CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 28, 2019 |
Mar. 30, 2019 |
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Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 |
Ordinary shares, shares authorized (in shares) | 650,000,000 | 650,000,000 |
Ordinary shares, shares issued (in shares) | 216,815,137 | 216,050,939 |
Ordinary shares, shares outstanding (in shares) | 151,633,281 | 150,932,306 |
Treasury shares (in shares) | 65,181,856 | 65,118,633 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions |
Total |
Ordinary Shares |
Additional Paid-in Capital |
Treasury Shares |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total Equity of Capri |
Non-controlling Interests |
---|---|---|---|---|---|---|---|---|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of accounting standards | $ 12 | $ 12 | $ 12 | |||||
Adjusted beginning balance | 2,034 | $ 0 | $ 831 | $ (3,016) | $ 51 | 4,164 | 2,030 | $ 4 |
Beginning balance (in shares) at Mar. 31, 2018 | 210,991,000 | |||||||
Beginning balance, treasury (in shares) at Mar. 31, 2018 | (61,293,000) | |||||||
Beginning balance at Mar. 31, 2018 | 2,022 | $ 0 | 831 | $ (3,016) | 51 | 4,152 | 2,018 | 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 323 | 324 | 324 | (1) | ||||
Other comprehensive loss | (113) | (113) | (113) | 0 | ||||
Total comprehensive income (loss) | 210 | 211 | (1) | |||||
Vesting of restricted awards, net of forfeitures (in shares) | 697,000 | |||||||
Exercises of employee share options (in shares) | 1,521,000 | |||||||
Exercise of employee share options | 20 | 20 | 20 | |||||
Equity compensation expense | 26 | 26 | 26 | |||||
Purchase of treasury shares (in shares) | (1,766,000) | |||||||
Purchase of treasury shares | (107) | $ (107) | (107) | |||||
Increase in noncontrolling interest | 1 | 1 | ||||||
Ending balance (in shares) at Sep. 29, 2018 | 213,209,000 | |||||||
Ending balance, treasury (in shares) at Sep. 29, 2018 | (63,059,000) | |||||||
Ending balance at Sep. 29, 2018 | 2,184 | $ 0 | 877 | $ (3,123) | (62) | 4,488 | 2,180 | 4 |
Beginning balance (in shares) at Jun. 30, 2018 | 212,210,000 | |||||||
Beginning balance, treasury (in shares) at Jun. 30, 2018 | (63,041,000) | |||||||
Beginning balance at Jun. 30, 2018 | 2,042 | $ 0 | 850 | $ (3,122) | (40) | 4,350 | 2,038 | 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 137 | 138 | 138 | (1) | ||||
Other comprehensive loss | (22) | (22) | (22) | 0 | ||||
Total comprehensive income (loss) | 115 | 116 | (1) | |||||
Vesting of restricted awards, net of forfeitures (in shares) | 97,000 | |||||||
Exercises of employee share options (in shares) | 902,000 | |||||||
Exercise of employee share options | 14 | 14 | 14 | |||||
Equity compensation expense | 13 | 13 | 13 | |||||
Purchase of treasury shares (in shares) | (18,000) | |||||||
Purchase of treasury shares | (1) | $ (1) | (1) | |||||
Increase in noncontrolling interest | 1 | 1 | ||||||
Ending balance (in shares) at Sep. 29, 2018 | 213,209,000 | |||||||
Ending balance, treasury (in shares) at Sep. 29, 2018 | (63,059,000) | |||||||
Ending balance at Sep. 29, 2018 | 2,184 | $ 0 | 877 | $ (3,123) | (62) | 4,488 | 2,180 | 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of accounting standards | (152) | (152) | (152) | |||||
Adjusted beginning balance | $ 2,280 | $ 0 | 1,011 | $ (3,223) | (66) | 4,555 | 2,277 | 3 |
Beginning balance (in shares) at Mar. 30, 2019 | 216,050,939 | 216,051,000 | ||||||
Beginning balance, treasury (in shares) at Mar. 30, 2019 | (65,118,633) | (65,119,000) | ||||||
Beginning balance at Mar. 30, 2019 | $ 2,432 | $ 0 | 1,011 | $ (3,223) | (66) | 4,707 | 2,429 | 3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 118 | 118 | 118 | 0 | ||||
Other comprehensive loss | (37) | (37) | (37) | 0 | ||||
Total comprehensive income (loss) | 81 | 81 | 0 | |||||
Vesting of restricted awards, net of forfeitures (in shares) | 764,000 | |||||||
Equity compensation expense | 49 | 49 | 49 | |||||
Purchase of treasury shares (in shares) | (63,000) | |||||||
Purchase of treasury shares | $ (2) | $ (2) | (2) | |||||
Ending balance (in shares) at Sep. 28, 2019 | 216,815,137 | 216,815,000 | ||||||
Ending balance, treasury (in shares) at Sep. 28, 2019 | (65,181,856) | (65,182,000) | ||||||
Ending balance at Sep. 28, 2019 | $ 2,408 | $ 0 | 1,060 | $ (3,225) | (103) | 4,673 | 2,405 | 3 |
Beginning balance (in shares) at Jun. 29, 2019 | 216,742,000 | |||||||
Beginning balance, treasury (in shares) at Jun. 29, 2019 | (65,177,000) | |||||||
Beginning balance at Jun. 29, 2019 | 2,324 | $ 0 | 1,039 | $ (3,225) | (93) | 4,600 | 2,321 | 3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 73 | 73 | 73 | 0 | ||||
Other comprehensive loss | (10) | (10) | (10) | 0 | ||||
Total comprehensive income (loss) | 63 | 63 | 0 | |||||
Vesting of restricted awards, net of forfeitures (in shares) | 73,000 | |||||||
Equity compensation expense | 21 | 21 | 21 | |||||
Purchase of treasury shares (in shares) | (5,000) | |||||||
Purchase of treasury shares | $ 0 | $ 0 | ||||||
Ending balance (in shares) at Sep. 28, 2019 | 216,815,137 | 216,815,000 | ||||||
Ending balance, treasury (in shares) at Sep. 28, 2019 | (65,181,856) | (65,182,000) | ||||||
Ending balance at Sep. 28, 2019 | $ 2,408 | $ 0 | $ 1,060 | $ (3,225) | $ (103) | $ 4,673 | $ 2,405 | $ 3 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
6 Months Ended | |
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Sep. 28, 2019 |
Sep. 29, 2018 |
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Cash flows from operating activities | ||
Net income | $ 118 | $ 323 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 125 | 109 |
Equity compensation expense | 49 | 26 |
Deferred income taxes | (8) | 13 |
Impairment of long-lived assets | 201 | 11 |
Changes to lease related balances, net | (26) | |
Tax deficit (benefit) on exercise of share options | 2 | (23) |
Amortization of deferred financing costs | 3 | 2 |
Foreign currency losses | 6 | 5 |
Other non-cash charges | 0 | 3 |
Change in assets and liabilities: | ||
Receivables, net | 8 | (55) |
Inventories, net | (141) | (126) |
Prepaid expenses and other current assets | (86) | (68) |
Accounts payable | 32 | 10 |
Accrued expenses and other current liabilities | (52) | 12 |
Other long-term assets and liabilities | 12 | 22 |
Net cash provided by operating activities | 243 | 264 |
Cash flows from investing activities | ||
Capital expenditures | (105) | (90) |
Purchase of intangible assets | 0 | (1) |
Unrealized loss on hedge related to acquisitions | 0 | 31 |
Cash paid for business acquisitions, net of cash acquired | (1) | (2) |
Settlement of a net investment hedges | 31 | 0 |
Net cash used in investing activities | (75) | (62) |
Cash flows from financing activities | ||
Debt borrowings | 1,325 | 810 |
Debt repayments | (1,480) | (925) |
Repurchase of treasury shares | (2) | (107) |
Exercise of employee share options | 0 | 20 |
Net cash used in financing activities | (157) | (202) |
Effect of exchange rate changes on cash and cash equivalents | (4) | (8) |
Net increase (decrease) in cash and cash equivalents | 7 | (8) |
Beginning of period | 172 | 163 |
End of period | 179 | 155 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 45 | 16 |
Cash paid for income taxes | 62 | 98 |
Supplemental disclosure of non-cash investing and financing activities | ||
Accrued capital expenditures | $ 27 | $ 23 |
Business and Basis of Presentation |
6 Months Ended |
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Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation The Company was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018. The Company is a holding company that owns brands that are leading designers, marketers, distributors and retailers of branded women’s and men’s accessories, apparel and footwear bearing the Versace, Jimmy Choo and Michael Kors tradenames and related trademarks and logos. The Company completed the acquisition of Gianni Versace S.r.l. (“Versace”) on December 31, 2018. As a result, the Company now operates in three reportable segments: Versace, Jimmy Choo and Michael Kors. See Note 18 for additional information. The interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The interim consolidated financial statements as of September 28, 2019 and for the three and six months ended September 28, 2019 and September 29, 2018 are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation in conformity with U.S. GAAP. The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended March 30, 2019, as filed with the Securities and Exchange Commission on May 29, 2019, in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods should not be considered indicative of results to be expected for the full fiscal year. The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31. As such, the term “Fiscal Year” or “Fiscal” refers to the 52-week or 53-week period, ending on that day. The results for the three and six months ended September 28, 2019 and September 29, 2018, are based on 13-week and 26-week periods, respectively.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of gift card breakage, estimates of inventory recovery, the valuation of share-based compensation, valuation of deferred taxes and the valuation of and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation, including the realignment of the Company’s segment reporting structure in the fourth quarter of Fiscal 2019, as further described in Note 18. Seasonality The Company experiences certain effects of seasonality with respect to its business. The Company generally experiences greater sales during its third fiscal quarter, primarily driven by holiday season sales, and the lowest sales during its first fiscal quarter. Inventories, net Inventories mainly consist of finished goods with the exception of raw materials inventory of $22 million and $25 million, respectively, recorded on the Company’s consolidated balance sheets as of September 28, 2019 and March 30, 2019. Derivative Financial Instruments Forward Foreign Currency Exchange Contracts The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation. In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts in September 2018 with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the closing date of the acquisition, which were settled on December 21, 2018. These derivative contracts were not designated as accounting hedges. Therefore, changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income. The Company’s accounting policy is to classify cash flows from derivative instruments that are accounted for as cash flow hedges in the same category as the cash flows from the items being hedged. Accordingly, the Company classified the unrealized gains and losses relating to these derivative instruments within cash flows from investing activities. The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income. The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities. The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, the Company only enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge. Net Investment Hedges The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its U.S. Dollars and these foreign currencies. The Company has elected the spot method of designating these contracts under ASU 2017-12 and has designated these contracts as net investment hedges. The net gain or loss on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in the Company’s statement of operations and comprehensive income. Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the hedged net investment is sold, diluted, or liquidated. Net Income per Share The Company’s basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and restricted share units (“RSUs”), were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method. The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in millions, except share and per share data):
During the three and six months ended September 28, 2019, share equivalents of 5,822,186 shares and 4,098,382 shares, respectively, have been excluded from the above calculations due to their anti-dilutive effect. Share equivalents of 680,869 shares and 664,633 shares, respectively, have been excluded from the above calculations during the three and six months ended September 29, 2018. See Note 2 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 for a complete disclosure of the Company’s significant accounting policies. Recently Adopted Accounting Pronouncements Lease Accounting On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases. In evaluating the impact of ASU 2016-02, the Company considered guidance provided by several additional ASUs issued by the FASB, including ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842” in January 2018, ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” both issued in July 2018, and ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors” issued in December 2018. In connection with its implementation of ASU 2016-02, the Company adopted the package of three practical expedients, allowing it to carry forward its previous lease classification and embedded lease evaluations and not to reassess initial direct costs as of the date of adoption. The Company also adopted, the practical expedient allowing it to combine lease and non-lease components for its real estate leases. Lastly, the Company adopted the practical expedient provided by ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods. The Company’s existing lease obligations, which relate to stores, corporate locations, warehouses, and equipment, are subject to the new standard and resulted in recording of lease liabilities and right-of-use assets for operating leases on the Company’s consolidated balance sheet. The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):
