CPRI Filings — Capri Holdings Ltd

CPRI Filings — Capri Holdings Ltd - FilingSpy

10-Q · Quarter ended Jun 27, 2026 · SEC filing ↗

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Original filing text

Management's Discussion and Analysis

Overview Our Business Capri Holdings Limited is a global fashion luxury group consisting of iconic brands Michael Kors and Jimmy Choo. Our commitment to creativity, fashion, style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Our designs inspire consumers to embrace the feeling of luxury in every moment. Our Michael Kors brand was launched in 1981 by Michael Kors, a world-renowned designer, whose vision has taken the Company from its beginnings as an American luxury sportswear house to a global accessories, footwear and apparel company with a global distribution network that has presence in over 100 countries through Company-operated retail stores and e-commerce sites, leading department stores, specialty stores and select licensing partners. Michael Kors is a highly recognized fashion luxury brand in the Americas and Europe with strong brand awareness in other international markets. Michael Kors features distinctive designs, materials and craftsmanship with a Jet Set aesthetic that combines stylish elegance and a sporty attitude. Michael Kors offers three primary collections: the Michael Kors Collection line, the MICHAEL Michael Kors line and the Michael Kors Mens line. Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried by select retail stores, our e-commerce sites, as well as in the finest luxury department stores in the world. MICHAEL Michael Kors has a strong focus on accessories, in addition to offering footwear and apparel. Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image. Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range that, since its inception in 1996, has been anchored by women’s luxury footwear, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as men’s luxury footwear and accessories. In addition, certain categories, including fragrance and eyewear, are produced under licensing agreements. Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the brand since its inception. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, alongside innovative collections that are intended to set and lead fashion trends. Jimmy Choo is represented through its global store network, its e-commerce sites, as well as through the most prestigious department and specialty stores worldwide. On April 8, 2025, our Board of Directors made the decision to sell Versace to Prada, and a definitive agreement was entered into on April 10, 2025. Accordingly, we determined that the held for sale and discontinued operations criteria were met and we classified the results of operations and cash flows of our Versace business as discontinued operations in our consolidated statements of operations and comprehensive income (loss) and consolidated statements of cash flows for all periods presented. On December 2, 2025, we completed the sale of our Versace business. Unless otherwise noted, management’s discussion and analysis of financial condition and results of operations only relates to our continuing operations. Refer to Note 3 - “Discontinued Operations” to the accompanying consolidated financial statements for additional information. Certain Factors Affecting Financial Condition and Results of Operations Macroeconomic conditions and inflationary pressures. Global economic conditions, including inflationary pressure, geopolitical instability due to war or other geopolitical factors (such as the conflicts in the Middle East) and broader macroeconomic uncertainty and the related impact on levels of consumer spending worldwide impacted our business during the first three months of Fiscal 2027, and are likely to continue to impact our business and the luxury accessories, footwear and apparel industry overall for the foreseeable future. Given the discretionary nature of our products, fluctuations in consumer confidence and disposable income, as well as elevated inflation, impact our business performance. Costs of manufacturing, tariffs and import regulations. Our results of operations were impacted by volatility in manufacturing and sourcing costs during the first three months of Fiscal 2027, primarily driven by changes in raw material prices, labor costs and fuel and freight expenses (including increases in such costs due to the conflicts in the Middle East). In addition, because all of our products sold in the United States are manufactured outside the U.S., changes in trade policies, tariffs and import regulations affected product costs and operating income. In February 2026, the U.S. Supreme Court held that tariffs imposed under IEEPA were unlawful. We are entitled to a refund of approximately $65 million in IEEPA tariffs previously paid to U.S. Customs and Border Protection. Accordingly, as we intend to recover all the IEEPA tariffs previously