UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ~~March 28, 2020~~April 2, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-35368

(Exact Name of Registrant as Specified in Its Charter)

CAPRI HOLDINGS LTD


British Virgin Islands			N/A
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

33 Kingsway

London, United Kingdom

WC2B 6UF

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: 44 207 632 8600

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Ordinary Shares, no par value	CPRI	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	☒ Yes	☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.	☐ Yes	☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	☒ Yes	☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	☒ Yes	☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☐☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

☐ Yes

☒ No

The aggregate market value of the registrant’s voting and non-voting ordinary shares held by non-affiliates of the registrant was ~~$4,791,368,573~~$7,510,364,310 as of September ~~28,~~ ~~2019,~~24, 2021, the last business day of the registrant’s most recently completed second fiscal quarter based on the closing price of the ordinary shares on the New York Stock Exchange.

As of ~~July 1, 2020,~~May 24, 2022, Capri Holdings Limited had ~~150,184,409~~142,809,964 ordinary shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the Registrant’s definitive Proxy Statement, which will be filed in ~~July 2020,~~June 2022, for the ~~2020~~2022 Annual Meeting of the Shareholders.

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TABLE OF CONTENTS


		Page
	PART I

Item 1	Business	46
Item 1A	Risk Factors	1418
Item 1B	Unresolved Staff Comments	3034
Item 2	Properties	3034
Item 3	Legal Proceedings	3134
Item 4	Mine Safety Disclosures	3135

	PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3236
Item 6	Selected Financial Data	3438
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3640
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	5659
Item 8	Financial Statements and Supplementary Data	5761
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	5761
Item 9A	Controls and Procedures	5861
Item 9B	Other Information	5962

	PART III

Item 10	Directors, Executive Officers and Corporate Governance	6063
Item 11	Executive Compensation	6063
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6063
Item 13	Certain Relationships and Related Transactions and Director Independence	6063
Item 14	Principal Accounting Fees and Services	6063

	PART IV

Item 15	Exhibits and Financial Statement Schedules	6164

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including documents incorporated herein by reference, contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri Holdings Limited (the “Company”) about future events. All statements other than statements of historical facts included in this Annual Report on Form 10-K, including documents incorporated herein by reference, may be forward-looking statements. Forward-looking statements include information concerning the Company’s goals, future plans and strategies, including with respect to environmental, social and governance (“ESG”) goals, initiatives and ambitions as well as the Company’s possible or assumed future results of operations, including descriptions of its business strategy. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. These forward-looking statements are not guarantees of future financial performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements. These risks, uncertainties and other factors include the ~~effect~~impact of the COVID-19 pandemic and its potential material and significant impact on the Company’s future financial and operational results if retail stores remain closed and the pandemic is prolonged, including that our estimates could materially differ if the severity of the COVID-19 situation worsens, the length and severity of such outbreak across the globe and the pace of recovery following the COVID-19 pandemic, levels of cash flow and future availability of credit, compliance with restrictive covenants under the Company’s credit agreement, the Company’s ability to integrate successfully and to achieve anticipated benefits of any ~~acquisition;~~acquisition and to successfully execute our growth strategies; the risk of disruptions to the Company’s businesses; risks associated with operating in international markets and our global sourcing activities, including disruptions or delays in manufacturing or shipments; the risk of cybersecurity threats and privacy of data security breaches; the negative effects of events on the market price of the Company’s ordinary shares and its operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Company’s businesses; fluctuations in demand for the Company’s products; levels of indebtedness (including the indebtedness incurred in connection with acquisitions); the timing and scope of future share buybacks, which may be made in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors, and which share repurchases may be suspended or discontinued at any time, the level of other investing activities and uses of cash; changes in consumer traffic and retail trends; high consumer debt levels, recession and inflationary pressures; loss of market share and industry competition; fluctuations in the capital markets; fluctuations in interest and exchange rates; the occurrence of unforeseen epidemics and pandemics, disasters or catastrophes; extreme weather conditions and natural disasters; political or economic instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and market conditions including acts of war and other geopolitical conflicts; as well as those risks set forth in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including in this Annual Report on Form 10-K, particularly under “Item 1A. Risk Factors” and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company disclaims any obligation to update or revise any forward-looking statements contained herein other than in accordance with legal and regulatory obligations.

~~Electronic Access~~

SUMMARY OF RISKS AFFECTING OUR BUSINESS

Our business is subject to ~~Company Reports~~

~~Our investor website can be accessed at~~ ~~www.capriholdings.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the SEC pursuant to Section 13(a) or Section 15(d)~~numerous risks. The following summary highlights some of the ~~Securities Exchange Act~~risks you should consider with respect to our business and prospects. This summary is not complete and the risks summarized below are not the only risks we face. You should review and consider carefully the risks and uncertainties described in more detail in this “Risk Factors” section of 1934, as amended, are available free of charge on our website under the caption “Financials” and then “SEC Filings” promptly after we electronically file such materials with, or furnish such materials to, the SEC. No information contained on our website is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K. Information relating to corporate governance at our Company, including our Corporate Governance Guidelines, our Code of Business Conduct and Ethics for all directors, officers, and employees, and information concerning our directors, Committees10-K which includes a more complete discussion of the ~~Board, including Committee charters,~~risks summarized below as well as a discussion of other risks related to our business and ~~transactions~~an investment in ~~Company securities~~our ordinary shares. Risks are listed in the categories where they primarily apply, but other categories may also apply.

Risks Related to Macroeconomic Conditions

•the COVID-19 pandemic may continue to have a material adverse effect on our business and results of operations;

•the accessories, footwear and apparel industries are heavily influenced by ~~directors~~general macroeconomic cycles that affect consumer spending and ~~executive officers, is available at~~a prolonged period of depressed consumer spending could have a material adverse effect on our ~~website under the captions “Corporate Governance”~~business, results of operations and “Financials” and then “SEC Filings.” Paper copies of these filings and corporate governance documents are available to shareholders free of charge by written request to Investor Relations, Capri Holdings Limited, 33 Kingsway, London, United Kingdom, WC2B 6UF. Documents filed with the SEC are also available on the SEC’s website at ~~www.sec.gov~~.financial condition.

Risks Related to Our Business

•we face risks associated with operating globally and our strategy to continue to expand internationally;

•our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments;

•our retail stores are heavily dependent on the ability and desire of consumers to travel and shop and a decline in consumer traffic could have a negative effect on our comparable store sales and store profitability resulting in

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impairment charges, which could have a material adverse effect on our business, results of operations and financial condition;

•recent changes in our executive management team, the departure of key employees or our failure to attract and retain qualified personnel could have a material adverse effect on our business;

•the long-term growth of our business depends on the successful execution of our strategic initiatives;

•if we are unable to effectively execute our e-commerce business and provide a reliable digital experience for our customers, our reputation and operating results may be harmed;

•we may not be able to respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition;

•increased scrutiny from investors and others regarding our corporate social responsibility initiatives, including environmental, social and other matters of significance relating to sustainability, could result in additional costs or risks and adversely impact our reputation;

•our wholesale business could suffer as a result of consolidations, liquidations, restructurings and other ownership changes;

•acquisitions may not achieve intended benefits and may not be successfully integrated;

•the markets in which we operate are highly competitive, both within North America and internationally, and increased competition based on a number of factors could cause our profitability and/or gross margins to decline;

•our business is subject to risks associated with importing products, and the imposition of additional duties, tariffs or trade restrictions could have a material adverse effect on our business, results of operations and financial condition;

•we are subject to risks associated with leasing retail space subject to long-term and non-cancelable leases. We may be unable to renew leases at the end of their terms. If we close a leased retail space, we remain obligated under the applicable lease;

•we are dependent on a limited number of distribution facilities. If one or more of our distribution facilities experiences operational difficulties or becomes inoperable, it could have a material adverse effect on our business, results of operations and financial condition;

•fluctuations in our tax obligations and changes in tax laws, treaties and regulations may have a material adverse impact on our future effective tax rates and results of operations;

•our business is exposed to foreign currency exchange rate fluctuations;

•our current and future licensing and joint venture arrangements may not be successful and may make us susceptible to the actions of third parties over whom we have limited control;

•increases in the cost of raw materials could increase our production costs and cause our operating results and financial condition to suffer;

•we primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods;

•as we outsource functions, we will become more dependent on the third parties performing these functions;

•our business is susceptible to the risks associated with climate change and other environmental impacts which could negatively affect our business and operations; and

•our industry is subject to significant pricing pressure caused by many factors which may cause our profitability and gross margins in the future to be materially lower than our expectations.

Risks Related to Information Technology and Data Security

•privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business; and

•a material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Legal and Regulatory

•if we fail to comply with labor laws or collective bargaining agreements, or if our independent manufacturing contractors fail to use acceptable, ethical business practices, our business and reputation could suffer;

•we may be unable to protect our trademarks, copyrights and other intellectual property rights, and others may allege that we infringe upon their intellectual property rights;

•we self-insure certain risks and may be impacted by unfavorable claims experience; and

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•we are subject to various proceedings, lawsuits, disputes, and claims in the ordinary course of business which could have an adverse impact on our business, financial condition, and results of operations;

Risks Related to Our Debt

•we have incurred a substantial amount of indebtedness, which could adversely affect our financial condition and restrict our ability to incur additional indebtedness or engage in additional transactions; and

•we may be unable to meet financial covenants in our indebtedness agreements which could result in an event of default and restrictive covenants in such agreements may restrict our ability to pursue our business strategies.

Risks Related to Our Ordinary Shares

•our share price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance;

•failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting, which could harm our business and cause a decline in the price of our ordinary shares;

•provisions in our organizational documents may delay or prevent our acquisition by a third party;

•rights of shareholders under British Virgin Islands law differ from those under United States law, and, accordingly, our shareholders may have fewer protections;

•the laws of the British Virgin Islands provide limited protection for minority shareholders, so minority shareholders will have limited or no recourse if they are dissatisfied with the conduct of our affairs;

•it may be difficult to enforce judgments against us or our executive officers and directors in jurisdictions outside the United States; and

•British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of one avenue to protect their interests.

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PART I

Unless the context requires otherwise, references in this Annual Report on Form 10-K to “Capri”, “we”, “us”, “our”, “the Company”, “our Company” and “our business” refer to Capri Holdings Limited and its consolidated subsidiaries. References to our stores, retail stores and retail segment include all of our full-price retail stores (including concessions), our e-commerce websites and outlet ~~stores,~~stores. The Company utilizes a 52 to 53 week fiscal year and the term “Fiscal~~” with respect to any year,~~ Year” or “Fiscal” refers to that 52-week or 53-week period. The fiscal year ending on April 2, 2022 (“Fiscal 2022”) contains 53 weeks and the fiscal years ending on March 27, 2021 and March 28, 2020 (“Fiscal 2021” and “Fiscal 2020”, respectively) contain 52 weeks. The Company’s Fiscal 2023 is a 52-week period ending ~~on the Saturday closest to March 31 of such year, except for “Fiscal 2016,” which refers to the 53-week period ending~~ April ~~2, 2016.~~1, 2023. Some differences in the numbers in the tables and text throughout this annual report may exist due to rounding. ~~All comparable store sales are presented on a 52-week basis.~~

Item 1. Business

Our Company

Capri Holdings Limited (“Capri”) is a global fashion luxury group, consisting of iconic brands that are industry leaders in design, style and ~~craftsmanship.~~craftsmanship, led by a world-class management team and renowned designers. Our brands cover the full spectrum of fashion luxury categories including women’s and men’s accessories, footwear and ready-to-wear as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. Our goal is to continue to extend the global reach of our brands while ensuring that they maintain their independence and exclusive DNA.

Our Brands

Versace

~~The~~Our Versace brand has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style. Founded ~~over 40 years ago~~in 1978 in Milan, ~~Italy,~~ Versace is known for its iconic and unmistakable style and unparalleled craftsmanship. Over the past several decades, the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of accessories, ready-to-wear, ~~accessories,~~ footwear, eyewear, watches, jewelry, fragrance and home furnishings businesses. Versace’s design team is led by Donatella Versace, who has been the brand’s Artistic Director for over 20 years. Versace distributes its products through a worldwide distribution network, which includes boutiques in some of the world’s most glamorous ~~cities. In addition, certain categories, such~~cities, its e-commerce sites, as ~~jeans, fragrances, watches~~well as through the most prestigious department and ~~eyewear are produced under licensing agreements.~~specialty stores worldwide.

Jimmy Choo

~~The~~Our Jimmy Choo brand ~~founded over 20 years ago, enjoys a leading position in the luxury footwear market and an expanding presence in the luxury accessories space. Since its inception in 1996, Jimmy Choo has offered~~offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering ofis women’s luxury shoes, is complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as a men’s luxury ~~shoe~~shoes and an accessory business. In addition, certain categories, such as ~~fragrances~~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 in 1996. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, as well as innovative products 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.

Michael Kors

~~The~~Our Michael Kors brand was launched ~~almost~~over 40 years ago by Michael Kors, a world-renowned designer, whose vision has taken itthe Company from its beginnings as an American luxury sportswear house to a global accessories, footwear and ~~apparel~~ready-to-wear company with a global distribution network that has presence in over 100 countries through ~~company-operated~~Company-operated retail stores and e-commerce sites, leading department stores, specialty stores and select licensing partners. Michael Kors is a highly recognized luxury fashion brand in the Americas and Europe with growing 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 luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried ~~in many of our Michael Kors~~by select retail stores, our ~~Michael Kors~~ e-commerce sites, as well as in the finest luxury department stores in the world. ~~Our accessible luxury line~~ MICHAEL Michael Kors has a strong focus on accessories, in addition to offering footwear and ~~apparel~~ready-to-wear, and ~~is carried~~addresses the significant demand opportunity in ~~all~~accessible luxury goods. We have also been developing our

Table of ~~our Michael Kors lifestyle stores, as well as leading department stores throughout the world. We also continue to develop our Michael Kors Mens~~Contents

men’s business in recognition of the significant opportunity afforded by ~~our~~the Michael Kors brand’s established fashion ~~authority. In addition, certain categories, such as watches, jewelry, fragrances~~authority and ~~eyewear are produced under product and geographic licensing arrangements.~~

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the expanding men’s market. Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image.

Our Segments

We operate in three reportable segments ~~which are~~ as follows:

•Versace — accounted for approximately ~~15%~~19% of our total revenue in Fiscal ~~2020~~2022 and includes worldwide sales of Versace products through ~~206~~209 retail stores (including concessions) and e-commerce sites, through ~~824~~803 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

•Jimmy Choo — accounted for approximately ~~10%~~11% of our total revenue in Fiscal ~~2020~~2022 and includes worldwide sales of Jimmy Choo products through ~~226~~237 retail stores (including concessions) and e-commerce sites, through ~~554~~446 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

•Michael Kors — accounted for approximately ~~75%~~70% of our total revenue in Fiscal ~~2020~~2022 and includes worldwide sales of Michael Kors products through ~~839~~825 retail stores (including concessions) and e-commerce sites, through ~~2,982~~2,742 wholesale doors, as well as through product and geographic licensing arrangements.

In addition to these reportable segments, 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 systems expenses, including Enterprise Resource Planning (“ERP”) system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, ~~(including transition costs related to our recent acquisitions),~~ impairment costs, ~~and~~ COVID-19 related ~~charges.~~charges, charitable donations and the war in Ukraine. The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. For additional financial information regarding our segments and corporate unallocated expenses, see ~~Segment Information note in~~Note 19 to the accompanying consolidated financial ~~statements.~~statements for additional information.

Industry

We operate in the global personal luxury goods industry. ~~The~~Through 2019, the personal luxury goods market grew at a 5%mid-single digit rate over the past 20 years, with more recent growth driven by stronger Chinese demand from both international and local consumers and demographic and socioeconomic shifts resulting in younger consumers purchasing more luxury goods. The personal luxury goods market grew approximately 7% in 2019 despite growing geopolitical tensions, such as trade tensions between the United States and China, Brexit and protests in Hong Kong. GrowthThen, in 2020, ~~is expected~~due to ~~be impacted by~~the impact of the COVID-19 ~~outbreak and subsequent global recovery. According to forecasts by Bain-Altagamma,~~crisis, the personal luxury goods market ~~is expected~~declined 22%. According to ~~contract between 20% and 35% in 2020. Bain-Altagamma forecasted a 10% growth rate from 2020 to 2025. Accessories remains~~Bain*, the ~~largest and fastest growing~~ personal luxury goods ~~category,~~market returned to 2019 levels in 2021, and the market is predicted to increase at a 10% compound annual growth rate between 2020 and 2025. Future growth will be driven by ~~leather goods~~e-commerce, Chinese consumers and footwear. Over the past several years, direct-to-consumer has been the fastest-growing channel, largely driven by the rapid and accelerating growth of the e-commerce channel, which is expected to representyounger generations. By 2025, Bain studies estimate that approximately 30% of personal luxury goods sales ~~by 2025. Consumer shopping preferences have continued to shift from physical stores to on-line shopping.~~will occur online, Chinese consumers will represent nearly half of total global personal luxury goods sales and Gen Z and Gen Y combined will make up at least two-thirds of the market. As the ~~overall retail environment becomes increasingly omni-channel, with point of sales evolving into point of touch, we believe that~~personal luxury goods market continues to evolve, Capri is committed to creating engaging luxury experiences globally. In our view, increased customer engagement and tailoring merchandise to customer shopping and communication preferences are ~~the~~ key ~~ingredients~~ to growing market share. We believe that our innovative and luxurious product offerings and customer engagement initiatives across all three brands position us to capitalize on the continued growth of the global personal luxury ~~accessories~~goods industry.

*Bain – Altagamma Luxury Goods Worldwide Market Study, Fall 2021 (November 11, 2021). These studies were prepared by Bain & Company and ~~footwear product categories, as they are among our primary product categories~~Altagamma and can be obtained free of ~~focus, as well as to grow our sales in our other product categories, such as ready-to-wear where~~charge or at a nominal cost by contacting Bain & Company’s media contacts at aliza.medina@bain.com or dan.pinkney@bain.com. While we ~~now~~believe that each of these studies and publications is reliable, we have ~~a broader presence across both women’s~~not independently verified market and ~~men’s offerings.~~industry data from third-party sources.

Geographic Information

We generate revenue globally through our three ~~reporting~~reportable segments, as described above. We sell our Versace, Jimmy Choo and Michael Kors products through retail and wholesale channels ~~of distribution~~ in three principal geographic markets: the Americas ~~(U.S.,~~(United States, Canada and Latin America), EMEA (Europe, Middle East and Africa) and ~~Asia.~~Asia (Asia and Oceania). We also have wholesale arrangements pursuant to which we sell products to ~~our~~ geographic licensees. In addition, we have licensing agreements through which we license to third parties the use of our Versace, Jimmy Choo and Michael Kors brand names and trademarks, certain production rights and sales and/or distribution rights with respect to our brands.

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The following table details our revenue by segment and geographic location (in millions):


		Fiscal Years Ended											Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018			April 2, 2022		March 27, 2021		March 28, 2020
															April 2, 2022	March 27, 2021	March 28, 2020
Versace revenue - the Americas	Versace revenue - the Americas	$	186	$	22	$	—	Versace revenue - the Americas	$	408	$	201	$	186
Versace revenue - EMEA	Versace revenue - EMEA	420		66		—		Versace revenue - EMEA	425		276		420
Versace revenue - Asia	Versace revenue - Asia	237		49		—		Versace revenue - Asia	255		241		237
Total Versace		843		137		—
Total Versace revenue								Total Versace revenue	1,088		718		843
Jimmy Choo revenue - the Americas	Jimmy Choo revenue - the Americas	107		96		37		Jimmy Choo revenue - the Americas	175		102		107
Jimmy Choo revenue - EMEA	Jimmy Choo revenue - EMEA	282		321		123		Jimmy Choo revenue - EMEA	229		146		282
Jimmy Choo revenue - Asia	Jimmy Choo revenue - Asia	166		173		63		Jimmy Choo revenue - Asia	209		170		166
Total Jimmy Choo		555		590		223
Total Jimmy Choo revenue								Total Jimmy Choo revenue	613		418		555
Michael Kors revenue - the Americas	Michael Kors revenue - the Americas	2,822		3,064		2,996		Michael Kors revenue - the Americas	2,627		1,869		2,822
Michael Kors revenue - EMEA	Michael Kors revenue - EMEA	821		892		970		Michael Kors revenue - EMEA	835		607		821
Michael Kors revenue - Asia	Michael Kors revenue - Asia	510		555		530		Michael Kors revenue - Asia	491		448		510
Total Michael Kors		4,153		4,511		4,496
Total Michael Kors revenue								Total Michael Kors revenue	3,953		2,924		4,153

Total revenue - the Americas	Total revenue - the Americas	3,115		3,182		3,033		Total revenue - the Americas	3,210		2,172		3,115
Total revenue - EMEA	Total revenue - EMEA	1,523		1,279		1,093		Total revenue - EMEA	1,489		1,029		1,523
Total revenue - Asia	Total revenue - Asia	913		777		593		Total revenue - Asia	955		859		913
Total revenue	Total revenue	$	5,551	$	5,238	$	4,719	Total revenue	$	5,654	$	4,060	$	5,551

Competitive Strengths

We believe that the following strengths differentiate us from our competitors:

Global Fashion Luxury Group Led by a World-Class Management Team and Renowned Designers. We are a global fashion luxury group, consisting of three iconic brands defined by fashion luxury products with a reputation for world-class design and innovation. The design leadership of our founder-designers Donatella Versace, Sandra Choi and Michael Kors is a unique advantage that we possess. Our founder-led design teams are supported by our senior management team with extensive experience across a broad range of disciplines in the retail industry, including design, sales, marketing, public relations, merchandising, real estate, supply chain and finance. With an average of 25 years of experience in the retail industry, including at a number of public companies, and an average of 1419 years experience with our brands, our senior management team has strong creative and operational experience and a successful track record.

For over 20 years, Donatella Versace has been the ~~artistic director,~~Artistic Director, molding Versace’s iconic style. A true visionary with an intuition for how to blend fashion, design and culture, Donatella continues to honor the rich and storied Versace heritage founded in 1978, while constantly evolving and adapting the luxury house to ensure the brand’s continued relevance. Donatella’s most recent collections for Versace are a testament to her ~~unique~~bold and fearless design vision that celebrate Versace’s Italian heritage and ~~are equal parts bold and refined, evoking both a rock and roll spirit as well as runway~~unapologetic glamour. Versace designs have been worn by the world’s most famous celebrities and most sought-after super models.

Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the Jimmy Choo brand since its inception in 1996. Jimmy Choo products are ~~unique, instinctively seductive~~glamourous and ~~chic.~~daring. The Jimmy Choo brand offers classic and timeless luxury products, as well as innovative products that are intended to set and lead fashion trends. Jimmy Choo’s products have a strong red carpet presence and are often worn by global celebrities.

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The Michael Kors brand was launched ~~almost~~over 40 years ago by Michael Kors, a world-renowned designer, who is responsible for conceptualizing and directing the design of our Michael Kors brand products. We believe that the Michael Kors brand name has become synonymous with luxurious fashion that is timeless and elegant, expressed through the brand’s sophisticated accessories and ready-to-wear collections. Each of our Michael Kors brand collections exemplifies the jet-set lifestyle and features high quality designs, materials and craftsmanship. Michael Kors has received a number of awards, which

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recognize the contribution he and his team have made to the fashion industry and our Company. Some of the most widely recognized global trendsetters and celebrities wear our Michael Kors brand collections.

Expertise in the Accessories ~~and Footwear Product Categories.~~Category. We have strong group expertise in ~~accessories and footwear.~~accessories. The strength of our Michael Kors luxury collection and our accessible luxury MICHAEL Michael Kors line have allowed us to expand our brand awareness and position Michael Kors as one of the leading global luxury brands in the accessories product categories. Capitalizing on the success of our accessories product category, we continue to further develop the accessories businesses for Jimmy Choo and Versace, bringing our accessories expertise, including our product category knowledge, our merchandising best practices and our substantial group buying power to these brands. Our goal is to increase Versace’s ~~accessories~~women’s and ~~footwear~~men’s accessories penetration from ~~less than 35%~~20% of revenues in Fiscal ~~2020~~2022 to ~~60%~~50% of Versace’s revenues over time and to increase Jimmy ~~Choo's~~Choo’s women’s accessories penetration from ~~less than~~approximately 20% of revenues in Fiscal ~~2020~~2022 to ~~50%~~30% of Jimmy Choo’s revenues over the next few years and to 50% over time.

Exceptional Retail Store Footprint. Versace operates in three primary retail formats: boutiques, outlet and e-commerce. We operated ~~206~~209 Versace retail stores as of ~~March 28, 2020,~~April 2, 2022 in some of the most fashionable cities and the most sought-after shopping destinations around the world. During Fiscal 2022, we completed renovations at approximately 50% of our Versace retail stores to incorporate our new store design and will continue with these renovations in Fiscal 2023. Versace’s products are distributed worldwide through a global network of highly specialized stores, which average approximately ~~1,700~~1,800 square feet. In addition, we operate Versace e-commerce sites in the ~~U.S.,~~United States, certain parts of Europe and ~~China.~~China (covering 85 countries worldwide).

We operated ~~226~~237 Jimmy Choo retail stores as of ~~March 28, 2020, with approximately 85%~~April 2, 2022, in some of ~~stores represented by~~ the ~~brand’s new global retail store format, which has been progressively rolled out around the world during the past several years.~~most premier locations worldwide. Jimmy Choo retail stores, comprised of full-price stores and outlets, average approximately ~~1,300~~1,400 square feet. In addition, we operate Jimmy Choo e-commerce sites in the ~~U.S.,~~United States, certain parts of Europe, ~~and~~ Japan and ~~launched a localized site in China during Fiscal 2020. Omni-channel developments continued during Fiscal 2020 with the successful roll out of in-store ordering at concessions across Europe and Japan.~~China.

We operated ~~839~~825 Michael Kors stores as of ~~March 28, 2020~~April 2, 2022 with four primary retail store formats: collection stores, lifestyle stores, outlet stores and e-commerce sites. Michael Kors collection stores are located in some of the world’s most prestigious shopping areas and average approximately 2,900 square feet in size. The Michael Kors lifestyle stores are located in some of the world’s most frequented metropolitan shopping locations and leading regional shopping centers, and average approximately ~~2,800~~2,700 square feet in size. We also extend our reach to additional consumer groups through our outlet stores, which average approximately ~~4,300~~4,400 square feet in size. In addition, we also operate Michael Kors e-commerce sites in ~~the U.S., Canada,~~North America, China, Japan, South Korea, certain parts of Europe, ~~China, Japan~~the Middle East, Africa and ~~South Korea.~~Oceania.

World-class Omni and CRM ~~capabilities.~~Capabilities. We have omni-channel capabilities from best-in-class digital platforms to state-of-the-art distribution facilities globally, which we leverage across businesses. As part of our plan to continue to implement omni-channel capabilities throughout our businesses, we have begun leveraging our ~~world class~~ distribution centers ~~including in Venlo, Netherlands and Teterboro, New Jersey,~~globally to serve ~~all three~~multiple brands.

Strong Relationships with Premier Department Stores. We partner with leading wholesale customers, such as ~~Macy's,~~Macy’s, Saks Fifth Avenue, Bloomingdale’s and Holt Renfrew in North America, as well as Harrods, Harvey Nichols, Printemps, Selfridges and Galeries Lafayette in Europe. These relationships enable us to access large numbers of our key consumers in a targeted manner. Our “shop-in-shops” have specially trained staff, as well as customized fixtures, wall casings, decorative items, ~~and~~ flooring and provide department store consumers with a more personalized shopping experience than traditional retail department store configurations. We have engaged with our wholesale customers on various initiatives and have continued to enter into ~~innovative~~ supply chain partnerships designed to increase the speed at which our luxury fashion products reach the ultimate consumer. We plan to increase Versace’s and Jimmy Choo’s presence in certain luxury department stores, and for Michael Kors, we ~~have continued~~continue to ~~strategically reduce shipments~~optimize deliveries with the intent to drive more full-price ~~sell throughs~~sell-through in the wholesale channel.

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~~Business Strategy~~Jimmy Choo

Our ~~goal~~Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as men’s luxury shoes and accessory business. In addition, certain categories, such as 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 in 1996. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, as well as innovative products that are intended to ~~continue~~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.

Michael Kors

Our Michael Kors brand was launched over 40 years ago by Michael Kors, a world-renowned designer, whose vision has taken the Company from its beginnings as an American luxury sportswear house to ~~create long-term shareholder value~~a global accessories, footwear and ready-to-wear 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 luxury fashion brand in the Americas and Europe with growing 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 luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried by ~~increasing~~select retail stores, our ~~revenue~~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 ~~profits~~ready-to-wear, and ~~strengthening~~addresses the significant demand opportunity in accessible luxury goods. We have also been developing our ~~global brands. We also believe that sound environmental~~

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men’s business in recognition of the significant opportunity afforded by the Michael Kors brand’s established fashion authority and ~~social policies are both ethically correct and fiscally responsible. To that end, we are committed to improving~~ the ~~way we work in order to better the world in which we live. We plan to achieve our business strategy by focusing on the following strategic initiatives:~~

~~Leverage group expertise and capabilities.~~ ~~We will continue to leverage our group expertise in accessories and footwear to fuel growth across our portfolio of brands, implementing the best practices from~~expanding men’s market. Taken together, our Michael Kors ~~core accessories business~~collections target a broad customer base while retaining our premium luxury image.

Our Segments

We operate in three reportable segments as follows:

•Versace — accounted for approximately 19% of our total revenue in Fiscal 2022 and includes worldwide sales of Versace products through 209 retail stores (including concessions) and e-commerce sites, through 803 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

•Jimmy Choo — accounted for approximately 11% of our total revenue in Fiscal 2022 and includes worldwide sales of Jimmy Choo products through 237 retail stores (including concessions) and e-commerce sites, through 446 wholesale doors (including multi-brand stores), as well as through product and geographic licensing arrangements.

•Michael Kors — accounted for approximately 70% of our total revenue in Fiscal 2022 and includes worldwide sales of Michael Kors products through 825 retail stores (including concessions) and e-commerce sites, through 2,742 wholesale doors, as well as through product and geographic licensing arrangements.

In addition to these reportable segments, 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 systems expenses, including Enterprise Resource Planning (“ERP”) system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine. The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. For additional financial information regarding our segments and corporate unallocated expenses, see Note 19 to the accompanying consolidated financial statements for additional information.

Industry

We operate in the global personal luxury goods industry. Through 2019, the personal luxury goods market grew at a mid-single digit rate over the past 20 years, with more recent growth driven by stronger Chinese demand from both international and local consumers and demographic and socioeconomic shifts resulting in younger consumers purchasing more luxury goods. Then, in 2020, due to the impact of the COVID-19 crisis, the personal luxury goods market declined 22%. According to Bain*, the personal luxury goods market returned to 2019 levels in 2021, and the market is predicted to increase at a 10% compound annual growth rate between 2020 and 2025. Future growth will be driven by e-commerce, Chinese consumers and younger generations. By 2025, Bain studies estimate that approximately 30% of personal luxury goods sales will occur online, Chinese consumers will represent nearly half of total global personal luxury goods sales and Gen Z and Gen Y combined will make up at least two-thirds of the market. As the personal luxury goods market continues to evolve, Capri is committed to creating engaging luxury experiences globally. In our view, increased customer engagement and tailoring merchandise to customer shopping and communication preferences are key to growing market share. We believe that our innovative and luxurious product offerings and customer engagement initiatives across all three brands position us to capitalize on the continued growth of the global personal luxury goods industry.

*Bain – Altagamma Luxury Goods Worldwide Market Study, Fall 2021 (November 11, 2021). These studies were prepared by Bain & Company and Altagamma and can be obtained free of charge or at a nominal cost by contacting Bain & Company’s media contacts at aliza.medina@bain.com or dan.pinkney@bain.com. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources.

Geographic Information

We generate revenue globally through our three reportable segments, as described above. We sell our Versace, ~~and~~ Jimmy Choo ~~brands.~~and Michael Kors products through retail and wholesale channels in three principal geographic markets: the Americas (United States, Canada and Latin America), EMEA (Europe, Middle East and Africa) and Asia (Asia and Oceania). We ~~will~~ also ~~continue~~have wholesale arrangements pursuant to ~~prioritize~~which we sell products to geographic licensees. In addition, we have licensing agreements through which we license to third parties the ~~development~~use of our ~~e-commerce platforms~~Versace, Jimmy Choo and ~~omni-channel capabilities~~Michael Kors brand names and trademarks, certain production rights and sales and/or distribution rights with respect to our brands.

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The following table details our revenue by segment and geographic location (in millions):


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020

Versace revenue - the Americas	$	408	$	201	$	186
Versace revenue - EMEA	425		276		420
Versace revenue - Asia	255		241		237
Total Versace revenue	1,088		718		843
Jimmy Choo revenue - the Americas	175		102		107
Jimmy Choo revenue - EMEA	229		146		282
Jimmy Choo revenue - Asia	209		170		166
Total Jimmy Choo revenue	613		418		555
Michael Kors revenue - the Americas	2,627		1,869		2,822
Michael Kors revenue - EMEA	835		607		821
Michael Kors revenue - Asia	491		448		510
Total Michael Kors revenue	3,953		2,924		4,153

Total revenue - the Americas	3,210		2,172		3,115
Total revenue - EMEA	1,489		1,029		1,523
Total revenue - Asia	955		859		913
Total revenue	$	5,654	$	4,060	$	5,551

Competitive Strengths

We believe that the following strengths differentiate us from our competitors:

Global Fashion Luxury Group Led by a World-Class Management Team and Renowned Designers. We are a global fashion luxury group, consisting of three iconic brands defined by fashion luxury products with a reputation for world-class design and innovation. The design leadership of our ~~brands, leveraging~~founder-designers Donatella Versace, Sandra Choi and Michael Kors is a unique advantage that we possess. Our founder-led design teams are supported by our senior management team with extensive experience across a broad ~~expertise~~range of disciplines in the retail industry, including design, sales, marketing, public relations, merchandising, real estate, supply chain and ~~capabilities~~finance. With an average of 25 years of experience in ~~this area. With~~ the ~~addition of Versace, we see~~retail industry, including at a number of ~~opportunities to create long-term~~public companies, and an average of 19 years experience with our brands, our senior management team has strong creative and operational ~~synergies as we combine our global competencies~~experience and ~~footprint. These synergies will be primarily focused on opportunities in our supply chain, information systems, back office support and manufacturing.~~a successful track record.

~~Continue to increase our presence in Asia.~~ ~~We plan to continue to diversify our group’s global footprint~~For over 20 years, Donatella Versace has been the Artistic Director, molding Versace’s iconic style. A true visionary with an ~~emphasis on~~intuition for how to blend fashion, design and culture, Donatella continues to honor the ~~Asia market, where we believe each of our three brands continue~~rich and storied Versace heritage founded in 1978, while constantly evolving and adapting the luxury house to ensure the brand’s continued relevance. Donatella’s most recent collections for Versace are a testament to her bold and fearless design vision that celebrate Versace’s Italian heritage and unapologetic glamour. Versace designs have been worn by the ~~potential to significantly grow market share in~~world’s most famous celebrities and most sought-after super models.

Jimmy Choo’s design team is led by Sandra Choi, who has been the ~~region.~~

~~Integrate Versace and continue to build on the brand~~’~~s luxury image.~~ We plan to grow the Versace business to $2 billion in revenues over time. There are five strategic initiatives that we will focus on to achieve this goal. First, we plan to build on Versace’s luxury runway momentum. Second, we will enhance Versace’s powerful and iconic communications messaging. Third, we plan to increase Versace’s global footprint from 206 stores to 300 retail stores. Fourth, we will accelerate Versace’s e-commerce development to create a full omni-channel experience. Finally, we plan to leverage our group’s expertise to expand Versace’s women’s and men’s accessories and footwear businesses from less than 35% of revenues to a target of 60% of the brand's revenues over time, while maintaining Versace’s authoritative presence in women’s and men’s ready-to-wear.

~~Continue to execute on our strategies to grow~~Creative Director for the Jimmy Choo ~~brand.~~ ~~We plan to continue to implement our growth strategies for~~brand since its inception in 1996. Jimmy Choo ~~with a goal of reaching $1 billion in revenues over time. Since the acquisition, we have grown~~products are glamourous and daring. The Jimmy Choo brand offers classic and timeless luxury products, as well as innovative products that are intended to set and lead fashion trends. Jimmy Choo’s ~~retail store base from 150 stores to over 200 stores~~products have a strong red carpet presence and are ~~targeting to expand~~often worn by global celebrities.

The Michael Kors brand was launched over 40 years ago by Michael Kors, a world-renowned designer, who is responsible for conceptualizing and directing the Jimmy Choo retail footprint to 300 stores globally, with an emphasis on growth in Asia. Maintaining our leadership in footwear for Jimmy Choo remains a top priority, and we plan to accelerate footwear growth by continuing to expand the strategic fashion active category. In addition, we plan to continue increasing our presence in the accessories product category by expanding the breadth of new collection offerings, focusing on visual merchandising and increased marketing, with a goal of growing the accessories business to 50% of Jimmy Choo's revenues. Our marketing campaign, featuring Jimmy Choo’s first global brand ambassador, model Kaia Gerber, aims to attract a younger customer, while simultaneously highlighting our new active footwear and accessories products, in addition to continuing to showcase our core luxury women’s fashion footwear.

~~Continue to leverage the strength~~design of our Michael Kors brand ~~which remains~~products. We believe that the ~~foundation for our fashion luxury group.~~ ~~Our goal is to position~~ Michael Kors tobrand name has become ~~a stronger~~synonymous with luxurious fashion that is timeless and ~~more profitable brand. Our focus on product innovation has greatly improved newness across all product categories for~~elegant, expressed through the brand’s sophisticated accessories and ready-to-wear collections. Each of our Michael Kors ~~brand. In accessories, we continue to introduce new product groups, as well as unique design, style,~~brand collections exemplifies the jet-set lifestyle and features high quality designs, materials and craftsmanship. In footwear, we plan to grow our fashion active product offerings and continue fashion innovation. In women’s apparel, our KORS style head-to-toe dressing remains our key focus, along with our strategic dress and outerwear categories. We will continue to increase product offerings within menswear, including our new men's footwear collection. We also plan to continue to focus on brand engagement, capitalizing on Michael ~~Kors’ leading red carpet and social media presence. Our strategy to enhance customer experience by expanding our omni-channel capabilities also remains a key priority.~~

~~Execute on our corporate social responsibility strategy.~~ Our corporate social responsibility strategy is divided into three areas: (i) Our World: focused on actions across our operations and supply chain, meant to significantly reduce our environmental impact; (ii) Our Community: fostering a supportive, healthy, diverse and inclusive workplace for all of our employees; and (iii) Our Philanthropy: connecting the talents, energy and success of each of our brands to those in need around the world. We have set targets to be 100% carbon neutral in our direct operations and to source 100% of energy for our owned and operated facilities from renewable sources by 2025. Building on our net zero carbon emissions commitment, and in an effort to deliver on the goals of the Paris Agreement, we will also commit to set emissions reduction targets across our operations and supply chain with the Science Based Targets initiative by 2021. We have additionally committed to, and have already been working towards,Kors has received a number of ~~important initiatives, including:~~awards, which

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•~~All plastic in packaging~~recognize the contribution he and his team have made to ~~be recyclable, compostable, recycled or reusable by 2025~~the fashion industry and our Company. Some of the most widely recognized global trendsetters and celebrities wear our Michael Kors brand collections.

•Expertise in the Accessories Category. ~~100% of point-of-sale packaging materials to be recyclable or sustainably sourced by 2025~~

•~~Partnering with key suppliers to reduce water use~~

•~~Traceability~~We have strong group expertise in accessories. The strength of our ~~supply chain~~

•~~Sourcing at least 95% of~~Michael Kors luxury collection and our ~~leather from certified tanneries by 2025~~

•~~Furthering diversity~~accessible luxury MICHAEL Michael Kors line have allowed us to expand our brand awareness and ~~inclusion within the organization, including through our new Global D&I Council~~

•Supply chain empowerment programs focused on human rights and fair wages to be implemented in line with the United Nations Framework for Corporate Action on Workplace Women’s Health and Empowerment by 2025

~~Collections and Products~~

~~Our total revenue by major product category is~~position Michael Kors as ~~follows (in millions):~~

Fiscal Years Ended
March 28,
2020 % of
Total March 30,
2019 % of
Total March 31,
2018 % of
Total
Accessories $ 2,933 52.8% $ 3,139 59.9% $ 3,057 64.8%
Footwear 1,100 19.8% 1,023 19.5% 657 13.9%
Apparel 1,069 19.3% 698 13.3% 605 12.8%
Licensed product 222 4.0% 218 4.2% 250 5.3%
Licensing revenue 201 3.6% 156 3.0% 150 3.2%
Other 26 0.5% 4 0.1% — —%
Total revenue $ 5,551 $ 5,238 $ 4,719

~~Versace~~

~~Versace is~~ one of the leading ~~international fashion~~global luxury brands in the accessories product categories. Capitalizing on the success of our accessories product category, we continue to further develop the accessories businesses for Jimmy Choo and Versace, bringing our accessories expertise, including our product category knowledge, our merchandising best practices and our substantial group buying power to these brands. Our goal is to increase Versace’s women’s and men’s accessories penetration from 20% of revenues in Fiscal 2022 to 50% of Versace’s revenues over time and to increase Jimmy Choo’s women’s accessories penetration from approximately 20% of revenues in Fiscal 2022 to 30% of Jimmy Choo’s revenues over the next few years and to 50% over time.

Exceptional Retail Store Footprint. Versace operates in three primary retail formats: boutiques, outlet and e-commerce. We operated 209 Versace retail stores as of April 2, 2022 in some of the most fashionable cities and the most sought-after shopping destinations around the world. During Fiscal 2022, we completed renovations at approximately 50% of our Versace retail stores to incorporate our new store design ~~houses~~ and will continue with these renovations in Fiscal 2023. Versace’s products are distributed worldwide through a ~~symbol~~global network of ~~Italian luxury worldwide,~~highly specialized stores, which ~~has developed its expertise~~average approximately 1,800 square feet. In addition, we operate Versace e-commerce sites in ~~haute couture~~the United States, certain parts of Europe and China (covering 85 countries worldwide).

We operated 237 Jimmy Choo retail stores as of April 2, 2022, in some of the most premier locations worldwide. Jimmy Choo retail stores, comprised of full-price stores and outlets, average approximately 1,400 square feet. In addition, we operate Jimmy Choo e-commerce sites in the United States, certain parts of Europe, Japan and China.

We operated 825 Michael Kors stores as of April 2, 2022 with four primary retail store formats: collection stores, lifestyle stores, outlet stores and e-commerce sites. Michael Kors collection stores are located in some of the world’s most prestigious shopping areas and average approximately 2,900 square feet in size. The Michael Kors lifestyle stores are located in some of the world’s most frequented metropolitan shopping locations and leading regional shopping centers, and average approximately 2,700 square feet in size. We also extend our reach to ~~include ready-to-wear, accessories, footwear~~additional consumer groups through our outlet stores, which average approximately 4,400 square feet in size. In addition, we also operate Michael Kors e-commerce sites in North America, China, Japan, South Korea, certain parts of Europe, the Middle East, Africa and ~~home furnishings. Generally, Versace’s haute couture retails up~~Oceania.

World-class Omni and CRM Capabilities. We have omni-channel capabilities from best-in-class digital platforms to ~~$100,000, ready-to-wear retails from $250~~state-of-the-art distribution facilities globally, which we leverage across businesses. As part of our plan to ~~$4,000, accessories retail from $100~~continue to ~~$3,500, and footwear retails from $225~~implement omni-channel capabilities throughout our businesses, we have begun leveraging our distribution centers globally to ~~$2,500.~~serve multiple brands.

~~Certain product categories,~~Strong Relationships with Premier Department Stores. We partner with leading wholesale customers, such as ~~Versace Jeans Couture, eyewear, fragrances, jewelry~~Macy’s, Saks Fifth Avenue, Bloomingdale’s and ~~watches are produced under product licensing agreements. Swinger SA is~~Holt Renfrew in North America, as well as Harrods, Harvey Nichols, Printemps, Selfridges and Galeries Lafayette in Europe. These relationships enable us to access large numbers of our key consumers in a targeted manner. Our “shop-in-shops” have specially trained staff, as well as customized fixtures, wall casings, decorative items, flooring and provide department store consumers with a more personalized shopping experience than traditional retail department store configurations. We have engaged with our wholesale customers on various initiatives and have continued to enter into supply chain partnerships designed to increase the ~~exclusive licensee~~speed at which our luxury fashion products reach the ultimate consumer. We plan to increase Versace’s and Jimmy Choo’s presence in certain luxury department stores, and for ~~Versace Jeans Couture, Luxottica is~~Michael Kors, we continue to optimize deliveries with the ~~exclusive licensee for Versace eyewear, Euroitalia is~~intent to drive more full-price sell-through in the exclusive licensee for Versace fragrances, Samra International is the exclusive licensee for Versace jewelry, and Vertime is the exclusive licensee for Versace watches. Generally, Versace Jeans Couture retail from $75 to $2,000, Versace eyewear retails from $200 to $500, Versace fragrances retail from $75 to $400, Versace jewelry retails from $500 to $7,500, and Versace watches retail from $500 to $3,500.wholesale channel.

Jimmy Choo

Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as men’s luxury shoes and accessory business. In addition, certain categories, such as 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 in 1996. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, as well as innovative products 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.

Michael Kors

Our Michael Kors brand was launched over 40 years ago 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 ready-to-wear 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 luxury fashion brand in the Americas and Europe with growing 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 luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The 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 ready-to-wear, and addresses the significant demand opportunity in accessible luxury goods. We have also been developing our

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men’s business in recognition of the significant opportunity afforded by the Michael Kors brand’s established fashion authority and the expanding men’s market. Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image.

Our Segments

We operate in three reportable segments as follows:

In addition to these reportable segments, 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 systems expenses, including Enterprise Resource Planning (“ERP”) system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine. The segment structure is consistent with how our chief operating decision maker plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. For additional financial information regarding our segments and corporate unallocated expenses, see Note 19 to the accompanying consolidated financial statements for additional information.

Industry

Geographic Information

We generate revenue globally through our three reportable segments, as described above. We sell our Versace, Jimmy Choo and Michael Kors products through retail and wholesale channels in three principal geographic markets: the Americas (United States, Canada and Latin America), EMEA (Europe, Middle East and Africa) and Asia (Asia and Oceania). We also have wholesale arrangements pursuant to which we sell products to geographic licensees. In addition, we have licensing agreements through which we license to third parties the use of our Versace, Jimmy Choo and Michael Kors brand names and trademarks, certain production rights and sales and/or distribution rights with respect to our brands.

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The following table details our revenue by segment and geographic location (in millions):


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020

Versace revenue - the Americas	$	408	$	201	$	186
Versace revenue - EMEA	425		276		420
Versace revenue - Asia	255		241		237
Total Versace revenue	1,088		718		843
Jimmy Choo revenue - the Americas	175		102		107
Jimmy Choo revenue - EMEA	229		146		282
Jimmy Choo revenue - Asia	209		170		166
Total Jimmy Choo revenue	613		418		555
Michael Kors revenue - the Americas	2,627		1,869		2,822
Michael Kors revenue - EMEA	835		607		821
Michael Kors revenue - Asia	491		448		510
Total Michael Kors revenue	3,953		2,924		4,153

Total revenue - the Americas	3,210		2,172		3,115
Total revenue - EMEA	1,489		1,029		1,523
Total revenue - Asia	955		859		913
Total revenue	$	5,654	$	4,060	$	5,551

Competitive Strengths

We believe that the following strengths differentiate us from our competitors:

Global Fashion Luxury Group Led by a World-Class Management Team and Renowned Designers. We are a global fashion luxury group, consisting of three iconic brands defined by fashion luxury products with a reputation for world-class design and innovation. The design leadership of our founder-designers Donatella Versace, Sandra Choi and Michael Kors is a unique advantage that we possess. Our founder-led design teams are supported by our senior management team with extensive experience across a broad range of disciplines in the retail industry, including design, sales, marketing, public relations, merchandising, real estate, supply chain and finance. With an average of 25 years of experience in the retail industry, including at a number of public companies, and an average of 19 years experience with our brands, our senior management team has strong creative and operational experience and a successful track record.

For over 20 years, Donatella Versace has been the Artistic Director, molding Versace’s iconic style. A true visionary with an intuition for how to blend fashion, design and culture, Donatella continues to honor the rich and storied Versace heritage founded in 1978, while constantly evolving and adapting the luxury house to ensure the brand’s continued relevance. Donatella’s most recent collections for Versace are a testament to her bold and fearless design vision that celebrate Versace’s Italian heritage and unapologetic glamour. Versace designs have been worn by the world’s most famous celebrities and most sought-after super models.

Jimmy Choo’s design team is led by Sandra Choi, who has been the Creative Director for the Jimmy Choo brand since its inception in 1996. Jimmy Choo products are glamourous and daring. The Jimmy Choo brand offers classic and timeless luxury products, as well as innovative products that are intended to set and lead fashion trends. Jimmy Choo’s products have a strong red carpet presence and are often worn by global celebrities.

The Michael Kors brand was launched over 40 years ago by Michael Kors, a world-renowned designer, who is responsible for conceptualizing and directing the design of our Michael Kors brand products. We believe that the Michael Kors brand name has become synonymous with luxurious fashion that is timeless and elegant, expressed through the brand’s sophisticated accessories and ready-to-wear collections. Each of our Michael Kors brand collections exemplifies the jet-set lifestyle and features high quality designs, materials and craftsmanship. Michael Kors has received a number of awards, which

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Expertise in the Accessories Category. We have strong group expertise in accessories. The strength of our Michael Kors luxury collection and our accessible luxury MICHAEL Michael Kors line have allowed us to expand our brand awareness and position Michael Kors as one of the leading global luxury brands in the accessories product categories. Capitalizing on the success of our accessories product category, we continue to further develop the accessories businesses for Jimmy Choo and Versace, bringing our accessories expertise, including our product category knowledge, our merchandising best practices and our substantial group buying power to these brands. Our goal is to increase Versace’s women’s and men’s accessories penetration from 20% of revenues in Fiscal 2022 to 50% of Versace’s revenues over time and to increase Jimmy Choo’s women’s accessories penetration from approximately 20% of revenues in Fiscal 2022 to 30% of Jimmy Choo’s revenues over the next few years and to 50% over time.

Exceptional Retail Store Footprint. Versace operates in three primary retail formats: boutiques, outlet and e-commerce. We operated 209 Versace retail stores as of April 2, 2022 in some of the most fashionable cities and the most sought-after shopping destinations around the world. During Fiscal 2022, we completed renovations at approximately 50% of our Versace retail stores to incorporate our new store design and will continue with these renovations in Fiscal 2023. Versace’s products are distributed worldwide through a global network of highly specialized stores, which average approximately 1,800 square feet. In addition, we operate Versace e-commerce sites in the United States, certain parts of Europe and China (covering 85 countries worldwide).

We operated 825 Michael Kors stores as of April 2, 2022 with four primary retail store formats: collection stores, lifestyle stores, outlet stores and e-commerce sites. Michael Kors collection stores are located in some of the world’s most prestigious shopping areas and average approximately 2,900 square feet in size. The Michael Kors lifestyle stores are located in some of the world’s most frequented metropolitan shopping locations and leading regional shopping centers, and average approximately 2,700 square feet in size. We also extend our reach to additional consumer groups through our outlet stores, which average approximately 4,400 square feet in size. In addition, we also operate Michael Kors e-commerce sites in North America, China, Japan, South Korea, certain parts of Europe, the Middle East, Africa and Oceania.

World-class Omni and CRM Capabilities. We have omni-channel capabilities from best-in-class digital platforms to state-of-the-art distribution facilities globally, which we leverage across businesses. As part of our plan to continue to implement omni-channel capabilities throughout our businesses, we have begun leveraging our distribution centers globally to serve multiple brands.

Strong Relationships with Premier Department Stores. We partner with leading wholesale customers, such as Macy’s, Saks Fifth Avenue, Bloomingdale’s and Holt Renfrew in North America, as well as Harrods, Harvey Nichols, Printemps, Selfridges and Galeries Lafayette in Europe. These relationships enable us to access large numbers of our key consumers in a targeted manner. Our “shop-in-shops” have specially trained staff, as well as customized fixtures, wall casings, decorative items, flooring and provide department store consumers with a more personalized shopping experience than traditional retail department store configurations. We have engaged with our wholesale customers on various initiatives and have continued to enter into supply chain partnerships designed to increase the speed at which our luxury fashion products reach the ultimate consumer. We plan to increase Versace’s and Jimmy Choo’s presence in certain luxury department stores, and for Michael Kors, we continue to optimize deliveries with the intent to drive more full-price sell-through in the wholesale channel.

Business Strategy

Our goal is to continue to create long-term shareholder value by increasing our revenue and profits and strengthening our global brands. We also believe that sound environmental and social policies are both ethically correct and fiscally responsible. To that end, we are committed to improving the way we work in order to better the world in which we live. We plan to achieve our business strategy by focusing on the following strategic initiatives:

Leverage group expertise and capabilities. We will continue to leverage our group expertise in accessories and footwear to fuel growth across our portfolio of brands, implementing the best practices from our Michael Kors core accessories business to our Versace and Jimmy Choo brands. We will also continue to prioritize the development of our e-commerce

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platforms and omni-channel capabilities for our brands, leveraging our broad expertise and capabilities in this area. We see a number of opportunities to create long-term operational synergies as we combine our global competencies and footprint. These synergies will be primarily focused on opportunities in our supply chain, information systems, back office support and manufacturing.

Continue to increase our presence in Asia. We plan to continue to diversify our group’s global footprint with an emphasis on the Asia market, where we believe each of our three brands continue to have the potential to significantly grow market share in the region.

Integrate Versace and continue to build on the brand’s luxury image. We plan to grow the Versace business to at least $2 billion in revenues over time. To achieve this goal, we plan to build on Versace’s iconic brand codes - Virtus, La Medusa and La Greca. Additionally, we will capitalize on Versace’s high brand awareness through bold and engaging consumer communication. We also plan to expand and elevate Versace’s distribution by accelerating e-commerce and omni-channel capabilities, increasing our global retail footprint to 300 retail stores and continuing to renovate the remainder of the store fleet. Finally, we plan to leverage our group’s expertise to expand Versace’s women’s and men’s accessories to 50% of the brand’s revenues over time, while maintaining Versace’s authoritative presence in women’s and men’s ready-to-wear.

Continue to execute on our strategies to grow the Jimmy Choo brand. We plan to continue to implement our growth strategies for Jimmy Choo with a goal of reaching $1 billion in revenues over time. Our overarching strategy is rooted in reinforcing the brand’s glamorous DNA through consumer experience and communications, as well as through product – from formal to casual, across accessories and footwear. Additionally, we plan to expand Jimmy Choo’s distribution by accelerating e-commerce and omni-channel developments and increasing our global retail footprint to 300 retail stores in the most fashionable shopping destinations around the world. We also have a significant opportunity to increase women’s accessories to approximately 50% of Jimmy Choo’s revenue over time by expanding the breadth of new collections. At the same time, we plan to continue to grow footwear sales by capitalizing on the success of glamour while expanding our fashion active and casual offerings.

Continue to leverage the strength of our Michael Kors brand, which remains the foundation for our fashion luxury group. Our goal is to continue to elevate Michael Kors to become a stronger and more profitable brand. We are capitalizing on high brand awareness and consumer engagement by embracing Michael Kors jet set heritage through a modern lens. Expanding our highly recognizable Signature pattern across all product categories remains a core growth strategy and our goal is to increase penetration to approximately 50% of our overall product assortments. In accessories, we continue to refresh and celebrate brand icons while evolving Signature styles with newness. Additionally, we plan to grow our men’s business by leading with accessories and maximizing our Signature brand codes. Our strategy to enhance customer experience by expanding our omni-channel capabilities also remains a key priority. Finally, we plan to double Michael Kors revenue in Asia over time.

Execute on our corporate social responsibility strategy. We believe that the success of our company is directly linked to the sustainability of the world around us. In April 2020, we shared Capri's group-wide, global corporate social responsibility (CSR) strategy, set around the environmental and social sustainability opportunities and challenges most important to our company and its stakeholders. Within each of our strategy’s three foundational pillars – Our World, Our Community, Our Philanthropy – are key CSR focus areas that guide our work in support of the United Nations Sustainable Development Goals (SDGs). Over the past year, we continued to improve the way we work in order to better the world in which we live. Our key sustainability goals, our plans for getting there, and an update on the progress we have made can be found in our annual CSR report located at www.capriholdings.com/responsibility. The content on this website and the content in our CSR reports are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.

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Collections and Products

Our total revenue by major product category is as follows (in millions):


	Fiscal Years Ended
	April 2, 2022		% of Total	March 27, 2021		% of Total	March 28, 2020		% of Total
Accessories	$	2,901	51.3%	$	2,158	53.2%	$	2,933	52.8%
Footwear	1,208		21.4%	796		19.6%	1,100		19.8%
Apparel	1,027		18.2%	720		17.7%	1,069		19.3%
Licensed product	241		4.3%	185		4.6%	222		4.0%
Licensing revenue	212		3.7%	155		3.8%	201		3.6%
Other	65		1.1%	46		1.1%	26		0.5%
Total revenue	$	5,654		$	4,060		$	5,551

Versace

Versace is one of the leading international fashion design houses, representing the brand’s creative vision through a wide range of products. From haute-couture, to ready-to-wear, footwear, accessories and home decor, Versace delivers a unique lifestyle that welcomes customers in its elegant yet glamorous universe. Generally, Versace’s haute couture retails up to $250,000, ready-to-wear retails from $220 to $17,000, accessories retail from $55 to $3,900 and footwear retails from $300 to $4,100.

Certain product categories, such as Versace Jeans Couture, eyewear, fragrances, jewelry, watches and home furnishings, are produced under product licensing agreements. Swinger SA is the exclusive licensee for Versace Jeans Couture, Luxottica is the exclusive licensee for Versace eyewear, EuroItalia is the exclusive licensee for Versace fragrances, Vertime is the exclusive licensee for Versace watches and Poltrona Frau is the exclusive licensee for Versace home furnishings. Generally, Versace Jeans Couture retail from $45 to $2,000, Versace eyewear retails from $240 to $500, Versace fragrances retail from $50 to $400, Versace watches retail from $480 to $3,500 and Versace home furnishings, which include a variety of products, generally retails from $990 to $100,000.

Jimmy Choo

Jimmy Choo is a leading global luxury accessories brand and offers a distinctive, glamorous and fashion-forward product range, whose core product offerings are women’s luxury shoes, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as a ~~growing~~ men’s luxury shoes and accessories business. Generally, Jimmy Choo women’s and men’s luxury shoes retail from $400 to $5,500 ~~accessories retail from $450 to $5,500~~ and ~~men’s shoes~~accessories retail from $200 to ~~$2,500.~~$4,500.

Certain product categories, such as Jimmy Choo ~~fragrances~~fragrance and eyewear, are produced under product licensing agreements. Interparfums SA is the exclusive licensee for Jimmy Choo fragrances and Safilo SpA is the exclusive licensee for Jimmy Choo eyewear. Generally, Jimmy Choo eyewear retails from $200 to ~~$500~~$550 and Jimmy Choo fragrances retail from ~~$50~~$80 to ~~$200.~~

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$220.

Michael Kors

Michael Kors has three primary collections that offer accessories, footwear and apparel: Michael Kors Collection, MICHAEL Michael Kors and Michael Kors Mens. The three primary collections and licensed products are offered through our own Michael Kors retail stores and e-commerce businesses, in department stores around the world and by our exclusive licensees to wholesale customers in addition to select retailers. The Michael Kors Collection is a sophisticated designer collection for women based on a philosophy of essential luxury and pragmatic glamour and includes accessories, primarily handbags and small leather goods, ready-to-wear and footwear. Generally, the Michael Kors Collection women’s handbags and small leather goods retail from $300 to $6,000, footwear retails from $300 to $1,500 and ready-to-wear retails from $400 to $7,500. MICHAEL Michael Kors is the accessible luxury collection and offers women’s accessories, primarily handbags and small leather goods, as well as footwear and apparel and is carried in all of the Michael Kors lifestyle stores and leading department stores around the world. MICHAEL Michael Kors offers handbags designed to meet the fashion and functional requirements of our broad and diverse consumer base. Generally, MICHAEL Michael Kors handbags retail from $200 to $750, small leather goods retail from $50 to $250, footwear retails from $50 to $300 and apparel retails from $75 to ~~$600.~~$700. Michael Kors Mens is an innovative collection of men’s ready-to-wear, accessories and footwear with a modern American style.