See Note 4 for additional disclosures related to the Company’s lease accounting policy. Recently Issued Accounting Pronouncements We have considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition or cash flows based on current information. Intangibles In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which reduces the complexity for the accounting for costs of implementing a cloud computing service arrangement. The standard aligns the accounting for capitalizing implementation costs of hosting arrangements, regardless of whether or not the contract conveys a license to the hosted software. ASU 2018-15 is effective beginning with the Company’s Fiscal 2021, with early adoption permitted, and can either be presented prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2018-15 on its consolidated financial statements, but believes it is generally consistent with its current accounting for cloud computing arrangements and will not have a material impact on its consolidated financial statements.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. The Company sells its products through three primary channels of distribution: retail, wholesale and licensing. Within the retail and wholesale channels, substantially all of the Company’s revenues consist of sales of products that represent a single performance obligation, where control transfers at a point in time to the customer. For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s brands. Retail The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America, excluding Brazil), EMEA (Europe, Middle East, and Africa) and certain parts of Asia. Gift Cards. The contract liability related to gift cards, net of estimated “breakage,” was $12 million and $13 million as of September 28, 2019 and March 30, 2019, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheet. Loyalty Program. The contract liability, net of an estimated “breakage,” of $3 million as of both September 28, 2019 and March 30, 2019 is recorded as a reduction to revenue in the consolidated statements of operations and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheet and is expected to be recognized within the next 12 months. Wholesale The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia. The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia, and South America. Licensing The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements. Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa, certain parts of Asia and Australia. The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees. Generally the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are multi-year based. As of September 28, 2019, contractually guaranteed minimum fees from our license agreements expected to be recognized as revenue during future periods were as follows (in millions):
Sales Returns The refund liability recorded as of September 28, 2019 and March 30, 2019 was $35 million in each period and the related asset for the right to recover returned product as of September 28, 2019 and March 30, 2019 was $12 million in each period. Contract Balances Total contract liabilities were $17 million and $31 million as of September 28, 2019 and March 30, 2019, respectively. For the three and six months ended September 28, 2019, the Company recognized $3 million and $17 million, respectively, in revenue which related to contract liabilities that existed at March 30, 2019. For the three and six months ended September 29, 2018, the Company recognized $3 million and $11 million, respectively, in revenue which related to contract liabilities that existed at April 1, 2018. There were no contract assets recorded as of September 28, 2019 and March 30, 2019. There were no changes in historical variable consideration estimates that were materially different from actual results. Disaggregation of Revenue The following table presents the Company’s segment revenues disaggregated by geographic location (in millions):
See Note 3 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 for a complete disclosure of the Company’s revenue recognition.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases retail stores, office space and warehouse space under operating lease agreements that expire at various dates through September 2043. The Company’s leases generally have terms of up to 10 years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount. Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through February 2024. The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its Retail Fleet Optimization Plan, as defined in Note 10. Fixed sublease payments received are recognized on a straight-line basis over the sublease term. The Company determines the sublease term based on the date it provides possession to the subtenant through the expiration date of the sublease. The Company recognizes operating lease right-of-use assets and lease liabilities at lease commencement date, based on the present value of fixed lease payments over the expected lease term. The Company uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable for the Company’s leases. The Company’s incremental borrowing rates are based on the term of the leases, the economic environment of the leases, and reflect the rate it would pay to borrow on a secured basis. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company generally does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the operating lease right-of-use asset and lease liability. Certain leases also contain termination options with an associated penalty. Generally, the Company is reasonably certain not to exercise these options and as such, they are not included in the determination of the expected lease term. The Company recognizes operating lease expense on a straight-line basis over the lease term. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term. The Company’s leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for lease and non-lease components of its real estate leases together as a single lease component and, as such, includes fixed payments of non-lease components in the measurement of the operating lease right-of-use assets and lease liabilities for its real estate leases. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred as variable lease costs and are not recorded on the balance sheet. The Company’s lease agreements do not contain any material residual value guarantees or material restrictions or covenants. The following table presents the Company’s supplemental balance sheet information related to leases (in millions):
The components of net lease costs for the three and six months ended September 28, 2019 were as follows (in millions):
The following table presents the Company’s supplemental cash flow information related to leases (in millions):
The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheet as of September 28, 2019:
At September 28, 2019, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):
At September 28, 2019, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):
Additionally, the Company had approximately $15 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of September 28, 2019.
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Acquisitions |
6 Months Ended |
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Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisition of Versace On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately €1.753 billion (or approximately $2.005 billion), giving effect to an investment made by the Versace family at acquisition of 2.4 million shares of CPRI stock. The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand (see Note 11 for additional information). Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018. Versace contributed total revenue of $228 million and $435 million, respectively, for the three and six months ended August 31, 2019 and net income from operations of $9 million and $6 million, respectively, after amortization of non-cash purchase accounting adjustments, for the three and six months ended August 31, 2019 (reflecting a one-month reporting lag). As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. See Note 4 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 for additional disclosures relating to the Company’s acquisitions.
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Receivables, net |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables, net | Receivables, net Receivables, net, consist of (in millions):
Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and doubtful accounts. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on wholesale customers’ sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in revenues. The Company’s allowance for doubtful accounts is determined through analysis of periodic aging of receivables that are not covered by insurance and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowance for doubtful accounts was $15 million and $18 million, respectively, as of September 28, 2019 and March 30, 2019. The Company had bad debt expense of $4 million and $1 million, respectively, for the six months ended September 28, 2019 and September 29, 2018. All other periods presented were immaterial.
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Property and Equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, net | Property and Equipment, net Property and equipment, net, consists of (in millions):
Depreciation and amortization of property and equipment for the three months ended September 28, 2019 and September 29, 2018 was $52 million and $45 million, respectively, and was $99 million and $92 million, respectively, for the six months ended September 28, 2019 and September 29, 2018. During the three months ended September 28, 2019, the Company recorded property and equipment impairment charges of $10 million, primarily related to Jimmy Choo and Versace store locations. During the six months ended September 28, 2019, the Company recorded property and equipment impairment charges of $23 million, $11 million of which related to determining asset groups for the Company’s premier store locations at an individual store level, $7 million of which related to Michael Kors and $4 million related to Jimmy Choo. In addition, during the six months ended September 28, 2019, the Company recorded property and equipment impairment charges of $12 million, primarily related to Jimmy Choo and Versace store locations (see Note 13 for additional information). During the three and six months ended September 29, 2018, the Company recorded property and equipment impairment charges of $6 million and $9 million, respectively, of which $4 million and $8 million, respectively, were related to underperforming Michael Kors full-price retail store locations, some of which related to the Retail Fleet Optimization Plan, as defined in Note 10.
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Current Assets and Current Liabilities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Assets and Current Liabilities | Current Assets and Current Liabilities Prepaid expenses and other current assets consist of the following (in millions):
Accrued expenses and other current liabilities consist of the following (in millions):
(2) The accrued rent balance relates to variable lease payments.
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Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill The following table details the carrying values of the Company’s intangible assets and goodwill (in millions):
Amortization expense for the Company’s definite-lived intangible assets for the three months ended September 28, 2019 and September 29, 2018 was $13 million and $8 million, respectively, and was $26 million and $17 million, respectively, for the six months ended September 28, 2019 and September 29, 2018. During the three and six months ended September 28, 2019, the Company recorded impairment charges of $1 million and $6 million, respectively, primarily related to intangible assets associated with its premier Michael Kors store locations (see Note 13 for further information). Impairment charges recorded during the three and six months ended September 29, 2018 were $1 million and $2 million, respectively. There were no goodwill or other indefinite-lived intangible asset impairment charges recorded during any of the periods presented.
