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Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Numerator: | |||||||
Net income attributable to MKHL | $ | 125.5 | $ | 147.1 | |||
Denominator: | |||||||
Basic weighted average shares | 154,486,898 | 174,158,571 | |||||
Weighted average dilutive share equivalents: | |||||||
Share options, restricted shares/units, and performance restricted share units | 2,384,620 | 2,455,180 | |||||
Diluted weighted average shares | 156,871,518 | 176,613,751 | |||||
Basic net income per share | $ | 0.81 | $ | 0.84 | |||
Diluted net income per share | $ | 0.80 | $ | 0.83 |
|
May 31, 2016 | |||
Cash and cash equivalents | $ | 19.4 | |
Accounts receivable | 22.3 | ||
Inventory | 36.1 | ||
Other current assets | 5.5 | ||
Current assets | 83.3 | ||
Property and equipment | 46.6 | ||
Goodwill | 96.5 | ||
Reacquired rights | 400.4 | ||
Favorable lease assets | 1.8 | ||
Customer relationships | 0.7 | ||
Deferred tax assets | 7.8 | ||
Other assets | 6.6 | ||
Total assets acquired | $ | 643.7 | |
Accounts payable | $ | 8.9 | |
Short-term debt | 5.8 | ||
Other current liabilities | 27.8 | ||
Current liabilities | 42.5 | ||
Unfavorable lease liabilities | 4.8 | ||
Deferred tax liabilities | 92.3 | ||
Other liabilities | 4.1 | ||
Total liabilities assumed | $ | 143.7 | |
Fair value of net assets acquired | $ | 500.0 | |
Fair value of acquisition consideration | $ | 500.0 |
Three Months Ended | ||||
July 2, 2016 | ||||
Pro-forma total revenue | $ | 1,014.3 | ||
Pro-forma net income | 155.2 | |||
Pro-forma net income per ordinary share attributable to MKHL: | ||||
Basic | $ | 0.89 | ||
Diluted | $ | 0.88 |
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July 1, 2017 | April 1, 2017 | ||||||
Trade receivables: | |||||||
Credit risk assumed by insured | $ | 207.2 | $ | 294.0 | |||
Credit risk retained by Company | 49.9 | 63.8 | |||||
Receivables due from licensees | 8.1 | 11.9 | |||||
265.2 | 369.7 | ||||||
Less: allowances | (93.9 | ) | (103.9 | ) | |||
$ | 171.3 | $ | 265.8 |
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July 1, 2017 | April 1, 2017 | ||||||
Leasehold improvements | $ | 525.8 | $ | 507.9 | |||
In-store shops | 261.2 | 256.0 | |||||
Furniture and fixtures | 251.6 | 244.1 | |||||
Computer equipment and software | 236.8 | 226.2 | |||||
Equipment | 107.3 | 104.4 | |||||
Building | 43.6 | 40.6 | |||||
Land | 15.0 | 14.0 | |||||
1,441.3 | 1,393.2 | ||||||
Less: accumulated depreciation and amortization | (885.4 | ) | (833.9 | ) | |||
555.9 | 559.3 | ||||||
Construction-in-progress | 29.6 | 32.2 | |||||
$ | 585.5 | $ | 591.5 |
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July 1, 2017 | April 1, 2017 | ||||||
Reacquired Rights | $ | 400.4 | $ | 400.4 | |||
Trademarks | 23.0 | 23.0 | |||||
Lease Rights | 78.8 | 74.2 | |||||
Customer Relationships | 5.0 | 5.0 | |||||
$ | 507.2 | $ | 502.6 | ||||
Less: accumulated amortization | $ | (92.9 | ) | $ | (84.5 | ) | |
$ | 414.3 | $ | 418.1 |
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July 1, 2017 | April 1, 2017 | ||||||
Prepaid taxes | $ | 61.8 | $ | 56.6 | |||
Prepaid rent | 20.0 | 21.7 | |||||
Leasehold incentive receivable | 11.0 | 12.0 | |||||
Prepaid insurance | 5.1 | 3.2 | |||||
Unrealized gains on forward foreign exchange contracts | 0.1 | 4.7 | |||||
Restricted cash | — | 1.9 | |||||
Other | 25.9 | 21.8 | |||||
$ | 123.9 | $ | 121.9 |
July 1, 2017 | April 1, 2017 | ||||||
Accrued capital expenditures | $ | 12.8 | $ | 20.5 | |||
Other taxes payable | 40.0 | 29.2 | |||||
Accrued rent | 23.5 | 21.5 | |||||
Accrued advertising and marketing | 17.0 | 10.7 | |||||
Gift cards and retail store credits | 12.8 | 12.9 | |||||
Professional services | 9.8 | 7.1 | |||||
