TPR 10-K & 10-Q changes, risk factors and insider trading

Our results can be impacted by a number of macroeconomic factors, including but not limited to: consumer confidence and spending levels, tax rates, levels of unemployment, consumer credit availability, tariffs and trade restrictions, pandemics, natural disasters, raw material costs, fuel and energy costs, bank failures, market volatility, global factory production, supply chain operations, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls, shopping centers and online.

We operate on a global basis, with approximately 40.0%41.3% of our net sales coming from operations outside of the United States for fiscal year 2025.2026. While geographic diversity helps to reduce the Company’s exposure to risks in any one country, we are subject to risks associated with international operations, including, but not limited to:

•changes to the U.S.'sU.S. participation in, withdrawal outfrom, of,or renegotiation of certain international trade agreements or other major trade relatedtrade-related issues, including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas and retaliatory tariffs, trade sanctions, new or onerous trade restrictions, embargoes and other stringent government controls;

•disruptions or delays in shipments whether due to port congestion, logistics carrier disruption (including as a result of labor disputes), militant attacks on commercial shipping vessels in the Red Sea, other shipping capacity constraints or other factors, which hashave resulted and may continue to result in significantly increased inbound freight costs and increased in-transit times;

Each of our brands areis unique and independent, while sharing a commitment to innovation and authenticity defined by unique brand purposes, distinctive products, and differentiated customer experiences across business channels and geographies. Any misstep in product quality or design, executive leadership, customer service, marketing, unfavorable publicity or excessive product discounting could negatively affect the image of our brands with our customers. Furthermore, our brands’ communications, product lines and experiences are subject to rapidly changing fashion trends and consumer preferences, including the increasing shift to digital brand engagement and social media communication. If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing campaigns that appeal to our target consumers, our sales and results of operations may be negatively impacted.

Our growth depends on the continued success of existing products, as well as the successful design, introduction of new products and maintaining an appropriate rationalization of our assortment. Our ability to create new products and to sustain existing products is affected by whether we can successfully anticipate and respond to consumer preferences and fashion trends. The failure to develop and launch successful new products or to rationalize our assortment appropriatelyappropriately, including through our efforts to harmonize select products between our retail and outlet channels, could hinder the growth of our business. Also, any delay in the development or launch of a new product could result in our company not being the first to bring product to market, which could compromise our competitive position.

Our success also depends in part on our and our executive leadership team's ability to execute on our plans and strategies for each of our brands and for Tapestry, as a multi-brand enterprise. Even ifIf our products, marketing campaigns, consumer experiences and environments do not meet changing customer preferences and/or fail to stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact the growth of our brands and the Tapestry multi-brand portfolio, and our overall business, financial condition, and results of operations.

The growth of our business depends on the successful execution of our global omni-channel expansion efforts and our ability to execute our digital and e-commerce priorities.priorities and our multi-channel strategies.

Our success and growth depend on the continued development of our omni-channel presence for each of our brands globally, leaning intopursuing global digital opportunities for each brand, along with select bricks and mortar expansion.expansion, renovation, and modernization efforts. Our bricks and mortar strategies may require upfront investment, may temporarily disrupt store operations and may not generate the expected increases in traffic, sales, productivity or profitability. With respect to international expansion, our brands may not be well-established or widely sold in some of these markets, and we may have limited experience operating directly or working with our partners there. In addition, some of these markets, either through bricks and mortar stores or digital channels, have different operational characteristics, including but not limited to employment and labor, privacy, transportation, logistics, real estate, environmental regulations and local reporting or legal requirements.

We aim to provide a seamless omni-channel experience to our customers regardless of whether they are shopping in stores or engaging with our brands through digital technology, such as computers, mobile phones, tablets or other devices. This requires investment in new technologies and reliance on third-party digital partners, over which we may have limited control. Additionally, our digital business is subject to numerous risks that could adversely impact our results, including (i) a diversion of sales from our brand stores or wholesale customers, (ii) difficulty in recreating the in-store experience through digital channels, (iii) liability for online content, (iv) changing dynamics within the digital marketing environment and our ability to effectively market to consumers, (v) intense competition from online retailers, and (vi) the ability to provide timely delivery of e-commerce purchases, which is dependent on the capacity and operations of our owned and third-party operated fulfillment facilities. See “Our business is subject to the risks inherent in global sourcing activities” for additional risks related to our fulfillment networks. If we are unable to effectively execute our e-commerce and digital strategies and provide reliable experiences for our customers across all business channels, our reputation and ability to compete with other brands could suffer, which could adversely impact our business, results of operations and financial condition.

We have also made strategic updates to our global product and pricing architecture, which may change consumer shopping behavior and shift demand across channels and geographies. Furthermore, consumer demand and behavior, as well as tastes and purchasing trends, may differ across countries, and as a result, sales of our productproducts may not be successful, or the margins on those sales may not be in line with those we currently anticipate. Further, expanding in certain markets may have upfront investment costs that may not be accompanied by sufficient revenues to achieve typical or expected operational and financial performance and therefore may be dilutive to our brands in the short-term.short term. We may also have to compete for talent in international regions as we expand our omni-channel presence.

Consequently, if our global omni-channel expansion plansplans, or our product and pricing architecture strategies, are unsuccessful, or we are unable to retain and/or attract key personnel, our business, financial condition and results of operations could be materially adversely affected.