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Restructuring and Other Charges |
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Restructuring and Other Charges | Restructuring and Other Charges Retail Fleet Optimization Plan On May 31, 2017, the Company announced that it plans to close between 100 and 125 of its Michael Kors retail stores in order to improve the profitability of its retail store fleet (“Retail Fleet Optimization Plan”). The Company anticipates finalizing the remainder of the planned store closures under the Retail Fleet Optimization Plan by the end of Fiscal 2020. The Company expects to incur approximately $100 - $125 million of one-time costs associated with these store closures. Collectively, the Company anticipates lower depreciation and amortization expense as a result of the impairment charges recorded once these initiatives are completed. During the six months ended September 28, 2019, the Company closed 23 of its Michael Kors retail stores under the Retail Fleet Optimization Plan, for a total of 123 stores closed at a cost of $95 million since plan inception. Restructuring charges recorded in connection with the Retail Fleet Optimization Plan during the six months ended September 28, 2019 were $1 million. The below table presents a rollforward of the Company’s remaining restructuring liability related to this plan (in millions):
During the three and six months ended September 29, 2018, the Company recorded restructuring charges of $2 million and $6 million, respectively, under the Retail Fleet Optimization Plan, which were comprised of lease-related charges. Other Restructuring Charges In addition to the restructuring charges related to the Retail Fleet Optimization Plan, the Company incurred charges of $1 million during the three and six months ended September 28, 2019 related to the Company’s intent to exit certain of its agreements in the EMEA region. During the six months ended September 28, 2019 the Company also incurred charges of $2 million relating to Jimmy Choo lease-related charges. The Company also incurred charges of $1 million relating to Jimmy Choo lease-related charges during the three and six months ended September 29, 2018. Other Costs During the three months ended September 28, 2019, the Company recorded costs of $6 million primarily in connection with the acquisition of Versace. During the six months ended September 28, 2019, the Company recorded costs of $18 million, which included $13 million in connection with the acquisition of Versace and $5 million in connection with the Jimmy Choo acquisition. During the three and six months ended September 29, 2018, the Company recorded costs of $16 million and $23 million, respectively, which included $9 million in each period in connection with the acquisition of Versace, as well as $7 million and $14 million, respectively, in connection with the Jimmy Choo acquisition.
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Debt Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | Debt Obligations The following table presents the Company’s debt obligations (in millions):
Senior Unsecured Revolving Credit Facility The 2018 Credit Facility requires the Company to maintain a leverage ratio as of the end of each fiscal quarter of no greater than 3.75 to 1. Such leverage ratio is calculated as the ratio of the sum of total indebtedness as of the date of the measurement plus six times the consolidated rent expense for the last four consecutive fiscal quarters, to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus income tax expense, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash charges, subject to certain additions and deductions. The 2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type. As of September 28, 2019, the Company was in compliance with all covenants related to this agreement. As of September 28, 2019 and March 30, 2019, the Company had borrowings of $513 million and $539 million, respectively, outstanding under the 2018 Revolving Credit Facility, which were recorded within short-term debt in its consolidated balance sheets. In addition, stand-by letters of credit of $16 million were outstanding as of September 28, 2019. At September 28, 2019, the amount available for future borrowings under the 2018 Revolving Credit Facility was $471 million. As of September 28, 2019 and March 30, 2019, the carrying value of borrowings outstanding under the 2018 Term Loan Facility was $1.428 billion and $1.570 billion, respectively, of which $80 million was recorded within short-term debt in each period and $1.348 billion and $1.490 billion, respectively, was recorded within long-term debt in its consolidated balance sheets. See Note 11 to the Company’s Fiscal 2019 Annual Report on Form 10-K for additional information regarding the Company’s credit facilities and debt obligations.
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Commitments and Contingencies |
6 Months Ended |
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Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company’s management does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position. Please refer to the Contractual Obligations and Commercial Commitments disclosure within the Liquidity section of the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 for a detailed disclosure of other commitments and contractual obligations as of March 30, 2019.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date. Level 2 – Valuations based on quoted inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. At September 28, 2019 and March 30, 2019, the fair values of the Company’s forward foreign currency exchange contracts and net investment hedges were determined using broker quotations, which were calculations derived from observable market information: the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception. The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate. The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities to the Company. The fair values of net investment hedges are included in other assets, as detailed in Note 14. All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):
The Company’s long-term debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values. The fair value of the Company’s long-term debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics. Borrowings under revolving credit agreements, if outstanding, are recorded at carrying value, which approximates fair value due to the short-term nature of such borrowings. See Note 11 for detailed information relating to carrying values of the Company’s outstanding debt. The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):
The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value. Non-Financial Assets and Liabilities The Company’s non-financial assets include goodwill, intangible assets, operating lease right-of-use assets and property and equipment. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. The Company’s goodwill and its indefinite-lived intangible assets (Versace and Jimmy Choo brands) are assessed for impairment at least annually during the fourth quarter of each fiscal year, while its other long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The fair values of these assets were determined based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations. The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that carrying amounts of such assets may not be recoverable. This assessment is performed for each long-lived asset group that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The grouping of assets requires a significant amount of judgment. The Company historically grouped certain premier store locations, primarily Michael Kors premier stores, with other Michael Kors stores within the immediate geographic area surrounding the premier store as the Company believed the assets of the store group benefited from the Company’s investments in the premier store. Due to the Company’s recent significant expansion in luxury retail, as well as its continued growth in its global digital business, the Company reassessed its methodology for evaluating impairment of long-lived assets, including the determination of asset groupings. The Company’s luxury retail business generally operates only premier, more luxurious, retail store locations with consistent investments across its individual stores. As a result, during the six months ended September 28, 2019, the Company determined that asset groups at an individual store level represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As a result of this determination, in the first quarter of Fiscal 2020, the Company identified impairment indicators at certain premier retail store locations and recorded operating lease right-of-use asset and property and equipment impairment charges of $68 million and $11 million, respectively, which are included in the impairment charges detailed in the table below (in millions):
In addition to the impairment charges above, the Company recorded an adjustment to reduce its March 31, 2019 opening balance of retained earnings by $152 million, net of tax, reflecting impairments of operating lease right-of-use assets for certain underperforming real estate locations for which the carrying value of the opening operating lease right-of-use asset exceeded its related fair value. Property and equipment related to these underperforming locations were fully impaired due to the adoption of ASU 2016-02. See Note 2 and Note 4 for additional information.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Forward Foreign Currency Exchange Contracts The Company uses forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to certain forecasted inventory purchases by using forward foreign currency exchange contracts. The Company only enters into derivative instruments with highly credit-rated counterparties. The Company does not enter into derivative contracts for trading or speculative purposes. In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts in September 2018 with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the closing date of the acquisition, which were settled on December 21, 2018. These derivative contracts were not designated as accounting hedges. Therefore, changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income. The Company’s accounting policy is to classify cash flows from derivative instruments that are accounted for as cash flow hedges in the same category as the cash flows from the items being hedged. Accordingly, the Company classified the unrealized gains and losses relating to these derivative instruments within cash flows from investing activities. Net Investment Hedges As of September 28, 2019, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $3.190 billion to hedge its net investment in Euro-denominated subsidiaries and $44 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between U.S. Dollar and these currencies. Under the terms of these contracts, which have maturity dates between January 2022 and June 2026, the Company will exchange the semi-annual fixed rate payments on U.S. denominated debt for fixed rate payments of 0% to 1.674% in Euros and 0.89% in Japanese Yen. These contracts have been designated as net investment hedges. When a cross-currency swap is used as a hedging instrument in a net investment hedge assessed under the spot method, the cross-currency basis spread is excluded from the assessment of hedge effectiveness and is recognized as a reduction in interest expense in the Company’s consolidated statements of operations and comprehensive income. Accordingly, the Company recorded a reduction in interest expense of $19 million and $34 million, respectively, during the three and six months ended September 28, 2019 and $3 million and $4 million, respectively, during the three and six months ended September 29, 2018. The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of September 28, 2019 and March 30, 2019 (in millions):
The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, as shown in the previous table. However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies, the resulting impact as of September 28, 2019 and March 30, 2019 would be as follows (in millions):
The Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. Changes in the fair value of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income (loss), and are reclassified from accumulated other comprehensive income (loss) into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations and comprehensive income. The net gain or loss on net investment hedges are reported within foreign currency translation gains and losses (“CTA”) as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. Upon discontinuation of the hedge, such amounts remain in CTA until the related investment is sold or liquidated. The following table summarizes the gains and losses on the Company’s designated forward foreign currency exchange contracts and net investment hedges (in millions):
The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income related to the designated forward foreign currency exchange contracts for the three and six months ended September 28, 2019 and September 29, 2018 (in millions):
The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive income (loss) for its forward foreign currency exchange contracts will be reclassified into earnings during the next 12 months, based upon the timing of inventory purchases and turnover. Undesignated Hedges During the three and six months ended September 28, 2019, the net impact of changes in the fair value of undesignated forward foreign currency exchange contracts recognized within foreign currency loss (gain) in the Company’s consolidated statement of operations and comprehensive income was not material. During the three and six months ended September 29, 2018, the Company recognized a net loss of $30 million and $29 million, respectively, related to changes in the fair value of undesignated forward foreign currency exchange contracts within foreign currency loss (gain) in the Company’s consolidated statement of operations and comprehensive income. These amounts were primarily comprised of a $30 million loss related to the derivative contracts entered into on September 25, 2018 to mitigate foreign currency exchange risk associated with the Versace acquisition that were settled on December 21, 2018.
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Shareholders' Equity |
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Shareholders' Equity | Shareholders’ Equity Share Repurchase Program During the six months ended September 29, 2018, the Company repurchased 1,659,941 shares at a cost of $100 million through open market transactions under its $1.0 billion share-repurchase program, which expired on May 25, 2019. On August 1, 2019, the Company’s Board of Directors authorized a new $500 million share repurchase program, which expires August 1, 2021. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading under the Company’s insider trading policy and other relevant factors. The program may be suspended or discontinued at any time. The Company also has in place a “withhold to cover” repurchase program, which allows the Company to withhold ordinary shares from certain executive officers and directors to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards. During the six month periods ended September 28, 2019 and September 29, 2018, the Company withheld 63,223 shares and 106,002 shares, respectively, with a fair value of $2 million and $7 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards. Accumulated Other Comprehensive Income (Loss) The following table details changes in the components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes for the six months ended September 28, 2019 and September 29, 2018, respectively (in millions):
(2) Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. All tax effects were not material for the periods presented.