Advance royalties | 8.5 | 5.0 | |||||
Unrealized loss on forward foreign currency exchange contracts | 7.8 | 0.4 | |||||
Other | 29.7 | 27.7 | |||||
$ | 161.9 | $ | 135.0 |
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Fair value at July 1, 2017 using: | Fair value at April 1, 2017 using: | ||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||
Forward foreign currency exchange contracts - assets | $ | — | $ | 0.1 | $ | — | $ | — | $ | 4.7 | $ | — | |||||||||||
Forward foreign currency exchange contracts - liabilities | $ | — | $ | 7.8 | $ | — | $ | — | $ | 0.4 | $ | — |
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Fair Values | |||||||||||||||||||||||
Notional Amounts | Current Assets (1) | Current Liabilities (2) | |||||||||||||||||||||
July 1, 2017 | April 1, 2017 | July 1, 2017 | April 1, 2017 | July 1, 2017 | April 1, 2017 | ||||||||||||||||||
Designated forward foreign currency exchange contracts | $ | 179.5 | $ | 167.5 | $ | 0.1 | $ | 4.7 | $ | 7.6 | $ | 0.4 | |||||||||||
Undesignated forward foreign currency exchange contracts | 16.6 | — | — | — | 0.2 | — | |||||||||||||||||
Total | $ | 196.1 | $ | 167.5 | $ | 0.1 | $ | 4.7 | $ | 7.8 | $ | 0.4 |
(1) | Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets. |
(2) | Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets. |
Three Months Ended | |||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||
Pre-Tax Loss Recognized in OCI (Effective Portion) | Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion) | Pre-Tax Gain Recognized in OCI (Effective Portion) | Pre-Tax Loss Reclassified from Accumulated OCI into Earnings (Effective Portion) | ||||||||||||
Forward foreign currency exchange contracts | $ | (9.3 | ) | $ | 1.9 | $ | 3.3 | $ | (0.1 | ) |
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Foreign Currency Translation (Losses) Gains | Net (Losses) Gains on Derivatives (1) | Other Comprehensive (Loss) Income Attributable to MKHL | Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | Total Accumulated Other Comprehensive (Loss) Income | |||||||||||||||
Balance at April 2, 2016 | $ | (77.7 | ) | $ | (3.2 | ) | $ | (80.9 | ) | $ | 0.1 | $ | (80.8 | ) | |||||
Other comprehensive (loss) income before reclassifications (2) | (0.5 | ) | 3.0 | 2.5 | 0.1 | 2.6 | |||||||||||||
Less: amounts reclassified from AOCI to earnings (3) | — | (0.1 | ) | (0.1 | ) | — | (0.1 | ) | |||||||||||
Other comprehensive (loss) income net of tax | (0.5 | ) | 3.1 | 2.6 | 0.1 | 2.7 | |||||||||||||
Balance at July 2, 2016 | $ | (78.2 | ) | $ | (0.1 | ) | $ | (78.3 | ) | $ | 0.2 | $ | (78.1 | ) | |||||
Balance at April 1, 2017 | $ | (86.1 | ) | $ | 5.5 | $ | (80.6 | ) | $ | (0.3 | ) | $ | (80.9 | ) | |||||
Other comprehensive income (loss) before reclassifications (2) | 22.1 | (8.0 | ) | 14.1 | — | 14.1 | |||||||||||||
Less: amounts reclassified from AOCI to earnings (3) | — | 1.7 | 1.7 | — | 1.7 | ||||||||||||||
Other comprehensive income (loss) net of tax | 22.1 | (9.7 | ) | 12.4 | — | 12.4 | |||||||||||||
Balance at July 1, 2017 | $ | (64.0 | ) | $ | (4.2 | ) | $ | (68.2 | ) | $ | (0.3 | ) | $ | (68.5 | ) |
(1) | Accumulated other comprehensive income balance related to net gains on derivative financial instruments as of July 1, 2017 and April 1, 2017 is net of tax (benefit) provision of $(0.7) million and $0.8 million, respectively. Other comprehensive income (loss) before reclassifications related to derivative financial instruments for the three months ended July 1, 2017 and July 2, 2016 is net of tax benefits of $1.3 million and $1.0 million, respectively. All other tax effect were not material for the periods presented. |
(2) | Foreign currency translation losses for the three months ended July 1, 2017 include net losses of $1.4 million on intra-entity transactions that are of a long-term investment nature. |
