Tapestry

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 29, 2024
OR
☐
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-16153
Tapestry, Inc.
(Exact name of registrant as specified in its charter)
Maryland
 
52-2242751
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
10 Hudson Yards, New York, NY 10001
(Address of principal executive offices); (Zip Code)
(212) 946-8400
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on which
Registered
Common Stock, par value $.01 per share
TPR
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 and posted 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 and post 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 growth company" in Rule 12b-2 of the Exchange Act.
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. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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 Tapestry, Inc. common stock held by non-affiliates as of December 29, 2023 (the last business day of the most recently completed second
fiscal quarter) was approximately $8.42 billion. For purposes of determining this amount only, the registrant has excluded shares of common stock held by directors and
executive officers. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to cause the direction of
the management or policies of the registrant, or that such person is controlled by or under common control with the registrant.
On August 2, 2024, the Registrant had 230,220,721 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Documents
 
Form 10-K Reference
Proxy Statement for the 2024 Annual Meeting of Stockholders
 
Part III, Items 10 – 14

TAPESTRY, INC.
TABLE OF CONTENTS
Page Number
PART I
Item 1.
Business
2
Item 1A.
Risk Factors
14
Item 1B.
Unresolved Staff Comments
28
Item 1C.
Cybersecurity
28
Item 2.
Properties
29
Item 3.
Legal Proceedings
30
Item 4.
Mine Safety Disclosures
30
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
31
Item 6.
Reserved
32
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
33
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
49
Item 8.
Financial Statements and Supplementary Data
51
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
51
Item 9A.
Controls and Procedures
51
Item 9B.
Other Information
51
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
51
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
52
Item 11.
Executive Compensation
52
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
52
Item 13.
Certain Relationships and Related Transactions, and Director Independence
52
Item 14.
Principal Accounting Fees and Services
52
PART IV
Item 15.
Exhibits and Financial Statement Schedules
53
Item 16.
Form 10-K Summary
57
Signatures
58
i

SPECIAL NOTE ON FORWARD-LOOKING INFORMATION
This document, and the documents incorporated by reference in this document, our press releases and oral statements made from time to time by us or on
our behalf, may contain certain "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are based on management's current expectations, that involve
risks and uncertainties that could cause our actual results to differ materially from our current expectations. In this context, forward-looking statements often
address expected future business and financial performance and financial condition, and often contain words such as "may," "can," "continue," "project,"
"assumption," "should," "expect," "confidence," "goals," "trends," "anticipate," "intend," "estimate," "on track," "future," "well positioned to," "plan,"
"potential," "position," "believe," "seek," "see," "will," "would," "target," similar expressions and variations or negatives of these words. Forward-looking
statements by their nature address matters that are, to different degrees, uncertain. Such statements involve risks, uncertainties and assumptions. If such risks
or uncertainties materialize or such assumptions prove incorrect, the results of Tapestry, Inc. and its consolidated subsidiaries could differ materially from
those expressed or implied by such forward-looking statements and assumptions. All statements, other than statements of historical fact, are statements that
could be deemed forward-looking statements. Tapestry, Inc. assumes no obligation to revise or update any such forward-looking statements for any reason,
except as required by law.
Tapestry, Inc.’s actual results could differ materially from the results contemplated by these forward-looking statements and are subject to a number of
risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from current expectations due to a number of factors,
including those discussed in the sections of this Form 10-K filing entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.” These factors include, but are not limited to: (i) the impact of economic conditions, recession and inflationary measures; (ii) our
exposure to international risks, including currency fluctuations and changes in economic or political conditions in the markets where we sell or source our
products; (iii) the impact of the coronavirus ("Covid-19") pandemic; (iv) our ability to retain the value of our brands and to respond to changing fashion and
retail trends in a timely manner, including our ability to execute on our e-commerce and digital strategies; (v) our ability to successfully implement the
initiatives under our 2025 growth strategy; (vi) the effect of existing and new competition in the marketplace; (vii) satisfaction of the conditions precedent to
consummation of the proposed acquisition of Capri Holdings Limited ("Capri"), including the ability to secure regulatory approval in the United States on the
terms expected, at all or in a timely manner; (viii) our ability to achieve intended benefits, cost savings and synergies from acquisitions, including our
proposed acquisition of Capri; (ix) the outcome of the antitrust lawsuit by the Federal Trade Commission against us and Capri related to the consummation of
the proposed acquisition; (x) our ability to control costs; (xi) the effect of seasonal and quarterly fluctuations on our sales or operating results; (xii) the risk of
cyber security threats and privacy or data security breaches; (xiii) our ability to satisfy our outstanding debt obligations or incur additional indebtedness; (xiv)
the risks associated with climate change and other corporate responsibility issues; (xv) the impact of tax and other legislation; (xvi) the risks associated with
potential changes to international trade agreements and the imposition of additional duties on importing our products; (xvii) our ability to protect against
infringement of our trademarks and other proprietary rights; and (xviii) the impact of pending and potential future legal proceedings. These factors are not
necessarily all of the factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements.
1

In this Form 10-K, references to “we,” “our,” “us,” "Tapestry" and the “Company” refer to Tapestry, Inc., including consolidated subsidiaries as of June 29,
2024 ("fiscal 2024"). References to "Coach," "Kate Spade," "kate spade new york" or "Stuart Weitzman" refer only to the referenced brand. Fiscal 2024 was a
52-week period, July 1, 2023 ("fiscal 2023") was a 52-week period, and July 2, 2022 ("fiscal 2022") was a 52-week period.
PART I
ITEM 1. BUSINESS
Tapestry, Inc. (the "Company") is a house of iconic accessories and lifestyle brands. Our global house of brands unites the magic of Coach, kate spade
new york and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by
distinctive products and differentiated customer experiences across business channels and geographies. We use our collective strengths to move our
customers and empower our communities, to make the fashion industry more sustainable and to build a company that’s equitable, inclusive and diverse.
Individually, our brands are iconic. Together, we can stretch what’s possible.
Founded in 1941, Coach, Inc., the predecessor to Tapestry, Inc., was incorporated in the state of Maryland in 2000. During fiscal 2015, the Company
acquired Stuart Weitzman Holdings LLC, a luxury women's footwear company. During fiscal 2018, the Company acquired Kate Spade & Company, a lifestyle
accessories and ready-to-wear company. Later in fiscal 2018, the Company changed its name to Tapestry, Inc.
OUR BRANDS
The Company has three reportable segments:
•
Coach - Coach is a global fashion house of accessories and lifestyle collections, founded in New York City in 1941. Inspired by the vision of
Expressive Luxury and the inclusive and courageous spirit of its hometown, the brand makes beautiful things, crafted to last – for you to be yourself
in. Coach has built a legacy of craftsmanship and a community that champions the courage to be real. Coach includes global sales of primarily Coach
brand products to customers through our direct-to-consumer ("DTC"), wholesale and licensing businesses. This segment represented 76.4% of total
net sales in fiscal 2024.
•
Kate Spade - Since its launch in 1993 with a collection of six essential handbags, kate spade new york has always been colorful, bold and optimistic.
Today, it is a global lifestyle brand that designs extraordinary things for the everyday, delivering seasonal collections of handbags, ready-to-wear,
jewelry, footwear, gifts, home décor and more. Known for its rich heritage and unique brand DNA, kate spade new york offers a distinctive point of
view and celebrates communities of women around the globe who live their perfectly imperfect lifestyles. Kate Spade includes global sales of
primarily kate spade new york brand products to customers through our DTC, wholesale and licensing businesses. This segment represented 20.0%
of total net sales in fiscal 2024.
•
Stuart Weitzman - Since 1986, New York City based global luxury footwear brand Stuart Weitzman has combined its signature artisanal
craftsmanship and precise engineering to empower women to stand strong. Having perfected the art of shoemaking for over 35 years, the brand
continues to expand its assortment to feature handbags and men's footwear, all the while staying true to its ethos of inspiring strength and confidence
with every step. Stuart Weitzman includes global sales of primarily Stuart Weitzman brand products to customers through our DTC and wholesale
businesses. This segment represented 3.6% of total net sales in fiscal 2024.
In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands; therefore, they are not
allocated to its segments. Such costs primarily include certain overhead expenses related to corporate functions as well as certain administration, corporate
occupancy, information technology, and depreciation costs.
Refer to Note 17, "Segment Information," for further information about the Company's segments.
OUR STRATEGY
In the first quarter of fiscal 2023, the Company introduced the 2025 growth strategy, futurespeed, designed to amplify and extend the competitive
advantages of its brands, with a focus on four strategic priorities:
•
Building Lasting Customer Relationships: The Company's brands aim to leverage Tapestry’s transformed business model to drive customer lifetime
value through a combination of increased customer acquisition, retention and reactivation.
•
Fueling Fashion Innovation & Product Excellence: The Company aims to drive sustained growth in core handbags and small leathergoods, while
accelerating gains in footwear and lifestyle products.
2

•
Delivering Compelling Omni-Channel Experiences: The Company aims to extend its omni-channel leadership to meet the customer wherever they
shop, delivering growth online and in stores.
•
Powering Global Growth: The Company aims to support balanced growth across regions, prioritizing North America and China, its largest markets,
while capitalizing on opportunities in under-penetrated geographies such as Southeast Asia and Europe.
DIRECT TO CONSUMER BUSINESS
Our DTC business consists of channels that provide us with immediate, controlled access to consumers. This includes retail and outlet stores, brand e-
commerce sites as well as concession shop-in-shops. Direct-to-consumer revenues were approximately 87% of total net sales in fiscal 2024.
•
Stores - Our brands operate freestanding retail stores, outlet stores, as well as concession shop-in-shop locations. These stores are located in regional
shopping centers, metropolitan areas throughout the world and established outlet centers.
Variance
2024 vs 2023
2023 vs 2022
Store Count
2024
2023
2022
Amount
%
Amount
%
Coach
North America
324 
330 
343 
(6)
(1.8)%
(13)
(3.8)%
International
606 
609 
602 
(3)
(0.5)%
7 
1.2 %
Total Coach
930 
939 
945 
(9)
(1.0)%
(6)
(0.6)%
Kate Spade
North America
197 
205 
207 
(8)
(3.9)%
(2)
(1.0)%
International
181 
192 
191 
(11)
(5.7)%
1 
0.5 %
Total Kate Spade
378 
397 
398 
(19)
(4.8)%
(1)
(0.3)%
Stuart Weitzman
North America
34 
36 
39 
(2)
(5.6)%
(3)
(7.7)%
International
60 
57 
61 
3 
5.3 %
(4)
(6.6)%
Total Stuart Weitzman
94 
93 
100 
1 
1.1 %
(7)
(7.0)%
Tapestry
North America
555 
571 
589 
(16)
(2.8)%
(18)
(3.1)%
International
847 
858 
854 
(11)
(1.3)%
4 
0.5 %
Total Tapestry
1,402 
1,429 
1,443 
(27)
(1.9)%
(14)
(1.0)%
3

Variance
2024 vs 2023
2023 vs 2022
Avg. Square Footage
2024
2023
2022
Amount
%
Amount
%
Coach
North America
4,905 
4,904 
4,839 
1 
— %
65 
1.3 %
International
2,342 
2,294 
2,257 
48 
2.1 %
37 
1.6 %
Total Coach
3,235 
3,211 
3,194 
24 
0.7 %
17 
0.5 %
Kate Spade
North America
2,949 
2,876 
2,863 
73 
2.5 %
13 
0.5 %
International
1,439 
1,446 
1,441 
(7)
(0.5)%
5 
0.3 %
Total Kate Spade
2,226 
2,185 
2,181 
41 
1.9 %
4 
0.2 %
Stuart Weitzman
North America
1,938 
1,905 
1,919 
33 
1.7 %
(14)
(0.7)%
International
1,338 
1,371 
1,378 
(33)
(2.4)%
(7)
(0.5)%
Total Stuart Weitzman
1,555 
1,578 
1,589 
(23)
(1.5)%
(11)
(0.7)%
Tapestry
North America
4,029 
3,987 
3,951 
42 
1.1 %
36 
0.9 %
International
2,078 
2,043 
2,012 
35 
1.7 %
31 
1.5 %
Total Tapestry
2,850 
2,820 
2,804 
30 
1.1 %
16 
0.6 %
•
Digital - We view our digital platform as an instrument to deliver our products to customers directly with the benefit of added accessibility as
consumers can purchase our products wherever they choose. We have e-commerce sites in our major markets in the U.S., Canada, Japan, Greater
China, several throughout Europe, Australia, and several throughout the rest of Asia. Additionally, we continue to leverage various third-party digital
platforms to sell our products to customers.
4

WHOLESALE BUSINESS
Our wholesale business primarily includes major department stores, specialty stores, and third-party digital partners. We work closely with our wholesale
partners to ensure a clear and consistent product presentation. We enhance our presentation with proprietary brand fixtures within the department store
environment in select locations. We custom tailor our assortments through wholesale product planning and allocation processes to match the attributes to the
consumers of our wholesale partners in each local market. We continue to closely monitor inventories held by our wholesale customers in an effort to optimize
inventory levels across wholesale doors. Wholesale represented approximately 12% of our total net sales for fiscal 2024. As of June 29, 2024, there were no
customers who individually accounted for more than 10% of each segment’s total net sales.
LICENSING BUSINESS
Our brands take an active role in the design process and control the marketing and distribution of products in our worldwide licensing relationships. Our
key licensing relationships and their fiscal year expirations as of June 29, 2024 are as follows:
Brand
Category
 
Partner
 
Fiscal Year Expiration
Coach
Watches
Movado
 
2025
Coach
Eyewear
Luxottica
2026
Coach
Fragrance
Interparfums
2026
Kate Spade
Tableware and Housewares
Lenox
2025
Kate Spade
Sleepwear
Komar
2025
Kate Spade
Stationery and Gift
Lifeguard Press
2026
Kate Spade
Tech Accessories
Case-Mate
2027
Kate Spade
Fragrance
Interparfums
2030
Kate Spade
Eyewear
Safilo
2031
Products made under license are, in most cases, sold through stores and wholesale business channels and, with the Company's approval, the licensees
have the right to distribute products selectively through other venues, which provide additional, yet controlled, exposure of our brands. Our licensing partners
generally pay royalties on their net sales of our branded products. Such royalties currently comprise approximately 1% of Tapestry's total net sales. The
licensing agreements generally give our brands the right to terminate the license if specified sales targets are not achieved.
5

PRODUCTS
The following table shows Net sales for each of our product categories by segment:
 Fiscal Year Ended
June 29, 2024
July 1, 2023
July 2, 2022
Amount
% of total
net sales
Amount
% of total
net sales
Amount
% of total
net sales
(millions)
Coach
Women's Handbags
$
2,495.7 
37.5 % $
2,450.7 
36.8 % $
2,574.8 
38.5 %
Women's Accessories
1,079.6 
16.2 
1,024.8 
15.4 
942.5 
14.1 
Men's
983.9 
14.7 
947.1 
14.2 
904.8 
13.5 
Other Products
536.1 
8.0 
537.8 
8.1 
499.2 
7.5 
Total Coach
$
5,095.3 
76.4 % $
4,960.4 
74.5 % $
4,921.3 
73.6 %
Kate Spade
Women's Handbags
$
721.0 
10.9 % $
779.6 
11.7 % $
819.5 
12.2 %
Women's Accessories
316.8 
4.7 
306.9 
4.6 
307.0 
4.6 
Other Products
296.6 
4.4 
332.4 
5.0 
319.0 
4.8 
Total Kate Spade
$
1,334.4 
20.0 % $
1,418.9 
21.3 % $
1,445.5 
21.6 %
Stuart Weitzman
$
241.5 
3.6 % $
281.6 
4.2 % $
317.7 
4.8 %
Total Net sales
$
6,671.2 
100.0 % $
6,660.9 
100.0 % $
6,684.5 
100.0 %
The significant majority of sales for Stuart Weitzman is attributable to women's footwear.
•
Women’s Handbags — Women’s handbag collections feature classically inspired as well as fashion designs. These collections are designed to meet
the fashion and functional requirements of our broad and diverse consumer base.
•
Women’s Accessories  —  Women’s accessories include small leather goods which includes mini and micro handbags, money pieces, wristlets,
pouches and cosmetic cases. Also included in this category are novelty accessories (including address books, time management accessories, travel
accessories, sketchbooks and portfolios), belts, key rings and charms.
•
Men’s — Men’s includes bag collections (including business cases, computer bags, messenger-style bags, backpacks and totes), small leather goods
(including wallets, card cases, travel organizers and belts), footwear, watches, fragrances, sunglasses, novelty accessories and ready-to-wear items.
•
Other Products — These products primarily include women's footwear, eyewear (such as sunglasses), jewelry (including bracelets, necklaces, rings
and earrings), women's fragrances, watches, certain women's seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold
weather accessories, such as gloves, scarves and hats. In addition, Kate Spade brand housewares and home accessories, such as fashion bedding and
tableware, and stationery and gifts are included in this category.
DESIGN AND MERCHANDISING
Our creative leaders are responsible for conceptualizing and implementing the design direction for our brands across the consumer touchpoints of product,
stores and marketing. At Tapestry, each brand has a dedicated design and merchandising team; this ensures that Coach, Kate Spade and Stuart Weitzman speak
to their customers with a voice and positioning unique to their brand. Designers have access to the brands' extensive archives of product designs, which are a
valuable resource for product concepts. Our designers collaborate with strong merchandising teams that analyze sales, market trends and consumer
preferences to identify market opportunities that help guide each season's design process and create a globally relevant product assortment. Leveraging our
strategic investments that we have made in data and analytics tools, merchandisers are able to gain a deeper understanding of customer behavior which
empowers our teams to respond to changes in consumer preferences and demand as well as scale opportunities across brands with greater speed and efficiency.
Our merchandising teams are committed to managing the product life cycle to maximize sales and profitability across all business channels. The product
category teams, each comprised of design, merchandising, product development and sourcing specialists, help each brand execute design concepts that are
consistent with the brand's strategic direction.
(1)
(1)
6

Our design and merchandising teams also work in close collaboration with all of our licensing partners to ensure that the licensed products are
conceptualized and designed to address the intended market opportunity and convey the distinctive perspective and lifestyle associated with our brands.
MARKETING
We use a 360-degree approach to marketing for each of our brands, synchronizing our efforts across all business channels to ensure consistency at every
touchpoint. Our global marketing strategy is to deliver a consistent, relevant and multi-layered message every time the consumer comes in contact with our
brands through our communications and visual merchandising. Each brand's distinctive positioning is communicated by our creative marketing, visual
merchandising and public relations teams, as well as outside creative agencies. We also have a sophisticated consumer and market research capability, which
helps us assess consumer attitudes and trends.
We engage in several consumer communication initiatives globally, including direct marketing activities at a national, regional and local level. Total
expenses attributable to the Company's marketing-related activities in fiscal 2024 were $616.8  million, representing over 9% of net sales, compared to
$570.7 million in fiscal 2023, representing less than 9% of net sales.
Our wide range of marketing activities utilize a variety of media, including digital, social, print and out-of-home. Our respective brand websites serve as
effective communication vehicles by providing an immersive brand experience, showcasing the fullest expression across all product categories.
As part of our direct marketing strategy, we use databases of consumers to generate personalized communications in direct channels such as email and
text messages to drive engagement and build awareness. Email contacts are an important part of our communication and are sent to selected consumers to
stimulate consumer purchases and build brand awareness. Visitors to our e-commerce sites provide an opportunity to increase the size of these consumer
databases, in addition to serving as a point of transactions globally, except where restricted.
The Company has several regional informational websites for locations where we have not established an e-commerce presence. The Company utilizes
and continues to explore digital technologies such as social media websites as a cost-effective consumer communication opportunity to increase on-line and
store sales, acquire new customers and build brand awareness.
MANUFACTURING
Tapestry carefully balances its commitments to a limited number of “better brand” partners that have demonstrated integrity, quality and reliable delivery.
The Company continues to evaluate new manufacturing sources and geographies to deliver high quality products at competitive costs and to mitigate the
impact of manufacturing in inflationary markets.
Our raw material suppliers, independent manufacturers and licensing partners must achieve and maintain high quality standards, which are an integral part
of our brands' identity. Before directly partnering with a new manufacturing vendor for finished goods, the Company evaluates each facility by conducting a
quality, business practice standards and social compliance review. We expect finished good manufacturers to undergo a social compliance audit before being
approved as a Tapestry supplier. Manufacturers working with our licensed partners are expected to have had an acceptable social compliance audit conducted
within the prior six months of their onboarding date. Suppliers that fail to meet our standards are not approved until an acceptable report is provided. We also
conduct periodic evaluations of existing, previously approved finished good suppliers. We believe that our manufacturing partners are in material compliance
with the Company’s integrity standards.
These independent manufacturers each or in aggregate support a broad mix of product types, materials and a seasonal influx of new, fashion-oriented
styles, which allows us to meet shifts in marketplace demand and changes in consumer preferences.
We have longstanding relationships with purveyors of fine leathers and hardware. Although our products are manufactured by independent manufacturers,
we maintain a strong level of oversight in the selection of key raw materials and compliance with quality control standards is monitored through on-site
quality inspections at independent manufacturing facilities.
We maintain strong oversight of the supply chain process for each of our brands from design through manufacturing. We are able to do this by
maintaining sourcing management offices in Vietnam, mainland China, the Philippines, Cambodia and Spain that work closely with our independent
manufacturers. This broad-based, global manufacturing strategy is designed to optimize the mix of cost, lead times and construction capabilities.
During fiscal 2024, manufacturers of Coach products were primarily located in Vietnam, Cambodia, the Philippines and India and no individual vendor
provided 10% or more of the brand's total inventory purchases. During fiscal 2024, Kate Spade products were manufactured primarily in Vietnam, Cambodia,
mainland China, and the Philippines and no individual vendor provided 10% or more of the brand's total inventory purchases. Stuart Weitzman products were
primarily manufactured in
7

Spain. During fiscal 2024, Stuart Weitzman had two vendors, both located in Spain, who individually provided over 10% of the brand's total units
(approximately 23% across both, in the aggregate).
FULFILLMENT
The Company’s distribution network is designed to support the movement of each brand's products from our manufacturers to fulfillment centers around
the world. These fulfillment centers are either directly operated by the Company or by independent third parties, some of which support multiple brands. Our
facilities use bar code scanning warehouse management systems, where our fulfillment center employees use handheld scanners to read product bar codes.
This allows for accurate storage and order processing and allows us to provide excellent service to our customers. These facilities are also integrated into our
Enterprise Resource Planning system, ensuring accurate inventory reporting. Our products are primarily shipped to retail stores, wholesale customers and e-
commerce customers.
In North America, we maintain fulfillment centers in Florida, Nevada and Ohio, operated by Tapestry. The Company also has third-party facilities in
Canada and Mexico. Globally, we utilize regional fulfillment centers in mainland China, the Netherlands, the United Kingdom, Singapore and Spain, owned
and operated by third parties, that support multiple countries. We also utilize local fulfillment centers, through third-parties in Japan, parts of Greater China,
South Korea, Malaysia, Spain, the U.K., Canada and Australia.
INFORMATION SYSTEMS
The Company’s information systems are integral in supporting the Company’s long-term strategies. Our information technology platform is a key
capability used to support digital growth and drive consumer centricity and data-driven decision making. We are continually enhancing our digital technology
platforms to elevate our e-commerce capabilities, direct-to-consumer functionalities, and overall omni-channel experience, by utilizing cloud-based
technology infrastructure. For example, we will continue to enhance certain of our machine learning models to improve our customer capture and
segmentation capabilities.
The Company utilizes a cloud based digital platform which connects our customer shopping sites, Order Management Systems, Point of Sale systems, and
product management systems into one platform with a shared codebase. This platform allows us to be a more dynamic and responsive company providing
best-in-class service to our customers from all brands across North America, Europe and Japan.
Refer to Part I, Item 1C, "Cybersecurity" for further information on our cybersecurity risk management, strategy and governance.
INTELLECTUAL PROPERTY
Tapestry owns COACH, KATE SPADE and STUART WEITZMAN, as well as all of the material trademark, design and patent-rights related to the
production, marketing, distribution and sale of our products in the United States and other countries in which our products are principally sold. In addition, the
Company licenses trademarks and copyrights used in connection with the production, marketing and distribution of certain categories of goods and limited
edition collaborations. Tapestry also owns and maintains registrations in countries around the world for trademarks in relevant classes of products and
services. In addition, Tapestry owns trade dress, copyrights, design patents and utility patents for its brands' product designs. Tapestry aggressively polices its
intellectual property and pursues infringers both domestically and internationally. The Company pursues counterfeiters through leads generated internally, as
well as through its network of investigators, law enforcement and customs officials, the respective online reporting form for each brand, the Tapestry hotline
and business partners around the world.
SEASONALITY
The Company's results are typically affected by seasonal trends. During the first fiscal quarter, we typically build inventory for the winter and holiday
season. In the second fiscal quarter, working capital requirements are reduced substantially as we generate higher net sales and operating income, especially
during the holiday season.
Fluctuations in net sales, operating income and operating cash flows of the Company in any fiscal quarter may be affected by the timing of wholesale
shipments and other events affecting retail sales, including weather and macroeconomic events, such as pandemic diseases.
8

COVID-19 PANDEMIC
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions
around the world, resulting in restrictions and shutdowns implemented by national, state and local authorities. Such disruptions persisted into the beginning of
fiscal 2023, and the Company's results in Greater China (mainland China, Hong Kong SAR, Macao SAR and Taiwan) were adversely impacted as a result of
the Covid-19 pandemic. Towards the end of the first half of fiscal 2023, certain government restrictions were lifted in the region and business trends improved.
During fiscal 2024, the Covid-19 pandemic did not materially impact our business or operating results. The Company continues to monitor the latest
developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook.
GOVERNMENT REGULATION
Most of the Company's imported products are subject to duties, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products
that we may import into the U.S. and other countries or may impact the cost of such products. The Company is not materially restricted by quotas or other
government restrictions in the operation of its business; however, customs duties do represent a component of total product cost. To maximize opportunities,
the Company operates complex supply chains through foreign trade zones, bonded logistic parks and other strategic initiatives such as free trade agreements.
Additionally, the Company operates a direct import business in many countries worldwide. As a result, the Company is subject to stringent government
regulations and restrictions, adding significant complexity with respect to its cross-border activity either by the various customs and border protection agencies
or by other government agencies which control the quality, safety and sustainability of the Company’s products. The Company maintains an internal global
trade, customs and product compliance organization to help manage its import/export and regulatory affairs activity.
COMPETITION
The Company faces intense competition from many other brands in the product lines and markets that we participate. 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 others. Over the last
decade, these brands have grown and are expected to continue to grow, encouraging the entry of new competitors as well as increasing the competition from
existing competitors. This increased competition drives interest in these brand loyal categories. We believe, however, that we have significant competitive
advantages because of the recognition and the acceptance of our brands by consumers and the power of our information technology platform.
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CORPORATE RESPONSIBILITY
As a people-centered and purpose led Company, Tapestry believes that a better-made future is one that is both beautiful and responsible. Our
Environmental, Social and Corporate Governance (“ESG”) strategy, the Fabric of Change, aims to unite teams across the Company’s business to work to meet
our Corporate Responsibility Goals ("ESG Goals") and a shared objective: to create a company of the future that balances true fashion authority with
meaningful, positive change. The Fabric of Change focuses on four pillars: Power of Our People, Sustain the Planet, Uplift Our Communities and Create
Products with Care.
•
Power of Our People:
◦
We aim to foster a culture of purpose and fulfillment at Tapestry by embedding Equity, Inclusion and Diversity (“EI&D") throughout our
organization and attracting and retaining talent with a compelling and engaging employee experience.
◦
We have set goals focused on building diversity in our leadership team, reducing differences in our employee survey results based on
gender and ethnicity, focusing on progression and establishing core wellness standards to enable our employees to manage their work and
personal lives.
◦
We tie 10% of leadership annual incentive plan compensation to EI&D goals on a global basis level.
•
Sustain the Planet:
◦
We aim to sustain and restore our planet through continuous innovation in solutions that improve biodiversity and reduce our impact on
climate change with a focus on renewable energy, increased use of environmentally preferred materials and production methods and circular
business models that design out waste and pollution, keep products in use and restore natural systems.
◦
We have set goals focused on utilizing 100% renewable energy in our own operations globally, reducing waste in our corporate and
fulfillment centers and minimizing water use across our company and supply chain. We also have greenhouse gas (“GHG”) emissions
reduction targets for Scope 1, 2, 3 and Scope 3 Forest, Land and Agriculture that have been validated by Science Based Targets initiative.
•
Uplift Our Communities:
◦
We aim to empower the communities where our employees live and work, and provide the resources and capacity needed to support supply
chain partners in the regions where we operate.
◦
We have set goals focused on volunteer service hours completed by our employees around the world, financial and product donations to
nonprofit organizations globally, and ensuring people working in the factories crafting our products will have access to empowerment
programs during the workday.
•
Create Products with Care:
◦
We aim to increase the use of innovative materials and focus on production methods that design out waste and pollution, keep products in
use and restore natural systems.
◦
We have set goals focused on tracing and mapping our raw materials, increasing the recycled content in our consumer packaging and targets
to increase the uptake of sourcing environmentally preferred materials.
The Company’s ESG and corporate responsibility strategy, including oversight, management and identification of risks, is ultimately governed by the
Board of Directors (the "Board") and overseen by an ESG Steering Committee, which is comprised of members of our executive leadership team, and driven
by an ESG Task Force, comprised of senior leaders and cross-functional members from major business functions. The Board approves long-term sustainability
goals, strategic moves or major plans of action and receives updates at least annually. Tapestry's Governance and Nominations Committee of the Board
receives quarterly updates on sustainability strategy, including climate-related topics, progress towards the ESG goals and other ESG related initiatives.
Additional information on the Fabric of Change and ESG Goals can be found at www.tapestry.com/responsibility. The content on this website and the
content in our corporate responsibility 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.
HUMAN CAPITAL
At Tapestry, being true to yourself is core to who we are. When each of us brings our individuality to our collective ambition, our creativity is unleashed.
This global house of brands was built by unconventional entrepreneurs and unexpected solutions, so when we say we believe in dreams, we mean we believe
in making them happen.
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Where differences intersect, new thinking emerges. We cultivate a place for people who are both warm and rigorous, work that is both challenging and
fun and a culture led by both head and heart. Most of all, we bring together the unique spirits of our people and our brands and give them a place to move their
work and our industry forward. We believe that difference sparks brilliance, so we welcome people and ideas from everywhere to join us in stretching what’s
possible.
Governance and Oversight
Our Board and its committees provide governance and oversight of the Company's strategy, including over issues of human capital management. The
Board has designated the Human Resources Committee of the Board (the “HR Committee”) as the primary committee responsible for the Company’s human
capital strategy, overseeing executive compensation programs, performance and talent development, succession planning, engagement and regular review of
employee benefits and well-being strategies. Together with the Board, the HR Committee also provides oversight of the Company’s EI&D strategies. The full
Board and the HR Committee receive quarterly updates on the Company’s talent development strategies and other applicable areas of human capital
management.
Unlocking the power of our people is a key strategic focus area for the Company, supported by significant engagement from the Company’s senior
leadership on talent development and human capital management, as reflected in the key programs and focus areas described below.
Employees
As of June 29, 2024, the Company employed approximately 18,600 employees globally. Of these employees, approximately 14,700 employees worked in
retail locations, of which 6,100 were part-time employees. This total excludes seasonal and temporary employees that the Company employs, particularly
during the second quarter due to the holiday season. The Company believes that its relations with its employees are good and has never encountered a strike or
work stoppage.
Equity, Inclusion and Diversity
Our company name Tapestry, represents the diversity of our brands and the diversity of our people. We believe that having a diverse range of
perspectives, backgrounds and experiences makes us more innovative and successful and brings us closer to our consumer. Our goal is to create a culture that
is equitable, inclusive and diverse, where all of our employees, customers and stakeholders thrive.
Our EI&D strategy is grounded in our purpose and values and is a core element to unlocking the power of our people. To support these actions, we are
guided by four interconnected principles:
•
Talent: Attracting, retaining and growing top talent - making us an employer of choice in a rapidly evolving talent marketplace.
•
Culture: Fostering a culture of inclusion and belonging, where people and ideas from everywhere are welcomed.
•
Community: Nurturing the vibrancy of the communities in which we live and work to advance equity, opportunity and dignity for all.
•
Marketplace: Embracing our responsibility in the marketplace as a global fashion company. We are committed to affecting positive change for our
industry and deliver on our value proposition to stakeholders - consumers, investors and vendor partners.
Our global EI&D Champion Network supports and engages our professional community by creating an environment where all are welcomed. This
network includes our six employee business resource groups, three task forces and regional inclusion councils to support and engage our employees.
Additionally, we believe educating our employees is crucial in achieving our EI&D goals. We have curated a catalogue of learning and development
content, tools and resources, including bespoke skill-building programs to accommodate our dynamic employee population. Furthermore, the Company has
focused on providing employees with resources to foster continuing education and conversation on EI&D through 'Tapestry UNSCRIPTED', which is an
internal speaker series for our employees designed to bring our values to life. We feel hosting bold conversations about our values provides an opportunity for
us to be inspired, discover ideas, and ignite personal passions.
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Tapestry is committed to the support of historically excluded and marginalized groups through our corporate efforts. We are a member of the CEO Action
for Diversity and Inclusion, the largest business coalition committed to advancing diversity and inclusion. Our focus on fostering an equitable work
environment has led to continued recognition from Forbes on the list of “Best Employers for Diversity”, a top scoring company on the Disability:IN Disability
Equality Index and the Human Rights Campaign’s list of “Best Place to Work for LGBTQ Equality”. In 2024, we were recognized by Civic 50 as one of the
50 Most Community-Minded Companies. Additionally, we have been certified as a "Great Place to Work" for 2024. The Company is dedicated to building a
workforce with leadership teams better reflecting the customers we serve and the communities in which we operate. The Company monitors the representation
of women and racial or ethnic minorities at different levels throughout the Company, and discloses this information on our website at
www.tapestry.com/responsibility/our-people.
Total Rewards
Tapestry is dedicated to being a place where our employees love to work, where they feel recognized and rewarded for all that they do. Maintaining a
competitive total compensation program helps us attract, motivate and retain the key talent we need to achieve outstanding business and financial results. To
accomplish this goal, we strive to appropriately align our total compensation with the pay, benefits and rewards offered by companies that compete with us for
talent in the marketplace.
Our Total Compensation Program includes cash pay, annual and long-term incentives, benefits and other special programs that our employees value. We
strive to pay each employee fairly and competitively across our brands. Tapestry's primary compensation principle is to "pay for performance." Tapestry's
practice is to pay a competitive base salary and to provide corporate employees with the opportunity to earn an annual bonus tied to Tapestry's and its brands'
financial performance, and to provide store employees with the opportunity to earn sales incentives. Approximately 2,400 of our employees, including nearly
all of our store managers, received an annual long-term equity award in 2024, which aligns employee interests with those of our stockholders, rewards
employees for enhancing stockholder value and supports retention of key employees.
Our benefits package is designed to be competitive and comprehensive, which varies by location and jurisdiction. Our benefits, along with competitive
pay, include medical benefits and paid wellness days for directly hired full-time and part-time employees. Additionally, we offer parental leave for directly
hired full-time employees. The Company also offers retirement benefits for all employees. To support employees in achieving their career and financial goals,
the Company also provides access to learning opportunities on personal finances, as well as physical and mental wellness, through various platforms based on
the location of the employee.
Talent Acquisition and Development
Hiring talented employees is critically important to us, as we consider our employees around the world to be our greatest asset. Our recruitment and
sourcing strategy focuses on tapping diverse sources to attract the best talent to our organization and then retaining them through our continued investments in
resources that provide our employees with the tools for career advancement. Our internal opportunity program encourages employees to stretch themselves in
their career development, aligning their capabilities with career interests and goals. We strive to provide a working environment where our people can grow
and progress their careers within the Company.
We are committed to helping our employees develop the knowledge, skills and abilities needed for continued success and encourage employee
development at all levels and every career stage. Our development programs enable individual and team success through targeted initiatives and resources,
offering a wide-ranging curriculum focused on professional and leadership development for leaders, managers and individual contributors, including through
our People Management Program, Emerging Leaders High-Potential Program, Leader Transition Acceleration Program and third-party learning platforms, in
addition to other trainings and education facilitated through the Company for all employees.
As a company, performance management is critical to our ability to reach our goals and foster a culture of success. By having a dynamic, performance-
driven culture, we can achieve greater results, maximize employee, manager and team performance and offer exciting development and career opportunities.
As our focus extends beyond the performance of our employees to the performance of our Company as a whole, we have mechanisms in place to facilitate
comprehensive upward feedback through robust cross-functional feedback tools and a cadence of regular pulse surveys that inform on how we can continue to
strive for excellence in our work culture.
Well-being
At Tapestry, we are committed to providing a safe working environment for our people, as well as supporting our people in achieving and maintaining
their health and well-being goals. Work-life integration is top of mind, and we provide resources and benefits to help achieve this balance. We provide our
employees with supplemental resources to achieve wellness such as access to our Employee Assistance Program, regular employee programming and
subscriptions to Headspace, a smartphone application dedicated to meditation and mindfulness. In fiscal year 2024, the Company established an Associate
Relief Fund, which provides emergency assistance for events considered a disaster or hardship.
12

