CAPRI HOLDINGS LTD MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K)

The following Management's Discussion and Analysis ("MD&A") of our Financial
Condition and Results of Operations should be read in conjunction with the
consolidated financial statements and notes thereto included as part of this
Annual Report on Form 10-K. Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current expectations and
projections of the management of the Company about future events, and are
therefore subject to risks and uncertainties which could cause actual results to
differ materially from the future results expressed or implied by the
forward-looking statements. All statements other than statements of historical
facts included herein, may be forward-looking statements. Forward-looking
statements include information concerning the Company's goals, future plans and
strategies, including with respect to ESG goals, initiatives and ambitions as
well as the Company's possible or assumed future results of operations,
including descriptions of its business strategy. Without limitation, any
statements preceded or followed by or that include the words "plans",
"believes", "expects", "intends", "will", "should", "could", "would", "may",
"anticipates", "might" or similar words or phrases, are forward-looking
statements. These forward-looking statements are not guarantees of future
financial performance. Such forward-looking statements involve known and unknown
risks and uncertainties that could significantly affect expected results and are
based on certain key assumptions, which could cause actual results to differ
materially from those projected or implied in any forward-looking statements.
These risks, uncertainties and other factors include the effect of the COVID-19
pandemic and its potential material and significant impact on the Company's
future financial and operational results if retail stores are forced to close
again and the pandemic is prolonged, including that our estimates could
materially differ if the severity of the COVID-19 situation worsens, or if there
are further supply chain disruptions, including additional production delays and
increased costs, the length and severity of such outbreak across the globe and
the pace of recovery following the COVID-19 pandemic, levels of cash flow and
future availability of credit, compliance with restrictive covenants under the
Company's credit agreement, the Company's ability to integrate successfully and
to achieve anticipated benefits of any acquisition and to successfully execute
our growth strategies; the risk of disruptions to the Company's businesses;
risks associated with operating in international markets and our global sourcing
activities; the risk of cybersecurity threats and privacy or data security
breaches; the negative effects of events on the market price of the Company's
ordinary shares and its operating results; significant transaction costs;
unknown liabilities; the risk of litigation and/or regulatory actions related to
the Company's businesses; fluctuations in demand for the Company's products;
levels of indebtedness (including the indebtedness incurred in connection with
acquisitions); the timing and scope of future share buybacks, which may be made
in open market or privately negotiated transactions, and are subject to market
conditions, applicable legal requirements, trading restrictions under the
Company's insider trading policy and other relevant factors, and such share
repurchases may be suspended or discontinued at any time, the level of other
investing activities and uses of cash; changes in consumer traffic and retail
trends; higher consumer debt levels, recession and inflationary pressures, loss
of market share and industry competition; fluctuations in the capital markets;
fluctuations in interest and exchange rates; the occurrence of unforeseen
epidemics and pandemics, disasters or catastrophes; extreme weather conditions
and natural disasters; political or economic instability in principal markets;
adverse outcomes in litigation; and general, local and global economic,
political, business and market conditions including acts of war and other
geopolitical conflicts, as well as those risks set forth in the Company's
filings with the U.S. Securities and Exchange Commission, including in this
Annual Report on Form 10-K, particularly under "Item 1A. Risk Factors".

Insight

Our business

Capri Holdings Limited is a global fashion luxury group, consisting of iconic
brands that are industry leaders in design, style and craftsmanship, led by a
world-class management team and renowned designers. Our brands cover the full
spectrum of fashion luxury categories, including women's and men's accessories,
footwear and ready-to-wear, as well as wearable technology, watches, jewelry,
eyewear and a full line of fragrance products. Our goal is to continue to extend
the global reach of our brands while ensuring that they maintain their
independence and exclusive DNA.

Our Versace brand has long been recognized as one of the world's leading
international fashion design houses and is synonymous with Italian glamour and
style. Founded in 1978 in Milan, Versace is known for its iconic and
unmistakable style and unparalleled craftsmanship. Over the past several
decades, the House of Versace has grown globally from its roots in haute
couture, expanding into the design, manufacturing, distribution and retailing of
accessories, ready-to-wear, footwear, eyewear, watches, jewelry, fragrance and
home furnishings businesses. Versace's design team is led by Donatella Versace,
who has been the brand's Artistic Director for over 20 years. Versace
distributes its products through a worldwide distribution network, which
includes boutiques in some of the world's most glamorous cities, its e-commerce
sites, as well as through the most prestigious department and specialty stores
worldwide.
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Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product
range, enabling it to develop into a leading global luxury accessories brand,
whose core product offering is women's luxury shoes, complemented by
accessories, including handbags, small leather goods, jewelry, scarves and
belts, as well as a growing men's luxury shoe and accessory business. In
addition, certain categories, such as fragrances and eyewear are produced under
licensing agreements. Jimmy Choo's design team is led by Sandra Choi, who has
been the Creative Director for the brand since its inception in 1996. Jimmy Choo
products are unique, instinctively seductive and chic. The brand offers classic
and timeless luxury products, as well as innovative products that are intended
to set and lead fashion trends. Jimmy Choo is represented through its global
store network, its e-commerce sites, as well as through the most prestigious
department and specialty stores worldwide.

Our Michael Kors brand was launched 40 years ago by Michael Kors, a
world-renowned designer, whose vision has taken the Company from its beginnings
as an American luxury sportswear house to a global accessories, footwear and
ready-to-wear company with a global distribution network that has presence in
over 100 countries through Company-operated retail stores and e-commerce sites,
leading department stores, specialty stores and select licensing partners.
Michael Kors is a highly recognized luxury fashion brand in the Americas and
Europe with growing brand awareness in other international markets. Michael Kors
features distinctive designs, materials and craftsmanship with a jet-set
aesthetic that combines stylish elegance and a sporty attitude. Michael Kors
offers three primary collections: the Michael Kors Collection luxury line,
the MICHAEL Michael Kors accessible luxury line and the Michael Kors Mens line.
The Michael Kors Collection establishes the aesthetic authority of the entire
brand and is carried by select retail stores, our e-commerce sites, as well as
in the finest luxury department stores in the world. MICHAEL Michael Kors has a
strong focus on accessories, in addition to offering footwear and ready-to-wear,
and addresses the significant demand opportunity in accessible luxury goods. We
have also been developing our men's business in recognition of the significant
opportunity afforded by the Michael Kors brand's established fashion authority
and the expanding men's market. Taken together, our Michael Kors collections
target a broad customer base while retaining our premium luxury image.