(3) | 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. |
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Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Revenue: | |||||||
Net sales: Retail | $ | 619.9 | $ | 562.9 | |||
Wholesale | 303.6 | 394.4 | |||||
Licensing | 28.9 | 30.6 | |||||
Total revenue | $ | 952.4 | $ | 987.9 | |||
Income from operations: | |||||||
Retail | $ | 92.2 | $ | 66.6 | |||
Wholesale | 43.5 | 105.0 | |||||
Licensing | 13.7 | 15.3 | |||||
Income from operations | $ | 149.4 | $ | 186.9 |
Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Depreciation and amortization: | |||||||
Retail | $ | 32.0 | $ | 34.0 | |||
Wholesale | 15.0 | 15.9 | |||||
Licensing | 0.6 | 0.5 | |||||
Total depreciation and amortization | $ | 47.6 | $ | 50.4 |
Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Revenue: | |||||||
The Americas (U.S., Canada and Latin America)(1) | $ | 634.1 | $ | 690.8 | |||
Europe | 201.2 | 224.0 | |||||
Asia | 117.1 | 73.1 | |||||
Total revenue | $ | 952.4 | $ | 987.9 |
As of | |||||||
July 1, 2017 | April 1, 2017 | ||||||
Long-lived assets: | |||||||
The Americas (U.S., Canada and Latin America)(1) | $ | 340.5 | $ | 356.1 | |||
Europe | 206.1 | 197.7 | |||||
Asia | 453.2 | 455.8 | |||||
Total Long-lived assets | $ | 999.8 | $ | 1,009.6 |
(1) | Total revenues earned in the U.S. were $587.1 million and $641.4 million, respectively, for the three months ended July 1, 2017 and July 2, 2016. Long-lived assets located in the U.S. as of July 1, 2017 and April 1, 2017 were $313.8 million and $328.8 million, respectively. |
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Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Numerator: | |||||||
Net income attributable to MKHL | $ | 125.5 | $ | 147.1 | |||
Denominator: | |||||||
Basic weighted average shares | 154,486,898 | 174,158,571 | |||||
Weighted average dilutive share equivalents: | |||||||
Share options, restricted shares/units, and performance restricted share units | 2,384,620 | 2,455,180 | |||||
Diluted weighted average shares | 156,871,518 | 176,613,751 | |||||
Basic net income per share | $ | 0.81 | $ | 0.84 | |||
Diluted net income per share | $ | 0.80 | $ | 0.83 |
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May 31, 2016 | |||
Cash and cash equivalents | $ | 19.4 | |
Accounts receivable | 22.3 | ||
Inventory | 36.1 | ||
Other current assets | 5.5 | ||
Current assets | 83.3 | ||
Property and equipment | 46.6 | ||
Goodwill | 96.5 | ||
Reacquired rights | 400.4 | ||
Favorable lease assets | 1.8 | ||
Customer relationships | 0.7 | ||
Deferred tax assets | 7.8 | ||
Other assets | 6.6 | ||
Total assets acquired | $ | 643.7 | |
Accounts payable | $ | 8.9 | |
Short-term debt | 5.8 | ||
Other current liabilities | 27.8 | ||
Current liabilities | 42.5 | ||
Unfavorable lease liabilities | 4.8 | ||
Deferred tax liabilities | 92.3 | ||
Other liabilities | 4.1 | ||
Total liabilities assumed | $ | 143.7 | |
Fair value of net assets acquired | $ | 500.0 | |
Fair value of acquisition consideration | $ | 500.0 |
Three Months Ended | ||||
July 2, 2016 | ||||
Pro-forma total revenue | $ | 1,014.3 | ||
Pro-forma net income | 155.2 | |||
Pro-forma net income per ordinary share attributable to MKHL: | ||||
Basic | $ | 0.89 | ||
Diluted | $ | 0.88 |
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July 1, 2017 | April 1, 2017 | ||||||
Trade receivables: | |||||||
Credit risk assumed by insured | $ | 207.2 | $ | 294.0 | |||
Credit risk retained by Company | 49.9 | 63.8 | |||||
Receivables due from licensees | 8.1 | 11.9 | |||||
265.2 | 369.7 | ||||||
Less: allowances | (93.9 | ) | (103.9 | ) | |||