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Share-Based Compensation |
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Share-Based Compensation | Share-Based Compensation The Company issues equity grants to certain employees and directors of the Company at the discretion of the Company’s Compensation and Talent Committee. The Company has two equity plans, one stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and the Omnibus Incentive Plan adopted in the third fiscal quarter of Fiscal 2012 and amended and restated with shareholder approval in May 2015 (the “Incentive Plan”). The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares. As of September 28, 2019, there were no shares available to grant equity awards under the 2008 Plan. The Incentive Plan allows for grants of share options, restricted shares and RSUs, and other equity awards, and authorizes a total issuance of up to 15,246,000 ordinary shares. At September 28, 2019, there were 2,530,245 ordinary shares available for future grants of equity awards under the Incentive Plan. Option grants issued from the 2008 Plan generally expire ten years from the date of the grant, and those issued under the Incentive Plan generally expire seven years from the date of the grant. The following table summarizes the Company’s share-based compensation activity during the six months ended September 28, 2019:
The weighted average grant date fair value of service-based and performance-based RSUs granted during the six months ended September 28, 2019 was $33.90 and $33.86, respectively, and $67.39 and $67.52, respectively, during the six months ended September 29, 2018. Share-Based Compensation Expense The following table summarizes compensation expense attributable to share-based compensation for the three and six months ended September 28, 2019 and September 29, 2018 (in millions):
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on its historical forfeiture rate to date. The estimated value of future forfeitures for equity grants as of September 28, 2019 is approximately $11 million. See Note 17 in the Company’s Fiscal 2019 Annual Report on Form 10-K for additional information relating to the Company’s share-based compensation awards.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rates for the three and six months ended September 28, 2019 are (5.8)% and 1.7%, respectively. Such rates differ from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to the favorable impact from the realization of previously unrecognized tax benefits associated with certain positions in Europe realized during the period and return to provision adjustments in the US and Europe, which resulted in a benefit to the Company’s effective income tax rate for the three and six months ended September 28, 2019. In addition, the Company had favorable effects related to global financing activities. The global financing activities are related to the Company’s 2014 move of its principal executive office from Hong Kong to the U.K. and decision to become a U.K. tax resident. In connection with this decision, the Company funded its international growth strategy through intercompany debt financing arrangements between certain of our U.S., U.K. and Switzerland subsidiaries in December 2015. Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized a lower effective tax rate. The Company’s effective tax rates for the three and six months ended September 29, 2018 were 9.9% and 9.5%, respectively. Such rates differed from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to the favorable effects of global financing arrangements and tax benefits of share-based compensation.
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company operates its business through three operating segments—Versace, Jimmy Choo and Michael Kors, which are based on its business activities and organization. The reportable segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Company’s chief operating decision maker ("CODM") in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are revenue and operating income for each segment. The Company’s reportable segments represent components of the business that offer similar merchandise, customer experience and sales/marketing strategies. The Company’s three reportable segments are as follows:
In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to segments. Such costs primarily include certain administrative, corporate occupancy, and information systems expenses, including enterprise resource planning system implementation costs. In addition, certain other costs are not allocated to segments, including restructuring and other charges (including transition costs related to the Company’s recent acquisitions) and impairment costs. The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. The following table presents the key performance information of the Company’s reportable segments (in millions):
Depreciation and amortization expense for each segment are as follows (in millions):
Total revenue (based on country of origin) by geographic location are as follows (in millions):
As of September 28, 2019 and March 30, 2019, the Company's total assets were $8.393 billion and $6.650 billion, respectively. The increase in total assets was primarily due to the adoption of ASU 2016-02 in the first quarter of Fiscal 2020, which resulted in the Company recording operating lease right-of-use assets of $1.671 billion, of which $1.062 billion related to Michael Kors, $386 million related to Versace, and $223 million related to Jimmy Choo, as of September 28, 2019.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Policy | The interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned or controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The interim consolidated financial statements as of September 28, 2019 and for the three and six months ended September 28, 2019 and September 29, 2018 are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation in conformity with U.S. GAAP. The interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended March 30, 2019, as filed with the Securities and Exchange Commission on May 29, 2019, in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods should not be considered indicative of results to be expected for the full fiscal year.
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Fiscal Period, Policy | The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31. As such, the term “Fiscal Year” or “Fiscal” refers to the 52-week or 53-week period, ending on that day. The results for the three and six months ended September 28, 2019 and September 29, 2018, are based on 13-week and 26-week periods, respectively.
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Use of Estimates | The preparation of financial statements in accordance with U.S. GAAP requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of gift card breakage, estimates of inventory recovery, the valuation of share-based compensation, valuation of deferred taxes and the valuation of and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates.
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Reclassifications | Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation, including the realignment of the Company’s segment reporting structure in the fourth quarter of Fiscal 2019, as further described in Note 18.
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Seasonality | The Company experiences certain effects of seasonality with respect to its business. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, net | Inventories mainly consist of finished goods with the exception of raw materials inventory | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Forward Foreign Currency Exchange Contracts The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain transactions. The Company, in its normal course of business, enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation. In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts in September 2018 with notional amounts totaling €1.680 billion (approximately $2.001 billion) to mitigate its foreign currency exchange risk through the closing date of the acquisition, which were settled on December 21, 2018. These derivative contracts were not designated as accounting hedges. Therefore, changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income. The Company’s accounting policy is to classify cash flows from derivative instruments that are accounted for as cash flow hedges in the same category as the cash flows from the items being hedged. Accordingly, the Company classified the unrealized gains and losses relating to these derivative instruments within cash flows from investing activities. The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument and the risk being hedged. The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item affects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income. The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities. The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In order to mitigate counterparty credit risk, the Company only enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge. Net Investment Hedges The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its U.S. Dollars and these foreign currencies. The Company has elected the spot method of designating these contracts under ASU 2017-12 and has designated these contracts as net investment hedges. The net gain or loss on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. Interest accruals and coupon payments are recognized directly in interest expense in the Company’s statement of operations and comprehensive income. Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the hedged net investment is sold, diluted, or liquidated.
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Net Income per Share | The Company’s basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and restricted share units (“RSUs”), were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.
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Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Lease Accounting On March 31, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases. In evaluating the impact of ASU 2016-02, the Company considered guidance provided by several additional ASUs issued by the FASB, including ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842” in January 2018, ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” both issued in July 2018, and ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors” issued in December 2018. In connection with its implementation of ASU 2016-02, the Company adopted the package of three practical expedients, allowing it to carry forward its previous lease classification and embedded lease evaluations and not to reassess initial direct costs as of the date of adoption. The Company also adopted, the practical expedient allowing it to combine lease and non-lease components for its real estate leases. Lastly, the Company adopted the practical expedient provided by ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods. The Company’s existing lease obligations, which relate to stores, corporate locations, warehouses, and equipment, are subject to the new standard and resulted in recording of lease liabilities and right-of-use assets for operating leases on the Company’s consolidated balance sheet. The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):
See Note 4 for additional disclosures related to the Company’s lease accounting policy. Recently Issued Accounting Pronouncements We have considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition or cash flows based on current information. Intangibles In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which reduces the complexity for the accounting for costs of implementing a cloud computing service arrangement. The standard aligns the accounting for capitalizing implementation costs of hosting arrangements, regardless of whether or not the contract conveys a license to the hosted software. ASU 2018-15 is effective beginning with the Company’s Fiscal 2021, with early adoption permitted, and can either be presented prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2018-15 on its consolidated financial statements, but believes it is generally consistent with its current accounting for cloud computing arrangements and will not have a material impact on its consolidated financial statements.
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Revenue Recognition | The Company accounts for contracts with its customers when there is approval and commitment from both parties, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. The Company sells its products through three primary channels of distribution: retail, wholesale and licensing. Within the retail and wholesale channels, substantially all of the Company’s revenues consist of sales of products that represent a single performance obligation, where control transfers at a point in time to the customer. For licensing arrangements, royalty and advertising revenue is recognized over time based on access provided to the Company’s brands. Retail The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America, excluding Brazil), EMEA (Europe, Middle East, and Africa) and certain parts of Asia. Gift Cards. The contract liability related to gift cards, net of estimated “breakage,” was $12 million and $13 million as of September 28, 2019 and March 30, 2019, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheet. Loyalty Program. The contract liability, net of an estimated “breakage,” of $3 million as of both September 28, 2019 and March 30, 2019 is recorded as a reduction to revenue in the consolidated statements of operations and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheet and is expected to be recognized within the next 12 months. Wholesale The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia. The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia, and South America. Licensing The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements. Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa, certain parts of Asia and Australia. The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees. Generally the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are multi-year based. As of September 28, 2019, contractually guaranteed minimum fees from our license agreements expected to be recognized as revenue during future periods were as follows (in millions):
Sales Returns The refund liability recorded as of September 28, 2019 and March 30, 2019 was $35 million in each period and the related asset for the right to recover returned product as of September 28, 2019 and March 30, 2019 was $12 million in each period.
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Leases | ight-of-use assets and lease liabilities at lease commencement date, based on the present value of fixed lease payments over the expected lease term. The Company uses its incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable for the Company’s leases. The Company’s incremental borrowing rates are based on the term of the leases, the economic environment of the leases, and reflect the rate it would pay to borrow on a secured basis. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company generally does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the operating lease right-of-use asset and lease liability. Certain leases also contain termination options with an associated penalty. Generally, the Company is reasonably certain not to exercise these options and as such, they are not included in the determination of the expected lease term. The Company recognizes operating lease expense on a straight-line basis over the lease term. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term. The Company’s leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for lease and non-lease components of its real estate leases together as a single lease component and, as such, includes fixed payments of non-lease components in the measurement of the operating lease right-of-use assets and lease liabilities for its real estate leases. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred as variable lease costs and are not recorded on the balance sheet. The Company’s lease agreements do not contain any material residual value guarantees or material restrictions or covenants.
