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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the Quarterly Period Ended April 2, 2022
or 
          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
Commission file number: 1-16153
Tapestry, Inc.
(Exact name of registrant as specified in its charter)
Maryland 52-2242751
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

10 Hudson Yards, New York, NY 10001
(Address of principal executive offices); (Zip Code) 
(212) 946-8400
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on which Registered
Common Stock, par value $.01 per shareTPRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer  Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
On April 29, 2022, the Registrant had 251,802,373 outstanding shares of common stock, which is the Registrant’s only class of common stock.



TAPESTRY, INC.
INDEX
 
  Page Number
PART I – FINANCIAL INFORMATION (unaudited)
   
ITEM 1.Financial Statements: 
 
 
 
 
 
ITEM 2.
ITEM 3.
ITEM 4.
PART II – OTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 4.
ITEM 6.
 

 



In this Form 10-Q, references to “we,” “our,” “us,” "Tapestry" and the “Company” refer to Tapestry, Inc., including consolidated subsidiaries. References to "Coach," "Kate Spade," "kate spade new york" or "Stuart Weitzman" refer only to the referenced brand.
SPECIAL NOTE ON FORWARD-LOOKING INFORMATION
This document, and the documents incorporated by reference in this document, our press releases and oral statements made from time to time by us or on our behalf, may contain certain "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are based on management's current expectations, that involve risks and uncertainties that could cause our actual results to differ materially from our current expectations. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "may," "can," "continue," "project," "should," "expect," "confidence," "trends," "anticipate," "intend," "estimate," "on track," "well positioned to," "plan," "potential," "position," "believe," "seek," "see," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Such statements involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Tapestry, Inc. and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Tapestry, Inc. assumes no obligation to revise or update any such forward-looking statements for any reason, except as required by law.
Tapestry, Inc.’s actual results could differ materially from the results contemplated by these forward-looking statements and are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from current expectations due to a number of factors, including, but not limited to: (i) the impact of the novel coronavirus ("Covid-19") global pandemic on our business and financial results, including impacts on our supply chain due to temporary closures of our manufacturing partners and shipping and fulfillment constraints; (ii) our ability to successfully execute our multi-year growth agenda under our Acceleration Program; (iii) the impact of economic conditions; (iv) our ability to control costs; (v) our exposure to international risks, including currency fluctuations and changes in economic or political conditions in the markets where we sell or source our products; (vi) the risk of cyber security threats and privacy or data security breaches; (vii) the effect of existing and new competition in the marketplace; (viii) our ability to retain the value of our brands and to respond to changing fashion and retail trends in a timely manner, including our ability to execute on our e-commerce and digital strategies; (ix) the effect of seasonal and quarterly fluctuations on our sales or operating results; (x) our ability to protect against infringement of our trademarks and other proprietary rights; (xi) the impact of legislation, including tax and trade legislation; (xii) our ability to achieve intended benefits, cost savings and synergies from acquisitions; (xiii) the risks associated with potential changes to international trade agreements and the imposition of additional duties on importing our products; (xiv) the impact of pending and potential future legal proceedings; and (xv) the risks associated with climate change and other corporate responsibility issues and (xvi) such other risk factors as set forth in Part II, Item 1A. "Risk Factors" and elsewhere in this report and in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021. These factors are not necessarily all of the factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements.
 WHERE YOU CAN FIND MORE INFORMATION
Tapestry's quarterly financial results and other important information are available by calling the Investor Relations Department at (212) 629-2618.
Tapestry maintains its website at www.tapestry.com where investors and other interested parties may obtain, free of charge, press releases and other information as well as gain access to our periodic filings with the SEC.