paid we recorded an IEEPA tariff refund receivable of $65 million in the prior fiscal year of which we have received 29 $49 million as of July 31, 2026. We still expect to recover the full amount, though actual timing and amounts are subject to completion of the CBP’s refund process and involve inherent risks, including delays in government processing, administrative offsets, appeals of court orders directing refunds, or changes in law or policy affecting the refund process. In response to the U.S. Supreme Court’s decision, the U.S. President issued an executive order imposing tariffs of 10% pursuant to Section 122 of the Trade Act of 1974 effective for 150 days, which commenced on February 24, 2026 and subsequently expired on July 24, 2026. On July 23, 2026, the United States Trade Representative took action under Section 301 imposing tariffs on 60 economies for forced-labor enforcement failures, at country-specific rates of 10% or 12.5%, effective on July 24, 2026. The outlook on further trade policy actions is unclear, and these actions have led to significant volatility and uncertainty in global markets. Uncertainty regarding the scope, duration and administration of trade measures, including the timing and recoverability of tariff refunds or relief where applicable, also contributed to, and may continue to contribute to, variability in costs and cash flows. We continue to seek to mitigate the impact of trade measures through sourcing strategies, free trade agreements and other supply chain initiatives, where available, but the extent to which we will be able to offset through such mitigation efforts is difficult to predict. Foreign currency fluctuation and foreign currency hedging instruments. Our consolidated results were impacted by movements in foreign currency exchange rates between our reporting currency, the United States dollar, and the functional currency of our non-United States subsidiaries, primarily the Euro, the British Pound, the Chinese Renminbi and the Japanese Yen, among others. Currency volatility impacted our first quarter Fiscal 2027 reported results and contributed, or are expected to contribute, to variability of results in prior and future periods. We also utilize derivative instruments, including cross-currency hedges, to manage foreign currency exposure associated with our net investments in foreign subsidiaries, which can help mitigate, but does not eliminate, the impact of foreign exchange fluctuations, and the effectiveness of our hedging strategies may vary based on market conditions and the timing and magnitude of currency movements. Disruptions or delays in shipping and distribution and other supply chain constraints. Our results of operations have been impacted, and may continue to be impacted, by disruptions in global shipping, distribution and supply chain operations. During recent periods, port congestion and closures, capacity constraints across ocean, trucking and distribution networks, and disruptions to certain international shipping routes contributed to increased logistics and production costs, affected the timing of inventory receipts and created pressure on gross margin. Segment Information We operate in two reportable segments, which are as follows: Michael Kors We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce sites, through which we sell our products, as well as licensed products bearing our name, directly to consumers throughout the Americas (United States, Canada and Latin America), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania). We also sell Michael Kors products directly to department stores, primarily located across the Americas and EMEA, to specialty stores and travel retail shops in the Americas, Europe and Asia, and to our geographic licensees in certain parts of EMEA, Asia and Brazil. In addition, revenue is generated through product and geographic licensing arrangements, which allow third parties to use the Michael Kors brand name and trademarks in connection with the manufacturing and sale of products, including watches, jewelry, fragrances and eyewear, as well as through geographic licensing arrangements, which allow third parties to use the Michael Kors tradename in connection with the retail and/or wholesale sales of our Michael Kors branded products in specific geographic regions. Jimmy Choo We generate revenue through the sale of Jimmy Choo luxury goods through directly operated Jimmy Choo retail and outlet stores throughout the Americas, certain parts of EMEA and certain parts of Asia, and through our e-commerce sites. In addition, revenue is generated through wholesale sales of luxury goods to distribution partners (including geographic licensing arrangements that allow third parties to use the Jimmy Choo tradename in connection with retail and/or wholesale sales of Jimmy Choo branded products in specific geographic regions), department stores and specialty stores worldwide, as well as through product licensing agreements, which allow third parties to use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of products, including fragrances and eyewear. 