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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 30, 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 ClassTrading SymbolName of Each Exchange on which Registered
Common Stock, par value $.01 per shareTPRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
On April 26, 2024, the Registrant had 229,773,250 outstanding shares of common stock, which is the Registrant’s only class of common stock.



TAPESTRY, INC.
INDEX
 



In this Form 10-Q, references to “we,” “our,” “us,” "Tapestry" and the “Company” refer to Tapestry, Inc., including consolidated subsidiaries. References to "Coach," "Kate Spade," "kate spade new york" or "Stuart Weitzman" refer only to the referenced brand.
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, but not limited to: (i) the impact of economic conditions, recession and inflationary measures; (ii) the impact of the coronavirus ("Covid-19") pandemic; (iii) 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; (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) our ability to control costs; (viii) the effect of seasonal and quarterly fluctuations on our sales or operating results; (ix) the risk of cyber security threats and privacy or data security breaches; (x) our ability to protect against infringement of our trademarks and other proprietary rights; (xi) the impact of tax and other legislation; (xii) the risks associated with potential changes to international trade agreements and the imposition of additional duties on importing our products; (xiii) our ability to achieve intended benefits, cost savings and synergies from acquisitions, including our proposed acquisition of Capri Holdings Limited ("Capri"); (xiv) satisfaction of the conditions precedent to consummation of the proposed acquisition of Capri, including the ability to secure regulatory approval in the United States on the terms expected, at all or in a timely manner; (xv) the outcome of the antitrust lawsuit by the Federal Trade Commission against us and Capri related to the consummation of the proposed acquisition; (xvi) the impact of pending and potential future legal proceedings; (xvii) the risks associated with climate change and other corporate responsibility issues and (xviii) such other risk factors as set forth in Part II, Item 1A. "Risk Factors" and elsewhere in this report and in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2023. 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.
 WHERE YOU CAN FIND MORE INFORMATION
Tapestry's quarterly financial results and other important information are available by calling the Investor Relations Department at (212) 629-2618.
Tapestry maintains its website at www.tapestry.com where investors and other interested parties may obtain, free of charge, press releases and other information as well as gain access to our periodic filings with the SEC.




TAPESTRY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

March 30,
2024
July 1,
2023
(millions)
(unaudited)
ASSETS  
Current Assets:  
Cash and cash equivalents$6,975.1 $726.1 
Short-term investments442.9 15.4 
Trade accounts receivable, less allowances for credit losses of $5.8 and $5.8, respectively
276.7 211.5 
Inventories824.1 919.5 
Income tax receivable222.5 231.1 
Prepaid expenses127.6 126.3 
Other current assets128.1 133.6 
Total current assets8,997.0 2,363.5 
Property and equipment, net518.4 564.5 
Operating lease right-of-use assets1,352.1 1,378.7 
Goodwill1,216.5 1,227.5 
Intangible assets1,355.2 1,360.1 
Deferred income taxes37.8 40.4 
Other assets250.9 182.1 
Total assets$13,727.9 $7,116.8 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current Liabilities:  
Accounts payable$373.1 $416.9 
Accrued liabilities658.9 547.1 
Current portion of operating lease liabilities308.9 297.5 
Current debt25.0 25.0 
Total current liabilities1,365.9 1,286.5 
Long-term debt7,673.7 1,635.8 
Long-term operating lease liabilities1,262.2 1,333.7 
Deferred income taxes286.4 240.0 
Long-term income taxes payable10.9 43.5 
Other liabilities353.7 299.5 
Total liabilities10,952.8 4,839.0 
See Note 14 on commitments and contingencies
Stockholders' Equity:  
Preferred stock: (authorized 25.0 million shares; $0.01 par value per share) none issued
  
Common stock: (authorized 1.0 billion shares; $0.01 par value per share) issued and outstanding - 229.8 million and 227.4 million shares, respectively
2.3 2.3 
Additional paid-in-capital3,731.0 3,682.2 
Retained earnings (accumulated deficit)(801.0)(1,216.8)
Accumulated other comprehensive income (loss)(157.2)(189.9)
Total stockholders' equity2,775.1 2,277.8 
Total liabilities and stockholders' equity$13,727.9 $7,116.8 
See accompanying Notes.
1