 





TAPESTRY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

April 2,
2022
July 3,
2021
(millions)
(unaudited)
ASSETS  
Current Assets:  
Cash and cash equivalents$806.0 $2,007.7 
Short-term investments267.0 8.1 
Trade accounts receivable, less allowances for credit losses of $4.3 and $4.2, respectively
242.9 200.2 
Inventories913.0 734.8 
Income tax receivable174.0 254.6 
Prepaid expenses96.0 93.8 
Other current assets59.7 76.1 
Total current assets2,558.6 3,375.3 
Property and equipment, net576.6 678.1 
Operating lease right-of-use assets1,359.7 1,496.6 
Goodwill1,268.3 1,297.3 
Intangible assets1,368.4 1,373.4 
Other assets206.6 161.7 
Total assets$7,338.2 $8,382.4 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current Liabilities:  
Accounts payable$478.9 $445.2 
Accrued liabilities536.6 609.2 
Current portion of operating lease liabilities306.7 319.4 
Accrued income taxes11.1 52.0 
Current debt400.0  
Total current liabilities1,733.3 1,425.8 
Long-term debt1,189.8 1,590.7 
Long-term operating lease liabilities1,356.2 1,525.9 
Deferred income taxes198.7 203.9 
Other liabilities325.2 376.8 
Total liabilities4,803.2 5,123.1 
See Note 15 on commitments and contingencies
Stockholders' Equity:  
Preferred stock: (authorized 25.0 million shares; $0.01 par value per share) none issued
  
Common stock: (authorized 1.0 billion shares; $0.01 par value per share) issued and outstanding - 251.8 million and 279.5 million shares, respectively
2.5 2.8 
Additional paid-in-capital3,593.5 3,487.0 
Retained earnings (accumulated deficit)(943.3)(158.5)
Accumulated other comprehensive income (loss)(117.7)(72.0)
Total stockholders' equity2,535.0 3,259.3 
Total liabilities and stockholders' equity$7,338.2 $8,382.4 
See accompanying Notes.
1


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 Three Months EndedNine Months Ended
April 2,
2022
March 27,
2021
April 2,
2022
March 27,
2021
(millions, except per share data)(millions, except per share data)
(unaudited)(unaudited)
Net sales$1,437.5 $1,273.3 $5,059.6 $4,130.9 
Cost of sales432.4 361.4 1,528.4 1,215.1 
Gross profit1,005.1 911.9 3,531.2 2,915.8 
Selling, general and administrative expenses835.6 795.2 2,603.9 2,207.5 
Operating income (loss)169.5 116.7 927.3 708.3 
Loss on extinguishment of debt  53.7  
Interest expense, net14.8 16.9 46.8 55.0 
Other expense (income)3.0 4.4 8.3 (1.8)
Income (loss) before provision for income taxes151.7 95.4 818.5 655.1 
Provision (benefit) for income taxes29.0 3.7 151.0 20.7 
Net income (loss)$122.7 $91.7 $667.5 $634.4 
Net income (loss) per share:    
Basic$0.47 $0.33 $2.47 $2.29 
Diluted$0.46 $0.32 $2.42 $2.25 
Shares used in computing net income (loss) per share:    
Basic259.9 278.2 269.7 277.5 
Diluted265.5 285.6 275.9 281.5 
 
See accompanying Notes.
 
2


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
 
 Three Months EndedNine Months Ended
April 2,
2022
March 27,
2021
April 2,
2022
March 27,
2021
(millions)(millions)
(unaudited)(unaudited)
Net income (loss)$122.7 $91.7 $667.5 $634.4 
Other comprehensive income (loss), net of tax:    
Unrealized gains (losses) on cash flow hedging derivatives, net 2.2 (0.6)(3.1)
Unrealized gains (losses) on available-for-sale investments, net(0.6) (0.9) 
Foreign currency translation adjustments(21.4)(23.6)(44.2)23.5 
Other comprehensive income (loss), net of tax(22.0)(21.4)(45.7)20.4 
Comprehensive income (loss)$100.7 $70.3 $621.8 $654.8 
 
See accompanying Notes.

