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Derivative Financial Instruments | 6 Months Ended
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Sep. 27, 2025
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 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. As of March 29, 2025, the Company had total notional amounts of $50 million of EUR/USD forward contracts outstanding. During the first quarter of Fiscal 2026, the Company entered into multiple EUR/USD forward contracts with additional notional amounts of $29 million. As of September 27, 2025, the Company had total notional amounts outstanding of $52 million of 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 (loss) income and are reclassified from accumulated other comprehensive (loss) income into earnings when the items underlying the 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. During both the three and six months ended September 27, 2025, the Company reclassified $1 million from accumulated other comprehensive (loss) income into cost of goods sold due to the maturity of certain forward foreign currency exchange contracts. Net Investment Hedges As of March 29, 2025, the Company had $3.5 billion of hedges outstanding to hedge its net investment in Swiss Franc (“CHF”) denominated subsidiaries, of which the Company will exchange monthly and semi-annual fixed rate payments on United States dollar notional amounts for fixed rate payments of 0.0% in CHF. During the first and second quarter of Fiscal 2026, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $950 million and $275 million, respectively, 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 September 27, 2025, the Company had $3.5 billion of outstanding hedges to hedge its net investment in CHF denominated subsidiaries. These contracts have maturity dates between March 2027 and May 2045 and are designated as net investment hedges. Certain of these contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the earliest effective date being June 2030. If the fair value of a derivative contract exceeds a certain threshold governed by the aforementioned CSAs, either party is required to post cash collateral. As of September 27, 2025 and March 29, 2025, the Company had $2.364 billion of fixed-to-fixed cross-currency hedges outstanding 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 EUR. 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 income in the Company’s consolidated statements of operations and comprehensive (loss) income. Accordingly, the Company recorded interest income of $35 million and $71 million during the three and six months ended September 27, 2025, and $29 million and $53 million during the three and six months ended September 28, 2024, respectively. The net gains or losses on net investment hedges are reported within CTA as a component of accumulated other comprehensive (loss) 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. Interest Rate Swaps 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 remaining €300 million of the interest rate swaps entered into related to the Company’s previously outstanding Versace Term Loan. During the fourth quarter of Fiscal 2025, the Company terminated these interest rate swaps to coincide with the Company’s debt refinancing and paid $13 million. As of September 27, 2025 and March 29, 2025, 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 (loss) income and are reclassified into interest income, net, in the same period in which the hedged transactions affect earnings. During the three and six months ended September 27, 2025, the Company recognized $2 million and $4 million of interest expense, respectively, related to amortization of the fair value previously recorded as a component of accumulated other comprehensive (loss) income related to the terminated interest rate swaps. During the three and six months ended September 28, 2024, the Company recognized $1 million of interest income related to these agreements. The Company only enters into derivative instruments with highly credit-rated counterparties and does not enter into derivative contracts for trading or speculative purposes. 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 27, 2025 and March 29, 2025 (in millions):
|  |  |  |  | Fair Value |  |
| Notional Amounts |  | Assets |  | Liabilities |  |
| September 27, 2025 |  | March 29, 2025 |  | September 27, 2025 |  | March 29, 2025 |  | September 27, 2025 |  | March 29, 2025 |
Designated forward foreign currency exchange contracts | $ | 52 |  |  | $ | 50 |  |  | $ | — |  |  | $ | — |  |  | $ | 4 |  | (1) |  | $ | 2 |  | (1) |
Designated net investment hedges | 5,864 |  |  | 5,864 |  |  | — |  |  | — |  |  | 909 |  | (2) |  | 289 |  | (2) |
Total | $ | 5,916 |  |  | $ | 5,914 |  |  | $ | — |  |  | $ | — |  |  | $ | 913 |  |  |  | $ | 291 |  |  |
(1)Recorded within accrued expenses and other current liabilities on the Company’s consolidated balance sheets. (2)As of September 27, 2025, the Company recorded $909 million within other long-term liabilities on the Company’s consolidated balance sheets. As of March 29, 2025, the Company recorded $12 million within accrued expenses and other current liabilities and $277 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 September 27, 2025 and March 29, 2025 would be as follows (in millions):
| Forward Currency Exchange Contracts |  | Net Investment Hedges |  |  |  |
| September 27, 2025 |  | March 29, 2025 |  | September 27, 2025 |  | March 29, 2025 |  |  |  |  |  |  |  |
Liabilities subject to master netting arrangements | $ | 4 |  |  | $ | 2 |  |  | $ | 909 |  |  | $ | 289 |  |  |  |  |  |  |  |  |
Derivative liabilities, net | $ | 4 |  |  | $ | 2 |  |  | $ | 909 |  |  | $ | 289 |  |  |  |  |  |  |  |  |
Currently, the Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. The following tables summarize the losses recognized within the consolidated statements of operations and comprehensive income related to the Company’s hedge contracts for the three and six months ended September 27, 2025 and September 28, 2024 (in millions):
| Three Months Ended |  | Six Months Ended |  |
| September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024 |  | Location of Loss Recognized
Designated forward foreign currency exchange contracts | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | Cost of goods sold
Designated interest rate swaps | $ | 2 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | Interest expense, net
The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive (loss) income 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. The following table summarizes the pre-tax impact of the losses recorded to other comprehensive income (“OCI”) related to the Company’s designated hedges (in millions):
| Three Months Ended |  | Six Months Ended
| September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
| Pre-Tax Losses Recognized in OCI |  | Pre-Tax Losses Recognized in OCI |  | Pre-Tax Losses Recognized in OCI |  | Pre-Tax Losses Recognized in OCI
Designated forward foreign currency exchange contracts | $ | — |  |  | $ | — |  |  | $ | (4) |  |  | $ | — |
Designated net investment hedges | $ | (35) |  |  | $ | (240) |  |  | $ | (620) |  |  | $ | (266) |
Designated interest rate swaps | $ | — |  |  | $ | (15) |  |  | $ | — |  |  | $ | (15) |

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