Certain Factors Affecting Financial Condition and Results of Operations

COVID-19 Pandemic. The ongoing COVID-19 pandemic has caused significant
disruption to the global economy, consumer spending and behavior, tourism and to
financial markets. While the overall COVID-19 situation appears to be improving,
our business and operating results may be negatively impacted if the virus
worsens or mutates, if vaccination efforts are unsuccessful and/or if regions or
countries take further actions to contain the virus (including additional
extended lock-downs and travel restrictions), among others. We continue to
monitor the latest developments regarding the pandemic and have made certain
assumptions about the pandemic for purposes of our business and operating
results, including assumptions regarding the duration, severity and global
macroeconomic impacts of the pandemic; however, the full extent of the impact of
COVID-19 on our business and operating results will depend largely on future
events outside of our control, including the duration and severity of the
pandemic and the success of vaccination efforts, new information concerning the
virus or variants of the virus, actions different states, regions or countries
may take to contain the virus (including extended lock-downs and travel
restrictions) and the economic impacts of the pandemic, including recent
inflationary pressures, among others. See Item 1A. "Risk Factors" - "The
COVID-19 pandemic may continue to have a material adverse effect on our business
and results of operations." for additional discussion regarding risks to our
business associated with the COVID-19 pandemic.

Channel shift, macroeconomic factors and demand for our accessories and related
merchandise. Our performance is affected by trends in the luxury goods industry,
global consumer spending, macroeconomic factors, overall levels of consumer
travel and spending on discretionary items as well as shifts in demographics and
changes in lifestyle preferences. Through 2019, the personal luxury goods market
grew at a mid-single digit rate over the past 20 years, with more recent growth
driven by stronger Chinese demand from both international and local consumers
and demographic and socioeconomic shifts resulting in younger consumers
purchasing more luxury goods. However, in 2020, due to the impact of the
COVID-19 crisis, the personal luxury goods market declined 23%. Market studies
indicate that the personal luxury goods market returned to 2019 levels in 2021,
and the market is predicted to increase at a 10% compound annual growth rate
between 2020 and 2025. Future growth is expected to be driven by e-commerce,
Chinese consumers and younger generations. As the personal luxury goods market
continues to evolve, Capri is committed to creating engaging luxury experiences
globally. In our view, increased customer engagement and tailoring merchandise
to customer shopping and communication preferences are key to growing market
share.

We also continue to adjust our retail operating strategy to the changing
business environment. We have finalized the planned store closures under the
Capri Retail Store Optimization Program as of the end of Fiscal 2022. As of
April 2, 2022, we closed a total of 167 stores and recorded total net
restructuring charges of $14 million relating to the plan. We recorded net
restructuring charges of $9 million and $5 million during Fiscal 2022 and Fiscal
2021, respectively, relating to the plan. See Item 9B - Other Information for
additional information. Collectively, we continue to anticipate ongoing savings
as a result of the store closures and lower depreciation associated with the
impairment charges being recorded.
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Foreign currency fluctuation. Our consolidated operations are impacted by the
relationships between our reporting currency, the United States dollar, and
those of our non-United States subsidiaries whose functional/local currency is
other than the United States dollar, primarily the Euro, the British Pound, the
Chinese Renminbi, the Japanese Yen, the Korean Won and the Canadian dollar,
among others. We continue to expect volatility in the global foreign currency
exchange rates, which may have a negative impact on the reported results of
certain of our non-United States subsidiaries in the future, when translated to
the United States dollar.

Disruptions or delays in shipping and distribution and other supply chain
constraints. We have been experiencing global logistics challenges, including
delays as a result of port congestion, vessel availability, container shortages
and temporary factory closures which are expected to continue for Fiscal 2023.
Our freight costs have increased as carrier rates for ocean and air shipments
have increased significantly, and the supply chain disruptions have caused us to
increase our use of air freight with greater frequency than in the past. Any
future disruptions in our shipping and distribution network, including impacts
on our supply chain due to temporary closures of our manufacturing partners and
shipping and fulfillment constraints, could have a negative impact on our
results of operations. See Item 1A. "Risk Factors" - "We primarily use foreign
manufacturing contractors and independent third-party agents to source our
finished goods and our business is subject to risks inherent in global sourcing
activities, including disruptions or delays in manufacturing or shipments." for
additional discussion.

Costs of manufacturing, tariffs and import regulations. Our industry is subject
to volatility in costs related to certain raw materials used in the
manufacturing of our products. This volatility applies primarily to costs driven
by commodity prices, which can increase or decrease dramatically over a short
period of time. In addition, our costs may be impacted by sanction tariffs
imposed on our products due to changes in trade terms. For example, we have
historically received benefits from duty-free imports on certain products from
certain countries pursuant to the GSP program. The GSP program expired on
December 31, 2020. If the GSP program is not renewed or otherwise made
retroactive, we will continue to experience significant additional duties and
our gross margin will continue to be negatively impacted. Additionally, we are
subject to government import regulations, including CBP withhold release orders.
The imposition of taxes, duties and quotas, the withdrawal from or material
modification to trade agreements and/or if CBP detains shipments of our goods
pursuant to a withhold release order could have a material adverse effect on our
business, results of operations and financial condition. If additional tariffs
or trade restrictions are implemented by the United States or other countries,
the cost of our products could increase which could adversely affect our
business. In addition, commodity prices and tariffs may have an impact on our
revenues, results of operations and cash flows. We use commercially reasonable
efforts to mitigate these effects by sourcing our products as efficiently as
possible and diversifying the countries where we produce. In addition,
manufacturing labor costs are also subject to degrees of volatility based on
local and global economic conditions. We use commercially reasonable efforts to
source from localities that suit our manufacturing standards and result in more
favorable labor driven costs to our product.

