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Debt Obligations | 9 Months Ended
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Dec. 28, 2024
Debt Disclosure [Abstract] |
Debt Obligations | Debt Obligations The following table presents the Company’s debt obligations (in millions):
| December 28, 2024 |  | March 30, 2024
Revolving Credit Facilities | $ | 521 |  |  | $ | 764 |
Versace Term Loan (1) | 469 |  |  | 486 |
364 Day Term Loan (1) | 450 |  |  | — |
Senior Notes due 2024 | — |  |  | 450 |
Other | 41 |  |  | 24 |
Total debt | 1,481 |  |  | 1,724 |
Less: Unamortized debt issuance costs | 2 |  |  | 1 |
Total carrying value of debt | 1,479 |  |  | 1,723 |
Less: Short-term debt (1) | 25 |  |  | 462 |
Total long-term debt | $ | 1,454 |  |  | $ | 1,261 |
(1)As of December 28, 2024, the Versace Term Loan and the 364 Day Term Loan are recorded as long-term debt on the Company’s consolidated balance sheets as a result of the refinancing activities associated with the amended and restated revolving credit facility and new term loans entered into on February 4, 2025. See Note 18 for additional information. Senior Revolving Credit Facility On July 1, 2022, the Company entered into a revolving credit facility (the “2022 Credit Facility”) with, among others, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (the “Administrative Agent”), which refinanced its existing senior unsecured revolving credit facility. The Company, a U.S. subsidiary of the Company, a Canadian subsidiary of the Company, a Dutch subsidiary of the Company and a Swiss subsidiary of the Company are the borrowers under the 2022 Credit Facility, and the borrowers and certain subsidiaries of the Company provide unsecured guaranties of the 2022 Credit Facility. The 2022 Credit Facility replaced the third amended and restated senior unsecured credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”), and matures on July 1, 2027. The 2022 Credit Facility provides for a $1.5 billion revolving credit facility (the “2022 Revolving Credit Facility”), which may be denominated in U.S. dollars and other currencies, including Euros, Pounds Sterling, Japanese Yen and Swiss Francs. The 2022 Revolving Credit Facility also includes sub-facilities for the issuance of letters of credit of up to $125 million and swing line loans at the Administrative Agent’s discretion of up to $100 million. The Company has the ability to expand its borrowing availability under the 2022 Credit Facility in the form of increased revolving commitments or one or more tranches of term loans by up to an additional $500 million, subject to the agreement of the participating lenders and certain other customary conditions. See Note 11 to the Company’s Fiscal 2024 Annual Report on Form 10-K for information regarding the Company’s interest rates associated with borrowings under the 2022 Credit Facility. The 2022 Credit Facility provides for an annual administration fee and a commitment fee equal to 7.5 basis points to 17.5 basis points per annum, which was 15.0 basis points as of December 28, 2024. The fees are based on the Company’s public debt ratings and/or net leverage ratio, applied to the average daily unused amount of the 2022 Credit Facility. Loans under the 2022 Credit Facility may be prepaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than customary “breakage” costs with respect to loans bearing interest based upon Adjusted Term SOFR, the Adjusted EURIBOR Rate and the Adjusted TIBOR Rate. The 2022 Credit Facility requires the Company to maintain a net leverage ratio as of the end of each fiscal quarter of no greater than 4.0 to 1.0. Such net leverage ratio is calculated as the ratio of the sum of total indebtedness as of the date of the measurement plus the capitalized amount of all operating lease obligations, minus unrestricted cash and cash equivalents not to exceed $200 million, to Consolidated EBITDAR for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus provision for taxes based on income, profits or capital, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash losses, charges and expenses, subject to certain additions and deductions. The 2022 Credit Facility also includes covenants that limit additional indebtedness, liens, acquisitions and other investments, restricted payments and affiliate transactions. The 2022 Credit Facility also contains events of default customary for financings of this type, including, but not limited to, payment defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under the Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the 2022 Credit Facility to be in full force and effect, and changes of control. If such an event of default occurs and is continuing, the lenders under the 2022 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2022 Credit Facility. As of December 28, 2024 and March 30, 2024, the Company had $521 million and $764 million of borrowings outstanding under the 2022 Revolving Credit Facility, respectively. In addition, stand-by letters of credit of $1 million and $2 million were outstanding as of December 