30 Unallocated Corporate Expenses In addition to the reportable segments discussed above, we have certain corporate costs that are not directly attributable to our brands and, therefore, are not allocated to segments. Such costs primarily include certain administrative, corporate occupancy, shared service and information technology systems expenses and Capri transformation costs. In addition, certain other costs are not allocated to segments, including restructuring and other expense. The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. The following table presents our total revenue and income from continuing operations by segment for the three months ended June 27, 2026 and June 28, 2025 (in millions): Three Months Ended June 27, 2026 June 28, 2025 Total revenue: Michael Kors $ 590 $ 635 Jimmy Choo 179 162 Total revenue $ 769 $ 797 Cost of goods sold: Michael Kors $ 213 $ 247 Jimmy Choo 56 48 Total cost of goods sold $ 269 $ 295 Selling, general and administrative expenses: Michael Kors $ 304 $ 307 Jimmy Choo 104 103 Corporate 43 45 Total selling, general and administrative expenses $ 451 $ 455 Depreciation and amortization: Michael Kors $ 18 $ 18 Jimmy Choo 6 7 Corporate 5 5 Total depreciation and amortization $ 29 $ 30 Income from continuing operations: Michael Kors $ 55 $ 63 Jimmy Choo 13 4 68 67 Less: Corporate expenses (48) (50) Restructuring and other expense (3) (1) Income from continuing operations $ 17 $ 16 31 The following table presents our global network of retail stores by brand: As of June 27, 2026 June 28, 2025 Number of full price retail stores (including concessions): Michael Kors 329 384 Jimmy Choo 154 161 483 545 Number of outlet stores: Michael Kors 333 311 Jimmy Choo 55 56 388 367 Total number of retail stores 871 912 The following table presents our retail stores by geographic location: As of As of June 27, 2026 June 28, 2025 Michael Kors Jimmy Choo Michael Kors Jimmy Choo Store count by region: The Americas 248 41 269 41 EMEA 140 64 141 64 Asia 274 104 285 112 662 209 695 217 Key Consolidated Performance Indicators and Statistics We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions): Three Months Ended June 27, 2026 June 28, 2025 Total revenue $ 769 $ 797 Gross profit as a percent of total revenue 65.0 % 63.0 % Income from continuing operations $ 17 $ 16 Income from continuing operations as a percent of total revenue 2.2 % 2.0 % 32 Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important to the portrayal of our results of operations and financial condition and that require our most difficult, subjective and complex judgments to make estimates about the effect of matters that are inherently uncertain. In applying such policies, we must use certain assumptions that are based on our informed judgments, assessments of probability and best estimates. Estimates, by their nature, are subjective and are based on analysis of available information, including current and historical factors and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis. While our significant accounting policies are detailed in Note 2 - “Summary of Significant Accounting Policies” to the accompanying consolidated financial statements, our critical accounting policies are disclosed, in full, in the management’s discussion and analysis section of our Annual Report on Form 10-K for the fiscal year ended March 28, 2026. There have been no significant changes to our critical accounting policies and estimates since March 28, 2026. 33 Results of Operations Comparison of the three months ended June 27, 2026 with the three months ended June 28, 2025 The following table details the results of our operations for the three months ended June 27, 2026 and June 28, 2025, and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions): Three Months Ended $ Change % Change % of Total Revenue for the Three Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Statements of Operations Data: Total revenue $ 769 $ 797 $ (28) (3.5) % Cost of goods sold 269 295 (26) (8.8) % 35.0 % 37.0 % Gross profit 500 502 (2) (0.4) % 65.0 % 63.0 % Selling, general and administrative expenses 451 455 (4) (0.9) % 58.6 % 57.1 % Depreciation and amortization 29 30 (1) (3.3) % 3.8 % 3.8 % Restructuring and other expense 3 1 2 NM 0.4 % 0.1 % Total operating expenses 483 486 (3) (0.6) % 62.8 % 61.0 % Income from continuing operations 17 16 1 6.3 % 2.2 % 2.0 % Other income, net (3) (1) (2) NM (0.4) % (0.1) % Interest income, net (31) (18) (13) 72.2 % (4.0) % (2.3) % Foreign currency gain (1) (5) 4 (80.0) % (0.1) % (0.6) % Income from continuing operations before income taxes 52 40 12 30.0 % 6.8 % 5.0 % Benefit for income taxes (18) (16) (2) 12.5 % (2.3) % (2.0) % Net income from continuing operations 70 56 14 25.0 % Net loss from discontinued operations, net of tax — (3) 3 