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Receivables, net | Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and doubtful accounts. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on wholesale customers’ sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in revenues. The Company’s allowance for doubtful accounts is determined through analysis of periodic aging of receivables that are not covered by insurance and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Calculation of Basic Net Income Per Ordinary Share and Diluted Net Income Per Ordinary Share | The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in millions, except share and per share data):
(1) Basic and diluted net income per share are calculated using unrounded numbers.
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Schedule of Impact of Adoption of New Accounting Pronouncements | The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):
(7) Represents the reclassification of noncurrent deferred rent and tenant improvement allowances to operating lease right-of-use assets.
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Revenue Recognition (Tables) |
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Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contractually Guaranteed Minimum Fees | As of September 28, 2019, contractually guaranteed minimum fees from our license agreements expected to be recognized as revenue during future periods were as follows (in millions):
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Schedule of Segment Revenues Disaggregated by Geographic Location | The following table presents the Company’s segment revenues disaggregated by geographic location (in millions):
See Note 3 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2019 for a complete disclosure of the Company’s revenue recognition.
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Balance Sheet Information Related to Leases | The following table presents the Company’s supplemental balance sheet information related to leases (in millions):
The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheet as of September 28, 2019:
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Schedule of Net Lease Costs and Supplemental Cash Flow Information | The components of net lease costs for the three and six months ended September 28, 2019 were as follows (in millions):
The following table presents the Company’s supplemental cash flow information related to leases (in millions):
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Schedule of Contractually Guaranteed Minimum Fees | At September 28, 2019, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):
At September 28, 2019, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):
Additionally, the Company had approximately $15 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of September 28, 2019.
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Receivables, net (Tables) |
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Sep. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables, net | Receivables, net, consist of (in millions):
(1) As of September 28, 2019 and March 30, 2019, $64 million and $317 million, respectively, of trade receivables were insured.
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Property and Equipment, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, Net | Property and equipment, net, consists of (in millions):
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Current Assets and Current Liabilities (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in millions):
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Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in millions):
(2) The accrued rent balance relates to variable lease payments.
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Intangible Assets and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Indefinite-Lived Intangible Assets | The following table details the carrying values of the Company’s intangible assets and goodwill (in millions):
(2) The change in the carrying values since March 30, 2019 reflects currency translation.
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Carrying Values of Intangible Assets | The following table details the carrying values of the Company’s intangible assets and goodwill (in millions):
(2) The change in the carrying values since March 30, 2019 reflects currency translation.
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Restructuring and Other Charges (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The below table presents a rollforward of the Company’s remaining restructuring liability related to this plan (in millions):
(1) Consists of the reclassification of sublease liabilities to an offset of the related operating lease right-of-use asset due to the adoption of ASC 842. See Note 2 and Note 4 for further information.
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Debt Obligations (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Obligations | The following table presents the Company’s debt obligations (in millions):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contracts Measured and Recorded at Fair Value on Recurring and Categorized in Level 2 of Fair Value Hierarchy | All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):
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Fair Value Measurement of Long-term Debt | The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):
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Schedule of Long-lived Assets, Nonrecurring | As a result of this determination, in the first quarter of Fiscal 2020, the Company identified impairment indicators at certain premier retail store locations and recorded operating lease right-of-use asset and property and equipment impairment charges of $68 million and $11 million, respectively, which are included in the impairment charges detailed in the table below (in millions):
|
Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Contracts Recorded on Gross Basis in Consolidated Balance Sheets | The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of September 28, 2019 and March 30, 2019 (in millions):
(4) Primarily includes undesignated hedges of foreign currency denominated intercompany balances and inventory purchases.
|
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Schedule of Derivative Instruments on The Balance Sheets, Net Basis | However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies, the resulting impact as of September 28, 2019 and March 30, 2019 would be as follows (in millions):
|
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Reclassification out of Accumulated Other Comprehensive Income | The following table summarizes the gains and losses on the Company’s designated forward foreign currency exchange contracts and net investment hedges (in millions):
The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income related to the designated forward foreign currency exchange contracts for the three and six months ended September 28, 2019 and September 29, 2018 (in millions):
|
Shareholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Components of Accumulated Other Comprehensive Income (Loss), Net of Taxes | The following table details changes in the components of accumulated other comprehensive income (loss) (“AOCI”), net of taxes for the six months ended September 28, 2019 and September 29, 2018, respectively (in millions):
(2) Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive income. All tax effects were not material for the periods presented.
|
Share-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Activity | The following table summarizes the Company’s share-based compensation activity during the six months ended September 28, 2019:
|
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Summary of Compensation Expense Attributable to Share-Based Compensation | The following table summarizes compensation expense attributable to share-based compensation for the three and six months ended September 28, 2019 and September 29, 2018 (in millions):
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Key Performance Information of Reportable Segments | The following table presents the key performance information of the Company’s reportable segments (in millions):
|
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Depreciation and Amortization Expense for Each Segment | Depreciation and amortization expense for each segment are as follows (in millions):
|
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Total Revenue (as Recognized Based on Country of Origin) | Total revenue (based on country of origin) by geographic location are as follows (in millions):
|
Business and Basis of Presentation - Additional Information (Details) |
6 Months Ended |
---|---|
Sep. 28, 2019
segment
| |
Accounting Policies [Abstract] | |
Number of reportable segments | 3 |
Summary of Significant Accounting Policies - Additional Information (Details) € in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 28, 2019
USD ($)
shares
|
Sep. 29, 2018
USD ($)
shares
|
Sep. 28, 2019
USD ($)
shares
|
Sep. 29, 2018
USD ($)
shares
|
Mar. 30, 2019
USD ($)
|
Sep. 30, 2018
EUR (€)
|
Sep. 30, 2018
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Notional amounts | $ 3,554,000,000 | $ 3,554,000,000 | $ 2,599,000,000 | ||||
Gift cards and retail store credits | 17,000,000 | 17,000,000 | 31,000,000 | ||||
Raw materials inventory | $ 22,000,000 | $ 22,000,000 | 25,000,000 | ||||
Anti-dilutive securities excluded from calculation of basic and diluted net income per ordinary share (in shares) | shares | 5,822,186 | 680,869 | 4,098,382 | 664,633 | |||
Revenue recognized during period | $ 3,000,000 | $ 3,000,000 | $ 17,000,000 | $ 11,000,000 | |||
Contract assets | 0 | $ 0 | 0 | ||||
Maximum | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Forward contracts term, maximum (no more than) | 12 months | ||||||
Foreign Currency Gain (Loss) | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Notional amounts | $ 2,001,000,000.000 | ||||||
Forward foreign currency exchange contracts | Not Designated as Hedging Instrument | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Notional amounts | $ 170,000,000 | $ 170,000,000 | $ 199,000,000 | ||||
Forward foreign currency exchange contracts | Foreign Currency Gain (Loss) | Not Designated as Hedging Instrument | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Notional amounts | € | € 1,680 |
Summary of Significant Accounting Policies - Components of Calculation of Basic Net Income Per Ordinary Share and Diluted Net Income Per Ordinary Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Numerator: | ||||
Net income attributable to Capri | $ 73 | $ 138 | $ 118 | $ 324 |
Denominator: | ||||
Basic weighted average shares (in shares) | 151,602,502 | 149,575,112 | 151,326,037 | 149,538,607 |
Weighted average dilutive share equivalents: | ||||
Share options and restricted shares/units, and performance restricted share units (in shares) | 973,781 | 2,130,573 | 1,129,181 | 2,514,064 |
Diluted weighted average shares (in shares) | 152,576,283 | 151,705,685 | 152,455,218 | 152,052,671 |