28, 2024 and March 30, 2024, respectively. As of December 28, 2024 and March 30, 2024, the amount available for future borrowings under the 2022 Revolving Credit Facility was $978 million and $734 million, respectively. The Company had $4 million and $5 million of deferred financing fees related to Revolving Credit Facilities for December 28, 2024 and March 30, 2024, respectively, and are recorded within other assets on the Company’s consolidated balance sheets. On August 23, 2024, the Company entered into a first incremental term loan amendment (the “Amendment”) to its existing 2022 Credit Facility with, among others, JPMorgan Chase Bank, N.A., as Administrative Agent. The Amendment amended the Existing Credit Facility, to, among other things, provide for a $450 million senior unsecured delayed draw term loan facility (the “364 Day Term Loan”) which was drawn upon during the third quarter to repay the Company’s 4.25% senior unsecured notes issued by Michael Kors (USA), Inc. which matured on November 1, 2024. The 364 Day Term Loan will mature on October 30, 2025. The borrowing of the delayed draw term loan is subject to customary conditions, including pro forma compliance with the financial covenant in the Credit Facility, which requires the Company to maintain a net leverage ratio as of the end of each fiscal quarter of no greater than 4.0 to 1.0. Amounts repaid or prepaid with respect of the term loan may not be reborrowed. The term loan will bear interest, at the Company’s option, at (i) an alternate base rate, which is the greatest of (x) the prime rate publicly announced from time to time by JPMorgan Chase, (y) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, and (z) the greater of term SOFR for an interest period of one month plus 10 basis points and zero, plus 100 basis points, or (ii) the greater of term SOFR for the applicable interest period plus 10 basis points (“Adjusted Term SOFR”) and zero; in each case, plus an applicable margin based on the Company’s public debt ratings and/or net leverage ratio. The 364 Day Term Loan is subject to a commitment fee which begins to accrue 45 days after the effective date of the Amendment until the facility terminates or the term loans are funded, which is equal to 10 basis points to 20 basis points per annum, based on the Company’s public debt ratings and/or net leverage ratio, applied to the average daily unused amount of the 364 Day Term Loan. The term loan may be prepaid and commitments may be terminated or reduced by the Company without premium or penalty other than customary “breakage” costs with respect to loans bearing interest based upon Adjusted Term SOFR. In addition, the Company is required to apply an amount equal to the net proceeds from certain incurrences of indebtedness for borrowed money, issuances of equity interests and dispositions of assets (subject to customary reinvestment rights) to reduce the commitments under the 364 Day Term Loan, or after the term loan is funded, to prepay the term loan, subject to certain qualifications and exceptions. As of December 28, 2024, the carrying value of the 364 Day Term Loan was $449 million, net of deferred financing fees, which was recorded within long-term debt on the Company’s consolidated balance sheets as it was refinanced as part of the amended and restated revolving credit facility and new term loans entered into on February 4, 2025. See Note 18 for additional information. As of December 28, 2024, and the date these financial statements were issued, the Company was in compliance with all covenants related to its credit facilities as in effect on such date. Versace Term Loan On December 5, 2022, Gianni Versace S.r.l., a wholly owned subsidiary of Capri Holdings Limited, entered into a credit facility with Intesa Sanpaolo S.p.A., Banca Nazionale del Lavoro S.p.A., and UniCredit S.p.A., as arrangers and lenders, and Intesa Sanpaolo S.p.A., as agent, which provides a senior unsecured term loan (the “Versace Term Loan”) in an aggregate principal amount of €450 million. The Versace Term Loan is not subject to amortization and matures on December 5, 2025. The Company provides an unsecured guaranty of the Versace Term Loan. The Versace Term Loan bears interest at a rate per annum equal to the greater of EURIBOR for the applicable interest period and zero, plus a margin of 1.35%. The Versace Term Loan may be prepaid without premium or penalty other than customary “breakage” costs. The Versace Term Loan requires the Company to maintain a net leverage ratio as of the end of each fiscal quarter of no greater than 4.0 to 1.0. Such net leverage ratio is calculated as the ratio of the sum of total indebtedness as of the date of the measurement plus the capitalized amount of all operating lease obligations, minus unrestricted cash and cash equivalents not to exceed $200 million, to Consolidated EBITDAR for the last four consecutive fiscal quarters. Consolidated EBITDAR is defined as consolidated net income plus provision for taxes based on income, profits or capital, net interest expense, depreciation and