At Tapestry, we believe in encouraging and empowering our employees to take part in building a welcoming and inclusive community. We provide all
employees with supplemental time-off to perform community service through nonprofits of their personal choice and through team and Company sponsored
volunteering events. In our commitment to supporting our communities, we have three foundations which provide monetary support to nonprofit organizations
across communities that we are a part of. Additionally, on an annual basis, our foundations match up to $10,000, per eligible employee, in donations to eligible
non-profits in North America.
FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
Refer to Note 4, "Revenue," and Note 17, "Segment Information," presented in the Notes to the Consolidated Financial Statements for geographic
information.
AVAILABLE INFORMATION
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to these reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on our investor website, located at
www.tapestry.com/investors under the caption “SEC Filings,” as soon as reasonably practicable after they are filed with or furnished to the Securities and
Exchange Commission. These reports are also available on the Securities and Exchange Commission’s website at www.sec.gov. No information contained on
any of our websites is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K.
The Company has included the Chief Executive Officer (“CEO”) and Chief Financial Officer ("CFO") certifications regarding its public disclosure
required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 32.1 and Exhibits 31.2 and 32.2, respectively to this Form 10-K.
13

ITEM 1A. RISK FACTORS
You should consider carefully all of the information set forth or incorporated by reference in this document and, in particular, the following risk factors
associated with the business of the Company and forward-looking information in this document. Please also see “Special Note on Forward-Looking
Information” at the beginning of this report. The risks described below are not the only ones we face. Additional risks not presently known to us or that we
currently deem immaterial may also have an adverse effect on us. If any of the risks below actually occur, our business, results of operations, cash flows or
financial condition could suffer.
Risks Related to Macroeconomic Conditions
Economic conditions, such as an economic recession, downturn, periods of inflation or uncertainty, could materially adversely affect our financial
condition, results of operations and consumer purchases of discretionary items.
Our results can be impacted by a number of macroeconomic factors, including but not limited to: consumer confidence and spending levels, tax rates,
levels of unemployment, consumer credit availability, pandemics, natural disasters, raw material costs, fuel and energy costs, bank failures, market volatility,
global factory production, supply chain operations, commercial real estate market conditions, credit market conditions and the level of customer traffic in
malls, shopping centers and online.
Many of our products can be considered discretionary items for consumers. Demand for our products, and consumer spending in the handbag, footwear
and accessories categories generally is or may be significantly impacted by trends in consumer confidence, general economic and business conditions, high
levels of unemployment, periods of inflation, health pandemics, interest rates, foreign currency exchange rates, the availability of consumer credit and
taxation. Consumer purchases of discretionary items, such as the Company's products, tend to decline during recessionary periods or periods of sustained high
unemployment when disposable income is lower.
Unfavorable economic conditions may also reduce consumers’ willingness and ability to travel to major cities and vacation destinations in which our
stores are located. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial
condition.
Risks Related to our Business and our Industry
We face risks associated with operating in international markets.
We operate on a global basis, with approximately 40.8% of our net sales coming from operations outside of United States for fiscal year 2024. While
geographic diversity helps to reduce the Company’s exposure to risks in any one country, we are subject to risks associated with international operations,
including, but not limited to:
•
political or economic instability or changing macroeconomic conditions in our major markets, including the potential impact of (1) new policies that
may be implemented by the U.S. or other jurisdictions, particularly with respect to tax and trade policies, (2) the outcome of several elections
worldwide, inclusive of the 2024 U.S. Presidential, congressional, and state elections and policy shifts resulting from those elections, and (3)
sanctions and related activities by the United States, European Union (“E.U.”) and others;
•
public health crises, such as pandemics and epidemic diseases;
•
changes to the U.S.'s participation in, withdrawal out of, renegotiation of certain international trade agreements or other major trade related issues,
including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas and retaliatory tariffs, trade sanctions, new or
onerous trade restrictions, embargoes and other stringent government controls;
•
changes in exchange rates for foreign currencies, which may adversely affect the retail prices of our products, result in decreased international
consumer demand, or increase our supply costs in those markets, with a corresponding negative impact on our gross margin rates;
•
compliance with laws relating to foreign operations, including the Foreign Corrupt Practices Act ("FCPA"), the U.K. Bribery Act and other global
anti-corruption laws, which in general concern the bribery of foreign public officials and other regulations and requirements;
•
changes in tourist shopping patterns and consumer behavior, particularly that of the Chinese consumer;
•
geopolitical instability (such as the uncertainty in U.S.-China relations);
•
natural and other disasters;
•
political, civil and social unrest; and
14

•
changes in legal and regulatory requirements, including, but not limited to safeguard measures, anti-dumping duties, cargo restrictions to prevent
terrorism, restrictions on the transfer of currency, climate change and other environmental legislation, product safety regulations or other charges or
restrictions.
Our business is subject to the risks inherent in global sourcing activities.
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:
•
continued disruptions or delays in shipments whether due to port congestion, logistics carrier disruption (including as a result of labor disputes),
militant attacks on commercial shipping vessels in the Red Sea, other shipping capacity constraints or other factors, which has and may continue to
result in significantly increased inbound freight costs and increased in-transit times;
•
loss or disruption of key manufacturing or fulfillment sites or extended closure of such sites due to unexpected factors;
•
imposition of additional duties, taxes and other charges or restrictions on imports or exports;
•
unavailability, or significant fluctuations in the cost, of raw materials;
•
compliance by us and our independent manufacturers and suppliers with labor laws and other foreign governmental regulations;
•
increases in the cost of labor, fuel (including volatility in the price of oil), travel and transportation;
•
compliance with our Global Business Integrity Program;
•
compliance by our independent manufacturers and suppliers with our Supplier Code of Conduct, social auditing procedures and requirements and
other applicable compliance policies;
•
compliance with applicable laws and regulations, including U.S. 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, other laws and regulations regarding the sourcing of materials in the
Company’s products, the FCPA, U.K. Bribery Act and other global anti-corruption laws, as applicable, and other U.S. and international regulations
and requirements;
•
regulation or prohibition of the transaction of business with specific individuals or entities and their affiliates or goods manufactured in certain
regions by any government or regulatory authority in the jurisdictions where we conduct business, such as the listing of a person or entity as a
Specially Designated National or Blocked Person by the U.S. Department of the Treasury’s Office of Foreign Assets Control and Uyghur Forced
Labor Prevention Act (“UFLPA”);
•
inability to engage new independent manufacturers that meet the Company’s cost-effective sourcing model;
•
product quality issues;
•
political unrest, protests and other civil disruption;
•
public health crises, such as pandemic and epidemic diseases, and other unforeseen outbreaks;
•
natural disasters or other extreme weather events, whether as a result of climate change or otherwise; and
•
acts of war or terrorism and other external factors over which we have no control.
We are subject to labor laws governing relationships with employees, including minimum wage requirements, overtime, working conditions and
citizenship requirements. Compliance with these laws may lead to increased costs and operational complexity and may increase our exposure to governmental
investigations or litigation.
In addition, we require our independent manufacturers and suppliers to operate in compliance with applicable laws and regulations, as well as our
Supplier Code of Conduct and other compliance policies under our Global Business Integrity Program; however, we do not control these manufacturers or
suppliers or their labor, environmental or other business practices. Copies of our Global Business Integrity Program documents, including our Global
Operating Principles, Anti-Corruption Policy and Supplier Code of Conduct are available through our website, www.tapestry.com. The violation of labor,
environmental or other laws by an independent manufacturer or supplier, or divergence of an independent manufacturer’s or supplier’s labor practices from
those generally accepted as ethical or appropriate in the U.S., could interrupt or otherwise disrupt the shipment of our products, harm our trademarks or
damage our reputation. In addition, if there is negative publicity regarding the production methods of any of our suppliers or manufacturers, even if unfounded
or not specific to our supply chain, our reputation and sales could be adversely affected, we could be subject to legal liability, or could cause us to contract
with alternative suppliers or manufacturing sources. The occurrence of any of these events could materially adversely affect our business, financial condition
and results of operations.
15

Public health crises, such as the Covid-19 pandemic, may adversely affect our business, financial condition, results of operations and cash flows.
Widespread public health crises, such as the Covid-19 pandemic, have had, and could in the future have, a negative impact on our operations, cash flow
and liquidity. Potential risks to our business include but are not limited to: (i) disruption of our supply chain; (ii) loss or disruption of key manufacturing or
fulfillment sites; (iii) closures, operating restrictions and capacity restrictions at our stores and our ability to negotiate existing lease agreements; (iv) changes
in consumer shopping behavior, including reduced discretionary spending; (v) costs associated with adhering to regulations and protecting the health and
safety of our employees and customers, (vi) excess inventory leading to increased promotional activity, (vii) heightened competition for retail and fulfillment
center employees, (viii) our ability access capital markets and to make payments on and refinance our debt obligations; and (ix) our ability to pay dividends or
conduct stock repurchases.
A decline in the volume of traffic to our stores could have a negative impact on our net sales.
The success of our retail stores located within malls and shopping centers may be impacted by (i) changes in consumer shopping behavior and store
closures; (ii) reduced travel resulting from economic conditions (including a recession or inflationary pressures); (iii) the location of the store within the mall
or shopping center; (iv) surrounding tenants or vacancies; (v) increased competition in areas where malls or shopping centers are located; (vi) the amount
spent on advertising and promotion to attract consumers to the mall; and (vii) a shift towards online shopping resulting in a decrease in store traffic. Declines
in consumer traffic could have a negative impact on our net sales and could materially adversely affect our financial condition and results of operations.
Furthermore, declines in traffic could result in store impairment charges if expected future cash flows of the related asset group do not exceed the carrying
value.
The growth of our business depends on the successful execution of our growth strategies, including our global omni-channel expansion efforts and our
ability to execute our digital and e-commerce priorities.
Our growth depends on the continued success of existing products, as well as the successful design, introduction of new products and maintaining an
appropriate rationalization of our assortment. Our ability to create new products and to sustain existing products is affected by whether we can successfully
anticipate and respond to consumer preferences and fashion trends. See “The success of our business depends on our ability to retain the value of our brands
and to respond to changing fashion and retail trends in a timely manner.” The failure to develop and launch successful new products or to rationalize our
assortment appropriately could hinder the growth of our business. Also, any delay in the development or launch of a new product could result in our company
not being the first to bring product to market, which could compromise our competitive position.
Our success and growth also depends on the continued development of our omni-channel presence for each of our brands globally, leaning into global
digital opportunities for each brand, along with continued bricks and mortar expansion in select international regions. With respect to international expansion,
our brands may not be well-established or widely sold in some of these markets, and we may have limited experience operating directly or working with our
partners there. In addition, some of these markets, either through bricks and mortar stores or digital channels, have different operational characteristics,
including but not limited to employment and labor, privacy, transportation, logistics, real estate, environmental regulations and local reporting or legal
requirements.
We aim to provide a seamless omni-channel experience to our customers regardless of whether they are shopping in stores or engaging with our brands
through digital technology, such as computers, mobile phones, tablets or other devices. This requires investment in new technologies and reliance on third-
party digital partners, over which we may have limited control. Additionally, our digital business is subject to numerous risks that could adversely impact our
results, including (i) a diversion of sales from our brand stores or wholesale customers, (ii) difficulty in recreating the in-store experience through digital
channels, (iii) liability for online content, (iv) changing dynamics within the digital marketing environment and our ability to effectively market to consumers,
(v) intense competition from online retailers, and (vi) the ability to provide timely delivery of e-commerce purchases, which is dependent on the capacity and
operations of our owned and third-party operated fulfillment facilities. See “Our business is subject to the risks inherent in global sourcing activities” for
additional risks related to our fulfillment networks. If we are unable to effectively execute our e-commerce and digital strategies and provide reliable
experiences for our customers across all business channels, our reputation and ability to compete with other brands could suffer, which could adversely 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, 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. Further, expanding in certain markets may have
upfront investment costs that may not be accompanied by sufficient revenues to achieve typical or expected operational and financial performance and
therefore may be dilutive to our brands in the short-term. We may also have to compete for talent in international regions as we expand our omni-channel
presence.
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Consequently, if our global omni-channel expansion plans are unsuccessful, or we are unable to retain and/or attract key personnel, our business, financial
condition and results of operation could be materially adversely affected.
The successful implementation of the Company’s 2025 growth strategy, futurespeed, is key to the long-term success of our business.
The Company introduced its 2025 growth strategy, futurespeed, in the first quarter of fiscal 2023, which is designed to amplify and extend the competitive
advantages of the brands, with a focus on four strategic priorities: (i) Building Lasting Customer Relationships; (ii) Fueling Fashion Innovation & Product
Excellence; (iii) Delivering Compelling Omni-Channel Experiences; and (iv) Powering Global Growth.
The Company believes that its intentional focus positions Tapestry to drive sustainable, profitable growth to create value for its stakeholders over time.
However, there is no assurance that we will be able to sustain such efforts in accordance with our plans, that such efforts will result in the intended or
otherwise desirable outcomes or that such efforts, even if successfully sustained, will be effective in achieving long-term growth or increased profitability.
Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further information regarding
futurespeed.
If our incorporation of the initiatives under futurespeed falls short, our business, financial condition and results of operation could be materially adversely
affected.
Significant competition in our industry could adversely affect our business.
We face intense competition from many other brands in the product lines and markets that we participate, which include the Company's wholesale
customers. Competition is based on a number of factors, including, without limitation, the following:
•
our competitors may develop new products or product categories that are more popular with our customers;
•
anticipating and responding in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to
digital brand engagement, social media communications, and online and cross-channel shopping;
•
maintaining strong brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media
presence;
•
recruiting and retaining key talent;
•
developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to a diverse group of consumers;
•
competitively pricing our products and creating an acceptable value proposition for consumers, including price increases to mitigate inflationary
pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases;
•
providing strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in
order to stay better connected to consumers;
•
providing attractive, reliable, secure, and user-friendly digital commerce sites;
•
sourcing sustainable raw materials at cost-effective prices;
•
ensuring product availability and optimizing supply chain efficiencies with third-party suppliers and retailers;
•
protecting our trademarks and design patents;
•
adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; and
•
the ability to withstand prolonged periods of adverse economic conditions or business disruptions.
A failure to compete effectively or to keep pace with rapidly changing consumer preferences and technology and product trends could adversely affect
our growth and profitability.
The success of our business depends on our ability to retain the value of our brands and to respond to changing fashion and retail trends in a timely
manner.
Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and
differentiated customer experiences across business channels and geographies. Any misstep in product quality or design, executive leadership, customer
service, marketing, unfavorable publicity or excessive product discounting could negatively affect the image of our brands with our customers. Furthermore,
the product lines we have historically marketed and those that we plan to market in the future are becoming increasingly subject to rapidly changing fashion
trends
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and consumer preferences, including the increasing shift to digital brand engagement and social media communication. If we do not anticipate and respond
promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing
campaigns that appeal to our customers, our sales and results of operations may be negatively impacted.
The shift towards digital engagement has become increasingly important, with increased use of social media platforms by our brand representatives,
influencers and our employees. Actions taken by our partners on social media that do not show our brands in a manner consistent with our desired image or
that are damaging to such partner’s reputation, whether or not through our brand social media platforms, could harm our brand reputation and materially
impact our business.
Our success also depends in part on our and our executive leadership team's ability to execute on our plans and strategies. Even if our products, marketing
campaigns and retail environments do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become
tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact our business, financial condition, and results
of operations.
Our success depends, in part, on attracting, developing and retaining qualified employees, including key personnel.
Our business and future success depends heavily on attracting, developing and retaining qualified employees, including our senior management team.
Competition in our industry to attract and retain these employees is intense and 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.
We depend on the guidance of our senior management team and other key employees who have significant experience and expertise in our industry and
our operations. There can be no assurance that these individuals will remain with us or that we will be able to identify and attract suitable successors for these
individuals. The loss of one or more of our key personnel or the direct or indirect consequences of results thereof, or any negative public perception with
respect to these individuals or the loss of these individuals, could have a material adverse effect on our business, results of operations and financial condition.
We do not maintain key-person or similar life insurance policies on any of senior management team or other key personnel.
We must also attract, motivate and retain a sufficient number of qualified retail and fulfillment center employees. Historically, competition for talent in
these positions has been intense and turnover is generally high. If we are unable to attract and retain such employees with the necessary skills and experience,
we may not achieve our objectives and our results of operations could be adversely impacted.
Additionally, changes to our office environments, the adoption of new work models, and our requirements and/or expectations about when or how often
certain employees work on-site or remotely may not meet the expectations of our employees. As businesses increasingly operate remotely, traditional
geographic competition for talent may change in ways that we cannot presently predict. If our employment proposition is not perceived as favorable compared
to other companies, it could negatively impact our ability to attract and retain our employees.
In order to consummate the Capri Acquisition (as defined below), we and Capri must obtain certain regulatory approvals and satisfy closing conditions,
and if such approvals are not granted or are granted untimely and/or with conditions, and if closing conditions are not satisfied, consummation of the
Capri Acquisition may be jeopardized or the anticipated benefits of the Capri Acquisition may not be realized.
On August 10, 2023, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among us, Capri and Sunrise Merger Sub, Inc.
("Merger Sub"), pursuant to which we agreed to acquire any and all of Capri’s ordinary shares (other than (a) Capri’s ordinary shares that are issued and
outstanding immediately prior to the consummation of the acquisition that are owned or held in treasury by us or by Capri or any of its direct or indirect
subsidiaries and (b) Capri’s ordinary shares that are issued and outstanding immediately prior to the consummation of the acquisition that are held by holders
who have properly exercised dissenters’ rights in accordance with, and who have complied with, Section 179 of the BVI Business Companies Act, 2004 (as
amended) of the British Virgin Islands) in cash at a purchase price of $57.00 per share, without interest, subject to any required tax (the "Capri Acquisition").
The consummation of the Capri Acquisition remains subject to the receipt of certain regulatory approvals and the satisfaction of certain closing conditions.
Subject to limited exceptions, we or Capri may terminate the Merger Agreement if the Capri Acquisition is not consummated on or before August 10, 2024,
subject to two extensions of up to three months each in certain circumstances, including to obtain required regulatory approvals.
On April 22, 2024, the Federal Trade Commission ("FTC") filed a preliminary injunction action against Tapestry and Capri in the United States District
Court for the Southern District of New York seeking to enjoin the consummation of the Capri Acquisition. The FTC’s action alleges that the Capri
Acquisition, if consummated, would violate Section 7 of the Clayton Act and that the Merger Agreement and the Capri Acquisition constitute unfair methods
of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined.
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There can be no assurance as to the outcome of litigation with the FTC or that we will receive regulatory approval from the FTC on a timely basis or at
all, and there can be no assurance that if regulatory clearance is obtained, it will not be subject to the compliance of certain conditions or impose limitations,
obligations or restrictions that could have the direct or indirect effect of delaying or preventing the completion of the Capri Acquisition, imposing additional
material costs on or materially limiting our revenues following the Capri Acquisition or otherwise reducing the anticipated benefits of the Capri Acquisition,
or resulting in the abandonment of the Capri Acquisition.
If the Capri Acquisition is not completed on a timely basis or at all, our ongoing business may be adversely affected as follows:
•
we may experience negative reactions from the financial markets, including investors and rating agencies, and the price of our common stock could
decline;
•
we have incurred, and will continue to incur, significant costs, expenses and fees, in connection with the Capri Acquisition and the transactions
contemplated by the Capri Acquisition, for which we may receive little or no benefit if the Capri Acquisition is not completed, including in
connection with the issuance and mandatory redemption of $4.50 billion of Capri Acquisition USD Senior Notes and €1.50 billion of Capri
Acquisition EUR Senior Notes (both as defined below) at 101% of par value if the Capri Acquisition is not completed by February 10, 2025 (or such
later date mutually agreed between us and Capri);
•
investor and consumer confidence in our business could decline, relationships with vendors, service providers, investors and other third parties may
be adversely impacted, and we may be unable to retain key personnel;
•
we may be subject to litigation, which could result in significant costs and expenses;
•
management’s focus may be diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to us; and
•
the anticipated benefits of the Capri Acquisition could be delayed or reduced.
Mergers, acquisitions and other strategic investments may not be successful in achieving intended benefits, cost savings and synergies and may disrupt
current operations.
One component of our historical growth strategy has been acquisitions, and, consistent with our longer-term capital allocation priorities, our management
team expects to maintain M&A flexibility and may from time to time evaluate and consider acquisitions or other strategic investments. These involve various
inherent risks and as a result, the expected benefits, cost savings and synergies may not be realized.
The integration process of any newly acquired company, such as our proposed Capri Acquisition, may be complex, costly and time-consuming. The
potential difficulties of integrating the operations of an acquired business and realizing our expectations for an acquisition, including the benefits that may be
realized, include, among other things:
•
failure of the business to perform as planned following the acquisition or achieve anticipated revenue, cash flow or profitability targets;
•
delays, unexpected costs or difficulties in completing the acquisition or integration of acquired companies or assets, including as a result of regulatory
challenges;
•
higher than expected costs, lower than expected cost savings or synergies and/or a need to allocate resources to manage unexpected operating
difficulties;
•
difficulties assimilating the operations and personnel of acquired companies into our operations;
•
diversion of the attention and resources of management or other disruptions to current operations;
•
the impact on our or an acquired business’ internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002;
•
changes in applicable laws and regulations or the application of new laws and regulations;
•
changes in the combined business due to potential divestitures or other requirements imposed by antitrust regulators;
•
failures or delays in receiving the necessary approvals by the relevant regulators and authorities;
•
retaining key customers, suppliers and employees;
•
retaining and obtaining required regulatory approvals, licenses and permits;
•
operating risks inherent in the acquired business and our business;
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•
lower than anticipated demand for product offerings by us or our licensees;
•
assumption of liabilities not identified in due diligence; and
•
other unanticipated issues, expenses and liabilities.
Our failure to successfully complete the integration of any acquired business, including as a result of regulatory challenges, and any adverse consequences
associated with future acquisition activities, could have an adverse effect on our business, financial condition and operating results. Even if the integration of
any acquired business is successfully completed, the full expected benefits and synergies of the acquisition may not be realized. Additional unanticipated
costs, which could be material, may also be incurred in the integration of our business and the acquired business. Additionally, the full benefits of an
acquisition may not be realized if the combined business does not perform as expected or demand for the combined company’s services does not meet our
expectations.
Completed acquisitions may result in additional goodwill and/or an increase in other intangible assets on our Consolidated Balance Sheets. We are
required annually, or as facts and circumstances exist, to assess goodwill and other intangible assets to determine if impairment has occurred. If the testing
performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the
goodwill or other intangible assets and the implied fair value of the goodwill or the fair value of other intangible assets in the period the determination is
made. We cannot accurately predict the amount and timing of any potential future impairment of assets. Should the value of goodwill or other intangible assets
become impaired, there could be a material adverse effect on our financial condition and results of operations.
Our business may be materially impacted if our fulfillment centers face significant interruptions and operations.
We are dependent on a limited number of fulfillment centers. Our ability to meet the needs of our customers and our retail stores and e-commerce sites
depends on the proper operation of these centers. If any of these centers were to shut down or otherwise become inoperable or inaccessible for any reason,
including as a result of accidents, economic and weather conditions, natural disasters, pandemic diseases, labor shortages and other unforeseen events and
circumstances, we could suffer a substantial loss of inventory and/or disruptions of deliveries to our retail and wholesale customers. Depending on the
duration of these closures, our results may be materially impacted. While we have business continuity and contingency plans for our sourcing and fulfillment
center sites, significant disruption of manufacturing or fulfillment for any of the above reasons could interrupt product supply, result in a substantial loss of
inventory, increase our costs, disrupt deliveries to our customers and our retail stores, and, if not remedied in a timely manner, could have a material adverse
impact on our business.
Because our fulfillment centers include automated and computer-controlled equipment, they are susceptible to risks including power interruptions, system
failures, software viruses, configuration errors and security breaches. In North America we maintain fulfillment centers in Florida, Ohio and Nevada, operated
by Tapestry. Our multi-brand Nevada fulfillment center began operations in May 2023.
Globally we utilize fulfillment centers in mainland China, the Netherlands, the U.K. and Spain, owned and operated by third parties, allowing us to better
manage the logistics in these regions while reducing costs. We also utilize local fulfillment centers, through third-parties, in Japan, parts of Greater China,
South Korea, Singapore, Malaysia, Spain, the U.K., Canada, Australia, and Mexico. The warehousing of the Company’s merchandise, store replenishment and
processing direct-to-customer orders is handled by these centers and a prolonged disruption in any center’s operation could materially adversely affect our
business and operations.
In addition, if our fulfillment centers are not sized to meet the optimal capacity for our products or are not adequately staffed, utilized or operated, our
profitability may be negatively impacted.
Our business may be subject to increased costs due to excess inventories and a decline in profitability as a result of increasing pressure on margins if we
misjudge the demand for our products.
Our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional environment,
fragmentation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns. If we misjudge the
market for our products or demand for our products are impacted by other factors, such as inflationary pressures, political instability or other macroeconomic
events, we may be faced with significant excess inventories for some products and missed opportunities for other products. We have in the past been, and may
in the future be, forced to rely on donation, markdowns, promotional sales or other write-offs, to dispose of excess, slow-moving inventory, which may
negatively impact our gross margin, overall profitability and efficacy of our brands.
Increases in our costs, such as raw materials, labor or freight could negatively impact our gross margin. Our costs for raw materials are affected by, among
other things, weather, customer demand, speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus
customer countries and other factors that are generally unpredictable and beyond our control. Any of these factors may be exacerbated by global climate
change. In addition, the remaining impacts of the pandemic, political instability, trade relations, sanctions, price inflationary pressure, or other
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geopolitical or economic conditions could cause raw material costs to increase and have an adverse effect on our future margins. Labor costs at many of our
manufacturers have been increasing significantly and, as the middle class in developing countries continues to grow, it is unlikely that such cost pressure will
abate. Furthermore, the cost of transportation has fluctuated and may continue to fluctuate significantly if oil prices continue to rise. We may not be able to
offset such increases in raw materials, labor or transportation costs through pricing measures or other means.
As we outsource functions, we will become more dependent on the third parties performing these functions.
As part of our long-term strategy, 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. We also cannot guarantee that these third parties
will not experience a personal data or security breach in the future, which could have a material impact on our operations. Any significant interruption in the
operations of these service providers, including as a result of changes in social, political, and economic conditions, including those resulting from military
conflicts or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located, 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 wholesale business could suffer as a result of consolidations, liquidations, restructurings and other ownership changes in the wholesale industry.
Our wholesale business comprised approximately 12% of total net sales for fiscal 2024. The retail industry, including wholesale customers, has
experienced financial difficulty leading to consolidations, reorganizations, restructuring, bankruptcies and ownership changes. This may continue and could
further decrease the number of, or concentrate the ownership of, wholesale stores that carry our or our licensees’ products. Furthermore, a decision by the
controlling owner of a group of stores or any other significant customer, whether motivated by competitive conditions, financial difficulties or otherwise, to
decrease or eliminate the amount of merchandise purchased from us or our licensing partners could result in an adverse effect on the sales and profitability
within this business channel.
Additionally, certain of our wholesale customers, particularly those located in the U.S., have in the past been highly promotional and have marked down
their merchandise and may do so again in the future, which could impact our brands or could affect our business, results of operations, and financial condition.
Our operating results are subject to seasonal and quarterly fluctuations, which could adversely affect the market price of the Company's common stock.
The Company's results are typically affected by seasonal trends. We have historically realized, and expect to continue to realize, higher sales and
operating income in the second quarter of our fiscal year. Business underperformance in the Company's second fiscal quarter would have a material adverse
effect on its full year operating results and result in higher inventories. In addition, fluctuations in net sales, operating income and operating cash flows of the
Company in any fiscal quarter may be affected by the timing of wholesale shipments and other events affecting retail sales, including adverse weather
conditions or other macroeconomic events.
We rely on our licensing partners to preserve the value of our licenses and the failure to maintain such partners could harm our business.
Our brands currently have multi-year agreements with licensing partners for certain products. In the future, we may enter into additional licensing
arrangements. The risks associated with our own products also apply to our licensed products, as do unique risks stemming from problems that our licensing
partners may experience, including risks associated with each licensing partner’s ability to obtain capital, manage its labor relations, maintain relationships
with its suppliers, manage its credit and bankruptcy risks, and maintain customer relationships. While we maintain significant control over the products
produced for us by our licensing partners, any of the foregoing risks, or the inability of any of our licensing partners to execute on the expected design and
quality of the licensed products or otherwise exercise operational and financial control over its business, may result in loss of revenue and competitive harm to
our operations in the licensed product categories. Further, while we believe that we could replace our existing licensing partners if required, any delay in doing
so could adversely affect our revenues and harm our business.
We are subject to risks associated with leasing retail space subject to 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 locations. The majority of our stores are under non-cancelable, multi-year leases, often with renewal options. We
believe that the majority of the leases we enter into in the future will likely be non-cancelable. Generally, our leases are “net” leases, which require us to pay
our proportionate share of the cost of insurance, taxes,
21

maintenance and utilities. We generally cannot cancel these leases at our option. 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. 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 uncertain 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.
Risks Related to Information Security and Technology
Computer system disruption and cyber security threats, including a personal data or security breach, could damage our relationships with our customers,
harm our reputation, expose us to litigation and adversely affect our business.
We depend on digital technologies for the successful operation of our business, including corporate email communications to and from employees,
customers, stores and vendors, the design, manufacture and distribution of our finished goods, digital and local marketing and clienteling efforts, data
analytics, collection, use and retention of customer data, employee, vendor and partner information, the processing of credit card transactions, online e-
commerce activities and our interaction with the public in the social media space. Our company implemented a hybrid working model. Many of our corporate
employees and independent contractors returned to offices several days a week but continued to work remotely the other days. Continued remote working has
increased our dependence on digital technology. Despite the security measures we have in place, including those described in Item 1C “Cybersecurity”, the
possibility of a successful cyber-attack on any one or all of these systems is a serious threat. The retail industry, in particular, has been the target of many
cyber-attacks. As part of our business model, we collect, retain and transmit confidential information and personal data over public networks. In addition to
our own databases, we use third-party service providers to store, process and transmit this information on our behalf. Although we contractually require these
service providers to implement and use reasonable and adequate security measures and data protection, we cannot control third parties and cannot guarantee
that a personal data or security breach will not occur in the future either at their location or within their systems. We also store all designs, goods
specifications, projected sales and distribution plans for our finished products digitally. We have enterprise class and industry comparable security measures in
place to protect both our physical facilities and digital systems from attacks. Despite these efforts, however, we may be vulnerable to targeted or random
cyber-attacks, personal data or security breaches, acts of vandalism, computer malware, misplaced or lost data, programming and/or human errors, or other
similar events. Further, like other companies in the retail industry, during the ordinary course of business, we and our vendors have in the past experienced,
and we expect to continue to experience, cyber-attacks of varying degrees and types, including phishing and other attempts to breach or gain unauthorized
access to our systems. To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that cyber-attacks will not
have a material impact in the future.
Awareness and sensitivity to personal data breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high. Any
misappropriation or unauthorized access to confidential or personal information gathered, stored or used by us, be it intentional or accidental, could have a
material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees, vendors
and investors. We have been incurring and expect that we will continue to incur significant costs implementing additional security measures to protect against
new or enhanced data security or privacy threats, or to comply with current and new international, federal and state laws governing the unauthorized
disclosure, access to, loss, alteration or exfiltration of confidential and personal information which are continuously being enacted and proposed such as the
General Data Protection Regulation ("GDPR") in the E.U. the UK GDPR, the American Privacy Rights Act (bill), the California Consumer Privacy Act
("CCPA") as amended by the California Privacy Rights Act ("CPRA"), the Virginia Consumer Data Protection Act ("VCDPA"), the Colorado Privacy Act
("CPA"), the Utah Consumer Privacy Act ("UCPA"), the Connecticut Data Privacy Act ("CTDPA"), the Montana Consumer Data Privacy Act ("MCDPA"),
the Washington My Health My Data Act ("WMHMDA"), the Florida Digital Bill of Rights ("FDBR"), the Texas Data Privacy and Security Act ("TDPSA")
and other comprehensive and sectoral state privacy laws in the U.S., as well as increased cyber security and privacy protection costs such as organizational
changes, deploying additional personnel and protection technologies, training employees and contractors, engaging outside counsel, third-party experts and
consultants. We may also experience loss of revenues resulting from unauthorized use of proprietary information including our intellectual property. Lastly,
we could face sizable fines, significant breach containment and notification costs to supervisory authorities
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and the affected data subjects, and increased litigation and customer claims, as a result of cyber security or personal data breaches. While we carry cyber
liability insurance, such insurance may not cover us with respect to any or all claims or costs associated with such a breach.
In addition, we have e-commerce sites in certain countries throughout the world, including the U.S., Canada, Japan, South Korea, Greater China, Europe,
Middle East, Australia and Southeast Asia and have plans for additional e-commerce sites in other parts of the world. Additionally, Tapestry has informational
websites in various countries. Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-commerce partners
maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, (iii) customer databases and (iv) ability to email or otherwise keep in
contact with our current and potential customers. Despite our preventative efforts, our systems are vulnerable from time-to-time to damage, disruption or
interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security and personal data breaches,
email blocking lists, computer malware or power outages. Any material disruptions in our e-commerce presence or information technology systems and
applications could have a material adverse effect on our business, financial condition and results of operations.
A delay, disruption in, failure of, or inability to upgrade our information technology systems precisely and efficiently could materially adversely affect our
business, financial condition or results of operations and cash flow.
We rely heavily on various information and other business systems, including data analytics and machine learning, to manage our operations, including
management of our supply chain, point-of-sale processing in our brands’ stores, our online businesses associated with each brand and various other processes
and metrics. We are continually evaluating and implementing upgrades and changes to our systems. In addition, from time to time, we implement new
systems.
Implementing new systems and upgrading existing systems and data analytics models carries substantial risk, including failure to operate as designed,
failure to properly integrate with other systems, failure to accurately capture or report data or metrics, potential loss of confidential and personal information,
cost overruns, implementation delays and disruption of operations. Furthermore, failure of our computer systems due to inadequate system capacity, computer
viruses, human error, changes in programming, security and personal data breaches, system upgrades or migration of these services, as well as employee,
vendor and consumer privacy concerns and new privacy and security laws and global government regulations, individually or in accumulation, could have a
material effect on our business, financial condition or results of operations and cash flow.
Risks Related to our Indebtedness
We have incurred a substantial amount of indebtedness, which could restrict our ability to engage in additional transactions or incur additional
indebtedness.
As of June 29, 2024, our consolidated debt was approximately $7.24 billion. In order to consummate the Capri Acquisition, we issued approximately
$6.10 billion of Capri Acquisition Senior Notes (as defined below) in November 2023 and expect to incur up to an additional $1.40 billion of indebtedness
under the Capri Acquisition Term Loan Facilities (as defined below) at closing. We also expect to assume certain of Capri’s indebtedness outstanding at
closing. This substantial level of indebtedness could have important consequences to our business including making it more difficult to satisfy our debt
obligations, increasing our vulnerability to general adverse economic and industry conditions, limiting our flexibility in planning for, or reacting to, changes in
our business and the industry in which we operate and restricting us from pursuing certain business opportunities.
In addition, the terms of our $2.00 billion Revolving Credit Facility (the "Revolving Credit Facility") contain certain affirmative and negative covenants,
including limits on our ability to incur debt, grant liens, engage in mergers and dispose of assets, make certain investments, engage in certain transactions with
its affiliates and make certain dividends and other distributions. The Revolving Credit Facility includes a maximum net leverage ratio of 4:00 to 1:00, which,
upon the consummation of the Capri Acquisition, increases to (i) 4.75 to 1.00 from and including the closing date of the Capri Acquisition to but excluding
June 28, 2025, (ii) 4.50 to 1.00 from and including June 28, 2025 to but excluding June 27, 2026, and (iii) 4.00 to 1.00 from and including June 27, 2026 and
thereafter.
We have also entered into the $1.40 billion Capri Acquisition Term Loan Facilities, comprised of (i) the Tranche A term loan commitments, in an
aggregate amount of $1.05 billion and which mature three years after the date on which the Capri Acquisition is consummated, and (ii) the Tranche B term
loan commitments, in an aggregate amount of $350 million and which mature five years after the date on which the Capri Acquisition is consummated. The
Capri Acquisition Term Loan Facilities currently remain unfunded. The Capri Acquisition Term Loan Facilities include the same affirmative and negative
covenants as our Revolving Credit Facility and requires compliance with the same maximum net leverage ratio from and after consummation of the Capri
Acquisition. Refer to Note 12, "Debt", for a summary of these terms and additional information on the terms of our Revolving Credit Facility, Capri
Acquisition Term Loan Facilities and outstanding senior notes, including the Capri Acquisition Senior Notes.
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The consequences and limitations under our Revolving Credit Facility, our Capri Acquisition Term Loan Facilities and our other outstanding indebtedness
could impede our ability to engage in future business opportunities or strategic acquisitions. In addition, a prolonged disruption in our business may impact
our ability to satisfy the leverage ratio covenant under our Revolving Credit Facility and, once the Capri Acquisition has been consummated, our Capri
Acquisition Term Loan Facilities. Non-compliance with these terms would constitute an event of default under our credit facilities, which may result in
acceleration of payment to the lenders. In the event of an acceleration of payment to the lenders, this would result in a cross default of the Company’s senior
notes (including the Capri Acquisition Senior Notes), causing the Company’s outstanding borrowings to also become due and payable on demand.
The amount of cash required to service our increased indebtedness is greater than the amount of cash flows required prior to the announcement of the
Capri Acquisition. Our ability to generate cash flows from our operations is, to a certain extent, subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our control. If our cash flows and capital resources are insufficient to fund our debt service obligations,
we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating
results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service
and other obligations.
As a result of having operations outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates. Substantial
changes in foreign currency exchange rates could cause our sales and profitability to be negatively impacted.
Risks Related to Environmental, Social, and Governance Issues
The risks associated with climate change and other environmental impacts and increased focus by stakeholders on climate change, could negatively affect
our business and operations.
Our business is susceptible to risks associated with climate change, including through disruption to our supply chain, potentially impacting the production
and distribution of our products including availability and pricing of raw materials, as well as shipping disruptions and/or higher freight costs. Climate change
can lead to physical and transition risks impacting our business. The physical risks result from climatic events, such as wildfires, storms and floods, whereas
transition risks result from policy action taken to transition the economy off of fossil fuels. Increased frequency and/or intensity of extreme weather events
(such as storms and floods) due to climate change could also lead to more frequent store and fulfillment center closures, adversely impacting retail traffic
and/or consumer's disposable income levels or spending habits on discretionary items, or otherwise disrupt business operations in the communities in which
we operate, any of which could result in lost sales or higher costs.
There is also increased focus from our stakeholders, including consumers, employees and investors, on climate change issues. Many countries in which
we and our suppliers operate have begun to enact new legislation and regulations in an attempt to mitigate the potential impacts of climate change, which
could result in higher sourcing, operational and compliance-related costs for the Company. Such proposed measures include expanded disclosure requirements
regarding GHG emissions and other climate-related information, as well as independent auditors providing some level of attestation to the accuracy of such
disclosures. Inconsistency of legislation and regulations among jurisdictions may also affect our compliance costs with such laws and regulations. An
assessment of the potential impact of future climate change legislation, regulations or industry standards, as well as any international treaties and accords, will
be fraught with uncertainty given the wide scope of potential regulatory change in the countries in which we operate. Any failure on our part to comply with
such climate change-related regulations could lead to adverse consumer actions and/or investment decisions by investors, as well as expose us to legal risk.
Increased scrutiny from investors and others regarding our ESG initiatives, including matters of significance relating to sustainability, could result in
additional costs or risks and adversely impact our reputation.
Stakeholders, including consumers, employees and investors, have increasingly focused on corporate responsibility practices of companies. Although we
have announced our ESG strategy and related goals, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful
in achieving our goals. Failure to implement our strategy or achieve our goals on a timely basis, or at all, could damage our reputation, causing our investors
or consumers to lose confidence in our Company and brands, and negatively impact our operations. In addition, our brand is susceptible to risks associated
with changing consumer attitudes regarding social and political issues and consumer perceptions of our position on these issues.
Any ESG 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 corporate governance, environmental compliance, employee health and 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
our adoption of these practices. We could
24

