7 0.5 (30.2) (22.0) Balances at October 1, 2022 $ 5.4 $ — $ (198.3) $ (192.9) Balances at July 1, 2023 $ 34.9 $ — $ (224.8) $ (189.9) Other comprehensive income (loss) before reclassifications 31.5 — 3.3 34.8 Less: amounts reclassified from accumulated other comprehensive income to earnings 0.2 — — 0.2 Net current-period other comprehensive income (loss) 31.3 — 3.3 34.6 Balances at September 30, 2023 $ 66.2 $ — $ (221.5) $ (155.3) (1) The ending balances of AOCI related to cash flow hedges are net of tax of $(7.5) million and $0.7 million as of September 30, 2023 and October 1, 2022, respectively. The amounts reclassified from AOCI are net of tax of $0.6 million and $0.4 million as of September 30, 2023 and October 1, 2022, respectively. (2) The ending balances of AOCI related to foreign currency translation adjustments includes a loss of $25.9 million, net of tax of $(5.8) million and a loss of $1.8 million, net of tax of $(22.4) million, as of September 30, 2023 and October 1, 2022, respectively, related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The majority of the Company’s purchases of finished goods are denominated in U.S. dollars, which limits the Company’s exposure to the transactional effects of foreign currency exchange rate fluctuations. However, the Company is exposed to foreign currency exchange risk related to its sale of U.S. dollar inventory to foreign operating subsidiaries in local currency, as well as risk related to various cross-currency intercompany loans and payables, and translation risk. The Company is also exposed to foreign currency risk related to changes in the U.S. dollar value of its net investment in foreign subsidiaries and interest rate risk attributed to changes in the benchmark interest rates on the Company's debt obligations, including future issuances. The Company uses derivative financial instruments to manage these risks. These derivative transactions are in accordance with the Company’s risk management policies. The Company does not enter into derivative transactions for speculative or trading purposes. The Company records all derivative contracts at fair value on the Condensed Consolidated Balance Sheets. The fair values of foreign currency derivatives and interest rate derivatives are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the counterparty's or Company’s credit risk. Judgment is required of management in developing estimates of fair value. The use of different market assumptions or methodologies could affect the estimated fair value. For derivative instruments that qualify for hedge accounting, the changes in the fair value of these instruments are either (i) offset against the changes in fair value of the hedged assets or liabilities through earnings or (ii) recognized as a component of Accumulated other comprehensive income (loss) ("AOCI") until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows. For derivative instruments that are designated as a net investment hedge, the changes in the fair value of the instruments are recognized as a component of AOCI, and upon discontinuation of the hedge remain in AOCI until the net investment is sold or liquidated. Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative that is designated as a hedge, the Company documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, as well as how hedge effectiveness will be assessed over the term of the instrument. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis. If it is determined that a derivative instrument has not been highly effective and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued, and further gains (losses) are recognized in earnings within foreign currency gains (losses). Upon discontinuance of hedge accounting, the cumulative change in fair value of cash flow derivatives previously recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the original hedging strategy, unless the forecasted transaction is no longer probable of occurring, in which case the accumulated amount is immediately recognized in earnings within foreign currency gains (losses). As a result of the use of derivative instruments, the Company may be exposed to the risk that the counterparties to such contacts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings, among other factors. The fair values of the Company’s derivative instruments are recorded on its Condensed Consolidated Balance Sheets on a gross basis. For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item being hedged, primarily within cash from operating activities. Hedging Portfolio The Company enters into forward currency contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated inventory transactions, as well as various cross-currency intercompany loans and payables. To the extent its derivative contracts designated as cash flow hedges are highly effective in offsetting changes in the value of the hedged items, the related gains (losses) are initially deferred in AOCI and subsequently recognized in the Consolidated Statements of Operations as part of the cost of the inventory purchases being hedged within Cost of sales, when the related inventory is sold to a third party. Current maturity dates range from October 2023 to June 2025. Forward foreign currency exchange contracts designated as fair value hedges and associated with intercompany and other contractual obligations are recognized within Other expense (income) on the Company's Condensed Consolidated Statement of Operations, generally in the period in which the related balances being hedged are revalued. The maturity date of most instruments held as of September 30, 2023 are in November 2023, and such contracts are typically renewed upon maturity if the related balance has not been settled. The Company also enters into interest rate derivative contracts, with current maturity dates in March 2024, to reduce its risks related to changes in the benchmark interest rates on its debt obligations, including future issuances. Any premiums related to these instruments are excluded from the Company's measurement of hedge effectiveness, and are amortized over the period between the hedge execution and the contract maturity. To the extent its interest rate derivative contracts designated as cash flow hedges are highly effective in offsetting changes in the value of the hedged items, the related gains (losses) are initially deferred in AOCI and subsequently recognized in the Consolidated Statements of Operations as interest income (expense) in the same periods during which the hedged forecasted interest payments associated with the Company’s borrowings are recorded in earnings. The Company also enters into cross-currency swaps to reduce its risks related to exchange rate fluctuations on net investments in foreign subsidiaries. The related gains (losses) are deferred in AOCI until the net investment is sold or liquidated, and current maturity dates range from April 2025 to March 2032. The following tables provide information related to the Company's derivative instruments recorded on the Company's Condensed Consolidated Balance Sheets as of September 30, 2023 and July 1, 2023: Notional Value Derivative Assets Derivative Liabilities Designated Derivative Hedging Instruments Fair Value Fair Value September 30, 2023 July 1, 2023 Consolidated Balance Sheet Classification September 30, 2023 July 1, 2023 Consolidated Balance Sheet Classification September 30, 2023 July 1, 2023 (millions) FC - Inventory purchases (1) $ 882.4 $ 842.3 Other Current Assets $ 53.9 $ 38.6 Accrued Liabilities $ 2.1 $ 0.1 FC - Intercompany liabilities and loans (2) 278.1 272.3 Other Current Assets 0.1 0.4 Accrued Liabilities 0.5 0.2 IC - Interest rates (3) 1,500.0 — Other Current Assets 15.6 — Accrued Liabilities — — CCS - Net investment hedges (4) 1,200.0 1,200.0 Other Assets 35.1 13.1 Other Liabilities 82.4 90.5 Total Hedges $ 3,860.5 $ 2,314.6 $ 104.7 $ 52.1 $ 85.0 $ 90.8 (1) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships. (2) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in fair value hedging relationships. (3) Represents interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships. (4) Represents cross currency swap contracts ("CCS") designated as derivative instruments in net investment hedging relationships. The following tables provides the pretax impact of gains and losses from the Company's designated derivative instruments on its Condensed