•identifying and adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence,intelligence (“AI”), and machine learning;learning, and competing with AI-enabled shopping tools to help find products, compare prices, and make purchase decisions;

Our business and future success dependsdepend heavily on attracting, developing and retaining qualified employees, including our senior management team. Competition in our industry to attract and retain these employees is intense and is influenced by our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates.

We depend on the guidance of our senior management team and other key employees who have significant experience and expertise in our industry and our operations. There can be no assurance that these individuals will remain with us or that we will be able to identify and attract suitable successors for these individuals. The loss of one or more of our key personnel or the direct or indirect consequences of results thereof, orincluding any negative public perception with respect to these individuals or thetheir loss of these individuals,departure, could have a material adverse effect on our business, results of operations and financial condition. We do not maintain key-person or similar life insurance policies on any of our senior management team or other key personnel.

Additionally, changes to our office environments, the adoption of new work models,models and AI, and our requirements and/or expectations about when or how often certain employees work on-site or remotely may not meet the expectations of our employees. AsFurther, businessesany increasinglyfailure operateto remotely,maintain traditionala geographicworkforce competitionwith forthe talentskills mayand capabilities necessary to support our business and respond to technological change incould waysadversely thatimpact weour cannotbusiness, presentlyresults predict.of operations and financial condition. If our employment proposition is not perceived as favorable compared to other companies, it could negatively impact our ability to attract and retain our employees.

One component of our historical growth strategy has been acquisitions, and, consistent with our longer-term capital allocation priorities, our management team expects to maintain M&A flexibility and may from time to time evaluate and consider acquisitions or other strategic investments. These transactions involve various inherent risks and as a result, the expected benefits, cost savings and synergies may not be realized.

•failure of the business to perform as plannedplanned, following the acquisition or achieve anticipated revenue, cash flow or profitability targets;

We continuously evaluate how to best structure our business in an effort to maximize shareholder value, which could include the divestiture of certain of our lines of business, such as our recently completed sale of the Stuart Weitzman Business.business. Divestitures are subject to numerous risks and uncertainties, including, among others:

Our business may be materially impacted if our fulfillment centers face significant interruptions andin operations.

Because our fulfillment centers include automated and computer-controlled equipment, they are susceptible to risks including power interruptions, system failures, software viruses, configuration errors and security breaches. In North America we maintain fulfillment centers in Florida, Ohio and Nevada, operated by Tapestry. The Company is in the process of transitioning operations from its Ohio fulfillment center to a third-party facility in Pennsylvania. This transition involves risks including potential disruptions to order processing and deliveries, increased costs, and reliance on a new third-party operator during and after the transition period. The Company also has a third-party facility in Canada.

Globally we utilize fulfillment centers in mainland China, the Netherlands, the U.K. and Spain,Singapore, owned and operated by third parties, allowing us to better manage the logistics in these regions while reducing costs. We also utilize local fulfillment centers, through third parties, in Japan, parts of Greater China, South Korea, Singapore, Malaysia, Canada, Australia,Malaysia and Mexico.Australia. The warehousing of the Company’s merchandise, store replenishment and processing direct-to-customer orders is handled by these centers and a prolonged disruption in any center’s operation could materially adversely affect our business and operations.

Our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns. If we misjudge the market for our products or demand for our products areis impacted by other factors, such as inflationary pressures, political instability or other macroeconomic events, we may be faced with significant excess inventories for some products and missed opportunities for other products. We have in the past been, and may in the future be, forced to rely on donation,donations, markdowns, promotional sales or other write-offs,write-offs to dispose of excess, slow-moving inventory, which may negatively impact our gross margin, overall profitability and efficacy of our brands.

As part of our long-term strategy, we look for opportunities to cost effectivelycost-effectively enhance capabilitythe capabilities of our business services. While we believe we conduct appropriate due diligence before entering into agreements with these third parties, the failure of any of these third parties to provide the expected services, provide them on a timely basis or to provide them at the prices we expect could disrupt or harm our business. We also cannot guarantee that these third parties will not experience a personal data or security breach in the future, which could have a material impact on our operations. Any significant interruption in the operations of these service providers, includingwhether asdue a result ofto changes in social, political,political and economic conditions, including those resulting from military conflicts or other hostilities,hostilities that could result in the disruption ofdisrupt trade from the countries in which our manufacturers or suppliers are located, or other factors over which we have no control, could also have an adverse effect on our business. Furthermore, we may be unable to provide these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.

Our brands currently have multi-year agreements with licensing partners for certain products. In the future, we may enter into additional licensing arrangements. The risks associated with our own products also apply to our licensed products, as do unique risks stemming from problems that our licensing partners may experience, including risks associated with each licensing partner’s ability to obtain capital, manage its labor relations, maintain relationships with its suppliers, manage its credit and bankruptcy risks, and maintain customer relationships. While we maintain significant approval rights over the products produced for us by our licensing partners, any of the foregoing risks, or the inability of any of our licensing partners to execute on the expected design and quality of the licensed products or otherwise exercise operational and financial control over its business, may result in loss of revenue and competitive harm to our operations in the licensed product categories. Further, while we believe that we could engage with new licensing partners if required, any delay in doing so could adversely affect our revenues and harm our business.