Segment information

We operate in three segments to present, which are as follows:

Versace

We generate revenue through the sale of Versace luxury accessories,
ready-to-wear and footwear through directly operated Versace boutiques
throughout North America (United States and Canada), certain parts of EMEA
(Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania),
as well as through Versace outlet stores and e-commerce sites. In addition,
revenue is generated through wholesale sales to distribution partners (including
geographic licensing arrangements), multi-brand department stores and specialty
stores worldwide, as well as through product license agreements in connection
with the manufacturing and sale of products, including jeans, fragrances,
watches, jewelry, eyewear and home furnishings.

jimmy choo

We generate revenue through the sale of Jimmy Choo luxury goods through directly
operated Jimmy Choo retail and outlet stores throughout the Americas (United
States, Canada and Latin America), certain parts of EMEA and certain parts of
Asia, through our e-commerce sites, as well as through wholesale sales of luxury
goods to distribution partners (including geographic licensing arrangements that
allow third parties to use the Jimmy Choo tradename in connection with retail
and/or wholesale sales of Jimmy Choo branded products in specific geographic
regions), multi-brand department stores and specialty stores worldwide. In
addition, revenue is generated through product licensing agreements, which allow
third parties to use the Jimmy Choo brand name and trademarks in connection with
the manufacturing and sale of products, including fragrances and eyewear.
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Michael Kors

We generate revenue through the sale of Michael Kors products through four
primary Michael Kors retail store formats: "Collection" stores, "Lifestyle"
stores (including concessions), outlet stores and e-commerce, through which we
sell our products, as well as licensed products bearing our name, directly to
consumers throughout the Americas, certain parts of EMEA and certain parts of
Asia. Our Michael Kors e-commerce business includes e-commerce sites in the
United States, Canada and EMEA and Asia. We also sell Michael Kors products
directly to department stores, primarily located across the Americas and EMEA,
to specialty stores and travel retail shops in the Americas, Europe and Asia,
and to our geographic licensees in certain parts of EMEA, Asia and Brazil. In
addition, revenue is generated through product and geographic licensing
arrangements, which allow third parties to use the Michael Kors brand name and
trademarks in connection with the manufacturing and sale of products, including
watches, jewelry, fragrances and eyewear, as well as through geographic
licensing arrangements, which allow third parties to use the Michael Kors
tradename in connection with the retail and/or wholesale sales of our Michael
Kors branded products in specific geographic regions.

Unrestricted business expenses

In addition to the reportable segments discussed above, we have certain
corporate costs that are not directly attributable to our brands and, therefore,
are not allocated to segments. Such costs primarily include certain
administrative, corporate occupancy, shared service and information systems
expenses, including ERP system implementation costs and Capri transformation
program costs. In addition, certain other costs are not allocated to segments,
including restructuring and other charges, impairment costs, COVID-19 related
charges, charitable donations and the war in Ukraine. The segment structure is
consistent with how our chief operating decision maker plans and allocates
resources, manages the business and assesses performance. The following table
presents our total revenue and income (loss) from operations by segment for
Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in millions):

                                                                                      Fiscal Years Ended
                                                                       April 2,            March 27,           March 28,
                                                                         2022                2021                2020
Total revenue:
                 Versace                                             $    1,088          $      718          $      843
                 Jimmy Choo                                                 613                 418                 555
                 Michael Kors                                             3,953               2,924               4,153
Total revenue                                                        $    

5,654 $4,060 $5,551

Operating income (loss):

                 Versace                                             $      185          $       21          $       (8)
                 Jimmy Choo                                                  13                 (55)                (13)
                 Michael Kors                                             1,005                 595                 850
Total segment income from operations                                      1,203                 561                 829
Less:            Corporate expenses                                        (190)               (152)               (152)
                 Impairment of assets (1)                                   (73)               (316)               (708)
                 COVID-19 related charges (2)                                14                 (42)               (119)
                 Impact of war in Ukraine (3)                                (9)                  -                   -
                 Restructuring and other charges                            (42)                (32)                (42)
Total income (loss) from operations                                  $      903          $       19          $     (192)




(1)Impairment of assets during Fiscal 2022 includes $50 million, $19 million and
$4 million of impairment charges related to the Michael Kors, Versace and Jimmy
Choo reportable segments, respectively. Impairment of assets during Fiscal 2021
includes $191 million, $91 million and $34 million of impairment charges related
to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.
Impairment of assets during Fiscal 2020 includes $434 million, $187 million and
$87 million of impairment charges related to the Jimmy Choo, Michael Kors and
Versace reportable segments, respectively.
(2)COVID-19 related charges during Fiscal 2022 primarily include net inventory
credits of $16 million as a result of better than expected sell-through and
severance expense of $2 million, respectively. Net inventory credits during
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Fiscal 2022 is change of estimate from better than expected sell-through.
COVID-19 related charges during Fiscal 2021, primarily include net inventory
credits and severance expense of $10 million and $24 million, respectively.
COVID-19 related charges during Fiscal 2020, primarily include additional
inventory reserves and credit losses of $92 million and $25 million,
respectively. Inventory related costs are recorded within costs of goods sold
and severance expense and credit losses are recorded within selling, general and
administrative expenses in the consolidated statements of operations and
comprehensive income (loss).
(3)These charges primarily relate to incremental credit losses and inventory
reserves which are a direct impact of the war in Ukraine. Credit losses are
recorded within selling, general and administrative expenses and inventory
related costs are recorded within costs of goods sold in the consolidated
statements of operations and comprehensive income (loss).

The following table presents our global network of retail stores and wholesale
doors:

                                                                                   As of
                                                         April 2,                March 27,               March 28,
                                                           2022                    2021                    2020
Number of full price retail stores (including
concessions):
Versace                                                       149                     153                     157
Jimmy Choo                                                    181                     176                     179
Michael Kors                                                  524                     529                     568
                                                              854                     858                     904

Number of outlet stores:
Versace                                                        60                      57                      49
Jimmy Choo                                                     56                      51                      47
Michael Kors                                                  301                     291                     271
                                                              417                     399                     367

Total number of retail stores                               1,271                   1,257                   1,271

Total number of wholesale doors:
Versace                                                       803                     868                     824
Jimmy Choo                                                    446                     450                     554
Michael Kors                                                2,742                   2,852                   2,982
                                                            3,991                   4,170                   4,360

The following table shows our retail stores by geographic location:

                                                                   As of                                                                   As of
                                                               April 2, 2022                                                           March 27, 2021
                                         Versace                Jimmy Choo             Michael Kors             Versace                  Jimmy Choo             Michael Kors
Store count by region:
The Americas                                 39                       45                     334                    34                         44                     353
EMEA                                         55                       73                     176                    57                         74                     176
Asia                                        115                      119                     315                   119                        109                     291
                                            209                      237                     825                   210                        227                     820



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Key performance indicators and statistics

We use a number of key operating performance indicators to assess our performance, including the following (in millions of dollars):

Closed fiscal years

                                                        April 2,            March 27,            March 28,
                                                          2022                 2021                 2020
Total revenue                                         $    5,654          $     4,060          $     5,551