Consolidated Financial Statements as of September 30, 2023 and October 1, 2022: Amount of Gain (Loss) Recognized in OCI on Derivatives Three Months Ended September 30, 2023 October 1, 2022 (millions) Cash flow hedges: Inventory purchases (1) $ 19.9 $ 6.4 Interest rates (2) 15.6 — Total cash flow hedges $ 35.5 $ 6.4 Other: Net investment hedges (3) 34.8 16.8 Total other $ 34.8 $ 16.8 Total hedges $ 70.3 $ 23.2 Amount of Gain (Loss) Reclassified from Accumulated OCI into Income Statement of Operations Three Months Ended September 30, 2023 October 1, 2022 (millions) Cash flow hedges: Inventory purchases (1) Cost of sales $ 3.7 $ (1.5) Interest rates (2) Other income (expense) (4.1) — Total hedges $ (0.4) $ (1.5) (1) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships. (2) Represents forward interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships. (3) Represents cross currency swap contracts ("CCS") designated as derivative instruments in net investment hedging relationships. The Company expects that $40.8 million of net derivative gain related to inventory purchases and interest rates included in Accumulated other comprehensive income at September 30, 2023 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in foreign currency exchange rates and benchmark interest rates. The Company assesses the cross-currency swaps used as a net investment hedges under the spot method. This results in the cross-currency basis spread being excluded from the assessment of hedge effectiveness, and recorded as incurred as a reduction in interest expense in the Company’s consolidated statements of operations. Accordingly, the Company recorded net interest income of $7.2 million and $6.4 million during three months ended September 30, 2023 and October 1, 2022 , respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 October 1, 2022 (millions, except per share data) Net income (loss) $ 195.0 $ 195.3 Weighted-average basic shares 228.3 241.5 Dilutive securities: Effect of dilutive securities 4.2 5.3 Weighted-average diluted shares 232.5 246.8 Net income (loss) per share: Basic $ 0.85 $ 0.81 Diluted $ 0.84 $ 0.79 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 (loss) 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 and any applicable market condition modifiers (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. As of September 30, 2023 and October 1, 2022, there were 3.7 million and 6.2 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 | 3 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION The following table shows the share-based compensation expense and the related tax benefits recognized in the Company's Condensed Consolidated Statements of Operations for the periods indicated: Three Months Ended September 30, 2023 October 1, 2022 (millions) Share-based compensation expense $ 19.7 $ 15.1 Income tax benefit related to share-based compensation expense 3.7 3.0 Stock Options A summary of stock option activity during the three months ended September 30, 2023 is as follows: Number of (millions) Outstanding at July 1, 2023 8.7 Granted 1.2 Exercised — Forfeited or expired (0.7) Outstanding at September 30, 2023 9.2 The weighted-average grant-date fair value of options granted during the three months ended September 30, 2023 and October 1, 2022 was $10.51 and $12.00, 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: September 30, 2023 October 1, 2022 Expected term (years) 4.9 4.8 Expected volatility 44.7 % 48.7 % Risk-free interest rate 4.5 % 3.2 % Dividend yield 4.1 % 3.4 % Service-based Restricted Stock Unit Awards ("RSUs") A summary of service-based RSU activity during the three months ended September 30, 2023 is as follows: Number of (millions) Non-vested at July 1, 2023 5.9 Granted 2.2 Vested (2.6) Forfeited (0.1) Non-vested at September 30, 2023 5.4 The weighted-average grant-date fair value of share awards granted during the three months ended September 30, 2023 and October 1, 2022 was $33.70 and $35.22, respectively. Performance-based Restricted Stock Unit Awards ("PRSUs") A summary of PRSU activity during the three months ended September 30, 2023 is as follows: Number of (millions) Non-vested at July 1, 2023 0.7 Granted 0.4 Change due to performance condition achievement 0.1 Vested — Forfeited — Non-vested at September 30, 2023 1.2 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 differ from the date on which the award vests. The weighted-average grant-date fair value per share of PRSU awards granted during the three months ended September 30, 2023 and October 1, 2022 was $33.64 and $35.27, respectively. |
DEBT
DEBT | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the components of the Company’s outstanding debt: September 30, 2023 July 1, 2023 (millions) Current debt: Term Loan due May 2027 $ 25.0 $ 25.0 Total current debt $ 25.0 $ 25.0 Long-term debt: Term Loan due May 2027 $ 437.5 $ 443.8 3.050% Senior Notes due March 2032 500.0 500.0 4.125% Senior Notes due July 2027 396.6 396.6 4.250% Senior Notes due April 2025 303.4 303.4 Total long-term debt 1,637.5 1,643.8 Less: Unamortized discount and debt issuance costs on Senior Notes (7.6) (8.0) Total long-term debt, net $ 1,629.9 $ 1,635.8 During the three months ended September 30, 2023 and October 1, 2022, the Company recognized interest expense related to its debt of $22.3 million and $16.3 million, respectively. Capri Holdings Limited Merger Agreement On August 10, 2023, the Company entered into a Merger Agreement. The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of additional permanent financing, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. Refer to Note 5, "Acquisitions" for further information. Bridge Facility In connection with our entry into the Merger Agreement, the Company entered into a commitment letter, dated as of August 10, 2023, with Bank of America, N.A., Morgan Stanley Senior Funding, Inc. and the other commitment parties party thereto, to provide a 364-day senior unsecured bridge loan facility in an aggregate principal amount of up to $8.0 billion (the "Bridge Facility") to fund the purchase price of the Capri Acquisition and to pay related fees and expenses. Upon entering into the New Term Loan Agreement (as defined below) and, as a result of the commitments thereunder with respect to the New Term Loan Facilities (as defined below), the Bridge Facility commitments were reduced to $6.6 billion. As of September 30, 2023 there were no outstanding borrowings on the Bridge Facility. New Term Loan Facilities On August 30, 2023, the Company entered into a definitive credit agreement (such agreement, the "New Term Loan Credit Agreement") whereby Bank of America, N.A, as administrative agent, and the other agents party thereto, and a syndicate of banks and financial institutions have committed to lend the Company, subject to the satisfaction or waiver of the conditions set forth in the Term Loan Agreement, a $1.05 billion unsecured term loan facility maturing three years after the term loans thereunder are borrowed (the “Three-Year Term Loan Facility”) and a $350 million term loan facility maturing five years after the term loans thereunder are borrowed (the “Five-Year Term Loan Facility”; and collectively with the Three-Year Term Loan Facility, the “New Term Loan Facilities”). The Company plans to use borrowings under the New Term Loan Facilities to pay a portion of the consideration for the Capri Acquisition and to pay related fees and expenses. Borrowings under the New Term Loan Facilities bear interest at a rate per annum equal to, at the Company’s option, either (a) an alternate base rate or (b) a rate based on the forward-looking Secured Overnight Financing Rate ("SOFR") term rate administered by CME Group Benchmark Administration Limited (or any successor administrator) plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a grid based on the ratio of (a) consolidated debt (with certain customary deductions for unrestricted cash and permitted investments) to (b) consolidated EBITDAR. The applicable margin will initially be (x) in the case of the Three-Year Term Loan Facility, 0.250% for base rate loans and 1.250% for SOFR loans and (y) in the case of the Five-Year Term Loan Facility, 0.375% for base rate loans and 1.375% for SOFR loans. Additionally, the Company will pay a ticking fee of 0.15% on the average daily amount of the unused commitments of the New Term Loan Facilities. There