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 failure, to meet the standards included in any sustainability disclosure could negatively impact our
reputation, employee retention and the willingness of our customers and suppliers to do business with us.
In addition, many of the countries where we and our suppliers operate continue to enact legislation and regulatory rules that address climate change and
other sustainability issues, including expanded disclosure requirements on GHG emissions and other climate related information. Consumers, trade
associations, interested non-governmental organizations and other stakeholders have increased focus and emphasis on sustainable features of products and
other sustainability topics, including traceability and transparency, sustainability claims and product labeling requirements, responsible sourcing and
deforestation, the use of energy and water, and the recyclability or recoverability of packaging, product, and materials. The rules and regulations and
governmental oversight continue to rapidly evolve with varying degrees of complexity and scope, many that include penalties for non-compliance. Any failure
on our part to comply with sustainability related legislation, regulations and frameworks could lead to adverse consumer action, government enforcement
action and private litigation. Our ability to comply with the evolution of consumer expectations, regulations and governmental standards and legal landscape
can lead to increased risk, operational costs and management time and effort.
Risks Related to Global Economic Conditions and Legal and Regulatory Matters
We face risks associated with potential changes to international trade agreements and the imposition of additional duties on importing our products.
Most of our imported products are subject to duties, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that we
may import into the U.S. and other countries or may impact the cost of such products. To maximize opportunities, we rely on free trade agreements and other
supply chain initiatives and, as a result, we are subject to government regulations and restrictions with respect to our cross-border activity. For example, we
have historically received benefits from duty-free imports on certain products from certain countries pursuant to the U.S. Generalized System of Preferences
("GSP") program. The GSP program expired on December 31, 2020, resulting in additional duties that have negatively impacting gross margin. Additionally,
we are subject to government regulations relating to importation activities, including related to U.S. Customs and Border Protection ("CBP") enforcement
actions. The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our
goods pursuant to the UFLPA, could have a material adverse effect on our business, results of operations and financial condition. Since fiscal 2019, the U.S.
and China have both imposed tariffs on the importation of certain product categories into the respective country, with limited progress in negotiations to
reduce or remove the tariffs. However, while the U.S. has participated in multi-national negotiations on trade agreements and duty rates, there continues to be
a possibility of increases in tariffs on goods imported into the U.S. from other countries, which could in turn adversely affect the profitability for these
products and have an adverse effect on our business, financial conditions and results of operations as a result.
Fluctuations in our tax obligations and effective tax rate may result in volatility of our financial results and stock price.
We are subject to income taxes in many 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 one time, multiple tax years are subject to audit by various taxing jurisdictions. The results of these audits
and negotiations with taxing authorities may result in a settlement which differs from our original estimate. As a result, we expect that throughout the year
there could be ongoing variability in our quarterly effective tax rates as events occur and exposures are evaluated. In addition, our effective tax rate in a given
financial statement period may be materially impacted by changes in the mix and level of earnings. Further, proposed tax changes that may be enacted in the
future could impact our current or future tax structure and effective tax rates.
On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law by the Biden Administration, with tax provisions primarily focused on
implementing a 15% CAMT on global adjusted financial statement income and a 1% excise tax on share repurchases. The CAMT was effective at the
beginning of fiscal 2024 and did not have a material impact on the Company’s effective tax rate. On December 12, 2022, the E.U. member states also reached
an agreement to implement the OECD’s reform of international taxation known as GloBE, which broadly mirrors the Inflation Reduction Act by imposing a
15% global minimum tax on multinational companies. Based on the countries in which we do business that have enacted legislation effective January 1, 2025,
we do not expect the impact of these changes to be material for fiscal 2025. A number of other countries are also implementing similar legislation with
effective dates starting in 2026. As a result, we do expect a modest negative impact on the Company’s effective tax rate, however, this could change as other
countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts.
25

Our business is exposed to foreign currency exchange rate fluctuations.
Due to our global operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and liabilities denominated in
currencies other than the U.S. dollar. In addition, certain of our subsidiaries transact in currencies other than their functional currency, including intercompany
transactions, which results in foreign currency transaction gains or losses. If the U.S. dollar strengthens against these subsidiaries’ foreign currencies, the
translation of their foreign currency denominated transactions may decrease consolidated net sales and profitability. Furthermore, majority of the Company's
purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S. dollars. In order to minimize the impact
on earnings related to foreign currency rate movements, we hedge certain cross currency intercompany inventory transactions and foreign currency balance
sheet exposures which includes the Company’s cross currency intercompany loan portfolio. We cannot ensure, however, that these hedges will fully offset the
impact of foreign currency rate movements. Our continued international expansion will increase our exposure to foreign currency fluctuations.
We may be unable to protect our intellectual property and curb the sale of counterfeit merchandise, which can cause harm to our reputation and
business.
We believe our trademarks, copyrights, patents and other intellectual property rights are extremely important to our success and our competitive position.
We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. We pursue entities involved
in the trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. We cannot guarantee that the actions we have taken
to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future. Despite our efforts,
our brands are still susceptible to counterfeiting. Such counterfeiting dilutes our brands and can cause harm to our reputation and business. Our efforts to
enforce our intellectual property rights are from time to time met with defenses and counterclaims attacking the validity and enforceability of our intellectual
property rights. In the ordinary course of business, we become involved in trademark oppositions and cancellation actions. Our trademark applications may
face objections from the trademark offices we seek to register them in and may not mature into registrations. Other parties may seek to invalidate our
trademarks or assert violations of their trademarks or other intellectual property and seek to block our sales of certain products. Unplanned increases in legal
and investigative fees and other costs associated with defending our intellectual property rights could result in higher operating expenses. Finally, many
countries’ laws do not protect intellectual property rights to the same degree as U.S. laws.
Risks Related to Ownership of our Common Stock
If we are unable to pay quarterly dividends or conduct stock repurchases at intended levels, our reputation and stock price may be negatively impacted.
In fiscal 2024, the Company returned capital to its shareholders through a quarterly cash dividend of $0.35 per common share, for an annual dividend rate
of $1.40 per share, or $321 million. In August 2023, the Company suspended its share repurchase activity in connection with the Merger Agreement with
Capri. The dividend program and the stock repurchase program each require the use of a significant portion of our cash flow. Our ability to pay dividends and
conduct stock repurchases will depend on our ability to generate sufficient cash flows from operations in the future. This ability may be subject to certain
economic, financial, competitive and other factors that are beyond our control. Our Board may, at its discretion, decrease or entirely discontinue the dividend
program at any time. Any failure to pay dividends or conduct stock repurchases, or conduct either program at all or at expected levels, after we have
announced our intention to do so may negatively impact our reputation, investor confidence in us and negatively impact our stock price.
Our stock price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial
performance, including our ability to return value to investors.
Our business and long-range planning process is designed to maximize our long-term strength, 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 the Company and our stockholders. At the same time,
however, we recognize that, when possible, it is helpful to provide investors with guidance as to our forecast of net sales, operating income, net interest
expense, tax rate, earnings per diluted 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 provide guidance going forward or 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 stock 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 stock price.
26

We periodically return value to investors through payment of quarterly dividends and common stock repurchases. In August 2023, the Company
suspended its share repurchase activity in connection with the Merger Agreement with Capri. The market price of our securities could be adversely affected if
our cash dividend rate or common stock repurchase activity differs from investors’ expectations. Refer to “If we are unable to pay quarterly dividends or
conduct stock repurchases at intended levels, our reputation and stock price may be negatively impacted.” for additional discussion of our quarterly dividend.
Certain provisions of the Company's charter, bylaws and Maryland law may delay or prevent an acquisition of the Company by a third-party.
The Company's charter, bylaws and Maryland law contain provisions that could make it more difficult for a third-party to acquire the Company without
the consent of our Board. The Company's charter permits a majority of its entire Board, without stockholder approval, to amend the charter to increase or
decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Company has the authority to issue. In
addition, the Company's Board may classify or reclassify any unissued shares of common stock or preferred stock and may set the preferences, rights and
other terms of the classified or reclassified shares without stockholder approval. Although the Company's Board has no intention to do so at the present time, it
could establish a class or series of preferred stock that could have the effect of delaying, deferring or preventing a transaction or a change in control that might
involve a premium price for the Company's common stock or otherwise be in the best interest of the Company's stockholders.
The Company's bylaws provide that nominations of persons for election to the Company's Board and the proposal of business to be considered at an
annual meeting of stockholders may be made only in the notice of the meeting, by the Company's Board, by a stockholder who is a stockholder of record as of
the record date set by the Company's Board for purposes of determining stockholders entitled to vote at the meeting, at the time of the giving of the notice by
the stockholder pursuant to the Company's bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so
nominated or on any such other business and has complied with the advance notice procedures of the Company's bylaws or by qualifying stockholders that
satisfy the proxy access provisions of the Company’s bylaws.
Under Maryland law, business combinations, including mergers, consolidations, share exchanges or, in circumstances specified in the statute, asset
transfers or issuances or reclassifications of equity securities, between the Company and any interested stockholder, generally defined as any person who
beneficially owns, directly or indirectly, 10% or more of the Company’s common stock, or any affiliate of an interested stockholder are prohibited for a five-
year period, beginning on the most recent date such person became an interested stockholder. After this period, a business combination must be approved by
two super-majority stockholder votes, unless common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of
cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The statute permits various exemptions from its
provisions, including business combinations that are exempted by our Board prior to the time that the interested stockholder becomes an interested
stockholder.
The Company’s charter provides that, except as may be provided by our Board in setting the terms of any class or series of preferred stock, any vacancy
on our Board may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum. The Company’s charter
further provides that a director may be removed only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of
directors. This provision, when coupled with the exclusive power of our Board to fill vacant directorships, may preclude stockholders from removing
incumbent directors except by a substantial affirmative vote and filling the vacancies created by such removal with their own nominees.
Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions, including derivative actions,
which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company and its directors,
officers, other employees, or the Company's stockholders and may discourage lawsuits with respect to such claims.
Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on
behalf of the Company, (b) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Company to the
Company or to the stockholders of the Company, (c) any action asserting a claim against the Company or any director or officer or other employee of the
Company arising pursuant to any provision of the Maryland General Corporation Law, the charter or the bylaws of the Company or (d) any action asserting a
claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine, shall, to the fullest
extent permitted by law, be the Circuit Court for Baltimore City, Maryland (or, if that Court does not have jurisdiction, the United States District court for the
District of Maryland, Baltimore Division). This exclusive forum provision is intended to apply to claims arising under Maryland state law and would not apply
to claims brought pursuant to the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or any other claim for which the
federal courts have exclusive jurisdiction.
27

Although we believe the exclusive forum provision benefits us by providing increased consistency in the application of Maryland law for the specified
types of actions and proceedings, this provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with
the Company and its directors, officers or other employees and may discourage lawsuits with respect to such claims.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
The Company manages strategic, operational and external risks, including cybersecurity risk, through the Enterprise Risk Management (“ERM”) program
which has direct involvement from the Board, the Audit Committee of the Board (the "Audit Committee"), and Senior Management. Our ERM program
provides a framework whereby management conducts a comprehensive annual enterprise risk assessment to identify and prioritize the most critical risks
facing the Company, as well as emerging risks, and the development and reporting of risk mitigation strategies. Through this process, we have identified
cybersecurity as a risk management priority.
The Company has a comprehensive cybersecurity risk assessment program that systematically identifies, analyzes and evaluates potential threats and
vulnerabilities that may impact the confidentiality, integrity, and availability of the Company's information systems and data. This program includes
governance structure, risk identification, risk analysis, risk management, and risk communication and reporting.
On a periodic basis, the Company engages independent third-party subject matter experts to conduct a cybersecurity maturity assessment based on the
National Institute of Standards Technology framework, focused on risk assessment, global payment card industry audits, and compliance audits to help
identify gaps and improve existing processes. In addition, the Company has a cybersecurity risk program that includes policies and procedures around
onboarding of third-parties, contractual agreement review, risk assessment and on-going monitoring of high-risk vendors.
The Company also has several tools and processes in place to actively prevent, detect and manage cybersecurity incidents. This includes:
•
Vulnerability Management – continuous scanning of the technology environment to identify and remediate potential vulnerabilities.
•
Attack Surface Management – actively monitor and prevent external attack attempts.
•
Security Monitoring and Operations – collection and aggregation of security alerts that are reviewed, analyzed and managed by the security
operations team.
•
Threat Intelligence – gathering and analyzing information about current and emerging cyber threats.
•
Incident Response – incorporating detection and recovery processes, defining roles and responsibilities across the Company, establishing
communication protocols and escalation procedures, including performing tabletop exercises.
•
Disaster Recovery and Business Continuity Plans – covering both technology and business areas globally with annual exercises to validate processes.
•
Cybersecurity Awareness – educating employees and third-party service providers on best practices for protecting the Company from cyber threats,
which includes providing annual security and privacy industry-specific training to employees as well as conducting period phishing simulations to
test their awareness.
We are continuously enhancing our cybersecurity framework in response to the ongoing incidents and threats that we face.
Cybersecurity is a key component of the Company’s risk mitigation strategy. As such, a multi-year cybersecurity strategy and roadmap are developed and
incorporated into Tapestry’s long range planning and capital allocation process.
During the three fiscal years presented within this Form 10-K, our results of operations and financial condition have not been materially affected by
cybersecurity risks and incidents. For a detailed discussion of significant risk factors regarding cybersecurity threats, refer to Item 1A — "Risk Factors —
Risks Related to Information Security and Technology.”
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Governance
Our Board has active oversight of risk management, which includes cybersecurity. Several members of our Board have cybersecurity experience gained
through direct responsibilities, oversight or other relevant education and experience. Our Board has delegated primary responsibility of cybersecurity risk to
the Audit Committee.
The Chief Information Security Officer (“CISO”) and Chief Information Officer ("CIO") provide quarterly updates to the Audit Committee on
information security, privacy risk and compliance, with updates to the Board at least annually.
Our CISO manages the Company’s cybersecurity compliance program, including prevention, mitigation, detection and remediation of cybersecurity
incidents. Our CISO, who reports directly into the CIO, has over 30 years of experience in information technology and cybersecurity and holds multiple
industry certifications.
The Company has an Information Governance, Privacy & Security Committee responsible for management oversight of cybersecurity risk, which
includes the CISO and key members of management and meets quarterly.
As part of our cyber incident response plan, our CISO is responsible escalating certain cybersecurity incidents to relevant senior management, along with
several stakeholders, who then convene to evaluate the materiality of such incident using a list of quantitative and qualitative guidelines. In addition, outside
advisors would be engaged as deemed necessary. The CEO, CFO, and Board are informed if the incident is deemed potentially material.
ITEM 2. PROPERTIES
The following table sets forth the location, use and size of the Company's key fulfillment, corporate and product development facilities as of June 29,
2024. All of the properties are leased, with the leases expiring at various times through fiscal 2037, subject to renewal options.
Location
Use
Approximate 
Square Footage
Jacksonville, Florida
Coach North America fulfillment and customer service
1,050,000 
Las Vegas, Nevada
Coach North America fulfillment
789,000 
Westchester, Ohio
Kate Spade and Stuart Weitzman North America fulfillment
601,000 
New York, New York
Corporate global headquarters
546,000 
Chiba, Japan
Coach and Kate Spade Japan regional fulfillment
278,000 
Shanghai, China
Coach Asia regional fulfillment
179,000 
New York, New York
Kate Spade corporate management
135,000 
North Bergen, New Jersey
Corporate office and customer service
106,000 
Tokyo, Japan
Corporate regional management
27,100 
Shanghai, China
Coach Greater China regional management
21,200 
Shanghai, China
Corporate regional management
21,200 
Elda, Spain
Stuart Weitzman regional management, sourcing and quality control
19,000 
Dongguan, China
Corporate sourcing, quality control and product development
17,000 
London, England
Corporate regional management
16,500 
Ho Chi Minh City, Vietnam
Coach sourcing and quality control
12,600 
Seoul, South Korea
Corporate regional management
11,400 
Singapore
Coach Singapore regional management, sourcing and quality control
8,700 
Hong Kong SAR, China
Corporate sourcing and quality control
8,500 
In the beginning of fiscal 2025, the Kate Spade corporate management office relocated to the Corporate global headquarters in New York.
In addition to the above properties, the Company occupies leased retail and outlet store locations located in North America and internationally for each of
our brands. These leases expire at various times through fiscal 2036. The Company considers these properties to be in generally good condition and believes
that its facilities are adequate for its operations and provide sufficient capacity to meet its anticipated requirements. Refer to Item 1. "Business," for further
information.
(1)
(1) 
29

ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, such as to
protect Tapestry, Inc.'s intellectual property rights, litigation instituted by persons alleged to have been injured by advertising claims or upon premises within
the Company’s control, contract disputes, insurance claims and litigation, including wage and hour litigation with present or former employees.
Although the Company's litigation can result in large monetary awards, such as when a civil jury is allowed to determine compensatory and/or punitive
damages, the Company believes that the outcome of all pending legal proceedings in the aggregate will not have a material effect on the Company's business
or consolidated financial statements. There have been no material developments with respect to any previously reported proceedings.
However, as previously disclosed, on August 10, 2023, the Company entered into a Merger Agreement by and among the Company, Merger Sub and
Capri, pursuant to which, among other things, Merger Sub will merge with and into Capri (the “Merger”) with Capri surviving the Merger and continuing as a
wholly owned subsidiary of the Company. In connection with the Company’s proposed acquisition of Capri, we have been named as a defendant in legal
proceedings by the FTC. On April 22, 2024, the FTC filed a lawsuit in the United States District Court for the Southern District of New York against us and
Capri seeking to block the proposed acquisition of Capri, claiming that the proposed acquisition would violate Section 7 of the Clayton Act and that the
Merger Agreement and the Merger constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be
enjoined. We believe the FTC’s claims are without merit, and we intend to defend the lawsuit vigorously.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
30

PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
Market and Dividend Information
Tapestry, Inc.’s common stock is listed on the New York Stock Exchange and is traded under the symbol “TPR.”
As of August 2, 2024, there were 1,844 holders of record of Tapestry’s common stock.
Any future determination to pay cash dividends will be at the discretion of Tapestry’s Board and will be dependent upon Tapestry’s financial condition,
operating results, capital requirements and such other factors as the Board deems relevant.
Performance Graph
The following graph compares the cumulative total stockholder return (assuming reinvestment of dividends) of the Company's common stock with the
cumulative total return of the Standard & Poor's ("S&P") 500 Stock Index and the S&P 1500 Apparel, Accessories & Luxury Goods Index over the five-
fiscal-year period ending June 29, 2024, the last day of Tapestry’s most recent fiscal year. The graph assumes that $100 was invested on June 29, 2019 at the
per share closing price in each of Tapestry’s common stock, the S&P 500 Stock Index and the S&P 1500 Apparel, Accessories & Luxury Goods Index, and
that all dividends were reinvested. The stock performance shown in the graph is not intended to forecast or be indicative of future performance.
Fiscal 2019
Fiscal 2020
Fiscal 2021
Fiscal 2022
Fiscal 2023
Fiscal 2024
TPR
$100.00
$41.28
$140.34
$104.01
$148.98
$154.55
S&P 1500 Apparel, Accessories & Luxury
Goods
$100.00
$56.86
$113.76
$69.66
$65.62
$57.55
S&P 500
$100.00
$104.32
$153.32
$136.72
$161.80
$201.53
Stock Repurchase Program
On May 12, 2022, the Company announced that its Board authorized a common stock repurchase program to repurchase up to $1.50 billion of its
outstanding common stock (the "2022 Share Repurchase Program"). Purchases of the Company's common stock were executed through open market
purchases, including through purchase agreements under Rule 10b5-1. The authorized value of shares available to be repurchased under this program excludes
the cost of commissions and excise taxes. As of June 29, 2024 the Company had $800 million of additional shares available to be repurchased as authorized
under the 2022 Share Repurchase Program. In August 2023, the company suspended its share repurchase activity in connection with the Merger Agreement
with Capri. Refer to Note 5 "Acquisitions," for further information. There were no shares repurchased during fiscal 2024.
31

ITEM 6. RESERVED
32

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the Company's financial condition and results of operations should be read together with the Company’s consolidated
financial statements and notes to those financial statements included elsewhere in this document. When used herein, the terms “the Company,” "Tapestry,"
“we,” “us” and “our” refer to Tapestry, Inc., including consolidated subsidiaries. References to "Coach," "Stuart Weitzman," "Kate Spade" or "kate spade new
york" refer only to the referenced brand.
INTRODUCTION
Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the accompanying
consolidated financial statements and notes thereto to help provide an understanding of our results of operations, financial condition and liquidity. MD&A is
organized as follows:
•
Overview. This section provides a general description of the business and brands as well as the Company’s growth strategy.
•
Global Economic Conditions and Industry Trends. This section includes a discussion on global economic conditions and industry trends that affect
comparability that are important in understanding results of operations and financial conditions, and in anticipating future trends.
•
Results of operations. An analysis of our results of operations in fiscal 2024 compared to fiscal 2023.
•
Non-GAAP measures. This section includes non-GAAP measures that are useful to investors and others in evaluating the Company’s ongoing
operating and financial results in a manner that is consistent with management's evaluation of business performance and understanding how such
results compare with the Company’s historical performance.
•
Financial Condition. This section includes a discussion on liquidity and capital resources including an analysis of changes in cash flow as well as
working capital and capital expenditures.
•
Critical Accounting policies and estimates. This section includes any critical accounting policies or estimates that impact the Company.
OVERVIEW
Fiscal 2024, fiscal 2023 and fiscal 2022 were 52-week periods.
Tapestry, Inc. is a house of iconic accessories and lifestyle brands. Our global house of brands unites the magic of Coach, kate spade new york and Stuart
Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and
differentiated customer experiences across business channels and geographies. We use our collective strengths to move our customers and empower our
communities, to make the fashion industry more sustainable and to build a company that’s equitable, inclusive and diverse. Individually, our brands are iconic.
Together, we can stretch what’s possible.
The Company has three reportable segments:
•
Coach - Includes global sales of primarily Coach brand products to customers through our DTC, wholesale and licensing businesses.
•
Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through our DTC, wholesale and licensing
businesses.
•
Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through our DTC and wholesale businesses.
     Each of our brands is unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated
customer experiences across business channels and geographies. Our success does not depend solely on the performance of a single business channel,
geographic area or brand.
33

Capri Holdings Limited Acquisition
On August 10, 2023, the Company entered into the Merger Agreement by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned
subsidiary of Tapestry, and Capri for $57.00 per share in cash for a total enterprise value of approximately $8.50 billion. The Capri Acquisition, once
completed, will bring together six highly complementary brands with global reach, powered by the Company’s data-rich customer engagement platform and
diversified, direct-to-consumer operating model. The transaction is expected to close during calendar year 2024. In order to finance the Capri Acquisition, on
November 27, 2023, the Company issued $4.50 billion of U.S. dollar-denominated senior unsecured notes (the "Capri Acquisition USD Senior Notes") and
€1.50 billion of Euro-denominated senior unsecured notes (the "Capri Acquisition EUR Senior Notes" and, together with the Capri Acquisition USD Senior
Notes, the "Capri Acquisition Senior Notes") which, together with the $1.40 billion of delayed draw unsecured term loan facilities (the "Capri Acquisition
Term Loan Facilities") executed on August 30, 2023, complete the expected financing for the Capri Acquisition. The Company has received regulatory
approval from all applicable jurisdictions except for the United States. On April 22, 2024, the FTC filed a complaint against the Company and Capri in the
United States District Court for the Southern District of New York seeking to enjoin the consummation of the Capri Acquisition. The FTC’s complaint alleges
that the Capri Acquisition, if consummated, would violate Section 7 of the Clayton Act and that the Merger Agreement and the Capri Acquisition constitute
unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined. The Company believes the FTC’s
claims are without merit and intends to defend the lawsuit vigorously.Refer to Note 5, "Acquisitions" for further information.
2025 Growth Strategy
In the first quarter of fiscal 2023, the Company introduced the 2025 growth strategy (“futurespeed”), designed to amplify and extend the competitive
advantages of its brands, with a focus on four strategic priorities:
•
Building Lasting Customer Relationships: The Company’s brands aim to leverage Tapestry’s transformed business model to drive customer lifetime
value through a combination of increased customer acquisition, retention and reactivation.
•
Fueling Fashion Innovation & Product Excellence: The Company aims to drive sustained growth in core handbags and small leathergoods, while
accelerating gains in footwear and lifestyle products.
•
Delivering Compelling Omni-Channel Experiences: The Company aims to extend its omni-channel leadership to meet the customer wherever they
shop, delivering growth online and in stores.
•
Powering Global Growth: The Company aims to support balanced growth across regions, prioritizing North America and China, its largest markets,
while capitalizing on opportunities in under-penetrated geographies such as Southeast Asia and Europe.
GLOBAL ECONOMIC CONDITIONS AND INDUSTRY TRENDS
The environment in which we operate is subject to a number of different factors driving global consumer spending. Consumer preferences,
macroeconomic conditions, foreign currency fluctuations and geopolitical events continue to impact overall levels of consumer travel and spending on
discretionary items, with inconsistent patterns across business channels and geographies.
We will continue to monitor the below trends and evaluate and adjust our operating strategies and cost management opportunities to mitigate the related
impact on our results of operations, while remaining focused on the long-term growth of our business and protecting the value of our brands.
For a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations, see Part I,
Item 1A. "Risk Factors".
Current Macroeconomic Conditions and Outlook
During fiscal 2024, the macroeconomic environment remained challenging and volatile. Several organizations that monitor the world’s economy,
including the International Monetary Fund, continue to forecast growth in the global economy, and remains unchanged since the third quarter of fiscal 2024.
The forecast is below the historical growth average and is reflective of the current volatile environment, including tighter monetary and fiscal policies which
have started to moderate inflation, financial market volatility and the negative economic impacts of geopolitical instability in certain regions of the world.
In fiscal 2024, freight costs have continued to moderate as compared to prior year. As a result, during fiscal 2024, the Company incurred lower freight
expense of $84.2 million when compared to the prior year, positively impacting gross margin by approximately 130 basis points.
In fiscal 2024, the U.S. Dollar has continued to fluctuate as compared to foreign currencies in regions where we conduct our business. During fiscal 2024,
this trend has resulted in impacts to our business including, but not limited to, decreased Net
34

sales of $77.3  million, a positive impact to gross margin of approximately 30 basis points which benefited from the Company's hedging activity and
approximately 10 basis point positive impact to operating margin.
Currency volatility, political instability and potential changes to trade agreements or duty rates may also contribute to a worsening of the macroeconomic
environment or adversely impact our business. Since fiscal 2019, the U.S. and China have both imposed tariffs on the importation of certain product categories
into the respective country, with limited progress in negotiations to reduce or remove the tariffs.
In response to the current environment, the Company continues to take strategic actions considering near-term exigencies and remains committed to
maintaining the health of the brands and business.
Geopolitical Disruptions to Supply Chain
During fiscal 2024, certain geopolitical events have impacted trade routes in the Red Sea which have modestly increased inventory in-transit times and
costs. The Company has taken actions to minimize any potential disruptions and, at this time, does not anticipate material impact to our business or operating
results. We will continue to closely monitor the situation.
Covid-19 Pandemic
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions
around the world, resulting in restrictions and shutdowns implemented by national, state and local authorities. Such disruptions continued during the first half
of fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic. Starting in December 2022, certain
government restrictions were lifted in the region and business trends have improved. During fiscal 2024, the Covid-19 pandemic did not materially impact our
business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business,
operating results and outlook. Refer to Part I, Item 1A. "Risk Factors" for additional discussion regarding risks to our business associated with the Covid-19
pandemic.
Tax Legislation
On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law by the Biden Administration, with tax provisions primarily focused on
implementing a 15% CAMT on global adjusted financial statement income and a 1% excise tax on share repurchases. The CAMT was effective at the
beginning of fiscal 2024 and did not have a material impact on the Company’s effective tax rate.
On December 12, 2022, the E.U. member states also reached an agreement to implement the OECD’s reform of international taxation known as GloBE,
which broadly mirrors the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies. Based on the countries in which we
do business that have enacted legislation effective January 1, 2025, we do not expect the impact of these changes to be material for fiscal 2025. A number of
other countries are also implementing similar legislation with effective dates starting in 2026. As a result, we do expect a modest negative impact on the
Company’s effective tax rate, however, this could change as other countries enact similar legislation and further guidance is released. We continue to closely
monitor regulatory developments to assess potential impacts.
35

RESULTS OF OPERATIONS
FISCAL 2024 COMPARED TO FISCAL 2023
The following table summarizes results of operations for fiscal 2024 compared to fiscal 2023. All percentages shown in the tables below and the related
discussion that follows have been calculated using unrounded numbers.
Fiscal Year Ended
June 29, 2024
July 1, 2023
Variance
 
(millions, except per share data)
 
Amount
% of
net sales
Amount
% of
net sales
Amount
%
Net sales
$
6,671.2 
100.0 % $
6,660.9 
100.0 % $
10.3 
0.2 %
Gross profit
4,889.5 
73.3 
4,714.9 
70.8 
174.6 
3.7 
SG&A expenses
3,749.4 
56.2 
3,542.5 
53.1 
206.9 
5.8 
Operating income (loss)
1,140.1 
17.1 
1,172.4 
17.6 
(32.3)
(2.8)
Interest expense, net
125.0 
1.9 
27.6 
0.4 
97.4 
NM
Other expense (income)
3.2 
— 
1.7 
— 
1.5 
84.1 
Income (loss) before provision for income taxes
1,011.9 
15.2 
1,143.1 
17.2 
(131.2)
(11.5)
Provision for income taxes
195.9 
2.9 
207.1 
3.1 
(11.2)
(5.4)
Net income (loss)
816.0 
12.2 
936.0 
14.1 
(120.0)
(12.8)
Net income (loss) per share:
 
 
     Basic
$
3.56 
  $
3.96 
  $
(0.40)
(10.1)
     Diluted
$
3.50 
  $
3.88 
  $
(0.38)
(9.8)
NM - Not meaningful
GAAP to Non-GAAP Reconciliation
The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The reported results during fiscal 2024 reflect certain items which affect the comparability of our results, as noted in the following table. There were no
charges affecting comparability during fiscal 2023. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.
36

Fiscal 2024 Items
Fiscal Year Ended June 29, 2024
Items affecting comparability
 
GAAP Basis
(As Reported)
Acquisition Costs
Non-GAAP Basis
(Excluding Items)
(millions, except per share data)
Coach
$
1,651.1  $
—  $
1,651.1 
Kate Spade
132.6 
— 
132.6 
Stuart Weitzman
(21.2)
— 
(21.2)
Corporate
(622.4)
(109.9)
(512.5)
Operating income (loss)
$
1,140.1  $
(109.9) $
1,250.0 
Net income (loss)
$
816.0  $
(184.2) $
1,000.2 
Net income (loss) per diluted common share
$
3.50  $
(0.79) $
4.29 
In fiscal 2024, the Company incurred charges as follows:
•
Acquisition Costs - Total pre-tax charges of $226.6 million attributable to the Capri Acquisition. These charges include:
◦
Interest expense, net: $116.7 million of financing related charges, which primarily includes the net impact of the Capri Acquisition Senior
Notes, and the financing fees of the unsecured bridge loan facility in an aggregate principal amount of up to $8.00 billion;
◦
SG&A expenses: $109.9 million primarily related to professional fees recorded within Corporate.
These actions taken together negatively impacted Operating income by $109.9 million, increased Interest expense, net by $116.7 million and reduced the
Provision for income taxes by $42.4 million, resulting in a net decrease in Net income by $184.2 million, or $0.79 per diluted share.
Supplemental Segment Data
Fiscal Year Ended June 29, 2024
Items Affecting Comparability
 
GAAP Basis

(As Reported)
Acquisition Costs
Non-GAAP Basis

(Excluding Items)
(millions)
Coach
$
2,224.3  $
—  $
2,224.3 
Kate Spade
738.6 
— 
738.6 
Stuart Weitzman
164.1 
— 
164.1 
Corporate
622.4 
109.9 
512.5 
SG&A expenses
$
3,749.4  $
109.9  $
3,639.5 
37

Tapestry, Inc. Summary - Fiscal 2024
Currency Fluctuation Effects
The change in net sales in fiscal 2024 compared to fiscal 2023 has been presented both including and excluding currency fluctuation effects. All
percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
Net Sales
Fiscal Year Ended
Variance
June 29, 2024
July 1, 2023
Amount
%
Constant Currency
Change
(millions)
Coach
$
5,095.3 
$
4,960.4 
$
134.9 
2.7 %
4.1 %
Kate Spade
1,334.4 
1,418.9 
(84.5)
(6.0)
(5.4)
Stuart Weitzman
241.5 
281.6 
(40.1)
(14.2)
(13.4)
Tapestry
$
6,671.2 
$
6,660.9 
$
10.3 
0.2 
1.3 
Net sales in fiscal 2024 increased 0.2% or $10.3 million to $6.67 billion. Excluding the impact of foreign currency, net sales increased by 1.3% or $87.6
million.
•
Coach Net Sales increased 2.7% or $134.9 million to $5.10 billion in fiscal 2024. Excluding the impact of foreign currency, net sales increased 4.1%
or $202.4 million. This increase in net sales was primarily due to an increase of $110.7 million in DTC sales driven by an increase in store and to a
lesser extent, e-commerce sales. The increase in net sales was also attributed to an $81.4 million increase in wholesale sales primarily driven by
international, which included growth in the digital wholesale channel.
•
Kate Spade Net Sales decreased 6.0% or $84.5 million to $1.33 billion in fiscal 2024. Excluding the impact of foreign currency, net sales decreased
5.4% or $77.1 million. This decrease in net sales was primarily due a decrease of $76.9 million in DTC sales as a result of lower store and to a lesser
extent, e-commerce sales.
•
Stuart Weitzman Net Sales decreased by 14.2% or $40.1 million to $241.5 million in fiscal 2024. Excluding the impact of foreign currency, net sales
decreased 13.4% or $37.7 million.
Gross Profit
Fiscal Year Ended
June 29, 2024
July 1, 2023
Variance
(millions)
Amount
% of Net Sales
Amount
% of Net Sales
Amount
%
Coach
$
3,875.4 
76.1 % $
3,647.1 
73.5 % $
228.3 
6.3 %
Kate Spade
871.2 
65.2 
900.1 
63.4 
(28.9)
(3.2)
Stuart Weitzman
142.9 
59.2 
167.7 
59.6 
(24.8)
(14.8)
Tapestry
$
4,889.5 
73.3 
$
4,714.9 
70.8 
$
174.6 
3.7 
Gross profit increased 3.7% or $174.6 million to $4.89 billion in fiscal 2024 from $4.71 billion in fiscal 2023. Gross margin in fiscal 2024 increased 250
basis points to 73.3% as compared to 70.8% in fiscal 2023. This increase in Gross margin was primarily attributed to lower freight costs, net pricing
improvements and favorable currency impacts. Refer to "Current Macroeconomic Conditions and Outlook" herein, for further information.
The Company includes inbound product-related transportation costs from our service providers within Cost of sales. The Company, similar to some
companies, includes certain transportation-related costs due to our distribution network in SG&A expenses rather than in Cost of sales; for this reason, our
gross margins may not be comparable to that of entities that include all costs related to their distribution network in Cost of sales.
38