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Michael Kors Mens apparel generally retails from $50 to $1,000, men’s accessories generally retail from $50 to $800 and men’s footwear generally retails from ~~$200~~$150 to $400.

Certain product categories, including watches, jewelry, eyewear and fragrance, are produced under product licensing agreements. Fossil is our exclusive licensee for Michael Kors watches and jewelry, including our Michael Kors ACCESS smartwatches ~~introduced in Fiscal 2017~~ and our fine jewelry ~~line introduced in Fiscal 2019.~~line. Luxottica is our exclusive licensee for Michael Kors distinctive eyewear inspired by our collections. ~~Estée~~Estee Lauder ishas historically been Michael Kors exclusive women’s and men’s fragrance licensee. The Company is transitioning its fragrance business to EuroItalia during Fiscal 2023. Generally, Michael Kors fashion watches retail from ~~$150~~$200 to $600, Michael Kors ACCESS smartwatches retail from ~~$300~~$250 to ~~$500,~~$450, Michael Kors jewelry retails from $50 to $500, Michael Kors eyewear retails from $100 to ~~$250~~$350 and Michael Kors fragrance and related products generally retail from ~~$50~~$30 to $150.

Advertising and Marketing

Our marketing and advertising programs are designed to build brand awareness for each of our luxury houses as well as highlight our product offerings. We use a 360-degree marketing strategy for each of our brands to deliver a consistent message across each ~~brand's~~brand’s advertising communications, social media, celebrity dressing, special events and direct marketing activities at a national, regional and local level. Our campaigns are increasingly being executed through digital and social media platforms to drive further engagement with younger consumers.

Our brands introduce their new collections annually with fashion shows and other fashion events. These fashion events, in addition to celebrity red carpet dressing moments, generate extensive domestic and international media and social media coverage. The Versace and Michael Kors semi-annual runway shows and Jimmy Choo celebrity placements generate extensive media coverage. Jimmy Choo is also the leading brand in editorial coverage for women’s luxury shoes globally.

We believe our renowned brand founders, as well as our high-profile brand ambassadors and well-known social media influencers across our marketing programs ~~helps~~help expand brand awareness and drive cultural relevance.

During Fiscal 2020, Versace's Spring 2020 show celebrated the 20th anniversary of the legendary moment in fashion history when the iconic jungle print dress worn by Jennifer Lopez helped inspire Google Images' search function. To close the show, Jennifer Lopez wore a re-imagined version of the tropical print dress she wore to the 2000 Grammys. The reviews, press coverage and social media generated from the show continue to expand the global reach of Versace. Kaia Gerber continues to be the face of Jimmy Choo. With her timeless beauty and fashion pedigree, Kaia’s authenticity transcends generations and is the perfect representation of the dynamic energy of the Jimmy Choo brand. Bella Hadid remains the face of MICHAEL Michael Kors. Bella accentuates the lifestyle, attitude and mood that is quintessentially jet-set. The imagery reflects the speed, energy and optimism that are the hallmarks of our Company.

In Fiscal ~~2020,~~2022, we recognized approximately ~~$201~~$329 million in advertising and marketing expenses globally. We engage in a wide range of integrated marketing programs across various marketing channels, including but not limited to email marketing, print advertising, outdoor advertising, digital marketing, social media, public relations outreach, visual merchandising and partnership marketing, in an effort to engage our existing and potential customer base and ultimately stimulate sales in a consumer-preferred shopping venue.

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Our growing e-commerce businesses provide us with an opportunity to increase the size of our customer database and to communicate with our consumers to increase online and physical store sales, as well as to continue to build global brand awareness for our brands. We are continuously improving the functionalities and features on our e-commerce sites to create innovative ways to keep our brands at the forefront of consumers’ minds by offering a broad selection of products, including accessories, apparel and footwear. Since e-commerce growth is critical to our overall growth strategy, we plan to accelerate Versace’s and Jimmy Choo’s e-commerce and omni-channel development ~~while continuing~~and we are also in the process of re-platforming our brands’ e-commerce sites to ~~work with select~~expand our global capabilities. See Item 1A. “Risk Factors” — “If we are unable to effectively execute our e-commerce ~~partners.~~business and provide a reliable digital experience for our customers, our reputation and operating results may be harmed.”

Manufacturing and Sourcing

We generally contract for the purchase of finished goods principally with independent third-party manufacturing contractors, whereby the manufacturing contractor is generally responsible for the entire manufacturing process, including the purchase of piece goods and trim for our Jimmy Choo and Michael Kors brands. For the Versace brand, some of the piece goods and trim are separately purchased by Versace and provided to the manufacturers, and some are sourced directly by the manufacturers, as further described below.

Versace has a centrally managed production model for the majority of its products, and buys raw materials and components for these products. All raw materials arrive in a central warehouse in Novara, Italy and are distributed to independent third-party manufacturing contractors after the quality control process is complete. The vast majority of Versace’s production is located in Italy. The remaining production occurs ~~in Tunisia,~~ elsewhere in Europe and a small portion is produced in ~~Asia.~~Asia or North Africa.

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Jimmy Choo products are ~~also~~ manufactured by independent third-party manufacturing ~~contractors.~~contractors and our Italian atelier and shoe manufacturer. Most of Jimmy Choo’s products are produced by specialists in Italy, supported by other factories across Europe, with a small portion produced in Asia. Jimmy Choo has a product development facility in Florence. ~~During Fiscal 2020, we acquired Italian atelier and shoe manufacturer Alberto Gozzi S.r.L.~~ In ~~the immediate future, the factory will primarily develop and produce shoes for Jimmy Choo.~~addition to purchasing finished goods, Jimmy Choo ~~typically~~also purchases ~~finished goods and does not purchase~~ raw materials ~~except~~ for both product development and manufacturing purposes.

Michael Kors contracts for the purchase of finished goods principally with independent third-party manufacturing contractors that are generally responsible for the entire manufacturing process, including the purchase of piece goods and trim. Product manufacturing for the Michael Kors brand is allocated among third-party ~~agents~~manufacturing contractors based on their capabilities, the availability of production capacity, pricing and delivery. For certain product categories, Michael Kors also has relationships with various agents who source finished goods with numerous manufacturing contractors on its behalf. This multi-supplier strategy provides ~~specialist~~specialized skills, scalability, flexibility and speed to market, as well as diversifies risk. In Fiscal ~~2020~~2022 and Fiscal ~~2019,~~2021, one third-party buying agent sourced approximately ~~26% and~~ 24% of Michael Kors finished goods purchases, ~~respectively,~~ based on unit volume. Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for ~~over 10~~approximately 20 years, accounted for the production of approximately ~~20%~~17% of its finished products, based on dollar volume in Fiscal ~~2020.~~2022. Nearly all of our Michael Kors products were produced in Asia in Fiscal ~~2020.~~2022.

The manufacturing contractors ~~and agents~~ for our brands operate under the close supervision of our global manufacturing divisions and buying agents located in North America, Europe and Asia. All products are produced according to our specifications. Production staff monitors manufacturing at supplier facilities in order to correct problems prior to shipment of the final product. Quality assurance is focused on as early as possible in the production process, allowing merchandise to be received at the distribution facilities and shipped to customers with minimal interruption. See “Import Restrictions and Other Governmental Regulations” and Item 1A. ~~—“Risk~~“Risk Factors” — “We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods, which poses legal, regulatory, political and economic risks to our business operations.”

Our future manufacturing and sourcing strategy includes ~~creating a manufacturing center of excellence in Italy, as well as~~ purchasing luxury manufacturing facilities in Italy to support all of our brands, ~~to secure~~pursuing manufacturing synergies across brands and securing capacity and ~~improve~~improving our expertise in development and delivery. While the fashion design process will remain independently managed by each of our brands, we believe that ~~creating a~~in-sourcing luxury manufacturing ~~center of excellence, which would combine all functions that support our design teams, from leather and hardware purchases to investment in machinery and systems,~~capacity will create synergies and ~~efficiencies~~support expansion for our global fashion luxury group.

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Distribution

Versace owns a central warehouse in Novara, Italy, managed by a third party, which acts as a global hub for Versace’s primary operations. Versace also has a leased warehouse near Novara operated by the same third party, which serves as a distribution point for other Versace lines. From these warehouses, products are shipped to regional warehouses that are operated by third parties in New Jersey, Hong Kong, ~~Beijing~~Mainland China and ~~Tokyo,~~Japan, and supports the Versace retail and e-commerce businesses. ~~The e-commerce~~E-commerce distribution for the ~~other regions~~United States market is conducted through third party providers in ~~Columbus, Ohio and Beijing, China.~~New Jersey. Versace’s wholesale business is mainly serviced from three central warehouses located in Italy, the United States and Japan.

Jimmy ~~Choo's~~Choo’s primary distribution facility is our Company-owned and operated distribution facility in ~~Switzerland.~~the Netherlands. From there, products are shipped to regional warehouses in the United ~~Kingdom, the United~~ States, Canada, Mainland China, Hong Kong, South Korea, Japan and United Arab Emirates, largely supporting the Jimmy Choo retail and e-commerce businesses. Shipments to wholesale customers globally are made from ~~Switzerland~~the Netherlands and the United States, with some further local fulfillment. All of the distribution facilities utilized by Jimmy Choo are operated by third parties and are shared with other ~~businesses.~~unaffiliated businesses with the exception of our distribution facility in the Netherlands. This flexible method reinforces the speed and efficiency of the supply chain and allows the business to deliver Jimmy Choo product and collections to market rapidly and in line with the industry’s fashion calendar.

Michael Kors primary distribution facility in the United States is ~~the~~a leased facility in Whittier, California, which is directly operated and services our Michael Kors retail stores, e-commerce site and wholesale operations in the United States. We also engage in omni-channel order fulfillment by filling online orders through our Michael Kors retail stores and through our click-and-collect service offerings. Our primary Michael Kors distribution facility in Europe is our Company-owned and operated distribution facility in the Netherlands, which supports our European operations for our Michael Kors brand, including our European e-commerce sites. We also have a regional Michael Kors distribution ~~centers~~center in ~~New Jersey and~~ Canada, which ~~are~~is leased, as well as regional Michael Kors distribution centers in New Jersey, Mainland China, Hong Kong, Japan, South Korea and Taiwan, which are operated by third-parties.

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Intellectual Property

We own VERSACE, JIMMY CHOO and MICHAEL KORS trademarks, as well as other material trademarks, copyrights, design and patent rights related to the production, marketing and distribution of our products, both in the United States and in other countries in which our products are principally sold. We also have applications pending for a variety of related trademarks, copyrights, designs and patents in various countries throughout the world. As ~~our~~the worldwide usage of our material trademarks, copyrights, designs and patents continue to expand, we continue to strategically apply to register them in key countries where they are used. We expect that our material intellectual property will remain in full force and effect for as long as we continue to use and renew them.

We aggressively police our intellectual property and pursue infringers both domestically and internationally. In addition, we pursue counterfeiters in the United States, Europe, the Middle East, Asia and elsewhere in the world in both online and offline channels, working with our network of customs authorities, law enforcement, legal representatives and brand specialists around the world as well as involvement with industry associations and anti-counterfeiting organizations.

Information Systems

Each of our three brands currently operates using their legacy systems for finance and accounting, supply chain, inventory control, point-of-sale transactions, store replenishment and other functions. Our long-term strategy includes consolidating certain systems across our brands over time to create operational ~~efficiencies, as well as to achieve a common platform across the Company.~~efficiencies. During Fiscal 2020, we embarked on a multi-year ERP implementation to conform ~~the majority of our~~various processes onto one global system that would support certain finance, accounting and ~~accounting, procurement, inventory control, and store replenishment.~~operational functions. The implementation of the ERP ~~required~~requires a significant investment in human and financial resources. As a result of COVID-19 and our need to significantly reduce our capital expenditures in order to protect our liquidity and cash flows, we temporarily suspended our ERP project. Certain phases of the project have resumed as of the fourth quarter of Fiscal 2021 and a portion of the system will go live in Fiscal 2023. See Item 1A. “Risk Factors” -— “A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.”

Human Capital Management

12At Capri Holdings, we strive to create workplaces where our employees and the workers across our supply chain thrive. Through our benefits packages, learning and development programs, focus on diversity and inclusion, wellness programs and supply chain empowerment initiatives, we continue to make significant investments in our Capri community.

~~Table~~Governance and Oversight.Our Board of ~~Contents~~Directors has delegated oversight of matters relating to human capital management, including compensation, learning and development and diversity and inclusion to our Compensation and Talent Committee.Our Compensation and Talent Committee receives regular updates on our talent development strategies and other applicable areas of human capital management.

~~Employees~~

Employee Profile.At the end of Fiscal ~~2020, 2019~~2022, 2021 and ~~2018,~~2020, we had approximately ~~17,006, 17,797~~14,600, 13,800 and ~~14,846~~17,000 total employees, respectively. As of ~~March 28, 2020,~~April 2, 2022, we had approximately ~~10,834~~9,700 full-time employees and approximately ~~6,172~~4,900 part-time employees. Approximately ~~13,137~~11,000 of our employees were engaged in retail selling and administrative positions and our remaining employees were engaged in other aspects of our business as of ~~March 28, 2020.~~April 2, 2022. As of ~~March 28, 2020,~~April 2, 2022, we have ~~1,424~~approximately 2,600 employees covered by collective bargaining agreements in certain European countries. We consider our relations with both our union and non-union employees to be good.

Benefits and Compensation. We maintain comprehensive benefits and compensation packages to attract, retain and recognize our employees. Our health and welfare benefit program is designed to provide a wide range of benefits to meet the health care, financial, work/life and mental wellbeing needs of eligible employees. Benefits include, among others, medical, dental and vision plans, life insurance, short and long-term disability coverage, retirement plans (with matching contributions where applicable), paid parental leave for all parents, gender reassignment coverage and fertility support benefits in the United States, and a wellness program focused on mental wellbeing, including several digital therapeutic programs to assist with therapy, anxiety and worry and sleep. We also offer employees paid time off, including to volunteer with select charitable organizations, to get the COVID-19 vaccine and to quarantine in accordance with government or health organization recommended quarantine guidelines (in addition to any COVID-19 mandated paid sick leave at the federal, state, or local level). Employees are also entitled to discounts on our merchandise.

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Learning and Development. We honor our employees through our dedication to development. In 2022, we launched a new leadership development program for our mid-level management centered around the facets of Emotional Intelligence, to help our employees succeed in our changed and everchanging global environment. Additionally, we have implemented a new Learning Management System (LMS), which has allowed us to extend access to development resources to an even broader employee population. Dating back to the program’s inception in 2015, a majority of our senior leaders have participated in an executive leadership development program offered in partnership with the Center for Creative Leadership, and more than 800 of our people managers have participated in leadership development programs. These programs are aimed at equipping our leaders with strategies to effectively navigate and drive change, and to build and strengthen cross-functional relationships. All full-time employees also participate in a formal performance review process annually, and receive annual trainings on important topics including compliance, ethics and integrity, respect in the workplace and information security as a part of our efforts to maintain a safe, positive and inclusive work environment.

To build on the diversity and inclusion trainings that we implemented in Fiscal 2021 to address unconscious bias, microaggressions and workplace diversity, sensitivity, and inclusion, in Fiscal 2022 we added Diversity & Inclusion training workshops for our senior leaders to attend live with peers across all functions of the organization.

Diversity and Inclusion. Diversity and inclusion are embedded in our DNA. We foster an inclusive environment where employees, vendors and customers of diverse backgrounds are respected, valued and celebrated. We are proud of our commitment to diversity, equality and inclusion, and will continue to advance these principles through meaningful short and long term actions across the globe. Our commitment to diversity and inclusion is supported by three pillars:

Capri Culture - Our commitment to diversity extends beyond representation. We aim to build an inclusive space where all employees have the opportunity to realize their full potential and excel, while contributing to our success in a meaningful way.

Capri Talent - Differences in ideas and experiences allow our Company to thrive. We are attracting, advancing and advocating for a workforce that reflects the diversity of the world around us.

Capri Community - Through diversity and inclusion comes understanding and strength. Our responsibility to promote equality is not just to those who work with us, but to our industry, the customers we serve and the communities around us.

In Fiscal 2022, we continued our commitment to fostering a diverse and inclusive workplace. We launched our Ambassador Program with 43 active members. Our Diversity and Inclusion (“D&I”) ambassadors act as additional D&I champions that will help communicate, promote, and cascade D&I goals and initiatives to our Capri Community. In addition, we submitted data to the Human Rights Campaign’s Corporate Equality Index, a United States benchmarking tool measuring policies, practices and benefits pertinent to LGBTQ+ employees, and scored an 90 out of 100 earning a Best Place to Work for LGBTQ+ Equality designation. We also signed the Black In Fashion Council’s pledge to raise the percentage of Black employees in executive- and junior-level positions within our organization. Capri is also proud to partner with a wide array of organizations and pledges in furtherance of driving equality, including: The CEO Action for Diversity & Inclusion, Cristo Rey, Open To All, and Pride in Fashion. Finally, Capri launched its first employee resource group focused on the LGBTQ+ community within Capri, Pride@Capri.

Through The Capri Holdings Foundation for the Advancement in Diversity in Fashion, we are driving diversity, inclusion and equality throughout the fashion industry by working collaboratively with colleges and high schools to create meaningful opportunities in fashion for underrepresented communities. In Fiscal 2022, the Foundation announced an expansive new scholarship program in partnership with the Fashion Institute of Technology (FIT), Howard University, PENSOLE Academy and Central Saint Martins – University of the Arts London. Over the next four years, the Foundation will fund scholarships for nearly 100 students from historically underrepresented communities pursuing degrees in fashion and merchandising across these four educational institutions.

Well-being and Safety. Everyone working on behalf of our Company is entitled to work in a safe environment while maintaining their health and well-being. Capri’s global safe workplace program, which includes employee traveler and emergency response alerts, raises awareness and provides safety resources tailored for workers in different work environments – from our distribution centers to our retail stores. In addition, as we continue to navigate the COVID-19 pandemic, we continue to prioritize the safety of our employees and our customers and to do our part to help stop the spread within our communities. We enhanced health and safety protocols at our retail stores, distribution centers and corporate offices, adhered to social distancing measures and provided contact-free shopping opportunities when safe to do so. As the landscape of this pandemic evolves, we continue to adapt and enforce safety protocols at our retail stores, distribution centers and corporate offices. The COVID-19 pandemic also changed the way we work with many of our corporate employees working remotely

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during the pandemic. While we have welcomed employees back to work, we continue to explore flexible work options and have implemented a hybrid working environment. Beyond the threat COVID-19 has posed to physical health and the way we work, we also recognize the significant impact the pandemic has had on our employees’ overall well-being. We have significantly expanded our Thrive global wellness program, designed to inspire employees to improve their physical, emotional, and financial well-being.

Supply Chain Empowerment. Our community extends beyond our direct employees and our corporate social responsibility program drives us toward greater engagement with our suppliers. We are dedicated to conducting our operations throughout the world on principles of ethical business practice and recognition of the dignity of workers. Through our Code of Conduct for Business Partners and Factory Social Compliance Program, we partner with our suppliers on important human rights, health and safety, environmental and compliance issues. Capri is also signatory to the UN Women’s Empowerment Principles, and partnered with the Fashion Makes Change campaign to support the empowerment and education of women in the fashion supply chain.

Competition

We face intense competition in the product lines and markets in which we operate from both existing and new competitors. Our products compete with other branded products within their product category. In varying degrees, depending on the product category involved, we compete on the basis of style, price, customer service, quality, brand prestige and recognition, among ~~other bases.~~others. In our wholesale business, we compete with numerous manufacturers, importers and distributors of products like ours for the limited space available for product display. Moreover, the general availability of manufacturing contractors allows new entrants easy access to the markets in which we compete, which may increase the number of our competitors and adversely affect our competitive position and our business. We believe, however, that we have significant competitive advantages because of the recognition of our brands and the acceptance of our brands by consumers. See Item 1A. “Risk Factors” — “The markets in which we operate are highly competitive, both within North America and internationally, and increased competition based on a number of factors could cause our profitability and/or gross margins to decline.”

Seasonality

We experience certain effects of seasonality with respect to our business. We generally experience greater sales during our third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during our first fiscal quarter.

Import Restrictions and Other Governmental Regulations

Virtually all of our imported products are subject to duties which may impact the costs of such products. In addition, countries to which we ship our products may impose safeguard quotas to limit the quantity of products that may be imported. We ~~rely on~~utilize free trade agreements and other supply chain initiatives in order to maximize efficiencies and cost savings relating to product importation. ~~On May 10, 2019,~~For example, we have historically received benefits from duty-free imports on certain products from certain countries pursuant to the United ~~States~~States. Generalized System of Preferences (“~~U.S.”~~GSP”) ~~increased~~program. The GSP program expired on December 31, 2020. If the ~~sanction tariffs rate~~GSP program is not renewed or otherwise made retroactive, we will continue to experience significant additional duties and our gross margin will continue to be negatively impacted. Additionally, we are subject to government regulations relating to importation activities, including related to United States. Customs and Border Protection (“CBP”) withhold release orders. The imposition of taxes, duties and quotas, the withdrawal from ~~10%~~or material modification to ~~25%~~trade agreements and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on ~~$200 billion~~our business, results of ~~imports of select product categories (Tranche 3), which includes handbags~~operations and ~~travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect.~~financial condition. If additional tariffs or trade restrictions are implemented by the ~~U.S.~~United States or other countries, the cost of our products could increase which could adversely affect our results of operations and financial condition. Additionally, we are subject to government regulations relating to ~~both importation activities and~~ product labeling, testing and safety. We maintain a global customs and product compliance organization to help manage our import and related regulatory activity.

Corporate Social Responsibility (“CSR”)

In April 2020, we ~~released our first~~shared Capri's group-wide, ~~corporate social responsibility strategy. The report builds upon~~global CSR strategy, set around the ~~initiatives that each of our brands has already been working on, and outlines our global strategy to achieve significant, measurable goals across a range of important~~ environmental and social sustainability ~~issues, including material sourcing, greenhouse gas emissions, water use, waste reduction,~~opportunities and challenges most important to our company and its stakeholders relating to environmental sustainability and climate change, human rights, diversity and inclusion, and ~~philanthropic giving. See “Business Strategy” - “Execute on our corporate social responsibility strategy.”~~

philanthropy. Our ~~company’s corporate social responsibility~~CSR strategy is divided into three ~~areas:~~foundational pillars:

•Our World – ~~focused on actions across our operations and supply chain, meant to significantly reduce our environmental impact.~~

•~~Our Community~~ ~~– fostering a supportive, healthy, diverse and inclusive workplace for all~~We believe that the success of our ~~employees.~~

•Company is directly linked to the sustainability of the world around us. Our ~~Philanthropy~~ ~~– connecting~~brands strive to create the ~~talents, energy~~highest quality luxury products with longevity and ~~success of each of our brands to those~~sustainability in ~~need around the world.~~

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~~In arriving at~~mind. We endeavor to operate responsibly in order to lower our impact on the ~~goals~~planet.

•Our Community – We believe we have a responsibility to those who work with us. Our Company strives to create inclusive workplaces where all of our employees are empowered and ~~objectives described~~respected. We are committed to creating meaningful opportunities for our diverse Capri community to grow.

•Our Philanthropy – Giving back is embedded in Capri’s culture. We are dedicated to supporting and driving positive change in the communities where we live and work.

Within each of our ~~report, we looked to~~three foundational pillars are key CSR focus areas that guide our work in support of the United Nations Sustainable Development Goals (SDGs).

Our sustainability governance model includes a multi-level structure to ensure our Board of Directors, executive management team and business leaders across our brands are aligned on the most important ESG risks and opportunities for ~~insight,~~Capri. The Board has delegated oversight of ESG activities to the Governance, Nominating and ~~also~~CSR Committee. On at least an annual basis, our sustainability goals and action plans are presented to ~~align ourselves effectively~~the Governance, Nominating and CSR Committee for review and approval, along with CSR progress updates which are presented quarterly.

Additional information can be found at www.capriholdings.com/responsibility. The content on this website and the content in our CSR reports are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the ~~work being done~~SEC.

Available Information

Our investor website can be accessed at www.capriholdings.com. The content of our website is not incorporated by ~~governments, individuals~~reference into this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and ~~companies around the world. We are committed~~Current Reports on Form 8-K filed with or furnished to the ~~goals outlined in our global corporate social responsibility strategy and~~SEC pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, are ~~taking a number~~available free of ~~actions in furtherance of these objectives including endorsing pledges and joining industry groups that align with our strategy.~~

~~A copy of our Corporate Social Responsibility report is available~~charge on our website under the caption “Financials” and then “SEC Filings” promptly after we electronically file such materials with, or furnish such materials to, the SEC. No information contained on our website is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K. Information relating to corporate governance at our Company, including our Corporate Governance Guidelines, our Code of Business Conduct and Ethics for all directors, officers, and employees, and information concerning our directors, Committees of the Board, including Committee charters, and transactions in Company securities by directors and executive officers, is available at our website under the captions “Governance” and “Financials” and then “SEC Filings.” Paper copies of these filings and corporate governance documents are available to shareholders free of charge by written request to Investor Relations, Capri Holdings Limited, 33 Kingsway, London, United Kingdom, WC2B 6UF. Documents filed with the SEC are also available on the SEC’s website at ~~www.capriholdings.com/csr~~www.sec.gov.

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Item 1A. Risk Factors

You should carefully read this entire report, including, without limitation, the following risk factors and the section of this annual report entitled “Note Regarding Forward-Looking Statements.” Any of the following factors could materially adversely affect our business, results of operations and financial condition. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also materially adversely affect our business, results of operations and financial condition. Risks are listed in the categories where they primarily apply, but other categories may also apply.

Risks Related to Macroeconomic Conditions

The COVID-19 pandemic ~~could~~may continue to have a material adverse effect on our business and results of operations.

The ongoing COVID-19 pandemic has caused ~~and is likely to continue causing~~ significant disruption to the global economy, to consumer spending and behavior, tourism and to financial ~~markets, and could have a material adverse effect on~~markets. While the overall COVID-19 situation appears to be improving, our business and ~~financial results. The~~operating results may be negatively impacted if the virus worsens or mutates, if vaccination efforts are unsuccessful and/or if regions or countries take further actions to contain the virus (including additional extended lock-downs and travel restrictions), among others. We continue to monitor the latest developments regarding the pandemic and have made certain assumptions about the pandemic for purposes of our business and operating results, including assumptions regarding the duration, severity and global macroeconomic impacts of the pandemic; however, the full extent of the impact of COVID-19 on our business and operating results ~~cannot be predicted with certainty, and~~ will depend largely on future events outside of our control, including the duration and severity of the pandemic and ~~other future events outside~~the success of ~~our control.~~ vaccination efforts, new information concerning the virus or variants of the virus, actions different states, regions or countries may take to contain the virus (including extended lock-downs and travel restrictions) and the economic impacts of the pandemic, including recent inflationary pressures, among others.

As a result of the COVID-19 pandemic, and in response to government orders and proactive decisions we have made to protect the health and safety of our employees, consumers and communities, at various points during the course of the pandemic, we temporarily closed almost all of our retail stores globally and we furloughed all of our retail store employees in North America and many of our retail personnel elsewhere for an extended period of time. WeWhile most of our stores have reopened, we may face new, longer term store closure requirements and other operational restrictions with respect to some or all of our retail stores in the ~~future, and~~future. In addition, government restrictions and health and safety measures (including social distancing protocols) may prevent us from opening or limit our ability to fully operate in the ordinary course, which could materially impact our financial results. In addition, we have experienced scattered temporary store closings due to increased levels of retail associate absences and/or labor shortages. We ~~have~~ also ~~closed many of~~recently reopened our corporate offices ~~globally~~ and have implemented a ~~work-from-home~~hybrid work policy for many of our corporate employees and determined that some corporate functions may remain fully remote, which may also negatively affect productivity in, or otherwise result in disruptions to, parts of our business.

As a result of ~~store closures and reduced consumer traffic caused by~~the impact of the ongoing COVID-19 pandemic, many of our wholesale customers have experienced, and may continue to experience, liquidity constraints or other financial difficulties, causing a reduction in the amount of merchandise purchased from us and our product licensing partners, an increase in order cancellations and/or the need to extend payment terms. Any or all of these measures could substantially reduce our revenue and have a material adverse effect on our profitability. In addition, these actions could lead to larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increases in ~~bad debt expense,~~credit losses and reduced cash flows.

Furthermore, the pandemic has impacted and continues to impact our supply chain ~~may also be significantly negatively affected if the~~partners, including factories that produce our product, the distribution centers that manage and ship our inventory, ~~or the operations of our third-party~~ logistics providers and other service providers ~~are disrupted, closed or experience worker shortages, which may result in disruptions and delays in product shipments.~~

~~In light of our retail store closures in response to government orders, mandates, guidelines and recommendations limiting business operations due to the COVID-19 pandemic,~~ as well as ~~decisions by many~~the supply chains of our licensees. The current vessel container and other transportation shortages, labor shortages and port congestion globally, as well as disruptions in factory production in certain countries where we source our products has delayed, and is expected to continue to delay, inventory orders and impact product availability in our retail stores and through our e-commerce businesses as well as to our wholesale customers. As a result of these supply chain disruptions, our inventory levels and net revenue have been impacted and could continue to be impacted in future periods. We have also incurred, and expect to continue to incur, higher freight and other logistics costs, including increased carrier rates for ocean and air shipments, and the supply chain disruptions have caused us to increase our use of air freight with greater frequency than in the past. We are also experiencing negative impacts to the pricing of certain components of our products as a result of the retail centers in which we operate to close shopping centers, we are taking certain actions with respect to our lease obligations, including discontinuing rent payments, negotiating with landlords for rent abatement or other rent relief and terminating certain leases, which may subjectongoing COVID-19 pandemic. These higher costs have caused us to ~~legal, reputational~~increase prices and ~~financial risks. We~~we may ~~also take~~need to increase prices further ~~actions with respect to our lease obligations~~ in the ~~future, which may not~~future. There can be ~~successful.~~no assurance that consumers will accept these price increases or that the price increases will be sufficient to offset our higher costs.

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In addition, ~~we expect that~~ traffic to our retail stores (and ~~the retail stores of~~ department stores and other third-party retailers that sell our products) ~~as they reopen will~~may be adversely affected by the ongoing COVID-19 ~~pandemic as consumers may be concerned about becoming ill if they travel to physical retail locations. We further expect that consumer spending will be negatively affected by~~pandemic. General macroeconomic conditions resulting from the COVID-19 pandemic, including impacts of a ~~continued high unemployment rate and an economic~~ recession ~~which~~or inflationary pressures may negatively impact sales in our physical retail stores, through our e-commerce business and to third-party wholesale accounts. Any significant disruption in consumer traffic, consumer behavior and/or consumer spending at our retail stores, on our e-commerce sites and/or at third-party wholesale accounts following the pandemic would result in a decrease in sales and profits and otherwise materially impact our business and financial performance.

~~COVID-19 may also~~Any or all of the foregoing could have a material adverse effect on our ~~liquidity~~business results and ~~cash flows.~~operations.

The accessories, footwear and apparel industries are heavily influenced by general macroeconomic cycles that affect consumer spending and a prolonged period of depressed consumer spending could have a material adverse effect on our business, results of operations and financial condition.

Our business is affected by global economic conditions and the related impact on levels of consumer spending worldwide. Factors that may negatively influence consumer spending include, but are not limited to, high levels of unemployment, pandemics (such as the ongoing COVID-19 pandemic), extreme weather conditions and natural disasters, high consumer debt levels, inflationary pressures, war and global geopolitical instability (including the current war in Ukraine and related economic and other sanctions levied by the United States, European Union and others), reductions in net worth based on market declines and uncertainty, home prices, fluctuating interest and foreign currency rates and credit availability, higher fuel and energy costs, fluctuating commodity prices, taxation, political conditions and general uncertainty regarding the overall future economic environment. Purchases of discretionary luxury items, such as the accessories, footwear and apparel that we produce, tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Reduced consumer confidence and adversely impacted consumer spending patterns due to deteriorating economic conditions or geopolitical instability in any of the regions in which we operate could reduce consumer confidence, negatively impact consumer spending patterns and adversely affect our sales and results of operations.

Risks Related to Our Business

We face risks associated with operating globally and our strategy to continue to expand internationally.

We operate on a global basis, with approximately 47% of our total revenue from operations outside of the United States during Fiscal 2022. As a result, we are subject to the risks of doing business internationally, including:

•political or civil unrest, including protests and other civil disruption;

•unforeseen public health crises, such as pandemic and epidemic diseases, including the ongoing COVID-19 pandemic and any variants thereof;

•economic instability and unsettled regional and global conflicts (such as the current war in Ukraine), which may negatively affect consumer spending by foreign tourists and local consumers in the various regions where we operate;

•laws, regulations and policies of foreign governments (including sanctions and retaliatory actions by the United States, European Union and others);

•potential negative consequences from changes in taxation policies;

•natural disasters or other extreme weather events, including those attributed to climate change; and

•acts of terrorism, military actions or other conditions over which we have no control.

In addition, our current business strategies include pursuing selective international expansion in a number of countries around the world and through a number of channels. If our international expansion plans are unsuccessful, it could have a material adverse effect on our business, ~~does~~results of operations and financial condition. There are also some countries where we do not ~~generate sufficient~~yet have significant operating experience, and in most of these countries we face established competitors with significantly more operating experience in those locations.

We also sell our products at varying retail price points based on geographic location that yield different gross profit margins and we achieve different operating profit margins, depending on geographic region, due to a variety of factors including product mix, store size, occupancy costs, labor costs and retail pricing. Changes in any one or more of these factors could result in lower revenues, increased costs, and negatively impact our business, results of operations and financial condition. Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries

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and, as a result, sales of our product may not be successful, or the gross margins on those sales may not be in line with those we currently anticipate.

There can be no assurance that any or all of these events will not have a material adverse effect on our business, results of operations and financial condition.

Our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments.

As a company engaged in sourcing on a global scale, we are subject to the risks inherent in such activities, including, but not limited to:

•disease pandemics, epidemics and health-related concerns, including related to COVID-19 or variants thereof;

•political or labor instability, labor shortages (stemming from labor disputes or otherwise), or increases in costs of labor or production in countries where manufacturing contractors and suppliers are located;

•labor disputes or strikes at the location of the source of our goods and/or at ports of entry;

•disruptions, delays or reductions in shipments, including port delays and congestion, and/or capacity constraints on transportation of goods or at our factories due to COVID-19 or otherwise;

•significant increase in freight, shipping and other logistics costs, including as a result of disruptions at ports of entry;

•political or military conflict (such as the current war in Ukraine);

•heightened terrorism security concerns;

•a significant decrease in availability or an increase in the cost of raw materials or other limitations on our ability to use raw materials or goods produced in a country that is a major provider due to political, human rights, labor, environmental or other concerns;

•the migration and development of manufacturing contractors;

•product quality issues;

•imposition of regulations, quotas and safeguards relating to imports and our ability to adjust in a timely manner to changes in trade regulations;

•increases in the costs of fuel (including volatility in the price of oil), travel and transportation (including vessel and freight);

•imposition of duties, taxes and other charges on imports;

•significant fluctuation of the value of the United States dollar against foreign currencies;

•restrictions on transfers of funds out of countries where our foreign licensees are located;

•compliance by our independent manufacturers and suppliers with our Supplier Code of Conduct and other applicable compliance policies;

•compliance with United States laws regarding the identification and reporting on the use of “conflict minerals” sourced from the Democratic Republic of the Congo in the Company’s products and the United States Foreign Corrupt Practices Act, U.K. Bribery Act and other global anti-corruption laws, as applicable; and

•regulation or prohibition of the transaction of business with specific individuals or entities and their affiliates or goods manufactured in certain regions, such as the listing of a person or entity as a SDN (Specially Designated Nationals and Blocked Persons) by the United States Department of the Treasury’s Office of Foreign Assets Control and the issuance of withhold release orders by CBP.

Any of the foregoing could materially and adversely affect our ability to produce or deliver our products and, as a result, have a material adverse effect on our business, financial condition and results of operations.

Our retail stores are heavily dependent on the ability and desire of consumers to travel and shop and a decline in consumer traffic could have a negative effect on our comparable store sales and store profitability resulting in impairment charges, which could have a material adverse effect on our business, results of operations and financial condition.

Reduced travel resulting from economic conditions, fuel shortages, increased fuel prices, travel restrictions, travel concerns and other circumstances, including adverse weather conditions, disease pandemics (including COVID-19), epidemics and other health-related concerns, war, terrorist attacks or the perceived threat of war or terrorist attacks, or unsettled regional

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and global conflicts (such as the current war in Ukraine) could have a material adverse effect on us, particularly if such events impact our customers’ desire to travel to our retail stores.

In addition, other factors that could impact the success of our retail stores include: (i) the location of the mall or the location of a particular store within the mall; (ii) the other tenants occupying space at the mall; (iii) vacancies within the mall; (iv) stores and malls having to re-close due to personnel or customer illness or further government restrictions; (v) increased competition in areas where the malls are located; (vi) the amount of advertising and promotional dollars spent on attracting consumers to the malls; and (vii) a shift toward online shopping. A decline in consumer traffic could have a negative effect on our comparable store sales and/or average sales per square foot and store profitability. If our retail stores underperform due to declining consumer traffic or otherwise and our expected future cash flows ~~from operating activities,~~of the related underlying retail store asset do not exceed such asset’s carrying value, we may incur store impairment charges. A decline in future comparable store sales and/or store profitability or failure to meet market expectations or the occurrence of impairment charges relating to our retail store fleet could have a material adverse effect on our business, results of operations and ~~sufficient funds are not otherwise available~~financial condition.

Recent changes in our executive management team, the departure of key employees or our failure to ~~us from borrowings under~~attract and retain qualified personnel could have a material adverse effect on our ~~credit facility or~~business.

As we announced on March 7, 2022, Mr. Joshua Schulman, Chief Executive Officer of Michael Kors and expected successor Chief Executive Officer to Mr. John Idol at Capri Holdings, left the Company and Mr. Idol agreed to remain as Chairman and Chief Executive Officer. We depend on the services and management experience of executive officers who have substantial experience and expertise in our business as well as key employees involved in our design and marketing operations, including our creative officers for each of our brands, Ms. Donatella Versace, Ms. Sandra Choi and Mr. Michael Kors. Although we have entered into employment agreements with our executive officers and other ~~sources,~~key employees, we may not be able to ~~cover~~retain the services of such individuals in the future, which may be disruptive to, or cause uncertainty in, our ~~expenses, fund our other liquidity~~business and ~~working capital needs,~~future strategic direction, particularly if we fail to ensure a smooth transition and effective transfer of knowledge. Any such disruption or ~~execute~~uncertainty could generate a negative public perception and/or have a material adverse impact on our ~~strategic initiatives which could significantly harm~~results of operations, financial condition, and the market price of our ~~business. Our insurance costs may also increase substantially~~ordinary shares.

Competition for qualified personnel in the ~~future~~fashion industry is intense and turnover in the industry for retail associates is generally high and has only been exacerbated by the ongoing COVID-19 pandemic. Competitors may use aggressive tactics to recruit our employees. Our ability to attract, develop, motivate and retain employees is influenced by our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates. Additionally, our ability to meet our labor needs while also controlling costs is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and overtime regulations. If we are unable to attract, develop, motivate and retain talented employees with the necessary skills and experience, or if changes to our organizational structure, operating results, or business model, including as a result of the ongoing COVID-19 ~~pandemic.~~pandemic, adversely affect morale, hiring and/or retention, we may not achieve our objectives and our results of operations could be adversely impacted.

The long-term growth of our business depends on the successful execution of our strategic initiatives.

As part of our long-term strategy, we intend to grow our market share and revenue through the following initiatives:

•trendsetting and innovative product offerings;

•increased brand engagement;

•optimizing customer experience;

•investing in technology; and

•expanding our global presence.

We also intend to support the growth of Versace and Jimmy Choo sales through retail store openings and further developing each brand’s e-commerce and omni-channel presence, as well as expanding into the luxury accessories market. We cannot guarantee that we will be able to successfully execute on these strategic initiatives.

If we are unable to execute on our strategic initiatives, ~~including for reasons due to the challenges we face as a result of the COVID-19 pandemic,~~ our business, results of operations and financial condition could be materially adversely affected.

We have incurred a substantial amount of indebtedness, which could adversely affect our financial condition and restrict our ability to incur additional indebtedness or engage in additional transactions.

As of March 28, 2020, our consolidated indebtedness was approximately $2.2 billion, net of debt issuance costs and discount amortization. Our total borrowings as of March 28, 2020 included $681 million outstanding under our 2018 Revolving Credit Facility, senior notes of $450 million and term loans of $1.0 billion. Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depends on our ability to generate cash from our operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Until recently, we have been able to use our cash from operations to fund our debt service obligations and to utilize our Revolving Credit Facility to supplement our near-term liquidity needs. Our cash from operations have declined significantly largely due to retail store closures and reduced store traffic caused by the COVID-19 pandemic.

Pursuant to the Second Amendment, an additional $230 million 364 day revolving credit facility was added under the 2018 Credit Facility and our lenders agreed to modify until March 31, 2021 the material adverse change representation required to be made in connection with revolving borrowings and the issuance or amendment of letters of credit to disregard certain COVID-19 pandemic-related impacts. Notwithstanding this additional facility and the modifications to our 2018 Credit Facility, our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities.

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If we are unable to effectively execute our e-commerce business and provide a reliable digital experience for our customers, our reputation and operating results may be harmed.

E-commerce is approximately 17% of our net revenues and has been our fastest growing business over the last several years, particularly in light of the ongoing COVID-19 pandemic. The success of our e-commerce business depends, in part, on third parties and factors over which we have limited control, including changing consumer preferences and buying trends relating to e-commerce usage, both domestically and abroad, and promotional or other advertising initiatives employed by our wholesale customers or other third parties on their e-commerce sites. Any failure on our part, or on the part of our third-party digital partners, to provide attractive, reliable, secure, efficient and user-friendly e-commerce platforms could negatively impact our consumers’ shopping experience, resulting in reduced website traffic, reduced conversion, diminished loyalty to our brands and lost sales. In addition, if due to COVID-19, or otherwise, there is a change in consumer behavior such that customers shift to utilizing e-commerce more than, or even instead, of traditional brick-and-mortar stores, and we or our wholesale partners are unable to attract consumers who previously made in-store purchases to our digital commerce channels, our financial and operating results may be negatively affected.

The success of our business also depends on our ability to ~~access~~continue to develop and maintain a reliable digital experience for our customers. We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets and other devices. We also use social media to interact with our customers and enhance their shopping experience. Our inability to develop and continuously improve our digital brand engagement could negatively affect our ability to compete with other brands, which could adversely impact our business, results of operations and financial condition.

In addition, we must keep current with competitive technology trends, including the ~~credit~~use of new or improved technology and ~~capital markets~~services, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications, among others. Since e-commerce growth is critical to our overall growth strategy, we plan to accelerate Versace’s and Jimmy Choo’s e-commerce and omni-channel development and we are also in the ~~future~~process of re-platforming our brands’ e-commerce sites to expand our global capabilities. Implementing new or improved digital systems, services or technologies, such as new or improved e-commerce platforms, may increase our costs, cause delays in or hinder our ability to continually deliver a ~~source of funding,~~reliable or seamless digital experience for our customers, or cause us not to succeed in increasing sales or attracting consumers. For example, it is possible that consumers may not sign up for our loyalty program at anticipated rates if they do not find the features and benefits compelling or if they are unable to seamlessly navigate the ~~borrowing costs associated with such financing, is dependent upon market conditions~~digital experience we offer, which, in turn, may cause us not to realize the benefits that we anticipate from these programs. Our failure to successfully respond to these risks and our credit rating and outlook. In March 2020, Moody’s Investor Service downgraded their credit rating of us from Baa2 to Ba1, and in April 2020 Fitch Ratings downgraded their credit rating of us from BBB- to BB+. These downgrades, and any future reduction in our credit ratings, could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs, and potentially increased lease or hedging costs. Our financial results, our substantial indebtedness and our credit ratings coulduncertainties might adversely affect the ~~availability and terms of~~sales in our ~~financing and negatively impact our ability to enter into new financing arrangements in the future.~~

We have suspended rent payments for our retail stores that have been closed because of the COVID-19 pandemic and as a result our landlords may attempt to hold us in breach of our lease obligations and take other actions, including terminating our leases and/or accelerating our future rent if we cannot reach acceptable settlements or otherwise prevail in litigation.

We do not own any of our retail store facilities, but instead lease all of our stores under operating leases. Our leases generally have terms of up to 10 years, generally require a fixed annual base rent and most require the payment of additional percentage rent if store sales exceed a negotiated amount. Certain of our European stores also require initial investments in the form of key money to secure prime locations, which may be paid to landlords or existing lessees. Generally, our leases are “net” leases, which require us to pay all of the costs of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases or withhold payments at our option, and payments under these operating leases account for a significant portion of our operating costs. For example, as of March 28, 2020, we were party to operating leases associated with our retail stores that we operate directly throughout the globe,e-commerce business, as well as ~~other global corporate facilities, requiring future minimum lease payments aggregating to $1.8 billion through Fiscal 2025~~damage our reputation and ~~approximately $566 million thereafter through Fiscal 2044.~~brands.

~~In light~~

Additionally, the success of our ~~retail store closures in response~~e-commerce business and the satisfaction of our consumers depend on their timely receipt of our products. The efficient flow of our products requires that our company-operated and third-party operated distribution facilities have adequate capacity to ~~government orders, mandates, guidelines and recommendations limiting business~~support the current level of e-commerce operations ~~due to the COVID-19 pandemic,~~ as well as ~~decisions by many of~~any anticipated increased levels that may follow from the ~~retail centers in which we operate to close shopping centers, we temporarily closed all~~growth of our ~~retail stores~~e-commerce business. The current vessel container and other transportation shortages, labor shortages and port congestion globally, as well as disruptions in ~~North America~~factory production in certain countries where we source our products has delayed, and ~~Europe. On April 1, 2020, we suspended rent payments under the leases for these stores.~~is expected to continue to delay, inventory orders and impact product availability in our channels, including our e-commerce sites, and have resulted in increased freight and logistics costs. As a result of ~~such suspension, landlords~~these supply chain challenges, our inventory levels and net revenue have been impacted and could ~~allege that we are~~continue to be impacted in ~~default under the lease~~future periods. Continued shortages of inventory, disruptions or delays, significantly higher costs and ~~attempt~~longer lead times for distributing our products to ~~terminate~~ our ~~lease and/or accelerate our future rents. Although we believe that strong legal grounds exist to support our claim that we are not obligated to pay rent during periods of closure as a~~consumers could result ~~of the COVID-19 pandemic, there can be no assurance whether or not, and to what degree, such arguments will be successful,~~in customer dissatisfaction, and any ~~dispute under~~of these ~~leases may result in litigation with the landlord, which~~issues could ~~be costly and~~ have an ~~uncertain outcome.~~adverse effect on our business and harm our reputation.

In addition, as our retail stores reopen, we expect to require additional negotiations with our landlords to further defer or abate rent, to modify the terms of our leases (including rent and expiration date) and in certain instances to terminate a lease or permanently close a store. There can be no assurance that we willWe may not be able to ~~successfully negotiate rent deferrals or abatements, lease modifications or lease terminations on favorable terms or at all. Our substantial operating lease obligations~~respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition.

The accessories, footwear and apparel industries have historically been subject to rapidly changing fashion trends and consumer preferences. We believe that our success is largely dependent on the images of our brands and ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, production, merchandising and pricing of products. Any misstep in product quality or design, executive leadership, customer services, unfavorable publicity or excessive product discounting could negatively affect the image or our brands with our customers. If we do not correctly gauge consumer needs and fashion trends and respond appropriately, consumers may not purchase our products and our brand names and the images of our brands may be ~~unable~~impaired. Even if we react appropriately to ~~meet financial covenants~~changes in fashion trends and consumer preferences, consumers may consider our ~~indebtedness agreements which could result in an event~~brands to be outdated or associate our brands with styles that are no longer popular or trend-setting. We have also recently begun to increase the price of ~~default and restrictive covenants in such agreements may restrict~~ our ~~ability to pursue our business strategies.~~

On March 20, 2020, we entered into the first amendment, and on June 25, 2020, we entered into the second amendment (the “Second Amendment”), to the third amended and restated senior unsecured credit facility, dated as of November 15, 2018 (as amended, the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent. The Company and a U.S., Canadian, Dutch and Swiss subsidiary of the Company are the borrowers under the 2018 Credit Facility. The borrowers and certain material subsidiaries of the Company provide guarantees of the 2018 Credit Facility. Pursuant to the Second Amendment, the obligations under the 2018 Credit Facilityproducts. There can be no guarantee that consumers will be secured by substantially all of the assets of the Company and the US borrowers and guarantors and substantially all of the registered intellectual property of the Company, the borrower and the guarantors, subject to certain exceptions.

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Pursuant to the Second Amendment, the financial covenant in our 2018 Credit Facility requiring us to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021. When this financial covenant is reinstated, the applicable ratio will be calculated net of our unrestricted cash and cash equivalents to the extent in excess of $100 million and shall exclude up to $150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0. In addition, the Second Amendment requires us, during the period from June 25, 2020 until we deliver our financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $300 million, increasing to $400 million on October 1, 2020 and $500 million on December 1, 2020. Our ability to satisfy the maximum net leverage ratio test when it is reinstated and the liquidity test may be affected by events beyond our control, including effects of COVID-19 on our business, and we may be unable to comply withaccept these ~~covenants.~~

In addition, the 2018 Credit Facility and the Indenture governing our senior notes contain certain restrictive covenants that impose operating and financial restrictions on us, and the Second Amendment imposes incremental restrictions on certainprice increases. Any of these ~~covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on our ability to:~~

•~~incur additional indebtedness and guarantee indebtedness;~~

•~~pay dividends or make other distributions or repurchase or redeem capital stock;~~

•~~make loans and investments, including acquisitions;~~

•~~sell assets;~~

•~~incur liens;~~

•~~enter into transactions with affiliates; and~~

•~~consolidate, merge or sell all or substantially all of our assets~~

~~which collectively may limit our ability to engage in acts that may be in our long-term best interest.~~

A breach of the covenants or restrictions under the documents that govern our indebtedness could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreement governing our 2018 Credit Facility would permit the lenders under our 2018 Credit Facility to terminate all commitments to extend further credit under that facility and foreclose on the collateral that secures the 2018 Credit Facility. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:

•~~limited in how we conduct our business;~~

•~~unable to raise additional debt or equity financing to operate during general economic or business downturns, including as a result of COVID-19; or~~

•~~unable to compete effectively or to take advantage of new business opportunities.~~

Our retail stores are heavily dependent on the ability and desire of consumers to travel and shop and a decline in consumer traffic could have a negative effect on our comparable store sales and store profitability resulting in impairment charges, whichoutcomes could have a material adverse effect on our brands, business, results of operations and financial condition.

~~Reduced travel resulting~~Increased scrutiny from ~~economic conditions, fuel shortages, increased fuel prices, travel restrictions, travel concerns~~investors and others regarding our corporate social responsibility initiatives, including environmental, social and other ~~circumstances,~~matters of significance relating to sustainability, could result in additional costs or risks and adversely impact our reputation.

Investor advocacy groups, certain institutional investors, investment funds, other market participants, shareholders and customers have increasingly focused on ESG or “sustainability” practices of companies. These parties have placed increased importance on the implications of the social cost of their investments. If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and customer and employee retention may be negatively impacted. Any sustainability report that we publish or other sustainability disclosure we make may include our policies and practices on a variety of social and ethical matters, including ~~adverse weather conditions, disease pandemics (including COVID-19), epidemics~~corporate governance, environmental compliance, employee health and ~~other health-related concerns, war, terrorist attacks~~safety practices, human capital management, product quality, supply chain management and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of adoption. We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices and various legal, legislative and regulatory requirements. Also, our failure, or perceived ~~threat of war or terrorist attacks~~failure, to meet the standards included in any sustainability disclosure could ~~have a material adverse effect on us, particularly if such events~~negatively impact our ~~customers’ desire~~reputation, employee retention and the willingness of our customers and suppliers to ~~travel to our retail stores. For example, social distancing measures and other restrictions imposed by governments~~do business with us.

Our wholesale business could suffer as a result of ~~the COVID-19 pandemic, which have had~~consolidations, liquidations, restructurings and ~~are expected to continue to affect our customers’ ability and desire to travel to our stores, which in turn has had and will continue to have a material adverse impact on our store revenue.~~other ownership changes.

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In addition, other factors that could impact the success of our retail stores include: (i) the location of the mall or the location of a particular store within the mall; (ii) the other tenants occupying space at the mall; (iii) vacancies within the mall (including retailers that may not reopen post-COVID-19); (iv) stores and malls having to re-close due to personnel or customer illness or further government restrictions; (v) increased competition in areas where the malls are located; (vi) the amount of advertising and promotional dollars spent on attracting consumers to the malls; and (vii) a shift toward online shopping which may be exacerbated in light of COVID-19 even when stores reopen. A decline in consumer traffic could have a negative effect on our comparable store sales and/or average sales per square foot and store profitability. If our retail stores underperform due to declining consumer traffic or otherwise and our expected future cash flows of the related underlying retail store asset do not exceed such asset’s carrying value, we may incur store impairment charges. A decline in future comparable store sales and/or store profitability or failure to meet market expectations or the occurrence of impairment charges relating to our retail store fleet could have a material adverse effect on our business, results of operations and financial condition.

A substantial portion of our revenue is derived from a small number of large wholesale customers, and the loss of or decline in business from any of these wholesale customers could substantially reduce our total revenue.

A small number of our wholesale customers account for a significant portion of our sales. Revenue from our five largest wholesale customers represented 17% of our total revenue for Fiscal 2020 and 19% of our total revenue for Fiscal 2019. We do not have written agreements with any of our wholesale customers and purchases generally occur on an order-by-order basis. As a result of ~~store closures and reduced consumer traffic caused by~~the ongoing COVID-19 pandemic, many of our wholesale customers have experienced, and may continue to experience, liquidity constraints or other financial difficulties, causing a reduction in the amount of merchandise purchased from us and our product licensing partners, an increase in order cancellations and/or the need to extend payment terms. Any or all of these measures could substantially reduce our revenue and have a material adverse effect on our profitability. In addition, these actions could lead to larger outstanding accounts receivable balances, delays in collection of accounts receivable, increased expenses associated with collection efforts, increase in excess inventory, increases in ~~bad debt expense,~~credit losses and reduced cash flows.

The retail industry has experienced a great deal of consolidation and other ownership changes over the past several years and wea number of wholesale accounts were forced to file bankruptcy or undergo restructurings due to the impact of COVID-19 on their business. We expect ~~such changes will continue and~~ that the risk of consolidation, bankruptcy, restructurings or reorganizations by department stores and other retailers will ~~increase as a result of COVID-19. The changes~~continue to exist for the foreseeable future. This could ~~also~~ result in store closings by our wholesale customers, which would decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our brands. In addition, such consolidation, bankruptcy or other changes with respect to our wholesale customers could decrease our opportunities in the market, increase our reliance on a smaller number of large wholesale customers and decrease our negotiating strength with our wholesale customers, which could have a material adverse effect on our business, results of operations and financial condition.

Additionally, certain of our wholesale customers, particularly those located in the ~~U.S.,~~United States, have become highly promotional and have aggressively marked down their ~~merchandise and we~~merchandise. We expect that such markdowns may continue to be exacerbated because of the impact of COVID-19. Such promotional activity could negatively impact our business.

The accessories, footwear and apparel industries have historically been subject to cyclical variations, recessions in the general economy and uncertainties regarding future economic prospects that can affect consumer spending habits. Purchases of discretionary luxury items, such as our products, tend to decline during recessionary periods when disposable income is lower. The success of our operations depends on a number of factors impacting discretionary consumer spending, including the extent and duration of the ongoing impact of the COVID-19 pandemic, general economic conditions, consumer confidence, wages and unemployment, housing prices, consumer debt, interest rates, fuel and energy costs, taxation and political conditions. A worsening of the economy may negatively affect consumer and wholesale purchases of our products and could have a material adverse effect on our business, results of operations and financial condition.

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~~Our industry is subject to significant pricing pressure caused by many factors which may cause our profitability and gross margins in the future to be materially lower than our expectations.~~

Our industry is subject to significant pricing pressure caused by many factors, including the impact of COVID-19 on the economy and consumer discretionary spending, intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, changes in consumer behavior, fashion trends, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, the success of marketing programs and weather and other environmental conditions. These factors may cause our profitability and gross margins in the future to be materially lower than in recent periods and our expectations, which could have a material adverse effect on our business, results of operations and financial condition. As a result of COVID-19, we may be faced with significant excess inventories, and in the future, if we misjudge the market for our products, we may have excess inventories for some products and missed opportunities for other products. We may be forced to rely on markdowns or promotional sales to dispose of excess and slow-moving inventory, which also may negatively impact our gross margin and profitability.

Acquisitions may not achieve intended benefits and may not be successfully integrated.

We face additional risks associated with our strategy to grow our business through acquisitions of other brands and geographic licensees, such as our acquisitions of Versace in December 2018 and Jimmy Choo in November 2017.

Our acquisitions of Versace and Jimmy Choo or any other entity that we may acquire may not perform as well as initially expected, which could have a material adverse effect on our results of operations and financial condition. In addition, we are required to test goodwill, brand and any other intangible assets acquired as a result of acquisitions for impairment. For Fiscal 2021 and Fiscal 2020, the carrying value of goodwill and brand intangible value for Jimmy Choo exceeded its respective related fair value, requiring us to record an impairment ~~charge~~charges for the difference of $163 million and $351 ~~million.~~million, respectively.

In addition, we may not be able to successfully integrate ~~any licensee or any other business that we may acquire~~acquired businesses into our own business, or achieve any expected cost savings or synergies from such integration or we may determine to limit the integration of our brands. In addition to the overarching and continued challenges resulting from the ongoing COVID-19 pandemic, the potential difficulties that we may face that could cause the results of ~~the acquisition of such previously licensed business, Versace, Jimmy Choo, or any other business that we may acquire~~our acquisitions to not be in line with our expectations include, among others:

•failure to implement our business plan for the combined business or to achieve anticipated revenue or profitability targets;

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•delays or difficulties in completing the integration of acquired companies or assets;

•higher than expected costs, lower than expected cost savings and/or a need to allocate resources to manage unexpected operating difficulties;

•unanticipated issues in integrating logistics, information and other systems;

•unanticipated changes in applicable laws and regulations;

•retaining key customers, suppliers and employees;

•operating risks inherent in the acquired business and our business;

•diversion of the attention and resources of management and resource constraints;

•retaining and obtaining required regulatory approvals, licenses and permits;

•unanticipated changes in the combined business due to potential divestitures or other requirements imposed by antitrust regulators;

•assumption of liabilities not identified in due diligence or other unanticipated issues, expenses and liabilities; and

•the impact on our internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002.

Additionally, Jimmy Choo outsources its information technology, accounting and other back office activities to a third-party service ~~provider pursuant to an agreement effective October 2, 2017.~~provider. There are risks of relying on a third-party provider to perform these services, which may include experiencing operational challenges and incurring increased expenses, which may result in a material adverse effect on our business, results of operations and financial condition.

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The markets in which we operate are highly competitive, both within North America and internationally, and increased competition based on a number of factors could cause our profitability and/or gross margins to decline.

Our brands face intense competition from other accessories, footwear and apparel producers and retailers, including, primarily European and American international luxury brands. In addition, we face competition through third party distribution channels that sell our merchandise, such as e-commerce, department stores and specialty stores. Competition is based on a number of factors, including, without limitation, the following:

•anticipating and responding to changing consumer demands in a timely manner;

•establishing and maintaining favorable ~~brand-name~~brand name recognition;

•determining and maintaining product quality;

•~~maintaining~~retaining key employees;

•maintaining and growing market share;

•developing quality and differentiated products that appeal to consumers;

•establishing and maintaining acceptable relationships with retail customers;

•pricing products appropriately;

•providing appropriate service and support to retailers;

•optimizing retail and supply chain capabilities;

•determining size and location of retail and department store selling space; and

•protecting intellectual property.

In addition, some of our competitors may be significantly larger and more diversified than us and may have significantly greater financial, technological, manufacturing, sales, marketing and distribution resources than we do. Their ~~greater~~ capabilities in these areas may enable them to better withstand periodic downturns in the accessories, footwear and apparel industries (including those related to ~~COVID-19)~~the ongoing COVID-19 pandemic and/or recent inflationary pressures), compete more effectively on the basis of price and production and more quickly develop new products. The general availability of manufacturing contractors and agents also allows new entrants easy access to the markets in which we compete, which may increase the number of our competitors and adversely affect our competitive position and our business. Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced revenues, which could adversely affect our business, results of operations and financial condition.