were no outstanding borrowings on the New Term Loan Facilities as of September 30, 2023. $2.0 Billion Revolving Credit Facility On August 30, 2023, pursuant to that certain Amendment No. 1 to Credit Agreement (the "Amendment"), the Company amended its Existing Credit Agreement (as defined below), originally dated as of May 11, 2022, among the Company, as borrower, certain of our subsidiaries, as guarantors, Bank of America, N.A., as administrative agent, and the financial institutions parties thereto as lenders (the "Existing Credit Agreement", and as amended by the Amendment, the "Amended Credit Agreement") . Under th e Amended Credit Agreement, a syndicate of financial institutions and other lenders provided increases to the aggregate commitments to the revolving facility under the Existing Credit Agreement from $1.25 billion to $2.0 billion (the “Revolving Facility”). T he Revolving Facility will mature on May 11, 2027. Borrowings under the Revolving Facility bear interest at a rate per annum equal to, at the Company’s option, (i) for borrowings in U.S. Dollars, either (a) an alternate base rate or (b) a rate based on the forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited (or any successor administrator satisfactory to the administrative agent), (ii) for borrowings in Euros, the Euro Interbank Offered Rate, (iii) for borrowings in Pounds Sterling, the Sterling Overnight Index Average Reference Rate and (iv) for borrowings in Japanese Yen, the Tokyo Interbank Offer Rate, plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a grid (the “Pricing Grid”) based on the ratio of (a) consolidated debt to (b) consolidated EBITDAR. Additionally, the Company will pay facility fees, calculated at a rate per annum determined in accordance with the Pricing Grid, on the full amount of the Revolving Facility, payable quarterly in arrears, and certain fees with respect to letters of credit that are issued. The Revolving Facility may be used to finance the working capital needs, capital expenditures, permitted investments, share purchases, dividends, and other general corporate purposes of the Company and its subsidiaries (which may include commercial paper backup). Additionally, up to $250 million of the Revolving Facility will be available on a funds certain basis to fund the purchase price of the Capri Acquisition and to pay related fees and expenses. There were no outstanding borrowings on the Revolving Facility as of September 30, 2023. 2027 Term Loan On May 11, 2022, pursuant to the Existing Credit Agreement, the Company entered into an unsecured $500.0 million Term Loan (the “2027 Term Loan”) which matures on May 11, 2027. The 2027 Term Loan amortizes in an amount equal to 5.00% per annum, with payments made quarterly. As of September 30, 2023, $25.0 million of the 2027 Term Loan is included in Current debt on the Consolidated Balance Sheets. Borrowings under the 2027 Term Loan bear interest at a rate per annum equal to, at the Company’s option, either (i) an alternate base rate or (ii) a term secured overnight financing rate plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a pricing grid based on the ratio (a) consolidated debt to (b) consolidated EBITDAR. 2025, 2027, 2032 Senior Notes In March 2015, the Company issued $600.0 million aggregate principal amount of 4.25% senior unsecured notes due April 1, 2025 at 99.445% of par (the "2025 Senior Notes"). In June 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"). In December 2021, the Company completed a cash tender offer for $203.4 million and $296.6 million of the outstanding aggregate principal amount under its 2027 Senior Notes and 2025 Senior Notes, respectively. In addition, in December 2021, the Company issued $500.0 million aggregate principal amount of 3.050% senior unsecured notes due March 15, 2032 at 99.705% of par (the "2032 Senior Notes"). Debt Covenants Under the terms of our debt facilities, we must comply with certain restrictions limiting the Company’s ability to among other things: (i) incur certain indebtedness, (ii) create certain liens, (iii) enter into certain sale and leaseback transactions, (iv) make certain investments or payments and (v) merge, or consolidate or transfer, sell or lease all or substantially all of the Company’s assets. Under the Amended Credit Agreement, we are required to comply on a quarterly basis with a maximum net leverage ratio of 4.00:1.00. After giving effect to the Capri Acquisition, the Company will be required under the Amended Credit Agreement and the New Term Loan Agreement to comply on a quarterly basis with a maximum net leverage ratio of (i) from and including the closing date of the Capri Acquisition to but excluding June 28, 2025, 4.75 to 1.00, (ii) from and including June 28, 2025 to but excluding June 27, 2026, 4.50 to 1.00, and (iii) from and including June 27, 2026 and thereafter, 4.00 to 1.00. As of September 30, 2023, we were in compliance with these restrictions and covenants, have met such financial ratios and have met all debt payment obligations. Fair Value Considerations At September 30, 2023 the fair value of the 2032 Senior Notes, 2027 Senior Notes, and 2025 Senior Notes was approximately $367.3 million, $366.6 million and $295.5 million, 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 Level 2 measurements within the fair value hierarchy. At July 1, 2023, the fair value of the 2032 Senior Notes, 2027 Senior Notes and 2025 Senior Notes was approximately $399.5 million, $371.7 million and $295.1 million, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and July 1, 2023: Level 1 Level 2 September 30, July 1, September 30, July 1, (millions) Assets: Cash equivalents (1) $ 136.1 $ 155.7 $ 15.6 $ 11.9 Short-term investments : Time deposits (2) — — 0.6 0.6 Other — — 16.1 14.8 Long-term investments : Other — — 1.3 1.3 Derivative assets : Inventory-related instruments (3) — — 53.9 38.6 Net investment hedges (3) — — 35.1 13.1 Intercompany loans and payables (3) — — 0.1 0.4 Interest rate instruments (3) — — 15.6 — Liabilities: Derivative liabilities : Inventory-related instruments (3) — — 2.1 0.1 Net investment hedges (3) — — 82.4 90.5 Intercompany loans and payables (3) — — 0.5 0.2 Interest rate instruments (3) — — — — (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 11, "Debt", for the fair value of the Company's outstanding debt instruments. Non-Financial Assets and Liabilities |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and July 1, 2023: September 30, 2023 July 1, 2023 Short-term Long-term (2) Total Short-term Long-term (2) Total (millions) Other: Time deposits (1) $ 0.6 $ — $ 0.6 $ 0.6 $ — $ 0.6 Other 16.1 1.3 17.4 14.8 1.3 16.1 Total Investments $ 16.7 $ 1.3 $ 18.0 $ 15.4 $ 1.3 $ 16.7 (1) These securities have original maturities greater than three months and are recorded at fair value. (2) Long-term investments are presented within Other assets on the Condensed Consolidated Balance Sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Capri Holdings Limited Merger Agreement On August 10, 2023, the Company entered into a Merger Agreement. The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of additional permanent financing, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. Refer to Note 5, "Acquisitions" for further information. Letters of Credit The Company had standby letters of credit, surety bonds and bank guarantees totaling $37.3 million and $37.1 million outstanding at September 30, 2023 and July 1, 2023, respectively. The agreements, which expire at various dates through fiscal year 2040, 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. Other The Company had other contractual cash obligations as of September 30, 2023 related to debt repayments. Refer to Note 11, "Debt," for further information. The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including proceedings to protect Tapestry's intellectual property rights, litigation instituted by persons alleged to have been injured by advertising claims or upon premises within the Company’s control, contractual disputes, insurance claims and litigation with present or former employees. Although the Company's litigation can result in large monetary awards, such as when a civil jury is allowed to determine compensatory and/or punitive damages, the Company believes that the outcome of all pending legal proceedings in the aggregate will not have a material effect on the Company's