Selling, General and Administrative Expenses
Fiscal Year Ended
June 29, 2024
July 1, 2023
Variance
(millions)
Amount
% of Net Sales
Amount
% of Net Sales
Amount
%
Coach
$
2,224.3 
43.7 % $
2,117.2 
42.7 % $
107.1 
5.1 %
Kate Spade
738.6 
55.3 
785.1 
55.3 
(46.5)
(5.9)
Stuart Weitzman
164.1 
68.0 
174.4 
62.0 
(10.3)
(5.9)
Corporate
622.4 
NA
465.8 
NA
156.6 
33.6 
Tapestry
$
3,749.4 
56.2 
$
3,542.5 
53.1 
$
206.9 
5.8 
SG&A expenses increased 5.8% or $206.9 million to $3.75 billion in fiscal 2024 as compared to $3.54 billion in fiscal 2023. As a percentage of net sales,
SG&A expenses increased to 56.2% during fiscal 2024 as compared to 53.1% during fiscal 2023. Excluding items affecting comparability of 109.9 million in
fiscal 2024, SG&A expenses increased 2.7% or $97.0 million to $3.64 billion from $3.54 billion in fiscal 2023. SG&A as a percentage of net sales increased
140 basis points to 54.5% as compared to 53.1% in fiscal 2023. This increase in SG&A as a percentage of net sales was primarily due to higher marketing
spend, higher compensation costs, increased occupancy costs and higher professional fees, partially offset by a decrease in distribution costs.
In fiscal 2024, Corporate incurred charges affecting comparability of $109.9 million. Excluding those items affecting comparability, SG&A expenses
increased 10.0% or $46.7 million to $512.5 million in fiscal 2024 as compared to $465.8 million in fiscal 2023.
Corporate expenses, which are included within SG&A expenses discussed above but are not directly attributable to a reportable segment.
Operating Income (Loss)
Fiscal Year Ended
June 29, 2024
July 1, 2023
Variance
(millions)
Amount
% of Net Sales
Amount
% of Net Sales
Amount
%
Coach
$
1,651.1 
32.4 % $
1,529.9 
30.8 % $
121.2 
7.9 %
Kate Spade
132.6 
9.9 
115.0 
8.1 
17.6 
15.3 
Stuart Weitzman
(21.2)
(8.8)
(6.7)
(2.4)
(14.5)
NM
Corporate
(622.4)
NA
(465.8)
NA
(156.6)
(33.6)
Tapestry
$
1,140.1 
17.1 
$
1,172.4 
17.6 
$
(32.3)
(2.8)
Operating income decreased $32.3 million to $1.14 billion during fiscal 2024 as compared to $1.17 billion in fiscal 2023. Operating margin was 17.1% in
fiscal 2024 as compared to 17.6% in fiscal 2023. Excluding items affecting comparability of $109.9 million in fiscal 2024, operating income increased $77.6
million to $1.25 billion from $1.17 billion in fiscal 2023; and operating margin increased 110 basis points to 18.7% in fiscal 2024 as compared to 17.6% in
fiscal 2023. This increase in operating margin was primarily attributed to an increase of 250 basis points in gross margin partially offset by a 140 basis points
increase in SG&A as a percentage of sales.
•
Coach Operating Income increased $121.2 million to $1.65 billion in fiscal 2024, resulting in an operating margin increase of 160 basis points to
32.4%, as compared to $1.53 billion and 30.8%, respectively in fiscal 2023. This increase in operating margin was primarily attributed to:
◦
Gross Margin, increased 260 basis points mainly due to lower freight costs, net pricing improvements and favorable currency impacts;
◦
SG&A expenses as a percentage of net sales, increased 100 basis points mainly due to higher marketing spend and higher compensation
costs, partially offset by a decrease in distribution costs.
•
Kate Spade Operating Income increased $17.6 million to $132.6 million in fiscal 2024, resulting in an operating margin increase of 180 basis points
to 9.9%, as compared to 115.0 million and 8.1%, respectively in fiscal 2023. This increase in operating margin was primarily attributed to:
(1)(2)
(1)
(2)
39

◦
Gross Margin, increased 180 basis points mainly due to lower freight costs and net pricing improvements;
◦
SG&A expenses as a percentage of net sales, remained even to prior year mainly driven by increased occupancy costs and higher
information technology costs, partially offset by lower marketing spend, depreciation and lower compensation costs.
•
Stuart Weitzman Operating Loss increased $14.5 million to a loss of $21.2 million in fiscal 2024, resulting in an operating margin decrease of 640
basis points to (8.8)%, as compared to an operating loss of $6.7 million and operating margin of (2.4)% in fiscal 2023.
•
Corporate Operating Expenses increased (33.6)% or $156.6 million to $622.4 million in fiscal 2024. Excluding items affecting comparability,
Corporate operating expenses increased $46.7 million to $512.5 million from $465.8 million in fiscal 2023. This increase in operating expenses was
attributed to an increase in SG&A expenses primarily due to increased compensation costs, higher professional fees and increased occupancy costs.
Interest Expense, net
Interest expense, net, increased $97.4 million to $125.0 million in fiscal 2024 as compared to $27.6 million in fiscal 2023. Excluding items affecting
compatibility, Interest expense, net, decreased $19.3 million to $8.3 million from $27.6 million in fiscal 2023. This decrease in Interest expense, net, was
mainly due to higher interest income partially offset by higher interest on the term loan due 2027 (the "Term Loan due 2027").
Other Expense (Income)
Other expense increased $1.5 million to $3.2 million in fiscal 2024 as compared to an expense of $1.7 million in fiscal 2023. This increase in other
expense was related to an increase in foreign exchange losses.
Provision (Benefit) for Income Taxes
The effective tax rate was 19.4% in fiscal 2024 as compared to 18.1% in fiscal 2023. Excluding items affecting comparability, the effective tax rate was
19.2% in fiscal 2024 as compared to 18.1% in fiscal 2023. The increase in effective tax rate was primarily driven by discrete items recognized in the period
partially offset by geographic mix of earnings.
Net Income (Loss)
Net income decreased 12.8% or $120.0 million to $816.0 million in fiscal 2024 as compared to a net income of $936.0 million in fiscal 2023. Excluding
items affecting comparability, net income increased 6.9% or $64.2 million to $1.00 billion in fiscal 2024 from $936.0 million in fiscal 2023.
Net Income (Loss) per Share
Net income per diluted share was $3.50 in fiscal 2024 as compared to net income per diluted share of $3.88 in fiscal 2023. Excluding items affecting
comparability, net income per diluted share increased $0.41 to $4.29 in fiscal 2024 from $3.88 in fiscal 2023. This change was primarily due to higher net
income and a decrease in shares outstanding.
FISCAL 2023 COMPARED TO FISCAL 2022
The comparison of fiscal 2023 to 2022 has been omitted from this Form 10-K, but can be referenced in our Form 10-K for the fiscal year ended July 1,
2023, filed on August 17, 2023 within Part II. Item 7. "Management's Discussion and Analysis of Financial Conditions and Results of Operations".
40

NON-GAAP MEASURES
The Company’s reported results are presented in accordance with GAAP. The reported SG&A expenses, operating income, interest expense, provision for
income taxes, net income and earnings per diluted share in fiscal 2024 reflect certain items affecting comparability, including the impact of Acquisition costs.
There were no items affecting comparability in fiscal 2023. As a supplement to the Company's reported results, these metrics are also reported on a non-
GAAP basis to exclude the impact of these items along with a reconciliation to the most directly comparable GAAP measures.
These non-GAAP performance measures were used by management to conduct and evaluate its business during its regular review of operating results for
the periods affected. Management and the Company’s Board utilized these non-GAAP measures to make decisions about the uses of Company resources,
analyze performance between periods, develop internal projections and measure management performance. The Company’s internal management reporting
excluded these items. In addition, the HR Committee uses these non-GAAP measures when setting and assessing achievement of incentive compensation
goals.
The Company operates on a global basis and reports financial results in U.S. dollars in accordance with GAAP. Fluctuations in foreign currency exchange
rates can affect the amounts reported by the Company in U.S. dollars with respect to its foreign revenues and profit. Accordingly, certain material increases
and decreases in operating results for the Company and its segments have been presented both including and excluding currency fluctuation effects. These
effects occur from translating foreign-denominated amounts into U.S. dollars and comparing to the same period in the prior fiscal year. Constant currency
information compares results between periods as if exchange rates had remained constant period-over-period. The Company calculates constant currency
revenue results by translating current period revenue in local currency using the prior year period's currency conversion rate.
We believe these non-GAAP measures are useful to investors and others in evaluating the Company’s ongoing operating and financial results in a manner
that is consistent with management's evaluation of business performance and understanding how such results compare with the Company’s historical
performance. Additionally, we believe presenting certain increases and decreases in constant currency provides a framework for assessing the performance of
the Company's business outside the United States and helps investors and analysts understand the effect of significant year-over-year currency fluctuations.
We believe excluding these items assists investors and others in developing expectations of future performance.
By providing the non-GAAP measures, as a supplement to GAAP information, we believe we are enhancing investors’ understanding of our business and
our results of operations. The non-GAAP financial measures are limited in their usefulness and should be considered in addition to, and not in lieu of, GAAP
financial measures. Further, these non-GAAP measures may be unique to the Company, as they may be different from non-GAAP measures used by other
companies.
For a detailed discussion on these non-GAAP measures, see the GAAP to Non-GAAP Reconciliation discussions above in this Item 7. "Management’s
Discussion and Analysis of Financial Condition and Results of Operations."
41

FINANCIAL CONDITION
Cash Flows - Fiscal 2024 Compared to Fiscal 2023
Fiscal Year Ended
June 29,
2024
July 1,
2023
Change
(millions)
Net cash provided by (used in) operating activities
$
1,255.6 
$
975.2 
$
280.4 
Net cash provided by (used in) investing activities
(1,041.9)
5.7 
(1,047.6)
Net cash provided by (used in) financing activities
5,214.4 
(1,035.9)
6,250.3 
Effect of exchange rate changes on cash and cash equivalents
(12.2)
(8.7)
(3.5)
Net increase (decrease) in cash and cash equivalents
$
5,415.9 
$
(63.7)
$
5,479.6 
The Company’s cash and cash equivalents increased by $5.42 billion in fiscal 2024 compared to a decrease of $63.7 million in fiscal 2023, as discussed
below.
Net cash provided by (used in) operating activities
Net cash provided by operating activities increased $280.4 million primarily due to changes in operating assets and liabilities of $426.8 million partially
offset by lower net income of $120.0 million and lower impact of non-cash adjustments of $26.4 million.
The $426.8 million increase in changes in operating asset and liability balances was primarily driven by the following:
•
Accrued liabilities were a source of cash of $91.6 million in fiscal 2024 as compared to a use of cash of $93.0 million in fiscal 2023, primarily driven
by accrued incentive compensation and an increase in accrued interest due to issuance of the Capri Acquisition Senior Notes.
•
Accounts payable were a source of cash of $49.1 million in fiscal 2024 as compared to a use of cash of $98.1 million in fiscal 2023, primarily driven
by a reduction of in-transit inventory in the prior year.
•
Other Assets were a use of cash of $0.1 million in fiscal 2024 as compared to a use of cash of $100.7 million in fiscal 2023, primarily driven by an
increase in other receivables due to the net investment hedge, tax refunds in the current year and lower cloud computing project spend.
Net cash provided by (used in) investing activities
Net cash used in investing activities was $1.04 billion in fiscal 2024 compared to a source of cash of $5.7 million in fiscal 2023, resulting in a $1.05
billion increase in net cash used in investing activities.
The $1.04 billion use of cash in fiscal 2024 was primarily due to purchases of investments of $2.71 billion, partially offset by maturities and sales of
investments of $1.68 billion, mainly related to the proceeds of the Capri Acquisition Senior Notes.
The $5.7 million source of cash in fiscal 2023 was primarily due to proceeds from maturities and sales of investments of $148.0 million, settlement of net
investment hedge of $41.9 million, partially offset by capital expenditures of $184.2 million.
Net cash provided by (used in) financing activities
Net cash provided by financing activities was $5.21 billion in fiscal 2024 as compared to a use of cash of $1.04 billion in fiscal 2023, resulting in a $6.25
billion increase in net cash provided by financing activities.
The $5.21 billion source of cash in fiscal 2024 was primarily due to proceeds from the issuance of the Capri Acquisition Senior Notes of $6.09 billion,
partially offset by the repayment of the Term Loan due 2027 of $468.8 million, and dividend payments of $321.4 million.
The $1.04 billion use of cash in fiscal 2023 was primarily due to repurchase of common stock of $703.5 million, dividend payments of $283.3 million, as
well as taxes paid to net settle share-based awards of $55.6 million.
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents was a decrease of $12.2 million as compared to a decrease of $8.7 million in fiscal 2023.
42

Cash Flows - Fiscal 2023 Compared to Fiscal 2022
The comparison of fiscal 2023 to 2022 has been omitted from this Form 10-K, but can be referenced in our Form 10-K for the fiscal year ended July 1,
2023, filed on August 17, 2023 within Part II. Item 7. "Management's Discussion and Analysis of Financial Conditions and Results of Operations".
Working Capital and Capital Expenditures
The following table presents our financial condition as of June 29, 2024 and July 1, 2023:
June 29, 2024
July 1, 2023
Change
(millions)
Cash and cash equivalents
$
6,142.0  $
726.1  $
5,415.9 
Short-term investments
1,061.8 
15.4 
1,046.4 
Current debt
(303.4)
(25.0)
(278.4)
Long-term debt
(6,937.2)
(1,635.8)
(5,301.4)
Total, net
$
(36.8) $
(919.3) $
882.5 
As of June 29, 2024, approximately 4.2% of our Cash and cash equivalents and Short-term investments were held outside the United States.
Refer to Note 12, "Debt" for discussion of the carrying values of our debt.
Sources of Liquidity
Our primary sources of liquidity are the cash flows generated from our operations, our cash and cash equivalents and short-term investments, availability
under our credit facilities and other available financing options.
The following table presents the total availability, borrowings outstanding and remaining availability under our credit facilities as of June 29, 2024:
Total Availability
Borrowings Outstanding
Remaining Availability
(millions)
Revolving Credit Facility
$
2,000.0  $
—  $
2,000.0 
Capri Acquisition Term Loan Facilities
1,400.0 
— 
1,400.0 
China Credit Facility
34.4 
— 
34.4 
Total
$
3,434.4  $
—  $
3,434.4 
Refer to Note 12, "Debt" for further information on these instruments.
The carrying amounts of the China Credit Facility include the impact of changes in the exchange rate of the United States Dollar against the RMB.
We believe that our Revolving Credit Facility is adequately diversified with no undue concentrations in any one financial institution. As of June 29, 2024,
there were 18 financial institutions participating in the Revolving Credit Facility and 24 financial institutions participating in the Capri Acquisition Term Loan
Facilities with no one participant maintaining a combined maximum commitment percentage in excess of 10%. We have no reason to believe, at this time, that
the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the facility in the event we elect to
draw funds in the foreseeable future.
We have the ability to draw on our credit facilities or access other sources of financing options available to us in the credit and capital markets for, among
other things, acquisition or integration-related costs, our restructuring initiatives, settlement of a material contingency or a material adverse business or
macroeconomic development, as well as for other general corporate business purposes.
(1)
(1)
(2)
(2)
(1)    
(2)    
(1)
(1)
(1)(2)
(1)    
(2)     
43

If (i) the Capri Acquisition has not been completed by February 10, 2025 (or such later date mutually agreed between the Company and Capri) (such date,
the “special mandatory redemption end date”), (ii) prior to the special mandatory redemption end date, the Merger Agreement is terminated in accordance with
its terms or (iii) the Company otherwise notifies the trustee that it will not pursue the consummation of the Capri Acquisition, all of the Capri Acquisition
Senior Notes will be redeemed at a redemption price equal to 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the special
mandatory redemption date.
Management believes that cash flows from operations, access to the credit and capital markets and our credit lines, on-hand cash and cash equivalents and
our investments will provide adequate funds to support our operating, capital and debt service requirements for fiscal 2025 and beyond. There can be no
assurance that any such capital will be available to the Company on acceptable terms or at all. Our ability to fund working capital needs, planned capital
expenditures and scheduled debt payments, as well as to comply with all of the financial covenants under our debt agreements, depends on future operating
performance and cash flow. This future operating performance and cash flow are subject to prevailing economic conditions and to financial, business and
other factors, some of which are beyond the Company's control.
Supply Chain Finance
To improve our working capital efficiency, we make available to certain suppliers, a voluntary supply chain finance (“SCF”) program that enables our
suppliers to sell their receivables from the Company to a global financial institution on a non-recourse basis at a rate that leverages our credit rating. We do not
have the ability to refinance or modify payment terms to the global financial institution through the SCF program. No guarantees are provided by the
Company or any of our subsidiaries under the SCF program. Refer to Note 2, "Basis of Presentation and Organization," for additional information.
Capital Expenditures
Total capital expenditures and cloud computing implementation costs were $144.1 million in fiscal 2024. Certain cloud computing implementation costs
are recognized within Prepaid expenses and Other assets on the Consolidated Balance Sheets.
Seasonality
The Company's results are typically affected by seasonal trends. During the first fiscal quarter, we typically build inventory for the winter and holiday
season. In the second fiscal quarter, working capital requirements are reduced substantially as we generate higher net sales and operating income, especially
during the holiday season.
Fluctuations in net sales, operating income and operating cash flows of the Company in any fiscal quarter may be affected by the timing of wholesale
shipments and other events affecting retail sales, including weather and macroeconomic events, such as pandemic diseases.
Stock Repurchase Plan
On May 12, 2022, the Company announced the Board authorized the additional repurchase of up to $1.50 billion of its common stock. Pursuant to this
program, purchases of the Company's common stock will be made subject to market conditions and at prevailing market prices, through open market
purchases. Repurchased shares of common stock will become authorized but unissued shares. These shares may be issued in the future for general corporate
and other purposes. In addition, the Company may terminate or limit the stock repurchase program at any time. As of June 29, 2024 the Company had
$800  million of additional shares available to be repurchased as authorized under the 2022 Share Repurchase Program. In August 2023, the Company
suspended its share repurchase activity in connection with the Capri Acquisition. Refer to Note 5, "Acquisitions," for further information. There were no
shares repurchased during fiscal 2024.
44

Contractual and Other Obligations
Firm Commitments
As of June 29, 2024, the Company's contractual obligations are as follows:
Total
Fiscal
2025
Fiscal
2026 – 2027
Fiscal
2028 – 2029
Fiscal 2030
and Beyond
(millions)
Capital expenditure & cloud computing implementation
commitments
$
14.8 
$
12.4 
$
2.4 
$
— 
$
— 
Inventory purchase obligations
485.4 
485.4 
— 
— 
— 
Operating lease obligations
1,877.7 
378.9 
570.8 
304.7 
623.3 
Finance lease obligations
1.3 
1.3 
— 
— 
— 
Debt repayment
7,306.8 
303.4 
1,785.6 
1,932.2 
3,285.6 
Interest on outstanding debt
2,563.9 
469.8 
806.0 
590.9 
697.2 
Mandatory transition tax payments
14.9 
14.9 
— 
— 
— 
Other
253.5 
96.7 
139.3 
17.5 
— 
Total
$
12,518.3 
$
1,762.8 
$
3,304.1 
$
2,845.3 
$
4,606.1 
The principal amounts and interest of the Capri Acquisition EUR Senior Notes include the impact of changes in the exchange rate of the United States
Dollar against the Euro as of June 29, 2024.
Interest on outstanding debt includes fixed interest expenses for unsecured notes. The estimated interest expenses associated with our term loan is based on
the current interest rate as of June 29, 2024. Refer to Note 12, "Debt," for further information.
Mandatory transition tax payments represent our tax obligation incurred in connection with the deemed repatriation of previously deferred foreign earnings
pursuant to the Tax Legislation. Refer to Note 15, "Income Taxes," for further information.
We expect to fund these firm commitments with operating cash flows generated in the normal course of business and, if necessary, through availability
under our credit facilities or other accessible sources of financing. Excluded from the above contractual obligations table is the non-current liability for
unrecognized tax benefits of $134.8 million as of June 29, 2024, as we cannot make a reliable estimate of the period in which the liability will be settled, if
ever. Besides the firm commitments noted above, the above table excludes other amounts included in current liabilities in the Consolidated Balance Sheets at
June 29, 2024 as these items will be paid within one year and certain long-term liabilities not requiring cash payments.
Off-Balance Sheet Arrangements
In addition to the commitments included in the table above, we have outstanding letters of credit, surety bonds and bank guarantees totaling $28.4 million
as of June  29, 2024, primarily serving to collateralize our obligation to third parties for duty, leases, insurance claims and materials used in product
manufacturing. These letters of credit expire at various dates through calendar 2039.
We do not maintain any other off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be
expected to have a material current or future effect on our consolidated financial statements. Refer to Note 13, "Commitments and Contingencies," for further
information.
(1)
(1)(2)
(3)
(1)    
(2)    
(3)    
45

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect our results of operations, financial condition and cash flows as well as the disclosure of contingent assets and
liabilities as of the date of the Company's financial statements. Actual results could differ from estimates in amounts that may be material to the financial
statements. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ from estimates in
amounts that may be material to the financial statements. The development and selection of the Company’s critical accounting policies and estimates are
periodically reviewed with the Audit Committee.
The accounting policies discussed below are considered critical because changes to certain judgments and assumptions inherent in these policies could
affect the financial statements. For more information on the Company's accounting policies, please refer to the Notes to Consolidated Financial Statements.
Revenue Recognition
Revenue is recognized when the Company satisfies its performance obligations by transferring control of promised products or services to its customers,
which may be at a point of time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the
remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to be
entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which
will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
Retail store and concession shop-in-shop revenues are recognized at the point-of-sale, when the customer obtains physical possession of the products.
Digital revenue from sales of products ordered through the Company’s e-commerce sites is recognized upon delivery and receipt of the shipment by its
customers and includes shipping and handling charges paid by customers. Retail and digital revenues are recorded net of estimated returns, which are
estimated by developing an expected value based on historical experience. Payment is due at the point of sale.
The Company recognizes revenue within the wholesale business at the time title passes and risk of loss is transferred to customers, which is generally at
the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Wholesale revenue is recorded net of estimates
for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other consideration provided to the customer. The Company's
historical estimates of these variable amounts have not differed materially from actual results.
The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks.
These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for
contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned
once the minimum royalty threshold is achieved.
At June 29, 2024, a 10% change in the allowances for estimated uncollectible accounts, markdowns and returns would not have resulted in a material
change in the Company's reserves and net sales.
Inventories
The Company holds inventory that is sold through retail and wholesale distribution channels, including e-commerce sites. Substantially all of the
Company's inventories are comprised of finished goods and are reported at the lower of cost or net realizable value. Inventory costs include material,
conversion costs, freight and duties and are primarily determined on a weighted-average cost basis. The Company reserves for inventory, including slow-
moving and aged inventory, based on current product demand, expected future demand and historical experience. A decrease in product demand due to
changing customer tastes, buying patterns or increased competition could impact the Company's evaluation of its inventory and additional reserves might be
required. Estimates may differ from actual results due to the quantity, quality and mix of products in inventory, consumer and retailer preferences and market
conditions. At June 29, 2024, a 10% change in the inventory reserve, would not have resulted in material change in inventory and cost of sales.
46

Goodwill and Other Intangible Assets
Upon acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consists of brands, customer
relationships, right-of-use assets and order backlog. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including brand
intangible assets, are not amortized, but are assessed for impairment at least annually. Finite-lived intangible assets are amortized over their respective
estimated useful lives and, along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in
circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived and indefinite-lived intangible
assets are primarily determined using discounted cash flows and the multi-period excess earnings method, respectively, with consideration of market
comparisons as appropriate. This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth rates.
The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analysis using a quantitative approach. The
quantitative goodwill impairment test identifies the existence of potential impairment by comparing the fair value of each reporting unit with its carrying
value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired. If the
carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to that excess. The impairment charge
recognized is limited to the amount of goodwill allocated to that reporting unit.
Determination of the fair value of a reporting unit and intangible asset is based on management's assessment, considering independent third-party
appraisals when necessary. Furthermore, this determination is judgmental in nature and often involves the use of significant estimates and assumptions, which
may include projected future cash flows, discount rates, growth rates, and determination of appropriate market comparables and recent transactions. These
estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge.
The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal
year. The Company determined that there was no impairment in fiscal 2024, fiscal 2023 and fiscal 2022.
Based on the annual assessment in fiscal 2024, the fair values of our Coach brand reporting units significantly exceeded their respective carrying values.
The fair values of the Kate Spade brand reporting unit and indefinite-lived brand as of the fiscal 2024 testing date exceeded their carrying values by
approximately 20% and 55%, respectively. Several factors could impact the Kate Spade brand's ability to achieve expected future cash flows, including the
optimization of the store fleet productivity, the success of international expansion strategies, the impact of promotional activity, continued economic volatility
and potential operational challenges related to the macroeconomic factors, the reception of new collections in all business channels and other initiatives aimed
at increasing profitability of the business. Given the relatively small excess of fair value over carrying value as noted above, if profitability trends decline
during fiscal 2025 from those that are expected, it is possible that an interim test, or our annual impairment test, could result in an impairment of these assets.
Valuation of Long-Lived Assets
Long-lived assets, such as property and equipment, are evaluated for impairment whenever events or circumstances indicate that the carrying value of the
assets may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result
from the use of the related asset group and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are
less than its carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering
external market participant assumptions.
In determining future cash flows, the Company takes various factors into account, including the effects of macroeconomic trends such as consumer
spending, in-store capital investments, promotional cadence, the level of advertising and changes in merchandising strategy. Since the determination of future
cash flows is an estimate of future performance, there may be future impairments in the event that future cash flows do not meet expectations.
47

Share-Based Compensation
The Company recognizes the cost of equity awards to employees and the non-employee Directors based on the grant-date fair value of those awards. The
grant-date fair values of share unit awards are based on the fair value of the Company's common stock on the date of grant. The grant-date fair value of stock
option awards is determined using the Black-Scholes option pricing model and involves several assumptions, including the expected term of the option,
expected volatility and dividend yield. The expected term of options represents the period of time that the options granted are expected to be outstanding and
is based on historical experience. Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly
traded options on the Company's stock. Dividend yield is based on the current expected annual dividend per share and the Company’s stock price. Changes in
the assumptions used to determine the Black-Scholes value could result in significant changes in the Black-Scholes value.
For stock options and share unit awards, the Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in
subsequent periods if actual forfeitures differ from the estimates. The Company estimates the forfeiture rate based on historical experience as well as expected
future behavior.
The Company grants performance-based share awards to key executives, the vesting of which is subject to the executive’s continuing employment and the
Company's or individual's achievement of certain performance goals. On a quarterly basis, the Company assesses actual performance versus the predetermined
performance goals and adjusts the share-based compensation expense to reflect the relative performance achievement. Actual distributed shares are calculated
upon conclusion of the service and performance periods, and include dividend equivalent shares. If the performance-based award incorporates a market
condition, the grant-date fair value of such award is determined using a pricing model, such as a Monte Carlo Simulation.
A hypothetical 10% change in our stock-based compensation expense would not have a material impact to our fiscal 2024 net income.
Income Taxes
The Company’s effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning strategies available in the
various jurisdictions in which the Company operates. The Company classifies interest and penalties on uncertain tax positions in the Provision for income
taxes. The Company records net deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such
determination, the Company considers all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax
planning strategies and recent and expected future results of operation. The Company reduces deferred tax assets by a valuation allowance if, based upon the
weight of available evidence, it is more likely than not that some amount of deferred tax assets is not expected to be realized. The Company is not permanently
reinvested with respect to earnings of a limited number of foreign entities and has recorded the tax consequences of remitting earnings from these entities. The
Company is permanently reinvested with respect to all other earnings.
The Company recognizes the impact of tax positions in the financial statements if those positions will more likely than not be sustained on audit, based on
the technical merits of the position. Although the Company believes that the estimates and assumptions used are reasonable and legally supportable, the final
determination of tax audits could be different than that which is reflected in historical tax provisions and recorded assets and liabilities. Tax authorities
periodically audit the Company’s income tax returns, these tax authorities may take a contrary position that could result in a significant impact on the
Company's results of operations. Significant management judgment is required in determining the effective tax rate, in evaluating tax positions and in
determining the net realizable value of deferred tax assets.
Refer to Note 15, “Income Taxes,” for further information.
Recent Accounting Pronouncements
Refer to Note 3, "Significant Accounting Policies," to the accompanying audited consolidated financial statements for a description of certain recently
adopted, issued or proposed accounting standards which may impact our consolidated financial statements in future reporting periods.
48

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
The market risk inherent in our financial instruments represents the potential loss in fair value, earnings or cash flows, arising from adverse changes in
foreign currency exchange rates or interest rates. The Company manages these exposures through operating and financing activities and, when appropriate,
through the use of derivative financial instruments. The use of derivative financial instruments is in accordance with the Company's risk management policies,
and we do not enter into derivative transactions for speculative or trading purposes.
The quantitative disclosures in the following discussion are based on quoted market prices obtained through independent pricing sources for the same or
similar types of financial instruments, taking into consideration the underlying terms and maturities and theoretical pricing models. These quantitative
disclosures do not represent the maximum possible loss or any expected loss that may occur, since actual results may differ from those estimates.
Foreign Currency Exchange Rate Risk
Foreign currency exposures arise from transactions, including firm commitments and anticipated contracts, denominated in a currency other than the
entity’s functional currency, and from foreign-denominated revenues and expenses translated into U.S. dollars. The majority of the Company's purchases and
sales involving international parties, excluding international consumer sales, are denominated in U.S. dollars and, therefore, our foreign currency exchange
risk is limited. The Company is exposed to risk from foreign currency exchange rate fluctuations resulting from its operating subsidiaries’ transactions
denominated in foreign currencies. To mitigate such risk, certain subsidiaries enter into forward currency contracts. As of June 29, 2024 and July 1, 2023, the
total notional values of outstanding forward currency contracts designated as cash flow hedges were $764.6 million and $842.3 million, respectively. As a
result of the use of derivative instruments, we are exposed to the risk that counterparties to the derivative instruments will fail to meet their contractual
obligations. To mitigate the counterparty credit risk, we only enter into derivative contracts with carefully selected financial institutions. The Company also
reviews the creditworthiness of our counterparties on a regular basis. As a result of the above considerations, we do not believe that we are exposed to any
undue concentration of counterparty credit risk associated with our derivative contracts as of June 29, 2024.
The Company is also exposed to transaction risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany
loans, payables and receivables. This primarily includes exposure to exchange rate fluctuations in the Chinese Renminbi, the British Pound Sterling and the
Japanese Yen. To manage the exchange rate risk related to these balances, the Company enters into forward currency contracts. As of June 29, 2024 and
July 1, 2023, the total notional values of outstanding forward foreign currency contracts related to these loans, payables and receivables were $348.2 million
and $272.3 million, respectively.
The fair value of outstanding forward currency contracts included in current assets at June 29, 2024 and July 1, 2023 was $58.3 million and $39.0 million,
respectively. The fair value of outstanding foreign currency contracts included in current liabilities at June 29, 2024 and July 1, 2023 was $4.8 million and
$0.3 million, respectively. The fair value of these contracts is sensitive to changes in foreign currency exchange rates.
The Company is also exposed to foreign currency exchange rate fluctuations with respect to net investment hedges. As of June 29, 2024 and July 1, 2023,
we have multiple fixed to fixed cross currency swap foreign exchange and forward foreign exchange agreements with aggregate notional amounts of
$1.45 billion and $1.20 billion, respectively, to hedge our net investment in Euro-denominated subsidiaries and Japanese Yen-denominated subsidiaries against
future volatility in the exchange rates between the United States dollar and their local currencies. The fair values of outstanding derivative contracts related to
net investment hedges included in current assets and long-term assets at June 29, 2024 and July 1, 2023 was $32.2 million and $13.1 million, respectively. The
fair values of outstanding derivative contracts related to net investment hedges included in current and long-term liabilities at June 29, 2024 and July 1, 2023
was $139.4  million and $90.5  million, respectively. Under the term of the cross currency swap contracts, we will exchange the semi-annual fixed rate
payments on United States denominated debt for fixed rate payments of 6.0% to 6.3% in Euros and fixed rate payments of 3.1% to 7.9% in USD.
We perform a sensitivity analysis to determine the effects that market risk exposures may have on the fair values of our forward foreign currency
exchange contracts and net investment hedges. We assess the risk of loss in the fair values of these contracts that would result from hypothetical changes in
foreign currency exchange rates. This analysis assumes a like movement by the foreign currencies in our hedge portfolio against the U.S. Dollar. As of June
29, 2024, a 10% appreciation or depreciation of the U.S. Dollar against the foreign currencies under contract would result in a net increase or decrease,
respectively, in the fair value of our derivative portfolio of approximately $55.0 million. This hypothetical net change in fair value should ultimately be largely
offset by the net change in the related underlying hedged items. Refer to Note 10, "Derivative Investments and Hedging Activities," for additional information.
49

Interest Rate Risk
The Company is exposed to interest rate risk in relation to its indebtedness and investments. Our exposure to changes in interest rates is primarily
attributable to debt outstanding under the Revolving Credit Facility. Refer to Note 12, "Debt," for additional information.
Our exposure to changes in interest rates is primarily attributable to debt outstanding under the $1.05 Billion Three-Year Term Loan Facility and the
$350.0 million Five-Year Term Loan Facility (collectively, the "Capri Acquisition Term Loan Facilities") and the $2.00 Billion Revolving Credit Facility.
Borrowings under the Capri Acquisition Term Loan Facilities bear interest at a rate per annum equal to, at the Company’s option, either (a) an alternate base
rate or (b) a rate based on the forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited (or any successor
administrator) plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a grid based on the ratio of (a) consolidated
debt (with certain customary deductions for unrestricted cash and permitted investments) to (b) consolidated EBITDAR. The applicable margin will initially
be (x) in the case of the Three-Year Term Loan Facility, 0.250% for base rate loans and 1.250% for SOFR loans and (y) in the case of the Five-Year Term
Loan Facility, 0.375% for base rate loans and 1.375% for SOFR loans. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal
to, at the Company’s option, (i) for borrowings in U.S. Dollars, either (a) an alternate base rate or (b) a rate based on the forward-looking SOFR term rate
administered by CME Group Benchmark Administration Limited (or any successor administrator satisfactory to the administrative agent), (ii) for borrowings
in Euros, the Euro Interbank Offered Rate, (iii) for borrowings in Pounds Sterling, the Sterling Overnight Index Average Reference Rate and (iv) for
borrowings in Japanese Yen, the Tokyo Interbank Offer Rate, plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to
a grid (the “Pricing Grid”) based on the ratio of (a) consolidated debt to (b) consolidated EBITDAR. Borrowings under the Capri Acquisition Term Loan
Facilities and Revolving Credit Facility (collectively, the "Credit Facilities") are subject to interest rate risk due to changes in SOFR. A hypothetical 10%
change in the Credit Facilities' interest rates would have resulted in an immaterial change in interest expense in fiscal 2024.
The Company is exposed to changes in interest rates related to the fair value of the senior unsecured notes.
The following table shows the estimated fair values of the senior unsecured notes at June 29, 2024 and July 1, 2023 based on external pricing data,
including available quoted market prices of the instruments, and consideration of comparable debt instruments with similar interest rates and trading
frequency, among other factors, and are classified as Level 2 measurements within the fair value hierarchy:
June 29,
2024
July 1,
2023
(millions)
USD Senior Notes:
4.250% Senior Notes due 2025
$
300.2  $
295.1 
7.050% Senior Notes due 2025
508.1 
— 
7.000% Senior Notes due 2026
770.7 
— 
4.125% Senior Notes due 2027
378.2 
371.7 
7.350% Senior Notes due 2028
1,036.5 
— 
7.700% Senior Notes due 2030
1,042.9 
— 
3.050% Senior Notes due 2032
402.9 
399.5 
7.850% Senior Notes due 2033
1,311.3 
— 
EUR Senior Notes:
5.350% EUR Senior Notes due 2025
543.8 
— 
5.375% EUR Senior Notes due 2027
550.8 
— 
5.875% EUR Senior Notes due 2031
556.4 
— 
The fair values of the Capri Acquisition EUR Senior Notes include the impact of changes in the exchange rate of the United States Dollar against the
Euro.
The interest rate payable on the 4.125% Senior Notes due 2027 and the Capri Acquisition Senior Notes will 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 respective senior
notes of such series. Refer to Note 12, "Debt" for further information on these instruments.
(1)
(1)
(1)
(1)
50