NM Net income 70 53 17 32.1 % Less: Net income attributable to noncontrolling interest from continuing operations 1 — 1 NM Net income attributable to Capri $ 69 $ 53 $ 16 30.2 % NM Not meaningful Total Revenue Three Months Ended % Change (dollars in millions) June 27, 2026 June 28, 2025 $ Change As Reported Constant Currency Michael Kors $ 590 $ 635 $ (45) (7.1) % (7.6) % Jimmy Choo 179 162 17 10.5 % 9.3 % Total revenue $ 769 $ 797 $ (28) (3.5) % (4.1) % Total revenue decreased $28 million, or 3.5%, to $769 million for the three months ended June 27, 2026, compared to $797 million for the three months ended June 28, 2025, which included net favorable foreign currency effects of approximately $5 million, primarily as a result of the weakening of the United States dollar compared to the Euro and British Pound. On a constant currency basis, our total revenue decreased $33 million, or 4.1%. 34 •Michael Kors revenue decreased $45 million, or 7.1%, to $590 million for the three months ended June 27, 2026, compared to $635 million for the three months ended June 28, 2025, which included favorable foreign currency effects of $3 million. On a constant currency basis, revenue decreased $48 million, or 7.6%, primarily driven by our quality of sale initiatives, as we reduced promotional activity compared to the prior year. •Jimmy Choo revenue increased $17 million, or 10.5%, to $179 million for the three months ended June 27, 2026, compared to $162 million for the three months ended June 28, 2025, which included favorable foreign currency effects of $2 million. On a constant currency basis, revenue increased $15 million, or 9.3%, primarily driven by growth across all channels, reflecting strong brand momentum and the continued success of our product and marketing initiatives. Refer to Note 4 - “Revenue Recognition” to the accompanying consolidated financial statements for additional information. Gross Profit Three Months Ended (dollars in millions) June 27, 2026 June 28, 2025 $ Change % Change Gross Profit: Michael Kors $ 377 $ 388 $ (11) (2.8) % Jimmy Choo 123 114 9 7.9 % Total gross profit $ 500 $ 502 $ (2) (0.4) % Gross Profit Margin: Michael Kors 63.9 % 61.1 % Jimmy Choo 68.7 % 70.4 % Capri 65.0 % 63.0 % Gross profit decreased $2 million, or 0.4%, to $500 million for the three months ended June 27, 2026, compared to $502 million for the three months ended June 28, 2025. Gross profit as a percentage of total revenue was 65.0% and 63.0% for the three months ended June 27, 2026 and June 28, 2025, respectively. •Michael Kors gross profit decreased $11 million, or 2.8%, to $377 million for the three months ended June 27, 2026, compared to $388 million for the three months ended June 28, 2025. The 280 basis point increase in gross profit margin was primarily attributable to higher full price sell-throughs and lower U.S. import tariff costs compared to the prior year. •Jimmy Choo gross profit increased $9 million, or 7.9%, to $123 million for the three months ended June 27, 2026, compared to $114 million for the three months ended June 28, 2025. The 170 basis point decrease in gross profit margin was primarily due to unfavorable channel mix. Total Operating Expenses Total operating expenses decreased $3 million, or 0.6%, to $483 million for the three months ended June 27, 2026, compared to $486 million for the three months ended June 28, 2025. Total operating expenses increased to 62.8% as a percentage of total revenue for the three months ended June 27, 2026, compared to 61.0% for the three months ended June 28, 2025. The components that comprise total operating expenses are explained below. 35 Selling, General and Administrative Expenses Three Months Ended (dollars in millions) June 27, 2026 June 28, 2025 $ Change % Change Selling, general and administrative expenses: Michael Kors $ 304 $ 307 $ (3) (1.0) % Jimmy Choo 104 103 1 1.0 % Corporate 43 45 (2) (4.4) % Total selling, general and administrative expenses $ 451 $ 455 $ (4) (0.9) % Selling, general and administrative expenses decreased $4 million, or 0.9%, to $451 million for the three months ended June 27, 2026, compared to $455 million for the three months ended June 28, 2025. As a percentage of total revenue, selling, general and administrative expenses increased to 58.6% for the three months ended June 27, 2026, compared to 57.1% for the three months ended June 28, 2025. •Michael Kors selling, general and administrative expenses decreased $3 million, or 1.0%, to $304 million for the three months ended June 27, 2026, compared to $307 million for the three months ended June 28, 2025. The decrease was primarily due to cost savings initiatives which resulted in lower retail store related costs and personnel expenses compared to the prior year. •Jimmy Choo selling, general and administrative expenses remained consistent with the prior year increasing $1 million, or 1.0%, to $104 million for the three months ended June 27, 2026, compared to $103 