business or condensed consolidated financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has three reportable segments: • Coach - Includes global sales primarily of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors. • Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers, and through independent third party distributors. • Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites and through independent third party distributors. In deciding how to allocate resources and assess performance, the Company's chief operating decision maker regularly evaluates operating profit of these segments. Segment operating profit is the gross profit of the segment less direct expenses of the segment. The following table summarizes net sales of each of the company's segments for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Segment net sales: Coach $ 1,157.4 $ 1,119.3 Kate Spade 303.2 321.9 Stuart Weitzman 52.6 65.3 Total Net sales: $ 1,513.2 $ 1,506.5 The following table summarizes segment operating profit of each of the company's segments and reconciliation to Income (loss) before provision for income taxes for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Segment operating profit: Coach $ 371.3 $ 339.2 Kate Spade 26.6 23.2 Stuart Weitzman (8.6) (5.1) Total segment operating profit: $ 389.3 $ 357.3 Unallocated corporate expenses (1) 136.1 103.0 Unallocated other charges, net (2) 14.7 18.1 Income (loss) before provision for income taxes $ 238.5 $ 236.2 The following table summarizes depreciation and amortization expense of each of the company's segments for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Depreciation and amortization expense (3) : Coach $ 23.0 $ 22.3 Kate Spade 9.8 11.1 Stuart Weitzman 2.8 2.4 Unallocated corporate (1) 8.7 8.0 Total Depreciation and amortization expense: $ 44.3 $ 43.8 (1) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a segment. These costs primarily include administration and certain costs for information systems. (2) Includes Interest expense, net and Other expense (income). (3) Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Pay vs Performance Disclosure | ||
Net income (loss) | $ 195 | $ 195.3 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND ORG_2
BASIS OF PRESENTATION AND ORGANIZATION (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Periods | Fiscal PeriodsThe Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2024 will be a 52-week period. Fiscal 2023, ended on July 1, 2023, was also a 52-week period. The first quarter of fiscal 2024 ended on September 30, 2023 and the first quarter of fiscal 2023 ended on October 1, 2022, both of which 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; asset retirement obligations; customer returns, end-of-season markdowns and operational |
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. |
Share Repurchases | Share Repurchases The Company accounts for stock repurchases by allocating the repurchase price to common stock and retained earnings. Under Maryland law, the Company's state of incorporation, there are no treasury shares. All repurchased shares are authorized but unissued shares and these shares may be issued in the future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. Purchases of the Company's common stock are executed through open market purchases, including through purchase agreements under Rule 10b5-1. Effective January 1, 2023, the Company is subject to a 1% excise tax on net share repurchases as part of the Inflation Reduction Act of 2022, which is recorded in Retained earnings as part of Stockholders' Equity. |
Supplier Finance Program | Supplier Finance ProgramTo improve our working capital efficiency, the Company makes available to certain suppliers a voluntary supply chain finance (“SCF”) program that enables our suppliers to sell their receivables from the Company to a global financial institution on a non-recourse basis at a rate that leverages our credit rating. The Company does not have the ability to refinance or modify payment terms to the global financial institution through the SCF program. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. The Company’s payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, are not impacted by suppliers’ participation in the program. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)", which is intended to enhance the transparency of supplier finance programs. The ASU requires the buyer in a supplier finance program to disclose sufficient information about the program in order to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted ASU 2022-04 as of the beginning of fiscal 2024. The adoption of ASU 2022-04 did not have an impact on the Company's interim condensed consolidated financial statements other than the new disclosure requirements. Refer to Note 2, "Basis of Presentation and Organization", for additional information. Recently Issued Accounting Pronouncements The Company has considered all new accounting pronouncements and have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition or cash flows based on current information. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | North America Greater China (1) Other Asia (2) Other (3) Total (millions) Three Months Ended September 30, 2023 Coach $ 686.5 $ 220.3 $ 175.2 $ 75.4 $ 1,157.4 Kate Spade 240.2 10.8 30.6 21.6 303.2 Stuart Weitzman 34.7 13.5 0.4 4.0 52.6 Total $ 961.4 $ 244.6 $ 206.2 $ 101.0 $ 1,513.2 Three Months Ended October 1, 2022 Coach $ 669.1 $ 209.8 $ 167.9 $ 72.5 $ 1,119.3 Kate Spade 254.6 11.0 31.6 24.7 321.9 Stuart Weitzman 42.2 15.1 0.2 7.8 65.3 Total $ 965.9 $ 235.9 $ 199.7 $ 105.0 $ 1,506.5 (1) Greater China includes mainland China, Hong Kong SAR and Macao SAR, and Taiwan. (2) Other Asia includes Japan, Malaysia, Australia, New Zealand, Singapore, South Korea, and other countries within Asia. (3) Other sales primarily represents sales in Europe, the Middle East and royalties earned from the Company's licensing partners. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 (1) Total (millions) Balance at July 1, 2023 $ 597.5 $ 630.0 $ — $ 1,227.5 Foreign exchange impact (7.3) (1.7) — (9.0) Balance at September 30, 2023 $ 590.2 $ 628.3 $ — $ 1,218.5 (1) Amount is net of accumulated goodwill impairment charges of $210.7 million as of September 30, 2023 and July 1, 2023. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following: September 30, 2023 July 1, 2023 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.3 $ (51.6) $ 48.7 $ 100.3 $ (50.0) $ 50.3 Total intangible assets subject to amortization 100.3 (51.6) 48.7 100.3 (50.0) 50.3 Intangible assets not subject to amortization: Trademarks and trade names 1,309.8 — 1,309.8 1,309.8 — 1,309.8 Total intangible assets $ 1,410.1 $ (51.6) $ 1,358.5 $ 1,410.1 $ (50.0) $ 1,360.1 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: September 30, 2023 July 1, 2023 Gross Accum. Net Gross Accum. Net (millions) Intangible assets subject to amortization: Customer relationships $ 100.3 $ (51.6) $ 48.7 $ 100.3 $ (50.0) $ 50.3 Total intangible assets subject to amortization 100.3 (51.6) 48.7 100.3 (50.0) 50.3 Intangible assets not subject to amortization: Trademarks and trade names 1,309.8 — 1,309.8 1,309.8 — 1,309.8 Total intangible assets $ 1,410.1 $ (51.6) $ 1,358.5 $ 1,410.1 $ (50.0) $ 1,360.1 |
Schedule of Expected Amortization Expense | As of September 30, 2023 , the expected amortization expense for intangible assets is as follows: Amortization Expense (millions) Remainder of fiscal 2024 $ 4.9 Fiscal 2025 6.5 Fiscal 2026 6.5 Fiscal 2027 6.5 Fiscal 2028 6.5 Thereafter 17.8 Total $ 48.7 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Reconciliation of Stockholders Equity | A reconciliation of stockholders' equity is presented below: Shares of Common Stock Additional Retained Earnings / (Accumulated Deficit) Accumulated Total (millions, except per share data) Balance at July 2, 2022 241.2 $ 2.4 $ 3,620.2 $ (1,166.2) $ (170.9) $ 2,285.5 Net income (loss) — — — 195.3 — 195.3 Other comprehensive income (loss) — — — — (22.0) (22.0) Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 2.7 — (45.8) — — (45.8) Share-based compensation — — 15.1 — — 15.1 Repurchase of common stock (3.0) — — (100.0) — (100.0) Dividends declared ($0.30 per share) — — — (72.7) — (72.7) Balance at October 1, 2022 240.9 $ 2.4 $ 3,589.5 $ (1,143.6) $ (192.9) $ 2,255.4 Shares of Common Stock Additional Retained Earnings / (Accumulated Deficit) Accumulated Total (millions, except per share data) Balance at July 1, 2023 227.4 $ 2.3 $ 3,682.2 $ (1,216.8) $ (189.9) $ 2,277.8 Net income (loss) — — — 195.0 — 195.0 Other comprehensive income — — — — 34.6 34.6 Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes 1.8 — (31.2) — — (31.2) Share-based compensation — — 19.7 — — 19.7 Repurchase of common stock, including excise tax — — — — — — Dividends declared ($0.35 per share) — — — (80.2) — (80.2) Balance at September 30, 2023 229.2 $ 2.3 $ 3,670.7 $ (1,102.0) $ (155.3) $ 2,415.7 |
