The Company may use forward foreign currency exchange contracts to manage its exposure to fluctuations in foreign currencies 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.

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 and are reclassified from accumulated other comprehensive income into earnings when the items underlying hedged transactions are recognized into earnings, as a component of cost of goods sold within the Company’s consolidated statements of operations and comprehensive (loss) income. As of December 28, 2024, there were no forward foreign currency exchange contracts outstanding.

As of March 30, 2024, the Company had $2.5 billion of hedges outstanding to hedge its net investment in Swiss Franc (“CHF”) denominated subsidiaries, of which the Company will exchange semi-annual fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in CHF. During the first quarter of Fiscal 2025, the Company entered into additional fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $450 million, of which the Company will exchange monthly fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in CHF.

During the second quarter of Fiscal 2025, the Company terminated multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $325 million related to its net investment in CHF denominated subsidiaries which resulted in the Company receiving an immaterial amount of cash. Subsequently, the Company entered into multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $325 million related to its net investment in CHF denominated subsidiaries, of which the Company will exchange monthly fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in CHF. As of December 28, 2024, the Company had $2.95 billion of hedges outstanding to hedge its net investment in CHF denominated subsidiaries. These contracts have maturity dates between July 2025 and October 2030 and are designated as net investment hedges.

As of March 30, 2024, the Company had $1.35 billion of cross-currency hedges outstanding related to its net investment in Euro denominated subsidiaries, of which $1 billion was related to float-to-float cross-currency hedges and $350 million was related to fixed-to-fixed cross currency hedges. During the first quarter of Fiscal 2025, the Company entered into additional fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $534 million, of which the Company will exchange monthly fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in Euro. During the second quarter of Fiscal 2025, the Company entered into additional fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $500 million, of which the Company will exchange monthly fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in Euro.

During the third quarter of Fiscal 2025, the Company terminated its float-to-float cross-currency swap agreements with an aggregate notional amount of $1 billion, which resulted in the Company receiving $42 million of cash. These were subsequently replaced by fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $1 billion related to its net investment in Euro denominated subsidiaries, of which the Company will exchange monthly fixed rate payments on United States Dollar notional amounts for fixed rate payments of 0.0% in Euro. As of December 28, 2024, the Company had $2.384 billion of fixed-to-fixed cross-currency hedges outstanding related to its net investment in Euro denominated subsidiaries. These contracts have maturity dates between January 2027 and July 2031 and 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 (loss) income. Accordingly, the Company recorded interest income of $30 million and $83 million during the three and nine months ended December 28, 2024, respectively, and $26 million and $66 million during the three and nine months ended December 30, 2023, respectively.

The net gain or loss on net investment hedges are reported within CTA as a component of accumulated other comprehensive income on the Company’s consolidated balance sheets. Upon discontinuation of the hedge, such amounts remain in CTA until the related net investment is sold or liquidated.

During the second quarter of Fiscal 2025, the Company entered into multiple interest rate swaps with aggregate notional amounts of €800 million. The swaps were designed to mitigate the impact of adverse interest rate fluctuations for a portion of the Company’s variable rate debt. €500 million of the total interest rate swaps entered into relate to the Company’s Senior Revolving Credit Facility expiring July 2027. The Company will exchange monthly fixed rate payments of 2.922% and receive variable interest based on 1 month EURIBOR rate. The remaining €300 million of the interest rate swaps entered into relate to the Company’s Versace Term Loan expiring December 2025. The Company will exchange monthly fixed rate payments of 3.371% and receive variable interest based on 6 month EURIBOR rate. As of March 30, 2024, the Company did not have any interest rate swap agreements outstanding.

When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income and are reclassified into interest (income) expense, net, in the same period in which the hedged transactions affect earnings. During the three and nine months ended December 28, 2024, the Company recorded $1 million and $2 million, respectively, of interest income related to this agreement. As of December 30, 2023, the Company did not have interest income related to interest rate swap agreements as they were entered into during the second quarter of Fiscal 2025.

The Company is exposed to transaction risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany loans which will impact earnings on a consolidated basis. To manage the foreign currency exchange rate risk related to these balances, the Company had previously entered into cross-currency swap agreements to hedge its exposure in GBP denominated subsidiaries on Euro denominated intercompany loans. As of March 30, 2024 and December 28, 2024, there were no fair value hedges outstanding.

When a cross-currency swap is designated as a fair value hedge and qualifies as highly effective, the fair value hedge will be recorded at fair value each period on the Company’s consolidated balance sheets, with the difference resulting from the changes in the spot rate recognized in foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive (loss) income, which will offset the earnings impact of the underlying transaction being hedged. If the fair value hedge is terminated and the underlying intercompany loans are settled, the accumulated other comprehensive income (“AOCI”) remaining from the hedge at the time of termination will be reclassified to foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive (loss) income. Accordingly, the Company recorded a foreign currency gain of $2 million and $23 million during the three and nine months ended December 30, 2023, respectively.

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis on the consolidated balance sheets as of December 28, 2024 and March 30, 2024 (in millions):


					Fair Value
	Notional Amounts				Assets						Liabilities
	December 28, 2024		March 30, 2024		December 28, 2024			March 30, 2024			December 28, 2024			March 30, 2024

Designated net investment hedges	$	5,334	$	3,850	$	17	(1)	$	12	(1)	$	161	(2)	$	88	(2)
Designated interest rate swaps	834		—		—			—			14		(2)	—





Total	$	6,168	$	3,850	$	17		$	12		$	175		$	88

(2)As of December 28, 2024, the Company recorded $9 million within accrued expenses and current liabilities and $166 million within other long-term liabilities on the Company’s consolidated balance sheets. As of March 30, 2024, the Company recorded $3 million within accrued expenses and current liabilities and $85 million within other long-term liabilities on the Company’s consolidated balance sheets.

The Company records and presents the fair value of all of its derivative assets and liabilities on its consolidated balance sheets on a gross basis, as shown in the above 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 and with the same banks, the resulting impact as of December 28, 2024 and March 30, 2024 would be as follows (in millions):


	Net Investment Hedges			Interest Rate Swaps
		December 28, 2024		March 30, 2024		December 28, 2024		March 30, 2024
Assets subject to master netting arrangements		$	17	$	12	$	—	$	—
Liabilities subject to master netting arrangements		$	161	$	88	$	14	$	—
Derivative assets, net		$	9	$	8	$	—	$	—
Derivative liabilities, net		$	153	$	84	$	14	$	—


	Three Months Ended				Nine Months Ended
	December 28, 2024		December 30, 2023		December 28, 2024		December 30, 2023
	Pre-Tax Gains Recognized in OCI		Pre-Tax (Losses) Gains Recognized in OCI		Pre-Tax Losses Recognized in OCI		Pre-Tax Losses Recognized in OCI

Designated net investment hedges	$	240	$	(238)	$	(26)	$	(213)
Designated interest rate swaps	$	1	$	—	$	(14)	$	—
Designated fair value hedge	$	—	$	4	$	—	$	(5)

For the three months ended December 28, 2024 and December 30, 2023, there was no pre-tax activity recorded within the consolidated statements of operations and comprehensive (loss) income related to designated forward foreign currency exchange contracts. The following table summarizes the pre-tax impact of the gains within the consolidated statements of operations and comprehensive (loss) income related to designated forward foreign currency exchange contracts for the nine months ended December 28, 2024 and December 30, 2023 (in millions):

Nine Months Ended

Pre-Tax Gain Reclassified from
Accumulated OCI

Location of Gain Recognized

December 28, 2024

December 30, 2023

Designated forward foreign currency exchange contracts

—

Cost of goods sold