We do not own any of our retail store locations. The majority of our stores are under non-cancelable, multi-year leases, often with renewal options.leases. We believe that the majority of the leases we enter into in the future will likely be non-cancelable. Generally, our leases are “net” leases, which require us to pay our proportionate share of the cost of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases at our option. In certain cases, as we have done in the past, we may determine that it is no longer economical to operate a retail store subject to a lease or we may seek to generally downsize, consolidate, reposition, relocate or close some of our real estate locations. In such cases, we may be required to negotiate a lease exit with the applicable landlord or remain obligated under the applicable lease for, among other things, payment of the base rent for the balance of the lease term. In some instances, we may be unable to close an underperforming retail store due to continuous operation clauses in our lease agreements. In addition, as each of our leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close retail stores in desirable locations. Our inability to secure desirable retail space or favorable lease terms could impact our ability to grow. Likewise, our obligation to continue making lease payments in respect of leases for closed retail spaces could have a material adverse effect on our business, financial condition and results of operations.

We depend on digital technologies for the successful operation of our business, including corporate email and chat communications to and from employees, customers, stores and vendors, the design, manufacture and distribution of our finished goods, digital and local marketing and clienteling efforts, data analytics, collection, use and retention of customer, employee, vendor and partner information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. Our company implemented a hybrid working model. Continued remote working has increased our dependence on digital technology. Despite the security measures we have in place, including those described in Item 1C “Cybersecurity”, the possibility of a successful cyber-attack on any one or all of these systems is a serious threat. The retail industry, in particular, has been the target of many cyber-attacks. As part of our business model, we collect, retain and transmit confidential information and personal data over public networks. In addition to our own databases, we use third-party service providers to store, process and transmit this information on our behalf. Although we contractually require these service providers to implement and use reasonable and adequate security measures and data protection,protection controls, we cannot control third parties and cannot guarantee that a personal data or security breach will not occur in the future either at their location or within their systems. We also store all designs, goods specifications, projected sales and distribution plans for our finished products digitally. We have enterprise class and industry comparable security measures in place to protect both our physical facilities and digital systems from attacks. Despite these efforts, however, we may be vulnerable to targeted or random cyber-attacks, personal data or security breaches, acts of vandalism, computer malware, misplaced or lost data, programming and/or human errors, or other similar events. Further, like other companies in the retail industry, during the ordinary course of business, we and our vendors have in the past experienced, and we expect to continue to experience, cyber-attacks of varying degrees and types, including phishing and other attempts to breach or gain unauthorized access to our systems. As artificial intelligenceAI becomes increasingly integrated into business systems, concerns about data exposure and privacy risks are intensifying. Additionally, artificialsophisticated intelligenceand ispersistent beingcybercrime usedactors are using AI to carry out advanced social engineering attacks, increasing the potential for harm. As frontier and open-weight AI models advance, they are commoditizing IT vulnerability discovery and exploit development, dramatically increasing the volume of software and IT system risks, including in our critical third-party systems. We expect these risks to increase significantly over the next year, with the potential for a subset of these risks to materialize into attacks that may negatively affect our business. To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that cyber-attacks will not have a material impact in the future.

Awareness of and sensitivity to personal data breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high. Any misappropriation or unauthorized access to confidential or personal information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees, vendors and investors. We have been incurring and expect that we will continue to incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with current and new international, federal and state laws governing the unauthorized disclosure, access to, loss, alteration or exfiltration of confidential and personal information which are continuously being enacted and proposed such as the General Data Protection Regulation ("GDPR") in the E.U., the UK GDPR, the California Consumer Privacy Act ("CCPA") as amended by the California Privacy Rights Act ("CPRA"), the Virginia Consumer Data Protection Act ("VCDPA"), the Colorado Privacy Act ("CPA"), the Utah Consumer Privacy Act ("UCPA"), the Connecticut Data Privacy Act ("CTDPA"), the Montana Consumer Data Privacy Act ("MCDPA"), the Washington My Health My Data Act ("WMHMDA"), the Florida Digital Bill of Rights ("FDBR"), the Texas Data Privacy and Security Act ("TDPSA") and other comprehensive and sectoral state privacy laws in the U.S., as well as increased cyber security and privacy protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees and contractors, engaging outside counsel, third-party experts and consultants. We may also experience loss of revenues resulting from unauthorized use of proprietary information including our intellectual property. Lastly, we could face sizable fines, significant breach containment and notification costs to supervisory authorities and the affected data subjects, and increased litigation and customer claims, as a result of cyber security or personal data breaches. While we carry cyber liability insurance, such insurance may not cover us with respect to any or all claims or costs associated with such a breach.

In addition, we have e-commerce sites in certain countries throughout the world, including the U.S., Canada, Japan, South Korea, Greater China, Europe, the Middle East, Australia and Southeast Asia and have plans for additional e-commerce sites in other parts of the world. Additionally, Tapestry has informational websites in various countries. Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-commerce partners maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, (iii) customer databases and (iv) ability to email or otherwise keep in contact with our current and potential customers. Despite our preventative efforts, our systems are vulnerable from time-to-timetime to time to damage, disruption or interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security and personal data breaches, email blocking lists, computer malware or power outages. Any material disruptions in our e-commerce presence or information technology systems and applications could have a material adverse effect on our business, financial condition and results of operations.