$ | 171.3 | $ | 265.8 |
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July 1, 2017 | April 1, 2017 | ||||||
Leasehold improvements | $ | 525.8 | $ | 507.9 | |||
In-store shops | 261.2 | 256.0 | |||||
Furniture and fixtures | 251.6 | 244.1 | |||||
Computer equipment and software | 236.8 | 226.2 | |||||
Equipment | 107.3 | 104.4 | |||||
Building | 43.6 | 40.6 | |||||
Land | 15.0 | 14.0 | |||||
1,441.3 | 1,393.2 | ||||||
Less: accumulated depreciation and amortization | (885.4 | ) | (833.9 | ) | |||
555.9 | 559.3 | ||||||
Construction-in-progress | 29.6 | 32.2 | |||||
$ | 585.5 | $ | 591.5 |
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July 1, 2017 | April 1, 2017 | ||||||
Reacquired Rights | $ | 400.4 | $ | 400.4 | |||
Trademarks | 23.0 | 23.0 | |||||
Lease Rights | 78.8 | 74.2 | |||||
Customer Relationships | 5.0 | 5.0 | |||||
$ | 507.2 | $ | 502.6 | ||||
Less: accumulated amortization | $ | (92.9 | ) | $ | (84.5 | ) | |
$ | 414.3 | $ | 418.1 |
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July 1, 2017 | April 1, 2017 | ||||||
Prepaid taxes | $ | 61.8 | $ | 56.6 | |||
Prepaid rent | 20.0 | 21.7 | |||||
Leasehold incentive receivable | 11.0 | 12.0 | |||||
Prepaid insurance | 5.1 | 3.2 | |||||
Unrealized gains on forward foreign exchange contracts | 0.1 | 4.7 | |||||
Restricted cash | — | 1.9 | |||||
Other | 25.9 | 21.8 | |||||
$ | 123.9 | $ | 121.9 |
July 1, 2017 | April 1, 2017 | ||||||
Accrued capital expenditures | $ | 12.8 | $ | 20.5 | |||
Other taxes payable | 40.0 | 29.2 | |||||
Accrued rent | 23.5 | 21.5 | |||||
Accrued advertising and marketing | 17.0 | 10.7 | |||||
Gift cards and retail store credits | 12.8 | 12.9 | |||||
Professional services | 9.8 | 7.1 | |||||
Advance royalties | 8.5 | 5.0 | |||||
Unrealized loss on forward foreign currency exchange contracts | 7.8 | 0.4 | |||||
Other | 29.7 | 27.7 | |||||
$ | 161.9 | $ | 135.0 |
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Fair value at July 1, 2017 using: | Fair value at April 1, 2017 using: | ||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||
Forward foreign currency exchange contracts - assets | $ | — | $ | 0.1 | $ | — | $ | — | $ | 4.7 | $ | — | |||||||||||
Forward foreign currency exchange contracts - liabilities | $ | — | $ | 7.8 | $ | — | $ | — | $ | 0.4 | $ | — |
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Fair Values | |||||||||||||||||||||||
Notional Amounts | Current Assets (1) | Current Liabilities (2) | |||||||||||||||||||||
July 1, 2017 | April 1, 2017 | July 1, 2017 | April 1, 2017 | July 1, 2017 | April 1, 2017 | ||||||||||||||||||
Designated forward foreign currency exchange contracts | $ | 179.5 | $ | 167.5 | $ | 0.1 | $ | 4.7 | $ | 7.6 | $ | 0.4 | |||||||||||
Undesignated forward foreign currency exchange contracts | 16.6 | — | — | — | 0.2 | — | |||||||||||||||||
Total | $ | 196.1 | $ | 167.5 | $ | 0.1 | $ | 4.7 | $ | 7.8 | $ | 0.4 |
(1) | Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets. |
(2) | Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets. |
Three Months Ended | |||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||
Pre-Tax Loss Recognized in OCI (Effective Portion) | Pre-Tax Gain Reclassified from Accumulated OCI into Earnings (Effective Portion) | Pre-Tax Gain Recognized in OCI (Effective Portion) | Pre-Tax Loss Reclassified from Accumulated OCI into Earnings (Effective Portion) | ||||||||||||
Forward foreign currency exchange contracts | $ | (9.3 | ) | $ | 1.9 | $ | 3.3 | $ | (0.1 | ) |
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Foreign Currency Translation (Losses) Gains | Net (Losses) Gains on Derivatives (1) | Other Comprehensive (Loss) Income Attributable to MKHL | Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | Total Accumulated Other Comprehensive (Loss) Income | |||||||||||||||