Competition, along with other factors such as consolidation, changes in consumer spending patterns and a highly promotional retail selling environment, ~~(including the impacts of COVID-19),~~ could also result in significant pricing pressure. These factors may cause us to reduce our sales prices to our wholesale customers and retail consumers, which could cause our gross margins to decline if we are unable to appropriately manage inventory levels and/or otherwise offset price reductions with comparable reductions in our

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operating costs. If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability may decline, which could have a material adverse effect on our business, results of operations and financial condition.

~~We face risks associated with operating globally and our strategy to continue to expand internationally.~~

We operate on a global basis, with approximately 48% of our total revenue from operations outside of the U.S. during Fiscal 2020. As a result, we are subject to the risks of doing business internationally, including:

•~~political or civil unrest, including protests and other civil disruption;~~

•~~unforeseen public health crises, such as pandemic and epidemic diseases, including the recent global outbreak of COVID-19;~~

•~~economic instability and unsettled regional and global conflicts, which may negatively affect consumer spending by foreign tourists and local consumers in the various regions where we operate;~~

•~~laws, regulations and policies of foreign governments;~~

•~~potential negative consequences from changes in taxation policies;~~

•~~natural disasters or other extreme weather events, including those attributed to climate change; and~~

•~~acts of terrorism, military actions or other conditions over which we have no control.~~

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In addition, on June 23, 2016, voters in the United Kingdom (“U.K.”) approved an advisory referendum to withdraw from the European Union ("EU"), commonly referred to as “Brexit”. On March 29, 2017, the U.K. triggered Article 50 of the Lisbon Treaty formally starting negotiations with the EU. The U.K. formally left the EU on January 31, 2020. There is an agreement in principle to transitional provisions under which EU law would remain in force in the U.K. until the end of December 2020, but this remains subject to the successful conclusion of a final withdrawal agreement between the parties. Although the terms of the U.K.’s future relationship with the EU are still unknown, it is possible that there will be increased regulatory and legal complexities, including potentially divergent national laws and regulations between the U.K. and EU. Brexit may also cause disruption and create uncertainty surrounding our business, including affecting our relationship with our existing and future customers, suppliers and employees and resulting in increased cost by way of new or elevated customs duties or financial implications from operational challenges.

Finally, if our international expansion plans are unsuccessful, it could have a material adverse effect on our business, results of operations and financial condition. We sell our products at varying retail price points based on geographic location that yield different gross profit margins and we achieve different operating profit margins, depending on geographic region, due to a variety of factors including product mix, store size, occupancy costs, labor costs and retail pricing. Changes in any one or more of these factors could result in lower revenues, increased costs, and negatively impact our business, results of operations and financial condition. There are also some countries where we do not yet have significant operating experience, and in most of these countries we face established competitors with significantly more operating experience in those locations. Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries and, as a result, sales of our product may not be successful, or the margins on those sales may not be in line with those we currently anticipate.

~~There can be no assurance that any or all of these events will not have a material adverse effect on our business, results of operations and financial condition.~~

Our business is subject to risks associated with importing products, and the imposition of additional duties, ~~and any changes to international~~tariffs or trade ~~agreements~~restrictions could have a material adverse effect on our business, results of operations and financial condition.

There are risks inherent to importing our products. Virtually all of our imported products are subject to duties which may impact the cost of such products. In addition, countries to which we ship our products may impose safeguard quotas to limit the quantity of products that may be imported. We rely on free trade agreements and other supply chain initiatives in order to maximize efficiencies relating to product importation. For example, we have historically received benefits from duty-free imports on certain products from certain countries pursuant to the United States Generalized System of Preferences (“GSP”) program. The GSP program expired on December 31, 2020. If the GSP program is not renewed or otherwise made retroactive, we will continue to experience significant additional duties and our gross margin will continue to be negatively impacted. Additionally, we are subject to government regulations relating to importation ~~activities.~~activities, including related to CBP withhold release orders. The imposition of taxes, duties and quotas, ~~and/or~~ the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition. On May 10, 2019, the U.S. increased the sanction tariffs rate from 10% to 25% on $200 billion of imports of select product categories (Tranche 3), which includes handbags and travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect. If additional tariffs or trade restrictions are implemented by the ~~U.S.~~United States or other countries, the cost of our products could increase which could adversely affect our business.

We are subject to risks associated with leasing retail space subject to long-term and non-cancelable leases. We may be unable to renew leases at the end of their terms. If we close a leased retail space, we remain obligated under the applicable lease.

We do not own any of our retail store facilities, but instead lease all of our stores under operating leases. Our leases generally have terms of up to 10 years, generally require a fixed annual base rent and some require the payment of additional percentage rent if store sales exceed a negotiated amount. Certain of our European stores also require initial investments in the form of key money to secure prime locations, which may be paid to landlords or existing lessees. Generally, our leases are “net” leases, which require us to pay all of the costs of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases or withhold payments at our option, and payments under these operating leases account for a significant portion of our operating costs. For example, as of April 2, 2022, we were party to operating leases associated with our retail stores that we operate directly throughout the globe, as well as other global corporate facilities, requiring future minimum lease payments aggregating to $1.6 billion through Fiscal 2027 and approximately $426 million thereafter through Fiscal 2044. Our substantial operating lease obligations could have a material adverse effect on our business, results of operations and financial condition.

In certain cases, as we have done in the past, we may determine that it is no longer economical to operate a retail store subject to a lease or we may seek to generally downsize, consolidate, reposition, relocate or close some of our real estate locations. In such cases, we may be required to negotiate a lease exit with the applicable landlord or remain obligated under the applicable lease for, among other things, payment of the base rent for the balance of the lease term. For example, in connection with the impact of the ongoing COVID-19 pandemic and our Retail Fleet Optimization Plan, we have negotiated with some landlords on certain lease terminations. In some instances, we may be unable to close an underperforming retail store due to continuous operation clauses in our lease agreements. In addition, as each of our leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close retail stores in desirable locations. Our inability to secure desirable retail space or favorable lease terms could impact our ability to grow. Likewise, our obligation to continue making lease payments in respect of leases for closed retail spaces could have a material adverse effect on our business, financial condition and results of operations.

Additionally, due to the volatile economic environment, it may be difficult to determine the fair market value of real estate properties when we are deciding whether to enter into leases or renew expiring leases. This may impact our ability to manage the profitability of our store locations, or cause impairments of our lease right-of-use assets if market values decline, any of which could have a material adverse effect on our financial condition or results of operations.

We are dependent on a limited number of distribution facilities. If one or more of our distribution facilities experience operational difficulties or becomes inoperable, it could have a material adverse effect on our business, results of operations and financial condition.

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(including due to the ongoing COVID-19 pandemic), we could suffer a substantial loss of inventory and/or disruptions of deliveries to our customers. In addition, we could incur significantly higher costs and longer lead times associated with the distribution of our products during the time it takes to reopen or replace the damaged, inoperable or otherwise inaccessible facility. Any of the foregoing factors could result in decreased sales and have a material adverse effect on our business, results of operations and financial condition.

To support the growth of our business, we also use third-party logistics centers that are responsible for distribution, warehousing and fulfillment services on our behalf. Significant disruptions at these facilities could have a material adverse impact on our business. Because our direct and third-party fulfillment centers include automated and computer-controlled equipment, they are susceptible to risks including power interruptions, hardware and system failures, software viruses, security breaches and other technological and operational disruptions and of which could cause shipping delays or otherwise adversely affect our business.

Fluctuations in our tax obligations and changes in tax laws, treaties and regulations may have a material adverse impact on our future effective tax rates and results of operations.

Our subsidiaries are subject to taxation in the United States and various foreign jurisdictions, with the applicable tax rates varying by jurisdiction. As a result, our overall effective tax rate is affected by the proportion of earnings from the various tax jurisdictions. We record tax expense based on our estimates of taxable income and required reserves for uncertain tax positions in multiple tax jurisdictions. At any time, there are multiple tax years that are subject to examinations by various taxing authorities. The ultimate resolution of these audits and negotiations with taxing authorities may result in a settlement amount that differs from our original estimate. Any proposed or future changes in tax laws, treaties and regulations or interpretations where we operate could have a material adverse effect on our effective tax rates, results of operations and financial condition.

On October 5, 2015, the Organization for Economic Co-operation and Development (“OECD”), an international association of thirty four countries, including the United States and United Kingdom., released the final reports from its Base Erosion and Profit Shifting (“BEPS”) Action Plans. The BEPS recommendations covered a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties. Future tax reform resulting from this development may result in changes to long-standing tax principles, which could adversely affect our effective tax rate and/or result in higher cash tax liabilities. In late 2021, the OECD published model legislation and the EU issued a draft directive related to the global minimum tax (“Pillar Two Model Rules”). The directive is to be considered by member countries in calendar 2022 and if approved, could become effective as early as calendar 2023. The enactment of the Pillar Two Model Rules in jurisdictions where we have operations may have a material impact on our global transfer pricing arrangements and a materially adverse impact on our tax provision, cash tax liability and effective tax rate.

Our business is exposed to foreign currency exchange rate fluctuations.

Our results of operations for our international subsidiaries are exposed to foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into United States dollar during financial statement consolidation. If the United States dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions could impact our consolidated results of operations. In addition, we have intercompany notes amongst certain of our non-United States subsidiaries, which may be denominated in a currency other than the local currency of a particular reporting entity. As a result of using a currency other than the functional currency of the related subsidiary, results of these operations may be adversely affected during times of significant fluctuation between the functional currency of that subsidiary and the denomination currency of the note. We continuously monitor our foreign currency exposure and hedge a portion of our foreign subsidiaries’ foreign currency-denominated inventory purchases to minimize the impact of changes in foreign currency exchange rates. However, we cannot fully anticipate all of our foreign currency exposures and cannot ensure that these hedges will fully offset the impact of foreign currency exchange rate fluctuations. We also use fixed-to-fixed 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 these foreign currencies. As a result, we are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations.

As a result of operating retail stores and concessions in various countries outside of the United States, we are also exposed to market risk from fluctuations in foreign currency exchange rates, primarily the Euro, the British Pound, the Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian dollar, among others. A substantial weakening of foreign

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currencies against the United States dollar could require us to raise our retail prices or reduce our profit margins in various locations outside of the United States. In addition, our sales and profitability could be negatively impacted if consumers in those markets were unwilling to purchase our products at increased prices.

Our current and future licensing and joint venture arrangements may not be successful and may make us susceptible to the actions of third parties over whom we have limited control.

We have entered into a select number of product licensing agreements with companies that produce and sell, under our trademarks, products requiring specialized expertise. We have also entered into a number of select licensing agreements pursuant to which we have granted third parties certain rights to distribute and sell our products in certain geographical areas and have a number of joint ventures. In the future, we may enter into additional licensing and/or joint venture arrangements. Although we take steps to carefully select our partners, such arrangements may not be successful. Our partners may fail to fulfill their obligations under these agreements or have interests that differ from or conflict with our own, such as the timing of new store openings, the pricing of our products and the offering of competitive products. In addition, the risks applicable to the business of our partners may be different than the risks applicable to our business, including risks associated with each such partner’s ability to:

•obtain capital;

•exercise operational and financial control over its business;

•manage its labor relations;

•maintain relationships with suppliers;

•manage its credit and bankruptcy risks which may be exacerbated by the impact of COVID-19; and

•maintain customer relationships.

In addition, the geographic areas subject to our licensing agreements could be impacted by geopolitical risks. Any of the foregoing risks, or the inability of any of our partners to successfully market our products or otherwise conduct its business, may result in loss of revenue and competitive harm to our operations in regions or product categories where we have entered into such licensing arrangements.

We rely on our partners to preserve the value of our brands. Although we attempt to protect our brands through, among other things, approval rights over store location and design, product design, production quality, packaging, merchandising, distribution, advertising and promotion of our stores and products, we may not be able to control the use by our partners of our brand. The misuse of our brand by a licensing or joint venture partner could have a material adverse effect on our business, results of operations and financial condition.

Increases in the cost of raw materials could increase our production costs and cause our operating results and financial condition to suffer.

Our business is subject to volatility of costs related to certain raw materials used in the manufacturing of our products, including inflationary pressure. The costs of raw materials used in our products are affected by, among other things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries and other factors that are generally unpredictable and beyond our control. We are not always successful in our efforts to protect our business from the volatility of the market price of raw materials and our business can be materially affected by dramatic movements in prices of raw materials which have resulted, and are expected to continue to result, in increased pricing pressures and pressure on our margins. We may not be able to implement price increases that fully mitigate the impact of these higher costs and/or any such price increases could have an adverse impact on consumer demand for our products. In addition, our costs may be impacted by sanction tariffs and customs trade orders which could also impact sourcing and availability of raw materials used by our suppliers in the manufacturing of certain of our products. Manufacturing labor costs are also subject to volatility based on local and global economic conditions. Increases in commodity prices, tariffs, sanctions, customs trade orders and/or manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.

We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods.

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make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us.

We do not have written agreements with any of our third-party manufacturing contractors. As a result, any single manufacturing contractor could unilaterally terminate its relationship with us at any time. For example, in Fiscal 2022, Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for over ten years, accounted for the production of 17% of our finished products, based on dollar volume. Our inability to promptly replace manufacturing contractors that terminate their relationships with us or cease to provide high quality products in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition and impact the cost and availability of our goods.

Michael Kors uses third-party agents to source finished goods with numerous manufacturing contractors on its behalf. Any single agent could unilaterally terminate its relationship with Michael Kors at any time. In Fiscal 2022, Michael Kors’ largest third-party agent, whose primary place of business is Hong Kong and who Michael Kors has worked with for over ten years, sourced approximately 24% of its purchases of finished goods, based on unit volume. Our inability to promptly replace agents that terminate their relationships with us or cease to provide high quality service in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition.

As we outsource functions, we will become more dependent on the third parties performing these functions.

We look for opportunities to cost effectively enhance capability of business services. While we believe we conduct appropriate due diligence before entering into agreements with these third parties, the failure of any of these third parties to provide the expected services, provide them on a timely basis or to provide them at the prices we expect could disrupt or harm our business. Any significant interruption in the operations of these service providers, over which we have no control, could also have an adverse effect on our business. Furthermore, we may be unable to provide these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.

Our business is susceptible to the risks associated with climate change and other environmental impacts which could negatively affect our business and operations.

Our retail stores, distribution centers and manufacturing facilities, including those operated by third-parties, are subject to risks relating to climate change and other environmental impacts from our operations. For example, the physical effects of climate change, such as severe weather events, natural disasters and/or significant changes in climate patterns as well as our carbon emissions and our business’ overall impact on the environment could subject us to reputational, market and/or regulatory risks. Climate change and other environmental concerns may cause social and economic disruptions in the places where we operate, including disruptions to our supply chain and to local infrastructure and transportation systems which could limit material availability and quality, impact our ability to ship and deliver product and prevent access to our physical locations. These events could also adversely affect the economy and negatively impact consumer confidence and discretionary spending. Concern over climate change may result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment which may result in increased administrative costs. There is also increased focus, including by investors, customers, and other stakeholders, on climate change and other sustainability matters. In April 2020, we announced a global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including, material sourcing, reducing greenhouse gas emissions and converting to renewal energy, responsible water use and waste reduction. We may not be successful in attaining our goals, and even if we meet our commitments, there remains a significant risk that climate change and other environmental events could negatively impact our operations.

Our industry is subject to significant pricing pressure caused by many factors which may cause our profitability and gross margins in the future to be materially lower than our expectations.

Our industry is subject to significant pricing pressure caused by many factors, including the impact of the ongoing COVID-19 pandemic and recent inflationary pressure on the economy and consumer discretionary spending, higher freight costs, intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, wholesale demands for allowances, incentives and other forms of economic support for our partners, changes in consumer behavior, fashion trends, pricing, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, the success of marketing programs and weather and other environmental conditions. These factors may cause our profitability and gross margins in the future to be materially lower than in recent periods and our expectations, which could have a material adverse effect on our business, results of operations and financial condition. We may be faced with significant excess inventories (due to the impact of the ongoing COVID-19 pandemic, supply chain disruptions or

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otherwise), and in the future, if we misjudge the market for our products, we may have excess inventories for some products and missed opportunities for other products. We may be forced to rely on markdowns or promotional sales to dispose of excess and slow-moving inventory, which also may negatively impact our gross margin and profitability.

Risks Related to Information Technology and Data Security

Privacy breaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business.

We are dependent on information technology (“IT”) systems and networks for a significant portion of our direct-to-consumer sales, including our e-commerce sites and retail business credit card transaction authorization and processing. We are responsible for storing data relating to our customers and employees and also rely on third party vendors for the storage, processing and transmission of personal and Company information. Consumers, lawmakers and consumer advocates alike are increasingly concerned over the security of personal information transmitted over the Internet, consumer identity theft and privacy and the retail industry, in particular, has been the target of many recent cyber-attacks. In addition to taking the necessary precautions ourselves, we generally require that third-party service providers implement reasonable security measures to protect our employees’ and customers’ identity and privacy. We do not, however, control these third-party service providers and cannot guarantee the elimination of electronic or physical computer break-ins or security breaches in the future. Cyber security breaches, including physical or electronic break-ins, security breaches due to employee error or misconduct, attacks by “hackers,” phishing scams, malicious software programs such as viruses and malware, and other breaches outside of our control, could result in unauthorized access or damage to our IT systems and the IT systems of our third party service providers. Despite our efforts and the efforts of our third-party service providers to secure our and their IT systems, attacks on these systems do occur from time to time. As the techniques used to obtain unauthorized access to IT systems become more varied and sophisticated ~~(including in connection with the COVID-19 pandemic, as~~(as cybercriminals are finding new ways to launch their attacks) and if the occurrence of such security breaches becomes more frequent, we and our third-party service providers may be unable to adequately anticipate these techniques and implement appropriate preventative measures. While we maintain cyber risk insurance to provide some coverage for certain risks associated with cyber security incidents, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cyber security incident. A significant breach of customer, employee or Company data could damage our reputation, our relationship with customers and our brands, and could result in lost sales, sizable fines, significant breach-notification and other costs and lawsuits, as well as adversely affect our results of operations. We may also incur additional costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and privacy threats, or to comply with current and new state, federal and international laws governing the unauthorized disclosure of confidential information which are continuously being enacted and proposed, such as the General Data Protection Regulation in the EU, ~~and~~ the California Consumer Privacy Act, ~~in California~~ the Virginia Consumer Data Protection Act and the Colorado Privacy Act (CPA) in the United States and the Personal Information Protection Law in China, as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information.

A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.

We rely extensively on our IT systems to track inventory, manage our supply chain, record and process transactions, manage customer communications, summarize results and manage our business. The failure of our IT systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in or failure to implement new systems, could adversely affect our business. We also operate a number of e-commerce websites throughout the world. Our IT systems and e-commerce websites may be subject to damage and/or interruption from power outages, computer, network and telecommunications failures, malicious software, such as viruses and malware, attacks by “hackers”, security breaches, usage errors or misconduct by our employees and bad acts by our customers and website visitors which could materially adversely affect our business.

~~In early Fiscal 2020, we embarked on~~We are undergoing a multi-year ERP implementation. The implementation ~~but~~of the ERP will require a significant investment in human and financial resources. Implementing new systems also carries substantial risk, including failure to operate as ~~a result~~designed, failure to properly integrate with other systems, potential loss of ~~COVID-19~~data or information, cost overruns, implementation delays and ~~our need~~disruption of operations. Third-party vendors are also relied upon to ~~significantly reduce our capital expenditures in order to protect our liquidity~~design, program, maintain and ~~cash flows, we temporarily suspended our ERP project. Our inability to resume with~~service our ERP implementation ~~and~~program. Any failures of these vendors to ~~upgrade~~properly deliver their services could similarly have a material adverse effect on our ~~IT systems could result in system failures,~~business. In addition, any disruptions ~~damage~~ or malfunctions affecting our ERP implementation plan could cause critical information upon which we rely to be delayed, defective, corrupted, inadequate, inaccessible or lost ~~and~~ or

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otherwise cause delays or disruptions to our ~~operations. If any of these events happen,~~operations, and we may have to make significant investments to fix or replace impacted systems. ~~Our failure or inability~~

Risks Related to ~~upgrade IT systems effectively also could cause us to be unable to compete effectively, could harm our reputation~~Legal and ~~credibility, and could have a material adverse effect on our business, results of operations and financial condition.~~

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We may not be able to respond to changing fashion and retail trends in a timely manner, which could have a material adverse effect on our brands, business, results of operations and financial condition.

The accessories, footwear and apparel industries have historically been subject to rapidly changing fashion trends and consumer preferences. We believe that our success is largely dependent on the images of our brands and ability to anticipate and respond promptly to changing consumer demands and fashion trends in the design, styling, production, merchandising and pricing of products. If we do not correctly gauge consumer needs and fashion trends and respond appropriately, consumers may not purchase our products and our brand names and the images of our brands may be impaired. Even if we react appropriately to changes in fashion trends and consumer preferences, consumers may consider our brands to be outdated or associate our brands with styles that are no longer popular or trend-setting. Any of these outcomes could have a material adverse effect on our brands, our business, results of operations and financial condition.

The success of our business also depends on our ability to continue to develop and maintain a reliable digital experience for our customers. We strive to give our customers a seamless omni-channel experience both in stores and through digital technologies, such as computers, mobile phones, tablets, and other devices. We also use social media to interact with our customers and enhance their shopping experience. Our inability to develop and continuously improve our digital brand engagement could negatively affect our ability to compete with other brands, which could adversely impact our business, results of operations and financial condition.

We are dependent on a limited number of distribution facilities. If one or more of our distribution facilities experiences operational difficulties or becomes inoperable, it could have a material adverse effect on our business, results of operations and financial condition.

We operate a limited number of distribution facilities. Our ability to meet the needs of our own retail stores and e-commerce sites, as well as our wholesale customers, depends on the proper and uninterrupted operation of these distribution facilities. If any of these distribution facilities were to shut down or otherwise become inoperable or inaccessible for any reason (including as a result of a government mandate or order due to COVID-19), we could suffer a substantial loss of inventory and/or disruptions of deliveries to our retail and wholesale customers. In addition, we could incur significantly higher costs and longer lead times associated with the distribution of our products during the time it takes to reopen or replace the damaged facility. Any of the foregoing factors could result in decreased sales and have a material adverse effect on our business, results of operations and financial condition.

In addition, we have been moving into new and larger facilities as needed to further support our efforts to operate with increased efficiency and flexibility. There are risks inherent in operating in new distribution environments and implementing new warehouse management systems, including technological and operational difficulties that may arise with such transitions. We may experience shipping delays should there be any disruptions in our new warehouse management systems or warehouses themselves.

~~The departure of members of our executive management and other key employees or our failure to attract and retain qualified personnel could have a material adverse effect on our business.~~

We depend on the services and management experience of executive officers, who have substantial experience and expertise in our business. We also depend on other key employees involved in our design and marketing operations, including our creative officers for each of our brands, Ms. Donatella Versace, Ms. Sandra Choi and Mr. Michael Kors. Competition for qualified personnel in the fashion industry is intense, and competitors may use aggressive tactics to recruit our executive officers and key employees. Our ability to attract and retain employees is influenced by our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates. Although we have entered into employment agreements with our executive officers and other key employees, we may not be able to retain the services of such individuals in the future. The loss of services of one or more of these individuals or any negative public perception with respect to, or relating to, the loss of one or more of these individuals, could have a material adverse effect on our business, results of operations and financial condition. In addition, our operational efficiency initiatives as well as acquisitions and related integration activity may intensify this risk.

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We must also attract, develop, motivate and retain a sufficient number of qualified retail and distribution center personnel. Historically, competition for talent has been intense and the turnover rate in the retail industry is generally high. There can be no assurance that we will be able to attract or retain a sufficient number of qualified employees in future periods to execute on our business objectives. Additionally, our ability to meet our labor needs while also controlling costs is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation, and overtime regulations. If we are unable to attract, develop, motivate and retain talented employees with the necessary skills and experience, or if changes to our organizational structure, operating results, or business model, including as a result of COVID-19, adversely affect morale, hiring and/or retention, we may not achieve our objectives and our results of operations could be adversely impacted.

~~Our share price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance.~~

Our business and long-range planning process is designed to maximize our long-term growth and profitability and not to achieve an earnings target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of our Company and our shareholders. At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of total revenue, earnings per share, comparable store sales and other financial metrics or projections. Historically, we have provided updates to our financial guidance when we report our results each fiscal quarter, but we do not have any responsibility to update any of our forward-looking statements at such times or otherwise. The dynamic nature of COVID-19 on our business makes it difficult for us to accurately project the potential impact on our business and therefore we may not provide quarterly or year-end guidance for the foreseeable future. In addition, any longer-term guidance that we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years. However, such long-range targets are more difficult to predict than our current quarter and fiscal year expectations. If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our share price could be adversely affected. Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk. We take no responsibility for any losses suffered as a result of such changes in our share price.

We periodically return value to shareholders through our share repurchase program. Investors may have an expectation that we will repurchase all shares available under our share repurchase program. As a result of COVID-19, we suspended our share repurchase program. The market price of our securities could be adversely affected if our share repurchase activity differs from investors’ expectations or if our share repurchase program were to terminate.

~~Fluctuations in our tax obligations and changes in tax laws, treaties and regulations may have a material adverse impact on our future effective tax rates and results of operations.~~

Our subsidiaries are subject to taxation in the U.S. and various foreign jurisdictions, with the applicable tax rates varying by jurisdiction. As a result, our overall effective tax rate is affected by the proportion of earnings from the various tax jurisdictions. We record tax expense based on our estimates of taxable income and required reserves for uncertain tax positions in multiple tax jurisdictions. At any time, there are multiple tax years that are subject to examinations by various taxing authorities. The ultimate resolution of these audits and negotiations with taxing authorities may result in a settlement amount that differs from our original estimate. Any proposed or future changes in tax laws, treaties and regulations or interpretations where we operate could have a material adverse effect on our effective tax rates, results of operations and financial condition.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act included significant changes to the U.S. corporate income tax system including, among other things, lowering the U.S. statutory federal tax rate to 21% and implementing a territorial tax system. The Tax Act also added many new provisions, including changes to bonus depreciation, limits on the deductions for executive compensation and interest expense, a tax on global intangible low-taxed income, the base erosion anti-abuse tax and a deduction for foreign derived intangible income.

On March 26, 2015, the U.K. enacted new Diverted Profits Tax legislation (the “DPT”), which was effective on April 1, 2015. Under the DPT, profits of certain multinational enterprises (such as the Company) deemed to have been artificially diverted from the U.K. will be taxed at a rate of 25%. While the Company believes that all of its affiliated entities and the transactions among them have the required economic substance, there is no assurance that this legislation will not have a material effect on its results of operations and financial condition.

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We and our subsidiaries are also engaged in a number of intercompany transactions. Although we believe that these transactions reflect arm’s-length terms and that proper transfer pricing documentation is in place, the transfer prices and conditions may be scrutinized by local tax authorities, which could result in additional tax liabilities. On October 5, 2015, the Organization for Economic Co-operation and Development, an international association of thirty four countries, including the U.S. and U.K., released the final reports from its Base Erosion and Profit Shifting (BEPS) Action Plans. The BEPS recommendations covered a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties. Future tax reform resulting from this development may result in changes to long-standing tax principles, which could adversely affect our effective tax rate or result in higher cash tax liabilities.

~~Our business is exposed to foreign currency exchange rate fluctuations.~~

Our results of operations for our international subsidiaries are exposed to foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into U.S. dollars during financial statement consolidation. If the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions could impact our consolidated results of operations. In addition, we have intercompany notes amongst certain of our non-U.S. subsidiaries, which may be denominated in a currency other than the local currency of a particular reporting entity. As a result of using a currency other than the functional currency of the related subsidiary, results of these operations may be adversely affected during times of significant fluctuation between the functional currency of that subsidiary and the denomination currency of the note. We continuously monitor our foreign currency exposure and hedge a portion of our foreign subsidiaries’ foreign currency-denominated inventory purchases to minimize the impact of changes in foreign currency exchange rates. However, we cannot fully anticipate all of our foreign currency exposures and cannot ensure that these hedges will fully offset the impact of foreign currency exchange rate fluctuations.

As a result of operating retail stores and concessions in various countries outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates, particularly the Euro, the British Pound, the Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian Dollar, among others. A substantial weakening of foreign currencies against the U.S. Dollar could require us to raise our retail prices or reduce our profit margins in various locations outside of the U.S. In addition, our sales and profitability could be negatively impacted if consumers in those markets were unwilling to purchase our products at increased prices.

~~Our current and future licensing and joint venture arrangements may not be successful and may make us susceptible to the actions of third parties over whom we have limited control.~~

We have entered into a select number of product licensing agreements with companies that produce and sell, under our trademarks, products requiring specialized expertise. We have also entered into a number of select licensing agreements pursuant to which we have granted third parties certain rights to distribute and sell our products in certain geographical areas and have a number of joint ventures. In the future, we may enter into additional licensing and/or joint venture arrangements. Although we take steps to carefully select our partners, such arrangements may not be successful. Our partners may fail to fulfill their obligations under their agreements or have interests that differ from or conflict with our own, such as the timing of new store openings, the pricing of our products and the offering of competitive products. In addition, the risks applicable to the business of our partners may be different than the risks applicable to our business, including risks associated with each such partner’s ability to:

•~~obtain capital;~~

•~~exercise operational and financial control over its business;~~

•~~manage its labor relations;~~

•~~maintain relationships with suppliers;~~

•~~manage its credit and bankruptcy risks which may be exacerbated by the impact of COVID-19; and~~

•~~maintain customer relationships.~~

Any of the foregoing risks, or the inability of any of our partners to successfully market our products or otherwise conduct its business, may result in loss of revenue and competitive harm to our operations in regions or product categories where we have entered into such licensing arrangements.

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~~Increases in the cost of raw materials could increase our production costs and cause our operating results and financial condition to suffer.~~

Our business is subject to volatility in costs related to certain raw materials used in the manufacturing of our products. The costs of raw materials used in our products are affected by, among other things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries and other factors that are generally unpredictable and beyond our control. We are not always successful in our efforts to protect our business from the volatility of the market price of raw materials and our business can be materially affected by dramatic movements in prices of raw materials. The ultimate effect of this change on our earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on our business, results of operations and financial condition. In addition, our costs may be impacted by sanction tariffs imposed on our products due to changes in trade terms and increased manufacturing labor costs which are also subject to degrees of volatility based on local and global economic conditions. Increases in commodity prices, tariffs and manufacturing labor costs could increase our production costs and negatively impact our revenues, results of operations and financial condition.

We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods, which poses legal, regulatory, political and economic risks to our business operations.

Our products are primarily produced by, and purchased or procured from, independent manufacturing contractors located mainly in Asia and Europe. A manufacturing contractor’s failure to ship products to us in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items. The failure to make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us. In addition, any of the following factors could negatively affect our ability to produce or deliver our products and, as a result, could have a material adverse effect on our business, results of operations and financial condition:

•disease pandemics, epidemics and health-related concerns, including related to COVID-19, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;

•~~significant delays or disruptions in delivery of our products due to labor disputes or strikes at the location of the source of our goods and/or at ports of entry;~~

•~~political or military conflict, which could cause a delay in the transportation of our products and raw materials and increase transportation costs;~~

•heightened terrorism security concerns, which could subject imported or exported goods to additional, more frequent or more thorough inspections, leading to delays in deliveries or impoundment of goods for extended periods of time or could result in increased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures and damage to the reputation of our brands;

•~~a significant decrease in availability or an increase in the cost of raw materials;~~

•~~the migration and development of manufacturing contractors, which could affect where our products are or are planned to be produced;~~

•imposition of regulations, quotas and safeguards relating to imports and our ability to adjust in a timely manner to changes in trade regulations, which, among other things, could limit our ability to produce products in cost-effective countries that have the labor and expertise needed;

•~~increases in the costs of fuel, travel and transportation;~~

•~~imposition of duties, taxes and other charges on imports, including if the United States follows through on its proposed additional China tariffs;~~

•~~significant fluctuation of the value of the U.S. Dollar against foreign currencies; and~~

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•~~restrictions on transfers of funds out of countries where our foreign licensees are located.~~

We do not have written agreements with any of our third-party manufacturing contractors. As a result, any single manufacturing contractor could unilaterally terminate its relationship with us at any time. For example, in Fiscal 2020, Michael Kors’ largest manufacturing contractor, who produces its products in Asia and who Michael Kors has worked with for over ten years, accounted for the production of 20% of its finished products, based on dollar volume. Our inability to promptly replace manufacturing contractors that terminate their relationships with us or cease to provide high quality products in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition, and impact the cost and availability of our goods.

In addition, Michael Kors uses third-party agents to source its finished goods with numerous manufacturing contractors on its behalf. Any single agent could unilaterally terminate its relationship with Michael Kors at any time. In Fiscal 2020, Michael Kors’ largest third-party agent, whose primary place of business is Hong Kong and who Michael Kors has worked with for over 10 years, sourced approximately 26% of its purchases of finished goods, based on unit volume. Our inability to promptly replace agents that terminate their relationships with us or cease to provide high quality service in a timely and cost-efficient manner could have a material adverse effect on our business, results of operations and financial condition.Regulatory

If we fail to comply with labor laws or collective bargaining agreements, or if our independent manufacturing contractors fail to use acceptable, ethical business practices, our business and reputation could suffer.

We are subject to labor laws governing relationships with employees, including minimum wage requirements, overtime, working conditions and citizenship requirements. ~~Versace and Jimmy Choo~~We are also subject to collective bargaining agreements with respect to employees in certain European countries. Compliance with these laws and regulations, as well as collective bargaining agreements, may lead to increased costs and operational complexity and may increase our exposure to governmental investigations or litigation.

We require our independent manufacturing contractors to operate in compliance with applicable laws, rules and regulations regarding working conditions, employment practices and environmental ~~compliance. Additionally, we impose upon~~compliance, as well as our ~~business partners operating guidelines that require additional obligations in those three areas in order to promote ethical business practices,~~Supplier Code of Conduct and other compliance policies under our Factory Social Compliance Program. Our staff and third parties we retain for such purposes periodically visit and monitor the operations of our independent manufacturing contractors to determine compliance. However, we generally do not control ~~our~~these manufacturing contractors or suppliers or their labor, ~~and~~environmental or other business practices. ~~If one~~The violation of ~~our manufacturing contractors violates applicable~~ labor, environmental or other laws ~~rules~~by an independent manufacturer or ~~regulations~~supplier, or ~~implements~~divergence of an independent manufacturer’s or supplier’s labor practices from those generally accepted as ethical or ~~other business practices~~appropriate or that ~~are generally regarded as unethical,~~violate our Supplier Code of Conduct, could interrupt or otherwise disrupt the shipment of ~~finished~~our products, ~~to us~~harm our trademarks or damage our reputation. Further, we could be ~~interrupted, orders could be cancelled, relationships could be terminated and our reputation could be damaged. Any~~prohibited from importing goods by governmental authorities. The occurrence of any of these events could ~~have a material adverse effect on~~materially adversely affect our business, financial condition and results of ~~operations and financial condition.~~operations.

We may be unable to protect our trademarks, copyrights and other intellectual property rights, and others may allege that we infringe upon their intellectual property rights.

Our VERSACE, JIMMY CHOO and MICHAEL KORS trademarks, as well as other material trademarks, copyrights and design and patent rights related to the production, marketing and distribution of our products, are important to our success and our competitive position. We are susceptible to others imitating our products and infringing our intellectual property rights in the Americas, EMEA, Asia and elsewhere in the world in both online and offline channels. Our brands enjoy significant worldwide consumer recognition and the generally higher pricing of our products creates additional incentive for counterfeiters to infringe on our brands. We work with customs authorities, law enforcement, legal representatives and brand specialists globally in an effort to prevent the sale of counterfeit products, but we cannot guarantee the extent to which our efforts to prevent counterfeiting of our brands and other intellectual property infringement will be successful. Such counterfeiting and other intellectual property infringement could dilute our brands and otherwise harm our reputation and business.

Our trademark and other intellectual property applications may fail to result in registered trademarks or other intellectual property or to provide the scope of coverage sought, and others may seek to invalidate our trademarks, copyrights or other intellectual property or block sales of our products as an alleged violation of their trademarks and/or intellectual property rights. In addition, others may assert rights in, or ownership of, trademarks, copyrights and/or other intellectual property rights of ours or in trademarks, copyrights or other intellectual property that are similar to ours or that we license, and we may not be able to successfully resolve these types of conflicts to our satisfaction. In some cases, other intellectual property owners may have prior rights to our trademarks or similar trademarks or intellectual property. Furthermore, the laws of certain foreign countries may not protect trademarks, copyrights and/or other intellectual property rights to the same extent as the laws of the United States or the European Union.

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From time to time, in the ordinary course of our business, we become involved in opposition and cancellation proceedings with respect to trademarks or other intellectual property similar to some of our brands. Any litigation or dispute involving the scope or enforceability of our intellectual property rights or any allegation that we infringe upon the intellectual property rights of others could be costly and time-consuming and, if determined adversely to us, could result in harm to our competitive position.

We self-insure certain risks and may be impacted by unfavorable claims experience.

We use a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks including, employee health-care benefits, workers’ compensation, employer

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liability, general liability, marine transport and inventory, property damage, cyber risk and business interruption. Claims are difficult to predict and may be volatile. Any adverse claims experience could have a material adverse effect on our results of operations, financial condition and cash flows.

We are subject to various proceedings, lawsuits, disputes and claims in the ordinary course of business which could have an adverse impact on our business, financial condition and results of operations.

We are a global company and are subject to various proceedings, lawsuits, disputes and claims throughout the world in the ordinary course of business. These claims could include commercial, intellectual property, employment, customer and data privacy claims, as well as class action lawsuits. Typically, these claims raise complex factual and legal issues and are subject to uncertainties. Plaintiffs may seek unspecified damages and/or injunctive or other equitable relief. Our potential liability may be covered in part by our insurance policies, but we may not always have adequate insurance to defend all claims. An unfavorable outcome in any proceeding, lawsuit, dispute or claim may have an adverse impact on our business, financial condition and results of operations.

Risks Related to Our Debt

As of April 2, 2022, our consolidated indebtedness was approximately $1.2 billion, net of debt issuance costs. Our total borrowings as of April 2, 2022 primarily relate to senior notes of $450 million, term loans of $497 million and revolving credit facility of $175 million. Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depends on our ability to generate cash from our operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our substantial level of indebtedness could have negative consequences to our business and we cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make necessary capital expenditures or pursue certain business opportunities. Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing and negatively impact our ability to enter into new financing arrangements in the future.

In addition, our ability to access the credit and capital markets in the future as a source of funding, and the borrowing costs associated with such financing, is dependent upon market conditions and our credit rating and outlook. We are currently rated investment grade by two of the Company’s three credit rating agencies. If our investment rating is downgraded in the future, it could result in reduced access to the credit and capital markets, more restrictive covenants in future financial documents and higher interest costs and potentially increased lease or hedging costs.

We may be unable to meet financial covenants in our indebtedness agreements which could result in an event of default and restrictive covenants in such agreements may restrict our ability to pursue our business strategies.

The terms of our indebtedness contain affirmative and negative covenants that impose operating and financial restrictions on us and may restrict our ability to engage in future business opportunities or pursue our strategies. The Company’s 2018 Credit Facility requires us to maintain a quarterly maximum permitted net leverage ratio of no greater than 4.0 to 1.0. The 2018 Credit Facility and the Indenture governing our senior notes contain certain restrictive covenants, including restrictions on our ability to:

•incur additional indebtedness and guarantee indebtedness;

•pay dividends or make other distributions or repurchase or redeem capital stock;

•make loans and investments, including acquisitions;

•sell assets;

•incur liens;

•enter into transactions with affiliates; and

•consolidate, merge or sell all or substantially all of our assets

which collectively may limit our ability to engage in acts that may be in our long-term best interest.

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acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreement governing our 2018 Credit Facility would permit the lenders under our 2018 Credit Facility to terminate all commitments to extend further credit under that facility. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:

•limited in how we conduct our business;

•unable to raise additional debt or equity financing to operate during general economic or business downturns, including as a result of the ongoing COVID-19 pandemic and recent inflationary pressures and possible recession; or

•unable to compete effectively or to take advantage of new business opportunities.

Risks Related to Our Ordinary Shares

Our share price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance.

Our business and long-range planning process is designed to maximize our long-term growth and profitability and not to achieve an earnings target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of our Company and our shareholders. At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of total revenue, earnings per share and other financial metrics or projections. While we generally expect to provide updates to our financial guidance when we report our results each fiscal quarter, we do not have any responsibility to update any of our forward-looking statements at such times or otherwise. In addition, any longer-term guidance that we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years. However, such long-range targets are more difficult to predict than our current quarter and fiscal year expectations. If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our share price could be adversely affected. Investors who rely on these predictions when making investment decisions with respect to our securities do so at their own risk. We take no responsibility for any losses suffered as a result of such changes in our share price.

We periodically return value to shareholders through our share repurchase program. Investors may have an expectation that we will repurchase all shares available under our share repurchase program. The market price of our securities could be adversely affected if our share repurchase activity differs from investors’ expectations or if our share repurchase program were to terminate.

Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting, which could harm our business and cause a decline in the price of our ordinary shares.

As a public company, we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal control over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have an adverse effect on our business and cause a decline in the price of our ordinary shares.

We are subject to various proceedings, lawsuits, disputes, and claims in the ordinary course of business which could have an adverse impact on our business, financial condition, and results of operations.

We are a global company and are subject to various proceedings, lawsuits, disputes and claims throughout the world in the ordinary course of business. These claims could include commercial, intellectual property, employment, customer, and data privacy claims, as well as class action lawsuits. As a result of the COVID-19 pandemic, we may face an increase in claims against us including by landlords or other commercial counterparties, employees and customers. Typically, these claims raise complex factual and legal issues and are subject to uncertainties. Plaintiffs may seek unspecified damages and/or injunctive or other equitable relief. Our potential liability may be covered in part by our insurance policies, but we may not always have adequate insurance to defend all claims. An unfavorable outcome in any proceeding, lawsuit, dispute or claim may have an adverse impact on our business, financial condition and results of operations.

~~Our business is susceptible to the risks associated with climate change and other environmental impacts which could negatively affect our business and operations.~~

Our retail stores, distribution centers and manufacturing facilities, including those operated by third-parties, are subject to risks relating to climate change and other environmental impacts from our operations. For example, the physical effects of climate change, such as severe weather events and/or significant changes in climate patterns as well as our carbon emissions and our business’ overall impact on the environment could subject us to reputational, market and/or regulatory risks. Climate change and other environmental concerns may cause social and economic disruptions in the places where we operate, including disruptions to our supply chain and to local infrastructure and transportation systems which could limit material availability and quality, impact our ability to ship and deliver product and prevent access to our physical locations. These events could also adversely affect the economy and negatively impact consumer confidence and discretionary spending. In April 2020, we announced a global strategy to achieve significant, measurable goals across a range of important environmental and social sustainability issues, including, material sourcing, reducing greenhouse gas emissions and converting to renewal energy, responsible water use, and waste reduction. We may not be successful in attaining our goals, and even if we meet our commitments, there remains a significant risk that climate change and other environmental events could negatively impact our operations.

Provisions in our organizational documents may delay or prevent our acquisition by a third party.

Our Memorandum and Articles of Association (together, as amended from time to time, our “Memorandum and Articles”) contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of our board of directors. These provisions ~~also~~ may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their ordinary shares. These provisions include, among others:

•our board of directors’ ability to amend the Memorandum and Articles to create and issue, from time to time, one or more classes of preference shares and, with respect to each such class, to fix the terms thereof by resolution;

•provisions relating to the multiple classes and three-year terms of directors, the manner of election of directors, removal of directors and the appointment of directors upon an increase in the number of directors or vacancy on our board of directors;

•restrictions on the ability of shareholders to call meetings and bring proposals before meetings;

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•elimination of the ability of shareholders to act by written consent; and

•the requirement of the affirmative vote of 75% of the shares entitled to vote to amend certain provisions of our Memorandum and Articles.

These provisions of our Memorandum and Articles could discourage potential takeover attempts and reduce the price that investors might be willing to pay for our ordinary shares in the future, which could reduce the market price of our ordinary shares.

Rights of shareholders under British Virgin Islands law differ from those under United States law, and, accordingly, our shareholders may have fewer protections.

Our corporate affairs are governed by our Memorandum and Articles, the BVI Business Companies Act, 2004 (as amended, the “BVI Act”) and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the common law of the British Virgin Islands and by the BVI Act. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of the foregoing, holders of our ordinary shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a ~~U.S.~~United States company.

The laws of the British Virgin Islands provide limited protection for minority shareholders, so minority shareholders will have limited or no recourse if they are dissatisfied with the conduct of our affairs.

Under the laws of the British Virgin Islands, there is limited statutory law for the protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents of a British Virgin Islands company and are entitled to have the affairs of the ~~company~~Company conducted in accordance with the BVI Act and the memorandum and articles of association of the ~~company.~~Company. As such, if those who control the ~~company~~Company have persistently disregarded the requirements of the BVI Act or the provisions of the ~~company’s~~Company’s memorandum and articles of association, then the courts will likely grant relief. Generally, the areas in which the courts will intervene are the following: (i) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (ii) acts that constitute fraud on the minority where the wrongdoers control the ~~company;~~Company; (iii) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (iv) acts where the ~~company~~Company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws of many states in the United States.

It may be difficult to enforce judgments against us or our executive officers and directors in jurisdictions outside the United States.

Under our Memorandum and Articles, we may indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions. Furthermore, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder will be governed exclusively by the laws of the British Virgin Islands and subject to the jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise out of their capacities as such. Although there is doubt as to whether United States' courts would enforce these provisions in an action brought in the United States under United States securities laws, these provisions could make judgments obtained outside of the British Virgin Islands more difficult to enforce against our assets in the British Virgin Islands or jurisdictions that would apply British Virgin Islands law.

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British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of one avenue to protect their interests.

British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect of any such action, may result in the rights of shareholders of a British Virgin Islands' company being more

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limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce judgments of courts in the United States based on certain liability provisions of United States securities law or to impose liabilities, in original actions brought in the British Virgin Islands, based on certain liability provisions of the United States securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The following table sets forth the location, use and size of our significant distribution and corporate facilities as of ~~March 28, 2020,~~April 2, 2022, all of which are leased with the exception of our distribution center in the Netherlands, our central warehouse in Italy and luxury shoe factory in Italy, which are owned. The leases expire at various times through Fiscal 2044, subject to renewal options.

Location

Use

Approximate Square
Footage

Whittier, CA

Michael Kors ~~U.S.~~United States Distribution Center

~~1,284,430~~1,181,000

Venlo, Netherlands

Michael Kors and Jimmy Choo European Distribution Center

~~1,096,330~~1,096,000

New York, NY

Michael Kors, Versace and Jimmy Choo ~~U.S.~~United States Corporate Offices

~~262,780~~284,000

Montreal, Quebec

Michael Kors Canadian Corporate Office and Distribution ~~Centers~~Center

~~150,440~~150,000

Novara, Italy

Versace European Distribution Center

~~108,810~~109,000

Milan, Italy

Versace Corporate Offices

~~54,070~~90,000

~~East Rutherford, NJ~~Milan, Italy

~~Michael Kors U.S. Corporate Offices~~Versace Showroom

~~53,480~~54,000

Novara, Italy

Versace Manufacturing and Distribution Center

~~45,700~~46,000

East Rutherford, NJ

Michael Kors United States Corporate Offices

43,000

Pistoia, Italy

Capri Luxury Shoe Factory

~~41,050~~41,000

Milan, Italy

Michael Kors Regional Corporate Office and Showroom

~~24,660~~25,000

Shangai, China

Michael Kors, Versace and Jimmy Choo Regional Corporate Offices

25,000

London, England

Jimmy Choo Corporate Offices

~~23,950~~

~~New York, NY~~

~~Versace U.S. Corporate Offices~~

~~21,340~~24,000

Manno, Switzerland

Michael Kors European Corporate Offices

~~18,400~~18,000

London, England

Capri Corporate Headquarters and Michael Kors Regional Corporate Office

~~17,830~~18,000

As of ~~March 28, 2020,~~April 2, 2022, we also occupied 1,271 leased retail stores worldwide (including concessions). We consider our properties to be in good condition and believe that our facilities are adequate for our operations and provide sufficient capacity to meet our anticipated requirements.

Other than the land and building for our Michael Kors and Jimmy Choo European distribution center in the Netherlands, our Versace central warehouse in Italy and our Capri luxury shoe factory in Italy, property and equipment related to our stores (e.g. leasehold improvements, fixtures, etc.) and computer equipment, we did not own any material property as of ~~March 28, 2020.~~April 2, 2022.

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Item 3. Legal Proceedings

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.

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Item 4. Mine Safety Disclosures

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our ordinary shares trade on the NYSE under the symbol “CPRI”. At ~~March 28, 2020,~~April 2, 2022, there were ~~149,425,612~~142,806,269 ordinary shares outstanding, and the closing price of our ordinary shares was ~~$11.67.~~$50.99. Also as of that date, we had approximately ~~100~~127 ordinary shareholders of record.

Share Performance Graph

The line graph below compares the cumulative total shareholder return on our ordinary shares with the Standard & Poor’s (“S&P”) 500 Stock Index ~~(GSPC),~~and the S&P ~~Retailing~~500 Apparel, Accessories & Luxury Goods Index ~~(RLX), and a peer group index of companies that we believe are closest to ours~~ for the five-year period from March ~~27, 2015~~31, 2017 through ~~March 27, 2020,~~April 1, 2022, the last business day of ~~the~~ our fiscal year. The ~~peer group index consists of the following companies: Tapestry, Inc., Guess?, Inc., PVH Corp., L Brands, Inc., Ralph Lauren Corporation, Tiffany & Co. and VF Corporation. The~~ graph below assumes ~~that~~ an investment of $100 made at the ~~closing~~close of trading on March ~~27, 2015,~~31, 2017, in ~~(i)~~ our ordinary shares ~~(ii)~~and each of the ~~shares comprising the GSPC, (iii) the shares comprising the RLX and (iv) the shares comprising our peer group index.~~indices presented. All values assume reinvestment of the full amount of all dividends, if any, into additional shares of the same class of equity securities at the frequency with which dividends are paid on such securities during the applicable time period.

Issuer Purchases of Equity Securities

~~Our share repurchases were made under~~During the first quarter of Fiscal 2022, we reinstated our $500 million share repurchase program, which was ~~approved by~~previously suspended during the first quarter of Fiscal 2021 in response to the impact of the COVID-19 pandemic and the provisions of the Second Amendment of the 2018 Credit Facility. Subsequently, on November 3, 2021, we announced that our Board of Directors ~~on August 1, 2019.~~terminated the Company’s existing $500 million share repurchase program (the “Prior Plan”), which had $250 million of availability remaining at the time, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which we may, from time to time, repurchase up to $1.0 billion of our outstanding ordinary shares within a period of two years from the effective date of the program. We also have in place a “withhold to cover” repurchase program, which allows us to withhold ordinary shares from certain executive officers and directors to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards.

On June 1, 2022, we announced that our Board of Directors has terminated our Fiscal 2022 Plan, with $500 million of availability remaining, and authorized a new share repurchase program pursuant to which we may, from time to time, repurchase up to $1.0 billion of our outstanding ordinary shares within period of two years from the effective date of the program. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions,

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applicable legal requirements, trading restrictions under our insider trading policy and other relevant factors. The program may be suspended or discontinued at any time.

The following table provides information regarding our ordinary share repurchases during the three months ended ~~March 28, 2020:~~April 2, 2022:

~~Total Number of Shares Purchased~~

~~Average Price Paid per Share~~

~~Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs~~

Maximum Number (or
Approximated Dollar Value)
of Shares (or Units) That
May Yet Be Purchased
Under the Plans or Programs (in millions)

~~December 29 – January 25~~

—

~~400~~

~~January 26 – February 22~~

—

~~400~~

~~February 23 – March 28~~

—

~~400~~

—


	Total Number of Shares	Average Price Paid per Share		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximated Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (in millions)
December 26, 2021 – January 22, 2022	—	$	—	—	$	800
January 23, 2022 – February 19, 2022	943,978	$	66.40	943,978	$	737
February 20, 2022 – April 2, 2022	4,146,860	$	57.36	4,136,319	$	500
	5,090,838			5,080,297

~~The share repurchase program was suspended on April 6, 2020 in response to the continued global health and economic impact of the COVID-19 pandemic.~~

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Item 6. Selected Financial Data

The following table sets forth selected historical consolidated financial and other data for Capri Holdings Limited and its consolidated subsidiaries for the periods presented. The ~~statements~~statement of operations data for Fiscal 2022, Fiscal 2021 and Fiscal 2020 and the balance sheet data as of the end of Fiscal 2022 and Fiscal 2021 have been derived from our audited consolidated financial statements included elsewhere in this report. The statement of operations data for Fiscal 2019 and Fiscal 2018 and the balance sheet data as of the end of Fiscal 2020, Fiscal 2019 and Fiscal 2019 have been derived from our audited consolidated financial statements included elsewhere in this report. The statements of operations data for Fiscal 2017 and Fiscal 2016 and the balance sheet data as of the end of Fiscal 2018 ~~Fiscal 2017 and Fiscal 2016~~ have been derived from our prior audited consolidated financial statements, which are not included in this report.

The selected historical consolidated financial data below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included ~~elsewhere~~ in this annual report.

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018 April 1,
2017
April 2,
2016⁽¹⁾
(data presented in millions, except for shares and per share data)
Statement of Operations Data:
Total revenue $ 5,551 $ 5,238 $ 4,719 $ 4,494 $ 4,712
Cost of goods sold 2,280 2,058 1,860 1,833 1,915
Gross profit 3,271 3,180 2,859 2,661 2,797
Selling, general and administrative expenses 2,464 2,075 1,767 1,541 1,428
Depreciation and amortization 249 225 208 220 183
Impairment of assets 708 21 33 199 11
Restructuring and other charges ⁽²⁾
42 124 102 11 —
Total operating expenses 3,463 2,445 2,110 1,971 1,622
(Loss) Income from operations (192) 735 749 690 1,175
Other income (6) (4) (2) (6) (4)
Interest expense, net 18 38 22 4 2
Foreign currency loss (gain) 11 80 (13) 3 5
(Loss) income before provision for income taxes (215) 621 742 689 1,172
Provision for income taxes 10 79 150 137 334
Net (loss) income (225) 542 592 552 838
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (2) (1) — (1) (1)
Net (loss) income attributable to Capri $ (223) $ 543 $ 592 $ 553 $ 839
Weighted average ordinary shares outstanding:
Basic 150,714,598 149,765,468 152,283,586 165,986,733 186,293,295
Diluted 150,714,598 151,614,350 155,102,885 168,123,813 189,054,289
Net (loss) income per ordinary share⁽³⁾:
Basic $ (1.48) $ 3.62 $ 3.89 $ 3.33 $ 4.50
Diluted $ (1.48) $ 3.58 $ 3.82 $ 3.29 $ 4.44

⁽¹⁾~~Fiscal year ended April 2, 2016 contained 53 weeks, whereas all other fiscal years presented are based on 52-week periods.~~

⁽²⁾~~Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan (as defined in Note 11~~) and other restructuring initiatives, and costs recorded in connection with the acquisitions of Versace, Jimmy Choo and Michael Kors (HK) Limited and Subsidiaries (see Note 11 to the accompanying audited consolidated financial statements).

⁽³⁾Basic net (loss) income per ordinary share is computed by dividing net (loss) income available to ordinary shareholders of Capri by basic weighted average ordinary shares outstanding. Diluted net (loss) income per ordinary share is computed by dividing net (loss) income attributable to ordinary shareholders of Capri by diluted weighted average ordinary shares outstanding.


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020		March 30, 2019		March 31, 2018
	(data presented in millions, except for shares and per share data)
Statement of Operations Data:
Total revenue	$	5,654	$	4,060	$	5,551	$	5,238	$	4,719
Cost of goods sold	1,910		1,463		2,280		2,058		1,860
Gross profit	3,744		2,597		3,271		3,180		2,859
Selling, general and administrative expenses	2,533		2,018		2,464		2,075		1,767
Depreciation and amortization	193		212		249		225		208
Impairment of assets	73		316		708		21		33
Restructuring and other charges	42		32		42		124		102
Total operating expenses	2,841		2,578		3,463		2,445		2,110
Income (loss) from operations	903		19		(192)		735		749
Other income	(2)		(7)		(6)		(4)		(2)
Interest (income) expense, net	(18)		43		18		38		22
Foreign currency loss (gain)	8		(20)		11		80		(13)
Income (loss) before provision for income taxes	915		3		(215)		621		742
Provision for income taxes	92		66		10		79		150
Net income (loss)	823		(63)		(225)		542		592
Less: Net income (loss) attributable to noncontrolling interest	1		(1)		(2)		(1)		—
Net income (loss) attributable to Capri	$	822	$	(62)	$	(223)	$	543	$	592

Weighted average ordinary shares outstanding:
Basic	149,724,675		150,453,568		150,714,598		149,765,468		152,283,586
Diluted	152,497,907		150,453,568		150,714,598		151,614,350		155,102,885
Net income (loss) per ordinary share attributable to Capri:
Basic	$	5.49	$	(0.41)	$	(1.48)	$	3.62	$	3.89
Diluted	$	5.39	$	(0.41)	$	(1.48)	$	3.58	$	3.82

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		Fiscal Years Ended																			Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018		April 1, 2017		April 2, 2016⁽¹⁾			April 2, 2022		March 27, 2021		March 28, 2020		March 30, 2019		March 31, 2018
		(data presented in millions, except for share and store data)																			(data presented in millions, except for share and store data)
Operating Data:	Operating Data:											Operating Data:
Retail stores, including concessions, end of period	Retail stores, including concessions, end of period	1,271		1,249		1,011		827		668		Retail stores, including concessions, end of period	1,271		1,257		1,271		1,249		1,011

Balance Sheet Data:	Balance Sheet Data:											Balance Sheet Data:
Working capital	Working capital	$	493	$	187	$	302	$	599	$	1,234	Working capital	$	325	$	(75)	$	493	$	187	$	302
Total assets	Total assets	$	7,946	$	6,650	$	4,059	$	2,410	$	2,567	Total assets	$	7,480	$	7,481	$	7,946	$	6,650	$	4,059
Short-term debt	Short-term debt	$	167	$	630	$	200	$	133	$	—	Short-term debt	$	29	$	123	$	167	$	630	$	200
Long-term debt	Long-term debt	$	2,012	$	1,936	$	675	$	—	$	2	Long-term debt	$	1,131	$	1,219	$	2,012	$	1,936	$	675
Shareholders’ equity of Capri	Shareholders’ equity of Capri	$	2,167	$	2,429	$	2,018	$	1,593	$	1,996	Shareholders’ equity of Capri	$	2,559	$	2,158	$	2,167	$	2,429	$	2,018
Number of ordinary shares issued	Number of ordinary shares issued	217,320,010		216,050,939		210,991,091		209,332,493		208,084,175		Number of ordinary shares issued	221,967,599		219,222,937		217,320,010		216,050,939		210,991,091

⁽¹⁾~~Fiscal year ended April 2, 2016 contained 53 weeks, whereas all other fiscal years presented are based on 52-week periods.~~

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) of our Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and notes thereto included as part of this Annual Report on Form 10-K. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of ~~Capri Holdings Limited (the “Company”)~~the Company about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements other than statements of historical facts included herein, may be forward-looking statements. Forward-looking statements include information concerning the Company’s goals, future plans and strategies, including with respect to ESG goals, initiatives and ambitions as well as the Company’s possible or assumed future results of operations, including descriptions of its business strategy. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. These forward-looking statements are not guarantees of future financial performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements. These risks, uncertainties and other factors include the effect of the COVID-19 pandemic and its potential material and significant impact on the Company’s future financial and operational results if retail stores ~~remain closed~~are forced to close again and the pandemic is prolonged, including that our estimates could materially differ if the severity of the COVID-19 situation worsens, or if there are further supply chain disruptions, including additional production delays and increased costs, the length and severity of such outbreak across the globe and the pace of recovery following the COVID-19 pandemic, levels of cash flow and future availability of credit, compliance with restrictive covenants under the Company’s credit agreement, the Company’s ability to integrate successfully and to achieve anticipated benefits of any ~~acquisition;~~acquisition and to successfully execute our growth strategies; the risk of disruptions to the Company’s businesses; risks associated with operating in international markets and our global sourcing activities; the risk of cybersecurity threats and privacy or data security breaches; the negative effects of events on the market price of the Company’s ordinary shares and its operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Company’s businesses; fluctuations in demand for the Company’s products; levels of indebtedness (including the indebtedness incurred in connection with acquisitions); the timing and scope of future share buybacks, which may be made in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors, and ~~which~~such share repurchases may be suspended or discontinued at any time, the level of other investing activities and uses of cash; changes in consumer traffic and retail trends; higher consumer debt levels, recession and inflationary pressures, loss of market share and industry competition; fluctuations in the capital markets; fluctuations in interest and exchange rates; the occurrence of unforeseen epidemics and pandemics, disasters or catastrophes; extreme weather conditions and natural disasters; political or economic instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and market conditions including acts of war and other geopolitical conflicts, as well as those risks set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including in this Annual Report on Form 10-K, particularly under “Item 1A. Risk Factors”.