We rely heavily on various information and other business systems, including data analyticsanalytics, machine learning and machine learning, and artificial intelligence,AI, to manage our operations, including management of our supply chain, products, point-of-sale processing in our brands’ stores, our online businesses associated with each brand and various other processes and metrics. We are continually evaluating and implementing upgrades and changes to our systems. In addition, from time to time, we implement new systems.

Implementing new systems and upgrading existing systems and data analytics models carries substantial risk, including failure to operate as designed, failure to properly integrate with other systems, failure to accurately capture or report data or metrics, potential loss of confidential and personal information, cost overruns, implementation delays and disruption of operations. Furthermore, failure of our computer systems due to inadequate system capacity, computer viruses, human error, changes in programming, security and personal data breaches, system upgrades or migration of these services, as well as employee, vendor and consumer privacy concerns and new privacy andprivacy, security and artificial intelligenceAI laws and global government regulations, individually or in accumulation,the aggregate, could have a material effect on our business, financial condition or results of operations and cash flow.

As of June 28,27, 2025,2026, our consolidated debt was approximately $2.39$2.38 billion. In fiscal year 2025, the Company issued $1.50 billion of senior unsecured notes, consisting of $750.0 million aggregate principal amount of 5.100% senior unsecured notes due March 11, 2030 and $750.0 million aggregate principal amount of 5.500% senior unsecured notes due March 11, 2035. Also in fiscal year 2025, the Company refinanced and replaced the Company's unsecured revolving facility dated May 11, 2022 (the "Existing Revolving Credit Facility") with a new revolving credit facility (the "Amended Revolving Credit Facility"), dated as of May 22, 2025. Under the Amended Revolving Credit Facility, the Lenders have made available to the Company a $2.00 billion unsecured revolving credit facility, including sub facilitiessubfacilities for letters of credit, with a maturity date of May 22, 2030. On July 24, 2025, the Company entered into a commercial paper borrowing program (the "Commercial Paper Program") that provides for the issuance of up to $2.00 billion of unsecured commercial paper notes with maturities up to 365 days. Borrowings under the Commercial Paper Program are supported by the Amended Revolving Credit Facility and may be used to support the Company's general corporate needs. The aggregate amount of borrowings outstanding under the Commercial Paper Program and Amended Revolving Credit Facility will not exceed $2.00 billion.

Under the terms of our debt facilities, we must comply with certain restrictions limiting the Company’s ability to, among other things: (i) incur certain indebtedness, (ii) create certain liens, (iii) enter into certain sale and leaseback transactions, (iv) make certain investments or payments and (v) merge, or consolidate or transfer, sell or lease all or substantially all of the Company’s assets. Under the Amended Revolving Credit Facility, we are required to comply on a quarterly basis with a maximum net leverage ratio of 4.00:1.00, which may be increased to 4.50:1:001.00 following the consummation of a material acquisition, subject to certain limitations set forth in the Amended Revolving Credit Facility.

In addition, many of the countries where we and our suppliers operate continue to enact legislation and regulatory rules that address climate change and other sustainability issues, including expanded disclosure requirements on GHG emissions and other climate relatedclimate-related information. Consumers, trade associations, interested non-governmental organizations and other stakeholders have increased focus and emphasis on sustainable features of products and other sustainability topics, including traceability and transparency, sustainability claims and product labeling requirements, responsible sourcing and deforestation, the use of energy and water, and the recyclability or recoverability of packaging, product, and materials. The rules and regulations and governmental oversight continue to rapidly evolve with varying degrees of complexity and scope, many that include penalties for non-compliance. Any failure on our part to comply with sustainability relatedsustainability-related legislation, regulations and frameworks could lead to adverse consumer action, government enforcement action and private litigation. Our ability to comply with the evolution of consumer expectations, regulations and governmental standards and legal landscape can lead to increased risk, operational costs and management time and effort.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, with tax provisions primarily focused on implementing a 15% corporate alternative minimum tax (“CAMT”) on global adjusted financial statement income and a 1% excise tax on share repurchases. The CAMT was effective at the beginning of fiscal 2024 and did not have a material impact on the Company’s effective tax rate.

On December 12, 2022, the E.U. member states also reached an agreement to implement the Organization for Economic Co-operation and Development’s (“OECD”) reform of international taxation known as Pillar Two Global Anti-Base Erosion Rules (“GloBE”), which broadly mirrors the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies,companies. whichThese wasrules subject multinational companies to three possible tax mechanisms individually known as the Income Inclusion Rule (“IIR”), the Undertaxed Profits Rule (“UTPR”) and the Qualified Domestic Minimum Top-up Tax (“QDMTT”). The rules became effective on January 1, 2025. Based on the countries in which we do business, these rule changes didstarted notto have a materialnegatively impact the Company's effective tax rate beginning in fiscal 2025.2026. OtherOn countriesJanuary are also implementing similar legislation with effective dates starting in fiscal5, 2026, known as Qualifying Domestic Minimum Top-Up Tax ("QDMTT"). On June 26, 2025, the U.S.OECD Treasurypublished reachedadditional an agreement with the other G7 countriesguidance regarding the application of GloBE rules to U.S. parented multinational enterprises ("U.S. MNEs"). Most notably, the agreement includes a full exclusion forexcludes U.S. MNEs from the Undertaxed Profits RuleUTPR and IncomeIIR; Inclusion Rule, which are two of the three taxing mechanisms under GloBE. Given that the third mechanism,however, QDMTT is still in force,force itbased ison unclearcurrent whatlegislation. impact if any this agreement will haveBased on the Company.jurisdictions Unlessin U.S.which MNEswe areoperate likewiseand excludedour fromcurrent QDMTT,assessment of the Companyapplicable believesrules, QDMTTwe woulddo havenot expect these developments to result in a negativematerial impactincrease onto itsthe Company's effective tax rate in fiscal 20262027 andcompared beyond.to fiscal 2026.