The Company’s investment portfolio is maintained in accordance with the Company’s investment policy, which defines our investment principles
including credit quality standards and limits the credit exposure of any single issuer. The primary objective of our investment activities is the preservation of
principal while maximizing interest income and minimizing risk. We do not hold any investments for trading purposes.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to “Index to Financial Statements,” appearing at the end of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the
effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as
of the end of the fiscal year covered by this annual report. Based on that evaluation, our principal executive and principal financial officers have concluded
that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of the fiscal year-end covered by this Annual Report
on Form 10-K.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting as defined in Rule 13a-
15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board regarding the
preparation and fair presentation of published financial statements. Management evaluated the effectiveness of the Company’s internal control over financial
reporting using the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control — Integrated
Framework in 2013. Management, under the supervision and with the participation of the Company’s CEO and CFO, assessed the effectiveness of the
Company’s internal control over financial reporting as of June 29, 2024 and concluded that it was effective at the reasonable assurance level.
The Company’s independent auditors have issued an audit report on the Company's internal control over financial reporting as of June 29, 2024 as
included elsewhere herein.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2024 that were identified in connection with
management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended, that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
There was no adoption, modification or termination of any Rule 10b5-1 plan or other trading arrangements by our directors and officers during the quarter
ended June 29, 2024.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
51

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the 2024 Annual Meeting of Stockholders
(the "2024 Proxy Statement") and such information is incorporated by reference herein. The 2024 Proxy Statement will be filed with the Commission within
120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The information under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and “Tapestry Stock Ownership by Certain
Beneficial Owners and Management” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated herein by reference.
There are no arrangements known to the registrant that may at a subsequent date result in a change in control of the registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
52

PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
(1) Financial Statements. For a list of financial statements filed as part of this report refer to “Index to Consolidated Financial Statements and
Supplementary Information” which appears following the signature page below.
(2) Financial Statement Schedules:
Schedule II - Valuation and Qualifying Accounts
All other financial statement schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial
Statements or Notes thereto included in this Form 10-K.
(3) Exhibits:
In reviewing agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms
and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements
contain representations, warranties, covenants and conditions by or of each of the parties to the applicable agreement. These representations,
warranties, covenants and conditions have been made solely for the benefit of the other parties to the applicable agreement and:
(i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those
statements prove to be inaccurate;
(ii) may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement,
which disclosures are not necessarily reflected in the agreement;
(iii) may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors, or under
federal securities law; and
(iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are
subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
Additional information about the Company may be found elsewhere in this report and the Company’s other public filings, which are available without
charge through the SEC’s website at http://www.sec.gov.
Exhibit
 
Description
2.1
Agreement and Plan of Merger, dated as of August 10, 2023, by and among Tapestry, Inc., Sunrise Merger Sub, Inc. and Capri Holdings
Limited, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on August 10, 2023 (File No. 001-16153)
3.1
Articles of Incorporation, dated June 1, 2000, which is incorporated herein by reference from Exhibit 3.1 of to the Registrant's Registration
Statement on Form S-1 filed on June 16, 2000
3.2
Articles Supplementary of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.2 to the Registrant’s
Current Report on Form 8-K filed on May 9, 2001
3.3
Articles of Amendment of Coach, Inc., dated May 3, 2001, which is incorporated herein by reference from Exhibit 3.3 to the Registrant’s
Current Report on Form 8-K filed on May 9, 2001
3.4
Articles of Amendment of Coach, Inc., dated May 3, 2002, which is incorporated by reference from Exhibit 3.4 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended June 29, 2002
3.5
Articles of Amendment of Coach, Inc., dated February 1, 2005, which is incorporated by reference from Exhibit 99.1 to the Registrant’s
Current Report on Form 8-K filed on February 2, 2005
3.6
Articles of Amendment to Charter of Tapestry, Inc., effective as of October 31, 2017, which is incorporated by reference from Exhibit 3.1 to
the Registrant's Current Report on Form 8-K filed on October 31, 2017
3.7
Amended and Restated Bylaws of Tapestry, Inc., effective as of October 31, 2017, which is incorporated herein by reference from Exhibit 3.2
to the Registrant’s Current Report on Form 8-K filed on October 31, 2017
3.8
Bylaws of Tapestry, Inc., effective as of April 12, 2023, which is incorporated herein by reference from Exhibit 3.1 to the Registrant’s Current
Report on Form 8-K filed on April 13, 2023
4.1
Specimen Certificate for Common Stock of Tapestry, Inc. which is incorporated by reference from Exhibit 4.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 2018, filed on August 16, 2018
4.2
Indenture, dated as of March 2, 2015, between Coach, Inc. and U.S. Bank National Association, as trustee, which is incorporated herein by
reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 2, 2015
53

Exhibit
 
Description
4.3
First Supplemental Indenture, dated as of March 2, 2015, relating to the 4.250% senior unsecured notes due 2025, between Coach, Inc. and
U.S. Bank National Association, as trustee, which is incorporated herein by reference from Exhibit 4.2 to the Registrant’s Current Report on
Form 8-K filed on March 2, 2015
4.4
Form of 4.250% senior unsecured notes due 2025 (included in the First Supplemental Indenture), which is incorporated herein by reference
from Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on March 2, 2015
4.5
Third Supplemental Indenture, dated as of June 20, 2017, relating to the 4.125% senior unsecured notes due 2027, between Coach, Inc. and
U.S. Bank National Association, as trustee, which is incorporated by reference from Exhibit 4.2 to the Registrant's Current Report on Form 8-
K, filed on June 20, 2017
4.6
Form of 4.125% senior unsecured notes due 2027 (included in the Third Supplemental Indenture), which is incorporated by reference from
Exhibit 4.4 to the Registrant's Current Report on Form 8-K, filed on June 20, 2017
4.7
Indenture, dated as of December 1, 2021, between the Company and U.S. Bank National Association, as trustee, which is incorporated herein
by reference from Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on December 1, 2021
4.8
First Supplemental Indenture, dated as of December 1, 2021, relating to the 3.050% senior unsecured notes due 2032, between the Company
and U.S. Bank National Association, as trustee, which is incorporated by reference from Exhibit 4.2 to the Registrant’s Current Report on
Form 8-K filed on December 1, 2021
4.9
Form of 3.050% senior unsecured notes due 2032 (included in the First Supplemental Indenture), which is incorporated by reference from
Exhibit 4.3 to the Registrant’s Current Report on Form 8-K, filed on December 1, 2021
4.10
Second Supplemental Indenture, dated as of November 27, 2023, relating to the 7.050% senior unsecured notes due 2025, the 7.000% senior
unsecured notes due 2026, the 7.350% senior unsecured notes due 2028, the 7.700% senior unsecured notes due 2030 and the 7.850% senior
unsecured notes due 2033, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank
National Association), as trustee, which is incorporated by reference from Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed
on November 27, 2023
4.11
Form of 7.050% senior unsecured notes due 2025 (included in the Second Supplemental Indenture), which is incorporated by reference from
Exhibit 4.3 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.12
Form of 7.000% senior unsecured notes due 2026 (included in the Second Supplemental Indenture), which is incorporated by reference from
Exhibit 4.4 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.13
Form of 7.350% senior unsecured notes due 2028 (included in the Second Supplemental Indenture), which is incorporated by reference from
Exhibit 4.5 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.14
Form of 7.700% senior unsecured notes due 2030 (included in the Second Supplemental Indenture), which is incorporated by reference from
Exhibit 4.6 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.15
Form of 7.850% senior unsecured notes due 2033 (included in the Second Supplemental Indenture), which is incorporated by reference from
Exhibit 4.7 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.16
Third Supplemental Indenture, dated as of November 27, 2023, relating to the 5.350% senior unsecured notes due 2025, the 5.375% senior
unsecured notes due 2027 and the 5.875% senior unsecured notes due 2031, among the Company, U.S. Bank Trust Company, National
Association (as successor in interest to U.S. Bank National Association), as trustee, and Elavon Financial Services DAC, as paying agent,
which is incorporated by reference from Exhibit 4.8 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.17
Form of 5.350% senior unsecured notes due 2025 (included in the Third Supplemental Indenture), which is incorporated by reference from
Exhibit 4.9 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.18
Form of 5.375% senior unsecured notes due 2027 (included in the Third Supplemental Indenture), which is incorporated by reference from
Exhibit 4.10 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.19
Form of 5.875% senior unsecured notes due 2031 (included in the Third Supplemental Indenture), which is incorporated by reference from
Exhibit 4.11 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2023
4.20
Description of Securities, which is incorporated by reference from Exhibit 4.9 to the Registrant’s Annual Report on Form 10-K for the fiscal
year ended June 27, 2020
10.1†
Coach, Inc. Non-Qualified Deferred Compensation Plan for Outside Directors, which is incorporated by reference from Exhibit 10.14 to The
Registrant’s Annual Report on Form 10-K for the fiscal year ended June 28, 2003
54

Exhibit
 
Description
10.2†
Amended and Restated Tapestry, Inc. 2001 Employee Stock Purchase Plan, which is incorporated by reference to Appendix C to the
Registrant's Definitive Proxy Statement for the 2016 Annual Meeting of Stockholders filed on September 30, 2016
10.3†
Coach, Inc. 2004 Stock Incentive Plan, which is incorporated by reference from Appendix A to the Registrant’s Definitive Proxy Statement
for the 2004 Annual Meeting of Stockholders, filed on September 29, 2004
10.4†
Coach, Inc. 2010 Stock Incentive Plan, which is incorporated by reference from Appendix A to the Registrant’s Definitive Proxy Statement
for the 2010 Annual Meeting of Stockholders, filed on September 24, 2010
10.5†
Amendment to the Coach, Inc. 2010 Stock Incentive Plan, which is incorporated herein by reference to Exhibit 10.1 to the Registrant’s
Current Report on Form 8-K filed on September 22, 2014
10.6†
Coach, Inc. Amended and Restated 2010 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant’s
Definitive Proxy Statement for the 2014 Annual Meeting of Stockholders, filed on September 26, 2014
10.7†
Coach, Inc. Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 18, 2015), which is incorporated
herein by reference from Appendix B to the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting of Stockholders, filed on
September 25, 2015
10.8†
Coach Inc. Executive Deferred Compensation Plan, effective as of January 1, 2016, which is incorporated herein by reference from Exhibit
10.10 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.9†
Coach, Inc. Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 23, 2016), which is incorporated
herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2016 Annual Meeting of the Stockholders, filed
on September 30, 2016
10.10†
Coach, Inc. Amended and Restated 2010 Stock Incentive Plan (Amended and Restated as of September 20, 2017), which is incorporated
herein by reference from Appendix B to the Registrant's Definitive Proxy Statement for the 2017 Annual Meeting of the Stockholders, filed
on September 29, 2017
10.11†
Tapestry Inc. 2018 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant's Definitive Proxy
Statement for the 2018 Annual Meeting of Stockholders, filed on September 28, 2018
10.12†
Form of Stock Option Grant Notice and Agreement under the Tapestry, Inc. 2018 Stock Incentive Plan, which is incorporated herein by
reference from Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.13†
Form of Restricted Stock Unit Award Grant Notice and Agreement under the Tapestry, Inc. 2018 Stock Incentive Plan, which is incorporated
herein by reference from Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.14†
Form of Performance Restricted Stock Unit Agreement Grant Notice and Agreement under the Tapestry, Inc. 2018 Stock Incentive Plan,
which is incorporated herein by reference from Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June
29, 2019
10.15†
Form of Stock Option Grant Notice and Agreement for Outside Directors under the Tapestry, Inc. 2018 Stock Incentive Plan, which is
incorporated by reference from Exhibit 10.3 to the Registrant's Quarterly Report on Form-Q for the period ended December 29, 2018
10.16†
Form of Restricted Stock Unit Grant Notice and Agreement for Outside Directors under the Tapestry, Inc. 2018 Stock Incentive Plan, which
is incorporated by reference from Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the period ended December 29, 2018
10.17†
Tapestry, Inc. 2018 Performance-Based Annual Incentive Plan, which is incorporated herein by reference from Exhibit 10.1 to the
Registrant's Current Report on Form 8-K, filed on August 10, 2018
10.18†
Letter Agreement, dated June 22, 2015, between Coach, Inc. and Todd Kahn, which is incorporated by reference from Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, filed on June 22, 2015
10.19†
Letter Agreement, dated August 11, 2016, between Coach Inc. and Todd Kahn, which is incorporated herein by reference from Exhibit 10.20
to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
10.20
Redemption Agreement and Amendment to Limited Liability Company Agreement, dated as of August 1, 2016, by and between Legacy
Yards LLC, Coach Legacy Yards LLC and Podium Fund Tower C SPV LLC, which is incorporated by reference from Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the period ended October 1, 2016
10.21
Lease Agreement, dated as of August 1, 2016, by and between Coach, Inc. and Legacy Yards Tenant LP, which is incorporated by reference
from Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the period ended October 1, 2016
10.22
Amended and Restated Development Agreement, dated as of August 1, 2016, by and between ERY Developer LLC and Coach Legacy Yards
LLC, which is incorporated by reference from Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the period ended October
1, 2016
55

Exhibit
 
Description
10.23
Termination and Release of the Coach Guaranty, dated as of August 1, 2016, by and between Podium Fund Tower C SPV LLC and ERY
Developer LLC, which is incorporated by reference from Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the period ended
October 1, 2016
10.24
Sublease, dated as of September 13, 2017 between Coach, Inc. and The Guardian Life Insurance Company of America, a New York mutual
insurance company, which is incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on September
14, 2017.
10.25†
Letter Agreement, dated May 8, 2019 between the Registrant and Thomas Glaser, which is incorporated herein by reference from Exhibit
10.37 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.26†
Tapestry, Inc. Severance Pay Plan for Vice Presidents and Above, Amended and Restated effective May 9, 2019, which is incorporated herein
by reference from Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.27†
Tapestry, Inc. Special Severance Plan, effective August 12, 2019, which is incorporated herein by reference from Exhibit 10.40 to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019
10.28†
Amended & Restated Tapestry Inc. 2018 Stock Incentive Plan, which is incorporated herein by reference from Appendix B to the Registrant's
Definitive Proxy Statement for the 2019 Annual Meeting of Stockholders, filed on September 27, 2019
10.29
Credit Agreement, dated as of October 24, 2019, by and among Tapestry, Inc., Bank of America, N.A. as Administrative Agent, JPMorgan
Chase Bank, N.A. and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party thereto, incorporated by reference
from Exhibit 10.4 to Tapestry’s Quarterly Report on Form 10-Q filed on November 7, 2019
10.30†
Letter Agreement, dated January 28, 2020, between the Registrant and Liz Fraser, which is incorporated herein by reference from Exhibit
10.33 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021.
10.31
Amendment No. 1, dated May 19, 2020, to the Credit Agreement, dated as of October 24, 2019 by and among Tapestry, Inc., Bank of
America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A. and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other
lenders party thereto, which is incorporated herein by reference from Exhibit 10.37 to the Registrant’s Annual Report on Form 10-K for the
fiscal year ended June 27, 2020
10.32†
Letter Agreement, dated July 20, 2020 between the Registrant and Todd Kahn, which is incorporated herein by reference from Exhibit 10.40
to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020
10.33†
Second Amended and Restated Tapestry Inc. 2018 Stock Incentive Plan, which is incorporated by reference from Appendix B to the
Registrant's Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders, filed on September 25, 2020
10.34†
Letter Agreement, dated October 24, 2020 between the Registrant and Joanne Crevoiserat, incorporated by reference from Exhibit 10.5 to the
Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 2020
10.35
First Amendment to Lease, dated as of March 12, 2021, between Legacy Yards Tenant LP, a Delaware limited partnership and Tapestry, Inc.,
incorporated by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q
10.36†
Letter Agreement, dated April 12, 2021, between the Registrant and Todd Kahn, incorporated by reference from Exhibit 10.2 to the
Registrant’s Quarterly Report on Form 10-Q
10.37†
Letter Agreement, dated April 26, 2021, between the Registrant and Scott Roe, incorporated by reference from Exhibit 10.4 to the
Registrant’s Quarterly Report on Form 10-Q
10.38
Waiver, dated August 11, 2021, to the Credit Agreement, dated as of October 24, 2019 by and among Tapestry, Inc., Bank of America, N.A.
as Administrative Agent, JPMorgan Chase Bank, N.A. and HSBC Bank USA, N.A., as Co-Syndication Agents, and the other lenders party
thereto, which is incorporated herein by reference from Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the fiscal year
ended July 3, 2021
10.39
Credit Agreement dated as of May 11, 2022, among Tapestry, Inc., the foreign subsidiary borrowers from time to time party thereto, the
lenders from time to time party thereto, and Bank of America, N.A. as administrative agent, incorporated by reference from Exhibit 1.1 to the
Registrant’s Current Report on Form 8-K filed on May 12, 2022
10.40†
Letter Agreement, dated August 4, 2022, between the Registrant and Scott Roe, incorporated by reference from Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, filed on August 4, 2022
10.41
Amendment No. 1, dated as of August 30, 2023, to the Credit Agreement, dated as of May 11, 2022, among the Company, the lenders party
thereto and Bank of America, N.A., as administrative agent, which is incorporated herein by reference from Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q filed on November 9, 2023
56

Exhibit
 
Description
10.42
Term Loan Credit Agreement, dated as of August 30, 2023, among the Company, the lenders party thereto and Bank of America, N.A., as
administrative agent, which is incorporated herein by reference from Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on
November 9, 2023
19.1*
Insider Trading Policies and Procedures of Tapestry, Inc.
21.1* 
  List of Subsidiaries of Tapestry, Inc.
23.1* 
  Consent of Deloitte & Touche LLP
31.1* 
  Rule 13(a)-14(a)/15(d)-14(a) Certification of the Company's Chief Executive Officer
31.2*
Rule 13(a)-14(a)/15(d)-14(a) Certification of the Company's Chief Financial Officer
32.1* 
  Section 1350 Certification of the Company's Chief Executive Officer
32.2*
Section 1350 Certification of the Company's Chief Financial Officer
97.1*
Clawback Policy of Tapestry, Inc.
101.INS*
  Inline XBRL Instance Document
Note: the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL
document.
101.SCH*
  Inline XBRL Taxonomy Extension Schema Document
101.CAL*
  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*
  Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
  Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*
  Inline XBRL Taxonomy Extension Definition Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*    Filed herewith
†    Management contract or compensatory plan or arrangement.
ITEM 16. FORM 10-K SUMMARY
None.
57

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.
TAPESTRY, INC.
Date: August 15, 2024
By: /s/ Joanne C. Crevoiserat
Name: Joanne C. Crevoiserat
Title: Chief Executive Officer, and Director
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 indicated below on August 15, 2024.
Signature
 
Title
/s/ Joanne C. Crevoiserat
 
Chief Executive Officer, and Director
Joanne C. Crevoiserat
(Principal Executive Officer)
/s/ Scott A. Roe
 
Chief Operating Officer and Chief Financial Officer
Scott A. Roe
(Principal Financial Officer)
/s/ Manesh B. Dadlani
Corporate Controller
Manesh B. Dadlani
(Principal Accounting Officer)
/s/ Anne Gates
 
Independent Chair, Board of Directors
Anne Gates
/s/ John P. Bilbrey
Director
John P. Bilbrey
/s/ Darrell Cavens
 
Director
Darrell Cavens
/s/ David Elkins
 
Director
David Elkins
/s/ Johanna W. Faber
 
Director
Johanna W. Faber
/s/ Thomas R. Greco
 
Director
Thomas R. Greco
/s/ Kevin Hourican
Director
Kevin Hourican
/s/ Alan Lau
 
Director
Alan Lau
/s/ Pam Lifford
 
Director
Pam Lifford
/s/ Annabelle Yu Long
 
Director
Annabelle Yu Long
58

TAPESTRY, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Page 
Number
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
60
Consolidated Financial Statements:
Consolidated Balance Sheets
63
Consolidated Statements of Operations
64
Consolidated Statements of Comprehensive Income
65
Consolidated Statements of Stockholders’ Equity
66
Consolidated Statements of Cash Flows 
67
Notes to Consolidated Financial Statements
68
Financial Statement Schedules:
 
Schedule II — Valuation and Qualifying Accounts
104
All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes
thereto.
59

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Tapestry, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Tapestry, Inc. and subsidiaries (the "Company") as of June 29, 2024 and July 1, 2023, the
related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended
June 29, 2024, and the related notes and the financial statement Schedule II listed in the Index to the Consolidated Financial Statements (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
June 29, 2024 and July 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 29, 2024, in conformity
with accounting principles generally accepted in the United States of America.
We have also 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 June  29, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated August  15, 2024, expressed an unqualified opinion on the
Company's internal control over financial reporting.
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 Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required
to be communicated to the audit committee and that (1) relates 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 financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on
the accounts or disclosures to which it relates.
Goodwill and Other Intangible Assets - Kate Spade - Refer to Notes 3 and 14 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill and indefinite-lived brand intangible assets for impairment involves the comparison of carrying value to their
respective fair values. The determination of the fair values requires management to make significant estimates and assumptions related to forecasts of future
cash flows and growth rates, as well as discount rates. Changes in these assumptions could have a significant impact on either the fair values, the amount of
any impairment charge, or both.
The fair values of the Kate Spade brand reporting unit and indefinite-lived brand, which are included in the Company's goodwill and intangible asset balances,
respectively, as of the fiscal 2024 testing date exceeded their respective carrying values by approximately 20% and 55%, respectively. Several factors could
impact the Kate Spade brand's ability to achieve expected future cash flows, including the optimization of the store fleet productivity, the success of
international expansion strategies, the impact of promotional activity, continued economic volatility and potential operational challenges related to the
macroeconomic factors, the reception of new collections in all channels, and other initiatives aimed at increasing profitability of the business.
60

Given the significant judgments made by management to estimate the fair value of the Kate Spade operations used in both the brand's goodwill and indefinite-
lived brand intangible fair value analyses and the difference between their fair values and carrying values, performing auditing procedures to evaluate the
reasonableness of management’s judgments regarding the business and valuation assumptions utilized in the valuation model, particularly the forecasts of
future cash flows and growth rates and the selection of the discount rate, required a high degree of auditor judgment and an increased extent of effort,
including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the projected future cash flows and growth rates and discount rates included the following:
•
We tested the effectiveness of management’s controls over its Kate Spade goodwill and indefinite-lived brand intangible asset impairment
evaluations, including controls over the forecasts of future Kate Spade revenue and profit margin, and the selection of the discount rate.
•
We evaluated management’s ability to accurately forecast by comparing Kate Spade actual revenue and profit margin results to historical projections.
•
We evaluated management’s Kate Spade revenue and profit margin projections over the projection period by comparing them with (1) internal
communications to management and the Board of Directors, (2) peer companies, and (3) industry and market conditions.
•
With the assistance of our fair value specialists, we evaluated the Kate Spade market approach, including evaluating the reasonableness of the
selected guideline public companies and the resulting market multiples calculations, as well as benchmarking the selected multiples against these
guideline public companies.
•
We used the assistance of our fair value specialists to assess the acceptability of the weighting applied to value indications from different valuation
techniques for Kate Spade.
•
We used the assistance of our fair value specialists to assess the acceptability of the implied equity premium for Kate Spade. With respect to the
market value of equity, we tested the calculations used in developing the respective market value of equity.
•
We used the assistance of our fair value specialists in evaluating the Kate Spade fair value methodology and the discount rate, including testing the
underlying source information and the mathematical accuracy of the calculations. Specific to the discount rate, we considered the inputs and
calculations, and we developed a range of independent estimates and compared those to the respective discount rates selected by management.
/s/ DELOITTE & TOUCHE LLP
New York, New York
August 15, 2024
We have served as the Company's auditor since 2002.
61

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Tapestry, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Tapestry, Inc. and subsidiaries (the “Company”) as of June  29, 2024 based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 29, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
financial statements and financial statement schedule as of and for the year ended June 29, 2024, of the Company and our report dated August 15, 2024,
expressed an unqualified opinion on those financial statements.
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/ DELOITTE & TOUCHE LLP
New York, New York
August 15, 2024
62

TAPESTRY, INC.
CONSOLIDATED BALANCE SHEETS
June 29,
2024
July 1,
2023
(millions)
ASSETS
 
Current Assets:
 
 
Cash and cash equivalents
$
6,142.0  $
726.1 
Short-term investments
1,061.8 
15.4 
Trade accounts receivable, less allowances for credit losses of $6.9 and $5.8, respectively
228.2 
211.5 
Inventories
824.8 
919.5 
Income tax receivable
236.2 
231.1 
Prepaid expenses
170.9 
126.3 
Other current assets
139.8 
133.6 
Total current assets
8,803.7 
2,363.5 
Property and equipment, net
514.7 
564.5 
Operating lease right-of-use assets
1,314.4 
1,378.7 
Goodwill
1,204.1 
1,227.5 
Intangible assets
1,353.6 
1,360.1 
Deferred income taxes
44.1 
40.4 
Other assets
161.7 
182.1 
Total assets
$
13,396.3  $
7,116.8 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
Current Liabilities:
 
 
Accounts payable
$
452.2  $
416.9 
Accrued liabilities
656.3 
547.1 
Current portion of operating lease liabilities
299.7 
297.5 
Current debt
303.4 
25.0 
Total current liabilities
1,711.6 
1,286.5 
Long-term debt
6,937.2 
1,635.8 
Long-term operating lease liabilities
1,224.2 
1,333.7 
Deferred income taxes
251.3 
240.0 
Long-term income taxes payable
— 
43.5 
Other liabilities
375.1 
299.5 
Total liabilities
10,499.4 
4,839.0 
See Note 13 on commitments and contingencies
Stockholders’ Equity:
 
 
Preferred stock: (authorized 25.0 million shares; $0.01 par value) none issued
— 
— 
Common stock: (authorized 1.00 billion shares; $0.01 par value) issued and outstanding – 230.2 million and 227.4
million shares, respectively
2.3 
2.3 
Additional paid-in-capital
3,762.7 
3,682.2 
Retained earnings (accumulated deficit)
(722.2)
(1,216.8)
Accumulated other comprehensive income (loss)
(145.9)
(189.9)
Total stockholders’ equity
2,896.9 
2,277.8 
Total liabilities and stockholders’ equity
$
13,396.3  $
7,116.8 
See accompanying Notes.
63

TAPESTRY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Year Ended
 
June 29,
2024
July 1,
2023
July 2,
2022
(millions, except per share data)
Net sales
$
6,671.2  $
6,660.9  $
6,684.5 
Cost of sales
1,781.7 
1,946.0 
2,034.1 
Gross profit
4,889.5 
4,714.9 
4,650.4 
Selling, general and administrative expenses
3,749.4 
3,542.5 
3,474.6 
Operating income (loss)
1,140.1 
1,172.4 
1,175.8 
Loss on extinguishment of debt
— 
— 
53.7 
Interest expense, net
125.0 
27.6 
58.7 
Other expense (income)
3.2 
1.7 
16.4 
Income (loss) before provision for income taxes
1,011.9 
1,143.1 
1,047.0 
Provision for income taxes
195.9 
207.1 
190.7 
Net income (loss)
$
816.0  $
936.0  $
856.3 
Net income (loss) per share:
 
 
 
Basic
$
3.56  $
3.96  $
3.24 
Diluted
$
3.50  $
3.88  $
3.17 
Shares used in computing net income (loss) per share:
 
 
 
Basic
229.2 
236.4 
264.3 
Diluted
233.2 
241.3 
270.1 
See accompanying Notes.
64

TAPESTRY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Fiscal Year Ended
 
June 29,
2024
July 1,
2023
July 2,
2022
(millions)
Net income (loss)
$
816.0 
$
936.0 
$
856.3 
Other comprehensive income (loss), net of tax:
 
 
 
Unrealized gains (losses) on cash flow hedging derivatives, net
22.2 
37.2 
(1.6)
Unrealized gains (losses) on available-for-sale investments, net
(0.2)
0.5 
(0.5)
Foreign currency translation adjustments
22.0 
(56.7)
(96.8)
Other comprehensive income (loss), net of tax
44.0 
(19.0)
(98.9)
Comprehensive income (loss)
$
860.0 
$
917.0 
$
757.4 
See accompanying Notes.
65

TAPESTRY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Shares of Common
Stock
Common Stock
Additional Paid-in-
Capital
Retained Earnings /
(Accumulated
Deficit)
Accumulated Other
Comprehensive
Income (Loss)
Total Stockholders'
Equity
(millions, except per share data)
Balance at July 3, 2021
279.5 
$
2.8 
$
3,487.0 
$
(158.5)
$
(72.0)
$
3,259.3 
Net income (loss)
— 
— 
— 
856.3 
— 
856.3 
Other comprehensive income (loss)
— 
— 
— 
— 
(98.9)
(98.9)
Shares issued, pursuant to stock-based
compensation arrangements, net of shares
withheld for taxes
3.7 
— 
43.8 
— 
— 
43.8 
Share-based compensation
— 
— 
89.4 
— 
— 
89.4 
Repurchase of common stock
(42.0)
(0.4)
— 
(1,599.6)
— 
(1,600.0)
Dividends declared ($1.00 per share)
— 
— 
— 
(264.4)
— 
(264.4)
Balance at July 2, 2022
241.2 
2.4 
3,620.2 
(1,166.2)
(170.9)
2,285.5 
Net income (loss)
— 
— 
— 
936.0 
— 
936.0 
Other comprehensive income (loss)
— 
— 
— 
— 
(19.0)
(19.0)
Shares issued, pursuant to stock-based
compensation arrangements, net of shares
withheld for taxes
4.0 
0.1 
(16.8)
— 
— 
(16.7)
Share-based compensation
— 
— 
78.8 
— 
— 
78.8 
Repurchase of common stock, including
excise tax
(17.8)
(0.2)
— 
(703.3)
— 
(703.5)
Dividends declared ($1.20 per share)
— 
— 
— 
(283.3)
— 
(283.3)
Balance at July 1, 2023
227.4 
2.3 
3,682.2 
(1,216.8)
(189.9)
2,277.8 
Net income (loss)
— 
— 
— 
816.0 
— 
816.0 
Other comprehensive income (loss)
— 
— 
— 
— 
44.0 
44.0 
Shares issued, pursuant to stock-based
compensation arrangements, net of
shares withheld for taxes
2.8 
— 
(5.4)
— 
(5.4)
Share-based compensation
— 
— 
85.9 
— 
— 
85.9 
Repurchase of common stock, including
excise tax
— 
— 
— 
— 
— 
— 
Dividends declared ($1.40 per share)
— 
— 
— 
(321.4)
— 
(321.4)
Balance at June 29, 2024
230.2 
$
2.3 
$
3,762.7 
$
(722.2)
$
(145.9)
$
2,896.9 
See accompanying Notes.
66

TAPESTRY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Year Ended
 
June 29,
2024
July 1,
2023
July 2,
2022
(millions)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
 
 
 
Net income (loss)
$
816.0  $
936.0  $
856.3 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
174.0 
182.2 
195.3 
Provision for bad debt
4.3 
5.7 
19.9 
Loss on extinguishment of debt
— 
— 
53.7 
Share-based compensation
85.9 
78.8 
72.2 
Amortization of cloud computing arrangements
55.0 
42.0 
10.7 
Acceleration program charges
— 
— 
14.8 
Deferred income taxes
2.5 
41.2 
29.9 
Changes to lease related balances, net
(42.6)
(36.0)
(53.4)
Other non-cash charges, net
(7.4)
(15.8)
31.3 
Changes in operating assets and liabilities:
Trade accounts receivable
(37.3)
44.1 
(96.0)
Inventories
85.8 
49.9 
(311.7)
Accounts payable
49.1 
(98.1)
86.4 
Accrued liabilities
91.6 
(93.0)
(16.1)
Other liabilities
(21.2)
(61.1)
(9.2)
Other assets
(0.1)
(100.7)
(30.9)
Net cash provided by (used in) operating activities
1,255.6 
975.2 
853.2 
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Purchases of investments
(2,713.0)
(6.7)
(540.4)
Proceeds from maturities and sales of investments
1,676.3 
154.7 
380.7 
Purchases of property and equipment
(108.9)
(184.2)
(93.9)
Settlement of net investment hedge
103.7 
41.9 
— 
Net cash provided by (used in) investing activities
(1,041.9)
5.7 
(253.6)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
 
 
Payment of dividends
(321.4)
(283.3)
(264.4)
Repurchase of common stock
— 
(703.5)
(1,600.0)
Proceeds from issuance of debt, net of discount
6,089.5 
— 
998.5 
Payment of debt issuance costs
(78.3)
— 
(4.6)
Payment of debt extinguishment costs
— 
— 
(50.7)
Proceeds from share-based awards
27.3 
38.8 
74.7 
Repayment of debt
(468.8)
(31.2)
(900.0)
Taxes paid to net settle share-based awards
(32.7)
(55.6)
(30.6)
Other financing activity
(1.2)
(1.1)
(1.0)
Net cash provided by (used in) financing activities
5,214.4 
(1,035.9)
(1,778.1)
Effect of exchange rate changes on cash and cash equivalents
(12.2)
(8.7)
(39.4)
Net (decrease) increase in cash and cash equivalents
5,415.9 
(63.7)
(1,217.9)
Cash and cash equivalents at beginning of year
726.1 
789.8 
2,007.7 
Cash and cash equivalents at end of year
$
6,142.0  $
726.1  $
789.8 
Supplemental information:
 
 
 
Cash paid for income taxes, net
$
200.1  $
231.9  $
179.7 
Cash paid for interest
$
262.8  $
82.6  $
67.8 
Non-cash investing activity – property and equipment obligations
$
15.1  $
11.0  $
6.7 
 See accompanying Notes.
67

TAPESTRY, INC.
Notes to Consolidated Financial Statements
1. NATURE OF OPERATIONS
Tapestry, Inc. (the "Company") is a leading New York-based house of iconic accessories and lifestyle brands. Our global house of brands unites the magic
of Coach, kate spade new york, and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and
authenticity defined by distinctive products and differentiated customer experiences across business channels and geographies. We use our collective strengths
to move our customers and empower our communities, to make the fashion industry more sustainable and to build a company that’s equitable, inclusive and
diverse. Individually, our brands are iconic. Together, we can stretch what’s possible. The Company operates in three reportable segments: Coach, Kate Spade
and Stuart Weitzman. See Note 17, "Segment Information," for additional information.
2. BASIS OF PRESENTATION AND ORGANIZATION
Fiscal Year
The Company’s fiscal year ends on the Saturday closest to June 30. Unless otherwise stated, references to years in the financial statements relate to fiscal
years. The fiscal year ended June 29, 2024 (“fiscal 2024”) was a 52-week period. The fiscal year ended July 1, 2023 (“fiscal 2023”) was a 52-week period and
the fiscal year ended July 2, 2022 (“fiscal 2022”) was a 52-week period. The fiscal year ending June 28, 2025 (“fiscal 2025”) will be a 52-week period.
Covid-19 Pandemic
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions
around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities. Such disruptions persisted into the beginning of
fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic. Towards the end of the first half of
fiscal 2023, certain government restrictions were lifted in the region and business trends improved. During fiscal 2024, the Covid-19 pandemic did not
materially impact our business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on
our business, operating results and outlook.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and footnotes thereto. Actual results could differ from estimates in amounts that may be material to the
financial statements.
Significant estimates inherent in the preparation of the consolidated financial statements include reserves for the realizability of inventory; asset
retirement obligations; customer returns, end-of-season markdowns and operational chargebacks; useful lives and impairments of long-lived tangible and
intangible assets; accounting for income taxes and related uncertain tax positions; accounting for business combinations; the valuation of stock-based
compensation awards and related expected forfeiture rates; reserves for restructuring; and reserves for litigation and other contingencies, amongst others.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all 100% owned and controlled subsidiaries. All intercompany
transactions and balances are eliminated in consolidation.
Share Repurchases
The Company accounts for stock repurchases by allocating the repurchase price to common stock and retained earnings. Under Maryland law, the
Company's state of incorporation, there are no treasury shares. All repurchased shares are authorized but unissued shares and these shares may be issued in the
future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time. The Company accrues for the
shares purchased under the share repurchase plan based on the trade date. Purchases of the Company's common stock are executed through open market
purchases, including through purchase agreements under Rule 10b5-1. Effective January 1, 2023, the Company is subject to a 1% excise tax on net share
repurchases as part of the Inflation Reduction Act of 2022, which is recorded in Retained earnings as part of Stockholders' Equity.
68

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Supplier Finance Program
To improve our working capital efficiency, the Company makes available to certain suppliers a voluntary supply chain finance (“SCF”) program that
enables our suppliers to sell their receivables from the Company to a global financial institution on a non-recourse basis at a rate that leverages our credit
rating. The Company does not have the ability to refinance or modify payment terms to the global financial institution through the SCF program. No
guarantees are provided by the Company or any of our subsidiaries under the SCF program. The Company’s payment obligations, including the amounts due
and payment terms, which generally do not exceed 90 days, are not impacted by suppliers’ participation in the program. As of June 29, 2024 and July 1, 2023,
$294.9  million and $305.4  million, respectively, was related to suppliers eligible to participate in the Company's SCF program. A rollforward of the
outstanding obligations confirmed as valid under the SCF program, which are presented within Accounts payable on the Consolidated Balance Sheets, is
presented below:
June 29,
2024
July 1,
2023
(millions)
Obligations outstanding, beginning of year
$
305.4  $
393.2 
   Invoices added during the year
1,349.8 
1,397.5 
   Invoices settled during the year
(1,360.3)
(1,485.3)
Obligations outstanding, end of year
$
294.9  $
305.4 
3. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents consist of cash balances and highly liquid investments with a maturity of three months or less at the date of purchase.
Investments
Short-term investments consist primarily of high-credit quality U.S. and non-U.S. issued corporate debt securities and U.S. Treasuries and government
agency securities with original maturities greater than three months and with maturities within one year of balance sheet date, classified as available-for-sale.
Long-term investments typically consist of high-credit quality U.S. and non-U.S. issued corporate debt securities, U.S. Treasuries and government agency
securities, classified as available-for-sale, and recorded at fair value, with unrealized gains and losses recorded in other comprehensive income. Dividend and
interest income are recognized when earned.
Additionally, GAAP requires the consolidation of all entities for which a Company has a controlling voting interest and all variable interest entities
(“VIEs”) for which a Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has
insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant
decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the
entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with
disproportionately few voting rights.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of Cash and cash equivalents, investments and
accounts receivable. The Company places its cash investments with high-credit quality financial institutions and generally invests primarily in corporate debt
securities, money market instruments, U.S. government and agency debt securities, commercial paper and bank deposits placed with major banks and financial
institutions. Accounts receivable is generally diversified due to the number of entities comprising the Company's customer base and their dispersion across
many geographical regions. The Company believes no significant concentration of credit risk exists with respect to these investments and accounts receivable.
69