Overview

Our Business

Capri Holdings Limited is a global fashion luxury group, consisting of iconic brands that are industry leaders in design, style and craftsmanship, led by a world-class management team and renowned designers. Our brands cover the full spectrum of fashion luxury categories, including women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. Our goal is to continue to extend the global reach of our brands while ensuring that they maintain their independence and exclusive DNA.

Our Versace brand has long been recognized as one of the world’s leading international fashion design houses and is synonymous with Italian glamour and style. Founded in 1978 in Milan, Versace is known for its iconic and unmistakable style and unparalleled ~~craftsmanship, over~~craftsmanship. Over the past several decades, the House of Versace has grown globally from its roots in haute couture, expanding into the design, manufacturing, distribution and retailing of accessories, ready-to-wear, ~~accessories,~~ footwear, eyewear, watches, jewelry, fragrance and home furnishings businesses. Versace’s design team is led by Donatella Versace, who has been the brand’s ~~artistic director~~Artistic Director for over 20 years. Versace distributes its products through a worldwide distribution network, which includes boutiques in some of the world’s most glamorous cities, its e-commerce ~~site,~~sites, as well as through the most prestigious department and specialty stores worldwide.

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Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product range, enabling it to develop into a leading global luxury accessories brand, whose core product offering is women’s luxury shoes, complemented by accessories, including handbags, small leather goods, jewelry, scarves and belts, as well as a growing men’s luxury ~~shoes~~shoe and accessory business. In addition, certain categories, such as fragrances ~~sunglasses~~ 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 in 1996. Jimmy Choo products are unique, instinctively seductive and chic. The brand offers classic and timeless luxury products, as well as innovative products 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.

Our Michael Kors brand was launched ~~almost~~ 40 years ago 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~~ready-to-wear 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 luxury fashion brand in the Americas and Europe with growing 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 luxury line, the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line. The Michael Kors Collection establishes the aesthetic authority of the entire brand and is carried by ~~many of our~~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,~~ready-to-wear, and addresses the significant demand opportunity in accessible luxury ~~goods.We~~goods. We have also been developing our men’s business in recognition of the significant opportunity afforded by the Michael Kors brand’s established fashion authority and the expanding men’s market. Taken together, our Michael Kors collections target a broad customer base while retaining our premium luxury image.

Certain Factors Affecting Financial Condition and Results of Operations

COVID-19 Pandemic. A novel strain of coronavirus commonly referred to as COVID-19 has spread rapidly across the globe in recent months, including throughout all major geographies in which we operate (the Americas, EMEA and Asia), resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such factors, among others, have resulted in a significant decline in retail traffic, tourism, and consumer spending on discretionary items. Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs and reduced pay, which could lower consumers’ disposable income levels or willingness to purchase discretionary items. Further, even after such government restrictions and company initiatives are lifted, consumer behavior, spending levels, and/or shopping preferences, such as their willingness to congregate in shopping centers or other populated locations, could be adversely affected.

~~In connection with the~~The ongoing COVID-19 pandemic we have experienced varying degrees of business disruptions and periods of closures of our stores, distribution centers, and corporate facilities, as have our wholesale customers, licensing partners, suppliers and vendors. Retail traffic also continueshas caused significant disruption to be challenging in those regions in which our stores are open. Additionally, our stores in the Americas and in Europe closed mid-March, and although a significant number of stores have since reopened, a large number of stores remain closed. Our wholesale business has also been adversely affected, particularly in the Americas and Europe, as a result of department store closures and lower traffic and consumer demand.

~~In response to the COVID-19 pandemic, we have taken preemptive actions to preserve cash and strengthen our liquidity, including:~~

•~~for Fiscal 2021, our board of directors annual total cash compensation will be reduced by 50%;~~

•~~temporarily foregoing and reducing executive compensation for Fiscal 2021. In addition, the company reduced overall salaries at various levels throughout the organization by approximately 20%;~~

•~~reducing our corporate workforce in order to generate additional payroll savings;~~

•~~temporarily furloughing or reducing work hours for a significant portion of our employees who nevertheless remain eligible for employee benefits during such period;~~

•~~applying for national payroll subsidy programs in various countries throughout Europe to further reduce payroll expense;~~

•~~significantly reducing inventory purchases by reducing or canceling commitments, redeploying inventory and consolidating upcoming seasons;~~

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•~~extending payment terms of our payables with our partners in order to maintain our financial flexibility for the long term;~~

•~~reducing capital expenditures in Fiscal 2021;~~

•minimizing operating expenses, including decreasing marketing spend, delaying or canceling select new store openings, reducing external third-party services and halting non-critical systems implementations in order to reduce costs;

•~~temporarily suspended our ERP project~~

•~~suspending the remaining $400 million under our current share repurchase program; and~~

•~~adding new approximately $230 million 364-day Revolver due June 2021 to bolster cash availability.~~

The COVID-19 pandemic remains highly volatile and continues to evolve on a daily basis. Accordingly, we cannot predict for how long and to what extent this crisis will impact our business operations or the global economy, ~~as a whole.~~consumer spending and behavior, tourism and to financial markets. While the overall COVID-19 situation appears to be improving, our business and operating results may be negatively impacted if the virus worsens or mutates, if vaccination efforts are unsuccessful and/or if regions or countries take further actions to contain the virus (including additional extended lock-downs and travel restrictions), among others. We ~~will~~ continue to ~~assess~~monitor the latest developments regarding the pandemic and have made certain assumptions about the pandemic for purposes of our ~~operations location-by-location, taking into account~~business and operating results, including assumptions regarding the ~~guidance of local governments~~duration, severity and global ~~health organizations~~macroeconomic impacts of the pandemic; however, the full extent of the impact of COVID-19 on our business and operating results will depend largely on future events outside of our control, including the duration and severity of the pandemic and the success of vaccination efforts, new information concerning the virus or variants of the virus, actions different states, regions or countries may take to ~~determine when our operations can begin returning to normal course~~contain the virus (including extended lock-downs and travel restrictions) and the economic impacts of ~~business.~~the pandemic, including recent inflationary pressures, among others. See Item 1A1A. “Risk Factors” — ~~"The~~“The COVID-19 pandemic ~~could~~may continue to have a material adverse effect on our business and results of ~~operations"~~operations.” for additional discussion regarding risks to our business associated with the COVID-19 pandemic.

~~Establishing brand identity and enhancing global presence.~~ We intend to continue to increase our international presence and global brand recognition by growing our existing international operations through acquisitions, the formation of various joint ventures with international partners and continuing with our international licensing arrangements. We feel this is an efficient method for continued penetration into the global luxury goods market, especially for markets where we have yet to establish a substantial presence. In addition, our growth strategy includes assuming direct control of certain licensed international operations to better manage our growth opportunities in the related regions.

Channel ~~Shift~~shift, macroeconomic factors and ~~Demand~~demand for ~~Our Accessories~~our accessories and ~~Related Merchandise~~related merchandise. Our performance is affected by trends in the luxury goods industry, global consumer spending, macroeconomic factors, overall levels of consumer travel and spending on discretionary items as well as shifts in demographics and changes in lifestyle preferences. ~~Although~~Through 2019, the ~~overall consumer spending for~~ personal luxury ~~products has~~goods market grew at a mid-single digit rate over the past 20 years, with more recent growth driven by stronger Chinese demand from both international and local consumers and demographic and socioeconomic shifts resulting in younger consumers purchasing more luxury goods. However, in 2020, due to the impact of the COVID-19 crisis, the personal luxury goods market declined 23%. Market studies indicate that the personal luxury goods market returned to 2019 levels in 2021, and the market is predicted to increase at a 10% compound annual growth rate between 2020 and 2025. Future growth is expected to be driven by e-commerce, Chinese consumers and younger generations. As the personal luxury goods market continues to evolve, Capri is committed to creating engaging luxury experiences globally. In our view, increased ~~in recent years, consumer~~customer engagement and tailoring merchandise to customer shopping and communication preferences ~~have continued~~are key to ~~shift from physical stores to on-line shopping.~~ growing market share.

We ~~currently expect that this trend will continue in the foreseeable future. We~~also continue to adjust our retail operating strategy to the changing business environment. We have finalized the planned store closures under the ~~Michael Kors~~Capri Retail ~~Fleet~~Store Optimization ~~Plan~~Program as of the end of Fiscal ~~2020.~~2022. As of ~~March 28, 2020,~~April 2, 2022, we closed ata total of ~~143~~167 stores ~~at a~~and recorded total ~~cost of $99 million and recorded~~net restructuring charges of $14 million relating to the plan. We recorded net restructuring charges of $9 million and $5 million ~~and $41 million in~~during Fiscal ~~2020~~2022 and Fiscal ~~2019, respectively.~~2021, respectively, relating to the plan. See Item 9B - Other Information for additional information. Collectively, we continue to anticipate ongoing savings as a result of the store closures and lower depreciation associated with the impairment charges being recorded. ~~In addition, during the second quarter~~

Table of Fiscal 2021, we announced that we plan to close approximately 170 of our full-price retail stores over the next two years, in order to improve the profitability of our retail store fleet. Over this time period, we expect to incur approximately $75 million of one-time costs associated with these store closures. See Item 9B - Other Information for additional information.Contents

Foreign currency fluctuation. Our consolidated operations are impacted by the relationships between our reporting currency, the ~~U.S.~~United States dollar, and those of our ~~non-U.S.~~non-United States subsidiaries whose functional/local currency is other than the ~~U.S.~~United States dollar, ~~particularly~~primarily the Euro, the British Pound, the Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian ~~Dollar,~~dollar, among others. We continue to expect volatility in the global foreign currency exchange rates, which may have a negative impact on the reported results of certain of our ~~non-U.S.~~non-United States subsidiaries in the future, when translated to ~~U.S. Dollars.~~the United States dollar.

Disruptions or delays in shipping and distribution and other supply chain constraints. ~~Our operations are subject to the impact of shipping disruptions~~We have been experiencing global logistics challenges, including delays as a result of ~~changes or damage~~port congestion, vessel availability, container shortages and temporary factory closures which are expected to continue for Fiscal 2023. Our freight costs have increased as carrier rates for ocean and air shipments have increased significantly, and the supply chain disruptions have caused us to increase our ~~distribution infrastructure, as well as due to external factors, including~~use of air freight with greater frequency than in the ~~impact of COVID-19.~~past. Any future disruptions in our shipping and distribution network, including impacts on our supply chain due to temporary closures of our manufacturing partners and shipping and fulfillment constraints, could have a negative impact on our results of operations. See Item 1A. “Risk Factors” — “We primarily use foreign manufacturing contractors and independent third-party agents to source our finished goods and our business is subject to risks inherent in global sourcing activities, including disruptions or delays in manufacturing or shipments.” for additional discussion.

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Costs of ~~Manufacturing~~manufacturing, tariffs and ~~Tariffs.~~import regulations. Our industry is subject to volatility in costs related to certain raw materials used in the manufacturing of our products. This volatility applies primarily to costs driven by commodity prices, which can increase or decrease dramatically over a short period of time. In addition, our costs may be impacted by sanction tariffs imposed on our products due to changes in trade terms. ~~On May 10, 2019,~~For example, we have historically received benefits from duty-free imports on certain products from certain countries pursuant to the ~~U.S. increased~~GSP program. The GSP program expired on December 31, 2020. If the ~~sanction tariffs rate~~GSP program is not renewed or otherwise made retroactive, we will continue to experience significant additional duties and our gross margin will continue to be negatively impacted. Additionally, we are subject to government import regulations, including CBP withhold release orders. The imposition of taxes, duties and quotas, the withdrawal from ~~10%~~or material modification to ~~25%~~trade agreements and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on ~~$200 billion~~our business, results of ~~imports of select product categories (Tranche 3), which includes handbags~~operations and ~~travel goods from China, and effective September 1, 2019, a 10% tariff on an additional $300 billion of goods from China, including ready-to-wear, footwear and men’s products, went into effect.~~financial condition. If additional tariffs or trade restrictions are implemented by the ~~U.S.~~United States or other countries, the cost of our products could increase which could adversely affect our business. In addition, commodity prices and tariffs may have an impact on our revenues, results of operations and cash flows. We use commercially reasonable efforts to mitigate these effects by sourcing our products as efficiently as possible and diversifying the countries where we produce. In addition, manufacturing labor costs are also subject to degrees of volatility based on local and global economic conditions. We use commercially reasonable efforts to source from localities that suit our manufacturing standards and result in more favorable labor driven costs to our ~~products.~~product.

Segment Information

We operate in three reportable segments, which are as follows:

Versace

We generate revenue through the sale of Versace luxury accessories, ready-to-wear ~~accessories,~~and footwear ~~and home furnishings~~ through directly operated Versace boutiques throughout North America (United States and Canada), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania), as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of products, including jeans, fragrances, watches, jewelry, eyewear and ~~eyewear.~~home furnishings.

Jimmy Choo

We generate revenue through the sale of Jimmy Choo luxury goods ~~to end clients~~ through directly operated Jimmy Choo retail and outlet stores throughout the Americas (United States, Canada and Latin America), certain parts of EMEA and certain parts of Asia, through our e-commerce sites, as well as 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), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated 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 ~~sunglasses~~ and eyewear.

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Michael Kors

We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail store formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce, through which we sell our products, as well as licensed products bearing our name, directly to ~~the end consumer~~consumers throughout the Americas, ~~Europe~~certain parts of EMEA and certain parts of Asia. Our Michael Kors e-commerce business includes e-commerce sites in the ~~U.S.,~~United States, Canada and ~~certain parts of Europe~~EMEA and Asia. We also sell Michael Kors products directly to department stores, primarily located across the Americas and ~~Europe,~~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.

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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 systems expenses, including ERP system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, ~~(including transaction and transition costs related to our recent acquisitions),~~ impairment costs, ~~and~~ COVID-19 related ~~charges.~~charges, charitable donations and the war in Ukraine. 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 (loss) ~~income~~ from operations by segment for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 (in millions):


			Fiscal Years Ended																						Fiscal Years Ended
			March 28, 2020				March 30, 2019				March 31, 2018						April 2, 2022				March 27, 2021				March 28, 2020
Total revenue:	Total revenue:															Total revenue:
		Versace	$	843			$	137			$	—			Versace		$	1,088			$	718			$	843
		Jimmy Choo	555				590				223				Jimmy Choo		613				418				555
		Michael Kors	4,153				4,511				4,496				Michael Kors		3,953				2,924				4,153
Total revenue	Total revenue				$	5,551			$	5,238			$	4,719		Total revenue			$	5,654			$	4,060			$	5,551

(Loss) Income from operations:
Income (loss) from operations:													Income (loss) from operations:
		Versace	$	(8)			$	(11)			$	—			Versace		$	185			$	21			$	(8)
		Jimmy Choo	(13)				20				(4)				Jimmy Choo		13				(55)				(13)
		Michael Kors	850				964				975				Michael Kors		1,005				595				850
Total segment income from operations	Total segment income from operations				829				973				971			Total segment income from operations			1,203				561				829
Less:	Less:	Corporate expenses	(152)				(93)				(87)		Less:		Corporate expenses		(190)				(152)				(152)
		Restructuring and other charges	(42)				(124)				(102)				Impairment of assets (1)		(73)				(316)				(708)
		Impairment of assets	(708)				(21)				(33)				COVID-19 related charges (2)		14				(42)				(119)
		COVID-19 related charges ⁽¹⁾	(119)				—				—				Impact of war in Ukraine (3)		(9)				—				—
Total (loss) income from operations					$	(192)			$	735			$	749
															Restructuring and other charges		(42)				(32)				(42)
Total income (loss) from operations													Total income (loss) from operations				$	903			$	19			$	(192)

~~___________________~~

⁽¹⁾Impairment of assets during Fiscal 2022 includes $50 million, $19 million and $4 million of impairment charges related to the Michael Kors, Versace and Jimmy Choo reportable segments, respectively. Impairment of assets during Fiscal 2021 includes $191 million, $91 million and $34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively. Impairment of assets during Fiscal 2020 includes $434 million, $187 million and $87 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.

(2)COVID-19 related charges during Fiscal 2022 primarily ~~includes incremental~~include net inventory credits of $16 million as a result of better than expected sell-through and severance expense of $2 million, respectively. Net inventory credits during

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Fiscal 2022 is change of estimate from better than expected sell-through. COVID-19 related charges during Fiscal 2021, primarily include net inventory credits and severance expense of $10 million and $24 million, respectively. COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and ~~bad debt provision~~credit losses of $92 million and $25 million, ~~respectively,~~respectively. Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of ~~operation.~~operations and comprehensive income (loss).

~~Table~~(3)These charges primarily relate to incremental credit losses and inventory reserves which are a direct impact of ~~Contents~~the war in Ukraine. Credit losses are recorded within selling, general and administrative expenses and inventory related costs are recorded within costs of goods sold in the consolidated statements of operations and comprehensive income (loss).

The following table presents our global network of retail stores and wholesale doors:


		As of						As of
		March 28, 2020	March 30, 2019	March 31, 2018		April 2, 2022	March 27, 2021	March 28, 2020
Number of full price retail stores (including concessions):	Number of full price retail stores (including concessions):				Number of full price retail stores (including concessions):
Versace	Versace	157	146	—	Versace	149	153	157
Jimmy Choo	Jimmy Choo	179	169	158	Jimmy Choo	181	176	179
Michael Kors	Michael Kors	568	587	596	Michael Kors	524	529	568
		904	902	754		854	858	904

Number of outlet stores:	Number of outlet stores:				Number of outlet stores:
Versace	Versace	49	42	—	Versace	60	57	49
Jimmy Choo	Jimmy Choo	47	39	24	Jimmy Choo	56	51	47
Michael Kors	Michael Kors	271	266	233	Michael Kors	301	291	271
		367	347	257		417	399	367

Total number of retail stores	Total number of retail stores	1,271	1,249	1,011	Total number of retail stores	1,271	1,257	1,271

Total number of wholesale doors:	Total number of wholesale doors:				Total number of wholesale doors:
Versace	Versace	824	1,028	—	Versace	803	868	824
Jimmy Choo	Jimmy Choo	554	596	629	Jimmy Choo	446	450	554
Michael Kors	Michael Kors	2,982	3,202	3,544	Michael Kors	2,742	2,852	2,982
		4,360	4,826	4,173		3,991	4,170	4,360

The following table presents our retail stores by geographic location:


		As of					As of						As of		As of
		March 28, 2020					March 30, 2019						April 2, 2022		March 27, 2021
		Versace	Jimmy Choo	Michael Kors	Versace	Jimmy Choo	Michael Kors		Versace	Jimmy Choo	Michael Kors	Versace	Jimmy Choo	Michael Kors
Store count by region:	Store count by region:							Store count by region:
The Americas	The Americas	30	45	380	28	43	390	The Americas	39	45	334	34	44	353
EMEA	EMEA	60	76	180	53	71	186	EMEA	55	73	176	57	74	176
Asia	Asia	116	105	279	107	94	277	Asia	115	119	315	119	109	291
		206	226	839	188	208	853		209	237	825	210	227	820

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Key Performance Indicators and Statistics

We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Total revenue $ 5,551 $ 5,238 $ 4,719
Gross profit as a percent of total revenue 58.9 % 60.7 % 60.6 %
(Loss) income from operations $ (192) $ 735 $ 749
(Loss) income from operations as a percent of total revenue (3.5) % 14.0 % 15.9 %

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	Fiscal Years Ended
	April 2, 2022			March 27, 2021			March 28, 2020
Total revenue	$	5,654		$	4,060		$	5,551

Gross profit as a percent of total revenue	66.2		%	64.0		%	58.9		%
Income (loss) from operations	$	903		$	19		$	(192)
Income (loss) from operations as a percent of total revenue	16.0		%	0.5		%	(3.5)		%

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) 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 to the accompanying financial statements, our critical accounting policies are discussed below and include revenue recognition, inventories, long-lived assets, goodwill and other indefinite-lived intangible assets, share-based compensation, derivatives and income taxes.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. We recognize retail store revenue when control of the product is transferred at the point of sale at our owned stores, including concessions. Revenue from sales through our e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the underlying product is transferred to our wholesale customers. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns, which is based on management’s review of historical and current customer returns. The amounts reserved for retail sales returns were ~~$12~~$22 million, ~~$15~~$20 million and $12 million at April 2, 2022, March 27, 2021 and March 28, 2020, ~~March 30, 2019 and March 31, 2018,~~ respectively. Net sales for wholesale equals gross sales, reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were $70 million, $78 million and $154 million ~~$112 million~~at April 2, 2022, March 27, 2021 and ~~$109 million at~~ March 28, 2020, ~~March 30, 2019 and March 31, 2018,~~ respectively. These estimates are based on such factors as historical trends, actual and forecasted performance and market conditions, which are reviewed by management on a quarterly basis. Our historical estimates of these costs were not materially different from actual results.

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing our tradenames at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of our tradenames to sell our branded products in specific geographic regions.

During Fiscal 2018, we launched our Michael Kors customer loyalty program, which allows customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at our retail stores and e-commerce sites. We allocate a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income. The contract liability was $2 million and $3 million as of March 28, 2020 and March 30, 2019, respectively. Our breakage and other assumptions used to determine the estimated fair value of benefits are estimates, which could vary significantly from actual benefits that will be redeemed in the future.

Inventories

Our inventory costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods to the Company’s warehouses, as well as shipments to stores. The combined total of raw materials and work in process inventory recorded on our consolidated balance sheets as of April 2, 2022 and March 27, 2021 were $31 million and $28 million, respectively. We continuously evaluate the composition of our inventory and make adjustments when the cost of inventory is

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not expected to be fully recoverable. The net realizable value of our inventory is estimated based on historical experience, current and forecasted demand and market conditions. In addition, reserves for inventory losses are estimated based on historical experience and inventory counts. Our inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.

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The combined total of raw materials and work in process inventory recorded on the our consolidated balance sheets as of March 28, 2020 and March 30, 2019 were $27 million and $25 million, respectively. The net realizable value of our inventory as of March 28, 2020 includes the adverse impacts related to the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, international tourism, and consumer consumption.

Long-lived Assets

We evaluate all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, we group ~~our~~ long-lived assets ~~according to their~~at the lowest level of use, such as aggregating and capitalizing all construction costs related to a retail store into right-of-use assets, leasehold improvements and those related to our wholesale business into shop-in-shops.identifiable cash flow. Our leasehold improvements are typically amortized over the life of the store lease, including ~~highly probable~~reasonably assured renewals and our shop-in-shops are amortized over a useful life of three ~~or four~~to five years. Our impairment testing is based on our best estimate of the future operating cash flows. If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, we would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of ~~current~~ real estate market fair values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.

During Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, we recorded impairment charges of $83 million, $158 million and $357 million, ~~$21 million and $33 million,~~ respectively, ~~related to our retail long-lived assets. The impairment charges recorded during Fiscal 2020~~which were primarily related to operating lease right-of-use assets and ~~the impairment charges recorded during Fiscal 2019 and Fiscal 2018 primarily related to property and equipment and lease rights for underperforming Michael Kors~~fixed assets of our retail ~~stores.~~store locations. Please refer to Note ~~8, Note 9~~7 and Note ~~14 to~~13 of the accompanying consolidated ~~audited~~ financial statements for additional information.

Goodwill and Other Indefinite-lived Intangible Assets

We record intangible assets based on their fair value on the date of acquisition. Goodwill is recorded ~~for~~as the difference between the fair value of the purchase consideration ~~over~~and the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be an indefinite-lived intangible assets, which are not subject to amortization. We perform an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill and our brand indefinite-lived intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis ~~would be~~is performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill and our indefinite-lived intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. ~~The~~We use industry accepted valuation ~~methods used~~models and set criteria that are reviewed and approved by various levels of management and, in certain instances, we engage independent third-party valuation specialists for assistance. To determine the ~~quantitative~~ fair value ~~assessment include~~of a ~~discounted cash flow analysis, which requires management to make certain assumptions~~reporting unit, we use a combination of the income and ~~estimates regarding industry trends~~market approaches, when applicable. We believe the blended use of both models, when applicable, compensates for the inherent risk associated with either model if used on a stand-alone basis, and ~~future profitability~~this combination is indicative of ~~our reporting units.~~the factors a market participant would consider when performing a similar valuation. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. ~~This valuation is~~These valuations are affected by certain estimates, including ~~our~~ future revenue growth rates, future operating expense growth rates, gross margins and discount rates. Future events could cause us to conclude that impairment indicators exist and ~~therefore, that~~ goodwill may be impaired.

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When performing a quantitative impairment assessment of our brand ~~indefinite-lived~~ intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the ~~"relief~~“relief from ~~royalty"~~royalty” method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates. Actual future results may differ from these estimates. ~~Impairment~~An impairment loss is recognized when the estimated fair value of the ~~indefinite-lived~~ brand intangible assets is less than its carrying amount.

During the fourth quarter of Fiscal ~~2020,~~2022, we performed our annual goodwill and indefinite-lived intangible assets impairment ~~analysis for our three brands.~~analysis. Based on ~~the results of our~~ qualitative impairment assessment of the Michael Kors reporting units, we concluded that it is more likely than not that the fair value of the Michael ~~Kors’~~Kors reporting units exceeded ~~their~~its carrying value and, therefore, ~~were~~was not impaired. We elected to perform ~~our annual goodwill and brand indefinite-lived~~quantitative impairment ~~analysis~~analyses for ~~both~~ the Versace and Jimmy Choo reporting units, using a ~~quantitative approach, using a discounted cash flow analysis~~combination of income and market approaches to estimate the fair values of ~~each brands'~~ reporting units. We also elected to perform an impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values. Based on the results of these ~~assessments,~~assessment, we concluded that the fair values of the ~~Jimmy Choo Retail~~Versace and Jimmy Choo ~~Licensing~~ reporting units ~~along with~~and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

In Fiscal 2021, we recorded a goodwill impairment charge of $94 million related to the Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $69 million impairment charge related to the Jimmy Choo brand ~~indefinite-lived~~ intangible ~~asset did not exceed the related carrying amounts. Jimmy Choo expects to experience~~assets during Fiscal 2021. We recorded a reduction in profitability trends, primarily related to the ongoing impact of the COVID-19 pandemic, resulting in declines in sales driven by the full and partial closures of a significant portion of our stores globally.

~~Accordingly, we recorded~~goodwill impairment ~~charges~~charge of $171 million related to the Jimmy Choo ~~Retail~~retail and Jimmy Choo ~~Licensing~~licensing reporting units and $180 million impairment charge related to the Jimmy Choo brand intangible ~~asset~~assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal ~~year~~years ended March 27, 2021 and March 28, 2020. If the discount rate increased by 0.5%, it may cause an additional impairment of $36 million and $13 million for the Jimmy Choo Retail and Licensing reporting units and $21 million for Jimmy Choo Brand intangible assets. See Note 98 to the accompanying ~~audited~~ financial statements for information relating to ~~its~~the annual impairment analysis performed during the fourth ~~quarter~~quarters of Fiscal ~~2020.~~

~~We also elected to perform our annual goodwill~~2022, Fiscal 2021 and brand impairment analysis for Versace using a quantitative approach, using a discounted cash flow analysis to estimate the fair values of each reporting unit. We concluded that the fair values of the Versace reporting units and the brand intangible asset exceeded the related carrying amounts and there were no impairment recorded. The fair value of the Versace Retail reporting unit, which has a goodwill balance of $213 million, is 4% higher than the carrying value. The fair value of the Versace wholesale brand intangible asset, which has a balance of $312 million, is 3% higher than the carrying value.Fiscal 2020.

It is possible that our conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) our businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) ~~the change of~~ discount rates change, (v) market multiples change or ~~(v)~~(vi) the identification of our reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite intangible assets.

Share-based Compensation

We grant share-based awards to certain of our employees and directors. The grant date fair value of share options is calculated using the Black-Scholes option pricing model, which requires us to use subjective assumptions. The closing market price at the grant date is used to determine the grant date fair value of restricted ~~share~~stock units (“RSUs”) and performance-based RSUs. These values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements. Compensation expense for performance-based RSUs is recognized over the ~~employees'~~employees’ requisite service period when attainment of the performance goals is deemed probable, which involves judgment as to achievement of certain performance metrics.

We use our own historical experience in determining the expected holding period and volatility of our time-based share option awards. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term, risk-free rate and forfeitures. If factors change and we employ different assumptions, the fair value of future awards and resulting share-based compensation expense may differ significantly from what we have estimated in the past.

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Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

We use forward foreign currency exchange contracts to manage our exposure to fluctuations in foreign currency for certain ~~of our~~ transactions. We, ~~are exposed~~in our normal course of business, enter into transactions with foreign suppliers and seeks to minimize risks ~~on certain purchase commitments~~related to these transactions. We employ these contracts to hedge the our cash flows, as they relate to foreign ~~suppliers based on the value~~currency transactions. Certain of ~~our purchasing subsidiaries’ local currency relative to the currency requirement of the supplier on the date of the commitment. As such, we enter into forward currency~~these contracts ~~that generally mature in 12 months or less, which is consistent with the related purchase commitments. We designate certain contracts related to the purchase of inventory that qualify~~are designated as hedges for ~~hedge~~ accounting ~~as cash flow hedges.~~purposes, while others remain undesignated. All of our derivative instruments are recorded in our consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

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We designate certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged. The ~~effective portion of~~ changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income ~~(loss)~~ until the hedged item ~~effects~~affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income ~~(loss)~~ are recognized within cost of goods sold. ~~We use~~The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. ~~Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss).~~ If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded into foreign currency ~~gain (loss)~~(gain) loss in our consolidated statements of ~~operations.~~operations and comprehensive income (loss). We classify cash flows relating to our forward foreign currency exchange contracts related to purchases of inventory consistently with the classification of the hedged item within cash flows from operating activities.

We are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, we only enter into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.

Net Investment Hedges

We also use fixed-to-fixed cross currency swap agreements to hedge our net investments in foreign operations against future volatility in the exchange rates between ~~its U.S. Dollars~~the United States dollar and ~~these~~the associated foreign currencies. We have elected the spot method of designating these contracts under ASU 2017-12, ~~as defined in Note 2~~“Derivatives and Hedging (Topic 815): Targeted Improvements to ~~the accompanying consolidated financial statements,~~Accounting for Hedging Activities”, and have designated these contracts as net investment hedges. The net gain or loss on the net investment ~~hedges~~hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income ~~(loss)~~ on our consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest (income) expense, net, in our ~~statement~~consolidated statements of operations and comprehensive ~~income.~~income (loss). Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

During the fourth quarter of Fiscal 2020, we terminated all of our net investment hedges related to our Euro-denominated subsidiaries. The early termination of these hedges resulted in the receipt of $296 million in cash during the fourth quarter of Fiscal 2020. During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the United States dollar and these currencies. During Fiscal 2021, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $4 billion to hedge its net investment in Euro-denominated subsidiaries and $194 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the United States dollar and these currencies.

During the first quarter of Fiscal 2022, we modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $2.875 billion to hedge its net investment in Euro denominated subsidiaries. Due to an other-than-insignificant financing element for certain of the first quarter modifications, net interest cash inflows of $31 million during Fiscal 2022 related to these contracts are classified as financing activities in our consolidated statements of cash flows.

During the third and fourth quarter of Fiscal 2022, we modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $1.5 billion and $2.475 billion, respectively. The modification of these hedges resulted in the receipt of $59 million and $130 million in cash during the third and fourth quarter of Fiscal 2022, respectively. These amounts are classified within investing activities in our consolidated statements of cash flows.

Interest Rate Swap Agreements

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the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest (income) expense, net, in the same period during which the hedged transactions affect earnings.

During the third quarter of Fiscal 2022, we terminated our only interest rate swap. As a result, we recognized a $1 million gain within interest (income) expense, net, within our consolidated statements of operations and comprehensive income (loss).

Income Taxes

Deferred income tax assets and liabilities reflect temporary differences between the tax basis and financial reporting basis of our assets and liabilities and are determined using the tax rates and laws in effect for the periods in which the differences are expected to reverse. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or our own estimates and judgments.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. We periodically review the recoverability of our deferred tax assets and provide valuation allowances as deemed necessary to reduce deferred tax assets to amounts that more-likely-than-not will be realized. This determination involves considerable judgment and our management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if our estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

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We recognize the impact of an uncertain income tax position taken on our income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The effect of an uncertain income tax position will not be taken into account if the position has less than a 50% likelihood of being sustained. Our tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments ~~for~~to those positions. We record interest ~~expense~~ and penalties payable to relevant tax authorities as income tax expense.

In response to the COVID-19 pandemic, local governments enacted, or are in the process of enacting, measures to provide aid and economic stimulus to companies. On March 27, 2020, the United States government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which includes various tax provisions aimed at providing economic relief. We realized a slight favorable cash flow impact in Fiscal ~~2020~~2021 as a result of the deferral of income tax payments under the CARES Act and other local government relief initiatives. We also considered the significant adverse impact of COVID-19 on our business in assessing the realizability of our deferred tax assets. Based on this assessment, we determined that valuation allowances of approximately $65 million were needed against a portion of our ~~non-US~~non-United States deferred tax ~~assets.~~assets in Fiscal 2020 which increased to $95 million in Fiscal 2021 and during Fiscal 2022 decreased to $36 million. We will continue to monitor the impacts of COVID-19 on our ability to realize our deferred tax assets and on the tax provision. Another provision. of the CARES Act applicable to us is the modification to allow for a five-year carryback of net operating losses. We recognized a $13 million benefit from a net operating loss (“NOL”) carryback claim in Fiscal 2021, which represented our provisional estimate at that time. During Fiscal 2022, we finalized our accounting for the carryback and recognized an additional $43 million income tax benefit.

New Accounting Pronouncements

Please refer to Note 2 to the accompanying consolidated financial statements for detailed information relating to recently adopted and recently issued accounting pronouncements and the associated impacts.

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Results of Operations

A discussion regarding our results of operations for Fiscal ~~2020~~2022 compared to Fiscal ~~2019~~2021 is presented below. A discussion regarding our results of operations for Fiscal ~~2019~~2021 compared to Fiscal ~~2018~~2020 can be found under Item 7 in our Annual Report on Form 10-K for the year ended March ~~30, 2019,~~27, 2021, filed with the SEC on May ~~29, 2019,~~26, 2021, which is available on the SEC’s website at www.sec.gov and our investor website at www.capriholdings.com.

Comparison of Fiscal ~~2020~~2022 with Fiscal ~~2019~~2021

The following table details the results of our operations for Fiscal ~~2020~~2022 and Fiscal ~~2019~~2021 and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):


		Fiscal Years Ended						$ Change		% Change		% of Total Revenue for Fiscal 2020				% of Total Revenue for Fiscal 2019	Fiscal Years Ended				$ Change		% Change		% of Total Revenue for Fiscal 2022			% of Total Revenue for Fiscal 2021
		March 28, 2020		March 30, 2019															April 2, 2022								% of Total Revenue for Fiscal 2021
Statements of Operations Data:	Statements of Operations Data:													Statements of Operations Data:
Total revenue	Total revenue	$	5,551	$	5,238	$	313	6.0	%					Total revenue	$	5,654	$	4,060	$	1,594	39.3	%
Cost of goods sold	Cost of goods sold	2,280		2,058		222		10.8	%	41.1	%	39.3	%	Cost of goods sold	1,910		1,463		447		30.6	%	33.8	%	36.0	%
Gross profit	Gross profit	3,271		3,180		91		2.9	%	58.9	%	60.7	%	Gross profit	3,744		2,597		1,147		44.2	%	66.2	%	64.0	%
Selling, general and administrative expenses	Selling, general and administrative expenses	2,464		2,075		389		18.7	%	44.4	%	39.6	%	Selling, general and administrative expenses	2,533		2,018		515		25.5	%	44.8	%	49.7	%
Depreciation and amortization	Depreciation and amortization	249		225		24		10.7	%	4.5	%	4.3	%	Depreciation and amortization	193		212		(19)		(9.0)	%	3.4	%	5.2	%
Impairment of assets	Impairment of assets	708		21		687		NM		12.8	%	0.4	%	Impairment of assets	73		316		(243)		(76.9)	%	1.3	%	7.8	%
Restructuring and other charges ⁽¹⁾	Restructuring and other charges ⁽¹⁾	42		124		(82)		(66.1)	%	0.8	%	2.4	%	Restructuring and other charges ⁽¹⁾	42		32		10		31.3	%	0.7	%	0.8	%
Total operating expenses	Total operating expenses	3,463		2,445		1,018		41.6	%	62.4	%	46.7	%	Total operating expenses	2,841		2,578		263		10.2	%	50.2	%	63.5	%
(Loss) income from operations		(192)		735		(927)		(126.1)	%	(3.5)	%	14.0	%
Income from operations														Income from operations	903		19		884		NM		16.0	%	0.5	%
Other income, net	Other income, net	(6)		(4)		(2)		(50.0)	%	(0.1)	%	(0.1)	%	Other income, net	(2)		(7)		5		71.4	%	—	%	(0.2)	%
Interest expense, net		18		38		(20)		(52.6)	%	0.3	%	0.7	%
Foreign currency loss		11		80		(69)		(86.3)	%	0.2	%	1.5	%
(Loss) income before provision for income taxes		(215)		621		(836)		(134.6)	%	(3.9)	%	11.9	%
Interest (income) expense, net														Interest (income) expense, net	(18)		43		(61)		NM		(0.3)	%	1.1	%
Foreign currency loss (gain)														Foreign currency loss (gain)	8		(20)		28		NM		0.1	%	(0.5)	%
Income before provision for income taxes														Income before provision for income taxes	915		3		912		NM		16.2	%	0.1	%
Provision for income taxes	Provision for income taxes	10		79		(69)		(87.3)	%	0.2	%	1.5	%	Provision for income taxes	92		66		26		39.4	%	1.6	%	1.6	%
Net (loss) income		(225)		542		(767)		(141.5)	%
Less: Net loss attributable to noncontrolling interests		(2)		(1)		(1)		NM
Net (loss) income attributable to Capri		$	(223)	$	543	$	(766)	(141.1)	%
Net income (loss)														Net income (loss)	823		(63)		886		NM
Less: Net income (loss) attributable to noncontrolling interests														Less: Net income (loss) attributable to noncontrolling interests	1		(1)		2		NM
Net income (loss) attributable to Capri														Net income (loss) attributable to Capri	$	822	$	(62)	$	884	NM

~~___________________~~

NM Not ~~meaningful.~~

⁽¹⁾Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan and other restructuring initiatives, and costs recorded in connection with our acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited.meaningful

~~Total Revenue~~Segment Information

~~Total~~We operate in three reportable segments, which are as follows:

Versace

We generate revenue ~~increased $313 million,~~ through the sale of Versace luxury accessories, ready-to-wear and footwear through directly operated Versace boutiques throughout North America (United States and Canada), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania), as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of products, including jeans, fragrances, watches, jewelry, eyewear and home furnishings.

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 (United States, Canada and Latin America), certain parts of EMEA and certain parts of Asia, through our e-commerce sites, as well as 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 ~~6.0%~~wholesale sales of Jimmy Choo branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated through product licensing agreements, which allow third parties to ~~$5.551 billion~~use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of products, including fragrances and eyewear.

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Michael Kors

We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail store formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce, through which we sell our products, as well as licensed products bearing our name, directly to consumers throughout the Americas, certain parts of EMEA and certain parts of Asia. Our Michael Kors e-commerce business includes e-commerce sites in the United States, Canada and EMEA and Asia. 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.

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 systems expenses, including ERP system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine. 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 (loss) from operations by segment for Fiscal 2022, Fiscal 2021 and Fiscal 2020 ~~compared to $5.238 billion for~~(in millions):


		Fiscal Years Ended
		April 2, 2022		March 27, 2021		March 28, 2020
Total revenue:
	Versace	$	1,088	$	718	$	843
	Jimmy Choo	613		418		555
	Michael Kors	3,953		2,924		4,153
Total revenue		$	5,654	$	4,060	$	5,551

Income (loss) from operations:
	Versace	$	185	$	21	$	(8)
	Jimmy Choo	13		(55)		(13)
	Michael Kors	1,005		595		850
Total segment income from operations		1,203		561		829
Less:	Corporate expenses	(190)		(152)		(152)
	Impairment of assets (1)	(73)		(316)		(708)
	COVID-19 related charges (2)	14		(42)		(119)
	Impact of war in Ukraine (3)	(9)		—		—
	Restructuring and other charges	(42)		(32)		(42)
Total income (loss) from operations		$	903	$	19	$	(192)

(1)Impairment of assets during Fiscal ~~2019, which included net unfavorable foreign currency effects~~2022 includes $50 million, $19 million and $4 million of ~~$45 million primarily~~impairment charges related to the ~~weakening~~Michael Kors, Versace and Jimmy Choo reportable segments, respectively. Impairment of assets during Fiscal 2021 includes $191 million, $91 million and $34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively. Impairment of assets during Fiscal 2020 includes $434 million, $187 million and $87 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.

(2)COVID-19 related charges during Fiscal 2022 primarily include net inventory credits of $16 million as a result of better than expected sell-through and severance expense of $2 million, respectively. Net inventory credits during

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Fiscal 2022 is change of estimate from better than expected sell-through. COVID-19 related charges during Fiscal 2021, primarily include net inventory credits and severance expense of $10 million and $24 million, respectively. COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and credit losses of $92 million and $25 million, respectively. Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

(3)These charges primarily relate to incremental credit losses and inventory reserves which are a direct impact of the ~~Euro,~~war in Ukraine. Credit losses are recorded within selling, general and administrative expenses and inventory related costs are recorded within costs of goods sold in the ~~Chinese Renminbi,~~consolidated statements of operations and comprehensive income (loss).

The following table presents our global network of retail stores and wholesale doors:


	As of
	April 2, 2022	March 27, 2021	March 28, 2020
Number of full price retail stores (including concessions):
Versace	149	153	157
Jimmy Choo	181	176	179
Michael Kors	524	529	568
	854	858	904

Number of outlet stores:
Versace	60	57	49
Jimmy Choo	56	51	47
Michael Kors	301	291	271
	417	399	367

Total number of retail stores	1,271	1,257	1,271

Total number of wholesale doors:
Versace	803	868	824
Jimmy Choo	446	450	554
Michael Kors	2,742	2,852	2,982
	3,991	4,170	4,360

The following table presents our retail stores by geographic location:


	As of			As of
	April 2, 2022			March 27, 2021
	Versace	Jimmy Choo	Michael Kors	Versace	Jimmy Choo	Michael Kors
Store count by region:
The Americas	39	45	334	34	44	353
EMEA	55	73	176	57	74	176
Asia	115	119	315	119	109	291
	209	237	825	210	227	820

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Key Performance Indicators and Statistics

We use a number of key indicators of operating results to evaluate our performance, including the ~~British Pound~~following (dollars in millions):


	Fiscal Years Ended
	April 2, 2022			March 27, 2021			March 28, 2020
Total revenue	$	5,654		$	4,060		$	5,551

Gross profit as a percent of total revenue	66.2		%	64.0		%	58.9		%
Income (loss) from operations	$	903		$	19		$	(192)
Income (loss) from operations as a percent of total revenue	16.0		%	0.5		%	(3.5)		%

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the ~~Canadian Dollar against~~United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the ~~U.S. Dollar in Fiscal 2020,~~reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as ~~compared~~well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those that are the most important to ~~Fiscal 2019. On a constant currency basis, our total revenue increased $358 million, or 6.8%. Total revenue for Fiscal 2020 included approximately $723 million~~the portrayal of ~~incremental revenue attributable to Versace, which was acquired and consolidated into~~ our results of operations ~~effective December 31, 2018.~~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 to the accompanying financial statements, our critical accounting policies are discussed below and include revenue recognition, inventories, long-lived assets, goodwill and other indefinite-lived intangible assets, share-based compensation, derivatives and income taxes.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. We recognize retail store revenue when control of the product is transferred at the point of sale at our owned stores, including concessions. Revenue from sales through our e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the underlying product is transferred to our wholesale customers. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns, which is based on management’s review of historical and current customer returns. The ~~remaining decrease~~amounts reserved for retail sales returns were $22 million, $20 million and $12 million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively. Net sales for wholesale equals gross sales, reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were $70 million, $78 million and $154 million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively. These estimates are based on such factors as historical trends, actual and forecasted performance and market conditions, which are reviewed by management on a quarterly basis. Our historical estimates of these costs were not materially different from actual results.

Royalty revenue generated from product licenses, which includes contributions for advertising, is ~~attributable~~based on reported sales of licensed products bearing our tradenames at rates specified in the license agreements. These agreements are also subject to ~~lower~~contractual minimum levels. Royalty revenue generated by geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of our tradenames to sell our branded products in specific geographic regions.

Inventories

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Long-lived Assets

We evaluate all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, we group long-lived assets at the lowest level of identifiable cash flow. Our leasehold improvements are typically amortized over the life of the store lease, including reasonably assured renewals and our shop-in-shops are amortized over a useful life of three to five years. Our impairment testing is based on our best estimate of the future operating cash flows. If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, we would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of real estate market fair values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.

During Fiscal 2022, Fiscal 2021 and Fiscal 2020, we recorded impairment charges of $83 million, $158 million and $357 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations. Please refer to Note 7 and Note 13 of the accompanying consolidated financial statements for additional information.

Goodwill and Other Indefinite-lived Intangible Assets

We record intangible assets based on their fair value on the date of acquisition. Goodwill is recorded as the difference between the fair value of the purchase consideration and the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be indefinite-lived intangible assets, which are not subject to amortization. We perform an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill and our brand indefinite-lived intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill and our indefinite-lived intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. We use industry accepted valuation models and set criteria that are reviewed and approved by various levels of management and, in certain instances, we engage independent third-party valuation specialists for assistance. To determine the fair value of a reporting unit, we use a combination of the income and market approaches, when applicable. We believe the blended use of both models, when applicable, compensates for the inherent risk associated with either model if used on a stand-alone basis, and this combination is indicative of the factors a market participant would consider when performing a similar valuation. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. These valuations are affected by certain estimates, including future revenue growth rates, future operating expense growth rates, gross margins and discount rates. Future events could cause us to conclude that impairment indicators exist and goodwill may be impaired.

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When performing a quantitative impairment assessment of our brand intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the “relief from royalty” method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates. Actual future results may differ from these estimates. An impairment loss is recognized when the estimated fair value of the brand intangible assets is less than its carrying amount.

During the fourth quarter of Fiscal 2022, we performed our annual goodwill and indefinite-lived intangible assets impairment analysis. Based on qualitative impairment assessment of the Michael Kors ~~revenues, as compared~~reporting units, we concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired. We elected to perform quantitative impairment analyses for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of reporting units. We also elected to perform an impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values. Based on the results of these assessment, we concluded that the fair values of the Versace and Jimmy Choo reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

In Fiscal 2021, we recorded a goodwill impairment charge of $94 million related to the ~~prior year,~~Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $69 million impairment charge related to the Jimmy Choo brand intangible assets during Fiscal 2021. We recorded a goodwill impairment charge of $171 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $180 million impairment charge related to the Jimmy Choo brand intangible assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal years ended March 27, 2021 and March 28, 2020. See Note 8 to the accompanying financial statements for information relating to the annual impairment analysis performed during the fourth quarters of Fiscal 2022, Fiscal 2021 and Fiscal 2020.

It is possible that our conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) our businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of our reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite intangible assets.

Share-based Compensation

We grant share-based awards to certain of our employees and directors. The grant date fair value of share options is calculated using the Black-Scholes option pricing model, which ~~includes~~requires us to use subjective assumptions. The closing market price at the ~~adverse impact~~grant date is used to determine the grant date fair value of ~~COVID-19.~~restricted stock units (“RSUs”) and performance-based RSUs. These values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements. Compensation expense for performance-based RSUs is recognized over the employees’ requisite service period when attainment of the performance goals is deemed probable, which involves judgment as to achievement of certain performance metrics.

Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

We use forward foreign currency exchange contracts to manage our exposure to fluctuations in foreign currency for certain transactions. We, in our normal course of business, enter into transactions with foreign suppliers and seeks to minimize risks related to these transactions. We employ these contracts to hedge the our cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of our derivative instruments are recorded in our consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

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~~Gross Profit~~We designate certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in our consolidated statements of operations and comprehensive income (loss). We classify cash flows relating to our forward foreign currency exchange contracts related to purchases of inventory consistently with the classification of the hedged item within cash flows from operating activities.

~~Gross profit increased $91 million,~~We are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, we only enter into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.

Net Investment Hedges

We also use fixed-to-fixed 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 the associated foreign currencies. We have elected the spot method of designating these contracts under ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”, and have designated these contracts as net investment hedges. The net gain or ~~2.9%~~loss on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income on our consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest (income) expense, net, in our consolidated statements of operations and comprehensive income (loss). Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

We are exposed to ~~$3.271 billion during~~the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, we only enter into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure.

During the fourth quarter of Fiscal 2020, ~~compared to $3.180 billion for Fiscal 2019, which included~~we terminated all of our net unfavorable foreign currency effects of $28 million. Gross profit as a percentage of total revenue decreased 180 basis points to 58.9% during Fiscal 2020, compared to 60.7% during Fiscal 2019. The decrease in gross profit margin was primarily attributable to incremental inventory reserves of $92 million recorded in connection with COVID-19 and lower gross profit for Michael Kors primarily driven by increased markdowns during Fiscal 2020, as compared to Fiscal 2019, partially offset by the inclusion of Versace, which benefited our gross margin 140 basis points.

~~Total Operating Expenses~~

Total operating expenses increased $1.018 billion, or 41.6%, to $3.463 billion during Fiscal 2020, compared to $2.445 billion for Fiscal 2019, which included incremental operating expenses of $472 million associated with the recently acquired Versace business. Our operating expenses included a net favorable foreign currency impact of approximately $56 million. Total operating expenses as a percentage of total revenue increased to 62.4% in Fiscal 2020, compared to 46.7% in Fiscal 2019. The components that comprise total operating expenses are detailed below.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses increased $389 million, or 18.7%, to $2.464 billion during Fiscal 2020, compared to $2.075 billion for Fiscal 2019. The increase in selling, general and administrative expenses was primarily due to incremental costs of $421 million associated with the recently acquired Versace business, which has been consolidated in our operations beginning on December 31, 2018, increased retail store and e-commerce related costs and bad debt expenseinvestment hedges related to ~~COVID-19, partially offset by decreased rent and occupancy expense.~~

~~Selling, general and administrative expenses as a percentage~~our Euro-denominated subsidiaries. The early termination of ~~total revenue increased to 44.4% during Fiscal 2020, compared to 39.6% for Fiscal 2019, primarily due to~~these hedges resulted in the ~~inclusion~~receipt of ~~expenses associated with the Versace business, increased retail store and e-commerce related costs and bad debt expense related to COVID-19 of $25 million.~~

Corporate unallocated expenses, which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment and exclude COVID-19 related charges, increased $59 million, or 63.4%, to $152$296 million in cash during the fourth quarter of Fiscal ~~2020 as compared~~2020. During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to ~~$93 million~~hedge its net investment in ~~Fiscal 2019, primarily attributable to the inclusion of ERP system implementation costs~~Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the ~~current year.~~exchange rate between the United States dollar and these currencies. During Fiscal 2021, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $4 billion to hedge its net investment in Euro-denominated subsidiaries and $194 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the United States dollar and these currencies.

~~Depreciation and Amortization~~

~~Depreciation and amortization increased $24 million, or 10.7%,~~During the first quarter of Fiscal 2022, we modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $2.875 billion to ~~$249~~hedge its net investment in Euro denominated subsidiaries. Due to an other-than-insignificant financing element for certain of the first quarter modifications, net interest cash inflows of $31 million during Fiscal ~~2020, compared~~2022 related to ~~$225~~these contracts are classified as financing activities in our consolidated statements of cash flows.

Interest Rate Swap Agreements

We also use interest rate swap agreements to hedge the variability of our cash flows resulting from floating interest rates on our borrowings. When an interest rate swap agreement qualifies for Fiscal 2019. The increase in depreciation and amortization expense was primarily attributable to incremental depreciation and amortization expenses of $51 million attributable to the Versace business (including amortization of purchasehedge accounting ~~adjustments), partially offset by lower depreciation due to previously recorded property and equipment impairment charges. Depreciation and amortization increased to 4.5%~~ as a ~~percentage of total revenue during Fiscal 2020, compared to 4.3% for Fiscal 2019.~~

~~Impairment of Assets~~

~~During Fiscal 2020, we recognized asset impairment charges of $708 million. The increase was primarily related to~~cash flow hedge, the impairment of operating lease right-of-use assets, as well as the impairment of Jimmy Choo goodwill and its brand intangible assets as part of our annual impairment assessments (see Note 14 to the accompanying consolidated financial statements for additional information). During Fiscal 2019, we recognized asset impairment charges of approximately $21 million, of which $17 million related to underperforming Michael Kors full-price retail store locations, some of which were closed as part of our Michael Kors Retail Fleet Optimization Plan.

~~Restructuring and Other Charges~~

During Fiscal 2020, we recognized restructuring and other charges of $42 million, which included restructuring charges of $8 million, primarily related to our Michael Kors Retail Fleet Optimization Plan, and other costs of $34 million. The other costs recorded during Fiscal 2020 included $24 million related to the acquisition of Versace, $9 millionchanges in ~~connection with the Jimmy Choo acquisition, and $1 million in connection with the acquisition of Gozzi. (see Note 11 to the accompanying consolidated financial statements for additional information).~~

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During the third quarter of Fiscal ~~2019,~~2022, we terminated our only interest rate swap. As a result, we recognized ~~restructuring~~a $1 million gain within interest (income) expense, net, within our consolidated statements of operations and comprehensive income (loss).

Income Taxes

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. We periodically review the recoverability of our deferred tax assets and provide valuation allowances as deemed necessary to reduce deferred tax assets to amounts that more-likely-than-not will be realized. This determination involves considerable judgment and our management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other ~~charges~~factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if our estimates of ~~$124 million, which included restructuring charges~~taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

We recognize the impact of ~~$45 million, primarily associated with~~an uncertain income tax position taken on our ~~Michael Kors Retail Fleet Optimization Plan~~income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The effect of an uncertain income tax position will not be taken into account if the position has less than a 50% likelihood of being sustained. Our tax positions are analyzed periodically (at least quarterly) and ~~other costs of $79 million, $52 million of which related~~adjustments are made as events occur that warrant adjustments to those positions. We record interest and penalties payable to relevant tax authorities as income tax expense.

In response to the ~~Versace acquisition~~COVID-19 pandemic, local governments enacted, or are in the process of enacting, measures to provide aid and ~~$27 million related~~economic stimulus to companies. On March 27, 2020, the ~~Jimmy Choo acquisition.~~

~~(Loss) Income from Operations~~

AsUnited States government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which includes various tax provisions aimed at providing economic relief. We realized a slight favorable cash flow impact in Fiscal 2021 as a result of the ~~foregoing,~~deferral of income ~~from operations decreased $927~~tax payments under the CARES Act and other local government relief initiatives. We also considered the significant adverse impact of COVID-19 on our business in assessing the realizability of our deferred tax assets. Based on this assessment, we determined that valuation allowances of approximately $65 million ~~or 126.1%, to~~were needed against a ~~loss from operations~~portion of ~~$192 million during Fiscal 2020, compared to income from operations of $735 million for Fiscal 2019. Income from operations as a percentage of total revenue decreased to (3.5)%~~our non-United States deferred tax assets in Fiscal 2020 ~~compared~~which increased to ~~14.0%~~$95 million in Fiscal ~~2019. See~~ ~~Segment Information~~ ~~above~~2021 and during Fiscal 2022 decreased to $36 million. We will continue to monitor the impacts of COVID-19 on our ability to realize our deferred tax assets and on the tax provision. Another provision of the CARES Act applicable to us is the modification to allow for a ~~reconciliation~~five-year carryback of net operating losses. We recognized a $13 million benefit from a net operating loss (“NOL”) carryback claim in Fiscal 2021, which represented our ~~segment operating~~provisional estimate at that time. During Fiscal 2022, we finalized our accounting for the carryback and recognized an additional $43 million income tax benefit.

New Accounting Pronouncements

Please refer to ~~total operating income.~~

~~Interest expense, net~~

Interest expense, net decreased $20 million, or 52.6%, to $18 million for Fiscal 2020, as compared to $38 million for Fiscal 2019, primarily due to a reduction of interest expense related to cross-currency swaps associated with our net investment hedge during Fiscal 2020, as compared to Fiscal 2019, largely offset by increased interest expense attributable to higher average borrowings outstanding in the current year (see Note ~~12 and Note 15~~2 to the accompanying consolidated financial statements for ~~additional information).~~

~~Foreign Currency Loss~~

~~We recognized a net foreign currency loss of $11 million during Fiscal 2020, primarily attributable~~detailed information relating to ~~the revaluation~~recently adopted and settlement of certain of our accounts payable in currencies other than the functional currency, as well as the remeasurement of dollar-denominated intercompany loans with certain of our subsidiaries (see Note 15 to the accompanying consolidated financial statements for additional information).

We recognized a net foreign currency loss of $80 million during Fiscal 2019, primarily attributable to a $77 million loss related to forward foreign currency exchange derivative contracts to hedge the transaction price of the Versace acquisition (please refer to Note 15 to the accompanying consolidated financial statements for additional information).

~~Provision for Income Taxes~~

We recognized $10 million of income tax expense during Fiscal 2020, compared with $79 million for Fiscal 2019. Our effective tax rate for Fiscal 2020 was (4.7)%, compared to 12.7% for Fiscal 2019. The decrease in our income tax provision was primarily due to the impact of a consolidated pre-tax loss as well as the impact of a release of income tax reserves during Fiscal 2020. The decrease was partially offset by the effects of valuation allowances established on a portion of our non-US deferred tax assets, a lower favorable effect of our global financing activities during Fiscal 2020, compared to Fiscal 2019, as well as non-tax deductible goodwill impairment impacts. The global financing activities are related to our previously disclosed 2014 move of our principal executive office from Hong Kong to the United Kingdom (“U.K.”) and decision to become a U.K. tax resident. In connection with this decision, we funded our international growth strategy through intercompany debt financing arrangements between certain of our U.S., U.K. and Switzerland subsidiaries in December 2015. Accordingly, due to the difference in the statutory income tax rates between these jurisdictions, we realized a higher effective tax rate on the consolidated pre-tax loss.

Our effective tax rate may fluctuate from time to time due to the effects of changes in U.S. state and local taxes and tax rates in foreign jurisdictions. In addition, factors such as the geographic mix of earnings, enacted tax legislationrecently issued accounting pronouncements and the ~~results of various global tax strategies, may also impact our effective tax rate in future periods.~~

~~Net (Loss) Income Attributable to Capri~~

As a result of the foregoing, our net income attributable to Capri decreased $766 million, or 141.1%, to a net loss of $223 million during Fiscal 2020, compared to net income of $543 million for Fiscal 2019.associated impacts.

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Results of Operations

A discussion regarding our results of operations for Fiscal 2022 compared to Fiscal 2021 is presented below. A discussion regarding our results of operations for Fiscal 2021 compared to Fiscal 2020 can be found under Item 7 in our Annual Report on Form 10-K for the year ended March 27, 2021, filed with the SEC on May 26, 2021, which is available on the SEC’s website at www.sec.gov and our investor website at www.capriholdings.com.