Due to our global operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and liabilities denominated in currencies other than the U.S. dollar. In addition, certain of our subsidiaries transact in currencies other than their functional currency, including intercompany transactions, which results in foreign currency transaction gains or losses. If the U.S. dollar strengthens against these subsidiaries’ foreign currencies, the translation of their foreign currency denominated transactions may decrease consolidated net sales and profitability. Furthermore, a majority of the Company's purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S. dollars. In order to minimize the impact on earnings related to foreign currency rate movements, we hedge certain cross currencycross-currency intercompany inventory transactions and foreign currency balance sheet exposuresexposures, which includesincluding the Company’s cross currencycross-currency intercompany loan portfolio. We cannot ensure, however, that these hedges will fully offset the impact of foreign currency rate movements. Our continued international expansion will increase our exposure to foreign currency fluctuations.

We believe our trademarks, copyrights, patents and other intellectual property rights are extremely important to our success and our competitive position. We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. We pursue entities involved in the trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. We cannot guarantee that the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future. Despite our efforts, our brands are still susceptible to counterfeiting. Such counterfeiting dilutes our brands and can cause harm to our reputation and business. OurThe effortsgrowing prevalence of AI technologies may complicate or limit our ability to enforceassert ourownership intellectualin propertyoutputs rightsgenerated arewith fromthe timeassistance of AI. In addition, trade secret, confidential, or otherwise commercially sensitive information may be inadvertently or intentionally disclosed, including disclosure to timeunprotected metAI withsystems, defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. In the ordinary course of business, we become involved in trademark oppositions and cancellation actions. Our trademark applicationswhich may face objections from the trademark offices we seek to register them in and may not mature into registrations. Other parties may seek to invalidate our trademarks or assert violations of their trademarks or other intellectual property and seek to block our sales of certain products. Unplanned increases in legal and investigative fees and other costs associated with defending our intellectual property rights could result in higherunauthorized operating expenses. Finally, many countries’ laws do not protect intellectual property rights to the same degree as U.S. laws.use.

The following discussion of the Company's financial condition and results of operations should be read together with the Company’sCompany's consolidated financial statements and notes to those financial statements included elsewhere in this document. When used herein, the terms “"the Company,”" "Tapestry," “"we,”" “"us”" and “"our”" refer to Tapestry, Inc., including consolidated subsidiaries. References to "Coach," "Stuart Weitzman," "Kate Spade" or "kate spade new york" refer only to the referenced brand.

•Global Economic Conditions and Industry Trends. This section includes a discussion on global economic conditions and industry trends that affect comparability that are important in understanding results of operations and financial conditions,condition, and in anticipating future trends.

The Company has threetwo reportable segments:

On February 16, 2025, the Company entered into a sale and purchase agreement (the “Purchase Agreement”) with CaleresCaleres, Inc. (the “Purchaser”) to sell the Stuart Weitzman Business (as defined below). The sale was completed on August 4, 2025 (the "Stuart Weitzman Business Divestiture"). The Purchaser acquired certain assets and liabilities of the Company's global business of designing, manufacturing, promotion, marketing, production, distribution, sales and licensing of Stuart Weitzman branded products (the "Stuart Weitzman Business") for totala cashfinal considerationaggregate purchase price of $105.0$109.1 millionmillion, (thewhich "Purchase Price"), subject toincluded customary adjustments for cash, indebtedness, net working capital and transactionindebtedness. expenses.Effective Thein sale was completed on August 4, 2025 (the "first quarter of fiscal 2026, following the Stuart Weitzman Business Divestiture").Divestiture, the Company's reportable segments are Coach and Kate Spade. Refer to Note 5, "Acquisitions and Divestitures," and Note 21, "Subsequent Events,Divestitures" for further information.