3


TAPESTRY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months Ended
April 2,
2022
March 27,
2021
(millions)
(unaudited)
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES  
Net income (loss)$667.5 $634.4 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
Depreciation and amortization148.1 167.2 
Provision for bad debt18.6  
Loss on extinguishment of debt53.7  
Share-based compensation53.1 46.7 
Acceleration Program charges9.4 6.1 
Impairment charges  45.8 
Changes to lease related balances, net(42.0)(103.3)
Deferred income taxes5.2 (27.9)
Gain on sale of building (13.2)
Gain on deferred purchase price (12.5)
Other non-cash charges, net27.2 20.0 
Changes in operating assets and liabilities:  
Trade accounts receivable(59.5)(49.3)
Inventories(192.2)63.9 
Accounts payable23.1 275.0 
Accrued liabilities (110.6)7.6 
Other liabilities(47.5)(10.2)
Other assets62.3 (105.7)
Net cash provided by operating activities616.4 944.6 
CASH FLOWS USED IN INVESTING ACTIVITIES  
Proceeds from sale of building 23.9 
Purchases of investments(523.4)(0.5)
Proceeds from maturities and sales of investments261.0 1.9 
Purchases of property and equipment(75.1)(68.9)
Net cash used in investing activities(337.5)(43.6)
CASH FLOWS USED IN FINANCING ACTIVITIES  
Dividend payments(202.8) 
Repurchase of common stock(1,249.8) 
Proceeds from issuance of debt, net of discount498.5  
Payment of debt issuance costs(4.5) 
Payment of debt extinguishment costs(50.7) 
Proceeds from share-based awards72.2 37.8 
Repayment of debt(500.0)(11.5)
Repayment of revolving credit facility (700.0)
Payment of deferred purchase price (7.4)
Taxes paid to net settle share-based awards(30.5)(6.9)
Payments of finance lease liabilities(0.7)(0.6)
Net cash used in financing activities(1,468.3)(688.6)
Effect of exchange rate changes on cash and cash equivalents(12.3)13.0 
Net (decrease) increase in cash and cash equivalents(1,201.7)225.4 
Cash and cash equivalents at beginning of period2,007.7 1,426.3 
Cash and cash equivalents at end of period$806.0 $1,651.7 
Supplemental information:
Cash paid for income taxes, net$130.8 $218.2 
Cash paid for interest$62.1 $56.3 
Noncash investing activity - property and equipment obligations$7.7 $14.6 

See accompanying Notes.
4

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


1. NATURE OF OPERATIONS
Tapestry, Inc. (the "Company") is a leading New York-based house of modern luxury accessories and lifestyle brands. Our global house of brands unites the magic of Coach, kate spade new york and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible.
The Coach segment includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors.
The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors.
The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including e-commerce sites, sales to wholesale customers and through numerous independent third party distributors.
2. BASIS OF PRESENTATION AND ORGANIZATION
Interim Financial Statements
These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and are unaudited. In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial position, results of operations, comprehensive income (loss) and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") have been condensed or omitted from this report as is permitted by the SEC's rules and regulations. However, the Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended July 3, 2021 ("fiscal 2021") and other filings filed with the SEC.
The results of operations, cash flows and comprehensive income for the nine months ended April 2, 2022 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on July 2, 2022 ("fiscal 2022"). 
Fiscal Periods
The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30. Fiscal 2022 will be a 52-week period. Fiscal 2021, ended on July 3, 2021, was a 53-week period. The third quarter of fiscal 2022 ended on April 2, 2022 and the third quarter of fiscal 2021 ended on March 27, 2021, both of which were 13-week periods.
Covid-19 Pandemic
The outbreak of a novel strain of coronavirus ("Covid-19") continues to impact a significant majority of the regions in which we operate, resulting in significant global business disruptions. The widespread impact of Covid-19 resulted in temporary closures of directly operated stores globally, as well as at our wholesale and licensing partners starting in fiscal 2020. Since then, certain directly operated stores and the stores of our wholesale and licensing partners have experienced temporary re-closures or are operating under tighter restrictions in compliance with local government regulation. Covid-19 has also resulted in ongoing supply chain challenges, such as logistic constraints, the temporary closure of certain third-party manufacturers and increased freight costs.
5