Gross profit as a percent of total revenue                  66.2  %              64.0  %              58.9  %
Income (loss) from operations                         $      903          $ 

19 ($192)
Operating income (loss) as a percentage of total income

                                                     16.0  %               0.5  %              (3.5) %


Significant Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenue and
expenses during the reporting period. Critical accounting policies are those
that are the most important to the portrayal of our results of operations and
financial condition and that require our most difficult, subjective and complex
judgments to make estimates about the effect of matters that are inherently
uncertain. In applying such policies, we must use certain assumptions that are
based on our informed judgments, assessments of probability and best estimates.
Estimates, by their nature, are subjective and are based on analysis of
available information, including current and historical factors and the
experience and judgment of management. We evaluate our assumptions and estimates
on an ongoing basis. While our significant accounting policies are detailed in
Note 2 to the accompanying financial statements, our critical accounting
policies are discussed below and include revenue recognition, inventories,
long-lived assets, goodwill and other indefinite-lived intangible assets,
share-based compensation, derivatives and income taxes.

Revenue recognition

Revenue is recognized when control of the promised goods or services is
transferred to our customers in an amount that reflects the consideration we
expect to be entitled to in exchange for goods or services. We recognize retail
store revenue when control of the product is transferred at the point of sale at
our owned stores, including concessions. Revenue from sales through our
e-commerce sites is recognized at the time of delivery to the customer, reduced
by an estimate of returns. Wholesale revenue is recognized net of estimates for
sales returns, discounts, markdowns and allowances, after merchandise is shipped
and control of the underlying product is transferred to our wholesale customers.
To arrive at net sales for retail, gross sales are reduced by actual customer
returns, as well as by a provision for estimated future customer returns, which
is based on management's review of historical and current customer returns. The
amounts reserved for retail sales returns were $22 million, $20 million and $12
million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively. Net
sales for wholesale equals gross sales, reduced by provisions for estimated
future returns based on current expectations, as well as trade discounts,
markdowns, allowances, operational chargebacks, and certain cooperative selling
expenses. Total sales reserves for wholesale were $70 million, $78 million and
$154 million at April 2, 2022, March 27, 2021 and March 28, 2020, respectively.
These estimates are based on such factors as historical trends, actual and
forecasted performance and market conditions, which are reviewed by management
on a quarterly basis. Our historical estimates of these costs were not
materially different from actual results.

Royalty revenue generated from product licenses, which includes contributions
for advertising, is based on reported sales of licensed products bearing our
tradenames at rates specified in the license agreements. These agreements are
also subject to contractual minimum levels. Royalty revenue generated by
geographic licensing agreements is recognized as it is earned under the
licensing agreements based on reported sales of licensees applicable to
specified periods, as outlined in the agreements. These agreements allow for the
use of our tradenames to sell our branded products in specific geographic
regions.

Inventories

Our inventory costs include amounts paid to independent manufacturers, plus
duties and freight to bring the goods to the Company's warehouses, as well as
shipments to stores. The combined total of raw materials and work in process
inventory recorded on our consolidated balance sheets as of April 2, 2022 and
March 27, 2021 were $31 million and $28 million, respectively. We continuously
evaluate the composition of our inventory and make adjustments when the cost of
inventory is
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not expected to be fully recoverable. The net realizable value of our inventory
is estimated based on historical experience, current and forecasted demand and
market conditions. In addition, reserves for inventory losses are estimated
based on historical experience and inventory counts. Our inventory reserves are
estimates, which could vary significantly from actual results if future economic
conditions, customer demand or competition differ from expectations. Our
historical estimates of these adjustments have not differed materially from
actual results.

Long-lived assets

We evaluate all long-lived assets, including operating lease right-of-use
assets, property and equipment and definite-lived intangible assets, for
impairment whenever events or changes in circumstances indicate that the
carrying amount of any such asset may not be recoverable. For the purposes of
impairment testing, we group long-lived assets at the lowest level of
identifiable cash flow. Our leasehold improvements are typically amortized over
the life of the store lease, including reasonably assured renewals and our
shop-in-shops are amortized over a useful life of three to five years. Our
impairment testing is based on our best estimate of the future operating cash
flows. If the sum of our estimated undiscounted future cash flows associated
with the asset is less than the asset's carrying value, we would recognize an
impairment charge, which is measured as the amount by which the carrying value
exceeds the fair value of the asset. The fair values determined by management
require significant judgment and include certain assumptions regarding future
sales and expense growth rates, discount rates and estimates of real estate
market fair values. As such, these estimates may differ from actual results and
are affected by future market and economic conditions.

During Fiscal 2022, Fiscal 2021 and Fiscal 2020, we recorded impairment charges
of $83 million, $158 million and $357 million, respectively, which were
primarily related to operating lease right-of-use assets and fixed assets of our
retail store locations. Please refer to Note 7 and Note 13 of the accompanying
consolidated financial statements for additional information.

Good will and other intangible assets with an indefinite useful life

We record intangible assets based on their fair value on the date of
acquisition. Goodwill is recorded as the difference between the fair value of
the purchase consideration and the fair value of the net identifiable tangible
and intangible assets acquired. The brand intangible assets recorded in
connection with the acquisitions of Versace and Jimmy Choo were determined to be
indefinite-lived intangible assets, which are not subject to amortization. We
perform an impairment assessment of goodwill, as well as the Versace brand and
Jimmy Choo brand intangible assets on an annual basis, or whenever impairment
indicators exist. In the absence of any impairment indicators, goodwill, the
Versace brand and the Jimmy Choo brand are assessed for impairment during the
fourth quarter of each fiscal year. Judgments regarding the existence of
impairment indicators are based on market conditions and operational performance
of the business.