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Inventories
The Company holds inventory that is sold through retail, including e-commerce, and wholesale distribution channels. Substantially all of the Company's
inventories are comprised of finished goods and are reported at the lower of cost or net realizable value. Inventory costs include material, conversion costs,
freight and duties and are primarily determined on a weighted-average cost basis. The Company reserves for inventory, including slow-moving and aged
inventory, based on current product demand, expected future demand and historical experience. A decrease in product demand due to changing customer
tastes, buying patterns or increased competition could impact the Company's evaluation of its inventory and additional reserves might be required.
Property and Equipment, Net
Property and equipment, net is stated at cost less accumulated depreciation including the impact of long-lived asset impairment and disposals.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Buildings are depreciated over 40 years and building
improvements are depreciated over ten to 40 years. Machinery and equipment are depreciated over lives of five to seven years, furniture and fixtures are
depreciated over lives of three to ten years and software and computer equipment is generally depreciated over lives of three to seven years. Implementation
costs eligible for capitalization related to cloud computing arrangements that are a service contract are recorded within Prepaid expenses and Other assets in
the Consolidated Balance Sheets and amortized as Selling, general and administrative ("SG&A") expense in the Consolidated Statement of Operations over
the term of the associated hosting arrangement. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease
terms. Maintenance and repair costs are charged to earnings as incurred while expenditures for major renewals and improvements are capitalized.
Valuation of Long-Lived Assets
Long-lived assets, such as Property and equipment and Operating lease right-of-use ("ROU") assets are evaluated for impairment whenever events or
circumstances indicate that the carrying value of the assets may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its
best estimate of future cash flows expected to result from the use of the related asset group and its eventual disposition. To the extent that estimated future
undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized equal to the difference between the
carrying value of such asset and its fair value, considering external market participant assumptions. The Company recorded $6.3 million and $7.2 million of
impairment charges within SG&A expense in the Consolidated Statement of Operations in fiscal 2024 and fiscal 2023, respectively.
In determining future cash flows, the Company takes various factors into account, including the effects of macroeconomic trends such as consumer
spending, in-store capital investments, promotional cadence, the level of advertising and changes in merchandising strategy. Since the determination of future
cash flows is an estimate of future performance, there may be future impairments in the event that future cash flows do not meet expectations.
Goodwill and Other Intangible Assets
Upon acquisition, the Company estimates and records the fair value of purchased intangible assets, which primarily consists of brands, customer
relationships, right-of-use assets and order backlog. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including brand
intangible assets, are not amortized, but are assessed for impairment at least annually. Finite-lived intangible assets are amortized over their respective
estimated useful lives and, along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in
circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived and indefinite-lived intangible
assets are primarily determined using discounted cash flows and the multi-period excess earnings method, respectively, with consideration of market
comparisons when appropriate. This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth
rates.
The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analysis using a quantitative approach. The
quantitative goodwill impairment test identifies the existence of potential impairment by comparing the fair value of each reporting unit with its carrying
value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired. If the
carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to that excess. The impairment charge
recognized is limited to the amount of goodwill allocated to that reporting unit.
Determination of the fair value of a reporting unit and intangible asset is based on management's assessment, considering independent third-party
appraisals when necessary. Furthermore, this determination is judgmental in nature and often involves
70

TAPESTRY, INC.
Notes to Consolidated Financial Statements
the use of significant estimates and assumptions, which may include projected future cash flows, discount rates, growth rates and determination of appropriate
market comparables and recent transactions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is
recognized and the amount of any such charge.
The Company performs its annual impairment assessment of goodwill as well as brand intangibles during the fourth quarter of each fiscal year or if an
event occurs that would more likely than not reduce the fair value below its carrying amount. The Company determined that there was no impairment in fiscal
2024 or fiscal 2023.
Operating Leases
The Company leases retail space, office space, warehouse facilities, fulfillment centers, storage space, machinery, equipment and certain other items
under operating leases. These leases may also include rent escalation clauses or lease incentives in the form of construction allowances and rent reduction. In
determining the lease term used in the lease right-of-use ("ROU") asset and lease liability calculations, the Company considers various factors such as market
conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are
included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed
minimum rent payments, variable rent payments primarily based on performance (i.e., percentage-of-sales-based payments), or a combination thereof, directly
related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area
maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these
payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities.
The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term
beginning at the commencement date. Per the guidance, the use of the implicit rate to determine the present value of lease payments is required. As the rate
implicit in the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the lease
commencement date, including the Company's credit rating, credit spread and adjustments for the impact of collateral, lease tenors, economic environment
and currency.
For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and
impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense
associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized
on a straight-line basis over such term and are not recognized on the Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if
any, is recognized as incurred.
Asset retirement obligations represent legal obligations associated with the retirement of a tangible long-lived asset. The Company’s asset retirement
obligations are primarily associated with leasehold improvements in which the Company is contractually obligated to remove at the end of a lease to comply
with the lease agreement. When such an obligation exists, the Company recognizes an asset retirement obligation at the inception of a lease at its estimated
fair value. The asset retirement obligation is recorded in current liabilities or non-current liabilities (based on the expected timing of payment of the related
costs) and is subsequently adjusted for any changes in estimates. The associated estimated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset and depreciated over its useful life. As of the end of fiscal 2024 and fiscal 2023, the Company had asset retirement obligations of
$57.7 million and $53.7 million, respectively, primarily classified within Other non-current liabilities in the Company's Consolidated Balance Sheets.
Revenue Recognition
Revenue is recognized when the Company satisfies its performance obligations by transferring control of promised products or services to its customers,
which may be at a point of time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the
remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to be
entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which
will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
Retail store and concession shop-in-shop revenues are recognized at the point-of-sale, when the customer obtains physical possession of the products.
Digital revenue from sales of products ordered through the Company’s e-commerce sites is recognized upon delivery and receipt of the shipment by its
customers and includes shipping and handling charges paid by customers. Retail and digital revenues are recorded net of estimated returns, which are
estimated by developing an expected value based on historical experience. Payment is due at the point of sale.
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TAPESTRY, INC.
Notes to Consolidated Financial Statements
The Company recognizes revenue within the wholesale business at the time title passes and risk of loss is transferred to customers, which is generally at
the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Wholesale revenue is recorded net of estimates
for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other consideration provided to the customer. The Company's
historical estimates of these variable amounts have not differed materially from actual results.
The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks.
These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for
contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned
once the minimum royalty threshold is achieved.
Gift cards issued by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company also uses
historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in proportion
to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed property.
The Company accounts for sales taxes and other related taxes on a net basis, excluding such taxes from revenue.
Refer to Note 4, "Revenue," for additional information.
Cost of Sales
Cost of sales consists of inventory costs and other related costs such as reserves for inventory realizability and shrinkage, damages and replacements.
Selling, General and Administrative ("SG&A") Expenses
Selling expenses include store employee compensation, occupancy costs, depreciation, supply costs, wholesale and retail account administration
compensation globally. These expenses are affected by the number of stores open during any fiscal period and store performance, as compensation and rent
expenses can vary with sales. Advertising, marketing and design expenses include employee compensation, media space and production, advertising agency
fees, new product design costs, public relations and market research expenses. Distribution and customer service expenses include warehousing, order
fulfillment, shipping and handling, customer service, employee compensation and bag repair costs. SG&A expenses also include compensation costs for
corporate functions, including the executive, finance, human resources, legal and information systems departments, as well as corporate headquarters
occupancy costs, consulting fees and software expenses.
Shipping and Handling
Shipping and handling costs for delivery of products to consumers were $221.1 million, $217.0 million and $230.8 million in fiscal 2024, fiscal 2023 and
fiscal 2022, respectively, and are included in SG&A expenses. The Company includes inbound product-related transportation costs from manufacturers within
Cost of sales. The balance of the Company's transportation-related costs related to its distribution network is included in SG&A expenses rather than in Cost
of sales.
Advertising
Advertising costs include expenses related to direct marketing activities, such as digital and other media and production costs. In fiscal 2024, fiscal 2023
and fiscal 2022, advertising expenses for the Company totaled $616.8 million, $570.7 million and $551.6 million, respectively, and are included in SG&A
expenses. Advertising costs are generally expensed when the advertising first appears.
Share-Based Compensation
The Company recognizes the cost of equity awards to employees and the non-employee Directors based on the grant-date fair value of those awards. The
grant-date fair values of share unit awards are based on the fair value of the Company's common stock on the date of grant. The grant-date fair value of stock
option awards is determined using the Black-Scholes option pricing model and involves several assumptions, including the expected term of the option,
expected volatility and dividend yield. The expected term of options represents the period of time that the options granted are expected to be outstanding and
is based on historical experience. Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly
traded options on the Company's stock. Dividend yield is based on the current expected annual dividend per share and the Company’s stock price. Changes in
the assumptions used to determine the Black-Scholes value could result in significant changes in the Black-Scholes value.
72

TAPESTRY, INC.
Notes to Consolidated Financial Statements
The Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ
from the estimates. The Company estimates the forfeiture rate based on historical experience as well as expected future behavior.
The Company grants performance-based share awards to key executives, the vesting of which is subject to the executive’s continuing employment and the
Company's or individual's achievement of certain performance goals. On a quarterly basis, the Company assesses actual performance versus the predetermined
performance goals and adjusts the share-based compensation expense to reflect the relative performance achievement. Actual distributed shares are calculated
upon conclusion of the service and performance periods and include dividend equivalent shares. If the performance-based award incorporates a market
condition, the grant-date fair value of such award is determined using a pricing model, such as a Monte Carlo Simulation.
Income Taxes
The Company’s effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning strategies available in the
various jurisdictions in which the Company operates. The Company classifies interest and penalties on uncertain tax positions in the Provision for income
taxes. The Company records net deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such
determination, the Company considers all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax
planning strategies and recent and expected future results of operation. The Company reduces deferred tax assets by a valuation allowance if, based upon the
weight of available evidence, it is more likely than not that some amount of deferred tax assets is not expected to be realized. The Company is not permanently
reinvested with respect to earnings of a limited number of foreign entities and has recorded the tax consequences of remitting earnings from these entities. The
Company is permanently reinvested with respect to all other earnings.
The Company recognizes the impact of tax positions in the financial statements if those positions will more likely than not be sustained on audit, based on
the technical merits of the position. Although the Company believes that the estimates and assumptions used are reasonable and legally supportable, the final
determination of tax audits could be different than that which is reflected in historical tax provisions and recorded assets and liabilities. Tax authorities
periodically audit the Company’s income tax returns, these tax authorities may take a contrary position that could result in a significant impact on the
Company's results of operations. Significant management judgment is required in determining the effective tax rate, in evaluating tax positions and in
determining the net realizable value of deferred tax assets.
Refer to Note 15, "Income Taxes," herein for further discussion on the Company's income taxes.
Derivative Instruments
The majority of the Company’s purchases of finished goods are denominated in U.S. dollars, which limits the Company’s exposure to the transactional
effects of foreign currency exchange rate fluctuations. However, the Company is exposed to foreign currency exchange risk related to its sale of U.S. dollar
inventory to foreign operating subsidiaries in local currency, as well as risk related to various cross-currency intercompany loans and payables, and translation
risk. The Company is also exposed to foreign currency risk related to changes in the U.S. dollar value of its net investment in foreign subsidiaries and interest
rate risk attributed to changes in the benchmark interest rates on the Company's debt obligations, including future issuances. The Company uses derivative
financial instruments to manage these risks. These derivative transactions are in accordance with the Company’s risk management policies. The Company
does not enter into derivative transactions for speculative or trading purposes.
The Company records all derivative contracts at fair value on the Consolidated Balance Sheets. The fair values of foreign currency derivatives and
interest rate derivatives are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the counterparty's
or Company’s credit risk. Judgment is required of management in developing estimates of fair value. The use of different market assumptions or
methodologies could affect the estimated fair value.
For cash flow derivative instruments that qualify for hedge accounting, the changes in the fair value of these instruments are recognized as a component
of Accumulated other comprehensive income (loss) ("AOCI") until the hedged item is recognized in earnings. For derivative instruments that are designated
as a net investment hedge, the changes in the fair value of the instruments are recognized as a component of AOCI and, upon discontinuation of the hedge,
remain in AOCI until the net investment is sold or liquidated.
Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk
associated with the exposure being hedged. For each derivative that is designated as a hedge, the
73

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Company documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk
exposure, as well as how hedge effectiveness will be assessed over the term of the instrument. The extent to which a hedging instrument has been and is
expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a
quarterly basis.
If it is determined that a derivative instrument has not been highly effective and will continue not to be highly effective in hedging the designated
exposure, hedge accounting is discontinued and further gains (losses) are recognized in earnings within foreign currency gains (losses) or interest income
(expense). Upon discontinuance of hedge accounting, the cumulative change in fair value of cash flow derivatives previously recorded in AOCI is recognized
in earnings when the related hedged item affects earnings, consistent with the original hedging strategy, unless the forecasted transaction is no longer probable
of occurring, in which case the accumulated amount is immediately recognized in earnings within foreign currency gains (losses) or interest income (expense).
For foreign currency derivative instruments which are not designated as hedges, the changes in fair value of the instruments are recorded through
earnings. These changes generally offset the revaluation of certain underlying assets and liabilities.
As a result of the use of derivative instruments, the Company may be exposed to the risk that the counterparties to such contracts will fail to meet their
contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial
institutions based upon an evaluation of their credit ratings, among other factors.
The fair values of the Company’s derivative instruments are recorded on its Consolidated Balance Sheets on a gross basis. For cash flow reporting
purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item
being hedged, primarily within cash from operating activities.
Hedging Portfolio
The Company enters into forward currency contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated
inventory transactions, as well as various cross-currency intercompany loans and payables. This primarily includes exposure to exchange rate fluctuations in
the Japanese Yen, the Chinese Renminbi and the Euro. To the extent its derivative contracts designated as cash flow hedges are highly effective in offsetting
changes in the value of the hedged items, the related gains (losses) are initially deferred in AOCI and subsequently recognized in the Consolidated Statements
of Operations as part of the cost of the inventory purchases being hedged within Cost of sales, when the related inventory is sold to a third-party. Current
maturity dates range from July 2024 to March 2026. Forward foreign currency exchange contracts which are not designated as hedges of intercompany and
other contractual obligations are recognized within Other expense (income) on the Company's Consolidated Statement of Operations. The maturity date of
most instruments held as of June 29, 2024 are in August 2024, and such contracts are typically renewed upon maturity if the related balance has not been
settled.
During fiscal 2024, the Company also entered into interest rate derivative contracts to reduce its risks related to changes in the benchmark interest rates on
its debt obligations. Any premiums related to these instruments were excluded from the Company's measurement of hedge effectiveness and were amortized
over the period between the hedge execution and the contract maturity. The related gains (losses) were initially deferred in AOCI and are subsequently
recognized in the Consolidated Statements of Operations as interest income (expense) in the same periods during which the hedged interest payments
associated with the Company’s borrowings are recorded in earnings. As of June 29, 2024, there were no interest rate derivative contracts outstanding.
The Company also enters into cross-currency swaps to reduce its risks related to exchange rate fluctuations on net investments in foreign subsidiaries,
including our net investment in Euro-denominated subsidiaries and Japanese Yen-denominated subsidiaries against future volatility in the exchange rates
between the United States dollar and their local currencies. The related gains (losses) are deferred in AOCI until the net investment is sold or liquidated, and
current maturity dates range from November 2027 to March 2032.
Foreign Currency
The functional currency of the Company's foreign operations is generally the applicable local currency. Assets and liabilities are translated into U.S.
dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the weighted-average exchange rates
for the period. The resulting translation adjustments are included in the Consolidated Statements of Comprehensive Income as a component of Other
comprehensive income (loss) (“OCI”) and in the Consolidated Statements of Equity within AOCI.
74

TAPESTRY, INC.
Notes to Consolidated Financial Statements
The Company recognizes gains and losses on transactions that are denominated in a currency other than the respective entity's functional currency in
earnings. Foreign currency transaction gains and losses also include amounts realized on the settlement of certain intercompany loans with foreign
subsidiaries.
Reclassification
A reclassification has been made to the prior period's financial information to conform to the current period's presentation. Amortization expense, related
to the Company’s cloud computing arrangements of $42.0 million in Fiscal 2023 and $10.7 million in Fiscal 2022, respectively, have been reclassified out of
Other assets and into Amortization of cloud computing arrangements within the Company’s Consolidated Statements of Cash Flows.
Recently Adopted Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-04, "Liabilities—
Supplier Finance Programs (Subtopic 405-50)", which is intended to enhance the transparency of supplier finance programs. The ASU requires the buyer in a
supplier finance program to disclose sufficient information about the program in order to allow a user of financial statements to understand the program's
nature, activity during the period, changes from period to period and potential magnitude. The Company adopted ASU 2022-04 as of the beginning of fiscal
2024. The adoption of ASU 2022-04 did not have an impact on the Company's consolidated financial statements other than the new disclosure requirements.
Refer to Note 2, "Basis of Presentation and Organization", for additional information.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures", which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about
significant segment expenses. The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief
operating decision maker and included within segment profit and loss. The amendments will be effective for the Company's annual reporting periods
beginning in fiscal year 2025 and for interim periods beginning in fiscal year 2026, with early adoption permitted, and will be applied retrospectively to all
prior periods presented in the financial statements. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which includes
amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income
taxes paid by jurisdiction. The amendments are effective for the Company's annual periods beginning in fiscal year 2026, with early adoption permitted, and
should be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.
4. REVENUE
The Company recognizes revenue primarily from sales of the products of its brands through our Direct-to-consumer ("DTC") business which includes our
retail stores and e-commerce sites, along with our wholesale business. The Company also generates revenue from royalties related to licensing its trademarks,
as well as sales in ancillary business channels. In all cases, revenue is recognized upon the transfer of control of the promised products or services to the
customer, which may be at a point in time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially
all of the remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to
be entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which
will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
The Company has elected a practical expedient not to disclose the remaining performance obligations that are unsatisfied as of the end of the period
related to contracts with an original duration of one year or less or variable consideration related to sales-based royalty arrangements. There are no other
contracts with transaction price allocated to remaining performance obligations other than future minimum royalties as discussed below, which are not
material.
Other practical expedients elected by the Company include (i) assuming no significant financing component exists for any contract with a duration of one
year or less, (ii) accounting for shipping and handling as a fulfillment activity within SG&A expense regardless of the timing of the shipment in relation to the
transfer of control and (iii) excluding sales and value added tax from the transaction price.
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TAPESTRY, INC.
Notes to Consolidated Financial Statements
Direct-to-Consumer
The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical
possession of the products. Digital revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of
the shipment by its customers and includes shipping and handling charges paid by customers. Retail and digital revenues are recorded net of estimated returns,
which are estimated by developing an expected value based on historical experience. Payment is due at the point of sale.
Gift cards issued by the Company are recorded as a liability until redeemed by the customer, at which point revenue is recognized. The Company also
uses historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in
proportion to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed
property.
Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons. Loyalty
programs provide the customer a material right to acquire additional products and give rise to the Company having a separate performance obligation.
Additionally, certain products sold by the Company include an assurance warranty that is not considered a separate performance obligation. These programs
are immaterial individually and in the aggregate.
Wholesale
The Company recognizes revenue within the wholesale business at the time title passes and risk of loss is transferred to customers, which is generally at
the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Payment is generally due 30 to 90 days after
shipment. Wholesale revenue is recorded net of estimates for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other
consideration provided to the customer. Discounts are based on contract terms with the customer, while cooperative advertising allowances and other
consideration may be based on contract terms or negotiated on a case-by-case basis. Returns and markdowns generally require approval from the Company
and are estimated based on historical trends, current season results and inventory positions at the wholesale locations, current market and economic conditions
as well as, in select cases, contractual terms. The Company's historical estimates of these variable amounts have not differed materially from actual results.
Licensing
The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks.
These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for
contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned
once the minimum royalty threshold is achieved. Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods
bearing the licensed trademarks during the period, which may differ from the amount of revenue recorded during the period thereby generating a contract asset
or liability. Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents
approximately 1% of total net sales in the fiscal year ended June 29, 2024.
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TAPESTRY, INC.
Notes to Consolidated Financial Statements
Disaggregated Net Sales
The following table disaggregates the Company's net sales into geographies that depict how economic factors may impact the revenues and cash flows for
the periods presented. Each geography presented includes net sales related to the Company's directly operated business channels, global travel retail business
and to wholesale customers, including distributors, in locations within the specified geographic area.
North America
Greater China
Other Asia
Other
Total
(millions)
Fiscal 2024
Coach
$
3,078.7 
$
902.1 
$
771.4 
$
343.1 
$
5,095.3 
Kate Spade
1,074.4 
45.3 
130.1 
84.6 
1,334.4 
Stuart Weitzman
160.9 
65.2 
1.4 
14.0 
241.5 
Total
$
4,314.0 
$
1,012.6 
$
902.9 
$
441.7 
$
6,671.2 
Fiscal 2023
Coach
$
3,037.5 
$
896.7 
$
752.9 
$
273.3 
$
4,960.4 
Kate Spade
1,142.8 
47.9 
140.4 
87.8 
1,418.9 
Stuart Weitzman
180.0 
71.2 
1.8 
28.6 
281.6 
Total
$
4,360.3 
$
1,015.8 
$
895.1 
$
389.7 
$
6,660.9 
Fiscal 2022
Coach
$
3,102.8 
$
892.2 
$
691.3 
$
235.0 
$
4,921.3 
Kate Spade
1,156.7 
41.7 
139.0 
108.1 
1,445.5 
Stuart Weitzman
189.9 
92.7 
0.4 
34.7 
317.7 
Total
$
4,449.4 
$
1,026.6 
$
830.7 
$
377.8 
$
6,684.5 
    Greater China includes mainland China, Hong Kong SAR and Macao SAR, and Taiwan.
    Other Asia includes Japan, Malaysia, Australia, New Zealand, South Korea, Singapore, and other countries within Asia.
    Other sales primarily represents sales in Europe and the Middle East as well as royalties earned from the Company's licensing partners.
Deferred Revenue
Deferred revenue results from cash payments received or receivable from customers prior to the transfer of the promised goods or services and is
primarily related to unredeemed gift cards, net of breakage, which have been recognized. Additional deferred revenue may result from sales-based royalty
payments received or receivable which exceed the revenue recognized during the contractual period. The balance of such amounts as of June 29, 2024 and
July 1, 2023 was $45.5 million and $43.0 million, respectively, which were primarily recorded within Accrued liabilities on the Company's Consolidated
Balance Sheets and are generally expected to be recognized as revenue within a year. For the fiscal year ended June 29, 2024, net sales of $27.7 million were
recognized from amounts recorded as deferred revenue as of July 1, 2023. For the fiscal year ended July 1, 2023, net sales of $23.5 million were recognized
from amounts recorded as deferred revenue as of July 2, 2022.
(1)
(2)
(3)
(1)
(2)
(3)
77

TAPESTRY, INC.
Notes to Consolidated Financial Statements
5. ACQUISITIONS
On August 10, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Sunrise Merger
Sub, Inc., a direct wholly owned subsidiary of Tapestry ("Merger Sub"), and Capri Holdings Limited ("Capri"). Under the terms of the Merger Agreement,
Tapestry has agreed to acquire any and all of Capri’s ordinary shares (other than (a) Capri’s ordinary Shares that are issued and outstanding immediately prior
to the consummation of the acquisition that are owned or held in treasury by the Company or by Capri or any of its direct or indirect subsidiaries and (b)
Capri’s ordinary shares that are issued and outstanding immediately prior to the consummation of the acquisition that are held by holders who have properly
exercised dissenters’ rights in accordance with, and who have complied with, Section 179 of the BVI Business Companies Act, 2004 (as amended) of the
British Virgin Islands) in cash at a purchase price of $57.00 per share, without interest, subject to any required tax withholding as provided in the Merger
Agreement. The enterprise value is expected to be approximately $8.50 billion and the transaction is expected to close during calendar year 2024 (the "Capri
Acquisition"). On October 25, 2023, at a special meeting of Capri's shareholders, Capri's shareholders approved the Merger Agreement and the transactions
contemplated thereby. The Company has received regulatory approval from all applicable jurisdictions except for the United States. On April 22, 2024, the
FTC filed a complaint against the Company and Capri in the United States District Court for the Southern District of New York seeking to enjoin the
consummation of the Capri Acquisition. The FTC’s complaint alleges that the Capri Acquisition, if consummated, would violate Section 7 of the Clayton Act
and that the Merger Agreement and the Capri Acquisition constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission
Act and should be enjoined. The Company believes the FTC’s claims are without merit and intends to defend the lawsuit vigorously.
In order to finance the Capri Acquisition, on November 27, 2023, the Company issued $4.50 billion of senior unsecured notes (the "Capri Acquisition
USD Senior Notes") and €1.50 billion of Euro-denominated senior unsecured notes (the "Capri Acquisition EUR Senior Notes" and, together with the Capri
Acquisition USD Senior Notes, the "Capri Acquisition Senior Notes") which, together with the $1.40 billion of delayed draw unsecured term loan facilities
(the "Capri Acquisition Term Loan Facilities") executed on August 30, 2023, complete the expected financing for the Capri Acquisition. Until the close of the
transaction, the Company will maintain the proceeds from the issuance of the Capri Acquisition Senior Notes in Cash and cash equivalents and Short-term
investments. Refer to Note 8, "Investments," and Note 11, "Fair Value Measurements," for further detail on our cash equivalents and Short-term investments,
and Note 12, "Debt," for further information on our existing debt instruments related to the acquisition.
In conjunction with the Capri Acquisition, in fiscal 2024, the Company incurred $226.6 million in pre-tax expenses, primarily related to financing-related
expenses and professional fees.
78

TAPESTRY, INC.
Notes to Consolidated Financial Statements
6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The components of Accumulated other comprehensive income (loss), as of the dates indicated, are as follows:
Unrealized Gains
(Losses) on Cash
Flow Hedging
Derivatives
Unrealized
Gains (Losses)
on Available-
for-Sale
Investments
Cumulative
Translation
Adjustment
Total
(millions)
Balances at July 2, 2022
$
(2.3) $
(0.5) $
(168.1) $
(170.9)
Other comprehensive income (loss) before reclassifications
32.0 
0.5 
(56.7)
(24.2)
Less: amounts reclassified from accumulated other comprehensive
income to earnings
(5.2)
— 
— 
(5.2)
Net current-period other comprehensive income (loss)
37.2 
0.5 
(56.7)
(19.0)
Balances at July 1, 2023
$
34.9  $
—  $
(224.8) $
(189.9)
Other comprehensive income (loss) before reclassifications
49.2 
0.1 
22.0 
71.3 
   Less: amounts reclassified from accumulated other comprehensive
income to earnings
27.0 
0.3 
— 
27.3 
Net current-period other comprehensive income (loss)
22.2 
(0.2)
22.0 
44.0 
Balances at June 29, 2024
$
57.1  $
(0.2) $
(202.8) $
(145.9)
The ending balances of AOCI related to cash flow hedges are net of tax of $(2.7) million and $(2.9) million as of June 29, 2024 and July 1, 2023,
respectively. The amounts reclassified from AOCI are net of tax of $(0.2) million and $1.1 million as of June 29, 2024 and July 1, 2023, respectively.
    The ending balances of AOCI related to foreign currency translation adjustments includes a gain of $9.9 million, net of tax of $(6.7) million, and a loss of
$55.7 million, net of tax of $(0.8)  million, as of June  29, 2024 and July  1, 2023, respectively, related to changes in the fair values of instruments
designated as hedges of the Company's net investment in certain foreign operations.
7. SHARE-BASED COMPENSATION
The Company maintains several share-based compensation plans which are more fully described below. The following table shows the total compensation
cost charged against income for these plans and the related tax benefits recognized in the Consolidated Statements of Operations:
June 29, 2024
July 1, 2023
July 2, 2022
(millions)
Share-based compensation expense
$
85.9  $
78.8  $
89.4 
Income tax benefit related to share-based compensation expense
17.5 
12.9 
15.2 
    There was no share-based compensation expense under the Acceleration program during fiscal years ended June 29, 2024 and July 1, 2023. During the
fiscal year ended July 2, 2022, the Company incurred $17.2 million of share-based compensation expense related to Acceleration Program.
(1)
(2)
(1)       
(2)
(1)
(1)
79

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Stock-Based Plans
The Company maintains the Amended and Restated Tapestry, Inc. 2018 Stock Incentive Plan to award stock options and shares to certain members of
management and the outside members of its Board of Directors (“Board”). The Company maintains the 2010 Stock Incentive Plan for awards granted prior to
the establishment of the 2018 Stock Incentive Plan. These plans were approved by the Company's stockholders. The exercise price of each stock option equals
100% of the market price of the Company's stock on the date of grant and generally has a maximum term of 10 years. Stock options and service-based share
awards that are granted as part of the annual compensation process generally vest ratably over four years. Stock option and share awards are subject to
forfeiture until completion of the vesting period, which ranges from one to four years. The Company issues new shares upon the exercise of stock options or
vesting of share awards.
Stock Options
A summary of stock option activity during the fiscal year ended June 29, 2024 is as follows:
Number of
Options
Outstanding
Weighted-
Average

Exercise

Price per Option
Weighted-
Average

Remaining

Contractual

Term

(in years)
Aggregate
Intrinsic

Value
(millions)
(millions)
Outstanding at July 1, 2023
8.7 
$
34.02 
Granted
1.3 
33.36 
Exercised
(0.9)
29.11 
Forfeited or expired
(0.9)
50.25 
Outstanding at June 29, 2024
8.2 
32.59 
5.6 $
87.0 
Vested and expected to vest at June 29, 2024
8.2 
32.60 
5.6
86.6 
Exercisable at June 29, 2024
5.7 
32.32 
4.4
62.6 
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average
assumptions:
June 29,

2024
July 1,

2023
July 2,

2022
Expected term (years)
5.0
4.9
5.0
Expected volatility
44.8 %
48.6 %
46.9 %
Risk-free interest rate
4.5 %
3.3 %
0.8 %
Dividend yield
4.2 %
3.4 %
2.4 %
The expected term of options represents the period of time that the options granted are expected to be outstanding and is based on historical experience.
Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly traded options on the Company's
stock. The risk-free interest rate is based on the zero-coupon U.S. Treasury issue as of the date of the grant. Dividend yield is based on the expected annual
dividend per share and the Company’s stock price as of the grant date.
The weighted-average grant-date fair value of options granted during fiscal 2024, fiscal 2023 and fiscal 2022 was $10.35, $12.04 and $13.94,
respectively. The total intrinsic value of options exercised during fiscal 2024, fiscal 2023 and fiscal 2022 was $11.1 million, $19.5 million and $17.5 million,
respectively. The total cash received from option exercises was $23.0 million, $34.9 million and $71.3 million in fiscal 2024, fiscal 2023 and fiscal 2022,
respectively, and the cash tax benefit realized for the tax deductions from these option exercises was $2.0 million, $3.9 million and $3.7 million, respectively.
At June 29, 2024, $18.9 million of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a
weighted-average period of 1.3 years.
80

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Service-based Restricted Stock Unit Awards (“RSUs”)
A summary of service-based RSU activity during the year ended June 29, 2024 is as follows:
Number of
Non-vested

RSUs
Weighted-
Average Grant- Date
Fair Value per RSU
(millions)
Non-vested at July 1, 2023
5.9 
$
28.69 
Granted
2.5 
34.19 
Vested
(2.8)
24.59 
Forfeited
(0.4)
32.79 
Non-vested at June 29, 2024
5.2 
32.96 
At June 29, 2024, $95.9 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-
average period of 1.3 years.
The weighted-average grant-date fair value of share awards granted during fiscal 2024, fiscal 2023 and fiscal 2022 was $34.19, $35.53 and $41.70,
respectively. The total fair value of shares vested during fiscal 2024, fiscal 2023 and fiscal 2022 was $95.3  million, $88.0  million and $92.5  million,
respectively.
Performance-based Restricted Stock Unit Awards (“PRSU”)
The Company grants PRSUs to key executives, the vesting of which is subject to the executive’s continuing employment and the Company's achievement
of certain performance goals. A summary of PRSU activity during the fiscal year ended June 29, 2024 is as follows:
Number of

Non-vested

PRSUs
Weighted-

Average Grant- Date
Fair Value per PRSU
(millions)
Non-vested at July 1, 2023
0.7 
$
38.27 
Granted
0.5 
33.99 
Change due to performance condition achievement
0.1 
41.24 
Vested
— 
— 
Forfeited
(0.1)
36.00 
Non-vested at June 29, 2024
1.2 
$
36.74 
At June 29, 2024, 16.6 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-
average period of 1.0 year.
The weighted-average grant-date fair value per share of PRSU awards granted during fiscal 2024, fiscal 2023 and fiscal 2022 was $33.99, $35.46 and
$41.86, respectively. The total fair value of awards that vested during fiscal 2024, fiscal 2023 and fiscal 2022 was $0.0 million, $60.4 million and $0.0 million,
respectively.
PRSUs are subject to a two-year and three-year cliff vesting contingent on the employee's continuing employment and the Company's achievement of the
performance goals established at the beginning of the performance period. The fair value of the PRSU's is based on the price of the Company's common stock
on the date of grant.
In fiscal 2024, fiscal 2023 and fiscal 2022, the cash tax benefit realized for the tax deductions from all RSUs (service and performance-based) was
$15.3 million, $29.5 million and $17.4 million, respectively.
81

TAPESTRY, INC.
Notes to Consolidated Financial Statements
Employee Stock Purchase Plan
Under the 2001 Employee Stock Purchase Plan, eligible employees are permitted to purchase a limited number of Company common shares at 85% of
market value. Under this plan, the Company sold 0.2 million, 0.1 million and 0.1 million shares to employees in fiscal 2024, fiscal 2023 and fiscal 2022,
respectively. Compensation expense is calculated for the fair value of employees’ purchase rights using the Black-Scholes model and the following weighted-
average assumptions:
Fiscal Year Ended
 
June 29,
2024
July 1,
2023
July 2,
2022
Expected term (years)
0.5
0.5
0.5
Expected volatility
32.5 %
38.2 %
38.2 %
Risk-free interest rate
5.4 %
3.3 %
0.1 %
Dividend yield
3.9 %
3.1 %
1.5 %
The weighted-average fair value of the purchase rights granted during fiscal 2024, fiscal 2023 and fiscal 2022 was $8.45, $9.30 and $10.71, respectively.
The Company issues new shares for employee stock purchases.
8. INVESTMENTS
The following table summarizes the Company’s primarily U.S. dollar-denominated investments, recorded within the Consolidated Balance Sheets as of
June 29, 2024 and July 1, 2023:
June 29, 2024
July 1, 2023
 
Short-term
Long-term
Total
Short-term
Long-term
Total
(millions)
Available-for-sale investments:
 
 
 
 
 
 
Commercial paper
$
865.2  $
—  $
865.2  $
—  $
—  $
— 
Government securities – U.S.
178.2 
— 
178.2 
— 
— 
— 
Total Available-for-sale investments
$
1,043.4  $
—  $
1,043.4  $
—  $
—  $
— 
Other:
 
 
 
 
 
 
Time deposits
0.6 
— 
0.6 
0.6 
— 
0.6 
Other
17.8 
1.3 
19.1 
14.8 
1.3 
16.1 
Total Investments
$
1,061.8  $
1.3  $
1,063.1  $
15.4  $
1.3  $
16.7 
These securities, as of period end, have maturity dates during their respective following fiscal years and are recorded at fair value.
Long-term investments are presented within Other assets on the Consolidated Balance Sheets.
There were no material gross realized and unrealized gains or losses on available-for-sale investments as of the periods ended June 29, 2024 and July 1,
2023.
(2)
(2)
(1)
(1)
(1)
(1)
(2)
82

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
9. LEASES
The Company leases retail space, office space, warehouse facilities, fulfillment centers, storage space, machinery, equipment and certain other items
under operating leases. The Company's leases have initial terms ranging from 1 to 20 years and may have renewal or early termination options ranging from 1
to 10 years. These leases may also include rent escalation clauses or lease incentives. In determining the lease term used in the lease ROU asset and lease
liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist.
When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU
asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance
(i.e., percentage-of-sales-based payments), or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay
for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable,
depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease
ROU assets and lease liabilities.
The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term
beginning at the commencement date. The Company is required to use the implicit rate to determine the present value of lease payments. As the rate implicit
in the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the lease
commencement date, including the Company's credit rating, credit spread and adjustments for the impact of collateral, lease tenors, economic environment
and currency.
For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and
impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense
associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized
on a straight-line basis over such term and are not recognized on the Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if
any, is recognized as incurred.
The Company acts as sublessor in certain leasing arrangements, primarily related to a sublease of a portion of the Company's leased headquarters space as
well as certain retail locations. Fixed sublease payments received are recognized on a straight-line basis over the sublease term.
ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.
83