Comparison of Fiscal 2022 with Fiscal 2021

The following table details the results of our operations for Fiscal 2022 and Fiscal 2021 and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):


	Fiscal Years Ended				$ Change		% Change		% of Total Revenue for Fiscal 2022		% of Total Revenue for Fiscal 2021
	April 2, 2022		March 27, 2021
Statements of Operations Data:
Total revenue	$	5,654	$	4,060	$	1,594	39.3	%
Cost of goods sold	1,910		1,463		447		30.6	%	33.8	%	36.0	%
Gross profit	3,744		2,597		1,147		44.2	%	66.2	%	64.0	%
Selling, general and administrative expenses	2,533		2,018		515		25.5	%	44.8	%	49.7	%
Depreciation and amortization	193		212		(19)		(9.0)	%	3.4	%	5.2	%
Impairment of assets	73		316		(243)		(76.9)	%	1.3	%	7.8	%
Restructuring and other charges	42		32		10		31.3	%	0.7	%	0.8	%
Total operating expenses	2,841		2,578		263		10.2	%	50.2	%	63.5	%
Income from operations	903		19		884		NM		16.0	%	0.5	%
Other income, net	(2)		(7)		5		71.4	%	—	%	(0.2)	%
Interest (income) expense, net	(18)		43		(61)		NM		(0.3)	%	1.1	%
Foreign currency loss (gain)	8		(20)		28		NM		0.1	%	(0.5)	%
Income before provision for income taxes	915		3		912		NM		16.2	%	0.1	%
Provision for income taxes	92		66		26		39.4	%	1.6	%	1.6	%
Net income (loss)	823		(63)		886		NM
Less: Net income (loss) attributable to noncontrolling interests	1		(1)		2		NM
Net income (loss) attributable to Capri	$	822	$	(62)	$	884	NM

NM Not meaningful

Segment Information

We operate in three reportable segments, which are as follows:

Versace

Fiscal Years Ended
March 28,
2020 March 30,
2019 $ Change
Revenues $ 843 $ 137 $ 706
Loss from operations (8) (11) 3
Operating margin (0.9) % (8.0) %
We generate revenue through the sale of Versace luxury accessories, ready-to-wear and footwear through directly operated Versace boutiques throughout North America (United States and Canada), certain parts of EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania), as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of products, including jeans, fragrances, watches, jewelry, eyewear and home furnishings.

~~Revenues~~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 (United States, Canada and Latin America), certain parts of EMEA and certain parts of Asia, through our e-commerce sites, as well as 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), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated 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.

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Michael Kors

We generate revenue through the sale of Michael Kors products through four primary Michael Kors retail store formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce, through which we sell our products, as well as licensed products bearing our name, directly to consumers throughout the Americas, certain parts of EMEA and certain parts of Asia. Our Michael Kors e-commerce business includes e-commerce sites in the United States, Canada and EMEA and Asia. 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.

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 systems expenses, including ERP system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine. 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 (loss) from operations by segment for Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in millions):


		Fiscal Years Ended
		April 2, 2022		March 27, 2021		March 28, 2020
Total revenue:
	Versace	$	1,088	$	718	$	843
	Jimmy Choo	613		418		555
	Michael Kors	3,953		2,924		4,153
Total revenue		$	5,654	$	4,060	$	5,551

Income (loss) from operations:
	Versace	$	185	$	21	$	(8)
	Jimmy Choo	13		(55)		(13)
	Michael Kors	1,005		595		850
Total segment income from operations		1,203		561		829
Less:	Corporate expenses	(190)		(152)		(152)
	Impairment of assets (1)	(73)		(316)		(708)
	COVID-19 related charges (2)	14		(42)		(119)
	Impact of war in Ukraine (3)	(9)		—		—
	Restructuring and other charges	(42)		(32)		(42)
Total income (loss) from operations		$	903	$	19	$	(192)

(1)Impairment of assets during Fiscal 2022 includes $50 million, $19 million and $4 million of impairment charges related to the Michael Kors, Versace ~~revenues increased $706~~and Jimmy Choo reportable segments, respectively. Impairment of assets during Fiscal 2021 includes $191 million, $91 million and $34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively. Impairment of assets during Fiscal 2020 includes $434 million, $187 million and $87 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.

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Fiscal 2022 is change of estimate from better than expected sell-through. COVID-19 related charges during Fiscal 2021, primarily include net inventory credits and severance expense of $10 million and $24 million, respectively. COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and credit losses of $92 million and $25 million, respectively. Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

(3)These charges primarily relate to incremental credit losses and inventory reserves which are a direct impact of the war in Ukraine. Credit losses are recorded within selling, general and administrative expenses and inventory related costs are recorded within costs of goods sold in the consolidated statements of operations and comprehensive income (loss).

The following table presents our global network of retail stores and wholesale doors:


	As of
	April 2, 2022	March 27, 2021	March 28, 2020
Number of full price retail stores (including concessions):
Versace	149	153	157
Jimmy Choo	181	176	179
Michael Kors	524	529	568
	854	858	904

Number of outlet stores:
Versace	60	57	49
Jimmy Choo	56	51	47
Michael Kors	301	291	271
	417	399	367

Total number of retail stores	1,271	1,257	1,271

Total number of wholesale doors:
Versace	803	868	824
Jimmy Choo	446	450	554
Michael Kors	2,742	2,852	2,982
	3,991	4,170	4,360

The following table presents our retail stores by geographic location:


	As of			As of
	April 2, 2022			March 27, 2021
	Versace	Jimmy Choo	Michael Kors	Versace	Jimmy Choo	Michael Kors
Store count by region:
The Americas	39	45	334	34	44	353
EMEA	55	73	176	57	74	176
Asia	115	119	315	119	109	291
	209	237	825	210	227	820

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Key Performance Indicators and Statistics

We use a number of key indicators of operating results to evaluate our performance, including the following (dollars in millions):


	Fiscal Years Ended
	April 2, 2022			March 27, 2021			March 28, 2020
Total revenue	$	5,654		$	4,060		$	5,551

Gross profit as a percent of total revenue	66.2		%	64.0		%	58.9		%
Income (loss) from operations	$	903		$	19		$	(192)
Income (loss) from operations as a percent of total revenue	16.0		%	0.5		%	(3.5)		%

Critical Accounting Policies and Estimates

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. We recognize retail store revenue when control of the product is transferred at the point of sale at our owned stores, including concessions. Revenue from sales through our e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the underlying product is transferred to our wholesale customers. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns, which is based on management’s review of historical and current customer returns. The amounts reserved for retail sales returns were $22 million, $20 million and $12 million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively. Net sales for wholesale equals gross sales, reduced by provisions for estimated future returns based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses. Total sales reserves for wholesale were $70 million, $78 million and $154 million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively. These estimates are based on such factors as historical trends, actual and forecasted performance and market conditions, which are reviewed by management on a quarterly basis. Our historical estimates of these costs were not materially different from actual results.

Inventories

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Long-lived Assets

We evaluate all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, we group long-lived assets at the lowest level of identifiable cash flow. Our leasehold improvements are typically amortized over the life of the store lease, including reasonably assured renewals and our shop-in-shops are amortized over a useful life of three to five years. Our impairment testing is based on our best estimate of the future operating cash flows. If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, we would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of real estate market fair values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.

Goodwill and Other Indefinite-lived Intangible Assets

We may assess our goodwill and our brand indefinite-lived intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is performed to determine if impairment is required. We may also elect to perform a quantitative analysis of goodwill and our indefinite-lived intangible assets initially rather than using a qualitative approach.

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During the fourth quarter of Fiscal 2022, we performed our annual goodwill and indefinite-lived intangible assets impairment analysis. Based on qualitative impairment assessment of the Michael Kors reporting units, we concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired. We elected to perform quantitative impairment analyses for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of reporting units. We also elected to perform an impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values. Based on the results of these assessment, we concluded that the fair values of the Versace and Jimmy Choo reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

In Fiscal 2021, we recorded a goodwill impairment charge of $94 million related to the Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $69 million impairment charge related to the Jimmy Choo brand intangible assets during Fiscal 2021. We recorded a goodwill impairment charge of $171 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $180 million impairment charge related to the Jimmy Choo brand intangible assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal years ended March 27, 2021 and March 28, 2020. See Note 8 to the accompanying financial statements for information relating to the annual impairment analysis performed during the fourth quarters of Fiscal 2022, Fiscal 2021 and Fiscal 2020.

It is possible that our conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) our businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of our reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite intangible assets.

Share-based Compensation

We grant share-based awards to certain of our employees and directors. The grant date fair value of share options is calculated using the Black-Scholes option pricing model, which requires us to use subjective assumptions. The closing market price at the grant date is used to determine the grant date fair value of restricted stock units (“RSUs”) and performance-based RSUs. These values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements. Compensation expense for performance-based RSUs is recognized over the employees’ requisite service period when attainment of the performance goals is deemed probable, which involves judgment as to achievement of certain performance metrics.

Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

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We designate certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in our consolidated statements of operations and comprehensive income (loss). We classify cash flows relating to our forward foreign currency exchange contracts related to purchases of inventory consistently with the classification of the hedged item within cash flows from operating activities.

Net Investment Hedges

We also use fixed-to-fixed 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 the associated foreign currencies. We have elected the spot method of designating these contracts under ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”, and have designated these contracts as net investment hedges. The net gain or loss on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income on our consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest (income) expense, net, in our consolidated statements of operations and comprehensive income (loss). Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

During the fourth quarter of Fiscal 2020, we terminated all of our net investment hedges related to our Euro-denominated subsidiaries. The early termination of these hedges resulted in the receipt of $296 million in cash during the fourth quarter of Fiscal 2020. During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the United States dollar and these currencies. During Fiscal 2021, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $4 billion to hedge its net investment in Euro-denominated subsidiaries and $194 million to ~~$843~~hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the United States dollar and these currencies.

Interest Rate Swap Agreements

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Income Taxes

We recognize the impact of an uncertain income tax position taken on our income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The effect of an uncertain income tax position will not be taken into account if the position has less than a 50% likelihood of being sustained. Our tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments to those positions. We record interest and penalties payable to relevant tax authorities as income tax expense.

In response to the COVID-19 pandemic, local governments enacted, or are in the process of enacting, measures to provide aid and economic stimulus to companies. On March 27, 2020, the United States government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which includes various tax provisions aimed at providing economic relief. We realized a slight favorable cash flow impact in Fiscal 2021 as a result of the deferral of income tax payments under the CARES Act and other local government relief initiatives. We also considered the significant adverse impact of COVID-19 on our business in assessing the realizability of our deferred tax assets. Based on this assessment, we determined that valuation allowances of approximately $65 million were needed against a portion of our non-United States deferred tax assets in Fiscal 2020 which increased to $95 million in Fiscal 2021 and during Fiscal 2022 decreased to $36 million. We will continue to monitor the impacts of COVID-19 on our ability to realize our deferred tax assets and on the tax provision. Another provision of the CARES Act applicable to us is the modification to allow for a five-year carryback of net operating losses. We recognized a $13 million benefit from a net operating loss (“NOL”) carryback claim in Fiscal 2021, which represented our provisional estimate at that time. During Fiscal 2022, we finalized our accounting for the carryback and recognized an additional $43 million income tax benefit.

New Accounting Pronouncements

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Results of Operations

A discussion regarding our results of operations for Fiscal ~~2020,~~2022 compared to ~~$137 million~~Fiscal 2021 is presented below. A discussion regarding our results of operations for Fiscal ~~2019.~~2021 compared to Fiscal 2020 can be found under Item 7 in our Annual Report on Form 10-K for the year ended March 27, 2021, filed with the SEC on May 26, 2021, which is available on the SEC’s website at www.sec.gov and our investor website at www.capriholdings.com.

Comparison of Fiscal 2022 with Fiscal 2021

The following table details the results of our operations for Fiscal 2022 and Fiscal 2021 and expresses the relationship of certain line items to total revenue as a percentage (dollars in millions):


	Fiscal Years Ended				$ Change		% Change		% of Total Revenue for Fiscal 2022		% of Total Revenue for Fiscal 2021
	April 2, 2022		March 27, 2021
Statements of Operations Data:
Total revenue	$	5,654	$	4,060	$	1,594	39.3	%
Cost of goods sold	1,910		1,463		447		30.6	%	33.8	%	36.0	%
Gross profit	3,744		2,597		1,147		44.2	%	66.2	%	64.0	%
Selling, general and administrative expenses	2,533		2,018		515		25.5	%	44.8	%	49.7	%
Depreciation and amortization	193		212		(19)		(9.0)	%	3.4	%	5.2	%
Impairment of assets	73		316		(243)		(76.9)	%	1.3	%	7.8	%
Restructuring and other charges	42		32		10		31.3	%	0.7	%	0.8	%
Total operating expenses	2,841		2,578		263		10.2	%	50.2	%	63.5	%
Income from operations	903		19		884		NM		16.0	%	0.5	%
Other income, net	(2)		(7)		5		71.4	%	—	%	(0.2)	%
Interest (income) expense, net	(18)		43		(61)		NM		(0.3)	%	1.1	%
Foreign currency loss (gain)	8		(20)		28		NM		0.1	%	(0.5)	%
Income before provision for income taxes	915		3		912		NM		16.2	%	0.1	%
Provision for income taxes	92		66		26		39.4	%	1.6	%	1.6	%
Net income (loss)	823		(63)		886		NM
Less: Net income (loss) attributable to noncontrolling interests	1		(1)		2		NM
Net income (loss) attributable to Capri	$	822	$	(62)	$	884	NM

NM Not meaningful

Total Revenue

Total revenue increased $1.594 billion, or 39.3%, to $5.654 billion for Fiscal 2022, compared to $4.060 billion for Fiscal 2021, which included net favorable foreign currency effects of $25 million primarily related to the strengthening of the British Pound against the United States dollar in Fiscal 2022, as compared to Fiscal 2021. On a constant currency basis, our total revenue increased $1.569 billion, or 38.6%. The increase is attributable to the continued recovery from the COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread, temporary store closures and a significant decline in store traffic. Fiscal 2022 also included approximately $70 million of incremental revenue ~~of $723 million due~~attributable to the inclusion of the ~~Versace business acquired on December 31, 2018 for the entire~~53rd week.

Gross Profit

Gross profit increased $1.147 billion, or 44.2%, to $3.744 billion during Fiscal ~~2020 year. The remaining decrease in sales reflects the adverse impacts related to COVID-19.~~

~~Loss from Operations~~

~~During Fiscal 2020, we recorded a loss from operations of $8 million~~2022, compared to a loss of $11 million for the period from the date of acquisition through March 30, 2019 (after amortization of non-cash purchase accounting adjustments). Operating margin in Fiscal 2020 was (0.9)% compared to (8.0)% for the period from the date of acquisition through March 30, 2019.

~~Jimmy Choo~~

Fiscal Years Ended % Change
March 28,
2020 March 30,
2019 $ Change As Reported Constant
Currency
Revenues $ 555 $ 590 $ (35) (5.9) % (5.1) %
(Loss) income from operations (13) 20 (33) (165.0) %
Operating margin (2.3) % 3.4 %

~~Revenues~~

~~Jimmy Choo revenues decreased $35 million, or 5.9% to $555 million~~$2.597 billion for Fiscal ~~2020, compared to $590 million for Fiscal 2019,~~2021, which included ~~unfavorable~~net favorable foreign currency effects of $5 million. OnGross profit as a ~~constant currency~~percentage of total revenue increased 220 basis ~~revenue decreased $30 million, or 5.1%, primarily reflecting adverse impacts related~~points to ~~COVID-19.~~

~~(Loss) Income from Operations~~

~~During~~66.2% during Fiscal ~~2020, Jimmy Choo recorded a loss from operation of $13 million~~2022, compared to ~~income from operations of $20 million for~~64.0% during Fiscal ~~2019. Operating margin declined 570 basis points from 3.4% for Fiscal 2019, to (2.3)% for Fiscal 2020, primarily due to an~~2021. The increase in ~~operating expenses, including retail store expenses, as well as investments~~gross profit margin was primarily attributable to a higher average unit price and lower promotional activity, partially offset by increases in ~~new stores, while also reflecting the adverse impacts related to COVID-19.~~

supply chain costs and unfavorable channel mix.

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~~Michael Kors~~Total Operating Expenses

Fiscal Years Ended % Change
March 28,
2020 March 30,
2019 $ Change As Reported Constant
Currency
Revenues $ 4,153 $ 4,511 $ (358) (7.9) % (7.0) %
Income from operations 850 964 (114) (11.8) %
Operating margin 20.5 % 21.4 %

~~Revenues~~

~~Michael Kors revenues decreased $358~~Total operating expenses increased $263 million, or ~~7.9%~~10.2%, to ~~$4.153~~$2.841 billion during Fiscal 2022, compared to $2.578 billion for Fiscal ~~2020,~~2021. Our operating expenses included a net unfavorable foreign currency impact of approximately $2 million. Total operating expenses as a percentage of total revenue decreased to 50.2% in Fiscal 2022, compared to ~~$4.511~~63.5% in Fiscal 2021. The components that comprise total operating expenses are detailed below.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $515 million, or 25.5%, to $2.533 billion during Fiscal 2022, compared to $2.018 billion for Fiscal ~~2019,~~2021, primarily due to increased retail store, e-commerce, corporate and marketing expenses during Fiscal 2022.

Selling, general and administrative expenses as a percentage of total revenue decreased to 44.8% during Fiscal 2022, compared to 49.7% for Fiscal 2021, primarily due to leveraging of operating expenses as a result of higher revenue.

Unallocated corporate expenses, which are included within selling, general and administrative expenses discussed above, but are not directly attributable to a reportable segment, increased $38 million, or 25.0%, to $190 million for Fiscal 2022, compared to $152 million for Fiscal 2021, primarily due to an increase in professional fees related to the ERP system implementation and Capri transformation projects and an increase in compensation expense.

Depreciation and Amortization

Depreciation and amortization decreased $19 million, or 9.0%, to $193 million during Fiscal 2022, compared to $212 million for Fiscal 2021. The decrease in depreciation and amortization expense was primarily attributable to lower depreciation due to lower capital expenditures in Fiscal 2022 and Fiscal 2021. Depreciation and amortization decreased to 3.4% as a percentage of total revenue during Fiscal 2022, compared to 5.2% for Fiscal 2021 primarily due to higher revenues during Fiscal 2022.

Impairment of Assets

During Fiscal 2022, we recognized asset impairment charges of $73 million, primarily related to the impairment of operating lease right-of-use assets. During Fiscal 2021, we recognized asset impairment charges of approximately $316 million, primarily related to the impairment of Jimmy Choo goodwill and its brand intangible assets, as well as the impairment of operating lease right-of-use assets (see Note 13 to the accompanying consolidated financial statements for additional information).

Restructuring and Other Charges

During Fiscal 2022, we recognized restructuring and other charges of $42 million, which included other costs of $33 million, primarily related to equity awards associated with the acquisition of Versace and severance for an executive officer and $9 million related to our Capri Retail Store Optimization Program (see Note 10 to the accompanying consolidated financial statements for additional information).

During Fiscal 2021, we recognized restructuring and other charges of $32 million, which included other costs of $27 million, primarily related to equity awards associated with the acquisition of Versace and the closure of certain corporate locations and $5 million related to our Capri Retail Store Optimization Program.

Income from Operations

As a result of the foregoing, income from operations increased $884 million to $903 million during Fiscal 2022, compared to $19 million for Fiscal 2021. Income from operations as a percentage of total revenue increased to 16.0% in Fiscal 2022, compared to 0.5% in Fiscal 2021. See Segment Information above for a reconciliation of our segment operating income to total operating income.

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Interest (Income) Expense, net

During Fiscal 2022, we recognized $18 million of interest income compared to $43 million of interest expense during Fiscal 2021. The $61 million improvement in interest (income) expense, net, is primarily due to an increase of interest income from higher average notional amounts outstanding on our net investment hedges in the current year and a decrease in interest expense attributable to lower average borrowings outstanding (see Note 11 and Note 14 to the accompanying consolidated financial statements for additional information).

Foreign Currency (Gain) Loss

During Fiscal 2022 and Fiscal 2021, we recognized a net foreign currency loss of $8 million and a net foreign currency gain of $20 million, respectively, primarily attributable to the remeasurement of intercompany loans with certain of our subsidiaries.

Provision for Income Taxes

During Fiscal 2022, we recognized $92 million of income tax expense on pre-tax income of $915 million compared with $66 million of income tax expense on a pre-tax income of $3 million for Fiscal 2021. Our effective tax rate for Fiscal 2022 was significantly lower than our effective tax rate in Fiscal 2021, and not a meaningful or comparable metric, primarily due to the relationship between our income tax expense and minimal pre-tax income in the prior year as compared to the current year. The Fiscal 2022 income tax expense was higher than Fiscal 2021 primarily due to the increase in pre-tax income and increases in uncertain tax positions during Fiscal 2022. The increase was partially offset by a release of a valuation allowance in certain European subsidiaries, the impact of recently enacted tax legislation in Italy which allowed the Company to reduce its deferred tax liabilities, as well as a more favorable effect of our global financing activities during Fiscal 2022 compared to Fiscal 2021. As a result, the effect that discrete tax amounts have on the effective income tax rate during the year is not comparable. See Note 17 to the accompanying consolidated financial statements for additional information.

The global financing activities are related to our previously disclosed 2014 move of our principal executive office from Hong Kong to the U.K. and decision to become a U.K. tax resident. In connection with this decision, we funded our international growth strategy through intercompany debt financing arrangements between certain of our United States, United Kingdom and Hungarian subsidiaries. Accordingly, due to the difference in the statutory income tax rates between these jurisdictions, we realized a lower effective tax rate on consolidated pre-tax income.

Our effective tax rate may fluctuate from time to time due to the effects of changes in United States 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 (Loss) Attributable to Noncontrolling Interest

During Fiscal 2022, we recorded net income attributable to noncontrolling interest of $1 million and during Fiscal 2021, we recorded a net loss of $1 million, attributable to the noncontrolling interest in our joint ventures. These amounts represent the share of income (loss) that is not attributable to the Company.

Net Income (Loss) Attributable to Capri

As a result of the foregoing, during Fiscal 2022 our net income attributable to Capri increased $884 million to $822 million, compared to a net loss of $62 million for Fiscal 2021.

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Segment Information

Versace


	Fiscal Years Ended								% Change
	April 2, 2022			March 27, 2021			$ Change		As Reported		Constant Currency
Revenues	$	1,088		$	718		$	370	51.5	%	52.8	%
Income from operations	185			21			164		NM
Operating margin	17.0		%	2.9		%

NM Not meaningful

Revenues

Versace revenues increased $370 million, or 51.5%, to $1.088 billion for Fiscal 2022, compared to $718 million for Fiscal 2021, which included unfavorable foreign currency effects of ~~$40~~$9 million. On a constant currency basis, revenue ~~decreased $318~~increased $379 million, or ~~7.0%. The decrease in revenues was~~52.8%, primarily ~~due~~attributable to ~~lower sales of women's accessories and watches,~~the continued recovery from the COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread, temporary store closures and a ~~decrease~~significant decline in comparable stores sales of $146 million partially related to the adverse effects of COVID-19. This decrease was partially offset by higher sales of women's footwear and men's accessories, as well as a 9% increase in e-commerce sales.store traffic.

Income from Operations

~~Income~~During Fiscal 2022, Versace recorded income from operations ~~for our Michael Kors segment decreased $114~~of $185 million ~~or 11.8%,~~compared to ~~$850~~$21 million for Fiscal ~~2020, compared~~2021. Operating margin increased from 2.9% for Fiscal 2021 to ~~$964~~17.0% for Fiscal 2022, primarily due to a higher average unit price and leveraging of operating expenses due to higher revenue.

Jimmy Choo


	Fiscal Years Ended								% Change
	April 2, 2022			March 27, 2021			$ Change		As Reported		Constant Currency
Revenues	$	613		$	418		$	195	46.7	%	40.4	%
Income (loss) from operations	13			(55)			68		NM
Operating margin	2.1		%	(13.2)		%

NM Not meaningful

Revenues

Jimmy Choo revenues increased $195 million, or 46.7%, to $613 million for Fiscal ~~2019.~~ 2022, compared to $418 million for Fiscal 2021, which included favorable foreign currency effects of $26 million. On a constant currency basis, revenue increased $169 million, or 40.4%, primarily attributable to the continued recovery from the COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread, temporary store closures and a significant decline in store traffic. Fiscal 2022 also included incremental revenue attributable to the inclusion of the 53rd week.

Income (Loss) from Operations

During Fiscal 2022, Jimmy Choo recorded income from operations ~~as a percentage~~ of ~~Michael Kors revenue decreased 90 basis points to 20.5% in Fiscal 2020,~~$13 million compared to ~~21.4% in~~a loss from operations of $55 million for Fiscal ~~2019, largely~~2021. Operating margin improved from (13.2)% for Fiscal 2021 to 2.1% for Fiscal 2022, primarily due to a ~~decrease in gross profit margin, as previously discussed.~~higher average unit price and leveraging of operating expenses due to higher revenue.

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Michael Kors


	Fiscal Years Ended								% Change
	April 2, 2022			March 27, 2021			$ Change		As Reported		Constant Currency
Revenues	$	3,953		$	2,924		$	1,029	35.2	%	34.9	%
Income from operations	1,005			595			410		68.9	%
Operating margin	25.4		%	20.3		%

Revenues

Michael Kors revenues increased $1.029 billion, or 35.2%, to $3.953 billion for Fiscal 2022, compared to $2.924 billion for Fiscal 2021, which included favorable foreign currency effects of $8 million. On a constant currency basis, revenue increased $1.021 billion, or 34.9%, primarily attributable to the continued recovery from the COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread, temporary store closures and a significant decline in store traffic. Fiscal 2022 also included incremental revenue attributable to the inclusion of the 53rd week.

Income from Operations

During Fiscal 2022, Michael Kors recorded income from operations of $1.005 billion compared to $595 million for Fiscal 2021. Operating margin increased from 20.3% for Fiscal 2021 to 25.4% for Fiscal 2022, primarily due to a higher average unit price and leveraging of operating expenses due to higher revenue, partially offset by increases in supply chain costs.

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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 (see below discussion regarding “Revolving 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 our 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 growth plans, ~~shop-in-shop growth,~~ investments in corporate and distribution facilities, continued systems development, e-commerce and marketing initiatives. We spent ~~$223~~$131 million on capital expenditures during Fiscal ~~2020,~~2022 and expect to spend approximately ~~$130~~$300 million during Fiscal ~~2021. In response to the~~2023. This anticipated increase reflects continued ~~global health and economic impact of the COVID-19 pandemic, this represents a significant reduction to capital expenditures in Fiscal 2021. The majority of the Fiscal 2020~~ expenditures related to our retail operations (including e-commerce), ERP system implementation and Capri transformation programs. The majority of the Fiscal 2022 expenditures related to our retail operations (including e-commerce) and our corporate offices.

The following table sets forth key indicators of our liquidity and capital resources (in millions):


		As of							As of
		March 28, 2020		March 30, 2019			April 2, 2022		March 27, 2021
Balance Sheet Data:	Balance Sheet Data:					Balance Sheet Data:
Cash and cash equivalents	Cash and cash equivalents	$	592	$	172	Cash and cash equivalents	$	169	$	232
Working capital	Working capital	$	493	$	187	Working capital	$	325	$	(75)
Total assets	Total assets	$	7,946	$	6,650	Total assets	$	7,480	$	7,481
Short-term debt	Short-term debt	$	167	$	630	Short-term debt	$	29	$	123
Long-term debt	Long-term debt	$	2,012	$	1,936	Long-term debt	$	1,131	$	1,219


		Fiscal Years Ended											Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018			April 2, 2022		March 27, 2021		March 28, 2020
Cash Flows Provided By (Used In):
Cash flows provided by (used in):								Cash flows provided by (used in):
Operating activities	Operating activities	$	859	$	694	$	1,062	Operating activities	$	704	$	624	$	859
Investing activities	Investing activities	62		(2,125)		(1,533)		Investing activities	58		(124)		62
Financing activities	Financing activities	(497)		1,451		389		Financing activities	(800)		(870)		(497)
Effect of exchange rate changes	Effect of exchange rate changes	(4)		(11)		15		Effect of exchange rate changes	(24)		12		(4)
Net increase (decrease) in cash and cash equivalents		$	420	$	9	$	(67)
Net (decrease) increase in cash, cash equivalents and restricted cash								Net (decrease) increase in cash, cash equivalents and restricted cash	$	(62)	$	(358)	$	420

Cash Provided by Operating Activities

Cash provided by operating activities increased ~~$165~~$80 million to $704 million during Fiscal 2022, as compared to $624 million for Fiscal 2021, which was due to an increase in our net income after non-cash adjustments, partially offset by decreases related to changes in our working capital. The decreases related to the changes in our working capital are primarily attributable to an increase in our inventory levels and fluctuations in the timing of payments and receipts when compared to the prior year.

Cash provided by operating activities decreased $235 million to $624 million during Fiscal 2021, as compared to $859 million ~~during~~for Fiscal 2020, ~~as compared to $694 million for Fiscal 2019,~~ which was ~~primarily~~ due to a decrease in our net income after non-cash adjustments, primarily driven by a decrease in impairments and a decrease in net loss, partially offset by increases related to changes in our working capital, primarily attributable to ~~decreased inventory purchases, as well as~~fluctuations in the timing of payments and ~~receipts. The net increase in cash flows also included decreases to our net income after non-cash adjustments.~~

~~Cash provided by operating activities decreased $368 million to $694 million during Fiscal 2019, as compared to $1.062 billion for Fiscal 2018, which was primarily~~receipts due to ~~decreases related to changes in our working capital primarily attributable to increased inventory purchases as well as~~ the ~~timing~~impact of ~~payments and receipts. The net decrease in cash flows also included decreases to our net income after non-cash adjustments, partially offset by an increase in tax-related long-term liabilities.~~

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COVID-19.

Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was ~~$62~~$58 million during Fiscal ~~2020,~~2022, as compared to net cash used in investing activities of ~~$2.125 billion~~$124 million during Fiscal ~~2019.~~2021. The ~~$2.187 billion~~$182 million increase in cash ~~from~~provided by investing activities was primarily attributable to ~~$1.862 billion of~~$189 million cash paid, net of cash acquired, in connection with our Fiscal 2019 acquisition of the Versace business. The increase in cash was also due to a $77 million realized loss related to an undesignated derivative contract during Fiscal 2019 associated with the Versace acquisition andreceived on the settlement of certain net investment hedges ~~of $298 million~~ during Fiscal ~~2020, partly offset by higher capital expenditures~~2022.

Table of ~~$42 million, due to higher spending related to the ERP system implementation and expenditures related to corporate infrastructure.~~Contents

Net cash used in investing activities ~~increased $592~~was $124 million ~~to $2.125 billion~~ during Fiscal ~~2019,~~2021, as compared to ~~$1.533 billion~~net cash provided by investing activities of $62 million during Fiscal ~~2018.~~2020. The ~~decrease~~$186 million increase in cash used in investing activities was primarily attributable to a ~~$460~~$298 million ~~increase~~settlement of ~~cash paid,~~ net ~~of cash acquired,~~investment hedges during Fiscal 2020, partially offset by a $112 million decrease in ~~connection with our Fiscal 2019 acquisition of the Versace business, as~~capital expenditures compared to ~~our acquisition of the Jimmy Choo business during~~ Fiscal 2018. The decrease in cash was also due to a $77 million realized loss related to an undesignated derivative contract during Fiscal 2019 associated with the Versace acquisition, as well as higher capital expenditures of $61 million, due to higher spending related to build-outs for new and renovated retail stores and expenditures related to corporate infrastructure.2020.

Cash ~~(Used in) Provided by~~Used in Financing Activities

Net cash used in financing activities was ~~$497~~$800 million during Fiscal ~~2020,~~2022, as compared to ~~net cash provided by financing activities of $1.451 billion~~$870 million during Fiscal ~~2019.~~2021. The ~~increase~~decrease in cash used by financing activities of ~~$1.948 billion~~$70 million was primarily due to ~~decreased debt borrowings of $2.038 billion,~~a decrease in net of debt repayments ~~primarily attributable to~~of $681 million, higher ~~term loan borrowings to finance the acquisition of Versace during Fiscal 2019,~~cash proceeds from other financing activities and employee option exercises, partially offset by ~~a decrease~~an increase of ~~$105~~$660 million in cash payments to repurchase our ordinary shares during Fiscal ~~2020.~~2022.

Net cash ~~provided by~~used in financing activities ~~increased $1.062 billion to $1.451 billion during Fiscal 2019, compared to $389~~was $870 million during Fiscal ~~2018.~~2021, as compared to $497 million during Fiscal 2020. The increase in cash ~~from~~used by financing activities of $373 million was primarily due to ~~increased debt borrowings of $908 million,~~an increase in net of debt repayments ~~primarily attributable to higher term loan borrowings to finance the acquisition~~ of ~~Versace, as well as~~$474 million, partially offset by a decrease of ~~$154~~$101 million in cash payments to repurchase our ordinary ~~shares.~~shares during Fiscal 2021.

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Debt Facilities

The following table presents a summary of the Company’s borrowing capacity and amounts outstanding as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 (dollars in millions):


		Fiscal Years Ended									Fiscal Years Ended
		March 28, 2020			March 30, 2019				April 2, 2022		March 27, 2021
Senior Unsecured Revolving Credit Facility:
Senior Secured Revolving Credit Facility:								Senior Secured Revolving Credit Facility:
Revolving Credit Facility (excluding up to a $500 million accordion feature) ⁽¹⁾	Revolving Credit Facility (excluding up to a $500 million accordion feature) ⁽¹⁾							Revolving Credit Facility (excluding up to a $500 million accordion feature) (1)
Total Availability	Total Availability	$	1,000		$	1,000		Total Availability	$	1,000	$	1,000
Borrowings outstanding		681		(3)	539		⁽²⁾
Borrowings outstanding (2)								Borrowings outstanding (2)	175		—
Letter of credit outstanding	Letter of credit outstanding	18			17			Letter of credit outstanding	21		27
Remaining availability	Remaining availability	$	301		$	444		Remaining availability	$	804	$	973

Term Loan Facility ($1.6 billion)	Term Loan Facility ($1.6 billion)							Term Loan Facility ($1.6 billion)
Borrowings Outstanding, net of debt issuance costs ⁽³⁾⁽²⁾	Borrowings Outstanding, net of debt issuance costs ⁽³⁾⁽²⁾	$	1,010		$	1,570		Borrowings Outstanding, net of debt issuance costs ⁽³⁾⁽²⁾	$	495	$	865
Remaining availability	Remaining availability	$	—		$	—		Remaining availability	$	—	$	—

4.000% Senior Notes
Borrowings Outstanding, net of debt issuance costs and discount amortization ⁽³⁾		$	446		$	445
364 Credit Facility ($230 million)								364 Credit Facility ($230 million)
Total availability								Total availability	$	—	$	230
Remaining availability								Remaining availability	$	—	$	230

Senior Notes due 2024								Senior Notes due 2024
Borrowings Outstanding, net of debt issuance costs and discount amortization (2)								Borrowings Outstanding, net of debt issuance costs and discount amortization (2)	$	448	$	447

Other Borrowings ⁽³⁾	Other Borrowings ⁽³⁾	$	3		$	1		Other Borrowings (3)	$	42	$	21

Hong Kong Uncommitted Credit Facility:	Hong Kong Uncommitted Credit Facility:							Hong Kong Uncommitted Credit Facility:
Total availability (100 million Hong Kong Dollars)		$	14		$	13
Total availability (80 million and 100 million Hong Kong Dollar) (4)								Total availability (80 million and 100 million Hong Kong Dollar) (4)	$	10	$	13
Borrowings outstanding	Borrowings outstanding	—			—			Borrowings outstanding	—		—
Bank guarantees outstanding (4 million and 12 million Hong Kong Dollars)		1			2
Remaining availability		$	13		$	11

Remaining availability (80 million and 100 million Hong Kong Dollar)								Remaining availability (80 million and 100 million Hong Kong Dollar)	$	10	$	13

China Uncommitted Credit Facility:	China Uncommitted Credit Facility:							China Uncommitted Credit Facility:
Total availability (45 million and 100 million Chinese Yuan) (4)								Total availability (45 million and 100 million Chinese Yuan) (4)	$	7	$	15
Borrowings outstanding	Borrowings outstanding	$	—		$	—		Borrowings outstanding	—		$	—
Total and remaining availability (100 million Chinese Yuan)		$	14		$	14
Remaining availability (45 million and 100 million Chinese Yuan)								Remaining availability (45 million and 100 million Chinese Yuan)	$	7	$	15

Japan Credit Facility:	Japan Credit Facility:							Japan Credit Facility:
Borrowings outstanding		$	—		$	—
Total and remaining availability (1.0 billion Japanese Yen)		$	9		$	9
Total availability (1.0 billion Japanese Yen)								Total availability (1.0 billion Japanese Yen)	$	8	$	9
Borrowings outstanding (0.0 billion and 1.0 billion Japanese Yen) (5)								Borrowings outstanding (0.0 billion and 1.0 billion Japanese Yen) (5)	—		9
Remaining availability (1.0 billion and 0.0 billion Japanese Yen)								Remaining availability (1.0 billion and 0.0 billion Japanese Yen)	$	8	$	—

Versace Uncommitted Credit Facility:	Versace Uncommitted Credit Facility:							Versace Uncommitted Credit Facility:
Total availability (20 million Euro)		$	22		$	22
Borrowings outstanding (10 million Euro) ⁽²⁾		11			11
Total availability (48 million and 57 million Euro) (4)								Total availability (48 million and 57 million Euro) (4)	$	52	$	67
Borrowings outstanding (0 million Euro)								Borrowings outstanding (0 million Euro)	—		—
Remaining availability (48 million and 57 million Euro)								Remaining availability (48 million and 57 million Euro)	$	52	$	67

Remaining availability		$	11		$	11

Versace Uncommitted Credit Facilities:
Total availability (32 million Euro)		$	36		$	—
Borrowings outstanding (25 million Euro) ⁽²⁾		28			—
Remaining availability		$	8		$	—

Total borrowings outstanding⁽¹⁾	Total borrowings outstanding⁽¹⁾	$	2,179		$	2,566		Total borrowings outstanding (1)	$	1,160	$	1,342
Total remaining availability	Total remaining availability	$	356		$	489		Total remaining availability	$	881	$	1,298

~~_____________________________~~

⁽¹⁾~~As of the last day of Fiscal 2020, the~~The financial covenant in our 2018 Credit Facility ~~contained customary events of default and required~~requiring us to maintain a ~~leverage ratio at the end of each fiscal quarter of no greater than 3.75 to 1, calculated based on the~~ ratio of ~~consolidated~~the sum of total indebtedness plus the capitalized amount of all operating lease ~~liabilities presented on our consolidated balance sheets to Consolidated EBITDAR~~obligations for the last four ~~consecutive~~ fiscal ~~quarters.~~quarters to Consolidated EBITDAR ~~is defined~~of no greater than 3.75 to 1 was previously waived through the fiscal quarter ending June 26, 2021. We terminated the waiver period effective May 26, 2021. Effective as ~~consolidated~~of that date, the Company was required to comply with the quarterly maximum net ~~income plus income tax expense, net interest expense, depreciation~~leverage ratio test of 4.00 to 1.0. As of April 2, 2022 and ~~amortization expense, consolidated rent expense~~March 27, 2021, we were

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and other non-cash charges, subject to certain deductions. The 2018 Credit Facility also includes other customary covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends. As of March 28, 2020 and March 30, 2019, we were in compliance with all covenants related to our agreements then in effect governing our debt.

⁽²⁾~~Recorded as short-term debt in our consolidated balance sheets as~~As of ~~March 28, 2020 and March 30, 2019.~~

⁽³⁾~~Recorded~~April 2, 2022, all amounts are recorded as long-term debt in our consolidated balance ~~sheets as~~sheets. As of March ~~28, 2020 and March 30, 2019,~~27, 2021, all amounts were recorded as long-term debt, except for the current portion of ~~$128~~$97 million ~~and $80 million, respectively,~~ outstanding under the 2018 Term Loan Facility, which was recorded within short-term debt atin our consolidated balance sheets.

(3)The balance as of April 2, 2022 consists of $21 million related to our supplier finance program recorded within short-term debt in our consolidated balance sheets, $18 million related to the sale of certain Versace tax receivables, with $8 million and $10 million, respectively, recorded within short-term debt and long-term debt in our consolidated balance sheets and $3 million of other loans recorded as long-term debt in our consolidated balance sheets. The balance as of March ~~28, 2020~~27, 2021 consists of $17 million related to our supplier finance program recorded within short term debt in our consolidated balance sheets and $4 million of other loans recorded as long-term debt in our consolidated balance sheets.

(4)The balance as of April 2, 2022 represents the total availability of the credit facility, which excludes bank guarantees.

(5)Recorded as short-term debt in our consolidated balance sheets as of March ~~30, 2019.~~27, 2021.

We believe that our 2018 Credit Facility is adequately diversified with no undue concentration in any one financial institution. As of ~~March 28, 2020,~~April 2, 2022, there were 2625 financial institutions participating in the facility, with none maintaining a maximum commitment percentage in excess of 10%. 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 2018 Credit Facility.

See Note 1211 in the accompanying consolidated financial statements for detailed information relating to our credit facilities and debt obligations.

Share Repurchase Program

The following table presents our treasury share repurchases during the fiscal years ended ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 (dollars in millions):


		Fiscal Years Ended								Fiscal Years Ended
		March 28, 2020		March 30, 2019				April 2, 2022		March 27, 2021
Cost of shares repurchased under share repurchase program	Cost of shares repurchased under share repurchase program	$	100	$	200	⁽¹⁾	Cost of shares repurchased under share repurchase program	$	650	$	—
Fair value of shares withheld to cover tax obligations for vested restricted share awards	Fair value of shares withheld to cover tax obligations for vested restricted share awards	2		7			Fair value of shares withheld to cover tax obligations for vested restricted share awards	11		1
Total cost of treasury shares repurchased	Total cost of treasury shares repurchased	$	102	$	207		Total cost of treasury shares repurchased	$	661	$	1

Shares repurchased under share repurchase program	Shares repurchased under share repurchase program	2,711,807		3,718,237			Shares repurchased under share repurchase program	11,014,541		—
Shares withheld to cover tax withholding obligations	Shares withheld to cover tax withholding obligations	63,958		107,712			Shares withheld to cover tax withholding obligations	203,863		48,528
		2,775,765		3,825,949				11,218,404		48,528

~~_____________________________~~

⁽¹⁾~~The~~During the first quarter of Fiscal 2021, the Company suspended its $500 million share-repurchase program ~~expired on May 25, 2019.~~in response to the continued impact of the COVID-19 pandemic. See Note 15 in the accompanying financial statements for additional information.

On ~~August 1, 2019,~~November 3, 2021, we announced that our Board of Directors ~~authorized a new~~had terminated our existing $500 million share repurchase program (the “Prior Plan”), with $250 million of availability remaining, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which ~~was set~~we may, from time to ~~expire August 1, 2021.~~time, repurchase up to $1.0 billion of our outstanding ordinary shares within a period of two years from the effective date of the program. As of ~~March 28, 2020,~~April 2, 2022, the remaining availability under the Fiscal 2022 Plan was $500 million. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading transactions under our insider trading policy and other relevant factors. The program may be suspended or discontinued at any time.

On June 1, 2022, we announced that its Board of Directors has terminated our Fiscal 2022 Plan, with $500 million of availability remaining, and authorized a new share repurchase program ~~was $400 million.~~pursuant to which we may, from time to time, repurchase up to $1.0 billion of our outstanding ordinary shares within period of two years from the effective date of the program. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading restrictions under ~~the~~ our insider trading policy and other relevant factors. ~~This~~The program may be suspended or discontinued at any time.

~~The share repurchase program was suspended on April 6, 2020 in response to the continued global health and economic impact of the COVID-19 pandemic.~~

~~Contractual Obligations and Commercial Commitments~~

~~As of March 28, 2020, our commercial commitments and contractual obligations were as follows (in millions):~~

Fiscal Years Ending Fiscal 2021
Fiscal
2022-2023
Fiscal
2024-2025
Fiscal 2026 and thereafter Total
Operating leases $ 489 $ 801 $ 551 $ 566 $ 2,407
Inventory Purchase Obligations 570 — — — 570
Other commitments 58 20 3 — 81
Short-term debt 167 — — — 167
Long-term debt — 192 1,820 — 2,012
Total $ 1,284 $ 1,013 $ 2,374 $ 566 $ 5,237

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See Note 15 and Note 20 to the accompanying consolidated financial statements for additional information.

Contractual Obligations and Commercial Commitments

As of April 2, 2022, our contractual obligations and commercial commitments were as follows (in millions):


Fiscal Years	Fiscal 2023		Fiscal 2024-2025		Fiscal 2026-2027		Fiscal 2028 and thereafter		Total
Operating leases	$	482	$	734	$	422	$	426	$	2,064
Interest, net (1)	—		—		—		—		—
Inventory purchase obligations	1,016		—		—		—		1,016
Other commitments	77		26		5		—		108
Short-term debt	29		—		—		—		29
Long-term debt	—		1,135		—		—		1,135
Total	$	1,604	$	1,895	$	427	$	426	$	4,352

(1)Beginning in Fiscal 2023, we will be in an interest income position, therefore we would not have interest expense obligations due through the above periods.

Operating lease obligations represent ~~our~~ equipment leases and the minimum lease rental payments due under non-cancelable operating leases for our real estate locations globally. In addition to the above amounts, we are typically required to pay real estate taxes, contingent rent based on sales volume and other occupancy costs relating to ~~our~~ leased properties for our retail stores.

Interest, net represents the estimated net interest expense associated with our term loan based on the current interest rate and interest from our interest rate swap. It also includes the estimated net interest income from our net investment hedges.

Inventory purchase obligations represent ~~our~~ contractual ~~agreements relating to~~obligations for future purchases of inventory.

Other commitments include ~~our~~ non-cancelable contractual obligations related to marketing and advertising agreements, information technology agreements and supply agreements.

~~Excluded from the above commitments is $99 million of long-term liabilities related to net uncertain tax positions, due to the uncertainty of the time and nature of resolution.~~

The above table ~~also~~ excludes current liabilities (other than short-term ~~debt)~~debt and short-term operating lease liabilities) recorded as of ~~March 28, 2020,~~April 2, 2022, as these items will be paid within one year, and non-current liabilities that have no cash outflows associated with them (e.g., deferred taxes).

Off-Balance Sheet Arrangements

We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. In addition to the commitments in the above table, our off-balance sheet commitments relating to our outstanding letters of credit were ~~$24~~$36 million at ~~March 28, 2020,~~April 2, 2022, including $6$15 million in letters of credit issued outside of the 2018 Credit Facility. In addition, as of ~~March 28, 2020,~~April 2, 2022, bank guarantees of approximately ~~$18~~$30 million were supported by our ~~Versace Credit Facility.~~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.

~~Effects of Inflation~~

We do not believe that our sales or operating results have been materially impacted by inflation during the periods presented in our financial statements. However, we may experience an increase in cost pressure from our suppliers in the future, which could have an adverse impact on our gross profit results in the periods effected.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain market risks during the normal course of our business, such as risk arising from fluctuations in foreign currency exchange rates, as well as fluctuations in interest rates. In ~~attempts~~order to manage these risks, we employ certain strategies to mitigate the effect of these fluctuations. We enter into foreign currency forward contracts to manage our foreign currency exposure to the fluctuations of certain foreign currencies. The use of these instruments primarily helps to manage our exposure to our foreign purchase commitments and better control our product costs. We do not use derivatives for trading or speculative purposes.

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Foreign Currency Exchange Risk

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 enter into forward 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 and the Canadian ~~Dollar.~~dollar. These contracts are recorded at fair value in our consolidated balance sheets as either an asset or liability, and are derivative contracts to hedge cash flow risks. Certain of these contracts are designated as hedges for hedge accounting purposes, while ~~certain of these~~other contracts are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of the majority of these contracts at the balance sheet date are recorded in our equity as a component of accumulated other comprehensive income, ~~(loss),~~ and upon maturity (settlement) are recorded in, or reclassified into, our cost of ~~sales~~goods sold or operating expenses, in our consolidated ~~statement~~statements of operations and comprehensive income (loss), as applicable to the transactions for which the forward currency exchange contracts were established.

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We perform a sensitivity analysis on our forward currency contracts, both designated and not designated as hedges for accounting purposes, to determine the effects of fluctuations in foreign currency exchange rates. For this sensitivity analysis, we assume a hypothetical change in ~~U.S. Dollar~~United States dollar against foreign exchange rates. Based on all foreign currency exchange contracts outstanding as of ~~March 28, 2020,~~April 2, 2022, a 10% appreciation or devaluation of the ~~U.S. Dollar~~United States dollar compared to the level of foreign currency exchange rates for currencies under contract as of ~~March 28, 2020,~~April 2, 2022, would result in a potential net increase and decrease ~~respectively,~~upon settlement of approximately $15 million in the fair value of these contracts.

Net Investment ~~Hedge~~Hedges

We are exposed to adverse foreign currency exchange rate movements related to ~~interest from~~ our net investment ~~hedge.~~hedges. As of ~~March 28, 2020, the~~April 2, 2022, we have multiple fixed to fixed cross-currency swap agreements with aggregate notional amounts of $4 billion to hedge our net investment ~~hedge has an aggregate notional amount of $44~~in Euro-denominated subsidiaries and $194 million to hedge our net investments in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the ~~U.S. Dollar~~United States dollar and this currency. Under the ~~terms~~term of ~~this contract, which matures November 2024,~~these contracts, we will exchange the semi-annual fixed rate payments ~~made under our Senior Notes~~on United States denominated debt for fixed rate payments of ~~0.89%~~0% to 3.565% in Euros and 0% to 3.408% in Japanese Yen. Based on the net investment ~~hedge~~hedges outstanding as of ~~March 28, 2020,~~April 2, 2022, a 10% appreciation or devaluation of the ~~U.S. Dollar~~United States dollar compared to the level of foreign currency exchange rates for currencies under contract as of ~~March 28, 2020,~~April 2, 2022, would result in a potential net increase or decrease upon settlement of approximately $5$432 million in the fair value of this contract, which ~~matures in 4 years.~~include mandatory early termination dates between August 2025 and February 2026, while the remaining contracts have maturity dates between March 2024 and February 2051. In addition, certain other contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the earliest effective date being November 2023. If the outstanding position of a contract exceeds a certain threshold governed by the aforementioned CSA’s, either party is required to post cash collateral.

Interest Rate Risk

We are exposed to interest rate risk in relation to borrowings outstanding under our 2018 Term Loan Facility, our ~~2018~~ Credit Facility, our Hong Kong Credit Facility, our Japan Credit Facility and our Versace Credit Facilities. Our 2018 Term Loan Facility carries interest at a rate that is based on LIBOR. Our 2018 Credit Facility carries interest rates that are tied to LIBOR and the prime rate, among other institutional lending rates (depending on the particular origination of borrowing), as further described in Note 1211 to the accompanying consolidated financial statements. Our Hong Kong Credit Facility carries interest at a rate that is tied to the Hong Kong Interbank Offered Rate. Our China Credit Facility carries interest at a rate that is tied to the People’s Bank of China’s Benchmark lending rate. Our Japan Credit Facility carries interest at a rate posted by the Mitsubishi UFJ Financial Group. Our Versace Credit Facility carries interest at a rate set by the bank on the date of borrowing that is tied to the European Central Bank. Therefore, our consolidated statements of operations and comprehensive income (loss) and cash flows are exposed to changes in those interest rates. At ~~March 28, 2020,~~April 2, 2022, we had ~~$681~~$175 million ~~in long-term~~ borrowings outstanding under our ~~2018~~Revolving Credit Facility, ~~$1.010 billion,~~$495 million, net of debt issuance costs, outstanding under our 2018 Term Loan Facility and ~~$39 million~~no borrowings outstanding under our Versace Credit Facilities. At March ~~30, 2019,~~27, 2021, we had ~~$539 million in short-term~~no borrowings outstanding under our ~~2018~~Revolving Credit Facility, ~~$1.570 billion,~~$865 million, net of debt issuance costs, outstanding under our 2018 Term Loan Facility and ~~$11 million~~no borrowings outstanding under our Versace Credit Facility. These balances are not indicative of future balances that may be outstanding under our revolving credit facilities that may be subject to fluctuations in interest rates. Any increases in the applicable interest rate(s) would cause an increase to the interest expense relative to any outstanding balance at that date.

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Credit Risk

~~We have outstanding~~As of April 2, 2022, our $450 million ~~aggregate principal amount of~~ Senior Notes, due in ~~2024. The Senior Notes~~2024, bear interest at a fixed rate equal to ~~4.000%~~4.500% per year, payable semi-annually. Our Senior Notes interest rate payable may be subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency), downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes. See Note 20 to the accompanying consolidated financial statements for additional information.

Item 8. Financial Statements and Supplementary Data

~~The response to this item is provided in this Annual Report on Form 10-K under Item~~See “Item 15. ~~“Exhibits~~Exhibits and Financial Statement ~~Schedule”~~Schedules” for a listing of the consolidated financial statements and ~~is incorporated herein by reference.~~supplementary data included in this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a - 15(e) and 15(d) - 15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)) as of ~~March 28, 2020.~~April 2, 2022. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of ~~March 28, 2020.~~April 2, 2022.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined under the Exchange Act Rule 13a-15 (f)) to provide reasonable assurance regarding the reliability of financial reporting and that the consolidated financial statements have been prepared in accordance with U.S. GAAP. Such internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance (A) that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors; and (B) regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management assessed the effectiveness of our internal control over financial reporting as of ~~March 28, 2020.~~April 2, 2022. In making this assessment, it used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the 2013 Framework. Based on this assessment, management has determined that, as of ~~March 28, 2020,~~April 2, 2022, our internal control over financial reporting is effective based on those criteria.

The Company’s internal control over financial reporting as of ~~March 28, 2020,~~April 2, 2022, as well as the consolidated financial statements, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein. ~~The audit report appears on page 61 of this report.~~

Changes in Internal Control over Financial Reporting

Except as discussed below, there have been no changes in our internal control over financial reporting during the three months ended ~~March 28, 2020,~~April 2, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~COVID-19~~

~~In addition~~We are currently undertaking a major, multi-year ERP implementation to upgrade our information technology platforms and systems worldwide. The implementation is occurring in phases over multiple years. We have launched the ~~changes discussed below, we have experienced varying degrees of business disruptions related to~~Michael Kors Finance functionality on the ~~COVID-19 pandemic, including periods of closures of our stores, distribution centers and corporate facilities beginning during~~ERP system in North America in the ~~fourth~~first quarter of Fiscal ~~2020. In addition,~~2023.

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As a result of this multi-year implementation, we ~~have temporarily furloughed a significant portion of~~expect certain changes to our ~~store employees~~processes and ~~are requiring our corporate employees~~procedures, which in ~~affected regions to work remotely. Despite such actions, we have not experienced any material~~turn, could result in changes to our internal ~~controls~~control over financial reporting. WeWhile we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor ~~the impact of the COVID-19 pandemic on~~ our internal ~~controls.~~control over financial reporting as processes and procedures in the affected areas evolve. See Item 1A1A. “Risk Factors” — ~~"Risk Factors — The COVID-19 pandemic~~“A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, ~~and~~ results of ~~operations" for additional discussion regarding risks to our business associated with the COVID-19 pandemic.~~

~~Leases~~

In the first quarter of Fiscal 2020, we implemented additional internal controls in connection with our adoption of ASU 2016-02, Leases (Topic 842), none of which materially affected our internal control overoperations and financial ~~reporting.~~condition.”

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Item 9B. Other Information

~~The Company~~As previously disclosed that in connection with the Michael Kors Retail Fleet Optimization Plan, it expected to incur approximately $100 - $125 million of one-time costs, including lease termination and other store closure costs. The Company closed a total of 143 Michael Kors stores at a cost of $99 million since plan inception, with total costs in line with its original expectations. As of the end of Fiscal 2020, the previously disclosed Michael Kors Retail Fleet Optimization is completed.

~~On July 7, 2020,~~announced, the Board of Directors of the Company approved a retail store optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet. AsDuring the fourth quarter of Fiscal 2022, the Company completed its plan to close certain retail stores as a part of ~~the~~ Capri Retail Store Optimization ~~Program, the~~Program. The Company ~~intends to close approximately 170~~closed a total of 167 of its retail stores, ~~over the next two fiscal years (Fiscal 2021~~with 66 and 101 stores having closed during Fiscal 2022 and Fiscal ~~2022). In addition,~~2021, respectively. Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program ~~the Company expects to incur approximately $75~~was $14 million, of ~~one-time costs, including lease termination~~which $9 million and ~~other store closure costs, the majority of which are expected to result~~$5 million was recorded during Fiscal 2022 and Fiscal 2021, respectively. Net restructuring charges recorded in ~~future cash expenditures.~~

~~The exact amounts and timing of~~connection with the Capri Retail Store Optimization Program ~~charges and future cash expenditures associated therewith are undeterminable at this time. The Company will either disclose in a Current Report on Form 8-K, or disclose in another periodic filing with~~were $3 million during the U.S. Securities and Exchange Commission, the amount of any material charges relating to the Capri Retail Optimization Program by major type of cost once such amounts or range of amounts are determinable.three months ended April 2, 2022.

This disclosure is intended to satisfy the requirements of Item 2.05 of Form 8-K.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~July 2020,~~June 2022, which is incorporated herein by reference.

Item 11. Executive Compensation

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~July 2020,~~June 2022, which is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of ~~March 28, 2020~~April 2, 2022 regarding compensation plans under which the Company’s equity securities are authorized for issuance:

Equity Compensation Plan Information
(a) (b) (c)
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders ⁽¹⁾
6,697,026 $ 46.99
⁽²⁾
2,686,919
Equity compensation plans not approved by security holders ⁽³⁾
457,925 $ 4.57
⁽²⁾
—
Total 7,154,951 $ 44.28
⁽²⁾
2,686,919


Equity Compensation Plan Information
	(a)	(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights (2)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)	4,393,340	$	39.96	4,062,239
Equity compensation plans not approved by security holders	—	$	—	—
Total	4,393,340	$	39.96	4,062,239

⁽¹⁾Reflects share options and restricted ~~share~~stock units issued under the Company’s Amended and Restated Omnibus Incentive Plan.

⁽²⁾Represents the weighted average exercise price of outstanding share awards only.

⁽³⁾Reflects share options issued under the Company’s Amended and Restated Stock Option Plan (the “Option Plan”), which was in effect prior to our initial public offering. As of March 28, 2020, there were no shares available for future issuance under the Option Plan.

Item 13. Certain Relationships, Related Transactions and Director Independence

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~July 2020,~~June 2022, which is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information with respect to this Item is included in the Company’s Proxy Statement to be filed in ~~July 2020,~~June 2022, which is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)The following documents are filed as part of this annual report on Form 10-K:

1.The following consolidated financial statements listed below are filed as a separate section of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm - Ernst & Young ~~LLP.~~LLP (PCAOB ID No. 42).

Consolidated Balance Sheets as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019.~~27, 2021.

Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~ for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, ~~2020, March 30, 2019 and March 31, 2018.~~2020.

Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, ~~2020, March 30, 2019 and March 31, 2018.~~2020.

Consolidated Statements of Cash Flows for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, ~~2020, March 30, 2019 and March 31, 2018.~~2020.

Notes to Consolidated Financial Statements for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, ~~2020, March 30, 2019 and March 31, 2018.~~2020.

2.Exhibits:

EXHIBIT INDEX


Exhibit No.			Document Description
2.1			Share Purchase Agreement dated as of May 31, 2016, by and among Michael Kors (Europe) B.V., Michael Kors (HK) Limited, Michael Kors Far East Trading Limited and Sportswear Holdings Limited (included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on June 1, 2016 and incorporated herein by reference).
~~2.2~~			Cooperation Agreement, dated as of July 25, 2017, by and among Michael Kors Holdings Limited, JAG Acquisitions (UK) Limited and Jimmy Choo Group Limited (formerly known as Jimmy Choo PLC) (included as Exhibit 2.2 to the Company's Current Report on Form 8-K (File No. 001-35368), filed on July 25, 2017 and incorporated herein by reference).
~~2.3~~			Rule 2.7 Announcement, dated as of July 25, 2017 (included as Exhibit 2.1 to the Company's Current Report on Form 8-K (File No. 001-35368), filed on July 25, 2017 and incorporated herein by reference).
~~2.4~~			Stock Purchase Agreement, dated as of September 24, 2018, by and among Allegra Donata Versace Beck, Donatella Versace, Santo Versace, Borgo Luxembourg S.À R.L., Blackstone GPV Capital Partners (Mauritius) VI-D FDI Ltd., Blackstone GPV Tactical Partners (Mauritius)-N Ltd. and Capri Holdings Limited (f/k/a Michael Kors Holdings Limited) (included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on September 25, 2018 and incorporated herein by reference).
3.1			Amended and Restated Memorandum and Articles of Association of Capri Holdings Limited (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 31, 2018 and incorporated herein by reference).
4.1			Specimen of Ordinary Share Certificate of Capri Holdings ~~Limited.~~Limited (included as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 (File No. 001-35368), filed on May 29, 2019 and incorporated herein by reference).
4.2			Shareholders Agreement, dated as of July 11, 2011, among Michael Kors Holdings Limited and certain shareholders of Michael Kors Holdings Limited (included as Exhibit 10.2 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).
4.3			Indenture, dated as of October 20, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (included as Exhibit 4.1 to the ~~Company's~~Company’s Current Report on Form 8-K (File No. 001-35368), filed on October 20, 2017 and incorporated herein by reference).
10.1			Second Amendment, dated as of June 25, 2020, to the Third Amended and Restated Credit Agreement dated as of November 15, 2018 among Capri Holdings Limited, Michael Kors (USA), Inc., the foreign subsidiary borrowers party thereto, the guarantors party thereto, the financial institutions party thereto as lenders and issuing banks and JPMorgan Chase Bank, N.A., as administrative agent (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35368), filed on July 1, 2020 and incorporated herein by reference).
10.2			Form of Indemnification Agreement between Michael Kors Holdings Limited and its directors and executive officers (included as Exhibit 10.5 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).