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 Three Months EndedNine Months Ended
March 30,
2024
April 1,
2023
March 30,
2024
April 1,
2023
(millions, except per share data)(millions, except per share data)
(unaudited)(unaudited)
Net sales$1,482.4 $1,509.5 $5,080.1 $5,041.4 
Cost of sales375.0 411.2 1,381.8 1,499.2 
Gross profit1,107.4 1,098.3 3,698.3 3,542.2 
Selling, general and administrative expenses903.1 872.0 2,793.2 2,643.4 
Operating income (loss)204.3 226.3 905.1 898.8 
Interest expense, net32.0 6.1 94.5 21.4 
Other expense (income)2.8 (3.0)(0.5)1.1 
Income (loss) before provision for income taxes169.5 223.2 811.1 876.3 
Provision (benefit) for income taxes30.1 36.5 154.4 164.4 
Net income (loss)$139.4 $186.7 $656.7 $711.9 
Net income (loss) per share:    
Basic$0.61 $0.80 $2.87 $2.99 
Diluted$0.60 $0.78 $2.82 $2.93 
Shares used in computing net income (loss) per share:    
Basic229.5 234.6 229.0 238.4 
Diluted234.2 239.7 232.8 243.2 
See accompanying Notes.
2


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
 
 Three Months EndedNine Months Ended
March 30,
2024
April 1,
2023
March 30,
2024
April 1,
2023
(millions)(millions)
(unaudited)(unaudited)
Net income (loss)$139.4 $186.7 $656.7 $711.9 
Other comprehensive income (loss), net of tax:    
Unrealized gains (losses) on cash flow hedging derivatives, net21.9 4.7 12.2 (10.1)
Unrealized gains (losses) on available-for-sale investments, net   0.5 
Foreign currency translation adjustments(0.7)(4.5)20.5 (37.1)
Other comprehensive income (loss), net of tax21.2 0.2 32.7 (46.7)
Comprehensive income (loss)$160.6 $186.9 $689.4 $665.2 
See accompanying Notes.
3


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended
March 30,
2024
April 1,
2023
(millions)
(unaudited)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES  
Net income (loss)$656.7 $711.9 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
Depreciation and amortization125.8 130.5 
Provision for bad debt2.7 5.8 
Share-based compensation65.8 55.7 
Deferred income taxes53.1 31.6 
Changes to lease related balances, net(33.2)(26.1)
Other non-cash charges, net12.3 (21.3)
Changes in operating assets and liabilities:  
Trade accounts receivable(62.7)(7.6)
Inventories91.6 53.8 
Accounts payable(50.3)(166.7)
Accrued liabilities 94.2 (161.2)
Other liabilities(30.0)(45.0)
Other assets73.6 13.4 
Net cash provided by (used in) operating activities999.6 574.8 
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES  
Purchases of investments(1,126.0)(6.3)
Proceeds from maturities and sales of investments702.6 154.6 
Purchases of property and equipment(62.7)(149.6)
Settlement of net investment hedge 41.9 
Net cash provided by (used in) investing activities(486.1)40.6 
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES  
Payment of dividends(240.9)(214.2)
Repurchase of common stock (502.0)
Proceeds from issuance of debt, net of discount6,089.5  
Payment of debt issuance costs(78.3) 
Proceeds from share-based awards15.0 28.6 
Repayment of debt(18.8)(25.0)
Taxes paid to net settle share-based awards(32.0)(55.3)
Payments of finance lease liabilities(0.9)(0.8)
Net cash provided by (used in) financing activities5,733.6 (768.7)
Effect of exchange rate changes on cash and cash equivalents1.9 0.7 
Net increase (decrease) in cash and cash equivalents6,249.0 (152.6)
Cash and cash equivalents at beginning of period726.1 789.8 
Cash and cash equivalents at end of period6,975.1 637.2 
Supplemental information:
Cash paid for income taxes, net$152.1 $191.1 
Cash paid for interest$73.6 $64.7 
Non-cash investing activity - property and equipment obligations$18.2 $7.8 
See accompanying Notes.
4

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements
(Unaudited)