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheets as of June 29, 2024 and
July 1, 2023:
June 29, 2024
July 1, 2023
Location Recorded on the Consolidated Balance
Sheets
(millions)
Assets:
Operating leases
$
1,314.4  $
1,378.7  Operating lease right-of-use assets
Finance leases
0.6 
1.2  Property and equipment, net
Total lease assets
$
1,315.0  $
1,379.9 
Liabilities:
Operating leases:
Current lease liabilities
$
299.7  $
297.5  Current portion of operating lease liabilities
Long-term lease liabilities
1,224.2 
1,333.7  Long-term operating lease liabilities
Total operating lease liabilities
$
1,523.9  $
1,631.2 
Finance leases:
Current lease liabilities
$
1.2  $
1.2  Accrued liabilities
Long-term lease liabilities
— 
1.2  Other liabilities
Total finance lease liabilities
$
1.2  $
2.4 
Total lease liabilities
$
1,525.1  $
1,633.6 
The following table summarizes the composition of net lease costs, primarily recorded within SG&A expenses on the Company's Consolidated Statement
of Operations for the fiscal year ended June 29, 2024 and July 1, 2023:
Fiscal Year Ended
June 29, 2024
July 1, 2023
(millions)
Finance lease cost:
Amortization of right-of-use assets
$
1.2  $
1.1 
Interest on lease liabilities
0.2 
0.3 
Total finance lease cost
1.4 
1.4 
Operating lease cost
360.7 
323.1 
Short-term lease cost
19.5 
29.8 
Variable lease cost
205.3 
209.6 
Operating lease right-of-use impairment
— 
1.3 
Less: sublease income
(17.8)
(18.1)
Total net lease cost
$
569.1  $
547.1 
Interest on lease liabilities is recorded within Interest expense, net on the Company's Consolidated Statement of Operations.
(1)
(1)    
84

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following table summarizes certain cash flow information related to the Company's leases for the fiscal year ended June 29, 2024 and July 1, 2023:
Fiscal Year Ended
June 29, 2024
July 1, 2023
(millions)
Cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows from operating leases
$
420.4  $
387.8 
Operating cash flows from finance leases
0.2 
0.3 
Financing cash flows from finance leases
1.2 
1.1 
Non-cash transactions:
Right-of-use assets obtained in exchange for operating lease liabilities
246.2 
390.7 
Right-of-use assets obtained in exchange for finance lease liabilities
— 
— 
The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheets as of June 29, 2024:
June 29, 2024
Operating Leases
Finance Leases
Total
(millions)
Fiscal 2025
$
374.5  $
1.3  $
375.8 
Fiscal 2026
306.7 
— 
306.7 
Fiscal 2027
250.6 
— 
250.6 
Fiscal 2028
171.4 
— 
171.4 
Fiscal 2029
120.3 
— 
120.3 
Fiscal 2030 and thereafter
601.0 
— 
601.0 
Total lease payments
1,824.5 
1.3 
1,825.8 
Less: imputed interest
(300.6)
(0.1)
(300.7)
Total lease liabilities
$
1,523.9  $
1.2  $
1,525.1 
The future minimum fixed sublease receipts under non-cancelable operating lease agreements as of June 29, 2024 are as follows:
June 29, 2024
(millions)
Fiscal 2025
$
17.3 
Fiscal 2026
14.8 
Fiscal 2027
14.8 
Fiscal 2028
14.8 
Fiscal 2029
15.3 
Fiscal 2030 and thereafter
112.2 
Total sublease income
$
189.2 
85

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating
leases and finance leases recorded on the Consolidated Balance Sheets as of June 29, 2024 and July 1, 2023:
June 29, 2024
July 1, 2023
Weighted average remaining lease term (years):
Operating leases
7.8
8.3
Finance leases
0.9
1.9
Weighted average discount rate:
Operating leases
4.4 %
4.2 %
Finance leases
11.3 %
11.3 %
Additionally, the Company had approximately $53.2 million of future payment obligations related to executed lease agreements for which the related
lease had not yet commenced as of June 29, 2024.
10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The following tables provide information related to the Company's derivative instruments recorded on the Company's Consolidated Balance Sheets as of
June 29, 2024 and July 1, 2023:
Notional Value
Derivative Assets
Derivative Liabilities
Fair Value
Fair Value
June 29,
2024
July 1, 2023
Consolidated
Balance Sheet
Classification
June 29,
2024
July 1, 2023
Consolidated
Balance Sheet
Classification
June 29,
2024
July 1, 2023
(millions)
Designated Derivative Hedging Instruments:
FC - Inventory
purchases
$
764.6  $
842.3 
Other Current
Assets
$
58.2  $
38.6 
Accrued Liabilities
$
2.2  $
0.1 
Net investment hedges
1,450.0 
1,200.0 
Other Current
Assets & Other
Assets
32.2 
13.1 
Accrued Liabilities
& Other
Liabilities
139.4 
90.5 
Total designated
hedge instruments
$
2,214.6  $
2,042.3 
$
90.4  $
51.7 
$
141.6  $
90.6 
Undesignated hedging instruments:
FC - Intercompany
liabilities and loans
348.2 
272.3 
Other Current
Assets
0.1 
0.4 
Accrued Liabilities
2.6 
0.2 
Total Hedges
$
2,562.8  $
2,314.6 
$
90.5  $
52.1 
$
144.2  $
90.8 
Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships.
Represents cross currency swap foreign exchange contracts ("CCS") and forward foreign exchange contracts ("FC") designated as derivative instruments
in net investment hedging relationships.
Represents forward foreign currency exchange contracts ("FC") not designated as hedges.
As of June 29, 2024, the Company recorded $11.6 million within Other Current Assets and $20.6 million within Other Assets. As of July 1, 2023, the
Company recorded $13.1 million within Other Assets.
As of June 29, 2024, the Company recorded $2.2 million within Accrued Liabilities and $137.2 million within Other Liabilities. As of July 1, 2023, the
Company recorded $90.5 million within Other Liabilities.
(1)
(2)
(4)
(5)
(3)
(1)
(2)
(3)
(4)
(5)
86

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following tables provides the pretax impact of gains and losses from the Company's designated derivative instruments on its Consolidated Financial
Statements for the fiscal years ended June 29, 2024, July 1, 2023 and July 2, 2022:
Amount of Gain (Loss) Recognized in OCI on Derivatives
Fiscal Year Ended
June 29, 2024
July 1, 2023
July 2, 2022
(millions)
Cash flow hedges:
Inventory purchases
$
59.6  $
34.7  $
(5.6)
Interest rates
(10.4)
— 
— 
Total cash flow hedges
$
49.2  $
34.7  $
(5.6)
Other:
Net investment hedges
74.3 
(58.7)
3.8 
Total other
74.3 
(58.7)
3.8 
Total hedges
$
123.5  $
(24.0) $
(1.8)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Statement of
Operations

Classification
Fiscal Year Ended
June 29, 2024
July 1, 2023
July 2, 2022
(millions)
Cash flow hedges:
Inventory purchases
Cost of Sales
$
36.7  $
(6.3) $
(3.4)
Interest rates
Other income
(expense)
(9.5)
— 
— 
Total cash flow hedges
$
27.2  $
(6.3) $
(3.4)
Other:
Net investment hedges
Interest income
(expense)
2.8 
— 
— 
Total other
2.8 
0.0 
0.0 
Total hedges
$
30.0  $
(6.3) $
(3.4)
Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships.
Represents forward interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships.
Represents cross currency swap contracts ("CCS") and forward foreign exchange contracts ("FC") designated as derivative instruments in net investment
hedging relationships, for which the difference between changes in fair value and periodic amortization of excluded components is recorded within AOCI.
The Company expects that $49.8  million of net derivative gain related to inventory purchases and interest rates included in Accumulated other
comprehensive income at June 29, 2024 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in foreign
currency exchange rates and benchmark interest rates.
The Company assesses the cross-currency swaps and forward exchange contracts used as net investment hedges under the spot method. This results in the
cross-currency basis spread on the cross-currency swaps and the difference between the spot rate and the forward rate of the forward exchange contract being
excluded from the assessment of hedge effectiveness, and recorded as incurred as a reduction in interest expense in the Company’s Consolidated Statements of
Operations. Accordingly, the Company recorded net interest income of $28.7 million and $28.5 million during fiscal 2024 and fiscal 2023, respectively.
(1)
(2)
(3)
(1)
(2)
(3)
(1)
(2)
(3)
87

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
11. FAIR VALUE MEASUREMENTS
The Company categorizes its assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as
set forth below. The three levels of the hierarchy are defined as follows:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1. Level 2 inputs include quoted prices for identical assets or liabilities in non-
active markets, quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for substantially the
full term of the asset or liability.
Level 3 — Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or liability. The Company does not
have any Level 3 investments.
The following table shows the fair value measurements of the Company’s financial assets and liabilities at June 29, 2024 and July 1, 2023:
Level 1
Level 2
 
June 29,
2024
July 1,
2023
June 29,
2024
July 1,
2023
(millions)
Assets:
 
 
 
 
Cash equivalents
$
437.4  $
155.7  $
29.7  $
11.9 
Short-term investments:
Time deposits
— 
— 
0.6 
0.6 
Commercial paper
— 
— 
865.2 
— 
Government securities - U.S.
178.2 
— 
— 
— 
Other
— 
— 
17.8 
14.8 
Long-term investments:
Other
— 
— 
1.3 
1.3 
Derivative Assets:
Inventory-related instruments
— 
— 
58.2 
38.6 
Net investment hedges
— 
— 
32.2 
13.1 
Intercompany loans and payables
— 
— 
0.1 
0.4 
Liabilities:
 
 
 
 
Derivative liabilities:
Inventory-related instruments
$
—  $
—  $
2.2  $
0.1 
Net investment hedges
— 
— 
139.4 
90.5 
Intercompany loans and payables
— 
— 
2.6 
0.2 
Cash equivalents generally consists of money market funds and time deposits with maturities of three months or less at the date of purchase. Due to their
short-term maturity, management believes that their carrying value approximates fair value.
Short-term investments are recorded at fair value, which approximates their carrying value, and are primarily based upon quoted vendor or broker priced
securities in active markets.
The fair value of these hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment
for the counterparty’s or Company’s credit risk.
Refer to Note 12, "Debt," for the fair value of the Company's outstanding debt instruments.
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88

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
Non-Financial Assets and Liabilities
The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets, right-of-use assets and property and equipment, are not
required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in
circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-
financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions.
During the fiscal year ended June 29, 2024, the Company recorded $6.3 million of impairment charges to reduce the carrying amount of certain store
assets within property and equipment, net to their estimated fair values. During the fiscal year ended July 1, 2023, the Company recorded $5.9 million of
impairment charges to reduce the carrying amount of certain store assets within property and equipment, net to their estimated fair values.
During the fiscal year ended June 29, 2024, the Company did not have any impairment charges to reduce the carrying amount of certain operating lease
right-of-use assets to their estimated fair values. During the fiscal year ended July 1, 2023, the Company recorded $1.3 million of impairment charges to
reduce the carrying amount of certain operating lease right-of-use assets to their estimated fair values.
The fair value of store assets were determined based on Level 3 measurements. Inputs to these fair value measurements included estimates of the amounts
and the timing of the stores' net future discounted cash flows based on historical experience, current trends and market conditions.
89

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
12. DEBT
The following table summarizes the components of the Company’s outstanding debt:
June 29,
2024
July 1,
2023
(millions)
Current Debt:
Term Loan due 2027
$
—  $
25.0 
4.250% Senior Notes due 2025
303.4 
— 
Total Current Debt
$
303.4  $
25.0 
Long-Term Debt:
Term Loan due 2027
$
—  $
443.8 
USD Senior Notes:
4.250% Senior Notes due 2025
— 
303.4 
7.050% Senior Notes due 2025
500.0 
— 
7.000% Senior Notes due 2026
750.0 
— 
4.125% Senior Notes due 2027
396.6 
396.6 
7.350% Senior Notes due 2028
1,000.0 
— 
7.700% Senior Notes due 2030
1,000.0 
— 
3.050% Senior Notes due 2032
500.0 
500.0 
7.850% Senior Notes due 2033
1,250.0 
— 
EUR Senior Notes:
5.350% EUR Senior Notes due 2025
535.6 
— 
5.375% EUR Senior Notes due 2027
535.6 
— 
5.875% EUR Senior Notes due 2031
535.6 
— 
Total long-term debt
7,003.4 
1,643.8 
Less: Unamortized discount and debt issuance costs on senior notes
(66.2)
(8.0)
Total long-term debt, net
$
6,937.2  $
1,635.8 
The carrying amounts of the Capri Acquisition EUR Senior Notes (as defined above) include the impact of changes in the exchange rate of the United
States Dollar against the Euro.
During fiscal 2024, 2023 and 2022 the Company recognized interest expense related to the outstanding debt of $369.6  million, $72.8  million and
$68.8 million, respectively. During fiscal 2024, interest expense was inclusive of $28.5 million related to Bridge Facility (as defined below) financing fees.
Capri Holdings Limited Acquisition
In order to finance the Capri Acquisition, on November 27, 2023, the Company issued $4.50 billion Capri Acquisition USD Senior Notes and €1.50
billion Capri Acquisition EUR Senior Notes which, together with the $1.40 billion of delayed draw Capri Acquisition Term Loan Facilities executed on
August 30, 2023, complete the expected financing for the Capri Acquisition. Refer to Note 5, "Acquisitions," for further information.
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90

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
Bridge Facility
In connection with our entry into the Merger Agreement, the Company entered into a commitment letter, dated as of August 10, 2023, with Bank of
America, N.A., Morgan Stanley Senior Funding, Inc. and the other commitment parties party thereto, to provide a 364-day senior unsecured bridge loan
facility in an aggregate principal amount of up to $8.00 billion (the "Bridge Facility") to fund the purchase price of the Capri Acquisition and to pay related
fees and expenses. Upon entering into the Capri Acquisition Term Loan Credit Agreement (as defined below) and, as a result of the commitments thereunder
with respect to the Capri Acquisition Term Loan Facilities (as defined below), the Bridge Facility commitments were reduced to $6.60 billion. In November
2023, the Bridge Facility was terminated upon the issuance of approximately $6.10 billion of the Capri Acquisition Senior Notes by the Company. Refer to the
"Capri Acquisition USD Senior Notes" and "Capri Acquisition EUR Senior Notes" paragraphs below.
Capri Acquisition Term Loan Facilities
On August 30, 2023, the Company entered into a definitive credit agreement (such agreement, the "Capri Acquisition Term Loan Credit Agreement")
whereby Bank of America, N.A, as administrative agent, and the other agents party thereto, and a syndicate of banks and financial institutions have committed
to lend the Company, subject to the satisfaction or waiver of the conditions set forth in the Capri Acquisition Term Loan Credit Agreement, the Capri
Acquisition Term Loan Facilities consisting of a $1.05 billion unsecured term loan facility maturing three years after the term loans thereunder are borrowed
(the “Three-Year Term Loan Facility”) and a $350.0 million term loan facility maturing five years after the term loans thereunder are borrowed (the “Five-
Year Term Loan Facility”). The Company plans to use borrowings under the Capri Acquisition Term Loan Facilities to pay a portion of the consideration for
the Capri Acquisition and to pay related fees and expenses.
Borrowings under the Capri Acquisition Term Loan Facilities bear interest at a rate per annum equal to, at the Company’s option, either (a) an alternate
base rate or (b) a rate based on the forward-looking Secured Overnight Financing Rate ("SOFR") term rate administered by CME Group Benchmark
Administration Limited (or any successor administrator) plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a grid
based on the ratio of (a) consolidated debt (with certain customary deductions for unrestricted cash and permitted investments) to (b) consolidated EBITDAR.
The applicable margin will initially be (x) in the case of the Three-Year Term Loan Facility, 0.250% for base rate loans and 1.250% for SOFR loans and (y) in
the case of the Five-Year Term Loan Facility, 0.375% for base rate loans and 1.375% for SOFR loans. Additionally, the Company will pay a ticking fee of
0.15% on the average daily amount of the unused commitments of the Capri Acquisition Term Loan Facilities. There were no outstanding borrowings on the
Capri Acquisition Term Loan Facilities as of June 29, 2024.
$2.00 Billion Revolving Credit Facility
On August 30, 2023, pursuant to that certain Amendment No. 1 to Credit Agreement (the "Amendment"), the Company amended its Existing Credit
Agreement (as defined below), originally dated as of May 11, 2022, among the Company, as borrower, certain of our subsidiaries, as guarantors, Bank of
America, N.A., as administrative agent, and the financial institutions parties thereto as lenders (the "Existing Credit Agreement", and as amended by the
Amendment, the "Amended Credit Agreement"). Under the Amended Credit Agreement, a syndicate of financial institutions and other lenders provided
increases to the aggregate commitments to the revolving facility under the Existing Credit Agreement from $1.25 billion to $2.00 billion (the “Revolving
Credit Facility”). The Revolving Credit Facility will mature on May 11, 2027.
Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s option, (i) for borrowings in U.S. Dollars,
either (a) an alternate base rate or (b) a rate based on the forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited
(or any successor administrator satisfactory to the administrative agent), (ii) for borrowings in Euros, the Euro Interbank Offered Rate, (iii) for borrowings in
Pounds Sterling, the Sterling Overnight Index Average Reference Rate and (iv) for borrowings in Japanese Yen, the Tokyo Interbank Offer Rate, plus, in each
case, an applicable margin. The applicable margin will be adjusted by reference to a grid (the “Pricing Grid”) based on the ratio of (a) consolidated debt to (b)
consolidated EBITDAR. Additionally, the Company will pay facility fees, calculated at a rate per annum determined in accordance with the Pricing Grid, on
the full amount of the Revolving Credit Facility, payable quarterly in arrears, and certain fees with respect to letters of credit that are issued. The Revolving
Credit Facility may be used to finance the working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general
corporate purposes of the Company and its subsidiaries (which may include commercial paper backup). Additionally, up to $250 million of the Revolving
Credit Facility will be available on a funds certain basis to fund the purchase price of the Capri Acquisition and to pay related fees and expenses. There were
no outstanding borrowings on the Revolving Credit Facility as of June 29, 2024.
91

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
Capri Acquisition USD Senior Notes
On November 27, 2023, the Company issued $4.50 billion aggregate principal amount of the Capri Acquisition USD Senior Notes, consisting of $500.0
million aggregate principal amount of 7.050% senior unsecured notes due November 27, 2025 at 99.890% of par (the “7.050% Senior Notes due 2025”),
$750.0 million aggregate principal amount of 7.000% senior unsecured notes due November 27, 2026 at 99.803% of par (the “7.000% Senior Notes due
2026”), $1.00 billion aggregate principal amount of 7.350% senior unsecured notes due November 27, 2028 at 99.724% (the “7.350% Senior Notes due
2028”), $1.00 billion aggregate principal amount of 7.700% Senior Notes due November 27, 2030 at 99.712% of par (the “7.700% Senior Notes due 2030”)
and $1.25 billion aggregate principal amount of our 7.850% Senior Notes due November 27, 2033 at 99.475% (the “7.850% Senior Notes due 2033”). The
Company will pay interest semi-annually on the Capri Acquisition USD Senior Notes on May 27 and November 27 of each year, commencing on May 27,
2024.
If (i) the Capri Acquisition has not been completed by February 10, 2025 (or such later date mutually agreed between the Company and Capri) (such date,
the “special mandatory redemption end date”), (ii) prior to the special mandatory redemption end date, the Merger Agreement is terminated in accordance with
its terms or (iii) the Company otherwise notifies the trustee that it will not pursue the consummation of the Capri Acquisition, all of the Capri Acquisition
USD Senior Notes will be redeemed at a redemption price equal to 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the
special mandatory redemption date.
Capri Acquisition EUR Senior Notes
On November 27, 2023, the Company issued €1.50 billion aggregate principal amount of Capri Acquisition Senior Notes, consisting of €500.0 million
aggregate principal amount of 5.350% senior unsecured notes due November 27, 2025 at 99.878% of par (the “5.350% EUR Senior Notes due 2025”), €500.0
million aggregate principal amount of 5.375% senior unsecured notes due November 27, 2027 at 99.723% of par (the 5.375% EUR Senior Notes due 2027”)
and €500.0 million aggregate principal amount of our 5.875% senior unsecured notes due November 27, 2031 at 99.248% of par (the “5.875% EUR Senior
Notes due 2031"). The Company will pay interest annually on the Capri Acquisition EUR Senior Notes on November 27 of each year, commencing on
November 27, 2024. As of June 29, 2024, the carrying amount for each of the Capri Acquisition EUR Senior Notes was $535.6 million.
If (i) the Capri Acquisition has not been completed by the special mandatory redemption end date, (ii) prior to the special mandatory redemption end date,
the Merger Agreement is terminated in accordance with its terms or (iii) the Company otherwise notifies the trustee that it will not pursue the consummation
of the Capri Acquisition, all of the Capri Acquisition EUR Senior Notes will be redeemed at a redemption price equal to 101% of their principal amount, plus
accrued and unpaid interest to, but excluding, the special mandatory redemption date.
Term Loan due 2027
On May 11, 2022, pursuant to the Existing Credit Agreement, the Company entered into an unsecured $500.0 million Term Loan (the “Term Loan due
2027”) with a maturity date on May 11, 2027. The Term Loan due 2027 amortizes in an amount equal to 5.000% per annum, with payments made quarterly.
Borrowings under the Term Loan due 2027 bear interest at a rate per annum equal to, at the Company’s option, either (i) an alternate base rate or (ii) a term
secured overnight financing rate plus, in each case, an applicable margin. The applicable margin will be adjusted by reference to a pricing grid based on the
ratio (a) consolidated debt to (b) consolidated EBITDAR. The Company repaid its outstanding borrowings under the Term Loan due 2027 on May 31, 2024.
2025, 2027, 2032 Senior Notes
In March 2015, the Company issued $600.0 million aggregate principal amount of 4.250% senior unsecured notes due April 1, 2025 at 99.445% of par
(the "4.250% Senior Notes due 2025"). In June 2017, the Company issued $600.0 million aggregate principal amount of 4.125% senior unsecured notes due
July 15, 2027 at 99.858% of par (the 4.125% Senior Notes due 2027"). In December 2021, the Company completed a cash tender offer for $296.6 million and
$203.4 million of the outstanding aggregate principal amount under its 4.250% Senior Notes due 2025 and 4.125% Senior Notes due 2027, respectively. In
addition, in December 2021, the Company issued $500.0 million aggregate principal amount of 3.050% senior unsecured notes due March  15, 2032 at
99.705% of par (the "3.050% Senior Notes due 2032").
92

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
China Credit Facility
On May 20, 2024, the Company entered into a short-term credit facility (“China Credit Facility”) with Citibank, which may be used to fund general
working capital needs, not to exceed 12 months, and is subject to annual renewal. The China Credit Facility provides the Company with a maximum facility
amount of up to RMB 250.0 million (approximately $34.4 million), which includes a loan of up to RMB 85.0 million (approximately $11.7 million), a bank
guarantee facility of up to RMB 15.0 million (approximately $2.1 million) and Accounts payable financing of up to RMB 150.0 million (approximately $20.6
million). As of June 29, 2024, there were no borrowings, bank guarantees or Accounts Payable financing outstanding under the China Credit Facility.
Debt Covenants
Under the terms of our debt facilities, we must comply with certain restrictions limiting the Company’s ability to among other things: (i) incur certain
indebtedness, (ii) create certain liens, (iii) enter into certain sale and leaseback transactions, (iv) make certain investments or payments and (v) merge, or
consolidate or transfer, sell or lease all or substantially all of the Company’s assets.
Under the Amended Credit Agreement, we are required to comply on a quarterly basis with a maximum net leverage ratio of 4.00:1.00. After giving
effect to the Capri Acquisition, the Company is will be required under the Amended Credit Agreement and the Capri Acquisition Term Loan Credit
Agreement to comply on a quarterly basis with a maximum net leverage ratio of (i) from and including the closing date of the Capri Acquisition to but
excluding June 28, 2025, 4.75 to 1.00, (ii) from and including June 28, 2025 to but excluding June 27, 2026, 4.50 to 1.00, and (iii) from and including June 27,
2026 and thereafter, 4.00 to 1.00. As of June 29, 2024, we were in compliance with these restrictions and covenants, have met such financial ratios and have
met all debt payment obligations.
Fair Value Considerations
The following table shows the estimated fair values of the senior unsecured notes at June 29, 2024 and July 1, 2023 based on external pricing data,
including available quoted market prices of the instruments, and consideration of comparable debt instruments with similar interest rates and trading
frequency, among other factors, and are classified as Level 2 measurements within the fair value hierarchy:
June 29,
2024
July 1,
2023
(millions)
USD Senior Notes:
4.250% Senior Notes due 2025
$
300.2  $
295.1 
7.050% Senior Notes due 2025
508.1 
— 
7.000% Senior Notes due 2026
770.7 
— 
4.125% Senior Notes due 2027
378.2 
371.7 
7.350% Senior Notes due 2028
1,036.5 
— 
7.700% Senior Notes due 2030
1,042.9 
— 
3.050% Senior Notes due 2032
402.9 
399.5 
7.850% Senior Notes due 2033
1,311.3 
— 
EUR Senior Notes:
5.350% EUR Senior Notes due 2025
543.8 
— 
5.375% EUR Senior Notes due 2027
550.8 
— 
5.875% EUR Senior Notes due 2031
556.4 
— 
The fair values of the Capri Acquisition EUR Senior Notes include the impact of changes in the exchange rate of the United States Dollar against the
Euro.
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93

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
Debt Maturities
As of June 29, 2024 the debt maturities for the next five fiscal years and thereafter are as follows:
Principal
(millions)
Fiscal Year
2025
$
303
2026
1,035
2027
750
2028
932
2029
1,000
2030 and thereafter
3,285
Total
$
7,306
The principal amounts of the Capri Acquisition EUR Senior Notes include the impact of changes in the exchange rate of the United States Dollar against
the Euro as of June 29, 2024.
13. COMMITMENTS AND CONTINGENCIES
Capri Holdings Limited Acquisition
On August 10, 2023, the Company entered into a Merger Agreement. Refer to Note 5, "Acquisitions" for further information.
Letters of Credit
The Company had standby letters of credit, surety bonds and bank guarantees totaling $28.4 million and $37.1 million outstanding at June 29, 2024 and
July 1, 2023, respectively. The agreements, which expire at various dates through calendar 2039, primarily collateralize the Company’s obligation to third
parties for duty, leases, insurance claims and materials used in product manufacturing. The Company pays certain fees with respect to letters of credit that are
issued.
Tax Legislation
The Tax Legislation requires the Company to pay a one-time tax, or Transition Tax, on previously unremitted earnings of certain non-U.S. subsidiaries.
The Company expects to pay approximately $14.9 million related to the remaining obligation on the Transition Tax. Refer to Note 15, "Income Taxes," for
more information related to the impact of the Tax Legislation.
Other
The Company had other contractual cash obligations as of June 29, 2024, including $485.4 million related to inventory purchase obligations, $14.8
million related to capital expenditure and cloud computing implementation commitments, $253.5 million of other purchase obligations, $7.31 billion of debt
repayments, $1.3 million of finance lease obligations and $2.56 billion of interest payments on the outstanding debt. Refer to Note 9, "Leases," for a summary
of the Company's future minimum rental payments under non-cancelable leases.
The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including
proceedings to protect Tapestry's intellectual property rights, litigation instituted by persons alleged to have been injured by advertising claims or upon
premises within the Company’s control, contractual disputes, insurance claims and litigation with present or former employees.
Although the Company's litigation can result in large monetary awards, such as when a civil jury is allowed to determine compensatory and/or punitive
damages, the Company believes that the outcome of all pending legal proceedings in the aggregate will not have a material effect on the Company's business
or consolidated financial statements.
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94

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
14. GOODWILL AND OTHER INTANGIBLE ASSETS
The Company performs its annual impairment assessment of goodwill as well as brand intangibles at the beginning of the fourth quarter of each fiscal
year or if an event occurs that would more likely than not reduce the fair value below its carrying amount.
The estimated fair value of the Company’s reporting units are based on a weighted average of the income and market approaches. The income approach is
based on estimated discounted future cash flows, while the market approach is based on earnings multiples of selected guideline companies. The approach,
which qualifies as Level 3 in the fair value hierarchy, incorporated a number of significant assumptions and judgments, including, but not limited to, estimated
future cash flows, discount rates, income tax rates, terminal growth rates and valuation multiples derived from comparable publicly traded companies. The
Company determined there was no impairment in fiscal 2024 and fiscal 2023 based on the annual assessment and no events occurring that would more likely
than not reduce the fair value below its carrying amount.
Goodwill
The change in the carrying amount of the Company’s Goodwill by segment is as follows:
Coach
Kate Spade
Stuart Weitzman 
Total
(millions)
Balance at July 2, 2022
$
609.1  $
632.4  $
—  $
1,241.5 
Foreign exchange impact
(11.6)
(2.4)
— 
(14.0)
Balance at July 1, 2023
597.5 
630.0 
— 
1,227.5 
Foreign exchange impact
(19.5)
(3.9)
— 
(23.4)
Balance at June 29, 2024
$
578.0  $
626.1  $
—  $
1,204.1 
    Amount is net of accumulated goodwill impairment charges of $210.7 million as of June 29, 2024, July 1, 2023 and July 2, 2022.
Intangible Assets
Intangible assets consist of the following:
Fiscal Year Ended
June 29, 2024
July 1, 2023
Gross 

Carrying 

Amount
Accum.

Amort.
Net
Gross 

Carrying 

Amount
Accum.

Amort.
Net
(millions)
Intangible assets subject to amortization:
Customer relationships
$
100.3  $
(56.5) $
43.8  $
100.3  $
(50.0) $
50.3 
Total intangible assets subject to amortization
100.3 
(56.5)
43.8 
100.3 
(50.0)
50.3 
Intangible assets not subject to amortization:
Trademarks and trade names
1,309.8 
— 
1,309.8 
1,309.8 
— 
1,309.8 
Total intangible assets
$
1,410.1  $
(56.5) $
1,353.6  $
1,410.1  $
(50.0) $
1,360.1 
Amortization expense for the Company’s definite-lived intangible assets was $6.5 million and $6.5 million for fiscal 2024 and fiscal 2023, respectively.
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95

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
As of June 29, 2024, the expected amortization expense for intangible assets is as follows:
 Amortization Expense
(millions)
Fiscal Year
Fiscal 2025
$
6.5 
Fiscal 2026
6.5 
Fiscal 2027
6.5 
Fiscal 2028
6.5 
Fiscal 2029
6.5 
Fiscal 2030 and thereafter
11.3 
Total
$
43.8 
The expected future amortization expense above reflects remaining useful lives ranging from approximately 5.8 to 8.0 for customer relationships.
15. INCOME TAXES
The provisions for income taxes, computed by applying the U.S. statutory rate to income before taxes, as reconciled to the actual provisions were:
Fiscal Year Ended
 
June 29, 2024
July 1, 2023
July 2, 2022
 
Amount
Percentage
Amount
Percentage
Amount
Percentage
(millions)
Income before provision for income taxes:
 
 
 
 
 
 
United States
$
139.0 
13.7 % $
421.5 
36.9 % $
392.0 
37.4 %
Foreign
872.9 
86.3 
721.6 
63.1 
655.0 
62.6 
Total income before provision for income taxes
$
1,011.9 
100.0 % $
1,143.1 
100.0 % $
1,047.0 
100.0 %
Tax expense at U.S. statutory rate
$
212.5 
21.0 % $
240.0 
21.0 % $
219.9 
21.0 %
State taxes, net of federal benefit
18.1 
1.8 
23.2 
2.0 
15.8 
1.5 
Effects of foreign operations
20.5 
2.0 
4.3 
0.4 
(3.5)
(0.3)
Effects of tax credits, acquisition costs and
reorganization costs
(64.6)
(6.4)
(61.3)
(5.4)
(49.8)
(4.8)
Other, net
9.4 
1.0 
0.9 
0.1 
8.3 
0.8 
Taxes at effective worldwide rates
$
195.9 
19.4 % $
207.1 
18.1 % $
190.7 
18.2 %
The United States jurisdiction includes foreign pre-tax earnings allocated to the Company from its interest in a foreign partnership.
This includes the tax related to the Global Intangible Low-Taxed Income ("GILTI"). The Company has elected to account for the tax associated with
GILTI as a period cost, and accordingly, the Company has not recorded deferred taxes associated with GILTI.
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(2)
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96

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
Current and deferred tax provision (benefit) was:
Fiscal Year Ended
 
June 29, 2024
July 1, 2023
July 2, 2022
 
Current
Deferred
Current
Deferred
Current
Deferred
(millions)
Federal
$
71.0 
$
14.2 
$
111.6 
$
24.7 
$
104.0 
$
13.9 
Foreign
103.5 
(14.6)
48.0 
3.6 
46.6 
11.2 
State
18.9 
2.9 
6.3 
12.9 
10.7 
4.3 
Total current and deferred tax provision
(benefit)
$
193.4 
$
2.5 
$
165.9 
$
41.2 
$
161.3 
$
29.4 
The components of deferred tax assets and liabilities were:
June 29,

2024
July 1,

2023
(millions)
Share-based compensation
$
20.6 
$
21.8 
Reserves not deductible until paid
46.7 
45.9 
Employee benefits
30.1 
23.1 
Net operating loss
45.5 
47.7 
Other
44.8 
67.2 
Inventory
17.6 
23.4 
Lease liability
316.2 
348.6 
Gross deferred tax assets
521.5 
577.7 
Valuation allowance
32.1 
34.3 
Deferred tax assets after valuation allowance
$
489.4 
$
543.4 
Goodwill
48.6 
64.4 
Other intangibles
308.6 
306.0 
Property and equipment
15.1 
24.8 
Foreign investments
43.3 
44.8 
Right-of-use
279.3 
302.1 
Prepaid expenses
1.7 
0.9 
Gross deferred tax liabilities
696.6 
743.0 
Net deferred tax (liabilities) assets
$
(207.2)
$
(199.6)
Consolidated Balance Sheets Classification
 
 
Deferred income taxes – non-current asset
44.1 
40.4 
Deferred income taxes – non-current liability
(251.3)
(240.0)
Net deferred tax (liabilities) assets
$
(207.2)
$
(199.6)
Significant judgment is required in determining the worldwide provision for income taxes, and there are many transactions for which the ultimate tax
outcome is uncertain. It is the Company’s policy to establish provisions for taxes that may become payable in future years, including those due to an
examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure associated with uncertain tax
positions. The provisions are analyzed at least quarterly and adjusted as appropriate based on new information or circumstances in accordance with the
requirements of ASC 740.
97

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
June 29,
2024
July 1,
2023
July 2,
2022
(millions)
Balance at beginning of fiscal year
$
91.8 
$
96.1 
$
111.4 
Gross increase due to tax positions related to prior periods
20.5 
4.3 
1.6 
Gross decrease due to tax positions related to prior periods
(0.9)
(7.7)
(11.7)
Gross increase due to tax positions related to current period
6.5 
5.2 
7.4 
Decrease due to lapse of statutes of limitations
(2.1)
(6.1)
(10.9)
Decrease due to settlements with taxing authorities
— 
— 
(1.7)
Balance at end of fiscal year
$
115.8 
$
91.8 
$
96.1 
Of the $115.8 million ending gross unrecognized tax benefit balance as of June 29, 2024, $112.1 million relates to items which, if recognized, would
impact the effective tax rate. Of the $91.8 million ending gross unrecognized tax benefit balance as of July 1, 2023, $87.1 million relates to items which, if
recognized, would impact the effective tax rate. As of June  29, 2024 and July  1, 2023, gross interest and penalties payable was $19.7  million and
$10.3 million, respectively, which are included in Other liabilities. During fiscal 2024, fiscal 2023 and fiscal 2022, the Company recognized gross interest and
penalty expense of $9.5 million, gross interest and penalty expense of $2.3 million and gross interest and penalty income of $1.5 million, respectively.
The Company files income tax returns in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. Tax examinations are currently in
progress in select foreign and state jurisdictions that are extending the years open under the statutes of limitation. Fiscal years 2018 to present are open to
examination in the U.S. federal jurisdiction, fiscal 2018 to present in select state jurisdictions and fiscal 2017 to present in select foreign jurisdictions. The
Company is currently under U.S. federal audit for fiscal 2018 to 2020. The IRS is examining carryback claims to fiscal 2014 through fiscal 2020 as part of
Joint Committee procedures for tax refund claims. The Company anticipates that one or more of these audits may be finalized and certain statutes of limitation
may expire in the foreseeable future. However, based on the status of these examinations and the average time typically incurred in finalizing audits with the
relevant tax authorities, the Company cannot reasonably estimate the impact these audits may have in the next 12 months, if any, to previously recorded
uncertain tax positions. The Company accrues for certain known and reasonably anticipated income tax obligations after assessing the likely outcome based
on the weight of available evidence. Although the Company believes that the estimates and assumptions used are reasonable and legally supportable, the final
determination of tax audits could be different than that which is reflected in historical income tax provisions and recorded assets and liabilities. With respect to
all jurisdictions, the Company has made adequate provision for all income tax uncertainties.
As of June 29, 2024, the Company had the following tax loss carryforwards available: U.S. state tax loss carryforwards of $534.5 million and tax loss
carryforwards of various foreign jurisdictions of $78.7 million. As of July 1, 2023, the Company had the following tax loss carryforwards available: U.S. state
tax loss carryforwards of $547.2 million and tax loss carryforwards of various foreign jurisdictions of $80.6 million. The state net operating loss carryforwards
generally start to expire in fiscal 2025. The majority of the foreign net operating loss can be carried forward indefinitely. Deferred tax assets, including the
deferred tax assets recognized on these net operating losses, have been reduced by a valuation allowance of $32.1 million as of June 29, 2024 and $34.3
million as of July 1, 2023.
The Company is not permanently reinvested with respect to the earnings of a limited number of foreign entities and has recorded the tax consequences of
remitting earnings from these entities. The Company is permanently reinvested with respect to all other earnings. The total estimated amount of unremitted
earnings of foreign subsidiaries as of June 29, 2024 and July 1, 2023 was $750.0 million and $835.1 million, respectively. The Company intends to distribute
$525.8 million of earnings that were previously subject to U.S. Federal Tax and has recorded a deferred tax liability of $1.3 million during fiscal 2024 for U.S.
state taxes and foreign withholding taxes related to the future distribution. Based on the Company's current analysis, there is further unrecognized deferred tax
liability of approximately $3 million to $5 million on the remaining unremitted earnings.
Transition Tax
The Company is required to pay a one-time Transition Tax on previously unremitted earnings of certain non-U.S. subsidiaries. The Company has elected
to pay the Transition Tax in installments. The remaining Transition Tax payable is $14.9 million and is payable in fiscal 2025.
98