Schedule of 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 Gains Cumulative Translation Adjustment (2) Total (millions) Balances at July 2, 2022 $ (2.3) $ (0.5) $ (168.1) $ (170.9) Other comprehensive income (loss) before reclassifications 6.6 0.5 (30.2) (23.1) Less: amounts reclassified from accumulated other comprehensive income to earnings (1.1) — — (1.1) Net current-period other comprehensive income (loss) 7.7 0.5 (30.2) (22.0) Balances at October 1, 2022 $ 5.4 $ — $ (198.3) $ (192.9) Balances at July 1, 2023 $ 34.9 $ — $ (224.8) $ (189.9) Other comprehensive income (loss) before reclassifications 31.5 — 3.3 34.8 Less: amounts reclassified from accumulated other comprehensive income to earnings 0.2 — — 0.2 Net current-period other comprehensive income (loss) 31.3 — 3.3 34.6 Balances at September 30, 2023 $ 66.2 $ — $ (221.5) $ (155.3) (1) The ending balances of AOCI related to cash flow hedges are net of tax of $(7.5) million and $0.7 million as of September 30, 2023 and October 1, 2022, respectively. The amounts reclassified from AOCI are net of tax of $0.6 million and $0.4 million as of September 30, 2023 and October 1, 2022, respectively. (2) The ending balances of AOCI related to foreign currency translation adjustments includes a loss of $25.9 million, net of tax of $(5.8) million and a loss of $1.8 million, net of tax of $(22.4) million, as of September 30, 2023 and October 1, 2022, respectively, related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations. |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following tables provide information related to the Company's derivative instruments recorded on the Company's Condensed Consolidated Balance Sheets as of September 30, 2023 and July 1, 2023: Notional Value Derivative Assets Derivative Liabilities Designated Derivative Hedging Instruments Fair Value Fair Value September 30, 2023 July 1, 2023 Consolidated Balance Sheet Classification September 30, 2023 July 1, 2023 Consolidated Balance Sheet Classification September 30, 2023 July 1, 2023 (millions) FC - Inventory purchases (1) $ 882.4 $ 842.3 Other Current Assets $ 53.9 $ 38.6 Accrued Liabilities $ 2.1 $ 0.1 FC - Intercompany liabilities and loans (2) 278.1 272.3 Other Current Assets 0.1 0.4 Accrued Liabilities 0.5 0.2 IC - Interest rates (3) 1,500.0 — Other Current Assets 15.6 — Accrued Liabilities — — CCS - Net investment hedges (4) 1,200.0 1,200.0 Other Assets 35.1 13.1 Other Liabilities 82.4 90.5 Total Hedges $ 3,860.5 $ 2,314.6 $ 104.7 $ 52.1 $ 85.0 $ 90.8 (1) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships. (2) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in fair value hedging relationships. (3) Represents interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships. |
Hedging Activity Affected Accumulated Other Comprehensive Loss or Income Net of Tax | The following tables provides the pretax impact of gains and losses from the Company's designated derivative instruments on its Condensed Consolidated Financial Statements as of September 30, 2023 and October 1, 2022: Amount of Gain (Loss) Recognized in OCI on Derivatives Three Months Ended September 30, 2023 October 1, 2022 (millions) Cash flow hedges: Inventory purchases (1) $ 19.9 $ 6.4 Interest rates (2) 15.6 — Total cash flow hedges $ 35.5 $ 6.4 Other: Net investment hedges (3) 34.8 16.8 Total other $ 34.8 $ 16.8 Total hedges $ 70.3 $ 23.2 Amount of Gain (Loss) Reclassified from Accumulated OCI into Income Statement of Operations Three Months Ended September 30, 2023 October 1, 2022 (millions) Cash flow hedges: Inventory purchases (1) Cost of sales $ 3.7 $ (1.5) Interest rates (2) Other income (expense) (4.1) — Total hedges $ (0.4) $ (1.5) (1) Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships. (2) Represents forward interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships. (3) Represents cross currency swap contracts ("CCS") designated as derivative instruments in net investment hedging relationships. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of 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 September 30, 2023 October 1, 2022 (millions, except per share data) Net income (loss) $ 195.0 $ 195.3 Weighted-average basic shares 228.3 241.5 Dilutive securities: Effect of dilutive securities 4.2 5.3 Weighted-average diluted shares 232.5 246.8 Net income (loss) per share: Basic $ 0.85 $ 0.81 Diluted $ 0.84 $ 0.79 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Compensation Cost Charged Against Income and Related Tax Benefits for Share-based Compensation Plans | The following table shows the share-based compensation expense and the related tax benefits recognized in the Company's Condensed Consolidated Statements of Operations for the periods indicated: Three Months Ended September 30, 2023 October 1, 2022 (millions) Share-based compensation expense $ 19.7 $ 15.1 Income tax benefit related to share-based compensation expense 3.7 3.0 |
Schedule of Stock Option Activity | A summary of stock option activity during the three months ended September 30, 2023 is as follows: Number of (millions) Outstanding at July 1, 2023 8.7 Granted 1.2 Exercised — Forfeited or expired (0.7) Outstanding at September 30, 2023 9.2 |
Schedule of Stock Option Grant Weighted Average Assumptions | 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: September 30, 2023 October 1, 2022 Expected term (years) 4.9 4.8 Expected volatility 44.7 % 48.7 % Risk-free interest rate 4.5 % 3.2 % Dividend yield 4.1 % 3.4 % |
Service-based Restricted Stock Unit Awards (RSU) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of RSU Activity | A summary of service-based RSU activity during the three months ended September 30, 2023 is as follows: Number of (millions) Non-vested at July 1, 2023 5.9 Granted 2.2 Vested (2.6) Forfeited (0.1) Non-vested at September 30, 2023 5.4 |
Performance-based Restricted Stock Unit Awards (PRSU) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of RSU Activity | A summary of PRSU activity during the three months ended September 30, 2023 is as follows: Number of (millions) Non-vested at July 1, 2023 0.7 Granted 0.4 Change due to performance condition achievement 0.1 Vested — Forfeited — Non-vested at September 30, 2023 1.2 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the components of the Company’s outstanding debt: September 30, 2023 July 1, 2023 (millions) Current debt: Term Loan due May 2027 $ 25.0 $ 25.0 Total current debt $ 25.0 $ 25.0 Long-term debt: Term Loan due May 2027 $ 437.5 $ 443.8 3.050% Senior Notes due March 2032 500.0 500.0 4.125% Senior Notes due July 2027 396.6 396.6 4.250% Senior Notes due April 2025 303.4 303.4 Total long-term debt 1,637.5 1,643.8 Less: Unamortized discount and debt issuance costs on Senior Notes (7.6) (8.0) Total long-term debt, net $ 1,629.9 $ 1,635.8 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements of Assets and Liabilities | The following table shows the fair value measurements of the Company’s financial assets and liabilities at September 30, 2023 and July 1, 2023: Level 1 Level 2 September 30, July 1, September 30, July 1, (millions) Assets: Cash equivalents (1) $ 136.1 $ 155.7 $ 15.6 $ 11.9 Short-term investments : Time deposits (2) — — 0.6 0.6 Other — — 16.1 14.8 Long-term investments : Other — — 1.3 1.3 Derivative assets : Inventory-related instruments (3) — — 53.9 38.6 Net investment hedges (3) — — 35.1 13.1 Intercompany loans and payables (3) — — 0.1 0.4 Interest rate instruments (3) — — 15.6 — Liabilities: Derivative liabilities : Inventory-related instruments (3) — — 2.1 0.1 Net investment hedges (3) — — 82.4 90.5 Intercompany loans and payables (3) — — 0.5 0.2 Interest rate instruments (3) — — — — (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) | 3 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule 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 September 30, 2023 and July 1, 2023: September 30, 2023 July 1, 2023 Short-term Long-term (2) Total Short-term Long-term (2) Total (millions) Other: Time deposits (1) $ 0.6 $ — $ 0.6 $ 0.6 $ — $ 0.6 Other 16.1 1.3 17.4 14.8 1.3 16.1 Total Investments $ 16.7 $ 1.3 $ 18.0 $ 15.4 $ 1.3 $ 16.7 (1) These securities have original maturities greater than three months and are recorded at fair value. (2) Long-term investments are presented within Other assets on the Condensed Consolidated Balance Sheets. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Performance | The following table summarizes net sales of each of the company's segments for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Segment net sales: Coach $ 1,157.4 $ 1,119.3 Kate Spade 303.2 321.9 Stuart Weitzman 52.6 65.3 Total Net sales: $ 1,513.2 $ 1,506.5 The following table summarizes segment operating profit of each of the company's segments and reconciliation to Income (loss) before provision for income taxes for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Segment operating profit: Coach $ 371.3 $ 339.2 Kate Spade 26.6 23.2 Stuart Weitzman (8.6) (5.1) Total segment operating profit: $ 389.3 $ 357.3 Unallocated corporate expenses (1) 136.1 103.0 Unallocated other charges, net (2) 14.7 18.1 Income (loss) before provision for income taxes $ 238.5 $ 236.2 The following table summarizes depreciation and amortization expense of each of the company's segments for the three months ended September 30, 2023 and October 1, 2022: Three Months Ended September 30, 2023 October 1, 2022 Depreciation and amortization expense (3) : Coach $ 23.0 $ 22.3 Kate Spade 9.8 11.1 Stuart Weitzman 2.8 2.4 Unallocated corporate (1) 8.7 8.0 Total Depreciation and amortization expense: $ 44.3 $ 43.8 (1) Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a segment. These costs primarily include administration and certain costs for information systems. (2) Includes Interest expense, net and Other expense (income). (3) Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments. |
BASIS OF PRESENTATION AND ORG_3
BASIS OF PRESENTATION AND ORGANIZATION (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Supplier Finance Program [Line Items] | ||
Supplier finance program, obligation | $ 285.6 | $ 305.4 |
Maximum | ||
Supplier Finance Program [Line Items] | ||
Supplier finance program, payment timing, period | 90 days |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Jul. 01, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred revenue | $ 40.4 | $ 43 | |
Deferred revenue, revenue recognized | $ 14.6 | $ 11.5 | |
Licensing Business | Net Sales | Revenue from Rights Concentration Risk | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Percentage of revenue | 1% | ||
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 |
REVENUE (Summary of Disaggregat
REVENUE (Summary of Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,513.2 | $ 1,506.5 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 961.4 | 965.9 |
Greater China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 244.6 | 235.9 |
Other Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 206.2 | 199.7 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101 | 105 |
Coach | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,157.4 | 1,119.3 |
Coach | North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 686.5 | 669.1 |
Coach | Greater China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 220.3 | 209.8 |
Coach | Other Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 175.2 | 167.9 |
Coach | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 75.4 | 72.5 |
Kate Spade | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 303.2 | 321.9 |
Kate Spade | North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 240.2 | 254.6 |
Kate Spade | Greater China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 10.8 | 11 |
Kate Spade | Other Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 30.6 | 31.6 |
Kate Spade | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 21.6 | 24.7 |
Stuart Weitzman | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 52.6 | 65.3 |
Stuart Weitzman | North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 34.7 | 42.2 |
Stuart Weitzman | Greater China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13.5 | 15.1 |
Stuart Weitzman | Other Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0.4 | 0.2 |
Stuart Weitzman | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4 | $ 7.8 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - Capri Holdings Limited - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Aug. 10, 2023 | Sep. 30, 2023 | |
Business Acquisition [Line Items] | ||
Business acquisition, share price (USD per share) | $ 57 | |
Business acquisition, purchase price | $ 8,500 | |
Business acquisition, acquisition-related expenses | $ 26.3 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Change in Carrying Value of Goodwill) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Jul. 01, 2023 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 1,227.5 | |
Foreign exchange impact | (9) | |
Ending Balance | 1,218.5 | |
Coach | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 597.5 | |
Foreign exchange impact | (7.3) | |
Ending Balance | 590.2 | |
Kate Spade | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 630 | |
Foreign exchange impact | (1.7) | |
Ending Balance | 628.3 | |
Stuart Weitzman | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 0 | |
Foreign exchange impact | 0 | |
Ending Balance | 0 | |
Impairment charges | $ 210.7 | $ 210.7 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Indefinite and Finite Lived Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Intangible assets subject to amortization: | ||
Gross carrying amount, Customer relationships | $ 100.3 | $ 100.3 |
Accumulated amortization, Customer relationships | (51.6) | (50) |
Total | 48.7 | 50.3 |
Intangible assets not subject to amortization: | ||
Indefinite-lived intangible assets (excluding goodwill), Trademarks and trade names | 1,309.8 | 1,309.8 |
Intangible assets, gross (excluding goodwill) | 1,410.1 | 1,410.1 |
Intangible assets, net (excluding goodwill) | $ 1,358.5 | $ 1,360.1 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 1.6 | $ 1.7 |
Minimum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 6 years 6 months | |
Maximum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 8 years 9 months 18 days |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Expected Amortization Expense for Intangible Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Expected Amortization Expense For Intangible Assets | ||
Remainder of fiscal 2024 | $ 4.9 | |
Fiscal 2025 | 6.5 | |
Fiscal 2026 | 6.5 | |
Fiscal 2027 | 6.5 | |
Fiscal 2028 | 6.5 | |
Thereafter | 17.8 | |
Total | $ 48.7 | $ 50.3 |
STOCKHOLDERS' EQUITY (Summary o
STOCKHOLDERS' EQUITY (Summary of Stockholders' Equity) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 2,277.8 | $ 2,285.5 |
Net income (loss) | 195 | 195.3 |
Other comprehensive income (loss) | 34.6 | (22) |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes | (31.2) | (45.8) |
Share-based compensation | 19.7 | 15.1 |
Repurchase of common stock, including excise tax | (100) | |
Dividends declared | (80.2) | (72.7) |
Ending balance | $ 2,415.7 | $ 2,255.4 |
Cash dividends declared per common share (USD per share) | $ 0.35 | $ 0.30 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (shares) | 227.4 | 241.2 |
Beginning balance | $ 2.3 | $ 2.4 |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes (shares) | 1.8 | 2.7 |
Repurchase of common stock, including excise tax (shares) | 0 | (3) |
Ending balance (shares) | 229.2 | 240.9 |
Ending balance | $ 2.3 | $ 2.4 |
Additional Paid-in- Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 3,682.2 | 3,620.2 |
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes | (31.2) | (45.8) |
Share-based compensation | 19.7 | 15.1 |
Ending balance | 3,670.7 | 3,589.5 |
Retained Earnings / (Accumulated Deficit) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (1,216.8) | (1,166.2) |
Net income (loss) | 195 | 195.3 |
Repurchase of common stock, including excise tax | (100) | |
Dividends declared | (80.2) | (72.7) |
Ending balance | (1,102) | (1,143.6) |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (189.9) | (170.9) |
Other comprehensive income (loss) | 34.6 | (22) |