We may assess our goodwill and our brand indefinite-lived intangible assets for
impairment initially using a qualitative approach to determine whether it is
more likely than not that the fair value of these assets is greater than their
carrying value. When performing a qualitative test, we assess various factors
including industry and market conditions, macroeconomic conditions and
performance of our businesses. If the results of the qualitative assessment
indicate that it is more likely than not that our goodwill and other
indefinite-lived intangible assets are impaired, a quantitative impairment
analysis is performed to determine if impairment is required. We may also elect
to perform a quantitative analysis of goodwill and our indefinite-lived
intangible assets initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. We
use industry accepted valuation models and set criteria that are reviewed and
approved by various levels of management and, in certain instances, we engage
independent third-party valuation specialists for assistance. To determine the
fair value of a reporting unit, we use a combination of the income and market
approaches, when applicable. We believe the blended use of both models, when
applicable, compensates for the inherent risk associated with either model if
used on a stand-alone basis, and this combination is indicative of the factors a
market participant would consider when performing a similar valuation. If the
fair value of a reporting unit exceeds the related carrying value, the reporting
unit's goodwill is considered not to be impaired and no further testing is
performed. If the carrying value of a reporting unit exceeds its fair value, an
impairment loss is recorded for the difference. These valuations are affected by
certain estimates, including future revenue growth rates, future operating
expense growth rates, gross margins and discount rates. Future events could
cause us to conclude that impairment indicators exist and goodwill may be
impaired.
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When performing a quantitative impairment assessment of our brand intangible
assets, the fair value of the Versace and the Jimmy Choo brands is estimated
using a discounted cash flow analysis based on the "relief from royalty" method,
assuming that a third party would be willing to pay a royalty in lieu of
ownership for this intangible asset. This approach is dependent on many factors,
including estimates of future revenue growth rates, royalty rates and discount
rates. Actual future results may differ from these estimates. An impairment loss
is recognized when the estimated fair value of the brand intangible assets is
less than its carrying amount.

During the fourth quarter of Fiscal 2022, we performed our annual goodwill and
indefinite-lived intangible assets impairment analysis. Based on qualitative
impairment assessment of the Michael Kors reporting units, we concluded that it
is more likely than not that the fair value of the Michael Kors reporting units
exceeded its carrying value and, therefore, was not impaired. We elected to
perform quantitative impairment analyses for the Versace and Jimmy Choo
reporting units, using a combination of income and market approaches to estimate
the fair values of reporting units. We also elected to perform an impairment
analysis for the Versace and Jimmy Choo brand intangible assets using an income
approach to estimate the fair values. Based on the results of these assessment,
we concluded that the fair values of the Versace and Jimmy Choo reporting units
and the brand intangible assets exceeded the related carrying amounts and no
impairment was required.

In Fiscal 2021, we recorded a goodwill impairment charge of $94 million related
to the Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $69
million impairment charge related to the Jimmy Choo brand intangible assets
during Fiscal 2021. We recorded a goodwill impairment charge of $171 million
related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and
$180 million impairment charge related to the Jimmy Choo brand intangible assets
during Fiscal 2020. The impairment charges were recorded within impairment of
assets on our consolidated statement of operations and comprehensive income
(loss) for the fiscal years ended March 27, 2021 and March 28, 2020. See Note 8
to the accompanying financial statements for information relating to the annual
impairment analysis performed during the fourth quarters of Fiscal 2022, Fiscal
2021 and Fiscal 2020.

It is possible that our conclusions regarding impairment or recoverability of
goodwill or other indefinite intangible assets could change in future periods
if, for example, (i) our businesses do not perform as projected, (ii) overall
economic conditions in future years vary from current assumptions, (iii)
business conditions or strategies change from our current assumptions, (iv)
discount rates change, (v) market multiples change or (vi) the identification of
our reporting units change, among other factors. Such changes could result in a
future impairment charge of goodwill or other indefinite intangible assets.

Stock-based compensation

We grant share-based awards to certain of our employees and directors. The grant
date fair value of share options is calculated using the Black-Scholes option
pricing model, which requires us to use subjective assumptions. The closing
market price at the grant date is used to determine the grant date fair value of
restricted stock units ("RSUs") and performance-based RSUs. These values are
recognized as expense over the requisite service period, net of estimated
forfeitures, based on expected attainment of pre-established performance goals
for performance grants, or the passage of time for those grants which have only
time-based vesting requirements. Compensation expense for performance-based RSUs
is recognized over the employees' requisite service period when attainment of
the performance goals is deemed probable, which involves judgment as to
achievement of certain performance metrics.

We use our own historical experience in determining the expected holding period
and volatility of our time-based share option awards. Determining the grant date
fair value of share-based awards requires considerable judgment, including
estimating expected volatility, expected term, risk-free rate and forfeitures.
If factors change and we employ different assumptions, the fair value of future
awards and resulting share-based compensation expense may differ significantly
from what we have estimated in the past.

Derivative financial instruments

Forward exchange contracts

We use forward foreign currency exchange contracts to manage our exposure to
fluctuations in foreign currency for certain transactions. We, in our normal
course of business, enter into transactions with foreign suppliers and seeks to
minimize risks related to these transactions. We employ these contracts to hedge
the our cash flows, as they relate to foreign currency transactions. Certain of
these contracts are designated as hedges for accounting purposes, while others
remain undesignated. All of our derivative instruments are recorded in our
consolidated balance sheets at fair value on a gross basis, regardless of their
hedge designation.
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We designate certain contracts related to the purchase of inventory that qualify
for hedge accounting as cash flow hedges. Formal hedge documentation is prepared
for all derivative instruments designated as hedges, including a description of
the hedged item and the hedging instrument and the risk being hedged. The
changes in the fair value for contracts designated as cash flow hedges is
recorded in equity as a component of accumulated other comprehensive income
until the hedged item affects earnings. When the inventory related to forecasted
inventory purchases that are being hedged is sold to a third party, the gains or
losses deferred in accumulated other comprehensive income are recognized within
cost of goods sold. The Company uses regression analysis to assess effectiveness
of derivative instruments that are designated as hedges, which compares the
change in the fair value of the derivative instrument to the change in the
related hedged item. If the hedge is no longer expected to be highly effective
in the future, future changes in the fair value are recognized in earnings. For
those contracts that are not designated as hedges, changes in the fair value are
recorded to foreign currency (gain) loss in our consolidated statements of
operations and comprehensive income (loss). We classify cash flows relating to
our forward foreign currency exchange contracts related to purchases of
inventory consistently with the classification of the hedged item within cash
flows from operating activities.

We are exposed to the risk that counterparties to derivative contracts will fail
to meet their contractual obligations. In order to mitigate counterparty credit
risk, we only enter into contracts with carefully selected financial
institutions based upon their credit ratings and certain other financial
factors, adhering to established limits for credit exposure. The aforementioned
forward contracts generally have a term of no more than 12 months. The period of
these contracts is directly related to the foreign transaction they are intended
to hedge.