Basic net income per share (in dollars per share) | $ 0.48 | $ 0.92 | $ 0.78 | $ 2.17 |
Diluted net income per share (in dollars per share) | $ 0.47 | $ 0.91 | $ 0.77 | $ 2.13 |
Summary of Significant Accounting Policies - Adjustments from the Adoption of ASC 842 (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 31, 2019 |
Mar. 30, 2019 |
---|---|---|---|
Assets | |||
Prepaid expenses and other current assets | $ 275 | $ 198 | $ 221 |
Operating lease right-of-use assets | 1,671 | 1,856 | |
Intangible assets, net | 2,171 | 2,273 | 2,293 |
Deferred tax assets | 160 | 150 | 112 |
Liabilities | |||
Current portion of operating lease liabilities | 403 | 386 | |
Accrued expenses and other current liabilities | 283 | 302 | 374 |
Long-term portion of operating lease liabilities | 1,828 | ||
Deferred rent | 132 | ||
Deferred tax liabilities | 440 | 431 | 438 |
Shareholders’ Equity | |||
Retained earnings | $ 4,673 | 4,555 | 4,707 |
Previously Reported | |||
Assets | |||
Prepaid expenses and other current assets | 221 | ||
Intangible assets, net | 2,293 | ||
Deferred tax assets | 112 | ||
Liabilities | |||
Accrued expenses and other current liabilities | 374 | ||
Deferred rent | 132 | ||
Deferred tax liabilities | 438 | ||
Shareholders’ Equity | |||
Retained earnings | 4,707 | ||
Restatement Adjustment | ASU 2016-02 | |||
Assets | |||
Prepaid expenses and other current assets | (23) | ||
Operating lease right-of-use assets | 1,856 | ||
Intangible assets, net | (20) | ||
Deferred tax assets | 38 | ||
Liabilities | |||
Current portion of operating lease liabilities | 386 | ||
Accrued expenses and other current liabilities | (72) | ||
Long-term portion of operating lease liabilities | 1,828 | ||
Deferred rent | (132) | ||
Deferred tax liabilities | (7) | ||
Shareholders’ Equity | |||
Retained earnings | $ (152) | ||
Retail Fleet Optimization Plan | |||
Shareholders’ Equity | |||
Sublease liabilities | 54 | ||
Current deferred rent and tenant improvements | $ 18 |
Revenue Recognition - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
Mar. 30, 2019 |
|
Contract With Customer, Asset And Liability [Line Items] | |||||
Deferred loyalty program liabilities | $ 17,000,000 | $ 17,000,000 | $ 31,000,000 | ||
Return liabilities | 35,000,000 | 35,000,000 | 35,000,000 | ||
Right to recover returned product | 12,000,000 | 12,000,000 | 12,000,000 | ||
Revenue recognized during period | 3,000,000 | $ 3,000,000 | 17,000,000 | $ 11,000,000 | |
Contract assets | 0 | 0 | 0 | ||
Gift Cards | |||||
Contract With Customer, Asset And Liability [Line Items] | |||||
Deferred loyalty program liabilities | 12,000,000 | 12,000,000 | 13,000,000 | ||
Deferred loyalty program liabilities | |||||
Contract With Customer, Asset And Liability [Line Items] | |||||
Deferred loyalty program liabilities | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 |
Revenue Recognition - Schedule of Contractually Guaranteed Minimum Fees (Details) $ in Millions |
Sep. 28, 2019
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Remainder of Fiscal 2020 | $ 14 |
Fiscal 2021 | 27 |
Fiscal 2022 | 27 |
Fiscal 2023 | 20 |
Fiscal 2024 | 10 |
Fiscal 2025 and thereafter | 34 |
Total | $ 132 |
Revenue Recognition - Schedule of Revenue Disaggregation (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,442 | $ 1,253 | $ 2,788 | $ 2,456 |
The Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 802 | 793 | 1,531 | 1,511 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 409 | 289 | 769 | 591 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 231 | 171 | 488 | 354 |
Versace | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 228 | 0 | 435 | 0 |
Versace | The Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 48 | 0 | 92 | 0 |
Versace | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 121 | 0 | 213 | 0 |
Versace | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 59 | 0 | 130 | 0 |
Jimmy Choo | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 125 | 116 | 283 | 289 |
Jimmy Choo | The Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 21 | 20 | 51 | 46 |
Jimmy Choo | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 64 | 56 | 143 | 158 |
Jimmy Choo | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 40 | 40 | 89 | 85 |
Michael Kors | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,089 | 1,137 | 2,070 | 2,167 |
Michael Kors | The Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 733 | 773 | 1,388 | 1,465 |
Michael Kors | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 224 | 233 | 413 | 433 |
Michael Kors | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 132 | $ 131 | $ 269 | $ 269 |
Leases - Narrative (Details) $ in Millions |
Sep. 28, 2019
USD ($)
|
---|---|
Changes to lease related balances, net | |
Future payment obligations of lease agreements, not yet commenced | $ 15 |
Maximum | |
Changes to lease related balances, net | |
Term of lease | 10 years |
Leases - Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 31, 2019 |
---|---|---|
Assets | ||
Operating lease right-of-use assets | $ 1,671 | $ 1,856 |
Liabilities | ||
Current operating lease liabilities | 403 | $ 386 |
Long-term portion of operating lease liabilities | $ 1,766 |
Leases - Comprehensive Income Net Lease Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Sep. 28, 2019 |
Sep. 28, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 115 | $ 224 |
Short-term lease cost | 3 | 13 |
Variable lease cost | 39 | 79 |
Sublease income | (2) | (3) |
Total lease cost | $ 155 | $ 313 |
Leases - Supplemental Cash Flow Information Related to Leases (Details) $ in Millions |
6 Months Ended |
---|---|
Sep. 28, 2019
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows used in operating leases | $ 244 |
Non-cash transactions: | |
Lease assets obtained in exchange for new lease liabilities | $ 168 |
Leases - Operating Lease Information (Details) |
Sep. 28, 2019 |
---|---|
Operating leases: | |
Weighted average remaining lease term (years) | 6 years 6 months |
Weighted average discount rate | 3.00% |
Leases - Schedule of Contractually Guaranteed Minimum Fees (Details) $ in Millions |
Sep. 28, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of Fiscal 2020 | $ 243 |
Fiscal 2021 | 459 |
Fiscal 2022 | 404 |
Fiscal 2023 | 346 |
Fiscal 2024 | 292 |
Thereafter | 668 |
Total lease payments | 2,412 |
Less: interest | (243) |
Total lease liabilities | $ 2,169 |
Leases - Future Minimum Sublease Income (Details) $ in Millions |
Sep. 28, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of Fiscal 2020 | $ 3 |
Fiscal 2021 | 6 |
Fiscal 2022 | 5 |
Fiscal 2023 | 5 |
Fiscal 2024 | 4 |
Thereafter | 15 |
Total sublease income | $ 38 |
Acquisitions - Additional Information (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2018
EUR (€)
shares
|
Dec. 31, 2018
USD ($)
shares
|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
|
Business Acquisition [Line Items] | ||||||
Total revenue | $ 1,442 | $ 1,253 | $ 2,788 | $ 2,456 | ||
Net income | 73 | $ 138 | 118 | $ 324 | ||
Gianni Versace S.r.l. | ||||||
Business Acquisition [Line Items] | ||||||
Total transaction value in a business acquisition | € 1,753 | $ 2,005 | ||||
Shares acquired (in shares) | shares | 2,400,000 | 2,400,000 | ||||
Total revenue | 228 | 435 | ||||
Net income | $ 9 | $ 6 |
Receivables, net - Schedule of Receivables (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 428 | $ 459 |
Receivables due from licensees | 26 | 23 |
Receivables, gross | 454 | 482 |
Less: allowances | (86) | (99) |
Receivables, net | 368 | 383 |
Credit risk assumed by insured | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 64 | $ 317 |
Receivables, net - Additional Information (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Mar. 30, 2019 |
|
Receivables [Abstract] | |||
Allowance for doubtful accounts | $ 15 | $ 18 | |
Bad debt expense | $ 4 | $ 1 |
Property and Equipment, net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 656 | $ 639 |
Computer equipment and software | 307 | 292 |
Furniture and fixtures | 298 | 292 |
In-store shops | 272 | 270 |
Equipment | 124 | 123 |
Building | 46 | 47 |
Land | 17 | 15 |
Property and equipment, gross | 1,720 | 1,678 |
Less: accumulated depreciation and amortization | (1,205) | (1,115) |
Property and equipment, net (excluding construction-in-progress) | 515 | 563 |
Construction-in-progress | 74 | 52 |
Property and equipment, net | $ 589 | $ 615 |
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 28, 2019 |
Jun. 29, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization of property and equipment | $ 52 | $ 45 | $ 99 | $ 92 | |
Impairment of long-lived assets | 6 | 23 | 9 | ||
Jimmy Choo And Gianni Versace S.r.l. | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of long-lived assets | $ 10 | 12 | |||
Segment Total | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of long-lived assets | $ 11 | 11 | |||
Michael Kors | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of long-lived assets | 7 | ||||
Jimmy Choo | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of long-lived assets | $ 4 | ||||
Michael Kors Retail | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of long-lived assets | $ 4 | $ 8 |
Current Assets and Current Liabilities - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 31, 2019 |
Mar. 30, 2019 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Prepaid taxes | $ 187 | $ 125 | |
Interest receivable related to net investment hedges | 25 | 11 | |
Derivative Asset, Current | 7 | 5 | |
Prepaid property and equipment | 6 | 7 | |
Prepaid rent | 0 | 24 | |
Other | 50 | 49 | |
Prepaid expenses and other current assets | $ 275 | $ 198 | $ 221 |
Intangible Assets and Goodwill - Carrying Values of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 31, 2019 |
Mar. 30, 2019 |
---|---|---|---|
Finite-Lived Intangible Assets [Line Items] | |||
Total definite-lived intangible assets | $ 889 | $ 934 | |
Less: accumulated amortization | (164) | (143) | |
Net definite-lived intangible assets | 725 | 791 | |
Indefinite-lived intangible assets | 1,446 | 1,502 | |
Total intangible assets, excluding goodwill | 2,171 | $ 2,273 | 2,293 |
Goodwill | 1,598 | 1,659 | |
Reacquired rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total definite-lived intangible assets | 400 | 400 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total definite-lived intangible assets | 23 | 23 | |
Key Money | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total definite-lived intangible assets | 68 | 96 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total definite-lived intangible assets | 398 | 415 | |
Jimmy Choo | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | 539 | 572 | |
Gianni Versace S.r.l. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 907 | $ 930 |
Current Assets and Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 31, 2019 |
Mar. 30, 2019 |
---|---|---|---|
Contract With Customer, Asset And Liability [Line Items] | |||
Other taxes payable | $ 60 | $ 47 | |
Return liabilities | 35 | 35 | |
Accrued capital expenditures | 27 | 25 | |
Accrued advertising and marketing | 23 | 10 | |
Accrued rent | 18 | 34 | |
Gift cards and retail store credits | 17 | 31 | |
Professional services | 10 | 12 | |
Accrued litigation | 10 | 11 | |
Accrued interest | 10 | 10 | |
Restructuring liability | 7 | 64 | |