Ending balance | $ (155.3) | $ (192.9) |
STOCKHOLDERS' EQUITY (Summary_2
STOCKHOLDERS' EQUITY (Summary of Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | $ 2,277.8 | $ 2,285.5 |
Other comprehensive income (loss) before reclassifications | 34.8 | (23.1) |
Less: amounts reclassified from accumulated other comprehensive income to earnings | 0.2 | (1.1) |
Other comprehensive income (loss), net of tax | 34.6 | (22) |
Ending balance | 2,415.7 | 2,255.4 |
Net loss on foreign currency translation adjustments | 25.9 | 1.8 |
Net loss on foreign currency translation adjustments, tax | (5.8) | (22.4) |
Unrealized Gains (Losses) on Cash Flow Hedging Derivatives | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | 34.9 | (2.3) |
Other comprehensive income (loss) before reclassifications | 31.5 | 6.6 |
Less: amounts reclassified from accumulated other comprehensive income to earnings | 0.2 | (1.1) |
Other comprehensive income (loss), net of tax | 31.3 | 7.7 |
Ending balance | 66.2 | 5.4 |
Accumulated other comprehensive income, accumulated tax | (7.5) | 0.7 |
Amounts reclassified from AOCI, tax | 0.6 | 0.4 |
Unrealized Gains (Losses) on Available- for-Sale Investments | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | 0 | (0.5) |
Other comprehensive income (loss) before reclassifications | 0 | 0.5 |
Less: amounts reclassified from accumulated other comprehensive income to earnings | 0 | 0 |
Other comprehensive income (loss), net of tax | 0 | 0.5 |
Ending balance | 0 | 0 |
Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | (224.8) | (168.1) |
Other comprehensive income (loss) before reclassifications | 3.3 | (30.2) |
Less: amounts reclassified from accumulated other comprehensive income to earnings | 0 | 0 |
Other comprehensive income (loss), net of tax | 3.3 | (30.2) |
Ending balance | (221.5) | (198.3) |
Total | ||
Accumulated Other Comprehensive (Loss) Income, Net of Tax [Rollforward] | ||
Beginning balance | (189.9) | (170.9) |
Ending balance | $ (155.3) | $ (192.9) |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Summary of Derivative Instruments) (Details) - Designated Derivative Hedging Instruments - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Derivatives, Fair Value [Line Items] | ||
Notional Value | $ 3,860.5 | $ 2,314.6 |
Derivative Assets | 104.7 | 52.1 |
Derivative Liabilities | 85 | 90.8 |
Forward foreign currency exchange contracts | Cash flow hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional Value | 882.4 | 842.3 |
Derivative Assets | 53.9 | 38.6 |
Derivative Liabilities | 2.1 | 0.1 |
Forward foreign currency exchange contracts | Fair value hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional Value | 278.1 | 272.3 |
Derivative Assets | 0.1 | 0.4 |
Derivative Liabilities | 0.5 | 0.2 |
Interest rates | Cash flow hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional Value | 1,500 | 0 |
Derivative Assets | 15.6 | 0 |
Derivative Liabilities | 0 | 0 |
Cross currency swap contracts | Net investment hedging | ||
Derivatives, Fair Value [Line Items] | ||
Notional Value | 1,200 | 1,200 |
Derivative Assets | 35.1 | 13.1 |
Derivative Liabilities | $ 82.4 | $ 90.5 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Summary of Hedging Activity Affected Accumulated Other Comprehensive Loss or Income Net of Tax) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cash flow hedge | $ 35.5 | $ 6.4 |
Other | 34.8 | 16.8 |
Total hedges | 70.3 | 23.2 |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | (0.4) | (1.5) |
Forward foreign currency exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cash flow hedge | 19.9 | 6.4 |
Forward foreign currency exchange contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | 3.7 | (1.5) |
Interest rates | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cash flow hedge | 15.6 | 0 |
Interest rates | Other income (expense) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | $ (4.1) | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative gain in AOCI reclassified into earnings within next 12 months | $ 40.8 | |
Interest income | (13.3) | $ (7.4) |
Cross currency swaps | Net investment hedging | Designated derivative hedging instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest income | $ 7.2 | $ 6.4 |
EARNINGS PER SHARE (Summary of
EARNINGS PER SHARE (Summary of Calculation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 195 | $ 195.3 |
Weighted-average basic shares (shares) | 228.3 | 241.5 |
Effect of dilutive securities (shares) | 4.2 | 5.3 |
Weighted-average diluted shares (shares) | 232.5 | 246.8 |
Net income (loss) per share: | ||
Basic (USD per share) | $ 0.85 | $ 0.81 |
Diluted (USD per share) | $ 0.84 | $ 0.79 |
EARNINGS PER SHARE (Narrative)
EARNINGS PER SHARE (Narrative) (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Earnings Per Share [Abstract] | ||
Options to purchase shares of common stock excluded from the computation of diluted earnings per share (shares) | 3.7 | 6.2 |
SHARE-BASED COMPENSATION (Sched
SHARE-BASED COMPENSATION (Schedule of Total Compensation Cost and Related Tax Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Share-based compensation expense | $ 19.7 | $ 15.1 |
Income tax benefit related to share-based compensation expense | $ 3.7 | $ 3 |
SHARE-BASED COMPENSATION (Sch_2
SHARE-BASED COMPENSATION (Schedule of Option Activity) (Details) shares in Millions | 3 Months Ended |
Sep. 30, 2023 shares | |
Number of Options Outstanding | |
Beginning balance (shares) | 8.7 |
Granted (shares) | 1.2 |
Exercised (shares) | 0 |
Forfeited or expired (shares) | (0.7) |
Ending balance (shares) | 9.2 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Stock Options | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of awards granted (USD per share) | $ 10.51 | $ 12 |
Service-based Restricted Stock Unit Awards (RSU) | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of equity instruments other than options granted (USD per share) | 33.70 | 35.22 |
Performance-based Restricted Stock Unit Awards (PRSU) | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Weighted-average grant-date fair value of equity instruments other than options granted (USD per share) | $ 33.64 | $ 35.27 |
SHARE-BASED COMPENSATION (Sch_3
SHARE-BASED COMPENSATION (Schedule of Weighted-average Assumptions) (Details) - Stock Options | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 4 years 10 months 24 days | 4 years 9 months 18 days |
Expected volatility | 44.70% | 48.70% |
Risk-free interest rate | 4.50% | 3.20% |
Dividend yield | 4.10% | 3.40% |
SHARE-BASED COMPENSATION (Sch_4
SHARE-BASED COMPENSATION (Schedule of Non-vested Service-Based Restricted Stock Unit Activity) (Details) - Service-based Restricted Stock Unit Awards (RSU) shares in Millions | 3 Months Ended |
Sep. 30, 2023 shares | |
Number of Non-vested RSUs | |
Beginning balance (shares) | 5.9 |
Granted (shares) | 2.2 |
Vested (shares) | (2.6) |
Forfeited (shares) | (0.1) |
Ending balance (shares) | 5.4 |
SHARE-BASED COMPENSATION (Sch_5
SHARE-BASED COMPENSATION (Schedule of Non-vested Performance-based Restricted Stock Unit) (Details) - Performance-based Restricted Stock Unit Awards (PRSU) shares in Millions | 3 Months Ended |
Sep. 30, 2023 shares | |
Number of Non-vested PRSUs | |
Beginning balance (shares) | 0.7 |
Granted (shares) | 0.4 |
Change due to performance condition achievement (shares) | 0.1 |
Vested (shares) | 0 |
Forfeited (shares) | 0 |
Ending balance (shares) | 1.2 |
DEBT (Schedule of Debt) (Detail
DEBT (Schedule of Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 | Dec. 31, 2021 | Jun. 30, 2017 | Mar. 31, 2015 |
Current debt: | |||||
Current debt | $ 25 | $ 25 | |||
Long-term debt: | |||||
Long-term debt | 1,637.5 | 1,643.8 | |||
Less: Unamortized discount and debt issuance costs on Senior Notes | (7.6) | (8) | |||
Total long-term debt, net | 1,629.9 | 1,635.8 | |||
Term Loan, 2027 | |||||
Current debt: | |||||
Current debt | 25 | 25 | |||
Long-term debt: | |||||
Long-term debt | 437.5 | 443.8 | |||
Senior Notes | 3.050% Senior Notes due March 2032 | |||||
Long-term debt: | |||||
Long-term debt | $ 500 | 500 | |||
Interest rate, stated percentage | 3.05% | 3.05% | |||
Senior Notes | 4.125% Senior Notes due July 2027 | |||||
Long-term debt: | |||||
Long-term debt | $ 396.6 | 396.6 | |||
Interest rate, stated percentage | 4.125% | 4.125% | |||
Senior Notes | 4.250% Senior Notes due April 2025 | |||||
Long-term debt: | |||||