1. NATURE OF OPERATIONS
Tapestry, Inc. ("Tapestry" or the "Company") is a house of iconic accessories and lifestyle brands consisting of Coach, Kate Spade and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible.
The Coach segment includes global sales of primarily Coach brand products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors.
The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers and through independent third-party distributors.
The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites and through independent third-party distributors.
2. BASIS OF PRESENTATION AND ORGANIZATION
Interim Financial Statements
These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial position, results of operations, comprehensive income (loss) and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") have been condensed or omitted from this report as is permitted by the SEC's rules and regulations. However, the Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended July 1, 2023 ("fiscal 2023") and other filings filed with the SEC.
The results of operations, cash flows and comprehensive income for the nine months ended March 30, 2024 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 29, 2024 ("fiscal 2024").
Fiscal Periods
The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2024 will be a 52-week period. Fiscal 2023, ended on July 1, 2023, was also a 52-week period. The third quarter of fiscal 2024 ended on March 30, 2024 and the third quarter of fiscal 2023 ended on April 1, 2023, both of which were 13-week periods.
Covid-19 Pandemic
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities. Such disruptions 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 the nine months ended March 30, 2024, the Covid-19 pandemic did not materially impact our business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from estimates in amounts that may be material to the financial statements.
Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for the realizability of inventory; asset retirement obligations; customer returns, end-of-season markdowns and operational
5

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
chargebacks; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; accounting for business combinations; the valuation of stock-based compensation awards and related expected forfeiture rates; reserves for restructuring; and reserves for litigation and other contingencies, amongst others.
Principles of Consolidation
These unaudited interim condensed consolidated financial statements include the accounts of the Company and all 100% owned and controlled subsidiaries. All intercompany transactions and balances are eliminated in consolidation.
Share Repurchases
The Company accounts for stock repurchases by allocating the repurchase price to common stock and retained earnings. Under Maryland law, the Company's state of incorporation, there are no treasury shares. All repurchased shares are authorized but unissued shares and these shares may be issued in the future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. Purchases of the Company's common stock are executed through open market purchases, including through purchase agreements under Rule 10b5-1. Effective January 1, 2023, the Company is subject to a 1% excise tax on net share repurchases as part of the Inflation Reduction Act of 2022, which is recorded in Retained earnings as part of Stockholders' Equity.
Supplier Finance Program
To improve our working capital efficiency, the Company makes available to certain suppliers a voluntary supply chain finance (“SCF”) program that enables our suppliers to sell their receivables from the Company to a global financial institution on a non-recourse basis at a rate that leverages our credit rating. The Company does not have the ability to refinance or modify payment terms to the global financial institution through the SCF program. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. The Company’s payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, are not impacted by suppliers’ participation in the program. As of March 30, 2024 and July 1, 2023, $253.0 million and $305.4 million, respectively, was related to suppliers eligible to participate in the Company's SCF program and presented within Accounts payable on the Consolidated Balance Sheets.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)", which is intended to enhance the transparency of supplier finance programs. The ASU requires the buyer in a supplier finance program to disclose sufficient information about the program in order to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted ASU 2022-04 as of the beginning of fiscal 2024. The adoption of ASU 2022-04 did not have an impact on the Company's interim condensed consolidated financial statements other than the new disclosure requirements. Refer to Note 2, "Basis of Presentation and Organization," for additional information.
Recently Issued Accounting Pronouncements
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.
6