Net Investment Hedges

We also use fixed-to-fixed cross currency swap agreements to hedge our net
investments in foreign operations against future volatility in the exchange
rates between the United States dollar and the associated foreign currencies. We
have elected the spot method of designating these contracts under ASU 2017-12,
"Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for
Hedging Activities", and have designated these contracts as net investment
hedges. The net gain or loss on the net investment hedge is reported within
foreign currency translation gains and losses ("CTA"), as a component of
accumulated other comprehensive income on our consolidated balance sheets.
Interest accruals and coupon payments are recognized directly in interest
(income) expense, net, in our consolidated statements of operations and
comprehensive income (loss). Upon discontinuation of a hedge, all previously
recognized amounts remain in CTA until the net investment is sold, diluted or
liquidated.

We are exposed to the risk that counterparties to derivative contracts will fail
to meet their contractual obligations. In order to mitigate counterparty credit
risk, we only enter into contracts with carefully selected financial
institutions based upon their credit ratings and certain other financial
factors, adhering to established limits for credit exposure.

During the fourth quarter of Fiscal 2020, we terminated all of our net
investment hedges related to our Euro-denominated subsidiaries. The early
termination of these hedges resulted in the receipt of $296 million in cash
during the fourth quarter of Fiscal 2020. During Fiscal 2021, the Company
resumed its normal hedging program and entered into multiple fixed-to-fixed
cross-currency swap agreements to hedge its net investment in Euro-denominated
and Japanese Yen-denominated subsidiaries against future volatility in the
exchange rate between the United States dollar and these currencies. During
Fiscal 2021, the Company entered into multiple fixed-to-fixed cross-currency
swap agreements with aggregate notional amounts of $4 billion to hedge its net
investment in Euro-denominated subsidiaries and $194 million to hedge its net
investment in Japanese Yen-denominated subsidiaries against future volatility in
the exchange rates between the United States dollar and these currencies.

During the first quarter of Fiscal 2022, we modified multiple fixed-to-fixed
cross-currency swap agreements with aggregate notional amounts of $2.875 billion
to hedge its net investment in Euro denominated subsidiaries. Due to an
other-than-insignificant financing element for certain of the first quarter
modifications, net interest cash inflows of $31 million during Fiscal 2022
related to these contracts are classified as financing activities in our
consolidated statements of cash flows.

During the third and fourth quarter of Fiscal 2022, we modified multiple
fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of
$1.5 billion and $2.475 billion, respectively. The modification of these hedges
resulted in the receipt of $59 million and $130 million in cash during the third
and fourth quarter of Fiscal 2022, respectively. These amounts are classified
within investing activities in our consolidated statements of cash flows.

Interest rate swap contracts

We also use interest rate swap agreements to hedge the variability of our cash
flows resulting from floating interest rates on our borrowings. When an interest
rate swap agreement qualifies for hedge accounting as a cash flow hedge, the
changes in
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fair value is recognized in equity as a component of accumulated other comprehensive income and is reclassified to interest expense (income), net, in the same period that the hedged transactions affect the results.

During the third quarter of Fiscal 2022, we terminated our only interest rate
swap. As a result, we recognized a $1 million gain within interest (income)
expense, net, within our consolidated statements of operations and comprehensive
income (loss).

Income Taxes

Deferred income tax assets and liabilities reflect temporary differences between
the tax basis and financial reporting basis of our assets and liabilities and
are determined using the tax rates and laws in effect for the periods in which
the differences are expected to reverse. We periodically assess the
realizability of deferred tax assets and the adequacy of deferred tax
liabilities, based on the results of local, state, federal or foreign statutory
tax audits or our own estimates and judgments.

Realization of deferred tax assets associated with net operating loss and tax
credit carryforwards is dependent upon generating sufficient taxable income
prior to their expiration in the applicable tax jurisdiction. We periodically
review the recoverability of our deferred tax assets and provide valuation
allowances as deemed necessary to reduce deferred tax assets to amounts that
more-likely-than-not will be realized. This determination involves considerable
judgment and our management considers many factors when assessing the likelihood
of future realization of deferred tax assets, including recent earnings results
within various taxing jurisdictions, expectations of future taxable income, the
carryforward periods remaining and other factors. Changes in the required
valuation allowance are recorded in income in the period such determination is
made. Deferred tax assets could be reduced in the future if our estimates of
taxable income during the carryforward period are significantly reduced or
alternative tax strategies are no longer viable.

We recognize the impact of an uncertain income tax position taken on our income
tax returns at the largest amount that is more-likely-than-not to be sustained
upon audit by the relevant taxing authority. The effect of an uncertain income
tax position will not be taken into account if the position has less than a 50%
likelihood of being sustained. Our tax positions are analyzed periodically (at
least quarterly) and adjustments are made as events occur that warrant
adjustments to those positions. We record interest and penalties payable to
relevant tax authorities as income tax expense.

In response to the COVID-19 pandemic, local governments enacted, or are in the
process of enacting, measures to provide aid and economic stimulus to companies.
On March 27, 2020, the United States government enacted the Coronavirus Aid,
Relief and Economic Security Act (the "CARES Act"), which includes various tax
provisions aimed at providing economic relief. We realized a slight favorable
cash flow impact in Fiscal 2021 as a result of the deferral of income tax
payments under the CARES Act and other local government relief initiatives. We
also considered the significant adverse impact of COVID-19 on our business in
assessing the realizability of our deferred tax assets. Based on this
assessment, we determined that valuation allowances of approximately $65 million
were needed against a portion of our non-United States deferred tax assets in
Fiscal 2020 which increased to $95 million in Fiscal 2021 and during Fiscal 2022
decreased to $36 million. We will continue to monitor the impacts of COVID-19 on
our ability to realize our deferred tax assets and on the tax provision. Another
provision of the CARES Act applicable to us is the modification to allow for a
five-year carryback of net operating losses. We recognized a $13 million benefit
from a net operating loss ("NOL") carryback claim in Fiscal 2021, which
represented our provisional estimate at that time. During Fiscal 2022, we
finalized our accounting for the carryback and recognized an additional
$43 million income tax benefit.

New accounting statements

Please refer to Note 2 to the accompanying consolidated financial statements for
detailed information relating to recently adopted and recently issued accounting
pronouncements and the associated impacts.
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Results of Operations

A discussion regarding our results of operations for Fiscal 2022 compared to
Fiscal 2021 is presented below. A discussion regarding our results of operations
for Fiscal 2021 compared to Fiscal 2020 can be found under Item 7 in our Annual
Report on Form 10-K for the year ended March 27, 2021, filed with the SEC on May
26, 2021, which is available on the SEC's website at www.sec.gov and our
investor website at www.capriholdings.com.