Long-term debt | $ 303.4 | $ 303.4 | |||
Interest rate, stated percentage | 4.25% | 4.25% |
DEBT (Bridge Facility, New Term
DEBT (Bridge Facility, New Term Loan Facilities, Revolving Credit Facility and 2027 Term Loan) (Details) - USD ($) | 3 Months Ended | ||||||
Aug. 30, 2023 | Sep. 30, 2023 | Oct. 01, 2022 | Aug. 29, 2023 | Aug. 10, 2023 | Jul. 01, 2023 | May 11, 2022 | |
Debt Instrument [Line Items] | |||||||
Interest expense | $ 22,300,000 | $ 16,300,000 | |||||
Current debt | 25,000,000 | $ 25,000,000 | |||||
New Term Loan Facilities | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Ticking fee (percentage) | 0.15% | ||||||
Three-Year Term Loan Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 1,050,000,000 | ||||||
Term | 3 years | ||||||
Three-Year Term Loan Facility | Line of Credit | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percentage) | 0.25% | ||||||
Three-Year Term Loan Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percentage) | 1.25% | ||||||
Five-Year Term Loan Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 350,000,000 | ||||||
Term | 5 years | ||||||
Five-Year Term Loan Facility | Line of Credit | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percentage) | 0.375% | ||||||
Five-Year Term Loan Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percentage) | 1.375% | ||||||
Term Loan, 2027 | |||||||
Debt Instrument [Line Items] | |||||||
Current debt | $ 25,000,000 | $ 25,000,000 | |||||
Term Loan, 2027 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||
Interest rate, stated percentage | 5% | ||||||
Revolving Facility | $2.0 Billion Revolving Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 2,000,000,000 | $ 1,250,000,000 | |||||
Revolving Facility | $2.0 Billion Revolving Credit Facility | Line of Credit | Capri Holdings Limited | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 250,000,000 | ||||||
Bridge Loan | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 6,600,000,000 | $ 8,000,000,000 |
DEBT (2025, 2027 2032 Senior No
DEBT (2025, 2027 2032 Senior Notes, Debt Covenants and Fair Value) (Details) | 3 Months Ended | ||||
Sep. 30, 2023 USD ($) | Jul. 01, 2023 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2017 USD ($) | Mar. 31, 2015 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt instrument, covenant maximum net leverage ratio | 4 | ||||
From and including the closing date of the Capri Acquisition to but excluding June 28, 2025 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant maximum net leverage ratio | 4.75 | ||||
From and including June 28, 2025 to but excluding June 27, 2026 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant maximum net leverage ratio | 4.50 | ||||
From and including June 27, 2026 and thereafter | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant maximum net leverage ratio | 4 | ||||
2025 Senior Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 600,000,000 | ||||
Interest rate, stated percentage | 4.25% | 4.25% | |||
Debt instrument, issuance amount, percent of par | 99.445% | ||||
Tender offer, outstanding debt amount | $ 296,600,000 | ||||
2025 Senior Notes | Senior Notes | Level 2 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, fair value | $ 295,500,000 | $ 295,100,000 | |||
2027 Senior Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 600,000,000 | ||||
Interest rate, stated percentage | 4.125% | 4.125% | |||
Debt instrument, issuance amount, percent of par | 99.858% | ||||
Tender offer, outstanding debt amount | 203,400,000 | ||||
2027 Senior Notes | Senior Notes | Level 2 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, fair value | $ 366,600,000 | 371,700,000 | |||
2032 Senior Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 500,000,000 | ||||
Interest rate, stated percentage | 3.05% | 3.05% | |||
Debt instrument, issuance amount, percent of par | 99.705% | ||||
2032 Senior Notes | Senior Notes | Level 2 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, fair value | $ 367,300,000 | $ 399,500,000 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Assets and Liabilities) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Jul. 01, 2023 | |
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 | $ 136.1 | $ 155.7 |
Level 1 | Inventory-related instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Net investment hedging | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Intercompany loan and payables | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Interest rate instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 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 | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 1 | Long-term investments | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 15.6 | 11.9 |
Level 2 | Inventory-related instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 53.9 | 38.6 |
Derivative liabilities | 2.1 | 0.1 |
Level 2 | Net investment hedging | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 35.1 | 13.1 |
Derivative liabilities | 82.4 | 90.5 |
Level 2 | Intercompany loan and payables | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0.1 | 0.4 |
Derivative liabilities | 0.5 | 0.2 |
Level 2 | Interest rate instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 15.6 | 0 |
Derivative liabilities | 0 | 0 |
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 | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 16.1 | 14.8 |
Level 2 | Long-term investments | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1.3 | $ 1.3 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Fair Value Disclosures [Abstract] | ||
Asset impairment charges | $ 0 | $ 0 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Jul. 01, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Time deposits, current | $ 0.6 | $ 0.6 |
Time deposit, noncurrent | 0 | 0 |
Time deposit | 0.6 | 0.6 |
Other short-term investments | 16.1 | 14.8 |
Other long-term investments | 1.3 | 1.3 |
Other investments | 17.4 | 16.1 |
Short-term investments | 16.7 | 15.4 |
Long-term Investments | 1.3 | 1.3 |
Investments | $ 18 | $ 16.7 |
Maturity of time deposit | 3 months |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Letters of credit amount outstanding | $ 37.3 | $ 37.1 |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) | 3 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Information) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,513.2 | $ 1,506.5 |
Coach | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,157.4 | 1,119.3 |
Kate Spade | ||
Segment Reporting Information [Line Items] | ||
Net sales | 303.2 | 321.9 |
Stuart Weitzman | ||
Segment Reporting Information [Line Items] | ||
Net sales | 52.6 | 65.3 |
Operating Segments | Coach | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,157.4 | 1,119.3 |
Operating Segments | Kate Spade | ||
Segment Reporting Information [Line Items] | ||
Net sales | 303.2 | 321.9 |
Operating Segments | Stuart Weitzman | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 52.6 | $ 65.3 |
SEGMENT INFORMATION (Schedule_2
SEGMENT INFORMATION (Schedule of Segment Operating Profit (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||
Segment operating profit | $ 253.2 | $ 254.3 |
Income (loss) before provision for income taxes | 238.5 | 236.2 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment operating profit | 389.3 | 357.3 |
Operating Segments | Coach | ||
Segment Reporting Information [Line Items] | ||
Segment operating profit | 371.3 | 339.2 |
Operating Segments | Kate Spade | ||
Segment Reporting Information [Line Items] | ||
Segment operating profit | 26.6 | 23.2 |
Operating Segments | Stuart Weitzman | ||
Segment Reporting Information [Line Items] | ||
Segment operating profit | (8.6) | (5.1) |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Unallocated corporate expenses | 136.1 | 103 |
Unallocated other charges, net | $ 14.7 | $ 18.1 |
SEGMENT INFORMATION (Schedule_3
SEGMENT INFORMATION (Schedule of Segment Depreciation and Amortization Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | $ 44.3 | $ 43.8 |
Operating Segments | Coach | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 23 | 22.3 |
Operating Segments | Kate Spade | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 9.8 | 11.1 |
Operating Segments | Stuart Weitzman | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 2.8 | 2.4 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | $ 8.7 | $ 8 |