Balance at April 2, 2016 | $ | (77.7 | ) | $ | (3.2 | ) | $ | (80.9 | ) | $ | 0.1 | $ | (80.8 | ) | |||||
Other comprehensive (loss) income before reclassifications (2) | (0.5 | ) | 3.0 | 2.5 | 0.1 | 2.6 | |||||||||||||
Less: amounts reclassified from AOCI to earnings (3) | — | (0.1 | ) | (0.1 | ) | — | (0.1 | ) | |||||||||||
Other comprehensive (loss) income net of tax | (0.5 | ) | 3.1 | 2.6 | 0.1 | 2.7 | |||||||||||||
Balance at July 2, 2016 | $ | (78.2 | ) | $ | (0.1 | ) | $ | (78.3 | ) | $ | 0.2 | $ | (78.1 | ) | |||||
Balance at April 1, 2017 | $ | (86.1 | ) | $ | 5.5 | $ | (80.6 | ) | $ | (0.3 | ) | $ | (80.9 | ) | |||||
Other comprehensive income (loss) before reclassifications (2) | 22.1 | (8.0 | ) | 14.1 | — | 14.1 | |||||||||||||
Less: amounts reclassified from AOCI to earnings (3) | — | 1.7 | 1.7 | — | 1.7 | ||||||||||||||
Other comprehensive income (loss) net of tax | 22.1 | (9.7 | ) | 12.4 | — | 12.4 | |||||||||||||
Balance at July 1, 2017 | $ | (64.0 | ) | $ | (4.2 | ) | $ | (68.2 | ) | $ | (0.3 | ) | $ | (68.5 | ) |
(1) | Accumulated other comprehensive income balance related to net gains on derivative financial instruments as of July 1, 2017 and April 1, 2017 is net of tax (benefit) provision of $(0.7) million and $0.8 million, respectively. Other comprehensive income (loss) before reclassifications related to derivative financial instruments for the three months ended July 1, 2017 and July 2, 2016 is net of tax benefits of $1.3 million and $1.0 million, respectively. All other tax effect were not material for the periods presented. |
(2) | Foreign currency translation losses for the three months ended July 1, 2017 include net losses of $1.4 million on intra-entity transactions that are of a long-term investment nature. |
(3) | 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. |
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Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Revenue: | |||||||
Net sales: Retail | $ | 619.9 | $ | 562.9 | |||
Wholesale | 303.6 | 394.4 | |||||
Licensing | 28.9 | 30.6 | |||||
Total revenue | $ | 952.4 | $ | 987.9 | |||
Income from operations: | |||||||
Retail | $ | 92.2 | $ | 66.6 | |||
Wholesale | 43.5 | 105.0 | |||||
Licensing | 13.7 | 15.3 | |||||
Income from operations | $ | 149.4 | $ | 186.9 |
Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Depreciation and amortization: | |||||||
Retail | $ | 32.0 | $ | 34.0 | |||
Wholesale | 15.0 | 15.9 | |||||
Licensing | 0.6 | 0.5 | |||||
Total depreciation and amortization | $ | 47.6 | $ | 50.4 |
Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Revenue: | |||||||
The Americas (U.S., Canada and Latin America)(1) | $ | 634.1 | $ | 690.8 | |||
Europe | 201.2 | 224.0 | |||||
Asia | 117.1 | 73.1 | |||||
Total revenue | $ | 952.4 | $ | 987.9 |
(1) | Total revenues earned in the U.S. were $587.1 million and $641.4 million, respectively, for the three months ended July 1, 2017 and July 2, 2016. Long-lived assets located in the U.S. as of July 1, 2017 and April 1, 2017 were $313.8 million and $328.8 million, respectively. |
As of | |||||||
July 1, 2017 | April 1, 2017 | ||||||
Long-lived assets: | |||||||
The Americas (U.S., Canada and Latin America)(1) | $ | 340.5 | $ | 356.1 | |||
Europe | 206.1 | 197.7 | |||||
Asia | 453.2 | 455.8 | |||||
Total Long-lived assets | $ | 999.8 | $ | 1,009.6 |
(1) | Total revenues earned in the U.S. were $587.1 million and $641.4 million, respectively, for the three months ended July 1, 2017 and July 2, 2016. Long-lived assets located in the U.S. as of July 1, 2017 and April 1, 2017 were $313.8 million and $328.8 million, respectively. |
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