Comparison of fiscal year 2022 with fiscal year 2021

The following table details the results of our operations for fiscal 2022 and fiscal 2021 and expresses the relationship between certain line items and total revenue as a percentage (in millions of dollars):

                                                   Fiscal Years Ended                                                              % of Total                % of Total
                                              April 2,             March 27,                                                      Revenue for                Revenue for
                                                2022                 2021             $ Change             % Change               Fiscal 2022                Fiscal 2021
Statements of Operations Data:
Total revenue                             $    5,654             $    4,060          $  1,594                   39.3  %
Cost of goods sold                             1,910                  1,463               447                   30.6  %                    33.8  %                   36.0  %
Gross profit                                   3,744                  2,597             1,147                   44.2  %                    66.2  %                   64.0  %
Selling, general and administrative
expenses                                       2,533                  2,018               515                   25.5  %                    44.8  %                   49.7  %
Depreciation and amortization                    193                    212               (19)                  (9.0) %                     3.4  %                    5.2  %
Impairment of assets                              73                    316              (243)                 (76.9) %                     1.3  %                    7.8  %
Restructuring and other charges                   42                     32                10                   31.3  %                     0.7  %                    0.8  %
Total operating expenses                       2,841                  2,578               263                   10.2  %                    50.2  %                   63.5  %
Income from operations                           903                     19               884                        NM                    16.0  %                    0.5  %
Other income, net                                 (2)                    (7)                5                   71.4  %                       -  %                   (0.2) %
Interest (income) expense, net                   (18)                    43               (61)                       NM                    (0.3) %                    1.1  %
Foreign currency loss (gain)                       8                    (20)               28                        NM                     0.1  %                   (0.5) %
Income before provision for income taxes         915                      3               912                        NM                    16.2  %                    0.1  %
Provision for income taxes                        92                     66                26                   39.4  %                     1.6  %                    1.6  %
Net income (loss)                                823                    (63)              886                        NM
Less: Net income (loss) attributable to
noncontrolling interests                           1                     (1)                2                        NM
Net income (loss) attributable to Capri   $      822             $      (62)         $    884                        NM




NM Not meaningful

Total Revenue

Total revenue increased $1.594 billion, or 39.3%, to $5.654 billion for Fiscal
2022, compared to $4.060 billion for Fiscal 2021, which included net favorable
foreign currency effects of $25 million primarily related to the strengthening
of the British Pound against the United States dollar in Fiscal 2022, as
compared to Fiscal 2021. On a constant currency basis, our total revenue
increased $1.569 billion, or 38.6%. The increase is attributable to the
continued recovery from the COVID-19 pandemic. In the prior fiscal year, the
Company experienced widespread, temporary store closures and a significant
decline in store traffic. Fiscal 2022 also included approximately $70 million of
incremental revenue attributable to the inclusion of the 53rd week.

Gross profit

Gross profit increased $1.147 billion, or 44.2%, to $3.744 billion during Fiscal
2022, compared to $2.597 billion for Fiscal 2021, which included net favorable
foreign currency effects of $5 million. Gross profit as a percentage of total
revenue increased 220 basis points to 66.2% during Fiscal 2022, compared to
64.0% during Fiscal 2021. The increase in gross profit margin was primarily
attributable to a higher average unit price and lower promotional activity,
partially offset by increases in supply chain costs and unfavorable channel mix.
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Total operating expenses

Total operating expenses increased $263 million, or 10.2%, to $2.841 billion
during Fiscal 2022, compared to $2.578 billion for Fiscal 2021. Our operating
expenses included a net unfavorable foreign currency impact of approximately $2
million. Total operating expenses as a percentage of total revenue decreased to
50.2% in Fiscal 2022, compared to 63.5% in Fiscal 2021. The components that
comprise total operating expenses are detailed below.

Selling, general and administrative expenses

Selling, general and administrative expenses increased $515 millioni.e. 25.5%, at $2.533 billion in fiscal year 2022, compared to $2.018 billion for fiscal 2021, primarily due to increased retail store, e-commerce, corporate and marketing spending in fiscal 2022.

Selling, general and administrative expenses as a percentage of total revenue decreased to 44.8% in fiscal 2022 from 49.7% in fiscal 2021, primarily due to the leverage effect of operating expenses due to increased revenues.

Unallocated corporate expenses, which are included within selling, general and
administrative expenses discussed above, but are not directly attributable to a
reportable segment, increased $38 million, or 25.0%, to $190 million for Fiscal
2022, compared to $152 million for Fiscal 2021, primarily due to an increase in
professional fees related to the ERP system implementation and Capri
transformation projects and an increase in compensation expense.

Depreciation and amortization

Depreciation and amortization decreased $19 million, or 9.0%, to $193 million
during Fiscal 2022, compared to $212 million for Fiscal 2021. The decrease in
depreciation and amortization expense was primarily attributable to lower
depreciation due to lower capital expenditures in Fiscal 2022 and Fiscal 2021.
Depreciation and amortization decreased to 3.4% as a percentage of total revenue
during Fiscal 2022, compared to 5.2% for Fiscal 2021 primarily due to higher
revenues during Fiscal 2022.

Impairment of Assets

In fiscal 2022, we recorded asset impairment charges of $73 million, mainly related to the impairment of right-of-use assets of operating leases. In fiscal 2021, we recorded asset impairment charges of approximately $316 millionprimarily related to the impairment of Jimmy Choo goodwill and its brand intangible assets, as well as the impairment of operating lease right-of-use assets (see Note 13 to the accompanying consolidated financial statements for further details). information).

Restructuring and other charges

During Fiscal 2022, we recognized restructuring and other charges of $42
million, which included other costs of $33 million, primarily related to equity
awards associated with the acquisition of Versace and severance for an executive
officer and $9 million related to our Capri Retail Store Optimization Program
(see Note 10 to the accompanying consolidated financial statements for
additional information).

During Fiscal 2021, we recognized restructuring and other charges of $32
million, which included other costs of $27 million, primarily related to equity
awards associated with the acquisition of Versace and the closure of certain
corporate locations and $5 million related to our Capri Retail Store
Optimization Program.

