v3.25.4

Discontinued Operations | 9 Months Ended
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Dec. 27, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On April 10, 2025, the Company and Prada entered into the Purchase Agreement whereby Prada agreed to acquire certain subsidiaries of the Company which operate the Company’s Versace business for an aggregate purchase price of $1.375 billion in cash, subject to certain adjustments, including for net indebtedness, working capital and transaction expenses. On December 2, 2025 (the “Closing Date”), the Company completed the sale of its Versace business for gross cash proceeds of $1.395 billion based on an estimated closing statement. After giving effect to certain benefits the purchaser will receive pursuant to the Purchase Agreement and the Transition Services Agreement (“TSA”), the Company’s net consideration from the Versace divestiture was approximately $1.365 billion. Based on the provisions of the Purchase Agreement, within 90 days of the Closing Date, Prada will deliver an initial closing statement including net working capital, net indebtedness, cash and certain other post-closing adjustments as of the Closing Date. Once the initial closing statement becomes final and binding, the Company will adjust the cash proceeds and record an adjustment to the gain on sale for any difference from the estimated closing statement which the Company expects to record during the fourth quarter of Fiscal 2026. The Company previously determined that the sale of the Versace business represented a strategic shift and the Company concluded that it met the held-for-sale and discontinued operations accounting criteria during the first quarter of Fiscal 2026. Accordingly, the Company reported the results of the Versace business as discontinued operations in its consolidated statements of operations and presented the related assets and liabilities as held for sale in its consolidated balance sheets. These changes have been applied to all periods presented as applicable. Cash flows from the Company’s discontinued operations are presented as such in the consolidated statements of cash flows for all periods presented. Additionally, as of April 10, 2025, in accordance with ASC 360, Property, Plant and Equipment, the Company stopped recording depreciation and amortization of Versace’s long-lived tangible, intangible and operating lease right-of-use assets. The following table represents the carrying amounts of the major classes of assets and liabilities classified as held for sale in the consolidated balance sheet as of March 29, 2025 (in millions):
|  |  | March 29, 2025
Cash and cash equivalents |  |  | $ | 59 |
Receivables, net |  |  | 62 |
Inventories, net |  |  | 168 |
Prepaid expenses and other current assets |  |  | 53 |
Current assets held for sale |  |  | 342 |
Property and equipment, net |  |  | 120 |
Operating lease right-of-use assets |  |  | 388 |
Intangible assets, net |  |  | 534 |
Goodwill |  |  | 489 |
Other assets |  |  | 63 |
Noncurrent assets held for sale |  |  | 1,594 |
Total assets held for sale |  |  | $ | 1,936 |
Accounts payable |  |  | $ | 106 |
Accrued payroll and payroll related expenses |  |  | 28 |
Accrued income taxes |  |  | 2 |
Short-term operating lease liabilities |  |  | 101 |
Accrued expenses and other current liabilities |  |  | 67 |
Current liabilities held for sale |  |  | 304 |
Long-term operating lease liabilities |  |  | 439 |
Deferred tax liabilities |  |  | 106 |
Long-term debt |  |  | 10 |
Other long-term liabilities |  |  | 20 |
Noncurrent liabilities held for sale |  |  | 575 |
Total liabilities held for sale |  |  | $ | 879 |
The operating results of discontinued operations only reflect revenues and expenses that are directly attributable to the Versace business through the Closing Date that were removed from continuing operations. Discontinued operations do not include any allocation of corporate overhead expense. The following table presents the major components of discontinued operations, net of income taxes, in the Company’s consolidated statements of operations and comprehensive income (loss) (in millions):
| Three Months Ended |  | Nine Months Ended
| December 27, 2025 |  | December 28, 2024 |  | December 27, 2025 |  | December 28, 2024
Total revenue | $ | 206 |  |  | $ | 193 |  |  | $ | 592 |  |  | $ | 613 |
Cost of goods sold | 58 |  |  | 55 |  |  | 173 |  |  | 174 |
Selling, general and administrative expenses | 136 |  |  | 143 |  |  | 398 |  |  | 443 |
Depreciation and amortization | — |  |  | 17 |  |  | 5 |  |  | 46 |
Impairment of assets | — |  |  | 594 |  |  | — |  |  | 617 |
Restructuring and other expense | 1 |  |  | — |  |  | 5 |  |  | — |
Other income, net | (45) |  |  | — |  |  | (44) |  |  | — |
Foreign currency loss (gain) | 1 |  |  | 8 |  |  | (5) |  |  | 3 |
Income (loss) from discontinued operations before income taxes | 55 |  |  | (624) |  |  | 60 |  |  | (670) |
Benefit for income taxes | (4) |  |  | (72) |  |  | (2) |  |  | (82) |
Net income (loss) from discontinued operations, net of tax | $ | 59 |  |  | $ | (552) |  |  | $ | 62 |  |  | $ | (588) |
The Company recognized a preliminary gain on sale of $45 million, which is recorded in other income, net, as part of discontinued operations in the Company’s consolidated statements of operations and comprehensive income (loss) during the three and nine months ended December 27, 2025. The Company included the cash proceeds received from the sale in net cash used in investing activities of discontinued operations within the consolidated statements of cash flows. The following table presents the details of the gain on the sale of the Versace business as of the Closing Date (in millions):
Cash consideration, net | $ | 1,365 |
Transaction expenses | (15) |
Carrying value of net assets sold | (1,266) |
Gain on sale before reclassification of foreign currency translation | 84 |
Reclassification of foreign currency translation | (39) |
Gain on sale | $ | 45 |
The sale of the Versace business resulted in a capital loss for income tax purposes. As the Company maintains a full valuation allowance on its net deferred tax assets, a valuation allowance of $127 million was also recorded against the entire deferred tax asset generated from the sale resulting in no net impact to the tax provision during the period. In addition, the Company agreed to provide certain transition services to Versace pursuant to the TSA. Income related to the TSA is presented in continuing operations within other income, net of approximately $1 million on the Company’s consolidated statements of operations and comprehensive income (loss) for the three and nine months ended December 27, 2025, respectively.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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