Accrued purchases and samples | 5 | 29 | |
Other | 66 | 84 | |
Accrued expenses and other current liabilities | 283 | $ 302 | 374 |
Gift cards and retail store credits | |||
Contract With Customer, Asset And Liability [Line Items] | |||
Gift cards and retail store credits | $ 12 | $ 13 |
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 13,000,000 | $ 8,000,000 | $ 26,000,000 | $ 17,000,000 |
Impairment of intangible assets | $ 1,000,000 | 2,000,000 | ||
Goodwill and intangible asset impairment charges | 0 | $ 0 | ||
Michael Kors Retail | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 1,000,000 | $ 6,000,000 |
Restructuring and Other Charges - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
Sep. 28, 2019
USD ($)
store
|
Sep. 29, 2018
USD ($)
|
May 31, 2017
USD ($)
store
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Transition costs | $ 16 | $ 18 | $ 23 | ||
Gianni Versace S.r.l. | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transition costs | $ 6 | 9 | 13 | 9 | |
Jimmy Choo | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transition costs | 7 | 5 | 14 | ||
Lease-related and other costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges and other charges | $ 1 | 1 | |||
Lease-related and other costs | Jimmy Choo | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges and other charges | 1 | $ 2 | 1 | ||
Retail Fleet Optimization Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of store closed | store | 123 | ||||
Restructuring charges and other charges | $ 2 | $ 1 | $ 6 | ||
Closing costs | $ 95 | ||||
Retail Fleet Optimization Plan | Michael Kors Retail | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of store closed | store | 23 | ||||
Retail Fleet Optimization Plan | Severance and benefit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges and other charges | $ 0 | ||||
Retail Fleet Optimization Plan | Lease-related and other costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges and other charges | $ 1 | ||||
Retail Fleet Optimization Plan | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of stores expected to close | store | 100 | ||||
Expected restructuring charges | $ 100 | ||||
Retail Fleet Optimization Plan | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of stores expected to close | store | 125 | ||||
Expected restructuring charges | $ 125 |
Restructuring and Other Charges - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2019 |
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Transition costs | $ 16 | $ 18 | $ 23 | ||
Restructuring Reserve [Roll Forward] | |||||
Balance at March 30, 2019 | $ 64 | 64 | |||
Balance at September 28, 2019 | $ 7 | 7 | |||
Retail Fleet Optimization Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance at March 30, 2019 | 55 | 55 | |||
ASC 842 (Leases) Adjustment | (46) | ||||
Additions charged to expense | 2 | 1 | 6 | ||
Payments | (7) | ||||
Balance at September 28, 2019 | 9 | 3 | 3 | ||
Severance and benefit costs | Retail Fleet Optimization Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance at March 30, 2019 | 2 | 2 | |||
ASC 842 (Leases) Adjustment | 0 | ||||
Additions charged to expense | 0 | ||||
Payments | 0 | ||||
Balance at September 28, 2019 | 2 | 2 | 2 | ||
Lease-related and other costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Additions charged to expense | 1 | 1 | |||
Lease-related and other costs | Retail Fleet Optimization Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance at March 30, 2019 | 53 | 53 | |||
ASC 842 (Leases) Adjustment | (46) | ||||
Additions charged to expense | 1 | ||||
Payments | (7) | ||||
Balance at September 28, 2019 | $ 7 | 1 | 1 | ||
Gianni Versace S.r.l. | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transition costs | $ 6 | $ 9 | $ 13 | $ 9 |
Debt Obligations - Schedule of Debt Obligations (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 2,411 | $ 2,581 |
Less: Unamortized debt issuance costs | 10 | 13 |
Less: Unamortized discount on long-term debt | 2 | 2 |
Total carrying value of debt | 2,399 | 2,566 |
Less: Short-term debt | 603 | 630 |
Total long-term debt | 1,796 | 1,936 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 1,435 | 1,580 |
Credit Facility | 2018 Credit Facility | Revolving Credit Facilities | ||
Debt Instrument [Line Items] | ||
Total debt | 523 | 550 |
Less: Short-term debt | $ 513 | 539 |
4.000% Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate percentage | 4.00% | |
4.000% Senior Notes | Revolving Credit Facilities | ||
Debt Instrument [Line Items] | ||
Total debt | $ 450 | 450 |
Other | ||
Debt Instrument [Line Items] | ||
Total debt | $ 3 | $ 1 |
Debt Obligations - Senior Unsecured Revolving Credit Facility (Details) $ in Millions |
6 Months Ended | |
---|---|---|
Sep. 28, 2019
USD ($)
|
Mar. 30, 2019
USD ($)
|
|
Debt Instrument [Line Items] | ||
Short-term debt | $ 603 | $ 630 |
Long-term debt | 2,399 | 2,566 |
Revolving Credit Facilities | Credit Facility | ||
Debt Instrument [Line Items] | ||
Letter of credit outstanding | $ 16 | |
Revolving Credit Facilities | 2018 Credit Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Leverage ratio on credit facility | 3.75 | |
Short-term debt | $ 513 | 539 |
Amount available for future borrowings | 471 | |
2018 Term Loan Facility | Term Loan Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Short-term debt | 80 | |
Borrowings outstanding | 1,428 | 1,570 |
Long-term debt | $ 1,348 | $ 1,490 |
Fair Value Measurements - Schedule of Contracts Measured and Recorded at Fair Value on Recurring and Categorized in Level 2 of Fair Value Hierarchy (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | $ 116 | $ 42 |
Derivative liabilities | 4 | 5 |
Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 116 | 42 |
Derivative liabilities | 4 | 5 |
Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Forward foreign currency exchange contracts | Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Forward foreign currency exchange contracts | Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 6 | 5 |
Forward foreign currency exchange contracts | Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Net investment hedges | Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Net investment hedges | Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 109 | 37 |
Net investment hedges | Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Other undesignated derivative contracts | Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Other undesignated derivative contracts | Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 1 | 0 |
Derivative liabilities | 4 | 5 |
Other undesignated derivative contracts | Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Schedule of Fair Value Measurement of Long-term Debt (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
4.000% Senior Notes | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | $ 445 | $ 445 |
4.000% Senior Notes | Level 2 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | 459 | 438 |
Term Loan | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | 1,428 | 1,570 |
Term Loan | Level 2 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | 1,438 | 1,574 |
Revolving Credit Facilities | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | 523 | 550 |
Revolving Credit Facilities | Level 2 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value disclosure | $ 523 | $ 550 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 29, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
Mar. 31, 2019 |
Mar. 30, 2019 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Operating lease right-of-use assets impairment | $ 68 | |||||
Impairment of long-lived assets | $ 6 | $ 23 | $ 9 | |||
Cumulative effect of adoption as an adjustment | (4,673) | $ (4,555) | $ (4,707) | |||
Restatement Adjustment | ASU 2016-02 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cumulative effect of adoption as an adjustment | $ 152 | |||||
Segment Total | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment of long-lived assets | $ 11 | $ 11 |
Fair Value Measurements - Schedule of Impaired Long-lived Assets Carrying Value and Fair Value (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment Charge | $ 6 | $ 23 | $ 9 | |
Significant unobservable inputs (Level 3) | Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value Prior to Impairment | $ 200 | 11 | 360 | 18 |
Fair Value | 96 | 4 | 159 | 7 |
Impairment Charge | 104 | 7 | 201 | 11 |
Operating Lease Right-of-Use Assets | Significant unobservable inputs (Level 3) | Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value Prior to Impairment | 174 | 306 | ||
Fair Value | 81 | 134 | ||
Impairment Charge | 93 | 172 | ||
Property and Equipment | Significant unobservable inputs (Level 3) | Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value Prior to Impairment | 24 | 9 | 44 | 14 |
Fair Value | 14 | 3 | 21 | 5 |
Impairment Charge | 10 | 6 | 23 | 9 |
Key Money | Significant unobservable inputs (Level 3) | Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value Prior to Impairment | 10 | |||
Fair Value | 4 | |||
Impairment Charge | $ 6 | |||
Leasing rights | Key Money | Significant unobservable inputs (Level 3) | Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value Prior to Impairment | 2 | 2 | 4 | |
Fair Value | 1 | 1 | 2 | |
Impairment Charge | $ 1 | $ 1 | $ 2 |
Derivative Financial Instruments - Additional Information (Details) € in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 25, 2018
USD ($)
|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
Mar. 30, 2019
USD ($)
|
Sep. 30, 2018
EUR (€)
|
Sep. 30, 2018
USD ($)
|
|
Derivative [Line Items] | ||||||||
Notional amounts | $ 3,554 | $ 3,554 | $ 2,599 | |||||
Derivative gains (losses) | $ 30 | |||||||
Foreign Currency Gain (Loss) | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | $ 2,001 | |||||||
Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | 3,384 | 3,384 | 2,400 | |||||
Forward Currency Exchange Contracts | Not Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | 170 | 170 | 199 | |||||
Forward Currency Exchange Contracts | Not Designated as Hedging Instrument | Foreign Currency Gain (Loss) | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | € | € 1,680 | |||||||
Gain (loss) on derivative recognized | $ 30 | $ 29 | ||||||
Net investment hedging | Net investment hedges | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | 3,234 | 3,234 | $ 2,234 | |||||
Reduction in interest expense | 19 | $ 3 | 34 | $ 4 | ||||
Net investment hedging | Euro | Net investment hedges | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | $ 3,190 | $ 3,190 | ||||||
Derivative fixed interest rate | 1.674% | 1.674% | ||||||
Net investment hedging | Japan, Yen | Net investment hedges | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amounts | $ 44 | $ 44 | ||||||
Derivative fixed interest rate | 0.89% | 0.89% | ||||||
Net investment hedging | US Dollars | Net investment hedges | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Derivative fixed interest rate | 0.00% | 0.00% |
Derivative Financial Instruments - Schedule of Fair Value of Derivative Contracts Recorded on Gross Basis in Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 3,554 | $ 2,599 |
Assets | 116 | 42 |