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
The global Covid-19 pandemic is continuously evolving and the extent to which this impacts the Company - including unforeseen increased costs to the Company's business - will depend on future developments, which cannot be predicted, including the ultimate duration, severity and geographic resurgence of the virus and the success of actions to contain the virus, including variants of the novel strain, or treat its impact, among others. As the full magnitude of the effects on the Company's business is difficult to predict, the Covid-19 pandemic has and may continue to have a material adverse impact on the Company's business, financial condition, results of operations and cash flows for the foreseeable future. The Company believes that cash flows from operations, access to the credit and capital markets and our credit lines, on-hand cash and cash equivalents and our investments provide adequate funds to support our operating, capital, and debt service requirements. There can be no assurance, however, that any such capital will be available to the Company on acceptable terms or at all. The Company could experience other potential adverse impacts as a result of the Covid-19 pandemic, including, but not limited to, further charges from adjustments to the carrying amount of goodwill and other intangible assets, long-lived asset impairment charges, reserves for uncollectible accounts receivable and reserves for the realizability of inventory.
In response to the Covid-19 pandemic, the Company took actions to reinforce its liquidity and financial flexibility. If stores are required to close again for an extended period of time due to a resurgence of increased infections, the Company's liquidity may be negatively impacted.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from estimates in amounts that may be material to the financial statements.
Significant estimates inherent in the preparation of the condensed consolidated financial statements include reserves for the realizability of inventory; customer returns, end-of-season markdowns and operational chargebacks; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; accounting for business combinations; the valuation of stock-based compensation awards and related expected forfeiture rates; reserves for restructuring; and reserves for litigation and other contingencies, amongst others.
Principles of Consolidation
These unaudited interim condensed consolidated financial statements include the accounts of the Company and all 100% owned and controlled subsidiaries. All intercompany transactions and balances are eliminated in consolidation.
Share Repurchases
The Company accounts for stock repurchases by allocating the repurchase price to common stock and retained earnings. Under Maryland law, the Company's state of incorporation, there are no treasury shares. All repurchased shares are authorized but unissued shares and these shares may be issued in the future for general corporate and other purposes. The Company may terminate or limit the stock repurchase program at any time. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. Purchases of the Company's common stock are executed through open market purchases, including through purchase agreements under Rule 10b5-1.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in Topic 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 as of the beginning of fiscal 2022. The adoption of ASU 2019-12 did not have a material impact on the Company's condensed consolidated financial statements and notes thereto.
Recently Issued Accounting Pronouncements
The Company has considered all new accounting pronouncements and 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.
6