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
4. REVENUE
The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including e-commerce sites. The Company also generates revenue from royalties related to licensing its trademarks, as well as sales in ancillary channels. In all cases, revenue is recognized upon the transfer of control of the promised products or services to the customer, which may be at a point in time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to be entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical possession of the products. Digital revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers. Retail and digital revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience. Payment is due at the point of sale.
Gift cards issued by the Company are recorded as a liability until redeemed by the customer, at which point revenue is recognized. The Company also uses historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in proportion to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed property.
Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons. Loyalty programs provide the customer a material right to acquire additional products and give rise to the Company having a separate performance obligation. Additionally, certain products sold by the Company include an assurance warranty that is not considered a separate performance obligation. These programs are immaterial individually and in the aggregate.
The Company recognizes revenue within the wholesale channel at the time title passes and risk of loss is transferred to customers, which is generally at the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Payment is generally due 30 to 90 days after shipment. Wholesale revenue is recorded net of estimates for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other consideration provided to the customer. Discounts are based on contract terms with the customer, while cooperative advertising allowances and other consideration may be based on contract terms or negotiated on a case-by-case basis. Returns and markdowns generally require approval from the Company and are estimated based on historical trends, current season results and inventory positions at the wholesale locations, current market and economic conditions as well as, in select cases, contractual terms. The Company's historical estimates of these variable amounts have not differed materially from actual results.
The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks. These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned once the minimum royalty threshold is achieved. Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods bearing the licensed trademarks during the period, which may differ from the amount of revenue recorded during the period thereby generating a contract asset or liability. Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents approximately 1% of total net sales in the nine months ended March 30, 2024.
The Company has elected a practical expedient not to disclose the remaining performance obligations that are unsatisfied as of the end of the period related to contracts with an original duration of one year or less or variable consideration related to sales-based royalty arrangements. There are no other contracts with transaction price allocated to remaining performance obligations other than future minimum royalties as discussed above, which are not material.
Other practical expedients elected by the Company include (i) assuming no significant financing component exists for any contract with a duration of one year or less, (ii) accounting for shipping and handling as a fulfillment activity within SG&A expense regardless of the timing of the shipment in relation to the transfer of control and (iii) excluding sales and value added tax from the transaction price.
7

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Disaggregated Net Sales
The following table disaggregates the Company's net sales into geographies that depict how economic factors may impact the revenues and cash flows for the periods presented. Each geography presented includes net sales related to the Company's directly operated channels, global travel retail business and to wholesale customers, including distributors, in locations within the specified geographic area.
North America
Greater China(1)
Other Asia(2)
Other(3)
Total
(millions)
Three Months Ended March 30, 2024
Coach$620.3 $243.3 $201.0 $81.0 $1,145.6 
Kate Spade216.7 11.7 33.9 18.4 280.7 
Stuart Weitzman37.0 15.9  3.2 56.1 
Total$874.0 $270.9 $234.9 $102.6 $1,482.4 
Three Months Ended April 1, 2023
Coach$635.0 $253.8 $198.7 $56.5 $1,144.0 
Kate Spade227.3 13.6 37.9 18.4 297.2 
Stuart Weitzman42.5 18.4 0.7 6.7 68.3 
Total$904.8 $285.8 $237.3 $81.6 $1,509.5 
Nine Months Ended March 30, 2024
Coach$2,323.7 $692.8 $585.9 $242.5 $3,844.9 
Kate Spade844.6 33.8 102.1 63.8 1,044.3 
Stuart Weitzman125.3 53.6 1.3 10.7 190.9 
Total$3,293.6 $780.2 $689.3 $317.0 $5,080.1 
Nine Months Ended April 1, 2023
Coach$2,289.5 $659.6 $567.2 $196.7 $3,713.0 
Kate Spade900.4 34.4 106.9 67.7 1,109.4 
Stuart Weitzman141.5 53.6 1.2 22.7 219.0 
Total$3,331.4 $747.6 $675.3 $287.1 $5,041.4 
(1)    Greater China includes mainland China, Hong Kong SAR and Macao SAR, and Taiwan.
(2)    Other Asia includes Japan, Malaysia, Australia, New Zealand, Singapore, South Korea, and other countries within Asia.
(3)    Other sales primarily represents sales in Europe, the Middle East and royalties earned from the Company's licensing partners.
Deferred Revenue
Deferred revenue results from cash payments received or receivable from customers prior to the transfer of the promised goods or services, and is generally comprised of unredeemed gift cards, net of breakage which has been recognized. Additional deferred revenue may result from sales-based royalty payments received or receivable which exceed the revenue recognized during the contractual period. The balance of such amounts as of March 30, 2024 and July 1, 2023 was $41.9 million and $43.0 million, respectively, which were primarily recorded within Accrued liabilities on the Company's Condensed Consolidated Balance Sheets and are generally expected to be recognized as revenue within a year. For the nine months ended March 30, 2024, net sales of $25.3 million were recognized from amounts recorded as deferred revenue as of July 1, 2023. For the nine months ended April 1, 2023, net sales of $20.4 million were recognized from amounts recorded as deferred revenue as of July 2, 2022.
8