million for the three months ended June 28, 2025. Unallocated corporate expenses, which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment, decreased $2 million, or 4.4%, to $43 million for the three months ended June 27, 2026, compared to $45 million for the three months ended June 28, 2025. The decrease was primarily due to lower professional fees related to certain information technology projects which are now complete. Income from Continuing Operations Three Months Ended (dollars in millions) June 27, 2026 June 28, 2025 $ Change % Change Income from continuing operations: Michael Kors $ 55 $ 63 $ (8) (12.7) % Jimmy Choo 13 4 9 NM 68 67 1 1.5 % Unallocated corporate and other expenses, net (1) (51) (51) — — % Income from continuing operations $ 17 $ 16 $ 1 6.3 % Operating Margin: Michael Kors 9.3 % 9.9 % Jimmy Choo 7.3 % 2.5 % Capri 2.2 % 2.0 % NM Not meaningful (1)Certain corporate costs are not directly attributable to our brands and, therefore, are not allocated to segments. Refer to Note 17 - “Segment Information” to the accompanying consolidated financial statements for additional information. Income from continuing operations was $17 million for the three months ended June 27, 2026, compared to $16 million for the three months ended June 28, 2025. Income from continuing operations as a percentage of total revenue was 2.2% for the three months ended June 27, 2026, compared to income from continuing operations of 2.0% for the three months ended June 28, 2025. 36 •Michael Kors recorded income from operations of $55 million for the three months ended June 27, 2026, compared to $63 million for the three months ended June 28, 2025. Operating margin decreased from 9.9% for the three months ended June 28, 2025, to 9.3% for the three months ended June 27, 2026, primarily due to deleveraging of operating expenses on lower revenues compared to the prior year. •Jimmy Choo recorded income from operations of $13 million for the three months ended June 27, 2026, compared to $4 million for the three months ended June 28, 2025. Operating margin improved from 2.5% for the three months ended June 28, 2025, to 7.3% for the three months ended June 27, 2026, primarily due to leveraging of operating expenses on higher revenues compared to the prior year. Other Income, net We recognized $3 million of other income during the three months ended June 27, 2026 compared to $1 million during the three months ended June 28, 2025. The $3 million of other income recognized during the three months ended June 27, 2026 primarily related to certain transition services provided to Versace pursuant to the Transition Services Agreement. Refer to Note 3 - “Discontinued Operations” to the accompanying consolidated financial statements for additional information. Interest Income, net For the three months ended June 27, 2026, we recognized $31 million of interest income compared to $18 million for the three months ended June 28, 2025. The $13 million improvement in interest income, net, is primarily due to lower average borrowings outstanding compared to the prior year. Refer to Note 10 - “Debt Obligations” and Note 13 - “Derivative Financial Instruments” to the accompanying consolidated financial statements for additional information. Foreign Currency Gain For the three months ended June 27, 2026 and June 28, 2025, we recognized a net foreign currency gain of $1 million and $5 million, respectively, primarily attributable to the remeasurement of intercompany balances between certain of our subsidiaries. Benefit for Income Taxes The benefit for income taxes was $18 million on pre-tax income of $52 million for the three months ended June 27, 2026, compared to $16 million on pre-tax income of $40 million for the three months ended June 28, 2025. Our effective tax rate for the three months ended June 27, 2026 was (34.6)% compared to (40.0)% for the three months ended June 28, 2025. Our effective tax rate increased for the three months ended June 27, 2026 compared to our effective tax rate for the three months ended June 28, 2025 primarily due to changes in valuation allowances in both periods in proportion to the increase in pre-tax income compared to the prior year. Our effective tax rate may fluctuate from time to time due to the effects of valuation allowance on deferred tax assets, changes in United States federal, state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislation and the results of various global tax strategies, may also impact our effective tax rate in future periods. Net Income from Continuing Operations As a result of the above, our net income was $70 million for the three months ended June 27, 2026, compared to net income of $56 million for the three months ended June 28, 2025. 