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
4. REVENUE
The Company recognizes revenue primarily from sales of the products of its brands through retail and wholesale channels, including e-commerce sites. The Company also generates revenue from royalties related to licensing its trademarks, as well as sales in ancillary channels. In all cases, revenue is recognized upon the transfer of control of the promised products or services to the customer, which may be at a point in time or over time. Control is transferred when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized is the amount of consideration to which the Company expects to be entitled, including estimation of sale terms that may create variability in the consideration. Revenue subject to variability is constrained to an amount which will not result in a significant reversal in future periods when the contingency that creates variability is resolved.
The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical possession of the products. Digital revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery and receipt of the shipment by its customers and includes shipping and handling charges paid by customers. Retail and digital revenues are recorded net of estimated returns, which are estimated by developing an expected value based on historical experience. Payment is due at the point of sale.
Gift cards issued by the Company are recorded as a liability until redeemed by the customer, at which point revenue is recognized. The Company also uses historical information to estimate the amount of gift card balances that will never be redeemed and recognizes that amount as revenue over time in proportion to actual customer redemptions if the Company does not have a legal obligation to remit unredeemed gift cards to any jurisdiction as unclaimed property.
Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons. Loyalty programs provide the customer a material right to acquire additional products and give rise to the Company having a separate performance obligation. Additionally, certain products sold by the Company include an assurance warranty that is not considered a separate performance obligation. These programs are immaterial individually and in the aggregate.
The Company recognizes revenue within the wholesale channel at the time title passes and risk of loss is transferred to customers, which is generally at the point of shipment of products but may occur upon receipt of the shipment by the customer in certain cases. Payment is generally due 30 to 90 days after shipment. Wholesale revenue is recorded net of estimates for returns, discounts, end-of-season markdowns, cooperative advertising allowances and other consideration provided to the customer. Discounts are based on contract terms with the customer, while cooperative advertising allowances and other consideration may be based on contract terms or negotiated on a case-by-case basis. Returns and markdowns generally require approval from the Company and are estimated based on historical trends, current season results and inventory positions at the wholesale locations, current market and economic conditions as well as, in select cases, contractual terms. The Company's historical estimates of these variable amounts have not differed materially from actual results.
The Company recognizes licensing revenue over time during the contract period in which licensees are granted access to the Company's trademarks. These arrangements require licensees to pay a sales-based royalty and may include a contractually guaranteed minimum royalty amount. Revenue for contractually guaranteed minimum royalty amounts is recognized ratably over the license year and any excess sales-based royalties are recognized as earned once the minimum royalty threshold is achieved. Payments from the customer are generally due quarterly in an amount based on the licensee's sales of goods bearing the licensed trademarks during the period, which may differ from the amount of revenue recorded during the period thereby generating a contract asset or liability. Contract assets and liabilities and contract costs related to the licensing arrangements are immaterial as the licensing business represents approximately 1% of total net sales in the nine months ended April 2, 2022.
The Company has elected a practical expedient not to disclose the remaining performance obligations that are unsatisfied as of the end of the period related to contracts with an original duration of one year or less or variable consideration related to sales-based royalty arrangements. There are no other contracts with transaction price allocated to remaining performance obligations other than future minimum royalties as discussed above, which are not material.
Other practical expedients elected by the Company include (i) assuming no significant financing component exists for any contract with a duration of one year or less, (ii) accounting for shipping and handling as a fulfillment activity within SG&A expense regardless of the timing of the shipment in relation to the transfer of control and (iii) excluding sales and value added tax from the transaction price.
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TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Disaggregated Net Sales
The following table disaggregates the Company's net sales into geographies that depict how economic factors may impact the revenues and cash flows for the periods presented. Each geography presented includes net sales related to the Company's directly operated channels, global travel retail business and to wholesale customers, including distributors, in locations within the specified geographic area.    
North America
Greater China(1)
Other Asia(2)
Other(3)
Total
(millions)
Three Months Ended April 2, 2022
Coach$616.3 $226.4 $176.9 $52.8 $1,072.4 
Kate Spade231.2 9.5 36.9 23.9 301.5 
Stuart Weitzman38.3 18.4  6.9 63.6 
Total$885.8 $254.3 $213.8 $83.6 $1,437.5 
Three Months Ended March 27, 2021
Coach$515.1 $247.6 $163.8 $37.0 $963.5 
Kate Spade184.8 13.0 35.8 18.8 252.4 
Stuart Weitzman26.6 24.9 0.8 5.1 57.4 
Total$726.5 $285.5 $200.4 $60.9 $1,273.3 
Nine Months Ended April 2, 2022
Coach$2,309.2 $727.1 $515.4 $160.6 $3,712.3 
Kate Spade879.1 32.8 106.1 83.4 1,101.4 
Stuart Weitzman141.2 79.3 0.3 25.1 245.9 
Total$3,329.5 $839.2 $621.8 $269.1 $5,059.6 
Nine Months Ended March 27, 2021
Coach$1,724.4 $686.4 $514.1 $139.3 $3,064.2 
Kate Spade660.8 40.2 105.8 61.6 868.4 
Stuart Weitzman94.8 78.2 3.6 21.7 198.3 
Total$2,480.0 $804.8 $623.5 $222.6 $4,130.9 
(1)    Greater China includes mainland China, Hong Kong SAR, Taiwan and Macao SAR.
(2)    Other Asia includes Japan, Australia, New Zealand, South Korea, Thailand and other countries within Asia.
(3)    Other sales primarily represents sales in Europe, the Middle East and royalties related to licensing.
Deferred Revenue
Deferred revenue results from cash payments received or receivable from customers prior to the transfer of the promised goods or services, and is generally comprised of unredeemed gift cards, net of breakage which has been recognized. Additional deferred revenue may result from sales-based royalty payments received or receivable which exceed the revenue recognized during the contractual period. The balance of such amounts as of April 2, 2022 and July 3, 2021 was $40.1 million and $32.4 million, respectively, which were primarily recorded within Accrued liabilities on the Company's Condensed Consolidated Balance Sheets and are generally expected to be recognized as revenue within a year. For the nine months ended April 2, 2022, net sales of $12.7 million were recognized from amounts recorded as deferred revenue as of July 3, 2021. For the nine months ended March 27, 2021, net sales of $9.6 million were recognized from amounts recorded as deferred revenue as of June 27, 2020.
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TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
5. RESTRUCTURING ACTIVITIES
Acceleration Program
The Company has implemented a strategic growth plan after undergoing a review of its business under its multi-year growth agenda. This multi-faceted, multi-year strategic growth plan (the "Acceleration Program") reflects: (i) actions to streamline the Company's organization; (ii) select store closures as the Company optimizes its fleet (including store closure costs incurred as the Company exits certain regions in which it currently operates); and (iii) professional fees and compensation costs incurred as a result of the development and execution of the Company's comprehensive strategic initiatives aimed at increasing profitability. Under the Acceleration Program, the Company expects to incur total pre-tax charges of approximately $215 million - $220 million. The Acceleration Program is expected to be substantially complete by the end of fiscal 2022.
Under the Acceleration Program, the Company incurred charges of $6.3 million and $31.7 million during the three and nine months ended April 2, 2022, respectively, all of which was recorded within SG&A expenses. Of the $6.3 million and $31.7 million recorded within SG&A expenses, $4.2 million and $20.3 million was recorded within Corporate, $1.5 million and $4.0 million was recorded within the Coach segment, $0.7 million and $4.2 million was recorded within the Kate Spade segment and a reduction of expense of $0.1 million and expense of $3.2 million was recorded within the Stuart Weitzman segment.
For the three and nine months ended March 27, 2021, the Company incurred charges of $20.4 million and $68.7 million, respectively, all of which was recorded within SG&A expenses. Of the $20.4 million and $68.7 million recorded within SG&A expenses, $11.4 million and $44.5 million was recorded within Corporate, $4.7 million and $21.2 million was recorded within the Coach segment, $0.9 million and $4.3 million was recorded within the Kate Spade segment and $3.4 million and a reduction of expense of $1.3 million was recorded within the Stuart Weitzman segment, respectively.
A summary of charges and related liabilities under the Acceleration Program is as follows:
Organization-Related(1)
Store Closure(2)
Other(3)
Total
(millions)
Fiscal 2020 charges$44.7 $32.3 $10.0 $87.0 
Cash payments(15.8)(11.0)(7.1)(33.9)
Non-cash charges(4.0)(20.8) (24.8)
Liability balance as of June 27, 2020$24.9 $0.5 $2.9 $28.3 
Fiscal 2021 charges16.6 5.9 67.1 89.6 
Cash payments(38.2)(11.9)(36.6)(86.7)
Non-cash charges 5.8 (10.9)(5.1)
Liability balance as of July 3, 2021$3.3 $0.3 $22.5 $26.1 
Fiscal 2022 charges$(0.5)$3.6 $28.6 $31.7 
Cash payments(2.2)(6.3)(34.7)(43.2)
Non-cash charges 2.4 (11.8)(9.4)
Liability balance as of April 2, 2022$0.6 $ $4.6 $5.2 
(1)    Organization-related charges, recorded within SG&A expenses, primarily relates to severance and other related costs.
(2)    Store closure charges represent lease termination penalties, removal or modification of lease assets and liabilities, establishing inventory reserves, accelerated depreciation and severance.
(3)    Other charges, recorded within SG&A, primarily relates to share-based compensation and professional fees.
The Company expects to incur approximately $10 million in additional charges under the Acceleration Program in the fourth quarter of fiscal 2022.
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TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
6. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill

The change in the carrying amount of the Company’s goodwill by segment is as follows:
 CoachKate Spade
Stuart Weitzman(1)
Total
(millions)
Balance at July 3, 2021$656.3 $641.0 $ $1,297.3 
Foreign exchange impact(24.8)(4.2) (29.0)
Balance at April 2, 2022$631.5 $636.8 $ $1,268.3 
(1)    Amount is net of accumulated goodwill impairment charges of $210.7 million as of April 2, 2022 and July 3, 2021.
Intangible Assets
Intangible assets consist of the following:
April 2, 2022July 3, 2021
Gross
Carrying
Amount
Accum.
Amort.
NetGross
Carrying
Amount
Accum.
Amort.
Net
(millions)
Intangible assets subject to amortization:
Customer relationships$100.4 $(41.8)$58.6 $100.5 $(36.9)$63.6 
Intangible assets not subject to amortization:
Trademarks and trade names1,309.8  1,309.8 1,309.8 — 1,309.8 
Total intangible assets$1,410.2 $(41.8)$1,368.4 $1,410.3 $(36.9)$1,373.4 
As of April 2, 2022, the expected amortization expense for intangible assets is as follows:
 Amortization Expense
(millions)
Remainder of fiscal 2022$1.7 
Fiscal 20236.5 
Fiscal 20246.5 
Fiscal 20256.5 
Fiscal 20266.5 
Fiscal 20276.5 
Thereafter24.4 
Total$58.6 
The expected amortization expense above reflects remaining useful lives ranging from approximately 8.1 to 10.3 years for customer relationships.
10