Liabilities | 4 | 5 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | 3,384 | 2,400 |
Assets | 115 | 42 |
Liabilities | 0 | 0 |
Not Designated as Hedging Instrument | Forward Currency Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | 170 | 199 |
Assets | 1 | 0 |
Liabilities | 4 | 5 |
Cash flow hedging | Designated as Hedging Instrument | Forward Currency Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | 150 | 166 |
Assets | 6 | 5 |
Liabilities | 0 | 0 |
Net investment hedging | Designated as Hedging Instrument | Net investment hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | 3,234 | 2,234 |
Assets | 109 | 37 |
Liabilities | $ 0 | $ 0 |
Derivative Financial Instruments - Fair Values of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions |
Sep. 28, 2019 |
Mar. 30, 2019 |
---|---|---|
Cash flow hedging | Forward Currency Exchange Contracts | ||
Derivative [Line Items] | ||
Assets subject to master netting arrangements | $ 7 | $ 5 |
Liabilities subject to master netting arrangements | 4 | 5 |
Derivative assets, net | 6 | 5 |
Derivative liabilities, net | 3 | 5 |
Net investment hedging | Net investment hedges | ||
Derivative [Line Items] | ||
Assets subject to master netting arrangements | 109 | 37 |
Liabilities subject to master netting arrangements | 0 | 0 |
Derivative assets, net | 109 | 37 |
Derivative liabilities, net | $ 0 | $ 0 |
Derivative Financial Instruments - Summary of Pre-tax Impact of Gains (Losses) on Derivative (Details) - Designated as Hedging Instrument - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Forward Currency Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains Recognized in OCI | $ 6 | $ 1 | $ 6 | $ 10 |
Net investment hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains Recognized in OCI | $ 129 | $ 0 | $ 104 | $ 5 |
Derivative Financial Instruments - Summary of Pretax Impact of Gain (Loss) Reclassified from AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Cost of goods sold | $ 568 | $ 490 | $ 1,080 | $ 942 |
Total Cost of goods sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Cost of goods sold | 568 | 490 | 1,080 | 942 |
Forward Currency Exchange Contracts | Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Pre-Tax (Gain) Loss Reclassified from Accumulated OCI | $ (2) | $ 2 | $ (5) | $ 7 |
Shareholders' Equity - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
Aug. 01, 2019 |
|
Subsidiary or Equity Method Investee [Line Items] | |||||
Ordinary shares, shares repurchased amount | $ 0 | $ 1,000,000 | $ 2,000,000 | $ 107,000,000 | |
Stock Repurchase Program | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Ordinary shares, shares repurchased (in shares) | 1,659,941 | ||||
Ordinary shares, shares repurchased amount | $ 100,000,000 | ||||
Ordinary shares repurchased, shares authorized (in shares) | $ 1,000,000,000.0 | $ 1,000,000,000.0 | $ 500,000,000 | ||
Withholding Taxes | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Ordinary shares, shares repurchased (in shares) | 63,223 | 106,002 | |||
Ordinary shares, shares repurchased amount | $ 2,000,000 | $ 7,000,000 |
Shareholders' Equity - Changes in Components of Accumulated Other Comprehensive Income, Net of Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 2,324 | $ 2,042 | $ 2,432 | $ 2,022 |
Other comprehensive (loss) income, net of tax | (10) | (22) | (37) | (113) |
Ending balance | 2,408 | 2,184 | 2,408 | 2,184 |
Foreign currency translation adjustments | (13) | (25) | (38) | (128) |
Foreign Currency Translation Gains (Losses) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (73) | 61 | ||
Other comprehensive (loss) income before reclassifications | (38) | (128) | ||
Less: amounts reclassified from AOCI to earnings | 0 | 0 | ||
Other comprehensive (loss) income, net of tax | (38) | (128) | ||
Ending balance | (111) | (67) | (111) | (67) |
Net gain (loss) on long-term transactions | 6 | 8 | ||
Gain (loss) related to net investment hedges | 86 | 4 | 86 | 4 |
Taxes related to the gain on net investment hedges | 18 | 1 | ||
Foreign Currency Translation Gains (Losses) | Gianni Versace S.r.l. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Foreign currency translation adjustments | (42) | |||
Foreign Currency Translation Gains (Losses) | Jimmy Choo | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Foreign currency translation adjustments | (105) | |||
Net Gains (Losses) on Derivatives | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 7 | (10) | ||
Other comprehensive (loss) income before reclassifications | 5 | 9 | ||
Less: amounts reclassified from AOCI to earnings | 4 | (6) | ||
Other comprehensive (loss) income, net of tax | 1 | 15 | ||
Ending balance | 8 | 5 | 8 | 5 |
Other Comprehensive Income (Loss) Attributable to Capri | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (93) | (40) | (66) | 51 |
Other comprehensive (loss) income before reclassifications | (33) | (119) | ||
Less: amounts reclassified from AOCI to earnings | 4 | (6) | ||
Other comprehensive (loss) income, net of tax | (10) | (22) | (37) | (113) |
Ending balance | $ (103) | $ (62) | $ (103) | $ (62) |
Share-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Millions |
6 Months Ended | |
---|---|---|
Sep. 28, 2019
USD ($)
equity_plan
$ / shares
shares
|
Sep. 29, 2018
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity plans | equity_plan | 2 | |
Estimated value of future forfeitures | $ | $ 11 | |
Service-Based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value of RSUs (in dollar per share) | $ / shares | $ 33.90 | $ 67.39 |
Performance-Based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value of RSUs (in dollar per share) | $ / shares | $ 33.86 | $ 67.52 |
2008 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity plans adopted | equity_plan | 1 | |
Shares authorized for issuance (up to) (in shares) | 23,980,823 | |
Shares available for grant (in shares) | 0 | |
Option expiration period (years) | 10 years | |
2012 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized for issuance (up to) (in shares) | 15,246,000 | |
Shares available for grant (in shares) | 2,530,245 | |
Option expiration period (years) | 7 years |
Share-Based Compensation - Summary of Share-based Compensation Activity (Details) |
6 Months Ended |
---|---|
Sep. 28, 2019
shares
| |
Options | |
Number of Options | |
Outstanding at beginning of period (in shares) | 2,131,259 |
Granted (in shares) | 0 |
Exercised (in shares) | 0 |
Canceled/forfeited (in shares) | (6,452) |
Outstanding at end of period (in shares) | 2,124,807 |
Service-Based RSUs | |
Number of Unvested Restricted Shares | |
Unvested at beginning of period (in shares) | 3,839,862 |
Granted (in shares) | 1,869,918 |
Vested (in shares) | (711,173) |
Decrease due to performance condition (in shares) | 0 |
Canceled/forfeited (in shares) | (120,970) |
Unvested at end of period (in shares) | 4,877,637 |
Performance-Based RSUs | |
Number of Unvested Restricted Shares | |
Unvested at beginning of period (in shares) | 737,074 |
Granted (in shares) | 169,817 |
Vested (in shares) | (53,025) |
Decrease due to performance condition (in shares) | (39,999) |
Canceled/forfeited (in shares) | 0 |
Unvested at end of period (in shares) | 813,867 |
Share-Based Compensation - Summary of Compensation Expense Attributable to Share-Based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Share-based Payment Arrangement [Abstract] | ||||
Share-based compensation expense | $ 21 | $ 13 | $ 49 | $ 26 |
Tax benefit related to share-based compensation expense | $ 4 | $ 3 | $ 9 | $ 5 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Operating Loss Carryforwards [Line Items] | ||||
Effective tax rate | (5.80%) | 9.90% | 1.70% | 9.50% |
United Kingdom | Foreign Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Provision for incomes taxes at the U.K. statutory tax rate | 19.00% | 19.00% |
Segment Information - Additional Information (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 28, 2019
USD ($)
|
Sep. 29, 2018
USD ($)
|
Sep. 28, 2019
USD ($)
segment
|
Sep. 29, 2018
USD ($)
|
Mar. 31, 2019
USD ($)
|
Mar. 30, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||||
Total revenue | $ 1,442 | $ 1,253 | $ 2,788 | $ 2,456 | ||
Number of operating segments | segment | 3 | |||||
Number of reportable segments | segment | 3 | |||||
Assets | 8,393 | $ 8,393 | $ 6,650 | |||
Operating lease right-of-use assets | 1,671 | 1,671 | $ 1,856 | |||
Versace | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenue | 228 | 0 | 435 | 0 | ||
Operating lease right-of-use assets | 386 | 386 | ||||
Jimmy Choo | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenue | 125 | 116 | 283 | 289 | ||
Operating lease right-of-use assets | 223 | 223 | ||||
Michael Kors | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenue | 1,089 | $ 1,137 | 2,070 | $ 2,167 | ||
Operating lease right-of-use assets | $ 1,062 | $ 1,062 |
Segment Information - Key Performance Information of Reportable Segments (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|||
Segment Reporting [Abstract] | ||||||
Total revenue | $ 1,442 | $ 1,253 | $ 2,788 | $ 2,456 | ||
Segment Reporting Information [Line Items] | ||||||
Less: Corporate expenses | (35) | (23) | (68) | (45) | ||
Restructuring and other charges | [1] | (7) | (19) | (22) | (30) | |
Impairment of long-lived assets | (104) | (7) | (201) | (11) | ||
Total income from operations | 75 | 190 | 139 | 405 | ||
Versace | ||||||
Segment Reporting [Abstract] | ||||||
Total revenue | 228 | 0 | 435 | 0 | ||
Segment Reporting Information [Line Items] | ||||||
Total income from operations | 9 | 0 | 6 | 0 | ||
Jimmy Choo | ||||||
Segment Reporting [Abstract] | ||||||
Total revenue | 125 | 116 | 283 | 289 | ||
Segment Reporting Information [Line Items] | ||||||
Total income from operations | (10) | (9) | 1 | 13 | ||
Michael Kors | ||||||
Segment Reporting [Abstract] | ||||||
Total revenue | 1,089 | 1,137 | 2,070 | 2,167 | ||
Segment Reporting Information [Line Items] | ||||||
Total income from operations | 222 | 248 | 423 | 478 | ||
Total segment income from operations | ||||||
Segment Reporting Information [Line Items] | ||||||
Total income from operations | $ 221 | $ 239 | $ 430 | $ 491 | ||
|
Segment Information - Depreciation and Amortization Expense for Each Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | $ 65 | $ 53 | $ 125 | $ 109 |
Versace | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 15 | 0 | 29 | 0 |
Jimmy Choo | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 9 | 9 | 17 | 17 |
Michael Kors | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | $ 41 | $ 44 | $ 79 | $ 92 |
Segment Information - Total Revenue (as Recognized Based on Country of Origin) by Geographic Location (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 28, 2019 |
Sep. 29, 2018 |
Sep. 28, 2019 |
Sep. 29, 2018 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 1,442 | $ 1,253 | $ 2,788 | $ 2,456 |
The Americas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 802 | 793 | 1,531 | 1,511 |
EMEA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 409 | 289 | 769 | 591 |
Asia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 231 | 171 | 488 | 354 |
U.S. | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 741 | $ 737 | $ 1,422 | $ 1,405 |