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
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 $8.5 billion and the transaction is expected to close during calendar year 2024 (the "Capri Acquisition"). On October 25, 2023, at a special meeting of Capri's shareholders, Capri's shareholders approved the Merger Agreement and the transactions contemplated thereby. The Company has received regulatory approval from all countries except for the United States. On April 22, 2024, the Federal Trade Commission ("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 16, "Subsequent Events," for further information.
The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of new senior unsecured notes, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. On November 27, 2023, the Company issued $4.5 billion senior unsecured notes (the "Capri Acquisition USD Senior Notes") and €1.5 billion 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, in addition to the $1.4 billion of delayed draw unsecured term loan facilities (the "Capri Acquisition Term Loan Facilities") executed on August 30, 2023, completes 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 11, "Debt," for further information on our existing debt instruments related to the acquisition and Note 12, "Fair Value Measurements," and Notes 13, "Investments," for further detail on our cash equivalents and Short-term investments.
In conjunction with the Capri Acquisition, during the three months ended March 30, 2024, the Company incurred $67.9 million in pre-tax expenses, primarily related to professional fees and financing-related expenses. During the nine months ended March 30, 2024, the Company incurred $166.6 million, in pre-tax expenses primarily related to financing-related expenses and professional fees.
9

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
6. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill

The change in the carrying amount of the Company’s goodwill by segment is as follows:
 CoachKate Spade
Stuart Weitzman(1)
Total
(millions)
Balance at July 1, 2023$597.5 $630.0 $ $1,227.5 
Foreign exchange impact(9.1)(1.9) $(11.0)
Balance at March 30, 2024$588.4 $628.1 $ $1,216.5 
(1)    Amount is net of accumulated goodwill impairment charges of $210.7 million as of March 30, 2024 and July 1, 2023.
Intangible Assets
Intangible assets consist of the following:
March 30, 2024July 1, 2023
Gross
Carrying
Amount
Accum.
Amort.
NetGross
Carrying
Amount
Accum.
Amort.
Net
(millions)
Intangible assets subject to amortization:
Customer relationships$100.3 $(54.9)$45.4 $100.3 $(50.0)$50.3 
Total intangible assets subject to amortization100.3 (54.9)45.4 100.3 (50.0)50.3 
Intangible assets not subject to amortization:
Trademarks and trade names1,309.8  1,309.8 1,309.8 — 1,309.8 
Total intangible assets$1,410.1 $(54.9)$1,355.2 $1,410.1 $(50.0)$1,360.1 
Amortization expense for the Company’s definite-lived intangible assets for the three and nine months ended March 30, 2024 was $1.7 million and $4.9 million, respectively. Amortization expense for the Company’s definite-lived intangible assets for the three and nine months ended April 1, 2023 was $1.6 million and $4.9 million, respectively.
As of March 30, 2024, the expected amortization expense for intangible assets is as follows:
 Amortization Expense
(millions)
Remainder of fiscal 2024$1.6 
Fiscal 20256.5 
Fiscal 20266.5 
Fiscal 20276.5 
Fiscal 20286.5 
Thereafter17.8 
Total$45.4 
The expected amortization expense above reflects remaining useful lives ranging from approximately 6.0 to 8.3 years for customer relationships.
10

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
7. STOCKHOLDERS' EQUITY
A reconciliation of stockholders' equity is presented below:
Shares of
Common
Stock
Common StockAdditional
Paid-in-
Capital
Retained Earnings / (Accumulated Deficit)Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
(millions, except per share data)
Balance at July 2, 2022241.2 $2.4 $3,620.2 $(1,166.2)$(170.9)$2,285.5 
Net income (loss)— — — 195.3 — 195.3 
Other comprehensive income (loss)— — — — (22.0)(22.0)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes2.7 — (45.8)— — (45.8)
Share-based compensation— — 15.1 — — 15.1 
Repurchase of common stock(3.0)— — (100.0)— (100.0)
Dividends declared ($0.30 per share)
— — — (72.7)— (72.7)
Balance at October 1, 2022240.9 $2.4 $3,589.5 $(1,143.6)$(192.9)$2,255.4 
Net income (loss)— — — 329.9 — 329.9 
Other comprehensive income (loss)— — — — (24.9)(24.9)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes0.5 — 4.6 — — 4.6 
Share-based compensation— — 19.7 — — 19.7 
Repurchase of common stock(5.4)— — (200.0)— (200.0)
Dividends declared ($0.30 per share)
— — — (71.5)— (71.5)
Balance at December 31, 2022236.0 $2.4 $3,613.8 $(1,085.2)$(217.8)$2,313.2 
Net income (loss)— — — 186.7 — 186.7 
Other comprehensive income (loss)— — — — 0.2 0.2 
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes0.5 — 14.5 — — 14.5 
Share-based compensation— — 20.9 — — 20.9 
Repurchase of common stock, including excise tax(4.7)(0.1)— (202.0)— (202.1)
Dividends declared ($0.30 per share)
— — — (70.0)— (70.0)
Balance at April 1, 2023231.8 $2.3 $3,649.2 $(1,170.5)$(217.6)$2,263.4 
11