On August 10, 2023, the Company entered into the Merger Agreement by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned subsidiary of Tapestry, and Capri. In order to finance the Capri Acquisition, on November 27, 2023, the Company issued $4.50 billion of U.S. dollar-denominated senior unsecured notes (the "Capri Acquisition USD Senior Notes") and €1.50 billion of Euro-denominated senior unsecured notes (the "Capri Acquisition EUR Senior Notes" and, together with the Capri Acquisition USD Senior Notes, the "Capri Acquisition Senior Notes") which, together with the $1.40 billion of delayed draw unsecured term loan facilities (the "Capri Acquisition Term Loan Facilities") executed on August 30, 2023, completecompleted the expected financing for the Capri Acquisition. On April 22, 2024, the FTC filed a complaint against the Company and Capri in the United States District Court for the Southern District of New York seeking to enjoin the consummation of the Capri Acquisition, and on October 24, 2024, the Court issued its Opinion and Order granting the FTC's request for a preliminary injunction of the Merger, pending an administrative trial on the merits which was scheduled to begin on December 9, 2024. On October 28, 2024, the Company and Capri filed a Notice of Appeal with respect to the October 24, 2024 Opinion and Order. On November 6, 2024, the United States Court of Appeals for the Second Circuit entered an order setting an expedited briefing schedule for the appeal of the decision of the United States District Court of the Southern District of New York granting the preliminary injunction of the merger. On November 13, 2024, the Parties entered into a Termination Agreement (the “Termination Agreement”), pursuant to which the Parties agreed to terminate the Merger Agreement, including all schedules and exhibits thereto and all ancillary agreements contemplated thereby or entered pursuant thereto (the “Termination Date”),thereto, effective immediately. Pursuant to the Termination Agreement, the Company agreed to reimburse Capri for its expenses in an amount equal to $45.1 million in cash on November 14, 2024. The Parties also agreed to release each other from claims, demands, damages, actions, causes of action and liability relating to or arising out of the Merger Agreement and the transactions contemplated therein or thereby. Following termination of the Merger Agreement, the Parties and the FTC filed a stipulation withdrawing the appeal to the United States Court of Appeals for the Second Circuit on November 19, 2024 and the Second Circuit dismissed the appeal on November 20, 2024. The Parties and the FTC also filed a Joint Motion to dismiss the complaint in the administrative trial on November 15, 2024 and the FTC dismissed the complaint on December 4, 2024. On November 25, 2024, due to the termination of the Merger Agreement and pursuant to the terms of the indenture governing the Capri Acquisition Senior Notes, as supplemented, the Company redeemed all outstanding Capri Acquisition Senior Notes at a redemption price of 101% of the aggregate principal amount of such Capri Acquisition Senior Notes, plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Capri Acquisition Term Loan Facilities were terminated concurrently with the execution of the Termination Agreement on November 13, 2024. Refer to Note 5, "Acquisitions and Divestitures" and Note 12, "Debt" for further information.

TheDuring fiscal 2026, the macroeconomic environment remained challenging and volatilevolatile. duringWhile fiscal 2025. Severalcertain organizations that monitor the world’sglobal economy, including the International Monetary Fund,economy continue to forecast growthgrowth, these projections remain subject to uncertainty and have fluctuated in therecent globalperiods. economy.Recent Someforecasts of these organizations have recently revised the forecast slightly upwards since the third quarter of fiscal 2025. The forecast is below the historical growth average and is reflective ofreflect the current volatile environment, including escalationthe continuation of trade tensions, tighter monetary and fiscal policies which have continued to moderate inflation, financial market volatilityvolatility, inflationary pressure and the negative economic impacts of geopolitical instability in certain regions of the world.

In fiscal 2025,2026, the U.S. Dollar has continued to fluctuate as compared to foreign currencies in regions where we conduct our business. During fiscal 2025,2026, this trend has resulted in impacts to our business including, but not limited to, decreasedincreased Net sales of $13.4$58.7 million, noand a negative impact of approximately 10 basis points to both gross margin and approximately 20 basis point negative impact to operating margin.

On December 12, 2022, the E.U. member states also reached an agreement to implement the Organization for Economic Co-operation and Development’s (“OECD”) reform of international taxation known as Pillar Two Global Anti-Base Erosion Rules (“GloBE”), which broadly mirrors the Inflation Reduction Act by imposing a 15% global minimum tax on multinational companies,companies. whichThese wasrules subject multinational companies to three possible tax mechanisms individually known as the Income Inclusion Rule (“IIR”), the Undertaxed Profits Rule (“UTPR”) and the Qualified Domestic Minimum Top-up Tax (“QDMTT”). The rules became effective on January 1, 2025. Based on the countries in which we do business, these rule changes didstarted notto have a materialnegatively impact the Company's effective tax rate beginning in fiscal 2025.2026. OtherOn countriesJanuary are also implementing similar legislation with effective dates starting in fiscal5, 2026, known as Qualifying Domestic Minimum Top-Up Tax ("QDMTT"). On June 26, 2025, the U.S.OECD Treasurypublished reachedadditional an agreement with the other G7 countriesguidance regarding the application of GloBE rules to U.S. parented multinational enterprises ("U.S. MNEs"). Most notably, the agreement includes a full exclusion forexcludes U.S. MNEs from the Undertaxed Profits RuleUTPR and IncomeIIR; Inclusion Rule, which are two of the three taxing mechanisms under GloBE. Given that the third mechanism,however, QDMTT is still in force,force itbased ison unclearcurrent whatlegislation. impact if any this agreement will haveBased on the Company.jurisdictions Unlessin U.S.which MNEswe areoperate likewiseand excludedour fromcurrent QDMTT,assessment of the Companyapplicable believesrules, QDMTTwe woulddo havenot expect these developments to result in a negativematerial impactincrease onto itsthe Company's effective tax rate in fiscal 20262027 andcompared beyond.to fiscal 2026.

Net sales in fiscal 20252026 increased 5.1%14.2% or $339.5$993.5 million to $7.01$8.00 billion. Excluding the impact of the Stuart Weitzman Business and foreign currency, net sales increased by 5.3%16.7% or $352.9$1.14 million.billion.

