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.


	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 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.