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Shares of
Common
Stock
Common StockAdditional
Paid-in-
Capital
Retained Earnings / (Accumulated Deficit)Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
(millions, except per share data)
Balance at July 1, 2023227.4 $2.3 $3,682.2 $(1,216.8)$(189.9)$2,277.8 
Net income (loss)   195.0  195.0 
Other comprehensive income (loss)    34.6 34.6 
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes1.8  (31.2)  (31.2)
Share-based compensation  19.7   19.7 
Repurchase of common stock, including excise tax      
Dividends declared ($0.35 per share)
   (80.2) (80.2)
Balance at September 30, 2023229.2 $2.3 $3,670.7 $(1,102.0)$(155.3)$2,415.7 
Net income (loss)   322.3  322.3 
Other comprehensive income (loss)    (23.1)(23.1)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes0.2  2.6   2.6 
Share-based compensation  22.5   22.5 
Repurchase of common stock, including excise tax      
Dividends declared ($0.35 per share)
   (80.2) (80.2)
Balance at December 30, 2023229.4 $2.3 $3,695.8 $(859.9)$(178.4)$2,659.8 
Net income (loss)   139.4  139.4 
Other comprehensive income (loss)    21.2 21.2 
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes0.4  11.6   11.6 
Share-based compensation  23.6   23.6 
Repurchase of common stock, including excise tax      
Dividends declared ($0.35 per share)
   (80.5) (80.5)
Balance at March 30, 2024229.8 $2.3 $3,731.0 $(801.0)$(157.2)$2,775.1 
12

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
The components of accumulated other comprehensive income (loss) ("AOCI"), as of the dates indicated, are as follows:
Unrealized Gains (Losses) on Cash
Flow
Hedging Derivatives(1)
Unrealized Gains
(Losses) on Available-
for-Sale Investments
Cumulative
Translation
Adjustment(2)
Total
(millions)
Balances at July 2, 2022$(2.3)$(0.5)$(168.1)$(170.9)
Other comprehensive income (loss) before reclassifications(14.2)0.5 (37.1)(50.8)
Less: amounts reclassified from accumulated other comprehensive income to earnings(4.1)  (4.1)
Net current-period other comprehensive income (loss)(10.1)0.5 (37.1)(46.7)
Balances at April 1, 2023$(12.4)$ $(205.2)$(217.6)
Balances at July 1, 2023$34.9 $ $(224.8)$(189.9)
Other comprehensive income (loss) before reclassifications26.6 0.2 20.5 47.3 
Less: amounts reclassified from accumulated other comprehensive income to earnings14.4 0.2  14.6 
Net current-period other comprehensive income (loss)12.2  20.5 32.7 
Balances at March 30, 2024$47.1 $ $(204.3)$(157.2)
(1)    The ending balances of AOCI related to cash flow hedges are net of tax of $(2.3) million and $(0.3) million as of March 30, 2024 and April 1, 2023, respectively. The amounts reclassified from AOCI are net of tax of $0.5 million and $1.2 million as of March 30, 2024 and April 1, 2023, respectively.
(2)    The ending balances of AOCI related to foreign currency translation adjustments includes a loss of $11.5 million, net of tax of $1.3 million, and a loss of $68.8 million, net of tax of $2.4 million, as of March 30, 2024 and April 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.
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The majority of the Company’s purchases of finished goods are denominated in U.S. dollars, which limits the Company’s exposure to the transactional effects of foreign currency exchange rate fluctuations. However, the Company is exposed to foreign currency exchange risk related to its sale of U.S. dollar inventory to foreign operating subsidiaries in local currency, as well as risk related to various cross-currency intercompany loans and payables, and translation risk. The Company is also exposed to foreign currency risk related to changes in the U.S. dollar value of its net investment in foreign subsidiaries and interest rate risk attributed to changes in the benchmark interest rates on the Company's debt obligations, including future issuances. The Company uses derivative financial instruments to manage these risks. These derivative transactions are in accordance with the Company’s risk management policies. The Company does not enter into derivative transactions for speculative or trading purposes.
The Company records all derivative contracts at fair value on the Condensed Consolidated Balance Sheets. The fair values of foreign currency derivatives and interest rate derivatives are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the counterparty's or Company’s credit risk. Judgment is required of management in developing estimates of fair value. The use of different market assumptions or methodologies could affect the estimated fair value.
For cash flow derivative instruments that qualify for hedge accounting, the changes in the fair value of these instruments are recognized as a component of 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.
13