•Coach Net Sales increased 9.9%23.5% or $503.2$1.32 millionbillion to $5.60$6.91 billion in fiscal 2025.2026. Excluding the impact of foreign currency, net sales increased 10.1%22.5% or $514.5$1.26 million.billion. This increase in net sales was primarily due to an increase of $445.0$1.09 millionbillion in DTC sales as a result of an increase in both e-commerce and store sales, mainly driven by North America, EuropeGreater China, and Greater China. The increase in net sales was also attributed to a $89.4 million increase in wholesale sales, mainly driven by North America and Greater China.Europe.

•Results of Operations. An analysis of our results of operations in the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025 and the first sixnine months of fiscal 2026 compared to the first sixnine months of fiscal 2025.

•Coach - Includes global sales of primarily Coach brand products to customers through our DTC,direct-to-consumer ("DTC"), wholesale and licensing businesses.

On February 16, 2025, the Company entered into a sale and purchase agreement (the “Purchase Agreement”) with Caleres, Inc. (the “Purchaser”) to sell the Stuart Weitzman Business (as defined below). The sale was completed on August 4, 2025 (the "Stuart Weitzman Business Divestiture"). The Purchaser acquired certain assets and liabilities of the Company's global business of designing, manufacturing, promotion, marketing, production, distribution, sales and licensing of Stuart Weitzman branded products (the "Stuart Weitzman Business") for totala cashfinal considerationaggregate purchase price of $105.0$109.1 millionmillion, (thewhich "Purchase Price"). The Purchase Price is subject toincluded customary adjustments for cash, indebtedness, net working capital and transaction expenses.indebtedness. Effective in the first quarter of fiscal 2026, following the Stuart Weitzman Business Divestiture, the Company's reportable segments are Coach and Kate Spade. Refer to Note 5, "Acquisitions and Divestitures" for further information.

During the secondthird quarter of fiscal 2026, the macroeconomic environment remained challenging and volatile. While certain organizations that monitor the global economy, including the International Monetary Fund,economy continue to forecast growth, these projections remain subject to uncertainty and have fluctuated in recent periods. The forecast is reflective of the current volatile environment, including the continuation of trade tensions, financial market volatilityvolatility, inflationary pressure and the negative economic impacts of geopolitical instability in certain regions of the world.

In the secondthird quarter of fiscal 2026, the U.S. Dollar continued to fluctuate as compared to foreign currencies in regions where we conduct our business. This trend has resulted in impacts to our business including, but not limited to, for the three months ended DecemberMarch 27,28, 2025,2026, increased Net sales of $0.9$35.1 million,million withand noa negative impact of approximately 10 basis points to eitherboth gross margin orand operating margin. For the sixnine months ended DecemberMarch 27,28, 2025,2026, fluctuations in foreign currency exchange rates resulted in increased Net sales of $11.4$46.5 million and a negative impact to gross margin and operating margin of approximately 20 basis points to both gross margin and 20operating basis points, respectively.margin.

The Company's results are typically affected by seasonal trends. During the first fiscal quarter, we typically build inventory for the winter and holiday season. In the second fiscal quarter, working capital requirements are reduced substantially as we generate higher net sales and operating income, especially during the holiday season. Fluctuations in net sales, operating income and operating cash flows of the Company in any fiscal quarter may be affected by the timing of wholesale shipments and other events affecting retail sales, including weather and macroeconomic events.

SECONDTHIRD QUARTER FISCAL 2026 COMPARED TO SECONDTHIRD QUARTER FISCAL 2025

The following table summarizes results of operations for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.

The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The reported results during the secondthird quarter of fiscal 2026 and fiscal 2025 reflect certain items which affect the comparability of our results, as noted in the following table. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.

SecondThird Quarter Fiscal 2026 Items

In the secondthird quarter of fiscal 2026, the Company incurred charges as follows:

•Acquisition and Divestiture - Total pre-tax income of $0.8$3.0 million related to the Stuart Weitzman Business Divestiture primarily due to income from the Transition Services Agreement with the Purchaser ("TSA"), partially offset by professional fees.Divestiture.

These actions taken together negatively impacted operating income by $55.4 million, increased Loss on extinguishment of debt by $119.4 million, increased interest expense by $22.8$2.6 million and reduced the provision for income tax by $57.8$0.4 million resulting in a net decrease in net income byof $139.8$2.2 million or $0.62$0.01 per diluted share.

Tapestry, Inc. Summary – SecondThird Quarter of Fiscal 20262025 Items

The change in Net sales for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025 has been presented both including and excluding currency fluctuation effects. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.

Net sales in the secondthird quarter of fiscal 2026 increased 14.0%21.2% or $307.0$336.0 million to $2.50$1.92 billion. Excluding the impact of the Stuart Weitzman Business and foreign currency, net sales increased by 17.7%22.6% or $375.8$347.1 million.

•Coach Net sales increased 25.3%31.5% or $433.1$407.5 million to $2.14$1.70 billion in the secondthird quarter of fiscal 2026. Excluding the impact of foreign currency, Net sales increased 25.3%29.0% or $432.3$374.9 million. This increase in Net sales was primarily due to an increase of $373.6$322.9 million in DTC sales, mainly driven by North America, Greater China and Europe.

•Kate Spade Net sales decreased 13.6%10.3% or $56.4$25.3 million to $360.0$219.6 million in the secondthird quarter of fiscal 2026. Excluding the impact of foreign currency, Net sales decreased 13.6%11.3% or $56.5$27.8 million. This decrease in Net sales was primarily due to a decrease of $54.0$24.3 million in DTC sales.