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

7. STOCKHOLDERS' EQUITY
A reconciliation of stockholders' equity is presented below:
Shares of
Common
Stock
Common StockAdditional
Paid-in-
Capital
Retained Earnings / (Accumulated Deficit)Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
(millions, except per share data)
Balance at June 27, 2020276.2 $2.8 $3,358.5 $(992.7)$(92.2)$2,276.4 
Net income (loss)— — — 231.7 — 231.7 
Other comprehensive income (loss)— — — — 15.7 15.7 
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes
1.2 — (8.3)— — (8.3)
Share-based compensation— — 14.6 — — 14.6 
Balance at September 26, 2020277.4 $2.8 $3,364.8 $(761.0)$(76.5)$2,530.1 
Net income (loss)— — — 311.0 — 311.0 
Other comprehensive income (loss)— — — — 26.1 26.1 
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes
0.4 — 6.1 — — 6.1 
Share-based compensation— — 17.4 — — 17.4 
Balance at December 26, 2020277.8 $2.8 $3,388.3 $(450.0)$(50.4)$2,890.7 
Net income (loss)— — — 91.7 — 91.7 
Other comprehensive income— — — — (21.4)(21.4)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes
1.0 — 32.9 — — 32.9 
Share-based compensation— — 21.1 — — 21.1 
Balance at March 27, 2021278.8 $2.8 $3,442.3 $(358.3)$(71.8)$3,015.0 
11

TAPESTRY, INC.
 
Notes to Condensed Consolidated Financial Statements (continued)
Shares of
Common
Stock
Common StockAdditional
Paid-in-
Capital
Retained Earnings / (Accumulated Deficit)Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
(millions, except per share data)
Balance at July 3, 2021279.5 $2.8 $3,487.0 $(158.5)$(72.0)$3,259.3 
Net income (loss)   226.9  226.9 
Other comprehensive income (loss)    (10.1)(10.1)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes
1.6  (26.4)  (26.4)
Share-based compensation  19.9   19.9 
Repurchase of common stock
(6.1)  (250.0) (250.0)
Dividends declared ($0.25 per share)
   (69.6) (69.6)
Balance at October 2, 2021275.0 $2.8 $3,480.5 $(251.2)$(82.1)$3,150.0 
Net income (loss)   317.9  317.9 
Other comprehensive income (loss)    (13.6)(13.6)
Shares issued, pursuant to stock-based compensation arrangements, net of shares withheld for taxes
0.7  19.0   19.0 
Share-based compensation  22.0   22.0 
Repurchase and retirement of common stock
(11.7)(0.2) (499.8) (