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative that is designated as a hedge, the Company documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, as well as how hedge effectiveness will be assessed over the term of the instrument. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis.
If it is determined that a derivative instrument has not been highly effective and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued, and further gains (losses) are recognized in earnings within foreign currency gains (losses) 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 contacts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings, among other factors.
The fair values of the Company’s derivative instruments are recorded on its Condensed Consolidated Balance Sheets on a gross basis. For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item being hedged, primarily within cash from operating activities.
Hedging Portfolio
The Company enters into forward currency contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated inventory transactions, as well as various cross-currency intercompany loans and payables. 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 April 2024 to December 2025. 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 Condensed Consolidated Statement of Operations. The maturity date of most instruments held as of March 30, 2024 are in May 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 March 30, 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 April 2025 to March 2032.
14

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
The following tables provide information related to the Company's derivative instruments recorded on the Company's Condensed Consolidated Balance Sheets as of March 30, 2024 and July 1, 2023:
Notional ValueDerivative AssetsDerivative Liabilities
Fair ValueFair Value
March 30, 2024July 1, 2023Consolidated Balance Sheet ClassificationMarch 30, 2024July 1, 2023Consolidated Balance Sheet ClassificationMarch 30, 2024July 1, 2023
(millions)
Designated hedge instruments:
FC - Inventory purchases(1)
$822.3 $842.3 Other Current Assets$48.9 $38.6 Accrued Liabilities$1.5 $0.1 
CCS - Net investment hedges(2)
1,200.0 1,200.0 Other Assets101.2 13.1 Other Liabilities137.3 90.5 
Total designated hedge instruments$2,022.3 $2,042.3 $150.1 $51.7 $138.8 $90.6 
Undesignated hedging instruments:
FC - Intercompany liabilities and loans(3)
246.7 272.3 Other Current Assets0.2 0.4 Accrued Liabilities0.2 0.2 
Total Hedges$2,269.0 $2,314.6 $150.3 $52.1 $139.0 $90.8 
(1)Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships.
(2)Represents cross currency swap contracts ("CCS") designated as derivative instruments in net investment hedging relationships.
(3)Represents forward foreign currency exchange contracts ("FC") not designated as hedges.
15

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)

The following tables provides the pretax impact of gains and losses from the Company's designated derivative instruments on its Condensed Consolidated Financial Statements as of March 30, 2024 and April 1, 2023:
Amount of Gain (Loss) Recognized in OCI on Derivatives
Nine Months Ended
March 30, 2024April 1, 2023
(millions)
Cash flow hedges:
Inventory purchases(1)
$35.9 $(14.2)
Interest rates(2)
(10.4) 
Total cash flow hedges$25.5 $(14.2)
Other:
Net investment hedges(3)
42.1 (74.9)
Total other$42.1 $(74.9)
Total hedges$67.6 $(89.1)

Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Statement of Operations
Classification
Nine Months Ended
March 30, 2024April 1, 2023
(millions)
Cash flow hedges:
Inventory purchases(1)
Cost of Sales$22.9 $(5.2)
Interest rates(2)
Other income (expense)(9.0) 
Total hedges$13.9 $(5.2)