37 Liquidity and Capital Resources Liquidity Our primary sources of liquidity are the cash flows generated from our operations, along with borrowings available under our credit facilities and available cash and cash equivalents. Our primary use of this liquidity is to fund the ongoing cash requirements, including our working capital needs and capital investments in our business, debt repayments, acquisitions, returns of capital, including share repurchases, and other corporate activities. We believe that the cash generated from operations, together with borrowings available under our revolving credit facilities and available cash and cash equivalents, will be sufficient to meet our working capital needs for the next 12 months and beyond, including investments made and expenses incurred in connection with our store opening and renovation plans, investments in corporate and distribution facilities, continued IT system development, e-commerce and marketing initiatives. We spent $25 million on capital expenditures during the three months ended June 27, 2026. We expect to spend approximately $125 million in Fiscal 2027, which includes Michael Kors and Jimmy Choo store renovations, as well as information technology and digital enhancements. The following table sets forth key indicators of our liquidity and capital resources (in millions): As of June 27, 2026 March 28, 2026 Balance Sheet Data: Cash and cash equivalents $ 114 $ 135 Working capital $ 182 $ 199 Total assets $ 3,210 $ 3,234 Short-term debt $ 14 $ 14 Long-term debt $ 324 $ 343 Three Months Ended June 27, 2026 June 28, 2025 Cash Flow Data: Operating activities from continuing operations $ 73 $ 20 Investing activities from continuing operations $ (25) $ (13) Financing activities from continuing operations $ (76) $ 94 Effect of exchange rate changes $ 8 $ (32) Net (decrease) increase in cash and cash equivalents and restricted cash (1) $ (20) $ 69 (1)For the three months ended June 28, 2025, the increase in cash and cash equivalents and restricted cash is presented on a continuing basis which differs from the Consolidated Statements of Cash Flows which is presented on a consolidated basis including discontinued operations. Cash Provided by Operating Activities Net cash provided by operating activities was $73 million during the three months ended June 27, 2026, as compared to net cash provided by operating activities of $20 million for the three months ended June 28, 2025. The increase in net cash provided by operating activities was primarily attributable to the timing of tax payments and an increase in net income after non-cash adjustments. Cash Used in Investing Activities Net cash used in investing activities was $25 million during the three months ended June 27, 2026, as compared to net cash used in investing activities of $13 million during the three months ended June 28, 2025, which were attributable to higher capital expenditures in the current period. 38 Cash (Used in) Provided by Financing Activities Net cash used in financing activities was $76 million during the three months ended June 27, 2026, as compared to net cash provided by financing activities of $94 million during the three months ended June 28, 2025. The change in cash from financing activities was primarily attributable to lower debt borrowings under our revolving credit facilities combined with an incremental $53 million in share repurchases during the current period. Debt Facilities The following table presents a summary of our borrowing capacity and amounts outstanding as of June 27, 2026 and March 28, 2026 (in millions): As of June 27, 2026 March 28, 2026 Revolving Credit Facility (1) Total availability $ 1,000 $ 1,500 Borrowings outstanding (2) 321 340 Letter of credit outstanding 1 1 Remaining availability $ 678 $ 1,159 Other Borrowings (3) $ 17 $ 17 Hong Kong Uncommitted Credit Facility: Total availability (20 million and 45 million Hong Kong Dollars) (4) $ 3 $ 6 Borrowings outstanding — — Remaining availability (20 million and 45 million Hong Kong Dollars) $ 3 $ 6 China Uncommitted Credit Facility: Total availability (75 million Chinese Yuan) (4) $ 11 $ 11 Borrowings outstanding — — Total and remaining availability (75 million Chinese Yuan) $ 11 $ 11 Japan Credit Facility: Total availability (1.0 billion Japanese Yen) $ 6 $ 6 Borrowings outstanding — — Remaining availability (1.0 billion Japanese Yen) $ 6 $ 6 Total borrowings outstanding (1) $ 338 $ 357 Total remaining availability $ 698 $ 1,182 (1)The financial covenant in our 2026 Revolving Credit Facility requires us to comply with a quarterly maximum net leverage ratio of 4.0 to 1.0. As of June 27, 2026 and March 28, 2026, we were in compliance with all covenants related to our agreements then in effect governing our debt. Refer to Note 10 - “Debt Obligations” to the accompanying consolidated financial statements for additional information. (2)As of June 27, 2026 and March 28, 2026, all amounts are recorded as long-term debt on our consolidated balance sheets. (3)The balance as of June 27, 2026 and March 28, 2026 primarily consists of $14 million related to our supplier financing program recorded within short-term debt in our consolidated balance sheets. (4)The balance as of June 27, 2026 and March 28, 2026 represents the total availability of the credit facility, which excludes bank guarantees. 