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Exhibit No.			~~Document Description~~
10.3			Amended and Restated Michael Kors (USA), Inc. Stock Option Plan (included as Exhibit 10.4 to the Company’s Registration Statement on Form F-1, as amended (File No. 333-178282), filed on December 2, 2011 and incorporated herein by reference).
10.4			~~Amended~~Amendment No. 1 to the Amended and Restated Michael Kors (USA), Inc. Share Option Plan (included as Exhibit 4.9 to the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2012, filed on June 12, 2012 and incorporated herein by reference).

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Exhibit No.			Document Description
10.5			Capri Holdings Limited Second Amended and Restated Omnibus Incentive Plan (included as ~~Appendix~~Annex A to the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-35368), filed on ~~June 16, 2015~~July 22, 2020 and incorporated herein by reference).
10.6			~~Third~~Fifth Amended and Restated Employment Agreement, dated as of March ~~28, 2018,~~7, 2022, by and among Michael Kors (USA), Inc., ~~Michael Kors~~Capri Holdings Limited and John D. ~~Idol (included as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed on May 30, 2018 and incorporated herein by reference).~~Idol.
10.7			Executive Bonus Program (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013 filed on August 8, 2013 and incorporated herein by reference).
10.8			Employment Agreement, dated as of May 12, 2014, by and between Michael Kors (USA), Inc., and Cathy Marie Robinson (included as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2014 filed on May 28, 2014 and incorporated herein by reference).
~~10.9~~			Employment Agreement, dated as of July 14, 2014, by and between Pascale Meyran and Michael Kors (USA), Inc. (included as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.10~~			Form of Employee Non-Qualified Option Award Agreement (included as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.11~~10.9			Form of Employee Restricted ~~Share~~Stock Unit Award Agreement (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.12~~10.10			Form of Performance-Based Restricted ~~Share~~Stock Unit Award Agreement (included as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.13~~10.11			Form of Independent Director Restricted ~~Share~~Stock Unit Award Agreement (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.14~~10.12			Aircraft Time Sharing Agreement, dated November 24, 2014, by and between Michael Kors (USA), Inc. and John Idol (included as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
~~10.15~~10.13			Employment Agreement, dated as of April 17, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and Thomas J. Edwards, Jr. ~~(including~~(included as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2017, filed on May 31, 2017 and incorporated herein by reference).
~~10.16~~			Agreement and General Release between Pascale Meyran and Michael Kors (USA), Inc., dated July 9, 2019 (included as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 001-35368), filed on November 7, 2019 and incorporated herein by reference).
~~10.17~~10.14			Capri Holdings Limited Deferred Compensation Plan (included as Exhibit 10.1 to the ~~Company's~~Company’s Current Report on Form 8-K (File No. 001.35368), filed on November 14, 2019 and incorporated herein by reference).
~~10.18~~10.15			Employment Agreement between Michael Kors (USA), Inc. and Krista McDonough made as of October 1, ~~2016.~~2016 (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020 (File No 001-35368), filed on July 8, 2020 and incorporated herein by reference).
10.16			Employment Agreement, dated as of March 30, 2020, by and among Capri Holdings Limited, Michael Kors (USA), Inc. and Daniel Purefoy (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021, filed on May 26, 2021 and incorporated herein by reference).
10.17			Employment Agreement, dated as of August 24, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc. and Joshua Schulman (included as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).
10.18			Separation Agreement (“Agreement”), by and between Joshua Schulman, Capri Holdings Limited (“Capri”), and Michael Kors (USA), Inc., dated March 7, 2022.
10.19			Employment Agreement, effective as of June 1, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc. and Jenna Hendricks.
10.20			Suspension of Rights Agreement, dated as of September 23, 2021, to the Third Amended and Restated Credit Agreement, dated as of November 15, 2018 among, Michael Kors (USA), Inc., Capri Holdings Limited, the Foreign Subsidiary Borrowers party to the Credit Agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders thereto and the other parties party thereto (included as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).
21.1			List of subsidiaries of Capri Holdings Limited.
23.2			Consent of Ernst & Young LLP.
31.1			Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.
31.2			Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1			Interactive Data Files.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~July 8, 2020~~June 1, 2022


			CAPRI HOLDINGS LIMITED
			By:			/s/ John D. Idol
			Name:			John D. Idol
			Title:			Chairman & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



By:	/s/ John D. Idol	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	~~July 8, 2020~~June 1, 2022
	John D. Idol
By:	/s/ Thomas J. Edwards, Jr.	Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer)	~~July 8, 2020~~June 1, 2022
	Thomas J. Edwards Jr.
By:	/s/ ~~M. William Benedetto~~Marilyn Crouther	Director	~~July 8, 2020~~June 1, 2022
	~~M. William Benedetto~~Marilyn Crouther
By:	/s/ Robin Freestone	Director	~~July 8, 2020~~June 1, 2022
	Robin Freestone
By:	/s/ Judy Gibbons	Director	~~July 8, 2020~~June 1, 2022
	Judy Gibbons
By:	/s/ Ann Korologos	Director	~~July 8, 2020~~June 1, 2022
	Ann Korologos
By:	/s/ Stephen F. Reitman	Director	~~July 8, 2020~~June 1, 2022
	Stephen F. Reitman
By:	/s/ Jane Thompson	Director	~~July 8, 2020~~June 1, 2022
	Jane Thompson
By:	/s/ Jean Tomlin	Director	~~July 8, 2020~~June 1, 2022
	Jean Tomlin

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Capri Holdings Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, and the related consolidated statements of operations and comprehensive income (loss) ~~income,~~, shareholders’ equity and cash flows for each of the three years in the period ended ~~March 28, 2020,~~April 2, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, and the results of its operations and its cash flow for each of the three years in the period ended ~~March 28, 2020,~~April 2, 2022, in conformity with the U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of ~~March 28, 2020,~~April 2, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated ~~July 8, 2020~~June 1, 2022 expressed an unqualified opinion thereon.

~~Adoption of ASU No. 2016-02~~

As discussed in Note 2 and Note 4 to the consolidated financial statements, the Company changed its method of accounting for leases in the fiscal year ended March 28, 2020 due to the adoption of ASU No. 2016-02, ~~Leases~~ ~~and associated amendments (Topic 842). See below for discussion of our related critical audit matter.~~

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

~~Table of Contents~~


						Valuation of Goodwill and Indefinite-lived Intangible Assets
Description of the Matter						At ~~March 28, 2020,~~April 2, 2022, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled ~~$1.5~~$1.4 billion and ~~$1.3~~$1.2 billion, respectively. As discussed in Note 2 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis, or whenever impairment indicators exist. During Fiscal 2020, the Company recognized a goodwill impairment charge of $171 million associated with two of its Jimmy Choo reporting units. The Company also recognized an impairment charge of $180 million associated with the Jimmy Choo indefinite-lived brand name intangible asset. Auditing the Company’s annual impairment assessments was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units for goodwill and the fair value of indefinite-lived brand name intangible assets. In particular, the fair value estimates were sensitive to significant assumptions, such as changes in the discount rate, revenue growth rate, margin and royalty rates, which are affected by expectations about future market or economic ~~conditions (including the effects of the global pandemic).~~conditions.

Table of Contents


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and indefinite-lived intangible assets impairment review process, including controls over management’s review of the significant assumptions described above. To test the estimated fair value of the Company’s reporting units and indefinite-lived intangible assets, we performed audit procedures that included, among others, assessing the valuation methodologies and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analyses. We compared the significant assumptions used by management to current industry and economic trends and evaluated whether changes to the Company’s business environment would affect the significant assumptions. For example, we compared the royalty rates used in estimating the fair value of certain indefinite-lived brand name intangible assets to current industry licensing agreements. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units and indefinite-lived brand name intangible assets that would result from changes in the assumptions. We also involved our internal valuation specialists to assist in our evaluation of the significant assumptions and methodologies used by the Company in developing the fair value estimates. In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.


						~~Adoption of Accounting Standards Update No. 2016-02, Leases~~
~~Description of the Matter~~						As discussed above and in Notes 2 and 4 to the consolidated financial statements, the Company adopted Accounting Standards Update No. 2016-02, Leases (“ASC 842”) on March 31, 2019. As a result of the adoption, the Company recorded a lease liability and related right of use asset of $2.2 billion and $1.6 billion, respectively on its balance sheet at March 28, 2020. Auditing management’s initial recognition of the lease liabilities and right-of-use asset upon adoption of ASU No. 2016-02 was especially challenging due to the volume and diversity of leases in the Company’s global lease portfolio. Further, the Company’s estimated incremental borrowing rate had a significant effect on the measurement of the lease liability and right-of use asset recognized upon adoption. Auditing management’s calculated incremental borrowing rate was complex due to the judgement involved in developing the expected interest rates for secured borrowings based on the term and the economic environment of the leases.

~~Table of Contents~~


~~How We Addressed the Matter in Our Audit~~						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the adoption of ASU No. 2016-02 included testing of controls over management’s review of the completeness of the lease population and the calculation of the incremental borrowing rate. We tested the completeness and accuracy of the data used in the Company’s initial recognition of the lease liabilities and right-of-use asset. Our audit procedures included, among others, comparing the information in a sample of lease agreements to the Company’s analyses and selecting leases from independent sources and assessing their inclusion in the Company’s analysis. We involved our valuation specialists to assist in evaluating the key assumptions and methodologies management used to develop the incremental borrowing rate. We independently calculated a range of incremental borrowing rates and compared it to the rates used by the Company.


						Impairment of Retail Store Long-Lived assets
Description of the Matter						As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets, which primarily include property ~~plant,~~ and equipment and operating lease right-of-use assets at retail stores, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. During the year ended ~~March 28, 2020,~~April 2, 2022, the Company recognized an impairment charge of ~~$357~~$83 million related to the long-lived assets at certain of its retail stores. In addition, upon adoption of ASC 842, Leases, the Company recorded a $152 million impairment, net of tax, of operating lease assets at certain of its retail stores as a reduction to retained earnings on March 31, 2019.assets. Auditing the Company’s impairment assessment of retail store long-lived assets was complex and highly judgmental due to the significant estimation required in determining the future cash flows used to assess recoverability of each retail store long-lived asset group (undiscounted) and determining the fair value (discounted). The significant assumptions used include estimated future cash flows directly related to the future operation of the stores (including sales and expense growth rates) and the discount rate used to determine fair value. Significant assumptions used in determining the fair value of certain operating lease right-of-use assets include the current market rent and discount rate for the remaining lease term of the related stores. These assumptions are subjective in nature and are affected by expectations about future market or economic ~~conditions (including the effects of the global pandemic).~~conditions.


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the retail store long-lived assets impairment process, including, determining the undiscounted future cash flows of the stores and the fair value of the long-lived assets (including those related to operating leases) for the stores that were deemed to be impaired. We also tested controls over management’s review of the significant assumptions described above. Our testing of the Company’s impairment measurement included, among other procedures, evaluating the significant assumptions and operating data used to calculate the estimated future cash flows and to determine the fair value of the store long lived asset groups. For a sample of retail stores, we tested the completeness and accuracy of the data used by the Company in its analyses and we compared the significant assumptions used to determine the forecasted cash flows to historical results of the retail stores, current industry and economic trends and inquired of the Company’s executives to understand the business initiatives supporting the assumptions in the future cash flows. We involved our internal valuation specialists to assist in evaluating the fair value of certain operating lease right-of-use assets, which included assessing the estimated market rental rates of these leases by comparing them to rental rates for comparable leases and evaluating the applied discount rate.

/s/ ERNST & YOUNG LLP

We have served as the Company’s auditor since ~~2014~~2014.

New York, New York

~~July 8, 2020~~June 1, 2022

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Capri Holdings Limited

Opinion on Internal Control over Financial Reporting

We have audited Capri Holdings Limited and subsidiaries’ internal control over financial reporting as of ~~March 28, 2020,~~April 2, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Capri Holdings Limited and subsidiaries (“the Company”) maintained, in all material respects, effective internal control over financial reporting as of ~~March 28, 2020,~~April 2, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, the related consolidated statements of operations and comprehensive income (loss) ~~income,~~, shareholders’ equity and cash flows for each of the three years in the period ended ~~March 28, 2020,~~April 2, 2022, and the related notes and our report dated ~~July 8, 2020~~June 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG LLP

New York, New York

~~July 8, 2020~~June 1, 2022

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

March 28,
2020 March 30,
2019
Assets
Current assets
Cash and cash equivalents $ 592 $ 172
Receivables, net 308 383
Inventories, net 827 953
Prepaid expenses and other current assets 167 221
Total current assets 1,894 1,729
Property and equipment, net 561 615
Operating lease right-of-use assets 1,625 —
Intangible assets, net 1,986 2,293
Goodwill 1,488 1,659
Deferred tax assets 225 112
Other assets 167 242
Total assets $ 7,946 $ 6,650
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
Current liabilities
Accounts payable $ 428 $ 371
Accrued payroll and payroll related expenses 93 133
Accrued income taxes 42 34
Short-term operating lease liabilities 430 —
Short-term debt 167 630
Accrued expenses and other current liabilities 241 374
Total current liabilities 1,401 1,542
Long-term operating lease liabilities 1,758 —
Deferred rent — 132
Deferred tax liabilities 465 438
Long-term debt 2,012 1,936
Other long-term liabilities 142 166
Total liabilities 5,778 4,214
Commitments and contingencies
Redeemable noncontrolling interest — 4
Shareholders’ equity
Ordinary shares, 0 par value; 650,000,000 shares authorized; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020; 216,050,939 shares issued and 150,932,306 outstanding at March 30, 2019 — —
Treasury shares, at cost (67,894,398 shares at March 28, 2020 and 65,118,633 shares at March 30, 2019) (3,325) (3,223)
Additional paid-in capital 1,085 1,011
Accumulated other comprehensive income (loss) 75 (66)
Retained earnings 4,332 4,707
Total shareholders’ equity of Capri 2,167 2,429
Noncontrolling interest 1 3
Total shareholders’ equity 2,168 2,432
Total liabilities and shareholders’ equity $ 7,946 $ 6,650


	April 2, 2022		March 27, 2021
Assets
Current assets
Cash and cash equivalents	$	169	$	232
Receivables, net	434		373
Inventories, net	1,096		736
Prepaid expenses and other current assets	192		205
Total current assets	1,891		1,546
Property and equipment, net	476		485
Operating lease right-of-use assets	1,358		1,504
Intangible assets, net	1,847		1,992
Goodwill	1,418		1,498
Deferred tax assets	240		278
Other assets	250		178
Total assets	$	7,480	$	7,481
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	555	$	512
Accrued payroll and payroll related expenses	165		116
Accrued income taxes	52		126
Short-term operating lease liabilities	414		447
Short-term debt	29		123
Accrued expenses and other current liabilities	351		297
Total current liabilities	1,566		1,621
Long-term operating lease liabilities	1,467		1,657

Deferred tax liabilities	432		397
Long-term debt	1,131		1,219
Other long-term liabilities	326		430
Total liabilities	4,922		5,324
Commitments and contingencies	0		0

Shareholders’ equity
Ordinary shares, no par value; 650,000,000 shares authorized; 221,967,599 shares issued and 142,806,269 outstanding at April 2, 2022; 219,222,937 shares issued and 151,280,011 outstanding at March 27, 2021	—		—
Treasury shares, at cost (79,161,330 shares at April 2, 2022 and 67,942,926 shares at March 27, 2021)	(3,987)		(3,326)
Additional paid-in capital	1,260		1,158
Accumulated other comprehensive income	194		56
Retained earnings	5,092		4,270
Total shareholders’ equity of Capri	2,559		2,158
Noncontrolling interest	(1)		(1)
Total shareholders’ equity	2,558		2,157
Total liabilities and shareholders’ equity	$	7,480	$	7,481

See accompanying notes to consolidated financial statements.

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

(In millions, except share and per share data)


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020
Total revenue	$	5,654	$	4,060	$	5,551
Cost of goods sold	1,910		1,463		2,280
Gross profit	3,744		2,597		3,271
Selling, general and administrative expenses	2,533		2,018		2,464
Depreciation and amortization	193		212		249
Impairment of assets	73		316		708
Restructuring and other charges	42		32		42
Total operating expenses	2,841		2,578		3,463
Income (loss) from operations	903		19		(192)
Other income, net	(2)		(7)		(6)
Interest (income) expense, net	(18)		43		18
Foreign currency loss (gain)	8		(20)		11
Income (loss) before provision for income taxes	915		3		(215)
Provision for income taxes	92		66		10
Net income (loss)	823		(63)		(225)
Less: Net income (loss) attributable to noncontrolling interest	1		(1)		(2)
Net income (loss) attributable to Capri	$	822	$	(62)	$	(223)

Weighted average ordinary shares outstanding:
Basic	149,724,675		150,453,568		150,714,598
Diluted	152,497,907		150,453,568		150,714,598
Net income (loss) per ordinary share attributable to Capri:
Basic	$	5.49	$	(0.41)	$	(1.48)
Diluted	$	5.39	$	(0.41)	$	(1.48)

Statements of Comprehensive Income (Loss):
Net income (loss)	$	823	$	(63)	$	(225)
Foreign currency translation adjustments	127		(15)		145
Net gain (loss) on derivatives	10		(4)		(4)
Comprehensive income (loss)	960		(82)		(84)
Less: Net income (loss) attributable to noncontrolling interest	1		(1)		(2)
Less: Foreign currency translation adjustments attributable to noncontrolling interest	(1)		—		—
Comprehensive income (loss) attributable to Capri	$	960	$	(81)	$	(82)

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Total revenue $ 5,551 $ 5,238 $ 4,719
Cost of goods sold 2,280 2,058 1,860
Gross profit 3,271 3,180 2,859
Selling, general and administrative expenses 2,464 2,075 1,767
Depreciation and amortization 249 225 208
Impairment of assets 708 21 33
Restructuring and other charges ⁽¹⁾
42 124 102
Total operating expenses 3,463 2,445 2,110
(Loss) Income from operations (192) 735 749
Other income, net (6) (4) (2)
Interest expense, net 18 38 22
Foreign currency loss (gain) 11 80 (13)
(Loss) income before provision for income taxes (215) 621 742
Provision for income taxes 10 79 150
Net (loss) income (225) 542 592
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (2) (1) —
Net (loss) income attributable to Capri $ (223) $ 543 $ 592
Weighted average ordinary shares outstanding:
Basic 150,714,598 149,765,468 152,283,586
Diluted 150,714,598 151,614,350 155,102,885
Net (loss) income per ordinary share attributable to Capri:
Basic $ (1.48) $ 3.62 $ 3.89
Diluted $ (1.48) $ 3.58 $ 3.82
Statements of Comprehensive (Loss) Income:
Net (loss) income $ (225) $ 542 $ 592
Foreign currency translation adjustments 145 (134) 148
Net (loss) gain on derivatives (4) 17 (16)
Comprehensive (loss) income (84) 425 724
Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (2) (1) —
Comprehensive (loss) income attributable to Capri $ (82) $ 426 $ 724

⁽¹⁾Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan (as defined in Note 11) and other restructuring initiatives, and costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited (see Note 5 and Note 11).

See accompanying notes to consolidated financial statements.

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in millions, except share data which is in thousands)

Ordinary Shares Additional
Paid-in
Capital Treasury Shares Accumulated
Other
Comprehensive
(Loss) Income Retained
Earnings Total Equity of Capri Non-controlling Interests Total Equity
Shares Amounts Shares Amounts
Balance at April 1, 2017 209,332 $ — $ 768 (53,499) $ (2,655) $ (81) $ 3,560 $ 1,592 $ 3 $ 1,595
Net income — — — — — — 592 592 — 592
Other comprehensive income — — — — — 132 — 132 — 132
Total comprehensive income — — — — — — — 724 — 724
Non-controlling interest of Jimmy Choo joint ventures — — — — — — — — 3 3
Partial repurchase of non-controlling interest — — — — — — — — (1) (1)
Vesting of restricted awards, net of forfeitures 542 — — — — — — — — —
Exercise of employee share options 1,117 — 14 — — — — 14 — 14
Equity compensation expense — — 50 — — — — 50 — 50
Purchase of treasury shares — — — (7,794) (361) — — (361) — (361)
Redemption of capital/dividends — — — — — — — — (1) (1)
Other — — (1) — — — — (1) — (1)
Balance at March 31, 2018, as previously reported 210,991 $ — $ 831 (61,293) $ (3,016) $ 51 $ 4,152 $ 2,018 $ 4 $ 2,022
Adoption of accounting standard (ASC 606) — — — — — — 12 12 — 12
Balance as of April 1, 2018 210,991 — 831 (61,293) (3,016) 51 4,164 2,030 4 2,034
Net income (loss) — — — — — — 543 543 (1) 542
Other comprehensive loss — — — — — (117) — (117) — (117)
Total comprehensive income (loss) — — — — — — — 426 (1) 425
Issuance of ordinary shares 2,395 — 91 — — — — 91 — 91
Vesting of restricted awards, net of forfeitures 818 — — — — — — — — —
Exercise of employee share options 1,847 — 29 — — — — 29 — 29
Equity compensation expense — — 60 — — — — 60 — 60
Purchase of treasury shares — — — (3,826) (207) — — (207) — (207)
Balance at March 30, 2019, as previously reported 216,051 $ — $ 1,011 (65,119) $ (3,223) $ (66) $ 4,707 $ 2,429 $ 3 $ 2,432
Adoption of accounting standard (See Note 2) — — — — — — (152) (152) — (152)
Balance as of March 31, 2019 216,051 — 1,011 (65,119) (3,223) (66) 4,555 2,277 3 2,280
Net (loss) — — — — — — (223) (223) (2) (225)
Other comprehensive income — — — — — 141 — 141 — 141
Total comprehensive (loss) — — — — — — — (82) (2) (84)
Vesting of restricted awards, net of forfeitures 1,262 — — — — — — — — —
Exercise of employee share options 7 — — — — — — — — —
Equity compensation expense — — 70 — — — — 70 — 70
Purchase of treasury shares — — — (2,775) (102) — — (102) — (102)
Adjustment of redeemable non-controlling interests to redemption value — — 4 — — — — 4 — 4
Balance at March 28, 2020 217,320 $ — $ 1,085 (67,894) $ (3,325) $ 75 $ 4,332 $ 2,167 $ 1 $ 2,168


	Ordinary Shares			Additional Paid-in Capital		Treasury Shares			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Equity of Capri		Non-controlling Interests		Total Equity
	Shares	Amounts				Shares	Amounts
Balance at March 30, 2019, as previously reported	216,051	$	—	$	1,011	(65,119)	$	(3,223)	$	(66)	$	4,707	$	2,429	$	3	$	2,432
Adoption of accounting standard (ASU 2106-02)	—	—		—		—	—		—		(152)		(152)		—		(152)
Balance as of March 30, 2019	216,051	—		1,011		(65,119)	(3,223)		(66)		4,555		2,277		3		2,280
Net loss	—	—		—		—	—		—		(223)		(223)		(2)		(225)
Other comprehensive income	—	—		—		—	—		141		—		141		—		141
Total comprehensive loss	—	—		—		—	—		—		—		(82)		(2)		(84)
Vesting of restricted awards, net of forfeitures	1,262	—		—		—	—		—		—		—		—		—
Exercise of employee share options	7	—		—		—	—		—		—		—		—		—
Share based compensation expense	—	—		70		—	—		—		—		70		—		70
Repurchase of ordinary shares	—	—		—		(2,775)	(102)		—		—		(102)		—		(102)




Adjustment of redeemable non-controlling interests to redemption value	—	—		4		—	—		—		—		4		$	—	4
Balance as of March 28, 2020	217,320	—		1,085		(67,894)	(3,325)		75		4,332		2,167		1		2,168
Net loss	—	—		—		—	—		—		(62)		(62)		(1)		(63)
Other comprehensive loss	—	—		—		—	—		(19)		—		(19)		—		(19)
Total comprehensive loss	—	—		—		—	—		—		—		(81)		(1)		(82)
Vesting of restricted awards, net of forfeitures	1,456	—		—		—	—		—		—		—		—		—
Exercise of employee share options	447	—		3		—	—		—		—		3		—		3
Share based compensation expense	—	—		70		—	—		—		—		70		—		70
Repurchase of ordinary shares	—	—		—		(49)	(1)		—		—		(1)		—		(1)
Other	—	—		—		—	—		—		—		—		(1)		(1)


Balance at March 27, 2021	219,223	—		1,158		(67,943)	(3,326)		$	56	4,270		2,158		(1)		2,157
Net income	—	—		—		—	—		—		822		822		1		823
Other comprehensive income (loss)	—	—		—		—	—		138		—		138		(1)		137
Total comprehensive income	—	—		—		—	—		—		—		960		—		960
Vesting of restricted awards, net of forfeitures	2,336	—		—		—	—		—		—		—		—		—
Exercise of employee share options	408	—		17		—	—		—		—		17		—		17
Share based compensation expense	—	—		85		—	—		—		—		85		—		85
Repurchase of ordinary shares	—	—		—		(11,218)	(661)		—		—		(661)		—		(661)


Balance at April 2, 2022	221,967	—		$	1,260	(79,161)	$	(3,987)	$	194	$	5,092	$	2,559	$	(1)	$	2,558

See accompanying notes to consolidated financial statements.

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Cash flows from operating activities
Net (loss) income $ (225) $ 542 $ 592
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 249 225 208
Equity compensation expense 70 60 50
Impairment of assets 708 21 33
Bad debt expense 29 4 8
Losses on store lease exits — 18 29
Deferred income taxes (73) (71) 9
Changes to lease related balances, net (55) — —
Amortization of deferred financing costs 8 4 4
Tax deficit (benefit) on exercise of share options 2 (24) (7)
Foreign currency losses (gains) 11 80 (13)
Other non-cash charges 3 — —
Change in assets and liabilities:
Receivables, net 42 (23) 11
Inventories, net 115 (125) 46
Prepaid expenses and other current assets 20 (31) 49
Accounts payable 63 (48) (21)
Accrued expenses and other current liabilities (95) 20 56
Other long-term assets and liabilities (13) 42 8
Net cash provided by operating activities 859 694 1,062
Cash flows from investing activities
Capital expenditures (223) (181) (120)
Purchase of intangible assets — (3) (3)
Cash paid for business acquisitions, net of cash acquired (13) (1,875) (1,415)
Realized (loss) gain on hedge related to acquisitions — (77) 5
Settlement of a net investment hedge 298 11 —
Net cash provided by (used in) investing activities 62 (2,125) (1,533)
Cash flows from financing activities
Debt borrowings 2,282 4,204 2,520
Debt repayments (2,676) (2,560) (1,784)
Debt issuance costs (1) (15) —
Purchase of treasury shares (102) (207) (361)
Exercise of employee share options — 29 14
Net cash (used in) provided by financing activities (497) 1,451 389
Effect of exchange rate changes on cash and cash equivalents (4) (11) 15
Net increase (decrease) in cash and cash equivalents 420 9 (67)
Beginning of period 172 163 230
End of period $ 592 $ 172 $ 163
Supplemental disclosures of cash flow information
Cash paid for interest $ 80 $ 45 $ 11
Cash paid for income taxes $ 98 $ 172 $ 104
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures $ 30 $ 25 $ 26


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020
Cash flows from operating activities
Net income (loss)	$	823	$	(63)	$	(225)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	193		212		249
Share-based compensation expense	85		71		70
Impairment of assets	83		316		708
Credit losses	7		(3)		29

Deferred income taxes	(57)		(70)		(73)
Changes to lease related balances, net	(142)		(112)		(55)
Amortization of deferred financing costs	6		6		8
Tax (benefit) deficit on exercise of share options	(4)		4		2

Foreign currency (gains) losses	—		(15)		11
Other non-cash charges	1		—		3
Change in assets and liabilities:
Receivables, net	(78)		(52)		42
Inventories, net	(386)		145		115
Prepaid expenses and other current assets	14		(31)		20
Accounts payable	69		50		63
Accrued expenses and other current liabilities	30		153		(95)
Other long-term assets and liabilities	60		13		(13)
Net cash provided by operating activities	704		624		859
Cash flows from investing activities
Capital expenditures	(131)		(111)		(223)


Cash paid for asset/business acquisitions, net of cash acquired	—		(13)		(13)

Settlement of net investment hedges	189		—		298
Net cash provided by (used in) investing activities	58		(124)		62
Cash flows from financing activities
Debt borrowings	945		2,443		2,282
Debt repayments	(1,132)		(3,311)		(2,676)
Debt issuance costs	—		(4)		(1)
Repurchase of ordinary shares	(661)		(1)		(102)
Exercise of employee share options	17		3		—

Other financing activities	31		—		—
Net cash used in financing activities	(800)		(870)		(497)
Effect of exchange rate changes on cash and cash equivalents	(24)		12		(4)
Net (decrease) increase in cash, cash equivalents and restricted cash	(62)		(358)		420
Beginning of period	234		592		172
End of period	$	172	$	234	$	592
Supplemental disclosures of cash flow information
Cash paid for interest	$	37	$	52	$	80
Cash paid for income taxes	$	43	$	45	$	98
Supplemental disclosure of non-cash investing and financing activities
Accrued capital expenditures	$	39	$	17	$	30

See accompanying notes to consolidated financial statements.

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CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

The Company was incorporated in the British Virgin Islands ~~(“BVI”)~~ on December 13, 2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018. The Company is a holding company that owns brands that are leading designers, marketers, distributors and retailers of branded women’s and men’s accessories, apparel and footwear bearing the Versace, Jimmy Choo and Michael Kors tradenames and related trademarks and logos. The Company operates in 3 reportable segments: Versace, Jimmy Choo and Michael Kors. See Note 2019 for additional information.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The ~~Company’s audited consolidated financial statements include~~Company consolidates the ~~following operations for the periods from the respective acquisition/consolidation date through March 28, 2020:~~

•~~Gianni~~results of its Versace ~~S.r.l. (“Versace”), acquired~~business on ~~December 31, 2018;~~

•~~Jimmy Choo Group Limited (“Jimmy Choo”), acquired on November 1, 2017;~~

~~See Note 5 for additional information related to the above acquisitions.~~a one-month lag, as consistent with prior periods.

The Company utilizes a 52 to 53 week fiscal year, ~~ending on~~and the ~~Saturday closest~~term “Fiscal Year” or “Fiscal” refers to ~~March 31. As such, the~~that 52-week or 53-week period. The fiscal years ending on March 27, 2021 and March 28, 2020 ~~March 30, 2019, and March 31, 2018~~ (“Fiscal ~~2020”, “Fiscal 2019”~~2021” and “Fiscal ~~2018”~~2020”, respectively) contain 52 ~~weeks.~~

~~Timing of Filing of Annual Report on Form 10-K~~

~~As a result of~~weeks, whereas the impacts of the COVID-19 pandemic on the business and employees of the Company, the Company has relied on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From the Reporting and Proxy Delivery Requirements for Public Companies dated March 25, 2020, to delay the filing of its Annual Report on Form 10-K for fiscal year ending April 2, 2022 (“Fiscal ~~2020 by up to 45 days from May 27, 2020, which is the original filing due date.~~

2022”) contain 53 weeks. The Company’s operations and business have experienced significant disruption due to the unprecedented conditions surrounding the COVID-19 global pandemic. The Company has been following the recommendations of local government and health authorities to minimize exposure risk for its employees. AsFiscal 2023 is a result, most of the Company’s corporate offices globally have been temporarily closed due to the pandemic and corporate employees involved in the Company’s annual financial statement closing process and finalizing the audit of the Company’s financial statements for Fiscal 2020 are working remotely. In addition, the Company required additional time to prepare analyses related to the impact of COVID-19 on its business and complete related required disclosures. This has resulted in delays in finalizing the Annual Report on Form 10-K for Fiscal 2020 and accompanying audited financial statements.52-week period ending April 1, 2023.

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2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts, ~~and doubtful accounts,~~credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes, ~~and the valuation of~~ goodwill, intangible assets, operating lease right-of-use assets and property and equipment, along with the estimated useful lives assigned to these assets. Actual results could differ from those estimates.

~~Reclassifications~~

~~Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.~~

Seasonality

The Company experiences certain effects of seasonality with respect to its business. The Company generally experiences greater sales during its third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during its first fiscal quarter.

Revenue Recognition

The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the ~~Company's~~Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. The Company recognizes retail store revenues when control of the product is transferred at the point of sale at Company owned stores, including concessions, net of estimated returns. Revenue from sales through the Company’s e-commerce sites is recognized at the time of delivery to the customer, reduced by an estimate of returns. Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, after merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers. To arrive at net sales for retail revenue, gross sales are reduced by actual customer returns as well as by a provision for estimated future customer returns, which is based on management’s review of historical and future customer return expectations. Sales taxes collected from retail customers are presented on a net basis and, as such, are excluded from revenue. To arrive at net sales for wholesale revenue, gross sales are reduced by provisions for estimated future returns, based on current expectations, as well as trade discounts, markdowns,

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allowances, operational chargebacks, and certain cooperative selling expenses. These estimates are based on such factors as historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.

The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 ~~March 30, 2019, and March 31, 2018~~ (in millions):

Balance
Beginning
of Year Amounts
Charged to
Revenue Write-offs
Against
Reserves Balance
at
Year End
Retail
Return Reserves:
Fiscal Year Ended March 28, 2020 $ 15 $ 231 $ (234) $ 12
Fiscal Year Ended March 30, 2019 12 226 (223) 15
Fiscal Year Ended March 31, 2018 7 161 (156) 12

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Balance
Beginning
of Year Amounts
Charged to
Revenue Write-offs
Against
Reserves Balance
at
Year End
Wholesale
Total Sales Reserves:
Fiscal Year Ended March 28, 2020 $ 112 $ 266 $ (224) $ 154
Fiscal Year Ended March 30, 2019 109 262 (259) 112
Fiscal Year Ended March 31, 2018 97 258 (246) 109


	Balance Beginning of Year		Amounts Charged to Revenue		Write-offs Against Reserves		Balance at Year End
Total Sales Reserves:
Fiscal Year Ended April 2, 2022	$	98	$	333	$	(339)	$	92
Fiscal Year Ended March 27, 2021	166		313		(381)		98
Fiscal Year Ended March 28, 2020	127		497		(458)		166

Royalty revenue generated from product licenses, which includes contributions for advertising, is based on reported sales of licensed products bearing the Company’s trademarks at rates specified in the license agreements. These agreements are also subject to contractual minimum levels. Royalty revenue generated by geographic licensing agreements is recognized as it is earned under the licensing agreements based on reported sales of licensees applicable to specified periods, as outlined in the agreements. These agreements allow for the use of the Company’s tradenames to sell its branded products in specific geographic regions.

The adverse impact from the COVID-19 pandemic which includes, but is not limited to, temporary retail store closures, wholesale customer store closures, a reduction in retail store traffic, a decline in international tourism and a decrease in consumer consumption is reflected in the Company's Fiscal 2020 total revenue.

Loyalty Program

The Company ~~has~~offers a loyalty program, which allows its Michael Kors ~~customer loyalty program in the~~ United States ~~which allows~~ customers to earn points on qualifying purchases toward monetary and non-monetary rewards, ~~that~~which may be redeemed for purchases at ~~the Company’s~~Michael Kors retail stores and e-commerce ~~site.~~sites. The Company ~~allocates~~defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits ~~using statistical formulas~~ based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” is recorded ~~as a reduction to revenue in the consolidated statements of income and comprehensive income and~~ within accrued expenses and other current liabilities in the Company’s consolidated balance ~~sheets.~~sheets and is expected to be recognized within the next 12 months. See Note 3 for additional information.

Advertising and Marketing Costs

Advertising and marketing costs are generally expensed ~~over~~when the ~~period of benefit~~advertisement is first exhibited and are recorded in selling, general and administrative ~~expenses.~~expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Advertising and marketing expense was ~~$201~~$329 million, ~~$158~~$137 million and ~~$167~~$201 million in Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, respectively.

Cooperative advertising expense, which represents the Company’s participation in advertising expenses of its wholesale customers, is reflected as a reduction ~~of net sales.~~to revenue. Expenses related to cooperative advertising for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, were $7$4 million, $8$3 million and $6$7 million, respectively.

Shipping and Handling

Freight-in expenses are recorded as part of cost of goods sold, along with product costs and other costs to acquire inventory. The costs of preparing products for sale, including warehousing expenses, are included in selling, general and administrative ~~expenses.~~expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Selling, general and administrative expenses also include the costs of shipping products to the Company’s e-commerce customers. Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss) were ~~$157~~$236 million, ~~$132~~$160 million and ~~$129~~$157 million for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, respectively. Shipping and handling costs charged to customers are included in total revenue.

COVID-19 Related Government Assistance and Subsidies

During Fiscal 2022 and Fiscal 2021, the Company recorded $10 million and $37 million, respectively, related to government assistance and subsidies. There was 0 government assistance or subsidies recorded in Fiscal 2020. These amounts mostly relate to rent support and payroll expense and were recorded as a reduction of selling, general and administrative expenses.

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Cash, ~~and~~ Cash Equivalents and Restricted Cash

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Included in the Company’s cash and cash equivalents as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 are credit card receivables of $4$18 million and ~~$24~~$25 million, respectively, which generally settle within two to three business days. ~~The decrease in credit card receivables year over year is mainly due~~

A reconciliation of cash, cash equivalents and restricted cash as of April 2, 2022 and March 27, 2021 from the consolidated balance sheets to the ~~impact on sales from the COVID-19 pandemic.~~consolidated statements of cash flows is as follows:

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	Fiscal Years Ended
	April 2, 2022		March 27, 2021
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	169	$	232
Restricted cash included within prepaid expenses and other current assets	3		2
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	172	$	234

Inventories

Inventories ~~mainly~~primarily consist of finished goods with the exception of raw materials and work in process inventory. The combined total of raw materials and work in process inventory recorded on the ~~Company's~~Company’s consolidated balance sheets as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 were ~~$27~~$31 million and ~~$25~~$28 million, respectively. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted-average cost method. Costs include amounts paid to independent manufacturers, plus duties and freight to bring the goods to the Company’s warehouses, as well as shipments to stores. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The net realizable value of the Company’s inventory is estimated based on historical experience, current and forecasted demand and other market conditions. In addition, reserves for inventory losses are estimated based on historical experience and physical inventory counts. The Company’s inventory reserves are estimates, which could vary significantly from actual results if future economic conditions, customer demand or competition differ from expectations. Our historical estimates of these adjustments have not differed materially from actual results.

The net realizable value of the Company's inventory as of March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic. This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, a decline in international tourism and a decrease in consumer consumption.

Store Pre-opening Costs

Costs associated with the opening of new retail stores and start up activities, are expensed as incurred.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization (carrying value). Depreciation is recorded on a straight-line basis over the expected remaining useful lives of the related assets. Equipment, furniture and fixtures are depreciated over five to seven years, computer hardware and software are depreciated over three to five years. The Company’s share of the cost of constructing in-store shop displays within its wholesale customers’ floor-space (“shop-in-shops”), which is paid directly to third-party suppliers, is capitalized as property and equipment and is generally amortized over a useful life of three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated remaining useful lives of the related assets or the remaining lease term, including highly probable renewal periods. The Company includes all depreciation and amortization expense as a component of total operating expenses, as the underlying long-lived assets are not directly or indirectly related to bringing the Company’s products to their existing location and condition. Maintenance and repairs are charged to expense in the year incurred.

The Company capitalizes, in property and equipment, direct costs incurred during the application development stage and the implementation stage for developing, purchasing or otherwise acquiring software for its internal use. These costs are amortized over the estimated useful lives of the software, generally five years, except for ERP systems which has an estimated useful life of ten years. All costs incurred during the preliminary project stage, including project scoping and identification and testing of alternatives, are expensed as incurred.

~~Definite-Lived~~

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Definite-lived Intangible Assets

The Company’s definite-lived intangible assets consist of trademarks and customer relationships which are stated at cost less accumulated amortization. The Company’s customer relationships are amortized over five to eighteen years. Reacquired rights recorded in connection with the acquisition of ~~MKHKL~~Michael Kors (HK) Limited and Subsidiaries (“MKHKL”) are amortized through March 31, 2041, the original expiration date of the Michael Kors license agreement in the Greater China region. The trademark for the Michael Kors brand is amortized over twenty years.

~~Impairment of~~ Long-lived Assets

The Company evaluates ~~its~~all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. For the purposes of impairment testing, the Company groups long-lived assets at the lowest level of identifiable cash flow. Leasehold improvements are typically amortized over the term of the store lease, including reasonably assured renewals and the shop-in-shops are amortized over a useful life of three to five years. The Company’s impairment testing is based on its best estimate of ~~its~~the future operating cash flows. ~~To the extent~~If the sum of ~~the~~our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, the Company ~~typically recognizes~~would recognize an impairment ~~loss~~charge, which is measured byas the amount inby which the carrying value exceeds the fair value of the ~~asset, taking into consideration other market assumptions.~~asset. The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of ~~current~~ real estate market fair values. As such, these estimates may differ from actual results and are affected by future market and economic conditions.

~~Table~~During Fiscal 2022, Fiscal 2021 and Fiscal 2020, the Company recorded impairment charges of ~~Contents~~

$83 million, $158 million and $357 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations. Please refer to Note 7 and Note 13 for additional information.

Goodwill and Other Indefinite-lived Intangible Assets

The Company records ~~indefinite-lived~~ intangible assets based on their fair value on the date of acquisition. Goodwill is recorded ~~for~~as the difference between the fair value of the purchase consideration ~~over~~and the fair value of the net identifiable tangible and intangible assets acquired. The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be indefinite-lived intangible assets, which are not subject to amortization. The Company performs an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill, for the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

The Company may assess its goodwill and its brand ~~indefinite-lived~~ intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, the Company assesses various factors, including industry and market conditions, macroeconomic conditions and performance of ~~the Company’s~~its businesses. If the results of the qualitative assessment indicate that it is more likely than not that ~~the Company’s~~our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis ~~would be~~is performed to determine if impairment is required. The Company may also elect to perform a quantitative analysis of goodwill and its indefinite-lived intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. The Company uses industry accepted valuation ~~methods used~~models and set criteria that are reviewed and approved by various levels of management and, in certain instances, it engages independent third-party valuation specialists. To determine the ~~quantitative~~ fair value ~~assessment included~~of a ~~discounted cash flow analysis which requires~~reporting unit, the ~~Company’s management to make certain assumptions and estimates regarding industry trends and future profitability~~Company uses a combination of the ~~Company’s reporting units.~~income and market approaches, when applicable. The Company believes the blended use of both models, when applicable, compensates for the inherent risk associated with either model if used on a stand-alone basis, and this combination is indicative of the factors a market participant would consider when performing a similar valuation. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. ~~This valuation is~~These valuations are affected by certain estimates, including ~~the Company’s~~ future revenue growth rates, future operating expense growth rates, gross margins and discount rates. Future events could cause ~~the Company~~us to conclude that impairment indicators exist and ~~therefore, that~~ goodwill may be impaired.

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When performing a quantitative impairment assessment of ~~the Company’s~~our brand ~~indefinite-lived~~ intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the ~~"relief~~“relief from ~~royalty"~~royalty” method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset. This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates. Actual future results may differ from these estimates. ~~Impairment~~An impairment loss is recognized when the estimated fair value of the ~~indefinite-lived~~ brand intangible assets is less than its carrying amount.

During the fourth quarter of Fiscal 2022, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for each brand. Based on qualitative impairment assessment of the Michael Kors reporting units, the Company concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired. The Company elected to perform quantitative impairment analyses for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of reporting units. The Company also elected to perform an impairment analysis for the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values. Based on the results of these assessments, the Company concluded that the fair values of the Jimmy Choo and Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.

In Fiscal 2021, the Company recorded impairment charges of $94 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $69 million related to the Jimmy Choo brand intangible assets. The Company recorded impairment charges of $171 million related to the ~~goodwill associated with the~~ Jimmy Choo ~~Retail~~retail and Jimmy Choo ~~Licensing~~licensing reporting units and $180 million related to the Jimmy Choo brand ~~indefinite-lived~~ intangible ~~asset~~assets during Fiscal 2020. The impairment charges were recorded within impairment of assets on ~~the Company's~~our consolidated statement of operations and comprehensive income (loss) for the fiscal ~~year~~years ended March 27, 2021 and March 28, 2020. See Note ~~9 and Note 14~~8 for information relating to the Company’s annual impairment analysis performed during the fourth quarter of Fiscal 2022, Fiscal 2021 and Fiscal 2020.

It is possible that the Company’s conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) the Company’s businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of the Company’s reporting units change, among other factors. Such changes could result in a future impairment charge of goodwill or other indefinite-lived intangible assets.

Insurance

The Company uses a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for ~~losses related to a number of~~the potential liabilities for certain risks, including workers’ compensation and employee-related health care benefits. The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from claims. Self-insurance claims filed and claims incurred but not reported are accrued based upon management’s estimates of the discounted cost for self-insured claims incurred using actuarial assumptions, historical loss experience, actual payroll and other data. Although the Company believes that it can reasonably estimate losses related to these claims, actual results could differ from these estimates.

The Company also maintains other types of customary business insurance policies, including general liability, directors and officers, marine transport and inventory and business interruption insurance. Insurance recoveries represent gain contingencies and are recorded upon actual settlement with the insurance carrier.

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Share-based Compensation

The Company grants share-based awards to certain employees and directors of the Company. The grant date fair value of share options is calculated using the Black-Scholes option pricing model. The Company uses its own historical experience in determining the expected holding period and volatility of its time-based share option awards. The risk-free interest rate is derived from the zero-coupon United States (“U.S.”) Treasury Strips yield curve based on the grant’s estimated holding period. Determining the grant date fair value of share-based awards requires considerable judgment, including estimating expected volatility, expected term and risk-free rate. If factors change and the Company employs different assumptions, the fair value of future awards and the resulting share-based compensation expense may differ significantly from what the Company has estimated in the past.

The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted ~~shares~~stock units (“~~RSU”s)~~RSUs”) and performance-based RSUs. These fair values are recognized as

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expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.

Foreign Currency Translation and Transactions

The financial statements of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. The Company’s functional currency is the United States Dollar (“USD”) for Capri and its United States based subsidiaries. Assets and liabilities are translated using period-end exchange rates, while revenues and expenses are translated using average exchange rates over the reporting period. The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other comprehensive ~~(loss)~~ income. Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency (gain) loss ~~(gain)~~ on the Company’s consolidated statements of operations and comprehensive ~~income.~~income (loss).

Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which were settled on December 21, 2018. Likewise, in connection with the July 25, 2017 cash offer to acquire Jimmy Choo, the Company entered into a forward foreign currency exchange contract with a notional amount of £1.115 billion (approximately $1.469 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which was settled on October 30, 2017. These derivative contracts were not designated as accounting hedges. Therefore, changes in fair value are recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income. The Company’s accounting policy is to classify cash flows from derivative instruments in the same category as the cash flows from the items being hedged. Accordingly, the Company classified $77 million of realized losses and $5 million of realized gains, respectively, relating to these derivative instruments within cash flows from investing activities during Fiscal 2019 and Fiscal 2018.

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The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive ~~(loss)~~ income until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive ~~(loss)~~ income are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss ~~(gain)~~ in the Company’s consolidated statements of operations and comprehensive ~~income.~~income (loss). The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities.

The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, the Company only enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge.

Net Investment Hedges

The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its ~~U.S. Dollars~~United States dollar and these foreign currencies. The Company has elected the spot method of designating these contracts under ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” and has designated these contracts as net investment hedges. The net gain or (loss) on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive ~~(loss)~~ income on the Company’s consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in the Company’s ~~statement~~consolidated statements of operations and comprehensive ~~income.~~income (loss). Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.

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During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries. The early termination of these hedges resulted in the Company receiving $296 million in cash during the fourth quarter of Fiscal 2020. During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the United States dollar and these currencies. As of April 2, 2022, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $4 billion to hedge its net investment in Euro-denominated subsidiaries and $194 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the United States dollar and these currencies.

Interest Rate Swap Agreements

The Company also uses interest rate swap agreements to hedge the variability of its cash flows resulting from floating interest rates on the Company’s borrowings. When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.

During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap. As a result, the Company recognized a $1 million gain within interest (income) expense, net, in the Company’s consolidated statements of operations and comprehensive income (loss).

Income Taxes

Deferred income tax assets and liabilities ~~have been provided~~provide for temporary differences between the tax bases and financial reporting bases of the Company’s assets and liabilities using the tax rates and laws in effect for the periods in which the differences are expected to reverse. The Company periodically assesses the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.

Realization of deferred tax assets associated with net operating loss and tax credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. The Company periodically reviews the recoverability of its deferred tax assets and provides valuation allowances, as deemed necessary, to reduce deferred tax assets to amounts that more-likely-than-not will be realized. The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings ~~results~~ within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. Deferred tax assets could be reduced in the future if the Company’s estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

The Company recognizes the impact of an uncertain income tax position taken on its income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. The Company records interest expense and penalties payable to relevant tax authorities as income tax expense.

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Leases

On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases. The Company adopted the new standard recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods.

The Company leases retail stores, office space and warehouse space under operating lease agreements that expire at various dates through September 2043. The Company’s leases generally have terms of up to 10ten years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount. Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through ~~May 2024.~~January 2026. The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its ~~Michael Kors Retail Fleet Optimization Plan,~~restructuring initiatives, as defined in Note ~~11.~~10. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. The Company determines the sublease term based on the date it provides possession to the subtenant through the expiration date of the sublease.

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The Company recognizes operating lease right-of-use assets and lease liabilities at lease commencement date, based on the present value of fixed lease payments over the expected lease term. The Company uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable for the Company’s leases. The Company’s incremental borrowing rates are based on the term of the leases, the economic environment of the leases and reflect the expected interest rate it would incur to borrow on a secured basis. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company generally does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the operating lease right-of-use asset and lease liability. Certain leases also contain termination options with an associated penalty. Generally, the Company is reasonably certain not to exercise these options and as such, they are not included in the determination of the expected lease term. The Company recognizes operating lease expense on a straight-line basis over the lease term.

Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term.

The Company’s leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for lease and non-lease components of its real estate leases together as a single lease component and, as such, includes fixed payments of non-lease components in the measurement of the operating lease right-of-use assets and lease liabilities for its real estate leases. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property, are expensed as incurred as variable lease costs and are not recorded on the balance sheet. The Company’s lease agreements do not contain any material residual value guarantees or material restrictions or covenants.

Debt Issuance Costs and Unamortized Discounts

The Company defers debt issuance costs directly associated with acquiring third party financing. These debt issuance costs and any discounts on issued debt are amortized on a straight-line basis, which approximates the effective interest method, as interest expense over the term of the related indebtedness. Deferred financing fees associated with the Company’s ~~revolving credit facilities~~Revolving Credit Facilities are primarily recorded within ~~prepaid expenses and~~ other ~~current assets.~~assets in the Company’s consolidated balance sheets. Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are primarily recorded as an offset to long-term debt in the Company’s consolidated balance sheets. See Note 1211 for additional information.

Net Income (Loss) ~~Income~~ per Share

The Company’s basic net income (loss) ~~income~~ per ordinary share is calculated by dividing net ~~loss~~income (loss) by the weighted average number of ordinary shares outstanding during the period. Diluted net ~~loss~~income (loss) per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and ~~restricted share units ("RSUs"),~~RSUs, were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are

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included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.

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The components of the calculation of basic net income (loss) ~~income~~ per ordinary share and diluted net ~~loss~~income (loss) per ordinary share are as follows (in millions, except share and per share data):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Numerator:
Net (loss) income attributable to Capri $ (223) $ 543 $ 592
Denominator:
Basic weighted average shares 150,714,598 149,765,468 152,283,586
Weighted average dilutive share equivalents:
Share options and restricted shares/units, and performance restricted share units — 1,848,882 2,819,299
Diluted weighted average shares 150,714,598 151,614,350 155,102,885
Basic net (loss) income per share ⁽¹⁾
$ (1.48) $ 3.62 $ 3.89
Diluted net (loss) income per share ⁽¹⁾
$ (1.48) $ 3.58 $ 3.82


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020
Numerator:
Net income (loss) attributable to Capri	$	822	$	(62)	$	(223)
Denominator:
Basic weighted average shares	149,724,675		150,453,568		150,714,598
Weighted average dilutive share equivalents:
Share options and restricted stock units, and performance restricted stock units	2,773,232		—		—
Diluted weighted average shares	152,497,907		150,453,568		150,714,598
Basic net income (loss) per share (1)	$	5.49	$	(0.41)	$	(1.48)
Diluted net income (loss) per share (1)	$	5.39	$	(0.41)	$	(1.48)

⁽¹⁾Basic and diluted net income (loss) ~~income~~ per share are calculated using unrounded numbers.

Share equivalents ~~for 3,752,560~~of 360,378 shares, ~~1,409,415~~3,658,959 shares and ~~1,662,889~~3,752,560 shares, for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, respectively, have been excluded from the above calculation due to their anti-dilutive effect.

Diluted net loss per share attributable to Capri for Fiscal 2021 and Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.

Noncontrolling Interest ~~and Redeemable Noncontrolling Interest~~

The Company has an ownership interest in the Michael Kors Latin American joint venture, MK (Panama) Holdings, S.A. and subsidiaries of 75%, an ownership interest in the Jimmy Choo EMEA ~~Joint Ventures, JC Industry S.r.L of 33% and~~joint venture JC Gulf Trading LLC of 49%, an ownership interest in the Jimmy Choo Macau joint venture J. Choo (Macau) Co. Limited of 70% and a 50% ownership interest in J. Choo Russia J.V. Limited and ~~a 70% interest in Versace Australia PTY Limited (“Versace Australia”).~~its subsidiary.

Recently Adopted Accounting Pronouncements

~~Lease~~Government Assistance Disclosures

In November 2021, the Financial Accounting

~~On March 31, 2019,~~ Standards Board (“FASB”) issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance”, which requires all businesses provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. These disclosures include providing the nature of the transactions and the related accounting policy used to account for the transactions, the amounts and financial statement line items impacted by these transactions, and the significant terms and conditions of these transactions, including commitments and contingencies related to such transactions. ASU 2021-10 is effective for the Company beginning in its Fiscal 2023 with early adoption permitted. The Company early adopted ASU ~~2016-02, “Leases (Topic 842),” which requires lessees~~2021-10 during the third quarter of Fiscal 2022 and will continue to ~~recognize a lease liability and a right-of-use asset on~~utilize the balance sheet for all leases, except certain short-term leases. In evaluating the impact of ASU 2016-02, the Company considered guidance provided by several additional ASUs issued by the FASB, including ASU 2018-01, “~~Land Easement Practical Expedient for Transition to Topic 842” in January 2018, ASU 2018-10, “CodificationImprovements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” both issued in July 2018, and ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors~~” issued in December 2018. In connection with its implementation of ASU 2016-02, the Company adopted the package of three practical expedients, allowing it to carry forward its previous lease classification and embedded lease evaluations and not to reassess initial direct costs as of the date of adoption. The Company also adopted the practical expedient allowing it to combine lease and non-lease components for its real estate leases. Lastly, the Company adopted the practical expedient provided by ASU 2018-11, “~~Leases (Topic 842): Targeted Improvements,” allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods~~.

The Company’s existing lease obligations, which relate to stores, corporate locations, warehouses, and equipment, are subject to the new standard and resulted in recording of lease liabilities and right-of-use assets for operating leases on the Company’s consolidated balance sheet.

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~~The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):~~

March 30, 2019
As Reported under ASC 840 ASC 842 Adjustments March 31, 2019
As Reported Under ASC 842
Assets
Prepaid expenses and other current assets $ 221 $ (23)
⁽¹⁾
$ 198
Operating lease right-of-use assets — 1,876
⁽²⁾
1,876
Intangible assets, net 2,293 (40)
⁽³⁾
2,253
Deferred tax assets 112 38
⁽⁴⁾
150
Liabilities
Current portion of operating lease liabilities — 386
⁽⁵⁾
386
Accrued expenses and other current liabilities 374 (72)
⁽⁶⁾
302
Long-term portion of operating lease liabilities — 1,828
⁽⁵⁾
1,828
Deferred Rent 132 (132)
⁽⁷⁾
—
Deferred tax liabilities 438 (7)
⁽⁴⁾
431
Shareholders’ Equity
Retained earnings 4,707 (152)
⁽⁴⁾
4,555

⁽¹⁾~~Represents the reclassification of rent paid in advance to current operating lease liabilities.~~

⁽²⁾Represents the recognition of operating lease right-of-use assets, reflecting the reclassifications of deferred rent, sublease liabilities, tenant allowances, and lease rights. This balance also reflects the initial impairments of the operating lease right-of-use assets recorded through retained earnings, as described below.

⁽³⁾~~Represents the reclassifications of lease rights for leases recorded in conjunction with the Company’s acquisitions to operating lease right-of-use assets.~~

⁽⁴⁾Represents the initial impairment recognized through retained earnings for certain underperforming retail store locations for which property and equipment were previously impaired, net of associated deferred taxes.

⁽⁵⁾~~Represents the recognition of current and non-current lease liabilities for fixed payments associated with the Company’s operating leases.~~

⁽⁶⁾Represents the reclassification of $54 million in sublease liabilities, primarily related to Michael Kors retail stores closed under the Michael Kors Retail Fleet Optimization Plan as defined in Note 10, as well as the reclassification of $18 million of deferred rent and tenant allowances to operating lease right-of-use assets.

⁽⁷⁾~~Represents the reclassification of noncurrent deferred rent and tenant improvement allowances to operating lease right-of-use assets.~~

~~See Note 4 for additional disclosures related to the Company’s lease~~grant accounting ~~policy.~~model.

Recently Issued Accounting Pronouncements

The Company has considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that ~~are expected to~~may have a material impact on ~~our~~the Company’s results of operations, financial condition or cash flows based on current information.

~~Measurement~~Reference Rate Reform

In March 2020, the Financial Accounting Standards Board issued ASU 2020-04, “Facilitation of ~~Credit Losses~~the Effects of Reference Rate Reform on Financial ~~Instruments~~

~~In June 2016, the FASB~~Reporting” and in January 2021, issued ASU ~~No. 2016-13, “Measurement~~2021-01, “Reference Rate Reform: Scope”. Both of ~~Credit Losses on Financial Instruments” (“ASU 2016-13”), which amends~~these updates aim to ease the ~~guidance on measuring credit losses~~potential burden in accounting for reference rate reform. These updates provide optional

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expedients and exceptions, if certain ~~financial assets measured at amortized cost, including trade receivables. The FASB has subsequently issued several updates~~criteria are met, for applying accounting principles generally accepted in the United States to ~~the standard, providing additional guidance on certain topics covered~~contract modifications, hedging relationships and other transactions affected by the ~~standard. This update requires entities~~expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to ~~recognize an allowance for credit losses using~~alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The amendments were effective upon issuance and allow companies to adopt the amendments on a ~~forward-looking expected loss impairment model, taking into consideration historical experience,~~prospective basis through December 31, 2022. The Company has not applied this ASU to any contract modifications or new hedging relationships in the current ~~conditions,~~year. As of April 2, 2022, the Company’s outstanding borrowings under the 2018 Term Loan Facility of $495 million and ~~supportable forecasts that impact collectibility. ASU No. 2016-13 is effective for~~ the ~~Company beginning in its Fiscal 2021. The adoption~~total availability of ~~this update is not expected~~$1 billion under the 2018 Revolving Credit Facility are both indexed to ~~have a material impact on the Company's consolidated financial statements.~~LIBOR. As such, these agreements are likely to be impacted by these ASUs upon adoption.

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3. Revenue Recognition

The Company sells its products through ~~three~~3 primary channels of distribution: retail, wholesale and licensing. Within the retail and wholesale channels, substantially all of the Company’s revenues consist of sales of products that represent a single performance obligation, where control transfers at a point in time to the customer. For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s brands.

The Company has chosen to apply the practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations that have an expected duration of 12 months or less.

Retail

The Company generates sales through directly operated stores and e-commerce throughout the Americas ~~(U.S.,~~(United States, Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of ~~Asia.~~Asia (Asia and Oceania). Retail revenue is recognized when control of the product is transferred at the point of sale at Company owned stores, including concessions. For e-commerce transactions, control is transferred and revenue is recognized when products are delivered to the customer, net of estimated returns. To arrive at net sales for retail, gross sales are reduced by actual customer returns, as well as by a provision for estimated future customer returns.