(1)Represents forward foreign currency exchange contracts ("FC") designated as derivative instruments in cash flow hedging relationships.
(2)Represents forward interest rate contracts ("IC") designated as derivative instruments in cash flow hedging relationships.
(3)Represents cross currency swap contracts ("CCS") designated as derivative instruments in net investment hedging relationships, for which the difference between changes in fair value and periodic amortization of excluded components is recorded within AOCI.
The Company expects that $42.1 million of net derivative gain related to inventory purchases and interest rates included in Accumulated other comprehensive income at March 30, 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 used as net investment hedges under the spot method. This results in the cross-currency basis spread being excluded from the assessment of hedge effectiveness and recorded as incurred as a reduction in interest expense in the Company’s consolidated statements of operations. Accordingly, the Company recorded net interest income of $21.8 million and $21.2 million during the nine months ended March 30, 2024 and April 1, 2023, respectively.
16

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
9. EARNINGS PER SHARE
Basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share is calculated similarly but includes potential dilution from the exercise of stock options and restricted stock units and any other potentially dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method.
The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted earnings per share:
 Three Months EndedNine Months Ended
March 30,
2024
April 1,
2023
March 30,
2024
April 1,
2023
(millions, except per share data)
Net income (loss)$139.4 $186.7 $656.7 $711.9 
Weighted-average basic shares 229.5 234.6 229.0 238.4 
Dilutive securities:    
Effect of dilutive securities4.7 5.1 3.8 4.8 
Weighted-average diluted shares234.2 239.7 232.8 243.2 
Net income (loss) per share:    
Basic$0.61 $0.80 $2.87 $2.99 
Diluted$0.60 $0.78 $2.82 $2.93 
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 March 30, 2024 and April 1, 2023, there were 0.2 million and 2.0 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.
17

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
10. SHARE-BASED COMPENSATION
The following table shows the share-based compensation expense and the related tax benefits recognized in the Company's Condensed Consolidated Statements of Operations for the periods indicated:
 Three Months EndedNine Months Ended
March 30,
2024
April 1,
2023
March 30,
2024
April 1,
2023
(millions)
Share-based compensation expense$23.6 $20.9 $65.8 $55.7 
Income tax benefit related to share-based compensation expense
4.1 3.9 12.0 10.6 
Stock Options
A summary of stock option activity during the nine months ended March 30, 2024 is as follows:
 Number of
Options
Outstanding
(millions)
Outstanding at July 1, 20238.7 
Granted1.3 
Exercised(0.5)
Forfeited or expired(0.9)
Outstanding at March 30, 20248.6 
The weighted-average grant-date fair value of options granted during the nine months ended March 30, 2024 and April 1, 2023 was $10.35 and $12.03, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions:
March 30,
2024
April 1,
2023
Expected term (years)5.04.9
Expected volatility44.8 %48.6 %
Risk-free interest rate4.5 %3.3 %
Dividend yield4.2 %3.4 %
Service-based Restricted Stock Unit Awards ("RSUs")
A summary of service-based RSU activity during the nine months ended March 30, 2024 is as follows:
 Number of
Non-vested RSUs
(millions)
Non-vested at July 1, 20235.9 
Granted2.4 
Vested(2.7)
Forfeited(0.3)
Non-vested at March 30, 20245.3 
The weighted-average grant-date fair value of share awards granted during the nine months ended March 30, 2024 and April 1, 2023 was $33.14 and $35.32, respectively.
18

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Performance-based Restricted Stock Unit Awards ("PRSUs")
A summary of PRSU activity during the nine months ended March 30, 2024 is as follows:
 Number of
Non-vested PRSUs
(millions)
Non-vested at July 1, 20230.7 
Granted0.4 
Change due to performance condition achievement0.1 
Vested 
Forfeited(0.1)
Non-vested at March 30, 20241.1 
The PRSU awards included in the non-vested amount are based on certain Company-specific financial metrics. The effect of the change due to performance condition on the non-vested amount is recognized at the conclusion of the performance period, which may differ from the date on which the award vests.
The weighted-average grant-date fair value per share of PRSU awards granted during the nine months ended March 30, 2024 and April 1, 2023 was $33.83 and $35.37, respectively.
19

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
11. DEBT
The following table summarizes the components of the Company’s outstanding debt:
March 30,
2024
July 1,
2023
(millions)
Current debt:
Term Loan due 2027$25.0 $25.0 
Total current debt$25.0 $25.0 
Long-term debt:
Term Loan due 2027$425.0 $443.8 
USD Senior Notes:
4.250% Senior Notes due 2025
303.4 303.4 
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