39 We believe that our 2026 Revolving Credit Facility is adequately diversified with no undue concentration in any one financial institution. As of June 27, 2026, there were 14 financial institutions participating in the facility, with none maintaining a maximum commitment percentage in excess of 12%. We have no reason to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the 2026 Revolving Credit Facility. Refer to Note 10 - “Debt Obligations” in the accompanying financial statements and Note 13 - “Debt Obligations” in our Fiscal 2026 Annual Report on Form 10-K for detailed information relating to our credit facilities and debt obligations. Share Repurchase Program The following table presents our treasury share repurchases during the three months ended June 27, 2026 and June 28, 2025 (dollars in millions): Three Months Ended June 27, 2026 June 28, 2025 Cost of shares repurchased under share repurchase program $ 50 $ — Fair value of shares withheld to cover tax obligations for vested restricted share awards 4 1 Total cost of treasury shares repurchased $ 54 $ 1 Shares repurchased under share repurchase program 2,589,502 — Shares withheld to cover tax withholding obligations 182,606 86,365 2,772,108 86,365 On November 4, 2025, we announced the Board of Directors approved a three-year share repurchase program of up to $1.0 billion of our outstanding ordinary shares, which was implemented during the fourth quarter of Fiscal 2026. Share repurchases may be made in open market or privately negotiated transactions and/or pursuant to Rule 10b5-1 trading plans, subject to market conditions, applicable legal requirements, trading restrictions under our insider trading policy and other relevant factors. The program may be suspended or discontinued at any time. During the three months ended June 27, 2026, we repurchased 2,589,502 shares through open market transactions with a fair value of $50 million as part of this program. As of June 27, 2026, the remaining availability under this share repurchase program was $871 million. No share repurchase program was in effect during the three months ended June 28, 2025. Refer to Note 14 - “Shareholders’ Equity” to the accompanying consolidated financial statements for additional information. Contractual Obligations and Commercial Commitments Please refer to the “Contractual Obligations and Commercial Commitments” disclosure within the “Liquidity and Capital Resources” section of our Fiscal 2026 Form 10-K for a detailed disclosure of our other contractual obligations and commitments as of March 28, 2026. Off-Balance Sheet Arrangements We have not created, and are not party to, any special-purpose entities or off-balance sheet arrangements for the purpose of raising capital, incurring debt or operating our business. Our off-balance sheet commitments relating to our outstanding letters of credit were $23 million at June 27, 2026, including $22 million in letters of credit issued outside of the 2026 Revolving Credit Facility. In addition, as of June 27, 2026, bank guarantees of approximately $29 million were supported by our various credit facilities. We do not have any other off-balance sheet arrangements or relationships with entities that are not consolidated into our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources. 40 Recent Accounting Pronouncements Refer to Note 2 - “Summary of Significant Accounting Policies” to the accompanying interim consolidated financial statements for recently issued accounting standards, which may have an impact on our financial statements and/or disclosures upon adoption. 41

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks during the normal course of business, such as risk arising from fluctuations in foreign currency exchange rates, as well as fluctuations in interest rates. In order to manage these risks, we employ certain strategies to mitigate the effect of these fluctuations, which include entering into foreign currency forward contracts, net investment hedges and interest rate swaps. Foreign Currency Exchange Risk We manage our exposure to changes in foreign currency exchange rates using various derivative instruments. Refer to Note 13 - “Derivative Financial Instruments” to the accompanying consolidated financial statements for a summary of the notional and fair value amounts of outstanding derivative instruments, as well as the impact on earnings and accumulated other comprehensive loss of such instruments as of June 27, 2026. We perform a sensitivity analysis related to our derivative instruments to determine the effects of fluctuations in foreign currency exchange rates. For this sensitivity analysis, we assume a hypothetical change in the United States dollar against the applicable foreign currency exchange rates. Forward