Sales tax collected from retail customers are presented on a net basis and, as such, are excluded from revenue. Shipping and handling costs that are billed to customers are included in net sales, with the related costs recorded in cost of goods sold. Shipping and handling costs that are not billed to customers are accounted for as fulfillment costs.

Gift Cards. The Company sells gift cards that can be redeemed for merchandise, resulting in a contract liability upon issuance. Revenue is recognized when the gift card is redeemed or upon “breakage” for the estimated portion of gift cards that are not expected to be redeemed. “Breakage” revenue is calculated under the proportional redemption methodology, which considers the historical patterns of redemption in jurisdictions where the Company is not required to remit the value of the unredeemed gift cards as unclaimed property. The Company anticipates that substantially all of its outstanding gift cards will be redeemed within the next 12 months. The contract liability related to gift cards, net of estimated ~~“breakage”,~~“breakage,” was ~~$11~~$13 million and ~~$13~~$12 million as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance ~~sheet.~~sheets.

Loyalty Program. The Company offers a loyalty program, which allows its Michael Kors ~~U.S.~~United States customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites. The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity. These amounts include estimated “breakage” for points that are not expected to be redeemed. The contract liability, net of an estimated “breakage,” of $2 million and $3 million as of March 28, 2020 and March 30, 2019, respectively, is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheet and is expected to be recognized within the next 12 months.

Wholesale

The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia. The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia and South America. Wholesale revenue is recognized net of estimates for sales

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returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers. To arrive at net sales for wholesale, gross sales are reduced by provisions for estimated future returns, as well as trade discounts, markdowns, allowances, operational chargebacks and certain cooperative selling expenses. These estimates are developed based on historical trends, actual and forecasted performance and market conditions, and are reviewed by management on a quarterly basis. Unfulfilled, non-cancelable purchase orders for products from wholesale customers (including the Company’s geographic licensees) are expected to be fulfilled within the next 12 months.

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Licensing

The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements. Under product licensing arrangements, the Company allows third parties to manufacture and sell luxury goods, including watches and jewelry, fragrances, ~~sunglasses~~eyewear and ~~eyewear,~~home furnishings, using the Company’s trademarks. Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa and certain parts of ~~Asia and Australia.~~Asia.

The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees. Advertising contributions are received to support the Company’s branded advertising and marketing campaigns and are viewed as part of a single performance obligation with the right to access the Company’s trademarks. Royalty revenue generated from licenses, which includes contributions for advertising, may be subject to contractual minimum levels, as defined in the contract. Such minimums are generally fixed annually, based on the previous year’s sales. Licensing revenue is based on reported current period sales of licensed products at rates that are specified in the license agreements for contracts that are expected to exceed the related guaranteed minimums. If the Company expects the minimum guaranteed amounts to exceed amounts calculated based on actual sales, the guaranteed minimums are recognized ratably over the contractual year to which they relate. Generally, the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are multi-year based. As of ~~March 28, 2020,~~April 2, 2022, contractually guaranteed minimum fees from ~~our~~the Company’s license agreements expected to be recognized as revenue during future periods were as follows (in millions):


	Contractually Guaranteed Minimum Fees

~~Fiscal 2021~~	$	27
~~Fiscal 2022~~	26
Fiscal 2023	20 $	29
Fiscal 2024	1026
Fiscal 2025	623
Fiscal 2026	23
Fiscal 2027	22
Fiscal 2028 and thereafter	2948
Total	$	~~118~~171

Sales Returns

For the sale of goods with a right of return, the Company recognizes revenue for the consideration to which it expects to be entitled and a refund liability for the amount it expects to refund to its customers within accrued expenses and other current liabilities. The refund liability is estimated based on management’s review of historical and current customer returns for its retail and wholesale customers, estimated future returns, adjusted for non-resalable products. The Company also considers its product strategies, as well as the financial condition of its customers, store closings by wholesale customers, changes in the retail environment and other macroeconomic factors. The Company recognizes an asset with a corresponding adjustment to cost of sales for the right to recover the products from its retail and wholesale customers. The refund liability recorded as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 was ~~$37~~$52 million and ~~$35~~$46 million, respectively, and the related asset for the right to recover returned product as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 was $15 million and $14 million, ~~and $12 million,~~ respectively.

Contract Balances

The Company’s contract liabilities are recorded within accrued expenses and other current liabilities and other long-term liabilities in its consolidated balance sheets depending on the short- or long-term nature of the payments to be recognized. The

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Company’s contract liabilities primarily consist of gift card liabilities, ~~loyalty program liabilities and~~ advanced payments from product ~~licensees.~~licensees and loyalty program liabilities. Total contract liabilities were ~~$22~~$30 million and ~~$31~~$18 million as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, respectively. ~~Contract liabilities decreased $5 million as a result of the adoption of ASC 606 on April 1, 2018, due to recognition of gift card breakage revenue (see Note 2).~~ During Fiscal ~~2020~~2022 and Fiscal ~~2019,~~2021, the Company recognized ~~$20~~$10 million and ~~$16~~$9 million in revenue, respectively, relating to contract liabilities that existed at March ~~28, 2020~~27, 2021 and March ~~30, 2019,~~ 28, 2020, respectively. There were 0no material contract assets recorded as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019.~~27, 2021.

There were no changes in historical variable consideration estimates that were materially different from actual results.

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Disaggregation of Revenue

The following table presents the Company’s segment revenues disaggregated by geographic location (in millions):


		Fiscal Years Ended											Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018			April 2, 2022		March 27, 2021		March 28, 2020
															April 2, 2022	March 27, 2021	March 28, 2020
Versace revenue - the Americas	Versace revenue - the Americas	$	186	$	22	$	—	Versace revenue - the Americas	$	408	$	201	$	186
Versace revenue - EMEA	Versace revenue - EMEA	420		66		—		Versace revenue - EMEA	425		276		420
Versace revenue - Asia	Versace revenue - Asia	237		49		—		Versace revenue - Asia	255		241		237
Total Versace		843		137		—
Total Versace revenue								Total Versace revenue	1,088		718		843
Jimmy Choo revenue - the Americas	Jimmy Choo revenue - the Americas	107		96		37		Jimmy Choo revenue - the Americas	175		102		107
Jimmy Choo revenue - EMEA	Jimmy Choo revenue - EMEA	282		321		123		Jimmy Choo revenue - EMEA	229		146		282
Jimmy Choo revenue - Asia	Jimmy Choo revenue - Asia	166		173		63		Jimmy Choo revenue - Asia	209		170		166
Total Jimmy Choo		555		590		223
Total Jimmy Choo revenue								Total Jimmy Choo revenue	613		418		555
Michael Kors revenue - the Americas	Michael Kors revenue - the Americas	2,822		3,064		2,996		Michael Kors revenue - the Americas	2,627		1,869		2,822
Michael Kors revenue - EMEA	Michael Kors revenue - EMEA	821		892		970		Michael Kors revenue - EMEA	835		607		821
Michael Kors revenue - Asia	Michael Kors revenue - Asia	510		555		530		Michael Kors revenue - Asia	491		448		510
Total Michael Kors		4,153		4,511		4,496
Total Michael Kors revenue								Total Michael Kors revenue	3,953		2,924		4,153

Total revenue - the Americas	Total revenue - the Americas	3,115		3,182		3,033		Total revenue - the Americas	3,210		2,172		3,115
Total revenue - EMEA	Total revenue - EMEA	1,523		1,279		1,093		Total revenue - EMEA	1,489		1,029		1,523
Total revenue - Asia	Total revenue - Asia	913		777		593		Total revenue - Asia	955		859		913
Total revenue	Total revenue	$	5,551	$	5,238	$	4,719	Total revenue	$	5,654	$	4,060	$	5,551

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4. Leases

The following table presents the Company’s supplemental balance ~~sheet~~sheets information related to leases (in millions):

~~Balance Sheet Location~~

~~March 28, 2020~~

~~Assets~~

~~Operating leases~~

~~Operating lease right-of-use assets~~

~~1,625~~

~~Liabilities~~

~~Current:~~

~~Operating leases~~

~~Short-term portion of operating lease liabilities~~

~~430~~

~~Non-current:~~

~~Operating leases~~

~~Long-term portion of operating lease liabilities~~

~~1,758~~


	Balance Sheet Location	April 2, 2022		March 27, 2021
Assets
Operating leases	Operating lease right-of-use assets	$	1,358	$	1,504

Liabilities
Current:
Operating leases	Short-term portion of operating lease liabilities	$	414	$	447
Non-current:
Operating leases	Long-term portion of operating lease liabilities	$	1,467	$	1,657

The components of net lease costs for the fiscal year ended April 2, 2022 and March ~~28, 2020~~27, 2021 were as follows (in millions):


	Consolidated Statement of Operations and Comprehensive Income (Loss) Location	April 2, 2022		March 27, 2021
Operating lease cost	Selling, general and administrative expenses	$	410	$	432
Variable lease cost (1)	Selling, general and administrative expenses	135		69
Short-term lease cost	Selling, general and administrative expenses	16		15
Sublease income (2)	Restructuring and other charges	(5)		(4)
Sublease income	Selling, general and administrative expenses	(3)		(2)
Total lease cost, net		$	553	$	510

Statement of Operations and
Comprehensive Income Location

~~March 28, 2020~~

~~Operating lease cost~~

~~Selling, general and administrative expenses~~

~~449~~

~~Short-term lease cost~~

~~Selling, general and administrative expenses~~

~~Variable lease cost~~⁽¹⁾

~~Selling, general and administrative expenses~~

~~155~~

~~Sublease income~~

~~Selling, general and administrative expenses~~

~~(6)~~

~~Total lease cost~~

~~616~~

~~Table of Contents~~(1)

⁽¹⁾The Company elected to account for rent concessions negotiated in connection with COVID-19 as if it were contemplated as part of the existing contract and these concessions are recorded as variable lease expense. ~~There is an immaterial impact from these concession for~~As of the fiscal year ended April 2, 2022 and March ~~28, 2020.~~27, 2021, rent concessions due to COVID-19 were $15 million and $52 million, respectively.

(2)The Company recorded sublease income related to certain leases in connection with the Capri Retail Store Optimization plan.

The following table presents the Company’s supplemental cash flow information related to leases (in millions):

~~March 28, 2020~~

~~Cash paid for amounts included in the measurement of lease liabilities:~~

~~Operating cash flows used in operating leases~~

~~495~~

~~Non-cash transactions:~~

~~Lease assets obtained in exchange for new lease liabilities~~

~~428~~


	April 2, 2022		March 27, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	543	$	488
Non-cash transactions:
Lease assets obtained in exchange for new lease liabilities	332		348
Rent concessions due to COVID-19	15		52

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The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance ~~sheet~~sheets as of April 2, 2022 and March ~~28, 2020:~~27, 2021:

~~March 28, 2020~~

~~Operating leases:~~

~~Weighted average remaining lease term (years)~~

~~6.6~~

~~Weighted average discount rate~~

~~2.9~~


	April 2, 2022		March 27, 2021
Operating leases:
Weighted average remaining lease term (years)	6.0		6.2
Weighted average discount rate	3.1	%	3.1	%

At ~~March 28, 2020,~~April 2, 2022, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):

~~March 28, 2020~~

~~Fiscal 2021~~

~~489~~

~~Fiscal~~ April 2,
2022

~~432~~

Fiscal 2023

~~369~~ $

482

Fiscal 2024

~~312~~409

Fiscal 2025

~~239~~325

Fiscal 2026

248

Fiscal 2027

174

Thereafter

~~566~~426

Total lease payments

~~2,407~~2,064

Less: interest

~~(219)~~(183)

Total lease liabilities

~~2,188~~1,881

At ~~March 28, 2020,~~April 2, 2022, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):


	~~March 28, 2020~~
~~Fiscal 2021~~	$	6
~~Fiscal~~ April 2, 2022	5
Fiscal 2023	5 $	7
Fiscal 2024	46
Fiscal 2025	6
Fiscal 2026	4
Fiscal 2027	4
Thereafter	1210
Total sublease income	$	3637

Additionally, the Company had approximately ~~$13~~$49 million and $23 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of April 2, 2022 and March ~~28, 2020.~~27, 2021, respectively.

See Note 2 for additional information on the ~~Company's~~Company’s accounting policies related to leases.

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5. ~~Acquisitions~~

~~Fiscal 2020~~

~~Acquisition of Alberto Gozzi S.r.L.~~

On December 16, 2019, the Company entered into a definitive agreement to acquire Italian atelier and shoe manufacturer Alberto Gozzi S.r.L. The transaction was completed in the Company's fourth quarter of Fiscal 2020 and the assets and liabilities acquired approximated fair value. The acquired identifiable assets and liabilities net to a nominal amount, with $11 million recognized in goodwill allocated to the Jimmy Choo reportable segment.

~~Fiscal 2019~~

~~Acquisition of Versace~~

On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately €1.753 billion (or approximately $2.005 billion), giving effect to an investment made by the Versace family at acquisition of 2.4 million shares. The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand (see Note 12 for additional information).

Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018. Versace contributed total revenue of $137 million and net loss of $12 million, after amortization of non-cash purchase accounting adjustments and transition and transaction costs, from the date of acquisition on December 31, 2018 through February 28, 2019 (reflecting a one-month reporting lag).

The Company recorded measurement period adjustments during Fiscal 2020. The measurement period adjustments are primarily related to conclusions reached on the ability to utilize certain deferred tax assets based on new facts and circumstances identified which existed at the acquisition date and if known, would have affected the measurement of the amounts recognized as of that date. The net measurement period adjustments increased goodwill by $26 million.

The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal years ended March 30, 2019 and March 31, 2018 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):

Fiscal Years Ended
March 30, 2019 March 31, 2018
Pro-forma total revenue $ 5,983 $ 5,473
Pro-forma net income 579 526
Pro-forma net income per ordinary share attributable to Capri:
Basic $ 3.82 $ 3.40
Diluted $ 3.78 $ 3.34

The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and Versace and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2018 and are not indicative of the future operating results of the combined company. The financial information for Versace prior to the acquisition has been included in the pro-forma results of operations on a calendar-year basis and includes certain adjustments to Versace’s historical consolidated financial statements to align with U.S. GAAP and the Company’s accounting policies. The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the definite-lived intangible assets acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 2, 2017. Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment. The pro-forma consolidated financial statements also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expenses related to Versace’s €90 million pre-existing debt. Transaction costs of $41 million for Fiscal 2019, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature. The shares used to calculate the pro-forma net income per ordinary share attributable to Capri reflect the weighted average impact of a 2.4 million ordinary share investment made by the Versace family at acquisition date.

~~Table of Contents~~

~~Fiscal 2018~~

~~Acquisition of Jimmy Choo Group Limited~~

On November 1, 2017, the Company completed the acquisition of Jimmy Choo, whereby the Company's wholly-owned subsidiary acquired all of Jimmy Choo’s issued and to be issued shares at a purchase price of 230 pence per share in cash, for a total transaction value of $1.447 billion, including the repayment of existing debt obligations, which was funded through a combination of borrowings under the Company’s new $1.0 billion term loan facility, the issuance of the Senior Notes and cash on hand (please refer to Note 12 for additional information).

Jimmy Choo’s results of operations have been included in our consolidated financial statements beginning on November 1, 2017. Jimmy Choo contributed revenue of $223 million and net loss of $15 million (after amortization of non-cash purchase accounting adjustments and transition and transaction costs) for the period from the date of acquisition through March 31, 2018.

The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal years ended March 31, 2018 and April 1, 2017 as if the acquisition had occurred on April 3, 2016, the beginning of Fiscal 2017 (in millions):

Fiscal Years Ended
March 31, 2018 April 1, 2017
Pro-forma total revenue $ 5,012 $ 4,985
Pro-forma net income 623 554
Pro-forma net income per ordinary share attributable to Capri:
Basic $ 4.09 $ 3.34
Diluted $ 4.02 $ 3.29

The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and Jimmy Choo and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2017 and are not indicative of the future operating results of the combined company. The financial information for Jimmy Choo prior to the acquisition has been included in the pro-forma results of operations on a calendar-year basis and includes certain adjustments to Jimmy Choo’s historical consolidated financial statements to align with U.S. GAAP and the Company’s accounting policies. The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the definite-lived intangible assets acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 3, 2016. Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment. The pro-forma consolidated financial statement also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expense for Jimmy Choo. Transaction costs of $41 million for Fiscal 2018, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature.

6. Receivables, net

Receivables, net consist of (in millions):

March 28,
2020 March 30,
2019
Trade receivables ⁽¹⁾
$ 432 $ 459
Receivables due from licensees 14 23
446 482
Less: allowances (138) (99)
$ 308 $ 383


	April 2, 2022		March 27, 2021
Trade receivables (1)	$	461	$	412
Receivables due from licensees	17		20
	478		432
Less: allowances	(44)		(59)
Total receivables, net	$	434	$	373

⁽¹⁾As of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019, $80~~27, 2021, $83 million and ~~$317~~$81 million, respectively, of trade receivables were insured.

~~Table of Contents~~

Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and ~~doubtful accounts.~~credit losses. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on wholesale customers’ sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in revenues.

The Company’s allowance for ~~doubtful accounts~~credit losses is determined through analysis of periodic aging of receivables ~~that are not covered by insurance~~ and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowance for ~~doubtful accounts~~credit losses was ~~$39~~$10 million and $25 million as of April 2, 2022 and March ~~28, 2020,~~27, 2021, respectively, including the impact related to COVID-19. ~~Allowance for doubtful accounts was $18 million as of March 30, 2019, which included an $11 million allowance within the opening balance sheet of the newly acquired Versace business.~~ The Company had ~~bad debt expense~~credit loss of ~~$29~~$7 million, $4$(3) million and $8$29 million, respectively, for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018.~~2020.

7.6. Concentration of Credit Risk, Major Customers and Suppliers

Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and receivables. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. The Company mitigates its risk by depositing cash and cash equivalents in major financial institutions. The Company also mitigates its credit risk by obtaining insurance coverage for a portion of its receivables (see Note 6)5). No individual customer accounted for 10% or more of the Company’s total revenues during Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 or Fiscal ~~2018.~~2020.

The Company contracts for the purchase of finished goods principally with independent third-party contractors, whereby the contractor is generally responsible for all manufacturing processes. Although the Company does not have any long-term agreements with any of its manufacturing contractors, the Company believes it has mutually satisfactory relationships with them. The Company allocates product manufacturing among agents and contractors based on their capabilities, the availability of production capacity, quality, pricing and delivery. The inability of certain contractors to provide needed services on a timely basis could adversely affect the Company’s operations and financial condition. For Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, one contractor accounted for approximately ~~20%~~17%, ~~21%~~18% and ~~26%~~20%, respectively, of the Company’s total finished goods purchases, based on dollar volume.

The Company also has relationships with various agents who source finished goods with numerous contractors on behalf of its Michael Kors brand. For Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, one agent sourced approximately ~~26%~~24%, ~~24%~~26% and ~~24%~~26%, respectively, of Michael Kors finished goods, based on unit volume.

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7. Property and Equipment, ~~Net~~net

Property and equipment, net, consists of (in millions):


		March 28, 2020		March 30, 2019			April 2, 2022		March 27, 2021
Leasehold improvements	Leasehold improvements	$	704	$	639	Leasehold improvements	$	575	$	737
In-store shops		236		270
Furniture and fixtures	Furniture and fixtures	329		292		Furniture and fixtures	218		350
Computer equipment and software	Computer equipment and software	329		292		Computer equipment and software	212		359
Equipment	Equipment	136		123		Equipment	81		139
Building	Building	49		47		Building	48		51
In-store shops						In-store shops	47		53
Land	Land	19		15		Land	19		20
		1,802		1,678
Total property and equipment, gross (1)						Total property and equipment, gross (1)	1,200		1,709
Less: accumulated depreciation and amortization(1)	Less: accumulated depreciation and amortization(1)	(1,310)		(1,115)		Less: accumulated depreciation and amortization(1)	(790)		(1,271)
		492		563
Subtotal						Subtotal	410		438
Construction-in-progress	Construction-in-progress	69		52		Construction-in-progress	66		47
		$	561	$	615
Total property and equipment, net						Total property and equipment, net	$	476	$	485

~~Table~~(1)During the fiscal year ended April 2, 2022, the Company wrote off $552 million of ~~Contents~~fully depreciated assets and related accumulated depreciation for assets which were no longer in service.

Depreciation and amortization of property and equipment for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 ~~March 30, 2019,~~totaled $144 million, $165 million and ~~March 31, 2018 was~~ $200 million, ~~$188 million and $182 million,~~ respectively. During Fiscal 2022, Fiscal 2021 and Fiscal 2020, the Company recorded property and equipment impairment charges of ~~$77~~$7 million, $66 million of which related to the Company's retail store locations and $11 million of which related to determining asset groups for the Company’s premier store locations at an individual store level. See Note 14 for additional information. During Fiscal 2019 and Fiscal 2018, the Company recorded property and equipment impairment charges of $19$23 million and ~~$28~~$77 million, respectively, primarily related to ~~underperforming Michael Kors~~the Company’s retail store locations. See Note 13 for additional information.

9.8. Intangible Assets and Goodwill

The following table details the carrying values of the Company’s intangible assets other than goodwill (in millions):

March 28, 2020 March 30, 2019
Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net
Definite-lived intangible assets:
Reacquired rights $ 400 $ 61 $ 339 $ 400 $ 45 $ 355
Trademarks 23 20 3 23 19 4
Lease rights ⁽¹⁾
— — — 96 56 40
Customer relationships 404 51 353 415 23 392
827 132 695 934 143 791
Indefinite-lived intangible assets:
Jimmy Choo brand ⁽²⁾
547 180 367 572 — 572
Versace brand ⁽³⁾
924 — 924 930 — 930
1,471 180 1,291 1,502 — 1,502
Total intangible assets, excluding goodwill $ 2,298 $ 312 $ 1,986 $ 2,436 $ 143 $ 2,293

⁽¹⁾The March 30, 2019 balance includes certain lease rights that were reclassified to the operating lease right-of-use asset as part of the adoption of ASU 2016-02 in Fiscal 2020. Includes $2 million and $5 million, respectively, of impairment charges recorded during Fiscal 2019 and Fiscal 2018, primarily in connection with underperforming full-price Michael Kors retail stores. See Note 14 for additional information.


	April 2, 2022						March 27, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carry Amount
Definite-lived intangible assets:
Reacquired rights	$	400	$	94	$	306	$	400	$	77	$	323
Trademarks	23		22		1		23		21		2

Customer relationships	414		112		302		437		86		351
Total definite-lived intangible assets	837		228		609		860		184		676

Indefinite-lived intangible assets:
Jimmy Choo brand (1)	570		249		321		587		249		338
Versace brand (1)	917		—		917		978		—		978
Total indefinite-lived intangible assets	1,487		249		1,238		1,565		249		1,316

Total intangible assets, excluding goodwill	$	2,324	$	477	$	1,847	$	2,425	$	433	$	1,992

⁽²⁾(1)The year-over-year change in net carrying ~~value~~amount reflects ~~an impairment charge of $180 million and~~ foreign currency translation for the fiscal year ended April 2, 2022. As of ~~$25 million. The~~April 2, 2022, the Company ~~did 0t incur any~~had accumulated impairment charges ~~in prior periods.~~of $249 million related to the Jimmy Choo brand intangible assets.

⁽³⁾

~~The year-over-year change in carrying value relates to foreign currency translation.~~Table of Contents

Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the ~~related license~~former licensing agreement. The trademarks relate to the Michael Kors brand name and are amortized over twenty years. Customer relationships are generally amortized over five to eighteen years. ~~Key money is amortized over the respective terms of the underlying lease, including highly probable renewal periods.~~ Amortization expense for the Company’s definite-lived intangibles was $49 million, ~~$37~~$47 million and ~~$26~~$49 million, respectively, for each of the fiscal years ended April 2, 2022, March 27, 2021 and March 28, ~~2020, March 30, 2019 and March 31, 2018.~~2020.

Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.

~~Table of Contents~~

Estimated amortization expense for each of the next five years is as follows (in millions):


Fiscal ~~2021~~2023	$	4645
~~Fiscal 2022~~	46
~~Fiscal 2023~~	46
Fiscal 2024	45
Fiscal 2025	45
Fiscal 2026	45
Fiscal 2027	45
Fiscal 2028 and thereafter	~~467~~384
Total	$	~~695~~609

The future amortization expense above reflects weighted-average estimated remaining useful lives of 21nineteen years for reacquired rights, ~~3 years~~one year for trademarks and 13eleven years for customer relationships.

The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):

Versace Jimmy Choo
Michael
Kors ⁽¹⁾
Total
Balance at March 31, 2018 $ — $ 728 $ 120 $ 848
Acquisition of Versace ⁽¹⁾
878 — — 878
Foreign currency translation (17) (50) — (67)
Balance at March 30, 2019 861 678 120 1,659
Acquisition — 11 — 11
Measurement period adjustment ⁽¹⁾
26 — — 26
Impairment charges ⁽²⁾
— (171) — (171)
Foreign currency translation (6) (31) — (37)
Balance at March 28, 2020 $ 881 $ 487 $ 120 $ 1,488


	Versace		Jimmy Choo		Michael Kors		Total
Balance at March 28, 2020	881		487		120		$	1,488


Impairment charges (1)	—		(94)		—		(94)
Foreign currency translation	52		52		—		104
Balance at March 27, 2021	933		445		120		1,498



Foreign currency translation	(59)		(21)		—		(80)
Balance at April 2, 2022	$	874	$	424	$	120	$	1,418

⁽¹⁾~~See Note 5 for additional information.~~

⁽²⁾The Company recorded impairment charges of ~~$171~~$94 million during Fiscal 2021 related to the Jimmy Choo ~~retail~~wholesale and licensing reporting units. ~~The Company did 0t incur any goodwill impairment charges in prior periods.~~

The Company’s goodwill and the Versace and Jimmy Choo brands are not subject to amortization but are evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist. During the fourth quarter of Fiscal ~~2020,~~2022, the Company performed its annual goodwill and indefinite-lived intangible assets impairment ~~analysis for its 3 segments.~~analysis. The Company performed its goodwill impairment assessment for its Michael Kors ~~segment~~reporting units using a qualitative assessment. As a result of realigning its segment reporting structure during the fourth quarter of Fiscal 2019, the Company presented the carrying amount of goodwill for the Michael Kors Retail, Michael Kors Wholesale and Michael Kors Licensing reporting units within the Michael Kors reportable segment. Based on the results of the Company’s qualitative impairment assessment, the Company concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired.

The Company performed its annual goodwill and indefinite-lived intangible ~~asset~~assets impairment analysis for both the Versace and Jimmy Choo reporting units, using a ~~quantitative approach, using a discounted cash flow analysis~~combination of income and market approaches to estimate the fair ~~values~~value of ~~the~~ each ~~brands'~~brands’ reporting units. The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values. Based on the results of these assessments, the Company ~~concluded that~~determined there was no impairment for the Jimmy Choo and Versace reporting units or brand intangible assets, as the fair values of the ~~Jimmy Choo retail and licensing~~ reporting units and the ~~Jimmy Choo~~ brand ~~indefinite-lived~~ intangible ~~asset did not exceed~~assets exceeded the related carrying amounts. ~~Jimmy Choo expects to experience a reduction in profitability trends, primarily~~

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In Fiscal 2021, the Company recorded goodwill impairment charges of $94 million related to the ~~ongoing impact of the COVID-19 pandemic, resulting in declines in sales driven by the full~~Jimmy Choo Wholesale and ~~partial closures of a significant portion of our stores globally.~~

~~The Company also concluded that the fair values of the Versace~~Jimmy Choo Licensing reporting units and impairment charges of $69 million related to the ~~Versace~~Jimmy Choo brand ~~indefinite-lived~~ intangible ~~asset exceeded the related carrying amounts and there was no impairment recorded.~~

~~Accordingly,~~assets. In Fiscal 2020, the Company recorded goodwill impairment charges of $171 million related to the Jimmy Choo ~~retail~~Retail and ~~licensing~~Jimmy Choo Licensing reporting units and impairment charges of $180 million related to the Jimmy Choo brand intangible ~~asset during Fiscal 2020.~~assets. The impairment charges were recorded within impairment of assets on ~~the Company's~~our consolidated statement of operations and comprehensive income (loss) for the fiscal ~~year~~years ended March 27, 2021 and March 28, 2020. See Note ~~14 to the accompanying audited financial statements~~13 for ~~information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2020.~~

~~Table of Contents~~

additional information.

~~10.~~9. Current Assets and Current Liabilities

Prepaid expenses and other current assets consist of the following (in millions):


		March 28, 2020		March 30, 2019			April 2, 2022		March 27, 2021
Prepaid taxes	Prepaid taxes	$	116	$	125	Prepaid taxes	$	86	$	133
Other accounts receivables						Other accounts receivables	17		13
Prepaid contracts	Prepaid contracts	17		15		Prepaid contracts	15		11
Other accounts receivables		10		10
Interest receivable related to net investment hedges	Interest receivable related to net investment hedges	1		11		Interest receivable related to net investment hedges	13		12
Prepaid rent		—		24
Other	Other	23		36		Other	61		36
Total prepaid expenses and other current assets						Total prepaid expenses and other current assets	$	192	$	205
		$	167	$	221

Accrued expenses and other current liabilities consist of the following (in millions):


		March 28, 2020		March 30, 2019			April 2, 2022		March 27, 2021
Other taxes payable	Other taxes payable	$	38	$	47	Other taxes payable	$	61	$	46
Return liabilities	Return liabilities	37		35		Return liabilities	52		46
Accrued capital expenditures	Accrued capital expenditures	31		25		Accrued capital expenditures	39		17
Gift cards and retail store credits		11		13
Accrued advertising and marketing						Accrued advertising and marketing	21		11
Accrued rent ⁽¹⁾	Accrued rent ⁽¹⁾	10		34		Accrued rent (1)	20		20
Gift and retail store credits						Gift and retail store credits	17		12
Professional services	Professional services	10		12		Professional services	15		13
Accrued litigation	Accrued litigation	10		11		Accrued litigation	13		12
Restructuring liability ⁽²⁾		9		64
Accrued advertising and marketing		9		10
Accrued purchases and samples						Accrued purchases and samples	11		8
Accrued interest	Accrued interest	8		10		Accrued interest	10		10
Accrued purchases and samples		3		29
Charitable donations (2)						Charitable donations (2)	10		20
Restructuring liability						Restructuring liability	1		9
Other	Other	65		84		Other	81		73
		$	241	$	374
Total accrued expenses and other current liabilities						Total accrued expenses and other current liabilities	$	351	$	297

⁽¹⁾The accrued rent balance relates to variable lease payments.

⁽²⁾~~In connection with~~The charitable donations balance relates to a $10 million unconditional pledge to The Versace Foundation as of April 2, 2022 and a $20 million unconditional pledge to The Capri Holdings Foundation for the ~~adoption~~Advancement of ~~ASU 2016-02, certain lease related assets and liabilities were reflected within operating lease right-of-use assets and liabilities~~Diversity in Fashion as of March ~~28, 2020. See Note 2 and Note 4 for additional information.~~27, 2021 which was funded during the second quarter ended September 25, 2021.

~~11.~~10. Restructuring and Other Charges

~~Michael Kors~~Capri Retail ~~Fleet~~Store Optimization ~~Plan~~Program

During Fiscal ~~2020,~~2022, the Company completed its plan to close ~~between 100 and 150 of its Michael Kors~~certain retail stores ~~in order to improve the profitability~~as a part of Capri Retail Store Optimization Program. The Company closed a total of 167 of its retail ~~store fleet (“Michael Kors~~stores, with 66 and 101 stores having closed during Fiscal 2022 and Fiscal 2021, respectively. Net restructuring charges recorded in connection with the Capri Retail ~~Fleet~~Store Optimization ~~Plan”). The Company expected approximately $100 - $125~~Program was $14 million, of one-time costs associated with these store closures, with total costs in line with its original expectations. Collectively, the Company continues to anticipate ongoing savings as a result of the store closureswhich $9 million and ~~lower depreciation expense associated with the impairment charges being recorded.~~$5 million was recorded during Fiscal 2022 and Fiscal 2021,

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During Fiscal 2020, the Company closed 43 of its Michael Kors retail stores under the Michael Kors Retail Fleet Optimization Plan, for a total of 143 stores closed at a cost of $99 million since plan inception. Restructuring charges recorded in connection with the Michael Kors Retail Fleet Optimization Plan during Fiscal 2020 was $5 million.respectively. The below table presents a ~~rollforward~~roll forward of the Company’s ~~remaining~~ restructuring liability related to ~~this plan~~its Capri Retail Store Optimization Program (in millions):

Severance and benefit costs Lease-related and other costs Total
Balance at March 30, 2019 $ 2 $ 53 $ 55
ASC 842 (Leases) Adjustment ⁽¹⁾
— (46) (46)
Balance at March 31, 2019 2 7 9
Additions charged to expense — 5 5
Payments (1) (8) (9)
Balance at March 28, 2020 $ 1 $ 4 $ 5


	Severance and benefit costs		Lease-related and other costs		Total
Balance at March 27, 2021	$	—	$	3	$	3
Additions charged to expense (1)	1		3		4
Payments	(1)		(5)		(6)

Balance at April 2, 2022	$	—	$	1	$	1

⁽¹⁾~~Consists~~Excludes $10 million of ~~the reclassification of sublease liabilities~~impairment charges related to ~~an offset of the related~~ operating lease right-of-use ~~asset due~~assets partially offset by a net credit of $5 million related to ~~the adoption of ASC 842. See Note 2 and Note 4 for further information.~~

~~During~~gains on certain lease terminations during Fiscal 2019, the Company recorded restructuring charges of $41 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $38 million and severance and benefit costs of $3 million. During Fiscal 2018, the Company recorded restructuring charges of $53 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $52 million and severance and benefit costs of $1 million.2022.

Other Restructuring Charges

In addition to the restructuring charges related to the ~~Michael Kors~~Capri Retail ~~Fleet~~Store Optimization Plan, the Company incurred charges of $3$15 million primarily ~~consisting~~relating to severance for an executive officer and the closure of ~~lease-related costs~~certain corporate locations during Fiscal ~~2020. The~~2022.

In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company ~~also~~ incurred charges of $4$8 million primarily relating to ~~Jimmy Choo lease-related charges~~the closure of certain corporate locations during Fiscal ~~2019.~~2021.

Other Costs

~~During Fiscal 2020, the~~The Company recorded costs of ~~$34~~$18 million ~~which included $24~~and $19 million ~~in connection with the Versace acquisition~~during Fiscal 2022 and ~~$9 million in connection~~Fiscal 2021, respectively, for equity awards associated with the acquisition of ~~Jimmy Choo, and $1 million in connection with the acquisition of Gozzi.~~

During Fiscal 2019, the Company recorded costs of $79 million, which included $52 million in connection with the Versace acquisition and $27 million in connection with the Jimmy Choo acquisition. During Fiscal 2018, the Company recorded costs of $49 million in connection with the Jimmy Choo acquisition. See Note 5 for additional information relating to these acquisitions.Versace.

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~~12.~~11. Debt Obligations

The following table presents the Company’s debt obligations (in millions):

March 28,
2020 March 30,
2019
Term Loan⁽¹⁾
$ 1,015 $ 1,580
4.000% Senior Notes due 2024 450 450
Revolving Credit Facilities 720 550
Other 3 1
Total debt 2,188 2,581
Less: Unamortized debt issuance costs 8 13
Less: Unamortized discount on long-term debt 1 2
Total carrying value of debt 2,179 2,566
Less: Short-term debt 167 630
Total long-term debt $ 2,012 $ 1,936

⁽¹⁾~~During Fiscal 2019, the Company repaid the remaining $59 million of borrowings outstanding under the previous Term Loan Facility entered into in connection with the Jimmy Choo acquisition.~~


	April 2, 2022		March 27, 2021
Term Loan	$	497	$	870
Senior Notes due 2024	450		450
Revolving Credit Facility	175		—
Other	42		30
Total debt	1,164		1,350
Less: Unamortized debt issuance costs	3		7
Less: Unamortized discount on senior notes	1		1
Total carrying value of debt	1,160		1,342
Less: Short-term debt	29		123
Total long-term debt	$	1,131	$	1,219

Senior ~~Unsecured~~ Revolving Credit Facility

~~On March 20, 2020, the Company entered into the first amendment (the “First Amendment”) to its third amended and restated senior unsecured~~The Company’s credit facility ~~dated as of November 15, 2018~~ (the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent. The First Amendment amends the 2018 Credit Facility to, among other things, provide for the exchange of approximately $267 million (out of $315 million) in aggregate principal amount of outstanding term loans due on the second anniversary, for term loans with the existing remaining tranche that matures on the fifth anniversary, resulting in the extension of the maturity of such exchanged loans to the third quarter of Fiscal 2024. The remaining $48 million that were not exchanged remain due in the third quarter of Fiscal 2021. In addition, the leverage ratio covenant metric in the 2018 Credit Facility was modified to take into account operating lease liability as defined by ASC 842. The Company and its U.S., Canadian, Dutch and Swiss subsidiaries are the borrowers under the 2018 Credit Facility. The borrowers and certain material subsidiaries of the Company provide unsecured guarantees of the 2018 Credit Facility. The 2018 Credit Facility provides for a ~~$1.0~~$1 billion revolving credit facility (the “Revolving Credit Facility”), which may be denominated in ~~U.S. Dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs.~~United States dollars. The Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to $75 million and swing ~~line~~ loans of up to $75 million. The 2018 Credit Facility also provides for a $1.6 billion term loan facility (the “2018 Term Loan Facility”) ~~to finance a portion of the purchase price of the Company’s acquisition of Versace.~~. The 2018 Term Loan Facility is divided into 2 tranches, ~~that now mature on~~with the ~~fifth anniversary~~second tranche maturing in December 2023, which requires a quarterly payment of ~~the initial borrowing of the term loans, except for the remaining $48 million that were not exchanged, and are required to be repaid on the last business day~~$24 million. As of March ~~June, September and December of each year, commencing after~~27, 2021, the ~~last business day of~~Company has fully paid off the first ~~full fiscal quarter after the initial borrowing, in installments equal to 2.50%~~tranche of ~~the aggregate original principal amount of the term loans. The Company has the right to prepay its borrowings under~~ the 2018 Term Loan Facility at any time in whole or in part. The Revolving Credit Facility expires on November 15, 2023. The Company has the ability to expand its borrowing availability under the 2018 Credit Facility in the form of revolving commitments or term loans by up to an additional $500 million, subject to the agreement of the participating lenders and certain other customary conditions.Facility.

Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, ~~at the following rates:~~

•for any loans (except loans denominated in Canadian Dollars), the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt rating;

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•for loans denominated in ~~U.S. Dollars,~~United States dollars, an alternate base rate, which is the greatest of: (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, and (c) the greater of the one-month London Interbank Offered Rate adjusted for

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statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the Company’s public debt ratings;

•for loans denominated in Canadian Dollars, the Canadian prime rate, which is the greater of the PRIMCAN Index rate and the rate applicable to one-month Canadian Dollar banker’s acceptances quoted on Reuters (“CDOR”), plus 100 basis points, plus an applicable margin based on the Company’s public debt ratings; or

•for loans denominated in Canadian Dollars, the average CDOR rate for the applicable interest period, plus 10 basis points per annum, plus an applicable margin based on the Company’s public debt ratings.

Borrowings under the 2018 Term Loan Facility bear interest, at the Company’s option, at (a) the alternate base rate plus an applicable margin based on the Company’s public debt ratings; or (b) the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt ratings.

On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated 2018 Credit Facility, dated as of November 15, 2018, with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”).

Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility required it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 had been waived through the fiscal quarter ending June 26, 2021.

In addition, the Second Amendment added a new $230 million revolving line of credit with a maturity date of June 24, 2021 (the “364 Day Facility”).

The Second Amendment also permitted certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the 2018 Credit Facility to be guaranteed under the 2018 Credit Facility guarantees and certain supply chain financings with, and up to $50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by a lender or an affiliate of a lender to be guaranteed and secured under the 2018 Credit Facility guarantees and collateral documents. The Second Amendment, among other things, also temporarily suspended the quarterly maximum leverage ratio covenant and imposed a minimum liquidity test during the period from June 25, 2020 until the earlier of (x) the date on which the Company delivers its financial statements for the fiscal quarter ending June 26, 2021 and (y) the date on which the Company certifies that its net leverage ratio as of the last day of the most recently ended fiscal quarter was no greater than 4.00 to 1.00 (the “Applicable Period”).

On May 20, 2021, the Company determined it no longer desired to maintain this additional line of credit and consequently delivered a notice to the Administrative Agent terminating the 364 Day Facility, and the 364 Day Facility terminated on May 25, 2021. The remainder of the 2018 Credit Facility remains in full force and effect.

On May 26, 2021 (the “Election Date”), the Company delivered to the Administrative Agent the certificate required to terminate the Applicable Period. Effective as of the Election Date, the Company will be required to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00.

On September 23, 2021, the Company agreed to suspend its rights to borrow in all non-United States dollar (i.e. Pounds Sterling, Euro, Swiss Francs and Japanese Yen) currency LIBOR rate tenors under the 2018 Credit Facility after December 31, 2021 given that non-United States dollar LIBOR will no longer be published after that date.

The Revolving Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10% to 0.25% per annum, based on the Company’s public debt ratings, applied to the average daily unused amount of the Revolving Credit Facility. The 2018 Term Loan Facility provides for a commitment fee equal to 0.10% to 0.25% per annum, based on the Company’s public debt ratings, applied to the undrawn amount of the 2018 Term Loan Facility, from January 6, 2019 until the term loans are fully drawn or the commitments under the 2018 Term Loan Facility terminate or expire. Loans under the 2018 Credit Facility may be repaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than the customary breakage costs with respect to loans bearing interest based on Adjusted LIBOR or the ~~CDOR rate.~~Canadian Dollar Offered Rate.

As per the reinstatement election date of ~~the last day of Fiscal 2020, the 2018 Credit Facility required~~May 27, 2021, the Company will be required to ~~maintain a~~comply with the quarterly maximum net leverage ratio astest of ~~the end of each fiscal quarter of no greater than 3.75~~4.00 to 1.1.00. Such leverage ratio is calculated based on the ratio of consolidated total indebtedness plus the capitalized amount of all operating lease liabilities presented on our consolidated balance sheets to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash charges, subject to certain additions and deductions. The 2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type. ~~See Note 23 for additional information.~~ As of ~~March 28, 2020~~April 2, 2022 and the date these financial statements were issued, the Company was in compliance with all covenants related to ~~this agreement.~~the 2018 Credit Facility.

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The 2018 Credit Facility contains events of default customary for financings of this type, including, but not limited to, payment of defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under The Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the 2018 Credit Facility to be in full force and effect, and changes of control. If such an event of default occurs, the lenders under the 2018 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2018 Credit Facility, subject to “certain funds” limitations in connection with the transaction governing the 2018 Term Loan Facility.

In connection with the acquisition of Versace, on December 21, 2018 the Company borrowed $1.6 billion in term loans under the 2018 Term Loan Facility and $350 million under its $1.0 billion Revolving Credit Facility provided for under the 2018 Credit Facility, to pay a portion of the acquisition consideration and other related fees and expenses. As of ~~March 28, 2020 and March 30, 2019,~~April 2, 2022, the Company had ~~borrowings~~$175 million of ~~$681 million and $539 million~~borrowings outstanding under the ~~2018~~ Revolving Credit Facility, ~~respectively,~~ which were recorded within long-term ~~and short-term~~ debt in its consolidated balance sheets. As of March 27, 2021, the Company had no borrowings outstanding under the Revolving Credit Facility. In addition, stand-by letters of credit of ~~$18~~$21 million and $27 million were outstanding as of April 2, 2022 and March ~~28, 2020.~~27, 2021, respectively. At April 2, 2022 and March ~~28, 2020,~~27, 2021, the amount available for future borrowings under the ~~2018~~ Revolving Credit Facility ~~was $301 million.~~ were $804 million and $973 million, respectively.

As of March ~~28, 2020,~~27, 2021, the Company had $230 million available for future borrowings under the 364 Day Facility, which was terminated as of May 25, 2021.

As of April 2, 2022, the carrying ~~value~~values of borrowings outstanding under the 2018 Term Loan Facility were $495 million, net of debt issuance costs of $2 million, which was ~~$1.010 billion,~~all recorded within long-term debt in its consolidated balance sheets due to prepayments made on the Term Loan during Fiscal 2022. As of March 27, 2021, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $865 million, net of debt issuance costs of $5 million, $97 million of which ~~$128 million~~ was recorded within short-term debt ~~and $882~~while $768 million was recorded within long-term debt in ~~its~~the Company’s consolidated balance sheets.

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Senior Notes

On October 20, 2017, Michael Kors (USA), Inc. (the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $450 million aggregate principal amount ~~of 4.000%~~ senior notes due in 2024 (the “Senior Notes”) ~~at an issue price of 99.508% of aggregate principal amount,~~, pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (the “Indenture”). The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.

~~The~~As of April 2, 2022, the Senior Notes bear interest at a rate of ~~4.000%~~4.500% per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes. Interest on the Senior Notes is payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2018. See Note 20 for additional information.

The Senior Notes are unsecured and are guaranteed by the Company and its existing and future subsidiaries that guarantee or are borrowers under the 2018 Credit Facility (subject to certain exceptions, including subsidiaries organized in China).

The Senior Notes may be redeemed at the Company’s option at any time in whole or in part at a price equal to 100% of the principal amount, plus accrued and unpaid interest, plus a “make-whole” amount calculated at the applicable Treasury Rate plus 30 basis points.

The Senior Notes rank equally in right of payment with all of the Issuer’s and guarantors’ existing and future senior unsecured indebtedness, senior in right of payment to any future subordinated indebtedness, effectively subordinated in right of payment to any of the Company’s subsidiaries’ obligations ~~(including secured and unsecured obligations)~~ and any of the Company’s secured obligations, to the extent of the assets securing such obligations.

The Indenture contains covenants, including those that limit the Company’s ability to create certain liens and enter into certain sale and leaseback transactions. In the event of a “Change of Control Triggering Event,” as defined in the Indenture, the Issuer will be required to make an offer to repurchase the Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes being repurchased plus any unpaid interest. These covenants are subject to important limitations and exceptions, as per the Indenture.

As of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, the carrying value of the Senior Notes was ~~$446~~$448 million and ~~$445~~$447 million, respectively, net of issuance costs and unamortized ~~discount.~~discount, which were recorded within long-term debt in the Company’s consolidated balance sheets.

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Supplier Financing Program

During the third quarter of Fiscal 2021, the Company began offering a supplier financing program to certain suppliers as the Company continues to identify opportunities to improve liquidity. This program enables suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide. The Company’s obligations, including the amount due and scheduled payment dates, are not impacted by a suppliers’ decision to participate in this program. The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary. The amount outstanding under this program as of April 2, 2022 and March 27, 2021 was $21 million and $17 million, respectively and is presented as short-term debt in the Company’s consolidated balance sheets.

Japan Credit Facility

In ~~November 2017,~~Fiscal 2021, the Company’s subsidiary in Japan ~~entered into~~renewed a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion. The Japan Credit Facility is in effect through November ~~30, 2020.~~2022. The Japan Credit Facility provides Michael Kors Japan K.K. with a revolving credit line of up to ¥1.0 billion (approximately $9$8 million). The Japan Credit Facility bears interest at a rate posted by the Bank plus 0.300% two business days prior to the date of borrowing or the date of interest renewal. As of ~~March 28, 2020 and March 30, 2019,~~April 2, 2022 the Company had 0no borrowings outstanding under the Japan Credit ~~Facility.~~Facility and $9 million borrowings outstanding as of March 27, 2021, which were recorded within short-term debt in the Company’s consolidated balance sheets.

Hong Kong Credit Facility

In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through ~~April 30, 2021~~January 2023 subject to the bank’s discretion. The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong ~~Dollars~~dollar (approximately ~~$14~~$13 million), ~~and may be used~~which includes bank guarantees of up to ~~support bank guarantees.~~20 million HKD (approximately $3 million). Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong ~~Dollars~~dollar and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus ~~150~~200 basis points. As of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, there were 0no borrowings outstanding under the HK Credit ~~Facility.~~Facility. As of ~~March 28, 2020,~~April 2, 2022, bank guarantees supported by this facility were 41 million Hong Kong ~~Dollars (approximately~~dollar (less than $1 million). ~~At March 28, 2020, the amount available for future borrowings under the HK Credit Facility was 96 million Hong Kong Dollars (approximately $13 million).~~

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China Credit Facility

In January 2019, the Company’s subsidiary in China, MKTSCL, entered into a short-term credit facility (“China Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months. The China Credit Facility is in effect through October 2022. The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 7065 million (approximately $10 million);, which includes a revolving loan of RMB 35 million (approximately $5 million), an overdraft facility with a credit line of RMB 10 million (approximately $1$2 million), and a non-financial bank guarantee facility of RMB 20 million (approximately $3 million) or its equivalent in another currency, at lender’s discretion.Borrowings under the China Credit Facility bear interest at ~~105%~~plus 0.42% of the applicable People’s Bank of China’s ~~Benchmark~~benchmark lending rate at the time of borrowing. As of April 2, 2022 and March ~~28, 2020,~~27, 2021, the Company had 0no borrowings outstanding under the China Credit Facility.

Versace ~~Credit~~ Facilities

During the first quarter of Fiscal 2022, the Company's subsidiary, Versace, entered into an agreement with Banco BPM Banking Group (“the Bank”) to sell certain tax receivables to the Bank in exchange for cash. The arrangement was determined to be a financing arrangement because the de-recognition criteria for the receivables was not met at the time of the cash receipt from the Bank. As of April 2, 2022, the outstanding balance was $18 million, with $8 million and $10 million recorded within short-term debt and long-term debt in the Company’s consolidated balance sheets, respectively.

In June 2019, the Company’s subsidiary, Versace, entered into 2 uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace. The Versace Credit Facilities provide Versace with a swing line of credit of up to €32 million (approximately ~~$36~~$35 million), with interest set by the bank on the date of borrowing. As of April 2, 2022 and March ~~28, 2020,~~27, 2021, there were no borrowings outstanding under the Versace Credit Facility.

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In November 2018, Versace entered into an overdraft facility (“Versace Overdraft Facility”), which may be used for general working capital needs of Versace. The overdraft facility provided Versace with a line of credit of up to €5 million (approximately ~~$28~~$6 million)~~, which~~. During the second quarter of Fiscal 2022, the Versace Overdraft Facility was terminated. As of March 27, 2021, there were ~~recorded within short-term debt in~~no borrowings outstanding under the ~~Company’s consolidated balance sheet.~~Versace Overdraft Facility.

In January 2018, Versace entered into an uncommitted short-term credit facility ~~with BNL~~ (“Versace Credit Facility”), which may be used for general working capital needs of Versace. The Versace Credit Facility provides Versace with a swing line of credit of up to €20 million (approximately $22 million), which includes a bank guarantee of €4 million (approximately $5 million), with interest set by the bank on the date of borrowing. As of April 2, 2022, bank guarantees outstanding under this facility were €3 million (approximately $3 million). As of April 2, 2022 and March ~~28, 2020,~~27, 2021, there were no borrowings outstanding ~~of €10 million (approximately $11 million), which were recorded within short-term debt in~~under the ~~Company’s consolidated balance sheet.~~Versace Credit Facility.

~~13.~~12. Commitments and Contingencies

Commitments

The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating ~~$24~~$36 million at ~~March 28, 2020,~~April 2, 2022, including ~~$18~~$21 million in letters of credit issued under the ~~2018~~Revolving Credit Facility.

Other Commitments

As of ~~March 28, 2020,~~April 2, 2022, the Company also has other contractual commitments aggregating ~~$2.830~~$2.288 billion, which consist of inventory purchase commitments of ~~$570 million,~~$1.016 billion, debt obligations of ~~$2.179~~$1.164 billion and other contractual obligations of ~~$81~~$108 million, which primarily relate ~~to obligations related~~ to the Company’s marketing and advertising ~~agreements,~~obligations, information technology agreements and supply agreements.

Long-term Employment Contract

The Company has an employment agreement with the Chief Creative Officer of the Michael Kors brand that provides for continuous employment through the date of the officer’s death or permanent disability at an annual salary of $1 million. In addition to salary, the agreement provides for an annual bonus and other employee related benefits. ~~In response to the continued global health and economic impact of the COVID-19 pandemic, the Chief Creative Officer of the Michael Kors brand voluntarily elected to forgo his salary for Fiscal 2021.~~

Contingencies

In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the ~~Company’s management~~Company does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.

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~~14.~~13. Fair Value Measurements

Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability ~~developed~~ based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions ~~developed~~ based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

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At ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, the fair values of the Company’s ~~forward foreign currency exchange~~derivative contracts, ~~and net investment hedges~~ were determined using broker quotations, which were calculations derived from observable market information: the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception. The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate. The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities toof the Company. The fair values of net investment hedges and interest rate swaps are included in other assets, ~~as detailed~~and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company. See Note ~~15.~~14 for further detail.

All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):

Fair value at March 28, 2020, using: Fair value at March 30, 2019, using:
Quoted prices
in active
markets for
identical
assets
(Level 1) Significant
other
observable
inputs
(Level 2) Significant
unobservable
inputs
(Level 3) Quoted prices
in active
markets for
identical
assets
(Level 1) Significant
other
observable
inputs
(Level 2) Significant
unobservable
inputs
(Level 3)
Derivative assets:
Forward foreign currency exchange contracts $ — $ 1 $ — $ — $ 5 $ —
Net investment hedges — 3 — — 37 —
Total derivative assets $ — $ 4 $ — $ — $ 42 $ —
Derivative liabilities:
Other undesignated derivative contracts $ — $ — $ — $ — $ 5 $ —

~~Table of Contents~~


	Fair value at April 2, 2022, using:						Fair value at March 27, 2021, using:
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative assets:
Forward foreign currency exchange contracts	$	—	$	4	$	—	$	—	$	2	$	—
Net investment hedges	—		44		—		—		3		—
Undesignated derivative contracts	—		4		—		—		—		—
Total derivative assets	$	—	$	52	$	—	$	—	$	5	$	—

Derivative liabilities:
Forward foreign currency exchange contracts	$	—	$	—	$	—	$	—	$	1	$	—
Net investment hedges	—		37		—		—		263		—
Interest rate swaps	—		—		—		—		1		—
Total derivative liabilities	$	—	$	37	$	—	$	—	$	265	$	—

The Company’s long-term debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values. The fair value of the Company’s long-term debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics. Borrowings under revolving credit agreements, if outstanding, are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments. See Note 1211 for detailed information ~~relating~~related to carrying values of the Company’s outstanding debt. The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):


		March 28, 2020						March 30, 2019							April 2, 2022				March 27, 2021
		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value			Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
4.000% Senior Notes		$	446	$	443	$	445	$	438
Senior Notes due 2024										Senior Notes due 2024	$	448	$	451	$	447	$	470
Term Loan	Term Loan	$	1,010	$	957	$	1,570	$	1,574	Term Loan	$	495	$	490	$	865	$	866
Revolving Credit Facilities	Revolving Credit Facilities	$	720	$	720	$	550	$	550	Revolving Credit Facilities	$	175	$	175	$	—	$	—

The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value.

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Non-Financial Assets and Liabilities

The Company’s non-financial assets include goodwill, intangible assets, operating lease right-of-use assets and property and equipment. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. The Company’s goodwill and its indefinite-lived intangible assets (Versace and Jimmy Choo brands) are assessed for impairment at least annually, while its other long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The Company determines the fair values of these assets ~~were determined~~ based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

The following table details the carrying values and fair values of the Company’s assets that have been impaired (in millions):

Carrying Value Prior to Impairment Fair Value Impairment Charge
Fiscal 2020:
Operating Lease Right-of-Use Assets $ 717 $ 437 $ 280
Trade Name 547 367 180
Goodwill 474 303 171
Property and Equipment 105 28 77
Total $ 1,843 $ 1,135 $ 708
Fiscal 2019:
Property and Equipment $ 26 $ 7 $ 19
Lease Rights 3 1 2
Total $ 29 $ 8 $ 21
Fiscal 2018:
Property and Equipment $ 31 $ 3 $ 28
Lease Rights 5 1 4
Customer relationships 1 — 1
Total $ 37 $ 4 $ 33


	Carrying Value Prior to Impairment		Fair Value		Impairment Charge (1)
Fiscal 2022:
Operating Lease Right-of-Use Assets	$	209	$	133	$	76


Property and Equipment	12		5		7
Total	$	221	$	138	$	83

Fiscal 2021:
Operating Lease Right-of-Use Assets	$	326	$	191	$	135
Goodwill	319		225		94
Brands	407		338		69
Property and Equipment	30		7		23
Total	$	1,082	$	761	$	321

Fiscal 2020:
Operating Lease Right-of-Use Assets	$	717	$	437	$	280
Brands	547		367		180
Goodwill	474		303		171
Property and Equipment	105		28		77
Total	$	1,843	$	1,135	$	708

~~Please refer to Note 8~~(1)Includes $10 million and ~~Note 9 for additional information.~~

~~Table~~$5 million of ~~Contents~~

~~In addition~~impairment charges that were recorded within restructuring and other charges related to the impairment charges above, the Company recorded an adjustment to reduce its March 31, 2019 opening balance of retained earnings by $152 million, net of tax, reflecting impairments of operating lease right-of-use assets for certain underperforming real estate locations for which the carrying value of the opening operating lease right-of-use asset exceeded its related fair value. PropertyCapri Retail Store Optimization Program during Fiscal 2022 and ~~equipment related to these underperforming locations were fully impaired due to the adoption of ASU 2016-02. See Note 2 and Note 4 for additional information.~~Fiscal 2021, respectively.

There were 0no impairment charges related to goodwill or indefinite-lived intangible assets in Fiscal ~~2019 and Fiscal 2018.~~2022.

~~15.~~14. Derivative Financial Instruments

Forward Foreign Currency Exchange Contracts

The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to certain forecasted inventory purchases by using forward foreign currency exchange contracts. The Company only enters into derivative instruments with highly credit-rated counterparties. The Company does not enter into derivative contracts for trading or speculative purposes.

~~On September 24, 2018, in connection with~~

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Net Investment Hedges

During the ~~acquisition~~first quarter of ~~Versace,~~Fiscal 2022, the Company ~~entered into forward foreign currency exchange contracts~~modified multiple fixed-to-fixed cross-currency swap agreements with ~~a total~~aggregate notional ~~amount~~amounts of ~~€1.680~~$2.875 billion ~~(approximately $2.001 billion)~~ to ~~mitigate~~hedge its ~~foreign currency exchange risk through the expected closing date~~net investment in Euro denominated subsidiaries. Due to an other-than-insignificant financing element for certain of ~~the acquisition. These derivative~~these modifications, $31 million of net interest cash receipts during Fiscal 2022 related to these contracts were ~~not designated~~classified as accounting hedges and were settled on December 21, 2018 as a result of the debt issued in connection with the acquisition of Versace (see Note 12 for further information). Changes in fair value were recorded to foreign currency (gain) lossfinancing activities in the Company’s consolidated ~~statement~~statements of ~~operations~~cash flows.

During the third and ~~comprehensive income for~~fourth quarter of Fiscal ~~2019.~~

~~On July 25, 2017, in connection with the acquisition of Jimmy Choo, which closed on November 1, 2017,~~2022, the Company ~~entered into a forward foreign currency exchange contract~~modified multiple fixed-to-fixed cross-currency swap agreements with aaggregate notional ~~amount~~amounts of ~~£1.115~~$1.5 billion ~~(approximately $1.469 billion) to mitigate its foreign currency exchange risk through~~and $2.475 billion, respectively. The modification of these hedges resulted in the ~~date~~Company receiving $59 million and $130 million in cash during the third and fourth quarter of ~~the acquisition. This derivative contract was not designated as an accounting hedge and was settled on October 30, 2017. Changes in fair value were recorded to foreign currency (gain) loss~~Fiscal 2022, respectively. These amounts are classified within investing activities in the Company’s consolidated ~~statement~~statements of ~~operations and comprehensive income for the Fiscal 2018.~~cash flows.

~~Net Investment Hedges~~

As of ~~March 28, 2020,~~April 2, 2022, the Company had 1multiple fixed-to-fixed cross-currency swap ~~agreement~~agreements with aaggregate notional ~~amount~~amounts of ~~$44~~$4 billion to hedge its net investment in Euro-denominated subsidiaries and $194 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange ~~rate~~rates between the ~~U.S. Dollar~~United States dollar and ~~the Japanese Yen.~~these currencies. Under the term of ~~this contract, which has a maturity date of November 2024,~~these contracts, the Company will exchange the semi-annual fixed rate payments on ~~U.S.~~United States denominated debt for fixed rate payments of ~~0.89%~~0% to 3.565% in Euros and 0% to 3.408% in Japanese Yen. ~~This contract has~~Certain of these contracts include mandatory early termination dates between August 2025 and February 2026, while the remaining contracts have maturity dates between March 2024 and February 2051. These contracts have been designated as a net investment ~~hedge.~~

~~During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries. The early termination~~hedges. Certain of these ~~hedges resulted in~~contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the ~~Company receiving $296 million in~~earliest effective date being May 2024. If the outstanding position of a contract exceeds a certain threshold governed by the aforementioned CSA’s, either party is required to post cash ~~during the fourth quarter of Fiscal 2020. This resulted in a pre-tax gain of $211 million being recognized in OCI during the fourth quarter of Fiscal 2020.~~collateral.