16. DEFINED CONTRIBUTION PLAN
The Company maintains the Tapestry, Inc. 401(k) Savings Plan, which is a defined contribution plan. Employees who meet certain eligibility
requirements and are not part of a collective bargaining agreement may participate in this program. The annual expense incurred by the Company for this
defined contribution plan was $12.7 million, $13.4 million and $11.8 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
17. SEGMENT INFORMATION
The Company has three reportable segments:
•
Coach - Includes global sales primarily of Coach brand products to customers through our DTC, wholesale and licensing businesses.
•
Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through our DTC, wholesale and licensing
businesses.
•
Stuart Weitzman - Includes global sales of Stuart Weitzman brand products primarily through our DTC and wholesale businesses.
In deciding how to allocate resources and assess performance, the Company's chief operating decision maker regularly evaluates operating profit of these
segments. Segment operating profit is the gross profit of the segment less direct expenses of the segment. Total expenditures for additions to long-lived assets
are not disclosed as this information is not regularly provided to the chief operating decision maker at the segment level.
In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands; therefore, they are not
allocated to its segments. Such costs primarily include certain overhead expenses related to corporate functions as well as certain administration, corporate
occupancy, information technology, and depreciation costs.
The following table summarizes net sales of each of the company's segments for fiscal 2024, fiscal 2023, and fiscal 2022:
Fiscal Year Ended
June 29,
2024
July 1,
2023
July 2,
2022
(millions)
Segment net sales:
 
 
 
Coach
$
5,095.3  $
4,960.4  $
4,921.3 
Kate Spade
1,334.4 
1,418.9 
1,445.5 
Stuart Weitzman
241.5 
281.6
317.7
Total Net sales:
$
6,671.2  $
6,660.9  $
6,684.5 
The following table summarizes segment operating profit of each of the company's segments and reconciliation to Income (loss) before provision for
income taxes for fiscal 2024, fiscal 2023, and fiscal 2022:
Fiscal Year Ended
June 29,

2024
July 1,

2023
July 2,

2022
(millions)
Segment operating profit (loss):
 
 
 
Coach
$
1,651.1  $
1,529.9  $
1,473.9 
Kate Spade
132.6 
115.0
157.4
Stuart Weitzman
(21.2)
(6.7)
1.8 
Total segment operating profit (loss):
$
1,762.5  $
1,638.2  $
1,633.1 
Unallocated corporate expenses
622.4 
465.8 
457.3 
Loss on extinguishment of debt
— 
— 
53.7 
Unallocated other charges, net
128.2 
29.3 
75.1 
Income (loss) before provision for income taxes
$
1,011.9  $
1,143.1  $
1,047.0 
(1)
(2)
99

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following table summarizes depreciation and amortization expense of each of the company's segments for fiscal 2024, fiscal 2023, and fiscal 2022:
Fiscal Year Ended
June 29,
2024
July 1,
2023
July 2,
2022
(millions)
Depreciation and amortization expense :
 
 
 
Coach
$
88.0  $
94.7  $
110.1 
Kate Spade
41.6 
44.2
48.5 
Stuart Weitzman
10.6 
10.5
10.3
Unallocated corporate
33.8 
32.8 
26.4 
Total Depreciation and amortization expense:
$
174.0  $
182.2  $
195.3 
Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a segment.
Includes Interest expense, net and Other expense (income).
Depreciation and amortization expense for the segments includes an allocation of expense related to assets which support multiple segments.
The following table summarizes total assets of each of the company's segments for fiscal 2024, fiscal 2023, and fiscal 2022:
Fiscal Year Ended
June 29,

2024
July 1,

2023
July 2,

2022
(millions)
Segment total assets:
 
 
 
Coach
$
2,238.4  $
2,272.3  $
2,392.2 
Kate Spade
2,469.2 
2,597.3 
2,641.3 
Stuart Weitzman
232.6 
235.8 
269.3 
Corporate
8,456.1 
2,011.4 
1,962.5 
Total Assets:
$
13,396.3  $
7,116.8  $
7,265.3 
(3)
(1)
(1)    
(2)    
(3)    
100

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
The following table disaggregates Net sales for each of our product categories by segment in fiscal 2024, fiscal 2023, and fiscal 2022.
 Fiscal Year Ended
June 29, 2024
July 1, 2023
July 2, 2022
Amount
% of total
net sales
Amount
% of total
net sales
Amount
% of total
net sales
(millions)
Coach
Women's Handbags
$
2,495.7 
37.5 % $
2,450.7 
36.8 % $
2,574.8 
38.5 %
Women's Accessories
1,079.6 
16.2 
1,024.8 
15.4 
942.5 
14.1 
Men's
983.9 
14.7 
947.1 
14.2 
904.8 
13.5 
Other Products
536.1 
8.0 
537.8 
8.1 
499.2 
7.5 
Total Coach
$
5,095.3 
76.4 % $
4,960.4 
74.5 % $
4,921.3 
73.6 %
Kate Spade
Women's Handbags
$
721.0 
10.9 % $
779.6 
11.7 % $
819.5 
12.2 %
Women's Accessories
316.8 
4.7 
306.9 
4.6 
307.0 
4.6 
Other Products
296.6 
4.4 
332.4 
5.0 
319.0 
4.8 
Total Kate Spade
$
1,334.4 
20.0 % $
1,418.9 
21.3 % $
1,445.5 
21.6 %
Stuart Weitzman
$
241.5 
3.6 % $
281.6 
4.2 % $
317.7 
4.8 %
Total Net sales
$
6,671.2 
100.0 % $
6,660.9 
100.0 % $
6,684.5 
100.0 %
The significant majority of sales for Stuart Weitzman is attributable to women's footwear.
Geographic Area Information
Geographic revenue information is based on the location of our customer sale. Geographic long-lived asset information is based on the physical location
of the assets at the end of each fiscal year and includes property and equipment, net, right of use assets and other assets.
United 

States
Greater
China
Japan
Other
Total
(millions)
Fiscal 2024
 
 
 
 
Net sales
$
3,949.7 
$
1,012.6 
$
554.4 
$
1,154.5 
$
6,671.2 
Long-lived assets
1,533.7 
151.8 
94.0 
210.0 
1,989.5 
Fiscal 2023
 
 
 
 
Net sales
$
4,040.2 
$
1,015.8 
$
569.0 
$
1,035.9 
$
6,660.9 
Long-lived assets
1,662.5 
160.3 
87.7 
213.5 
2,124.0 
Fiscal 2022
 
 
 
 
Net sales
$
4,174.3 
$
1,026.6 
$
578.8 
$
904.8 
$
6,684.5 
Long-lived assets
1,578.9 
131.0 
94.0 
231.6 
2,035.5 
Includes net sales from our global travel retail business in locations within the specified geographic area.
Greater China includes sales in mainland China, Hong Kong SAR and Macao SAR, and Taiwan.
Other includes sales in Europe, Canada, Malaysia, Australia and New Zealand, South Korea, Singapore and other countries in Asia as well as royalties
earned from the Company's licensing partners.
(1)
(1)
(2)
(3)
(1)
(1)
(1)
(1)
(2)
(3)
101

TAPESTRY, INC.
Notes to Consolidated Financial Statements (Continued)
18. EARNINGS PER SHARE
Basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net
income per share is calculated similarly but includes potential dilution from the exercise of stock options and restricted stock units and any other potentially
dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method.
The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted earnings per share:
Fiscal Year Ended
 
June 29,
2024
July 1,
2023
July 2,
2022
(millions, except per share data)
Net income (loss)
$
816.0 
$
936.0 
$
856.3 
Weighted-average basic shares
229.2 
236.4 
264.3 
Dilutive securities:
Effect of dilutive securities
4.0 
4.9 
5.8 
Weighted-average diluted shares
233.2 
241.3 
270.1 
Net income (loss) per share:
 
 
Basic
$
3.56 
$
3.96 
$
3.24 
Diluted
$
3.50 
$
3.88 
$
3.17 
At June 29, 2024, options to purchase 1.3 million shares of common stock were outstanding but not included in the computation of diluted earnings per
share, as these options’ exercise prices, ranging from $41.82 to $51.38, were greater than the average market price of the common shares.
At July 1, 2023, options to purchase 2.1 million shares of common stock were outstanding but not included in the computation of diluted earnings per
share, as these options’ exercise prices, ranging from $41.65 to $56.39, were greater than the average market price of the common shares.
At July 2, 2022, options to purchase 5.4 million shares of common stock were outstanding but not included in the computation of diluted earnings per
share, as these options’ exercise prices, ranging from $33.46 to $58.54, were greater than the average market price of the common shares.
Earnings per share amounts have been calculated based on unrounded numbers. Options to purchase shares of the Company's common stock at an
exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the
computation of diluted net income (loss) per common share. In addition, the Company has outstanding restricted stock unit awards that are issuable only upon
the achievement of certain performance goals. Performance-based restricted stock unit awards are included in the computation of diluted shares only to the
extent that the underlying performance conditions (and any applicable market condition modifiers) (i) are satisfied as of the end of the reporting period or
(ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the
treasury stock method. As of June 29, 2024, July 1, 2023 and July 2, 2022, there were approximately 0.8 million, 2.7 million and 6.9 million, respectively, of
additional shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based restricted stock unit awards, which were
excluded from the diluted share calculations.
19. RELATED PARTIES
The Stuart Weitzman brand owns approximately 50% of a factory located in Spain, which is involved in the production of Stuart Weitzman inventory.
Payments to this factory represented $12.3 million and $15.2 million in fiscal 2024 and fiscal 2023, respectively. Amounts payable to this factory were not
material at June 29, 2024 or July 1, 2023.
102

20. SUPPLEMENTAL BALANCE SHEET INFORMATION
The components of certain balance sheet accounts are as follows:
June 29,
2024
July 1,
2023
(millions)
Property and equipment
 
 
Land and building
$
8.1 
$
8.0 
Machinery and equipment
69.1 
67.2 
Software and computer equipment
642.8 
627.6 
Furniture and fixtures
295.4 
306.5 
Leasehold improvements
720.4 
778.5 
Construction in progress
42.2 
14.3 
Less: accumulated depreciation
(1,263.3)
(1,237.6)
Total property and equipment, net
$
514.7 
$
564.5 
Accrued liabilities
 
 
Payroll and employee benefits
$
171.3 
$
131.9 
Accrued rent
17.5 
18.4 
Accrued interest
104.7 
38.9 
Accrued income taxes
49.7 
41.8 
Accrued freight
51.5 
52.1 
Operating expenses
261.6 
264.0 
Total accrued liabilities
$
656.3 
$
547.1 
Other liabilities
 
 
Deferred lease obligation
$
32.2 
$
40.2 
Gross unrecognized tax benefit
115.8 
91.8 
Other
227.1 
167.5 
Total other liabilities
$
375.1 
$
299.5 
103

TAPESTRY, INC.
Schedule II — Valuation and Qualifying Accounts
For the Fiscal Years Ended June 29, 2024, July 1, 2023 and July 2, 2022
Balance at Beginning
of Year
Additions Charged to
Costs and Expenses
Write-offs/
Allowances Taken
Balance at
End of Year
(millions)
Fiscal 2024
 
 
 
 
Allowance for credit losses
$
5.8 
$
4.3 
$
(3.2)
$
6.9 
Allowance for returns
15.3 
10.4 
(14.5)
11.2 
Allowance for markdowns
11.3 
14.9 
(16.6)
9.6 
Valuation allowance
34.3 
— 
(2.2)
32.1 
Total
$
66.7 
$
29.6 
$
(36.5)
$
59.8 
Fiscal 2023
 
 
 
 
Allowance for credit losses
$
3.7 
$
5.7 
$
(3.6)
$
5.8 
Allowance for returns
11.2 
14.2 
(10.1)
15.3 
Allowance for markdowns
11.6 
17.6 
(17.9)
11.3 
Valuation allowance
51.6 
— 
(17.3)
34.3 
Total
$
78.1 
$
37.5 
$
(48.9)
$
66.7 
Fiscal 2022
 
 
 
 
Allowance for credit losses
$
4.2 
$
19.9 
$
(20.4)
$
3.7 
Allowance for returns
18.7 
8.8 
(16.3)
11.2 
Allowance for markdowns
11.4 
13.6 
(13.4)
11.6 
Valuation allowance
65.9 
— 
(14.3)
51.6 
Total
$
100.2 
$
42.3 
$
(64.4)
$
78.1 
104

EXHIBIT 19.1
Insider Trading Policy 
SCOPE
Global
SECTION
Compliance
ISSUED BY
Legal Department
GENERAL POLICY ON INSIDER TRADING UNDER THE FEDERAL SECURITIES LAWS APPLICABLE TO TAPESTRY, INC., including employees
of each of Tapestry’s brands (collectively, “Tapestry”).
In general, it is illegal to trade, or “tip” others to trade, in securities while in possession of material non-public information concerning the issuer of the
securities. Trading on material non-public information is frequently referred to as “insider trading.” Insider trading by Tapestry directors, officers, employees,
and members of their household, as well as other “Covered Persons” specified below, is forbidden. Information is material if it is likely to affect the market
price of securities or if there is a substantial likelihood that such information would be important to someone in deciding whether to buy, sell or hold
securities.  The information is “nonpublic” if it is not generally available to ordinary investors in the marketplace.  Generally, material nonpublic information
loses its “inside” character only after it has been publicly disclosed and absorbed by the marketplace.
Individuals who engage in insider trading are subject to criminal and civil liability.  Criminal penalties for persons convicted of insider trading include fines up
to $5 million and twenty years imprisonment per violation.
General Prohibitions
In order to ensure compliance with the restrictions on insider trading, it is the policy of Tapestry that its directors, officers, employees, and members of their
household, and other Covered Persons, should not:
•
Buy or sell securities of Tapestry or securities of any other company, or otherwise trade in such securities, or recommend the purchase or
sale of such securities, based on information that has not been released to the public;
•
Provide information about Tapestry to others who might buy, sell or trade in such securities based on that information;
•
Buy, sell or trade in Tapestry securities based on nonpublic information if you are in the slightest doubt as to whether the information has
been released to the public and absorbed by the market. Generally, you should wait at least two full business days after information has
been released to the public before executing a trade in order to ensure that the information has been absorbed by the market; or
•
Engage in “short sales” or “sales against the box,” trade in puts, calls or other options, trade in any other derivative securities, or engage in any other
similar hedging activities related to Tapestry securities. The purpose of this prohibition is to avoid the appearance that any Tapestry employee is
trading on nonpublic information.
Prohibitions During Blackout Periods
In general, a “Blackout Period” will include the period beginning approximately two weeks before the end of each fiscal quarter and the fiscal year-end and
continuing until two business days after the release of quarterly earnings or full year earnings. In addition, from time to time, other types of material nonpublic
information regarding Tapestry may be pending and not be publicly disclosed. While such material nonpublic information is pending, Tapestry may impose
special Blackout Periods during which specified Covered Persons are prohibited from trading in Tapestry securities. If Tapestry imposes a special Blackout
Period, it will notify the Covered Persons affected. During any quarterly Blackout Period, directors, officers, employees of Tapestry, and members of their
household, and other Covered Persons, (and during any special Blackout Period, the notified Covered Persons) may not buy, sell or trade in Tapestry
securities, except for:
•
transactions made pursuant to a contract, instructions or a trading plan in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934
that has been approved by the Tapestry Legal Department, including without
            Page 1 of 2

For Internal Use Only

limitation, pursuant to an approved limit order placed before the start of the Blackout Period that complies with Rule 10b5-1;
•
exercises of stock options made for cash, where the shares acquired are not sold during the Blackout Period;
•
purchases of shares through the Tapestry Employee Stock Purchase Plan (“ESPP”); and
•
other exceptions approved on a case-by-case basis by the Tapestry Legal Department.
Employees and directors will receive periodic reminders regarding the start and finish of the quarterly Blackout Periods.
Pre-Approval Requirements
Tapestry’s directors, officers and employees, and all other Covered Persons, who wish to enter into a contract, instructions or a trading plan pursuant to Rule
10b5-1 of the Securities Exchange Act of 1934 must obtain the prior written approval of the Tapestry Legal Department.  Prior written approval of the Legal
Department is also required before a Tapestry director, officer or employee, or other Covered Person, may terminate or modify, in any way, an approved Rule
10b5-1 plan.
In addition, because Tapestry Directors, members of the Executive Committee, the Company’s Principal Accounting Officer and Brand Executive Creative
Directors (“Company Insiders”) are likely to obtain material nonpublic information on a regular basis, Tapestry requires all such persons to refrain from
trading in Tapestry securities, at all times, and to refrain from making any gift or other transfer of Tapestry securities, without first obtaining prior approval
from the Tapestry Legal Department. Prior approval also applies to transactions by other persons living in a Company Insider’s household and to transactions
by entities whose investment decisions are made by or shared with a Company Insider. Prior approval is not required for purchases and sales of securities
under a 10b5-1 trading plan that has been previously approved by the Tapestry Legal Department.
Additional Information
For purposes of this Policy, “trading” in securities includes the sale, purchase, pledge or hypothecation of securities, including pledges in connection with
margin loans, as well as hedging and monetization transactions. The term “securities” includes common stock and any other equity or debt securities the issuer
in question may issue from time to time, such as preferred stock, notes, warrants and convertible debentures, as well as puts, calls, options, or other derivative
securities (rights that are exercisable for or have a value based on an issuer’s securities).
“Covered Persons” subject to this Policy include (i) all directors of Tapestry; (ii) all officers of Tapestry; (iii) all employees of Tapestry; (iv) any other person
designated by the Chairman of the Board, the CEO, or the General Counsel; (v) any member of the household of any of the foregoing; and (v) any other
person or entity whose investment decisions are made by or shared with any of the above.
You should notify your supervisor or the Legal Department if you know or suspect others are trading in securities based on nonpublic information. Violation
of this policy may result in termination of employment. In addition, Tapestry may pursue civil or criminal sanctions against employees or others violating the
policy.
Any questions concerning this policy should be directed to globalcompliance@tapestry.com. David Howard, General Counsel and Secretary at (212) 615-
2436 and Emily Zahler, Associate General Counsel and Assistant Secretary at (212) 946-8400, Ext. 100946.
Last Updated: May 16, 2024
            Page 2 of 2

For Internal Use Only

EXHIBIT 21.1
LIST OF SUBSIDIARIES OF TAPESTRY, INC.
Entity Name
Jurisdiction of Formation
17052011 Limited
Hong Kong
504-514 West 34th Street Corp.
United States
CAP US Investments LLC
United States
Coach (US) Partnership, LLC
United States
Coach Brasil Participações Ltda
Brazil
Coach Consulting Dongguan Co. Ltd.
China
Coach Consulting Dongguan Co. Ltd. Qingdao Branch
China
Coach Holdings Partnership (BVI) LP
British Virgin Islands
Coach Hong Kong Limited
Hong Kong
Coach Hong Kong Limited Macau Branch
Macau
Coach International (BVI) Holdings Limited
British Virgin Islands
Coach International Limited
Hong Kong
Coach International Limited Korea Branch
Korea, Republic Of
Coach International UK Holdings Limited
United Kingdom
Coach IP Holdings LLC
United States
Coach Italy S.r.l.
Italy
Coach Japan Investments, LLC
United States
Coach Korea Limited
Korea, Republic Of
Coach Leatherware (Thailand) Ltd.
Thailand
Coach Leatherware India Private Limited
India
Coach Legacy Yards Lender LLC
United States
Coach Legacy Yards LLC
United States
Coach Malaysia SDN. BHD.
Malaysia
Coach Management (Shanghai) Co., Ltd.
China
Coach Manufacturing Limited
Hong Kong
Coach Netherlands - Philippines Branch
Philippines
Coach Netherlands B.V.
Netherlands
Coach Netherlands B.V. - Taiwan Branch
Taiwan
Coach Netherlands B.V. (Roermond Branch)
Netherlands
Coach New Zealand
New Zealand
Coach Operations Singapore Pte. Ltd.
Singapore
Coach Operations Singapore Pte. Ltd. Foreign Trade Representative Office
Indonesia
Coach Services, Inc.
United States
Coach Shanghai Limited
China
Coach Singapore Pte. Ltd.
Singapore
Coach Spain, S.L.
Spain
Coach Stores Australia PTY LTD
Australia
Coach Stores Austria GmbH
Austria
Coach Stores Belgium
Belgium
Coach Stores Canada Corporation
Canada
Coach Stores France SARL
France
Coach Stores Germany GmbH
Germany
Coach Stores Ireland Limited
Ireland

Coach Stores Limited
United Kingdom
Coach Stores Puerto Rico, Inc.
United States
Coach Stores Switzerland GmbH
Switzerland
Coach Stores, Unipessoal LDA
Portugal
Coach Thailand Holdings, LLC
United States
Coach Vietnam Company Limited
Viet Nam
Creaciones S.W., S.A.
Spain
Fifth & Pacific Companies Cosmetics, Inc.
United States
Fifth & Pacific Companies Foreign Holdings, LLC
United States
Fifth & Pacific Companies Canada Inc.
Canada
FNP Holdings, LLC
United States
Hope Diamon, S.L.
Spain
IP Holdings 2017 LLC
United States
Karucci LLC
United States
Kate Spade Holdings LLC
United States
Kate Spade LLC
United States
Kate Spade Macau Limited
Macau
Kate Spade Puerto Rico, LLC
United States
Kate Spade Retail Hong Kong Limited
Hong Kong
KS China Co., Ltd.
Hong Kong
KS HMT Co., Limited
Hong Kong
KS HMT Co., Limited (Taiwan Branch)
Taiwan
Liz Claiborne De El Salvador, S.A., de C.V. (El Salvador)
El Salvador
Liz Claiborne de Mexico, S.A. de C.V. (Mexico)
Mexico
Liz Claiborne Servicios de Mexico, S.A. de C.V. (Mexico)
Mexico
Lizzy Mae LLC
United States
Mocaroni, S.L.
Spain
Preparaciones y Moldeados, SL
Spain
Representative Office of Coach International Limited in Ho Chi Minh City
Viet Nam
Shanghai Kate Spade Trading Co., Ltd.
China
Shoes By Stuart, S.L.U.
Spain
Stuart Weitzman IP, LLC
United States
Stuart Weitzman UK Holdings Limited
United Kingdom
Sunburst, S.L.
Spain
Sunrise Merger Sub 2, Inc.
British Virgin Islands
Sunrise Merger Sub, Inc.
British Virgin Islands
SW-Italy, LLC
United States
Tapestry (Cambodia) Company Limited
Cambodia
Tapestry (Hainan) Group Co., Ltd.
China
Tapestry International (BVI) Holdings Limited
British Virgin Islands
Tapestry International UK Holdings Limited
United Kingdom
Tapestry Japan, LLC
Japan
Tapestry Myanmar Limited
Myanmar
Tapestry Switzerland GmbH
Switzerland
Tapestry UK Holdings Limited
United Kingdom
Tapestry Ventures International, LLC
United States
Tapestry, Inc.
United States

WCFL Holdings LLC
United States
Westcoast Contempo Fashions Limited
Canada

EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-162454, 333-162502, 333-253071, and 333-276823 on Form S-3 and
Registration Statement Nos. 333-51706, 333-172699, 333-205331, 333-209393, 333-214562, 333-219241, 333-222915, 333-228281, 333-234576 and 333-
250200 on Form S-8 of our reports dated August 15, 2024, relating to the financial statements of Tapestry, Inc. and subsidiaries (“the Company”), and the
effectiveness of the Company's internal control over financial reporting appearing in this Annual Report on Form 10-K of Tapestry, Inc. for the year ended
June 29, 2024.
/s/ DELOITTE & TOUCHE LLP
New York, New York
August 15, 2024

EXHIBIT 31.1
I, Joanne C. Crevoiserat, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Tapestry, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, 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;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control
over financial reporting.
Date: August 15, 2024
By:
/s/ Joanne C. Crevoiserat
Name: Joanne C. Crevoiserat

Title:   Chief Executive Officer

EXHIBIT 31.2
I, Scott A. Roe, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Tapestry, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, 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;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control
over financial reporting.
Date: August 15, 2024
By:
/s/ Scott A. Roe
Name: Scott A. Roe

Title: Chief Operating Officer and Chief Financial Officer

EXHIBIT 32.1
Pursuant to 18 U.S.C. §1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Tapestry, Inc. (the “Company”)
hereby certifies, to such officer’s knowledge, that:
(i)  the accompanying Annual Report on Form 10-K of the Company for the fiscal year ended June 29, 2024 (the “Report”) fully complies with the
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 15, 2024
By:
/s/ Joanne C. Crevoiserat
Name: Joanne C. Crevoiserat

Title:  Chief Executive Officer
A signed original of this written statement required by Section 906 has been provided to Tapestry, Inc. and will be retained by Tapestry, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2
Pursuant to 18 U.S.C. §1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Tapestry, Inc. (the “Company”)
hereby certifies, to such officer’s knowledge, that:
(i)  the accompanying Annual Report on Form 10-K of the Company for the fiscal year ended June 29, 2024 (the “Report”) fully complies with the
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 15, 2024
By:
/s/ Scott A. Roe
Name: Scott A. Roe

Title: Chief Operating Officer and Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Tapestry, Inc. and will be retained by Tapestry, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 97.1
TAPESTRY, INC.
POLICY FOR THE
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
1.
Purpose. The purpose of this Policy is to describe the circumstances in which Executive Officers will be required to repay
or return Erroneously Awarded Compensation to members of the Company Group. Each Executive Officer shall be required to sign
and return to the Company the Acknowledgement Form attached hereto as Exhibit A pursuant to which such Executive Officer will
agree to be bound by the terms and comply with this Policy.
2.
Administration. This Policy shall be administered by the Committee. Any determinations made by the Committee shall be
final and binding on all affected individuals.
3.
Definitions. For purposes of this Policy, the following capitalized terms shall have the meanings set forth below.
(a)
“Accounting Restatement” shall mean an accounting restatement (i) due to the material noncompliance of the
Company with any financial reporting requirement under the securities laws, including any required accounting restatement to
correct an error in previously issued financial restatements that is material to the previously issued financial statements (a “Big R”
restatement), or (ii) that corrects an error that is not material to previously issued financial statements, but would result in a material
misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).
(b)
“Board” shall mean the Board of Directors of the Company.
(c)
“Clawback Eligible Incentive Compensation” shall mean, in connection with an Accounting Restatement and with
respect to each individual who served as an Executive Officer at any time during the applicable performance period for any
Incentive-based Compensation (whether or not such Executive Officer is serving at the time the Erroneously Awarded
Compensation is required to be repaid to the Company Group), all Incentive-based Compensation Received by such Executive
Officer (i) on or after the Effective Date, (ii) after beginning service as an Executive Officer, (iii) while the Company has a class of
securities listed on a national securities exchange or a national securities association, and (iv) during the applicable Clawback
Period.
(d)
“Clawback Period” shall mean, with respect to any Accounting Restatement, the three completed fiscal years of the
Company immediately preceding the Restatement Date and any transition period (that results from a change in the Company’s fiscal
year) of less than nine months within or immediately following those three completed fiscal years.
(e)
“Committee” shall mean the Human Resources Committee of the Board.
(f)
“Company” shall mean Tapestry, Inc., a Maryland corporation.
4866-4918-1289.v2

(g)
“Company Group” shall mean the Company, together with each of its direct and indirect subsidiaries.
(h)
“Effective Date” shall mean October 2, 2023.
(i)
“Erroneously Awarded Compensation” shall mean, with respect to each Executive Officer in connection with an
Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-based
Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without
regard to any taxes paid by such Executive Officer.
(j)
“Executive Officer” shall mean each individual who is or was designated as an “officer” of the Company in
accordance with 17 C.F.R. 240.16a-1(f). Identification of an executive officer for purposes of this Policy would include at a
minimum executive officers identified pursuant to 17 C.F.R. 229.401(b).
(k)
“Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the
accounting principles used in preparing the Company’s financial statements, and all other measures that are derived wholly or in
part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock
price or total shareholder return) shall for purposes of this Policy be considered Financial Reporting Measures. For the avoidance of
doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the
SEC.
(l)
“Incentive-based Compensation” shall mean any compensation that is granted, earned or vested based wholly or in
part upon the attainment of a Financial Reporting Measure.
(m)
“NYSE” shall mean the New York Stock Exchange.
(n)
“Policy” shall mean this Policy for the Recovery of Erroneously Awarded Compensation, as the same may be
amended and/or restated from time to time.
(o)
“Received” shall, with respect to any Incentive-based Compensation, mean actual or deemed receipt, and Incentive-
based Compensation shall be deemed received in the Company’s fiscal period during which the Financial Reporting Measure
specified in the Incentive-based Compensation award is attained, even if payment or grant of the Incentive-based Compensation
occurs after the end of that period.
(p)
“Restatement Date” shall mean the earlier to occur of (i) the date the Board, a committee of the Board or the officers
of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that
the issuer is required to prepare an Accounting Restatement, or (ii) the date a court, regulator or other legally authorized body
directs the issuer to prepare an Accounting Restatement.
2

(q)
“SEC” shall mean the U.S. Securities and Exchange Commission.
4.    Repayment of Erroneously Awarded Compensation.
(a)
In the event of an Accounting Restatement, the Committee shall promptly (and in all events within ninety (90) days
after the Restatement Date) determine the amount of any Erroneously Awarded Compensation for each Executive Officer in
connection with such Accounting Restatement and shall promptly thereafter provide each Executive Officer with a written notice
containing the amount of Erroneously Awarded Compensation and a demand for repayment or return, as applicable. For Incentive-
based Compensation based on (or derived from) stock price or total shareholder return or another Financial Reporting Measure
where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information
in the applicable Accounting Restatement, the amount shall be determined by the Committee based on a reasonable estimate of the
effect of the Accounting Restatement on the stock price or total shareholder return or other measure with respect to which the
Incentive-based Compensation was Received (in which case, the Company shall maintain documentation of such determination of
that reasonable estimate and provide such documentation to the NYSE).
(b)
The Committee shall have broad discretion to determine the appropriate means of recovery of Erroneously Awarded
Compensation based on all applicable facts and circumstances and taking into account the time value of money and the cost to
shareholders of delaying recovery, including without limitation, the discretion to reduce awards otherwise payable to the Executive
Officer or to cancel awards previously granted to the Executive Officer, or otherwise, or any combination thereof. To the extent that
the Committee determines that any method of recovery (other than repayment by the Executive Officer in a lump sum in cash or
property, through reduced or canceled awards or otherwise) is appropriate, the Company shall offer to enter into a repayment
agreement (in a form reasonably acceptable to the Committee) with the Executive Officer. If the Executive Officer accepts such
offer and signs the repayment agreement within thirty (30) days after such offer is extended, the Company shall countersign such
repayment agreement. If the Executive Officer fails to sign the repayment agreement within thirty (30) days after such offer is
extended, the Executive Officer will be required to repay the Erroneously Awarded Compensation in a lump sum in cash (or such
property as the Committee agrees to accept with a value equal to such Erroneously Awarded Compensation) on or prior to the date
that is one hundred twenty (120) days following the Restatement Date. For the avoidance of doubt, except as set forth in Section
4(d) below, in no event may the Company Group accept an amount that is less than the amount of Erroneously Awarded
Compensation in satisfaction of an Executive Officer’s obligations hereunder.
(c)
To the extent that an Executive Officer fails to repay all Erroneously Awarded Compensation to the Company Group
when due (as determined in accordance with Section 4(b) above), the Company shall, or shall cause one or more other members of
the Company Group to, take all actions reasonable and appropriate to recover such Erroneously Awarded Compensation from the
applicable Executive Officer, and may terminate the employment of such Executive Officer in its discretion. The applicable
Executive Officer shall be required to reimburse the
3

Company Group for any and all expenses reasonably incurred (including legal fees) by the Company Group in recovering such
Erroneously Awarded Compensation in accordance with the immediately preceding sentence. Termination of the employment of an
Executive Officer pursuant to this Section 4(c) shall be deemed to be termination for “Cause” under any applicable employment,
change of control or other agreement.
(d)
Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated
by Section 4(b) above if any of the following conditions are met and the Committee determines that recovery would be
impracticable:
(i)
The direct expenses paid to a third party to assist in enforcing the Policy 

against an Executive Officer would exceed the amount to be recovered, after the Company has made a reasonable attempt to
recover the applicable Erroneously Awarded Compensation, documented such attempts and provided such documentation to
NYSE;

(ii)
Recovery would violate home country law where that law was adopted prior to November 28, 2022, provided
that, before determining that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on
violation of home country law, the Company has obtained an opinion of home country counsel, acceptable to NYSE, that recovery
would result in such a violation and a copy of the opinion is provided to NYSE;
or
(iii)
Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly
available to employees of the Company Group, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and
regulations thereunder.

5.
Reporting and Disclosure. The Company shall file all disclosures with respect to this Policy in accordance with the
requirement of the federal securities laws, including the disclosure required by the applicable SEC filings.

6.
Indemnification Prohibition. No member of the Company Group shall be permitted to indemnify any Executive Officer
against (i) the loss of any Erroneously Awarded Compensation that is repaid, returned or recovered pursuant to the terms of this
Policy, or (ii) any claims relating to the Company Group’s enforcement of its rights under this Policy. Further, no member of the
Company Group shall enter into any agreement that exempts any Incentive-based Compensation from the application of this Policy
or that waives the Company Group’s right to recovery of any Erroneously Awarded Compensation and this Policy shall supersede
any such agreement (whether entered into before, on or after the Effective Date).

7.
Interpretation. The Committee is authorized to interpret and construe this Policy and to make all determinations necessary,
appropriate, or advisable for the administration of this Policy.

8.
Effective Date. This Policy shall be effective as of the Effective Date.

4

9.
Amendment; Termination. The Committee may amend this Policy from time to time in its discretion and shall amend this
Policy as it deems necessary, including as and when it determines that it is legally required by any federal securities laws, SEC rule
or the rules of any national securities exchange or national securities association on which the Company’s securities are listed. The
Committee may terminate this Policy at any time. Notwithstanding anything in this Section 9 to the contrary, no amendment or
termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by
the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws,
SEC rule or the rules of any national securities exchange or national securities association on which the Company’s securities are
listed.

10.
Other Recoupment Rights; No Additional Payments. The Committee intends that this Policy will be applied to the fullest
extent of the law. The Committee may require that any employment agreement, equity award agreement, or any other agreement
entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require an Executive Officer
to agree to abide by the terms of this Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any
other remedies or rights of recoupment that may be available to the Company Group under applicable law, regulation or rule or
pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any
other legal remedies available to the Company Group.

11.        Successors. This Policy shall be binding and enforceable against all Executive Officers and their beneficiaries, heirs,
executors, administrators or other legal representatives.
*    *    *
5

Exhibit A
TAPESTRY, INC.
POLICY FOR THE
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
ACKNOWLEDGEMENT FORM
By signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of the
Tapestry, Inc. Policy for the Recovery of Erroneously Awarded Compensation (the “Policy”). Capitalized terms used but not
otherwise defined in this Acknowledgement Form (this “Acknowledgement Form”) shall have the meanings ascribed to such
terms in the Policy. By signing this Acknowledgement Form, the undersigned acknowledges and agrees that the undersigned is and
will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the
Company Group. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without
limitation, by returning any Erroneously Awarded Compensation (as defined in the Policy) to the Company Group to the extent
required by, and in a manner permitted by, the Policy. To the extent that the undersigned is a party to any other agreement with a
member of the Company Group providing for the recovery of any compensation paid to the undersigned, such agreement shall
continue in full force and effect, provided however, to the extent that such other agreement shall conflict in any way with the terms
of the Policy, the Policy shall control.
Signature:_________________________________
Print Name: _______________________________
Date: _____________________________________