Foreign Currency Exchange Contracts We are exposed to risks on certain purchase commitments to foreign suppliers based on the value of our purchasing subsidiaries’ local currency relative to the currency requirement of the supplier on the date of the commitment. As such, we may enter into forward foreign currency exchange contracts that generally mature in 12 months or less and are consistent with the related purchase commitments to manage our exposure to the changes in the value of the Euro. Based on the forward foreign currency exchange contracts outstanding as of June 27, 2026, a 10% appreciation or devaluation of the United States dollar compared to the Euro would result in a net increase or decrease in the fair value of these contracts of approximately $7 million. Net Investment Hedges We utilize cross currency swap agreements to hedge our net investments in foreign operations against future volatility in the exchange rates between the United States dollar and foreign functional currencies in CHF and Euro. Based on the net investment hedges outstanding as of June 27, 2026, a 10% appreciation or devaluation of the United States dollar compared to CHF and Euro would result in a net increase or decrease in the fair value of these contracts of approximately $385 million and $245 million, respectively. Interest Rate Risk We are exposed to interest rate risk related to borrowings outstanding under our 2026 Revolving Credit Facility. Our 2026 Revolving Credit Facility bears interest at prime rates and other institutional lending rates (depending on the particular origination of borrowing), as further described in Note 10 - “Debt Obligations” to the accompanying consolidated financial statements. Our Hong Kong Credit Facility bears interest at the Hong Kong Interbank Offered Rate. Our China Credit Facility bears interest at the People’s Bank of China’s Benchmark lending rate. Our Japan Credit Facility bears interest at the Tokyo Interbank Offered Rate (“TIBOR”) plus 60 basis points two business days prior to the date of borrowing or the date of interest renewal. Therefore, our consolidated statements of operations and comprehensive income (loss) and cash flows are exposed to changes in those interest rates. At June 27, 2026, we had $321 million borrowings outstanding under our 2026 Revolving Credit Facility and no borrowings outstanding under all other credit facilities, as further described in Note 10 - “Debt Obligations” to the accompanying consolidated financial statements. At March 28, 2026, we had $340 million borrowings outstanding under our 2025 Credit Facilities and no borrowings outstanding under all other credit facilities. These balances are not indicative of future balances that may be outstanding under our credit facilities that may be subject to fluctuations in interest rates. Any increases in the applicable interest rates would cause an increase to the interest expense relative to any outstanding balance at that date. 42

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Legal Proceedings

Ordinary Course Litigation We are involved in various routine legal proceedings incident to the ordinary course of our business. We believe that the outcome of all pending legal proceedings, in the aggregate, will not have a material adverse effect on our business, results of operations and financial condition. Litigation Related to Terminated Merger On December 23, 2024 and January 28, 2025, two purported shareholders of Capri filed putative class action complaints in the United States District Court for the District of Delaware against Capri, Tapestry, Inc. and certain of their officers (including John D. Idol, our Chairman and Chief Executive Officer, and Thomas J. Edwards, Jr., our former Chief Financial and Chief Operating Officer) alleging violations of the federal securities laws based on certain statements by defendants concerning the previously proposed merger between Capri and Tapestry, Inc. and the FTC’s action to enjoin the merger. The Court appointed the lead plaintiff on March 7, 2025, and on May 15, 2025, the lead plaintiff filed the Consolidated Securities Law Complaint. The Consolidated Securities Law Complaint sought to bring federal securities claims on behalf of a class of all persons who purchased Capri stock or sold Capri puts between August 10, 2023 and October 24, 2024. On March 31, 2026, the Court granted our motion to dismiss the Consolidated Securities Law Complaint without prejudice. On April 30, 2026, plaintiffs filed the First Amended Complaint and we filed a motion to dismiss the First Amended Complaint on June 15, 2026. This litigation remains pending and we cannot predict the outcome or timing of this matter. Defending this litigation, even where claims are ultimately resolved in our favor, is costly and time‑consuming and an adverse outcome in this matter could result in substantial monetary damages, which may not be fully covered by available insurance.