Gross profit increased 15.6%22.4% or $255.3$270.7 million to $1.89$1.48 billion in the secondthird quarter of fiscal 2026 from $1.63$1.21 billion in the secondthird quarter of fiscal 2025. Gross margin increased 11080 basis points to 75.5%76.9% in the secondthird quarter of fiscal 2026 from 74.4%76.1% in the secondthird quarter of fiscal 2025, which includes a 5070 basis point benefit from the divestiture of Stuart Weitzman. The remaining 6010 basis point increase in Gross margin was primarily attributed to net pricing improvements,improvements and favorable brand mix, partiallysubstantially offset by the impact of higher tariffs. Refer to "CurrentGlobal MacroeconomicEconomic Conditions and OutlookIndustry Trends" for further information.

The Company includes inbound product-related transportation costs from our service providers within Cost of sales. The Company, similar to some companies, includes certain transportation-related costs due to our distribution network in SG&A expenses rather than in Cost of sales; for this reason, our gross margins may not be comparable to thatthose of entities that include all costs related to their distribution network in Cost of sales.

SG&A expenses increased 2.8%10.2% or $31.7$96.9 million to $1.17$1.05 billion in the secondthird quarter of fiscal 2026 as compared to $1.14$952.1 billionmillion in the secondthird quarter of fiscal 2025. As a percentage of net sales, SG&A expenses decreased to 46.8%54.6% during the secondthird quarter of fiscal 2026 from 51.9%60.1% during the secondthird quarter of fiscal 2025. Excluding items affecting comparability in the secondthird quarter of fiscal 2026, SG&A expenses increased 7.7%12.7% or $83.7$117.9 million to $1.17$1.05 billion from $1.08$928.5 billionmillion in the secondthird quarter of fiscal 2025. SG&A as a percentage of net sales decreased 270410 basis points to 46.7%54.5% compared to 49.4%58.6% during the secondthird quarter of fiscal 2025, which includes a 4010 basis point benefit from the divestiture of Stuart Weitzman. The remaining 230400 basis point decrease in SG&A as a percentage of net sales was primarily due to leverage of fixed costs on higher net sales, lower distribution costs and lower professional fees, partially offset by higher marketing spend.

(1)Excluding items affecting comparability, SG&A expenses decreasedincreased 1.3%24.3% or $2.8$145.3 million to $202.8$743.7 million in the secondthird quarter of fiscal 2026 as compared to $205.6$598.4 million in the secondthird quarter of fiscal 2025. SG&A as a percentage of net sales increaseddecreased approximately 710260 basis points to 56.4%43.7% in the secondthird quarter of fiscal 2026 as compared to 49.3%46.3% in the secondthird quarter of fiscal 2025.

(2)Excluding items affecting comparability, SG&A expenses increaseddecreased 2.4%1.4% or $3.6$2.2 million to $143.3$158.2 million in the secondthird quarter of fiscal 2026 as compared to $139.7$160.4 million in the secondthird quarter of fiscal 2025. SG&A as a percentage of net sales increased 650 basis points to 72.0% in the third quarter of fiscal 2026 as compared to 65.5% in the third quarter of fiscal 2025.

Operating income increased $223.6$173.8 million to $716.4$427.5 million in the secondthird quarter of fiscal 2026 as compared to $492.8$253.7 million in the secondthird quarter of fiscal 2025. Operating margin increased to 28.6%22.3% in the secondthird quarter of fiscal 2026 as compared to 22.4%16.0% in the secondthird quarter of fiscal 2025. Excluding items affecting comparability, operating income increased $171.6$152.8 million to $719.8$430.1 million in the secondthird quarter of fiscal 2026 from $548.2$277.3 million in the secondthird quarter of fiscal 2025. Operating margin increased approximately 390490 basis points to 28.8%22.4% in the secondthird quarter of fiscal 2026 as compared to 24.9%17.5% in the secondthird quarter of fiscal 2025, which includes aan 9080 basis point benefit from the divestiture of Stuart Weitzman. The remaining increase in operating margin was primarily attributed to a 6010 basis point increase in Gross margin and a 230400 basis point decrease in SG&A as a percentage of sales.

•Kate SpadeCoach Operating Income decreasedincreased $51.7$175.1 million to $16.3$595.2 million in the secondthird quarter of fiscal 2026. Operating margin decreasedincreased approximately 260 basis points to 4.5%35.0% in the secondthird quarter of fiscal 2026 as compared to 16.4%32.4% in the secondthird quarter of fiscal 2025. Excluding items affecting comparability, operating income decreasedincreased $51.4$175.2 million to $16.6$595.3 million in the secondthird quarter of fiscal 2026 from $68.0$420.1 million in the secondthird quarter of fiscal 2025; and operating margin decreasedincreased approximately 1,180260 basis points to 4.6%35.0% in the secondthird quarter of fiscal 2026 as compared to 16.4%32.4% in the secondthird quarter of fiscal 2025. This decreaseincrease in operating margin was primarily attributed to:

◦SG&A expenses as a percentage of net sales, increaseddecreased approximately 710260 basis points mainly drivendue byto higher marketing spend and deleverageleverage of fixed costs on lowerhigher net sales.sales, partially offset by higher marketing spend.