When a cross-currency swap is used as a hedging instrument in a net investment hedge assessed under the spot method, the cross-currency basis spread is excluded from the assessment of hedge effectiveness and is recognized as a reduction in interest expense in the Company’s consolidated statements of operations and comprehensive ~~income.~~income (loss). Accordingly, the Company recorded ~~a reduction in~~ interest ~~expense~~income of ~~$71~~$63 million, $16 million and ~~$17~~$71 million, respectively, during Fiscal ~~2020~~2022, Fiscal 2021 and Fiscal ~~2019.~~2020.

Interest Rate Swap

The Company had an interest rate swap with an initial notional amount of $500 million that would have decreased to $350 million in April 2022. The swap was designated as a cash flow hedge to mitigate the impact of adverse interest rate fluctuations for a portion of the Company’s variable-rate debt equal to the notional amount of the swap. The interest rate converted the one-month Adjusted LIBOR interest rate on these borrowings to a fixed interest rate of 0.237% through the date of termination.

During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap. As a result, the Company recognized a $1 million gain within interest (income) expense, net, within the Company’s consolidated statements of operations and comprehensive income (loss).

When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest expense in the same period during which the hedged transactions affect earnings. During Fiscal 2022 and Fiscal 2021, the Company recorded an immaterial amount of interest expense related to this agreement.

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The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 (in millions):

Fair Values
Notional Amounts Assets
Liabilities ⁽²⁾
March 28,
2020 March 30,
2019 March 28,
2020 March 30,
2019 March 28,
2020 March 30,
2019
Designated forward foreign currency exchange contracts $ 161 $ 166 $ 1
⁽¹⁾
$ 5
⁽¹⁾
$ — $ —
Designated net investment hedge 44 2,234 3
⁽³⁾
37
⁽³⁾
— —
Total designated hedges 205 2,400 4 42 — —
Undesignated derivative contracts ⁽⁴⁾
— 199 — — — 5
Total $ 205 $ 2,599 $ 4 $ 42 $ — $ 5


					Fair Values
	Notional Amounts				Assets						Liabilities
	April 2, 2022		March 27, 2021		April 2, 2022			March 27, 2021			April 2, 2022			March 27, 2021
Designated forward foreign currency exchange contracts	$	119	$	155	$	4	(1)	$	2	(1)	$	—	(2)	$	1
Designated net investment hedge	4,194		3,194		44		(3)	3		(3)	37		(4)	263
Designated interest rate swap	—		500		—			—			—		(4)	1
Total designated hedges	4,313		3,849		48			5			37			265
Undesignated derivative contracts (5)	38		13		4			—			—			—
Total	$	4,351	$	3,862	$	52		$	5		$	37		$	265

⁽¹⁾Recorded within prepaid expenses and other current assets in the Company’s ~~audited~~ consolidated balance sheets.

⁽²⁾Recorded within accrued expenses and other current liabilities in the Company’s ~~audited~~ consolidated balance sheets.

⁽³⁾Recorded within other assets in the Company’s ~~audited~~ consolidated balance sheets.

⁽⁴⁾Recorded within other long-term liabilities in the Company’s consolidated balance sheets.

(5)Primarily includes undesignated hedges of ~~foreign currency denominated intercompany balances and~~ inventory purchases.

The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, as shown in the above table. However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies and with the same banks, the resulting impact as of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019~~27, 2021 would be as follows (in millions):


		Forward Currency Exchange Contracts						Net Investment Hedges							Forward Currency Exchange Contracts				Net Investment Hedges				Interest Rate Swap
		March 28, 2020		March 30, 2019		March 28, 2020		March 30, 2019			April 2, 2022		March 27, 2021		April 2, 2022		March 27, 2021		April 2, 2022		March 27, 2021
Assets subject to master netting arrangements	Assets subject to master netting arrangements	$	1	$	5	$	3	$	37	Assets subject to master netting arrangements	$	8	$	2	$	44	$	3	$	—	$	—
Liabilities subject to master netting arrangements	Liabilities subject to master netting arrangements	$	—	$	5	$	—	$	—	Liabilities subject to master netting arrangements	$	—	$	1	$	37	$	263	$	—	$	1
Derivative assets, net	Derivative assets, net	$	1	$	5	$	3	$	37	Derivative assets, net	$	8	$	1	$	42	$	3	$	—	$	—
Derivative liabilities, net	Derivative liabilities, net	$	—	$	5	$	—	$	—	Derivative liabilities, net	$	—	$	—	$	35	$	263	$	—	$	1

~~The~~Currently, the Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties.

Changes in the fair value of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income, ~~(loss),~~ and are reclassified from accumulated other comprehensive income ~~(loss)~~ into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of ~~sales~~goods sold within the Company’s consolidated statements of operations and comprehensive income (loss). The net gain or loss on net investment hedges are reported within foreign currency translation gains and losses (“CTA”) as a component of accumulated other comprehensive income ~~(loss)~~ on the Company’s consolidated balance sheets. Upon discontinuation of the hedge, such amounts remain in CTA until the related net investment is sold or liquidated. Changes in the fair value of the Company’s interest rate swaps that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of interest expense within the Company’s consolidated statements of operations and comprehensive income (loss).

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The following table summarizes the pre-tax impact of the gains and losses on the ~~Company's~~Company’s designated forward foreign currency exchange contracts, ~~and~~ net investment hedges and interest rate swaps (in millions):


		Fiscal Year Ended March 28, 2020		Fiscal Year Ended March 30, 2019		Fiscal Year Ended March 31, 2018			Fiscal Year Ended April 2, 2022		Fiscal Year Ended March 27, 2021		Fiscal Year Ended March 28, 2020
		Pre-Tax Gains Recognized in OCI		Pre-Tax Gains Recognized in OCI		Pre-Tax Loss Recognized in OCI			Pre-Tax Gains Recognized in OCI		Pre-Tax Losses Recognized in OCI		Pre-Tax Gains Recognized in OCI
Designated forward foreign currency exchange contracts	Designated forward foreign currency exchange contracts	$	6	$	16	$	(22)	Designated forward foreign currency exchange contracts	$	11	$	(2)	$	6
Designated net investment hedges	Designated net investment hedges	$	264	$	47	$	—	Designated net investment hedges	$	435	$	(263)	$	264
Designated interest rate swaps								Designated interest rate swaps	$	—	$	(1)	$	—

The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income (loss) related to the designated forward foreign currency exchange contracts ~~for Fiscal 2020 and Fiscal 2019~~ (in millions):

Fiscal Year Ended
Pre-Tax Losses (Gains) Reclassified from
Accumulated OCI Location of Losses (Gains) Recognized Total Cost of Sales
March 28, 2020 March 30, 2019 March 31, 2018 March 28, 2020 March 30, 2019 March 31, 2018
Designated forward currency exchange contracts $ (10) $ 4 $ 4 Cost of Sales $ 2,280 $ 2,058 $ 1,860


	Fiscal Year Ended
	Pre-Tax Losses (Gains) Reclassified from Accumulated OCI						Location of Losses (Gains) Recognized
	April 2, 2022		March 27, 2021		March 28, 2020
Designated forward currency exchange contracts	$	1	$	(2)	$	(10)	Cost of goods sold

The Company expects that substantially all of the amounts recorded in accumulated other comprehensive income ~~(loss)~~ for its forward foreign currency exchange contracts will be reclassified into earnings during the next 12 months, based upon the timing of inventory purchases and turnover.

Undesignated Hedges

During Fiscal ~~2020, Fiscal 2019~~2022 and Fiscal ~~2018, the Company recognized an immaterial amount~~2021, a gain of ~~net gains, net losses of $78~~$2 million and ~~net gains~~a loss of $3$1 million, respectively, ~~related to~~were recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income (loss) as a result of the changes in the fair value of undesignated forward foreign currency exchange ~~contracts within foreign currency loss (gain) in~~contracts. During Fiscal 2020, the ~~Company’s consolidated statements~~Company recognized an immaterial amount of operations and comprehensive income. The Fiscal 2019 amount was primarily comprised of a $77 million loss related to the derivative contracts entered into on September 25, 2018 to mitigate foreign currency exchange risk associated with the Versace acquisition that were settled on December 21, 2018.net gains.

~~16.~~15. Shareholders’ Equity

Share Repurchase Program

During the first quarter of Fiscal ~~2020,~~2022, the Company ~~repurchased 2,711,807 shares through open market transactions at a cost of $100 million under~~reinstated its ~~new~~ $500 million share-repurchase program, which was ~~authorized by~~previously suspended during the ~~Company’s~~first quarter of Fiscal 2021 in response to the impact of the COVID-19 pandemic and the provisions of the Second Amendment of the 2018 Credit Facility. Subsequently, on November 3, 2021, the Company announced that its Board of Directors ~~on August 1, 2019~~had terminated the Company’s existing $500 million share repurchase program (the “Prior Plan”), which had $250 million of availability remaining at the time, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which ~~expires on August 1, 2021.~~ the Company may, from time to time, repurchase up to $1.0 billion of its outstanding ordinary shares within a period of two years from the effective date of the program.

During Fiscal ~~2019,~~2022, the Company ~~repurchased 3,718,237~~purchased 11,014,541 shares with a fair value of $650 million through open market transactions. During Fiscal 2021, the Company did not purchase any shares through open market ~~transactions at a cost of $200 million under its previous $1.0 billion share-repurchase program, which expired on May 25, 2019.~~transactions. As of ~~March 28, 2020,~~April 2, 2022, the remaining availability under the Company’s share repurchase program was ~~$400~~$500 million. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading transactions under the Company’s insider trading policy and other relevant factors. The program may be suspended or discontinued at any time.

~~The share repurchase program was suspended on April 6, 2020 in response to the continued global health and economic impact of the COVID-19 pandemic.~~

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The Company also has in place a “withhold to cover” repurchase program, which allows the Company to withhold ordinary shares from certain executive officers and directors to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards. During Fiscal ~~2020~~2022 and Fiscal ~~2019,~~2021, the Company withheld ~~63,958~~203,863 shares and ~~107,712~~48,528 shares, respectively, with a fair value of $2$11 million and $7$1 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

Accumulated Other Comprehensive Income ~~(Loss)~~

The following table details changes in the components of accumulated other comprehensive income ~~(loss) ("AOCI"~~(“AOCI”), net of taxes, for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 (in millions):


		Foreign Currency Translation (Losses) Gains ⁽¹⁾		Net Gains (Losses) on Derivatives ⁽²⁾		Other Comprehensive (Loss)/Gain Attributable to Capri			Foreign Currency Translation Income (Loss) (1)		Net Income (Loss) on Derivatives (2)		Other Comprehensive Income (Loss) Attributable to Capri
Balance at April 1, 2017		$	(87)	$	6	$	(81)
Other comprehensive income (loss) before reclassifications		148		(19)		129
Less: amounts reclassified from AOCI to earnings		—		(3)		(3)
Other comprehensive income (loss), net of tax		148		(16)		132
Balance at March 31, 2018		61		(10)		51
Other comprehensive (loss) income before reclassifications		(134)		14		(120)
Less: amounts reclassified from AOCI to earnings		—		(3)		(3)
Other comprehensive (loss) income, net of tax		(134)		17		(117)
Balance at March 30, 2019	Balance at March 30, 2019	(73)		7		(66)		Balance at March 30, 2019	$	(73)	$	7	$	(66)
Other comprehensive income before reclassifications	Other comprehensive income before reclassifications	145		5		150		Other comprehensive income before reclassifications	145		5		150
Less: amounts reclassified from AOCI to earnings	Less: amounts reclassified from AOCI to earnings	—		9		9		Less: amounts reclassified from AOCI to earnings	—		9		9
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	145		(4)		141		Other comprehensive income (loss), net of tax	145		(4)		141
Balance at March 28, 2020	Balance at March 28, 2020	$	72	$	3	$	75	Balance at March 28, 2020	72		3		75
Other comprehensive loss before reclassifications								Other comprehensive loss before reclassifications	(15)		(2)		(17)
Less: amounts reclassified from AOCI to earnings								Less: amounts reclassified from AOCI to earnings	—		2		2
Other comprehensive loss, net of tax								Other comprehensive loss, net of tax	(15)		(4)		(19)
Balance at March 27, 2021								Balance at March 27, 2021	57		(1)		56
Other comprehensive income before reclassifications								Other comprehensive income before reclassifications	127		10		137
Less: amounts reclassified from AOCI to earnings								Less: amounts reclassified from AOCI to earnings	—		(1)		(1)
Other comprehensive income, net of tax								Other comprehensive income, net of tax	127		11		138
Balance at April 2, 2022								Balance at April 2, 2022	$	184	$	10	$	194

⁽¹⁾Foreign currency translation ~~gains~~adjustments for Fiscal 2022 primarily include a $321 million gain, net of taxes of $114 million, primarily relating to the Company’s net investment hedges, and ~~losses~~a net $210 million translation loss. Foreign currency translation adjustments for Fiscal 2021 include a $199 million loss, net ~~gains~~ of $6taxes of $63 million, ~~for both Fiscal 2020~~primarily relating to the Company’s net investment hedges, a net $189 million translation gain and ~~Fiscal 2019,~~a net loss of $8 million on intra-entity transactions that are of a long-term investment nature. Foreign currency translation ~~losses~~gains for Fiscal 2020 include a $219 million gain, net of taxes of $45 million, relating to the Company's net investment hedges, a $60 million translation loss relating to the Jimmy Choo business, a $10 million translation loss relating to the Versace business and a ~~$219~~net gain of $6 million, ~~gain, net~~on intra-entity transactions that are of ~~taxes of $45 million relating to the Company’s net~~a long-term investment hedges. Foreign currency translation losses for Fiscal 2019 includes an $105 million translation loss relating to the Jimmy Choo business, a $33 million translation loss relating to the Versace business and a $39 million gain, net of taxes of $8 million relating to the Company's net investment hedges.nature.

⁽²⁾Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive ~~income. Other comprehensive~~ income (loss) before reclassifications related to derivative instruments for Fiscal 2020 was immaterial. Other comprehensive income (loss) before reclassifications related to derivative instruments for Fiscal 2019 and Fiscal 2018 is net of a tax benefits of $2 million and $3 million, respectively.. All tax effects were not material for the periods presented.

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~~17.~~16. Share-Based Compensation

The Company ~~issues~~grants equity ~~grants~~awards to certain employees and directors of the Company at the discretion of the Company’s Compensation and Talent Committee. The Company has 2 equity plans which includes 1 stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and an Omnibus Incentive Plan adopted in the third fiscal quarter of Fiscal 2012 and amended and restated with shareholder approval in May 2015 and again in June 2020 (the “Incentive Plan”). The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares. As of ~~March 28, 2020,~~April 2, 2022, there were 0no shares available to grant equity awards under the 2008 Plan. The Incentive Plan allows for grants of share options, restricted shares and ~~RSUs,~~restricted stock units (“RSUs”), and other equity awards, and authorizes a total issuance of up to ~~15,246,000~~18,846,000 ordinary shares. At ~~March 28, 2020,~~April 2, 2022, there were ~~2,686,919~~4,062,239 ordinary shares available for future grants of equity awards under the Incentive Plan. Option grants issued from the 2008 Plan generally expire ten years from the ~~date~~grant

102

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date, and those issued under the Incentive Plan generally expire seven years from the ~~date of the grant.~~grant date. See Note 20 for additional information.

Share Options

Share options are generally exercisable at the fair market value on the date of grant and vest on a pro-rata basis over a four year service period. The following table summarizes the share options activity during Fiscal ~~2020,~~2022, and information about options outstanding at ~~March 28, 2020:~~April 2, 2022:

Number of
Options Weighted
Average
Exercise price Weighted
Average
Remaining
Contractual
Life (years) Aggregate
Intrinsic
Value
(in millions)
Outstanding at March 30, 2019 2,131,259 $ 50.67
Granted — $ —
Exercised (6,682) $ 27.01
Canceled/forfeited (53,481) $ 53.79
Outstanding at March 28, 2020 2,071,096 $ 50.66 1.86 $ 3
Vested or expected to vest at March 28, 2020 2,071,096 $ 50.66 1.86
Vested and exercisable at March 28, 2020 1,785,076 $ 49.90 1.41 $ 3


	Number of Options	Weighted Average Exercise price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Outstanding at March 27, 2021	1,150,260	$	63.42
Granted	—	$	—
Exercised	(408,638)	$	41.48
Canceled/forfeited	(386,174)	$	92.05
Outstanding at April 2, 2022	355,448	$	57.54	2.00	$	1
Vested or expected to vest at April 2, 2022	355,448	$	57.54	2.00
Vested and exercisable at April 2, 2022	308,494	$	56.02	1.82	$	1

There were ~~286,020~~46,954 unvested options and ~~1,785,076~~308,494 vested options outstanding at ~~March 28, 2020.~~April 2, 2022. The total intrinsic value of options exercised during Fiscal ~~2020~~2022 and Fiscal 2021 was ~~immaterial~~$7 million and ~~$94~~$10 million, ~~during Fiscal 2019.~~respectively. The cash received from options exercised during Fiscal ~~2020~~2022 and Fiscal 2021 was ~~immaterial~~$17 million and ~~$29~~$3 million, ~~during Fiscal 2019.~~respectively. As of ~~March 28, 2020,~~April 2, 2022, the remaining unrecognized share-based compensation expense for ~~nonvested~~unvested share options was $2less than $1 million, which is expected to be recognized over the related weighted-average period of approximately ~~1.80~~0.2 years.

There were no0 options granted during Fiscal ~~2020. The weighted average grant date fair value for options granted during~~2022, Fiscal ~~2019 and~~2021 or Fiscal ~~2018 was $24.49 and $11.62, respectively. The following table represents assumptions used to estimate the fair value of options:~~

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Expected dividend yield N/A 0.0 % 0.0 %
Volatility factor N/A 36.9 % 36.3 %
Weighted average risk-free interest rate N/A 2.8 % 1.8 %
Expected life of option N/A 4.85 years 4.69 years
2020.

Restricted Awards

The Company grants ~~restricted share units~~RSUs at the fair market value on the ~~date of the grant. Expense for restricted awards~~grant date. The expense related to RSUs is based on the closing market price of the Company’s shares on the date of grant and is recognized ratably over the vesting period, net of expected forfeitures.

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The Company grants 2 types of ~~restricted stock unit ("RSU") awards:~~RSUs: time-based RSUs and performance-based RSUs. Time-based RSUs generally vest in full ~~either generally around~~on the first anniversary of the date of grant for our independent directors, or in equal increments on each of the ~~four~~third or fourth anniversaries of the date of ~~grant.~~grant (unless the employee is retirement-eligible). Performance-based RSUs generally vest in full on the second or third anniversary of the date of grant, subject to the employee’s continued employment during the vesting period ~~(unless the employee is retirement-eligible)~~ and only if certain pre-established cumulative performance targets are met. Expense related to performance-based RSUs is recognized ratably over the performance period, net of forfeitures, based on the probability of attainment of the related performance targets. The potential number of shares that may be earned ranges from 0%, if the minimum level of performance is not attained, to 150%, if the level of performance is at or above the predetermined maximum achievement level.

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The following table summarizes the RSU activity during Fiscal ~~2020:~~2022:


		Service-based				Performance-based						Service-based			Performance-based
		Number of Restricted Share Units	Weighted Average Grant Date Fair Value		Number of Restricted Share Units	Weighted Average Grant Date Fair Value			Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested at March 30, 2019		3,839,862	$	46.11	737,074	$	52.34
Unvested at March 27, 2021								Unvested at March 27, 2021	4,895,517	$	29.91	581,659	$	49.17
Granted	Granted	1,987,450	$	33.92	169,817	$	33.86	Granted	1,729,215	$	55.27	—	$	—
Decrease due to performance condition		—	$	—	(39,999)	$	49.88
Change due to performance conditions, net								Change due to performance conditions, net	—	$	—	26,109	$	7.82

Vested	Vested	(1,209,177)	$	46.62	(53,025)	$	49.88	Vested	(2,327,165)	$	33.58	(347,561)	$	56.49
Canceled/forfeited	Canceled/forfeited	(306,452)	$	45.70	(41,695)	$	41.97	Canceled/forfeited	(469,867)	$	33.85	(50,015)	$	39.36
Unvested at March 28, 2020		4,311,683	$	40.34	772,172	$	49.13
Unvested at April 2, 2022								Unvested at April 2, 2022	3,827,700	$	38.65	210,192	$	34.25

The total fair value of service-based RSUs vested during Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 was $78 million, $56 million ~~$47 million~~ and ~~$18~~$56 million, respectively. The total fair value of performance-based RSUs vested during Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 was $3$18 million, $7$6 million and $4$3 million, respectively. As of ~~March 28, 2020,~~April 2, 2022, the remaining unrecognized share-based compensation expense for ~~non-vested~~unvested service-based and performance-based RSU grants was ~~$111~~$77 million and $7$1 million, respectively, which is expected to be recognized over the related weighted-average periods of approximately ~~3.01~~1.9 years and ~~1.45~~1.3 years, respectively.

~~There were 0 non-vested restricted shares during Fiscal 2020. The total fair value of restricted shares vested was $4 million and $4 million during Fiscal 2019 and Fiscal 2018, respectively.~~

Share-Based Compensation Expense

The following table summarizes compensation expense attributable to share-based compensation for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 (in millions):


		Fiscal Years Ended											Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018			April 2, 2022		March 27, 2021		March 28, 2020
Share-based compensation expense	Share-based compensation expense	$	70	$	60	$	50	Share-based compensation expense	$	85	$	70	$	70
Tax benefits related to share-based compensation expense	Tax benefits related to share-based compensation expense	$	7	$	11	$	10	Tax benefits related to share-based compensation expense	$	14	$	12	$	7

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on its historical forfeiture ~~rate to date.~~rates. The estimated value of future forfeitures for equity ~~grants~~awards as of ~~March 28, 2020~~April 2, 2022 is ~~approximately $22~~$25 million.

~~18.~~17. Taxes

The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands. Capri’s subsidiaries are subject to taxation in the ~~U.S.~~United States and various other foreign jurisdictions, which are aggregated in the ~~“Non-U.S.”~~“Non-United States” information captioned below.

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~~(Loss) income~~Income (loss) before provision for income taxes consisted of the following (in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
U.S. $ (28) $ 191 $ 124
Non-U.S. (187) 430 618
Total (loss) income before provision for income taxes $ (215) $ 621 $ 742


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020
United States	$	247	$	(56)	$	(28)
Non-United States	668		59		(187)
Total income (loss) before provision for income taxes	$	915	$	3	$	(215)

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The provision for income taxes was as follows (in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Current
U.S. Federal $ 4 (3) $ 82
⁽²⁾
$ 48
U.S. State 19 24 16
Non-U.S. 60 44 77
Total current 83 150 141
Deferred
U.S. Federal (22) (34)
⁽²⁾
24
⁽¹⁾
U.S. State (3) (4) 1
Non-U.S. (48) (33) (16)
Total deferred (73) (71) 9
Total provision for income taxes $ 10 $ 79 $ 150


	Fiscal Years Ended
	April 2, 2022			March 27, 2021		March 28, 2020
Current
United States - Federal	$	36		$	35	$	4	(1)
United States - State	16			20		19
Non-United States	98			81		60
Total current	150			136		83
Deferred
United States - Federal	24		(2)	(37)		(22)
United States - State	7			(4)		(3)
Non-United States	(89)		(3)	(29)		(48)
Total deferred	(58)			(70)		(73)
Total provision for income taxes	$	92		$	66	$	10

⁽¹⁾~~Includes an $18 million provision related to the U.S. Tax Act one time revaluation of deferred tax assets.~~

⁽²⁾~~Includes a $25 million current tax provision and equal deferred tax benefit related to the U.S. Tax Act impact to business interest disallowance provisions.~~

⁽³⁾Includes a $35 million current tax benefit due to a release of income tax reserves in the ~~U.S.~~United States.

(2)Impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization.

(3)Includes an Italian valuation allowance reversal during Fiscal 2022.

The Company’s provision for income taxes for the years ended April 2, 2022, March 27, 2021 and March 28, 2020 ~~March 30, 2019 and March 31, 2018~~ was different from the amount computed by applying the statutory U.K. income tax ~~rate~~rates to the underlying income (loss) ~~income from operations~~ before provision for income taxes as a result of the ~~following:~~following (amounts in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Provision for income taxes at the U.K. statutory tax rate 19.0 % 19.0 % 19.0 %
State and local income taxes, net of federal benefit (1.9) % 0.9 % 0.5 %
Effects of global financing arrangements 21.7 % (4) (8.1) % (15.6) %
U.S. tax reform — % — % 2.0 %
⁽¹⁾
Differences in tax effects on foreign income 1.2 % (1.8) %
⁽²⁾
6.7 %
Liability for uncertain tax positions 5.7 % 1.3 % 6.6 %
Effect of changes in valuation allowances on deferred tax assets (30.9) % (5) 2.8 %
⁽³⁾
0.3 %
Excess tax benefits related to stock-based compensation (4.2) % (2.6) % (0.8) %
Transaction costs — % 1.5 % 0.9 %
Withholding tax (1.6) % 0.6 % 1.2 %
Nondeductible goodwill impairment (15.1) % (6) — % — %
Other 1.4 % (0.9) % (0.6) %
Effective tax rate (4.7) % 12.7 % 20.2 %

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	Fiscal Years Ended
	April 2, 2022				March 27, 2021					March 28, 2020
	Amount		% (1)		Amount		% (1)			Amount		% (1)
Provision for income taxes at the U.K. statutory tax rate	$	174	19.0	%	$	1	19.0	%		(41)		19.0	%
Effect of changes in valuation allowances on deferred tax assets	(67)		(7.3)	%	24		955.7	%		67		(30.9)	%	(2)
Effects of global financing arrangements	(56)		(6.1)	%	(24)		(953.4)	%		(41)		21.7	%	(3)
Brand tax basis step-up	(46)		(5.0)	%	—		—	%		—		—	%
CARES Act tax loss carryback	(43)		(4.6)	%	—		—	%		—		—	%
Liability for uncertain tax positions	91		9.9	%	11		414.2	%		(12)		5.7	%
Tax rate change impact on deferred items	21		2.1	%	9		351.3	%		—		—	%
State and local income taxes, net of federal benefit	12		1.3	%	5		201.5	%		4		(1.9)	%
Differences in tax effects on foreign income	10		1.1	%	13		522.4	%		(7)		1.2	%
Withholding tax	5		0.6	%	4		165.0	%		3		(1.6)	%
Share based compensation	3		0.4	%	6		247.7	%		9		(4.2)	%
Non-deductible goodwill impairment	—		—	%	18		700.2	%	(4)	32		(15.1)	%	(4)

Other	(12)		(1.3)	%	(1)		(33.1)	%	(5)	(4)		1.4	%
Effective tax rate	$	92	10.1	%	$	66	2,590.5	%		$	10	(4.7)	%

⁽¹⁾~~Includes an $18 million expense related to the re-measurement of certain net deferred tax assets in connection with U.S.~~ Tax ~~Act.~~rates are calculated using unrounded numbers.

⁽²⁾~~Mainly attributable to the United States statutory federal income tax rate change from a blended rate for Fiscal 2018 of 31.54% to 21% in Fiscal 2019.~~

⁽³⁾~~Includes an $11 million provision related to a United Kingdom capital loss.~~

⁽⁴⁾~~Mainly attributable to pre-tax loss position in Fiscal 2020~~

⁽⁵⁾Mainly attributable to valuation allowances established on a portion of ~~Non-US~~non-United States deferred tax ~~assets~~assets.

⁽⁶⁾(3)Mainly attributable to pre-tax loss position in Fiscal 2020.

(4)Attributable to ~~the~~goodwill impairment charges related to Jimmy Choo ~~brand intangible that was impaired~~reporting units in Fiscal ~~2020~~2021 and Fiscal 2020.

(5)Primarily relates to individually immaterial United States and foreign permanent adjustments.

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Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):


		Fiscal Years Ended								Fiscal Years Ended
		March 28, 2020		March 30, 2019			April 2, 2022			March 27, 2021
Deferred tax assets	Deferred tax assets					Deferred tax assets
Operating lease liabilities	Operating lease liabilities	521		—		Operating lease liabilities	$	465		$	501
Net operating loss carryforwards	Net operating loss carryforwards	109		61		Net operating loss carryforwards	108			139
Accrued Interest		40		41
Depreciation						Depreciation	53			54
Sales allowances	Sales allowances	37		26		Sales allowances	34			50
Inventories	Inventories	34		22		Inventories	26			25
Depreciation		33		18
Accrued interest						Accrued interest	20			44
Stock compensation	Stock compensation	13		13		Stock compensation	7			12
Payroll related accruals	Payroll related accruals	3		2		Payroll related accruals	3			3
Deferred rent		—		34
Derivative financial instruments						Derivative financial instruments	—			32
Other	Other	—		31		Other	46			42
		790		248
Total deferred tax assets						Total deferred tax assets	762			902
Valuation allowance	Valuation allowance	(134)		(40)		Valuation allowance	(92)		(1)	(159)
Total deferred tax assets		656		208
Net deferred tax assets						Net deferred tax assets	670			743

Deferred tax liabilities	Deferred tax liabilities					Deferred tax liabilities
Goodwill and intangibles	Goodwill and intangibles	(481)		(534)		Goodwill and intangibles	(449)		(2)	(495)
Operating lease right-of-use-assets	Operating lease right-of-use-assets	(401)		—		Operating lease right-of-use-assets	(340)			(367)
Other		(14)		—
Derivative financial instruments						Derivative financial instruments	(73)			—

Total deferred tax liabilities	Total deferred tax liabilities	(896)		(534)		Total deferred tax liabilities	(862)			(862)
Net deferred tax liabilities	Net deferred tax liabilities	$	(240)	$	(326)	Net deferred tax liabilities	$	(192)		$	(119)

(1)Includes an Italian valuation allowance reversal during Fiscal 2022.

(2)Includes a reversal of a Italian brand intangible deferred tax liability.

The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured. ~~Deferred tax~~The valuation ~~allowances increased approximately $94 million, $29 million and $8~~allowance decreased $67 million in Fiscal ~~2020, Fiscal 2019~~2022, and ~~Fiscal 2018, respectively. The Company established valuation allowances amounting to approximately $110~~increased $24 million and $94 million in Fiscal 2021 and Fiscal 2020, ~~as a result of the expected inability to realize deferred tax asset balances in certain countries comprising the Company’s North American, European, and Asian operations. Additionally, in~~respectively. In certain jurisdictions, the Company ~~remeasured and~~ increased the valuation allowance by ~~approximately $3~~$34 million ~~in Fiscal 2020. The Company also remeasured~~, $56 million and ~~reduced the valuation allowance by approximately $19~~$113 million ~~in Fiscal 2020~~ and released valuation allowances of ~~approximately $3~~$101 million, $32 million and $1$19 million in Fiscal ~~2019~~2022, Fiscal 2021 and Fiscal ~~2018,~~2020, respectively.

~~At March 28, 2020,~~As of April 2, 2022, the Company had ~~non-U.S.~~non-United States and ~~U.S.~~United States net operating loss carryforwards of ~~approximately $570~~$463 million, a portion of which will begin to expire in ~~2020.~~Fiscal 2023.

As of ~~March 28, 2020~~April 2, 2022 and March ~~30, 2019,~~27, 2021, the Company had liabilities related to its uncertain tax positions, including accrued interest, of ~~approximately $109~~$221 million and ~~$203~~$121 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets. ~~The March 28, 2020 balance, compared to the March 30, 2019 balance, includes the release of income tax reserves in North America and Europe.~~

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The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was ~~approximately$82~~$206 million, ~~$112~~$92 million and ~~$101~~$82 million as of April 2, 2022, March 27, 2021 and March 28, 2020, ~~March 30, 2019 and March 31, 2018,~~ respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018,~~2020, are presented below (in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Unrecognized tax benefits beginning balance $ 192 $ 101 $ 27
Additions related to prior period tax positions 29 81
⁽¹⁾
30
Additions related to current period tax positions 4 21 45
Decreases in prior period positions due to lapses in statute of limitations (3) (1) (1)
Decreases related to prior period tax positions (99) (2) (3) —
Decreases related to audit settlements (24) (3) (7) —
Unrecognized tax benefits ending balance $ 99 $ 192 $ 101


	Fiscal Years Ended
	April 2, 2022			March 27, 2021		March 28, 2020
Unrecognized tax benefits beginning balance	$	107		$	99	$	192
Additions related to prior period tax positions	105		(1)	12		29
Additions related to current period tax positions	29		(2)	9		4
Decreases related to audit settlements	(13)		(3)	(6)		(24)		(3)
Decreases in prior period positions due to lapses in statute of limitations	(3)			(4)		(3)
Decreases related to prior period tax positions	(4)			(3)		(99)		(4)
Unrecognized tax benefits ending balance	$	221		$	107	$	99

⁽¹⁾Primarily relates to incremental reserves in North America and Europe.

(2)Primarily relates to European tax reserves established in Fiscal 2022.

(3)Primarily relates to the ~~Versace acquisition.~~effective settlement of a United States audit.

⁽²⁾(4)Primarily relates to releases of North American and European tax ~~reserves~~

⁽³⁾~~Primarily relates to US audit effective settlement~~reserves.

The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes. Interest ~~expense~~and penalties recognized in the consolidated statements of operations and comprehensive income (loss) for Fiscal ~~2020,~~2022, Fiscal ~~2019~~2021 and Fiscal ~~2018~~2020 was ~~approximately $11~~$28 million, ~~$11~~$15 million and $7$11 million, respectively.

The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the ~~settlements~~settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by ~~approximately $8~~$52 million during the next 12 months, primarily due to the anticipated settlement of a tax ~~examination~~examinations as well as statute of limitation expirations. However, the outcomes and timing of such events are highly uncertain and changes in the occurrence, expected outcomes and timing of such events could cause the Company’s current estimate to change materially in the future.

The Company files income tax returns in the ~~U.S., for federal,~~United States and in various foreign, state and local ~~purposes,~~jurisdictions. Most examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and ~~in certain foreign jurisdictions. With few exceptions,~~local income tax returns filed by the Company ~~is no longer subject to examinations by the relevant tax authorities~~ for years ~~prior to its fiscal year ended April 1, 2017.~~through Fiscal 2016.

Prior to the enactment of the Tax Cuts and Jobs Act (“Tax Act”), the ~~Company's~~Company’s undistributed foreign earnings were considered permanently reinvested and, as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated. It remains the ~~Company's~~Company’s intent to either reinvest indefinitely substantially all of its foreign earnings outside of the United States or repatriate them tax neutrally. However, if future earnings are repatriated, the potential exists that the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding tax and income taxes. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Cares Act

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act requires the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for income taxes. However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury or other governing body that may significantly differ from our interpretation of the law, which may

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~~19.~~result in a material effect on our business, cash flow, results of operations, or financial conditions.

18. Retirement Plans

The Company maintains defined contribution retirement plans for its employees, who generally become eligible to participate after three months of service. Features of these plans allow participants to contribute ~~to a plan~~ a percentage of their compensation, up to statutory limits depending upon the country in which ~~a plan operates,~~the employee resides, and provide for mandatory and/or discretionary matching contributions by the Company, which vary by country. During Fiscal ~~2020,~~2022, Fiscal ~~2019,~~2021, and Fiscal ~~2018,~~2020, the Company recognized expenses of approximately ~~$12~~$16 million, ~~$14~~$20 million and $12 million, respectively, related to these retirement plans.

~~20.~~19. Segment Information

The Company operates its business through 3 operating ~~segments—~~segments — Versace, Jimmy Choo and Michael Kors, which are based on its business activities and organization. The reportable segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are revenue and operating income for each segment. The Company’s reportable segments represent components of the business that offer similar merchandise, customer experience and sales/marketing strategies.

The Company’s 3 reportable segments are as follows:

•Versace — segment includes revenue generated through the sale of Versace luxury ready-to-wear, accessories ~~footwear~~ and ~~home furnishings~~footwear through directly operated Versace boutiques throughout ~~North America (United States and Canada),~~the Americas, certain parts of EMEA and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements that allow third parties to use the Versace trademarks in connection with retail and/or wholesale sales of Versace branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of jeans, fragrances, watches, jewelry, eyewear and ~~eyewear.~~home furnishings.

•Jimmy Choo — segment includes revenue generated through the sale of Jimmy Choo luxury footwear, handbags and small leather goods through directly operated Jimmy Choo retail and outlet stores throughout the Americas, certain parts of EMEA and certain parts of Asia, through its e-commerce sites, as well as through wholesale sales of luxury goods to distribution partners (including geographic licensing arrangements that allow third parties to use the Jimmy Choo trademarks in connection with retail and/or wholesale sales of Jimmy Choo branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide. In addition, revenue is generated 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 fragrances ~~sunglasses~~ and eyewear.

•Michael Kors — segment includes revenue generated through the sale of Michael Kors products through ~~four~~4 primary Michael Kors retail store formats: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce sites, through which the Company sells Michael Kors products, as well as licensed products bearing the Michael Kors name, directly to ~~the end consumer~~consumers throughout the Americas, ~~Europe~~certain parts of EMEA and certain parts of Asia. The Company also sells Michael Kors products directly to department stores, primarily located across the Americas and Europe, to specialty stores and travel retail shops, and to its geographic licensees. 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.

In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to its segments. Such costs primarily include certain administrative, corporate occupancy, shared service and information systems expenses, including enterprise resource planning system implementation costs and Capri transformation program costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges, ~~(including transition costs related to the Company’s recent acquisitions),~~ impairment costs, ~~and~~ COVID-19 related ~~charges.~~charges, charitable donations and the war in Ukraine. The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating ~~segment performance.~~

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segment performance.

The following table presents the key performance information of the Company’s reportable segments (in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Total revenue:
Versace $ 843 $ 137 $ —
Jimmy Choo 555 590 223
Michael Kors 4,153 4,511 4,496
Total revenue $ 5,551 $ 5,238 $ 4,719
(Loss) income from operations:
Versace $ (8) $ (11) $ —
Jimmy Choo (13) 20 (4)
Michael Kors 850 964 975
Total segment income from operations 829 973 971
Less: Corporate expenses (152) (93) (87)
Restructuring and other charges (42) (124) (102)
Impairment of assets ⁽¹⁾
(708) (21) (33)
COVID-19 related charges ⁽²⁾
(119) — —
Total (loss) income from operations $ (192) $ 735 $ 749


		Fiscal Years Ended
		April 2, 2022		March 27, 2021		March 28, 2020
Total revenue:
	Versace	$	1,088	$	718	$	843
	Jimmy Choo	613		418		555
	Michael Kors	3,953		2,924		4,153
Total revenue		$	5,654	$	4,060	$	5,551

Income (loss) from operations:
	Versace	$	185	$	21	$	(8)
	Jimmy Choo	13		(55)		(13)
	Michael Kors	1,005		595		850
Total segment income from operations		1,203		561		829
Less:	Corporate expenses	(190)		(152)		(152)
	Impairment of assets (1)	(73)		(316)		(708)
	COVID-19 related charges (2)	14		(42)		(119)
	Impact of war in Ukraine (3)	(9)		—		—
	Restructuring and other charges	(42)		(32)		(42)
Total income (loss) from operations		$	903	$	19	$	(192)

⁽¹⁾Impairment of assets during Fiscal 2022 include $50 million, $19 million and $4 million of impairment charges related to the Michael Kors, Versace and Jimmy Choo reportable segments, respectively. Impairment of assets during Fiscal 2021 includes $191 million, $91 million and $34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively. Impairment of assets during Fiscal 2020 includes $434 million, $187 million and $87 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively. ~~The impairment~~

(2)COVID-19 related charges during Fiscal ~~2019~~2022 primarily include net inventory credits of $16 million as a result of better than expected sell-through and severance expense of $2 million, respectively. Net inventory credits during Fiscal ~~2018 were primarily related to the Michael Kors reportable segment.~~

⁽²⁾2022 reflected a change in estimate resulting from better than expected sell-through. COVID-19 related charges during Fiscal 2021, primarily include net inventory reserves and severance expense of $10 million and $24 million, respectively. COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and ~~bad debt expense~~credit losses of $92 million and $25 million, ~~respectively,~~respectively. Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of ~~operations.~~operations and comprehensive income (loss).

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Depreciation and amortization expense for each segment are as follows (in millions):

Fiscal Years Ended
March 28,
2020 March 30,
2019 March 31,
2018
Depreciation and amortization⁽¹⁾:
Versace $ 61 $ 9 $ —
Jimmy Choo 33 34 13
Michael Kors 155 182 195
Total depreciation and amortization $ 249 $ 225 $ 208

⁽¹⁾~~Excluded from the above table are impairment charges, which are detailed in the below table and in~~ ~~Note 8~~, ~~Note 9~~ ~~and~~ ~~Note 14~~.


	Fiscal Years Ended
	April 2, 2022		March 27, 2021		March 28, 2020
Depreciation and amortization:
Versace	$	52	$	54	$	61
Jimmy Choo	31		31		33
Michael Kors	110		127		155
Total depreciation and amortization	$	193	$	212	$	249

See Note ~~9 to the accompanying consolidated financial statements~~8 for the Company’s goodwill by reportable segment.

~~109~~

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Total revenue (based on country of origin) and long-lived assets by geographic location are as follows (in millions):


		Fiscal Years Ended											Fiscal Years Ended
		March 28, 2020		March 30, 2019		March 31, 2018			April 2, 2022		March 27, 2021		March 28, 2020
Revenue:	Revenue:							Revenue:
The Americas (U.S., Canada and Latin America)⁽¹⁾		$	3,115	$	3,182	$	3,033
The Americas (1)								The Americas (1)	$	3,210	$	2,172	$	3,115
EMEA	EMEA	1,523		1,279		1,093		EMEA	1,489		1,029		1,523
Asia	Asia	913		777		593		Asia	955		859		913
Total revenue	Total revenue	$	5,551	$	5,238	$	4,719	Total revenue	$	5,654	$	4,060	$	5,551

As of
March 28,
2020 March 30,
2019 March 31,
2018
Long-lived assets: ⁽¹⁾
The Americas (U.S., Canada and Latin America)⁽²⁾
$ 1,132 $ 319 $ 328
EMEA 2,432 2,123 1,050
Asia 608 466 441
Total Long-lived assets: $ 4,172 $ 2,908 $ 1,819


	As of
	April 2, 2022		March 27, 2021		March 28, 2020
Long-lived assets:
The Americas (1)	$	450	$	1,001	$	1,132
EMEA	2,156		2,384		2,432
Asia	1,075		596		608
Total long-lived assets	$	3,681	$	3,981	$	4,172

⁽¹⁾~~Long-lived assets as of March 28, 2020 reflect operating lease right-of-use assets resulting from the Company’s adoption of ASU 2016-02. See Note 2 for additional information.~~

⁽²⁾Net revenues earned in the ~~U.S.~~United States during Fiscal ~~2020,~~2022, Fiscal ~~2019,~~2021 and Fiscal ~~2018~~2020 were ~~$2.898~~$2.989 billion, ~~$2.972~~$2.016 billion and ~~$2.818~~$2.898 billion, respectively. Long-lived assets located in the ~~U.S.~~United States as of April 2, 2022, March 27, 2021 and March 28, 2020 were $858 million, $942 million and ~~March 30, 2019 were~~ $1.060 billion, ~~and $296 million,~~ respectively.

As of ~~March 28, 2020 and March 30, 2019,~~April 2, 2022, the ~~Company's~~Company’s total long-lived assets were $7.946 billion and $6.650 billion, respectively. The increase in total assets was primarily due to the adoption of ASU 2016-02 in the first quarter of Fiscal 2020. As of March 28, 2020, the Company had operating lease right-of-use assets recorded on its consolidated balance ~~sheets of $1.625~~sheet were $3.681 billion, of which, ~~$968 million~~$1.633 billion related to Versace, $1.404 billion related to Michael Kors ~~$457 million related to Versace,~~ and ~~$200~~$644 million related to Jimmy Choo.

Total revenue by major product category are as follows (in millions):

Fiscal Years Ended
March 28,
2020 % of
Total March 30,
2019 % of
Total March 31,
2018 % of
Total
Accessories $ 2,933 52.8% $ 3,139 59.9 % $ 3,057 64.8 %
Footwear 1,100 19.8% 1,023 19.5 % 657 13.9 %
Apparel 1,069 19.3% 698 13.3 % 605 12.8 %
Licensed product 222 4.0% 218 4.2 % 250 5.3 %
Licensing revenue 201 3.6% 156 3.0 % 150 3.2 %
Other 26 0.5% 4 0.1 % — — %
Total Revenue $ 5,551 $ 5,238 $ 4,719


	Fiscal Years Ended
	April 2, 2022		% of Total		March 27, 2021		% of Total		March 28, 2020		% of Total
Accessories	$	2,901	51.3	%	$	2,158	53.2	%	$	2,933	52.8	%
Footwear	1,208		21.4	%	796		19.6	%	1,100		19.8	%
Apparel	1,027		18.2	%	720		17.7	%	1,069		19.3	%
Licensed product	241		4.3	%	185		4.6	%	222		4.0	%
Licensing revenue	212		3.7	%	155		3.8	%	201		3.6	%
Other	65		1.1	%	46		1.1	%	26		0.5	%
Total revenue	$	5,654			$	4,060			$	5,551

110

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~~21. Selected Quarterly Financial Information (Unaudited)~~

~~The following table summarizes the Fiscal 2020 and Fiscal 2019 quarterly results (dollars in millions):~~

Fiscal Quarter Ended ⁽¹⁾
June 29,
2019 September 28,
2019 December 28,
2019 March 28,
2020
Fiscal 2020
Total revenue $ 1,346 $ 1,442 $ 1,571 $ 1,192
Gross profit $ 834 $ 874 $ 932 $ 631
Income (loss) from operations $ 64
⁽²⁾
$ 75
⁽³⁾
$ 205
⁽⁴⁾
$ (536)
⁽⁵⁾
Net income (loss) $ 45 $ 73 $ 209 $ (552)
Net income (loss) attributable to Capri $ 45 $ 73 $ 210 $ (551)
Weighted average ordinary shares outstanding:
Basic 151,049,572 151,602,502 150,826,196 149,380,121
Diluted 152,334,153 152,576,283 152,154,372 149,380,121
Fiscal Quarter Ended ⁽¹⁾
June 30,
2018 September 29,
2018 December 29,
2018 March 30,
2019
Fiscal 2019
Total revenue $ 1,203 $ 1,253 $ 1,438 $ 1,344
Gross profit $ 751 $ 763 $ 873 $ 793
Income from operations $ 215
⁽⁶⁾
$ 190
⁽⁷⁾
$ 290
⁽⁸⁾
$ 40
⁽⁹⁾
Net income $ 186 $ 137 $ 200 $ 19
Net income attributable to Capri $ 186 $ 138 $ 200 $ 19
Weighted average ordinary shares outstanding:
Basic 149,502,101 149,575,112 149,183,049 150,801,608
Diluted 152,399,655 151,705,685 150,268,424 152,083,632

⁽¹⁾~~All fiscal quarters presented contain 13 weeks.~~

⁽²⁾~~Fiscal quarter ended June 29, 2019 includes impairment charges of $97 million, other costs related to acquisitions of $12 million and restructuring charges of $1 million.~~

⁽³⁾~~Fiscal quarter ended September 28, 2019 includes impairment charges of $104 million and other costs related to acquisitions of $6 million.~~

⁽⁴⁾~~Fiscal quarter ended December 28, 2019 includes impairment charges of $19 million, other costs related to acquisitions of $8 million and restructuring charges of $5 million.~~

⁽⁵⁾~~Fiscal quarter ended March 28, 2020 includes impairment charges of $488 million and other costs related to acquisitions of $8 million.~~

⁽⁶⁾~~Fiscal quarter ended June 30, 2018 includes impairment charges of $4 million, other costs related to acquisitions of $7 million and restructuring charges of $4 million.~~

⁽⁷⁾~~Fiscal quarter ended September 29, 2018 includes impairment charges of $7 million, other costs related to acquisitions of $16 million and restructuring charges of $2 million.~~

⁽⁸⁾~~Fiscal quarter ended December 29, 2018 includes impairment charges of $6 million, other costs related to acquisitions of $12 million and restructuring charges of $8 million.~~

⁽⁹⁾~~Fiscal quarter ended March 30, 2019 includes impairment charges of $4 million, other costs related to acquisitions of $44 million and restructuring charges of $31 million.~~

~~See Note 11 for additional information related to restructuring charges, as well as other costs related to acquisitions and Note 14 for additional information related to impairment charges.~~

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Table of Contents

~~22. Non-cash Investing Activities~~

Significant non-cash investing activities for Fiscal 2019 and Fiscal 2018 included non-cash allocations of the fair values of the net assets acquired in connection with the Company’s acquisitions of Versace and Jimmy Choo, respectively. In addition, non-cash investing activities for Fiscal 2019 included an investment of 2.4 million of the Company’s ordinary shares made by the Versace family at acquisition date, which was valued at $91 million. See Note 5 for additional information.

~~There were no other significant non-cash investing or financing activities during the fiscal periods presented.~~20. Subsequent Events

~~23. Subsequent Events~~

~~Amendment to Credit Facility~~

~~On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”),~~Release of Collateral Related to the 2018 Credit Facility ~~with, among others, JPMorgan Chase Bank, N.A., as administrative agent. Pursuant~~

On April 2, 2022, the Company’s senior long-term, unsecured debt was upgraded to investment grade by two of the ~~Second Amendment,~~three specified rating agencies for two consecutive full fiscal quarters, meeting the criteria for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility.

On April 3, 2022, the Company notified the Administrative Agent under its 2018 Credit Facility ~~will be secured by liens on~~that it had met the conditions for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility. The collateral, which consists of substantially all of the assets ~~of the Company~~ and ~~its U.S. subsidiaries that borrowers and guarantors, subject to~~ certain ~~exceptions, and substantially all of the~~ registered intellectual property of the Company and certain of its ~~subsidiaries. This requirement~~subsidiaries, was released effective April 3, 2022. See Note 11 for ~~collateral will fall away if~~additional details regarding the Company’s Credit Facility.

Net Investment Hedges

During the first quarter of Fiscal 2023, the Company ~~achieves an~~modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $1 billion to hedge its net investment ~~grade ratings requirement~~in Euro denominated subsidiaries and Japanese-Yen denominated subsidiaries. The modification of these hedges resulted in the Company receiving $59 million in cash during the first quarter of Fiscal 2023. These contracts have been designated as net investment hedges.

Senior Notes Credit Rating Upgrade

On April 21, 2022, Moody’s Investor Services upgraded the Company’s credit rating to Baa1 from Baa2 in relation to the Company’s senior unsecured notes. As a result, as of May 1, 2022 the Senior Notes now bear interest at a fixed rate equal to 4.25% per year, payable semi-annually. See Note 11 for ~~two consecutive full fiscal quarters. The Amendment adds~~additional details regarding the Company’s Senior Notes.

Share Repurchase Program

On June 1, 2022, the Company announced that its Board of Directors has terminated the Company’s existing $1.0 billion share repurchase program, with $500 million of availability remaining, and authorized a ~~restriction on~~new share repurchase program pursuant to which the ~~disposition of assets and a requirement~~Company may, from time to ~~prepay the term loans with certain net cash proceeds of non-ordinary course asset sales, subject to certain exceptions and a reinvestment option with respect to~~time, repurchase up to ~~$100 million~~$1.0 billion of ~~net cash proceeds in~~its outstanding ordinary shares within a period of two years from the ~~aggregate.~~

~~Pursuant to the Second Amendment, the financial covenant in the Company's 2018 Credit Facility requiring it to maintain a ratio~~effective date of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021. When this financial covenant is reinstated, the applicable ratio will be calculated net of the Company's unrestricted cash and cash equivalents to the extent in excess of $100 million and shall exclude up to $150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0. In addition, until March 31, 2021, the material adverse change representation required toprogram. Share repurchases may be made in ~~connection with revolving borrowings and the issuance~~open market or ~~amendment of letters of credit will be modified~~privately negotiated transactions, subject to disregard certain COVID-19 pandemic-related impacts to the business, results of operations or financial condition of the Company and its subsidiaries, taken as a whole. The Second Amendment also requires the Company, during the period from June 25, 2020 until it delivers its financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amountsmarket conditions, applicable legal requirements, trading restrictions under the ~~revolving facilities under the 2018 Credit Facility of not less than $300 million, increasing to $400 million on October 1, 2020~~Company’s insider trading policy and ~~$500 million on December 1, 2020.~~

other relevant factors. The 2018 Credit Facility and the Indenture governing the Company's senior notes contain certain restrictive covenants that impose operating and financial restrictions on the Company, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on its ability to incur additional indebtedness and guarantee indebtedness, pay dividendsprogram may be suspended or make other distributions or repurchase or redeem capital stock, make loans and investments, including acquisitions, sell assets, incur liens, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of its assets.

In addition, the Second Amendment adds a new $230 million revolving line of credit that matures on June 24, 2021 (the “364 Day Facility”). The terms of the 364 Day Facility are substantially similar to the terms of the existing revolving facility under the Credit Facility except that (i) no letters of credit or swingline loans are provided and (ii) for loans subject to Adjusted LIBOR, the applicable margin is 225 basis points per annum, for loans subject to the base rate the applicable margin is 125 basis points per annum and the commitment fee is 35 basis points per annum. In addition, while the 364 Day Facility is outstanding, (i) if the Company incursdiscontinued at any incremental indebtedness under the Credit Facility or certain permitted indebtedness in lieu of such incremental indebtedness, the 364 Day Facility will be reduced on a dollar for dollar basis and the Company will be required to make corresponding prepayments and (ii) the Company will be required to prepay amounts outstanding under the 364 Day Facility on a weekly basis to the extent that cash and cash equivalents of the Company and its subsidiaries exceed $200 million.time.

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~~Table of Contents~~

The Second Amendment also permits certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the Credit Facility to be guaranteed under the Credit Facility guarantees and certain supply chain financings with, and up to $50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by, a lender or an affiliate of a lender to be guaranteed and secured under the Credit Facility guarantees and collateral documents.

~~Capri Retail Store Optimization Program~~

~~In addition, the Company recently approved a plan to close approximately 170 of its retail stores over the next~~ ~~two~~ fiscal years in order to improve the profitability of its retail store fleet. Over this time period, the Company expects to incur approximately $75 million of costs associated with these store closures. See Item 9B - Other Information for additional information.

~~Revolving Credit Facilities~~

~~During Fiscal 2021, the Company made net payments of approximately $328 million to lower the outstanding balance of its Revolving Credit Facilities.~~

~~113~~


Fiscal Years Ending	Fiscal 2021		Fiscal 2022-2023		Fiscal 2024-2025		Fiscal 2026 and thereafter		Total
Operating leases	$	489	$	801	$	551	$	566	$	2,407
Inventory Purchase Obligations	570		—		—		—		570
Other commitments	58		20		3		—		81
Short-term debt	167		—		—		—		167
Long-term debt	—		192		1,820		—		2,012
Total	$	1,284	$	1,013	$	2,374	$	566	$	5,237


	March 30, 2019 As Reported under ASC 840		ASC 842 Adjustments			March 31, 2019 As Reported Under ASC 842
Assets
Prepaid expenses and other current assets	$	221	$	(23)	⁽¹⁾	$	198
Operating lease right-of-use assets	—		1,876		⁽²⁾	1,876
Intangible assets, net	2,293		(40)		⁽³⁾	2,253
Deferred tax assets	112		38		⁽⁴⁾	150
Liabilities
Current portion of operating lease liabilities	—		386		⁽⁵⁾	386
Accrued expenses and other current liabilities	374		(72)		⁽⁶⁾	302
Long-term portion of operating lease liabilities	—		1,828		⁽⁵⁾	1,828
Deferred Rent	132		(132)		⁽⁷⁾	—
Deferred tax liabilities	438		(7)		⁽⁴⁾	431
Shareholders’ Equity
Retained earnings	4,707		(152)		⁽⁴⁾	4,555


	Fiscal Years Ended
	March 30, 2019		March 31, 2018
Pro-forma total revenue	$	5,983	$	5,473
Pro-forma net income	579		526
Pro-forma net income per ordinary share attributable to Capri:
Basic	$	3.82	$	3.40
Diluted	$	3.78	$	3.34


	Fiscal Years Ended
	March 31, 2018		April 1, 2017
Pro-forma total revenue	$	5,012	$	4,985
Pro-forma net income	623		554
Pro-forma net income per ordinary share attributable to Capri:
Basic	$	4.09	$	3.34
Diluted	$	4.02	$	3.29


	March 28, 2020		March 30, 2019
Trade receivables ⁽¹⁾	$	432	$	459
Receivables due from licensees	14		23
	446		482
Less: allowances	(138)		(99)
	$	308	$	383


	Versace		Jimmy Choo		Michael Kors ⁽¹⁾		Total
Balance at March 31, 2018	$	—	$	728	$	120	$	848
Acquisition of Versace ⁽¹⁾	878		—		—		878
Foreign currency translation	(17)		(50)		—		(67)
Balance at March 30, 2019	861		678		120		1,659
Acquisition	—		11		—		11
Measurement period adjustment ⁽¹⁾	26		—		—		26
Impairment charges ⁽²⁾	—		(171)		—		(171)
Foreign currency translation	(6)		(31)		—		(37)
Balance at March 28, 2020	$	881	$	487	$	120	$	1,488


	March 28, 2020		March 30, 2019
Term Loan⁽¹⁾	$	1,015	$	1,580
4.000% Senior Notes due 2024	450		450
Revolving Credit Facilities	720		550
Other	3		1
Total debt	2,188		2,581
Less: Unamortized debt issuance costs	8		13
Less: Unamortized discount on long-term debt	1		2
Total carrying value of debt	2,179		2,566
Less: Short-term debt	167		630
Total long-term debt	$	2,012	$	1,936


	Fair value at March 28, 2020, using:										Fair value at March 30, 2019, using:
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative assets:
Forward foreign currency exchange contracts	$	—	$	1	$	—	$	—	$	5	$	—
Net investment hedges	—		3		—		—		37		—

Total derivative assets	$	—	$	4	$	—	$	—	$	42	$	—

Derivative liabilities:

Other undesignated derivative contracts	$	—	$	—	$	—	$	—	$	5	$	—


	Carrying Value Prior to Impairment		Fair Value		Impairment Charge
Fiscal 2020:
Operating Lease Right-of-Use Assets	$	717	$	437	$	280
Trade Name	547		367		180
Goodwill	474		303		171
Property and Equipment	105		28		77
Total	$	1,843	$	1,135	$	708

Fiscal 2019:
Property and Equipment	$	26	$	7	$	19
Lease Rights	3		1		2

Total	$	29	$	8	$	21

Fiscal 2018:
Property and Equipment	$	31	$	3	$	28
Lease Rights	5		1		4
Customer relationships	1		—		1
Total	$	37	$	4	$	33


	Fiscal Quarter Ended ⁽¹⁾
	June 29, 2019			September 28, 2019			December 28, 2019			March 28, 2020
Fiscal 2020
Total revenue	$	1,346		$	1,442		$	1,571		$	1,192
Gross profit	$	834		$	874		$	932		$	631
Income (loss) from operations	$	64	⁽²⁾	$	75	⁽³⁾	$	205	⁽⁴⁾	$	(536)	⁽⁵⁾
Net income (loss)	$	45		$	73		$	209		$	(552)
Net income (loss) attributable to Capri	$	45		$	73		$	210		$	(551)
Weighted average ordinary shares outstanding:
Basic	151,049,572			151,602,502			150,826,196			149,380,121
Diluted	152,334,153			152,576,283			152,154,372			149,380,121

	Fiscal Quarter Ended ⁽¹⁾
	June 30, 2018			September 29, 2018			December 29, 2018			March 30, 2019
Fiscal 2019
Total revenue	$	1,203		$	1,253		$	1,438		$	1,344
Gross profit	$	751		$	763		$	873		$	793
Income from operations	$	215	⁽⁶⁾	$	190	⁽⁷⁾	$	290	⁽⁸⁾	$	40	⁽⁹⁾
Net income	$	186		$	137		$	200		$	19
Net income attributable to Capri	$	186		$	138		$	200		$	19
Weighted average ordinary shares outstanding:
Basic	149,502,101			149,575,112			149,183,049			150,801,608
Diluted	152,399,655			151,705,685			150,268,424			152,083,632