amortization expense, consolidated rent expense and other non-cash losses, charges and expenses, subject to certain additions and deductions. The Versace Term Loan also includes covenants that limit additional financial indebtedness, liens, acquisitions, loans and guarantees, restricted payments and mergers of GIVI Holding S.r.l., Gianni Versace S.r.l. and their respective subsidiaries. The Versace Term Loan contains events of default customary for financings of this type, including, but not limited to payment defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to material financial indebtedness, certain events of bankruptcy or insolvency, illegality or repudiation of any loan document under the Versace Term Loan or any failure thereof to be in full force and effect, and changes of control. If such an event of default occurs and is continuing, the lenders under the Versace Term Loan would be entitled to take various actions, including, but not limited to, accelerating amounts outstanding under the Versace Term Loan. As of December 28, 2024, the carrying value of the Versace Term Loan was $469 million, which was recorded within long-term debt on the Company’s consolidated balance sheets as it was refinanced as part of the amended and restated revolving credit facility and new term loans entered into on February 4, 2025. See Note 18 for additional information. As of March 30, 2024, the carrying value was $485 million, net of $1 million of deferred financing fees, which were recorded within long-term debt on the Company’s consolidated balance sheets. As of December 28, 2024, the Company was in compliance with all covenants related to the Versace Term Loan. Senior Notes On October 20, 2017, Michael Kors (USA), Inc. (the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $450 million aggregate principal amount senior notes due November 1, 2024 (the “Senior Notes”), pursuant to an exemption from registration under the Securities Act of 1933, as amended. The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (the “Indenture”). During the second quarter of Fiscal 2025, the Company drew on its 364 Day Term Loan in order to repay its $450 million Senior Notes at maturity. Accordingly, the Senior Notes were repaid in full as of November 1, 2024. The Senior Notes were unsecured and were guaranteed by the Company and its existing and future subsidiaries that guaranteed or were borrowers under the 2022 Credit Facility (subject to certain exceptions, including subsidiaries organized in China). The Senior Notes were redeemable at the Company’s option at any time in whole or in part at a price equal to 100% of the principal amount, plus accrued and unpaid interest, plus a “make-whole” amount calculated at the applicable Treasury Rate plus 30 basis points. The Indenture contained covenants, including those that limited the Company’s ability to create certain liens and enter into certain sale and leaseback transactions. In the event of a “Change of Control Triggering Event,” as defined in the Indenture, the Issuer was required to make an offer to repurchase the Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes being repurchased plus any unpaid interest. These covenants were subject to important limitations and exceptions, as per the Indenture. As of March 30, 2024, the carrying value of the Senior Notes was $450 million, which is recorded within short-term debt on the Company’s consolidated balance sheets. Versace Facilities During Fiscal 2022, the Company's subsidiary, GIVI Holding S.r.l, entered into an agreement with Banco BPM Banking Group (“the Bank”) to sell certain tax receivables to the Bank in exchange for cash. The arrangement was determined to be a financing arrangement because the de-recognition criteria for the receivables was not met at the time of the cash receipt from the Bank. As of December 28, 2024, the outstanding balance was $9 million recorded within long-term debt on the Company’s consolidated balance sheets. As of March 30, 2024, the outstanding balance was $11 million, with $1 million and $10 million recorded within short-term debt and long-term debt, respectively, on the Company’s consolidated balance sheets. Supplier Financing Program The Company offers a supplier financing program which enables the Company’s inventory suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide. The Company’s obligations, including the amount due and scheduled payment dates, which generally do not exceed 90 days, are not impacted by a suppliers’ decision to participate in this program. The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary. The amount outstanding under this program as of December 28, 2024 and March 30, 2024 was $25 million and $11 million, respectively, and is presented as short-term debt on the Company’s consolidated balance sheets. See Note 12 to the Company’s Fiscal 2024 Annual Report on Form 10-K for additional information regarding the Company’s credit facilities and debt obligations.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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