Income from operations

As a result of the foregoing, income from operations increased $884 million to
$903 million during Fiscal 2022, compared to $19 million for Fiscal 2021. Income
from operations as a percentage of total revenue increased to 16.0% in Fiscal
2022, compared to 0.5% in Fiscal 2021. See Segment Information above for a
reconciliation of our segment operating income to total operating income.
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Interest (income) Expenses, net

During Fiscal 2022, we recognized $18 million of interest income compared to $43
million of interest expense during Fiscal 2021. The $61 million improvement in
interest (income) expense, net, is primarily due to an increase of interest
income from higher average notional amounts outstanding on our net investment
hedges in the current year and a decrease in interest expense attributable to
lower average borrowings outstanding (see Note 11 and Note 14 to the
accompanying consolidated financial statements for additional information).

Exchange loss (gain)

During Fiscal 2022 and Fiscal 2021, we recognized a net foreign currency loss of
$8 million and a net foreign currency gain of $20 million, respectively,
primarily attributable to the remeasurement of intercompany loans with certain
of our subsidiaries.

Provision for Income Taxes

During Fiscal 2022, we recognized $92 million of income tax expense on pre-tax
income of $915 million compared with $66 million of income tax expense on a
pre-tax income of $3 million for Fiscal 2021. Our effective tax rate for Fiscal
2022 was significantly lower than our effective tax rate in Fiscal 2021, and not
a meaningful or comparable metric, primarily due to the relationship between our
income tax expense and minimal pre-tax income in the prior year as compared to
the current year. The Fiscal 2022 income tax expense was higher than Fiscal 2021
primarily due to the increase in pre-tax income and increases in uncertain tax
positions during Fiscal 2022. The increase was partially offset by a release of
a valuation allowance in certain European subsidiaries, the impact of recently
enacted tax legislation in Italy which allowed the Company to reduce its
deferred tax liabilities, as well as a more favorable effect of our global
financing activities during Fiscal 2022 compared to Fiscal 2021. As a result,
the effect that discrete tax amounts have on the effective income tax rate
during the year is not comparable. See Note 17 to the accompanying consolidated
financial statements for additional information.

The global financing activities are related to our previously disclosed 2014
move of our principal executive office from Hong Kong to the U.K. and decision
to become a U.K. tax resident. In connection with this decision, we funded our
international growth strategy through intercompany debt financing arrangements
between certain of our United States, United Kingdom and Hungarian subsidiaries.
Accordingly, due to the difference in the statutory income tax rates between
these jurisdictions, we realized a lower effective tax rate on consolidated
pre-tax income.

Our effective tax rate may fluctuate from time to time due to the effects of
changes in United States state and local taxes and tax rates in foreign
jurisdictions. In addition, factors such as the geographic mix of earnings,
enacted tax legislation and the results of various global tax strategies, may
also impact our effective tax rate in future periods.

Net income (loss) attributable to non-controlling interest

In fiscal 2022, we recorded net income attributable to non-controlling interests of $1 million and in fiscal year 2021, we recorded a net loss of $1 million, attributable to the non-controlling interest in our joint ventures. These amounts represent the portion of income (loss) that is not attributable to the Company.

Net income (loss) attributable to Capri

As a result of the above, in fiscal 2022 our net income attributable to Capri increased $884 million at $822 millioncompared to a net loss of $62 million for fiscal year 2021.

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Segment Information

Versace
                              Fiscal Years Ended                                  % Change
                            April 2,        March 27,                                      Constant
                              2022            2021         $ Change       As Reported      Currency
Revenues                 $    1,088        $    718       $     370            51.5  %       52.8  %
Income from operations          185              21             164                 NM
Operating margin               17.0   %         2.9  %




NM Not meaningful

Revenues

Versace revenues increased $370 million, or 51.5%, to $1.088 billion for Fiscal
2022, compared to $718 million for Fiscal 2021, which included unfavorable
foreign currency effects of $9 million. On a constant currency basis, revenue
increased $379 million, or 52.8%, primarily attributable to the continued
recovery from the COVID-19 pandemic. In the prior fiscal year, the Company
experienced widespread, temporary store closures and a significant decline in
store traffic.

Income from Operations

During Fiscal 2022, Versace recorded income from operations of $185 million
compared to $21 million for Fiscal 2021. Operating margin increased from 2.9%
for Fiscal 2021 to 17.0% for Fiscal 2022, primarily due to a higher average unit
price and leveraging of operating expenses due to higher revenue.

Jimmy Choo

                                                     Fiscal Years Ended                                                   % Change
                                              April 2,                March 27,                                                        Constant
                                                2022                    2021             $ Change             As Reported              Currency
Revenues                                    $     613                $    418          $     195                      46.7  %               40.4  %
Income (loss) from operations                      13                     (55)                68                           NM
Operating margin                                  2.1   %               (13.2) %




NM Not meaningful

Revenues

Jimmy Choo revenues increased $195 million, or 46.7%, to $613 million for Fiscal
2022, compared to $418 million for Fiscal 2021, which included favorable foreign
currency effects of $26 million. On a constant currency basis, revenue increased
$169 million, or 40.4%, primarily attributable to the continued recovery from
the COVID-19 pandemic. In the prior fiscal year, the Company experienced
widespread, temporary store closures and a significant decline in store traffic.
Fiscal 2022 also included incremental revenue attributable to the inclusion of
the 53rd week.

Operating income (loss)

During Fiscal 2022, Jimmy Choo recorded income from operations of $13 million
compared to a loss from operations of $55 million for Fiscal 2021. Operating
margin improved from (13.2)% for Fiscal 2021 to 2.1% for Fiscal 2022, primarily
due to a higher average unit price and leveraging of operating expenses due to
higher revenue.

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Michael Kors

                             Fiscal Years Ended                                % Change
                           April 2,       March 27,                                     Constant
                             2022           2021         $ Change      As Reported      Currency
Revenues                 $   3,953       $  2,924       $  1,029            35.2  %       34.9  %
Income from operations       1,005            595            410            68.9  %
Operating margin              25.4  %        20.3  %


Revenues

Michael Kors revenues increased $1.029 billion, or 35.2%, to $3.953 billion for
Fiscal 2022, compared to $2.924 billion for Fiscal 2021, which included
favorable foreign currency effects of $8 million. On a constant currency basis,
revenue increased $1.021 billion, or 34.9%, primarily attributable to the
continued recovery from the COVID-19 pandemic. In the prior fiscal year, the
Company experienced widespread, temporary store closures and a significant
decline in store traffic. Fiscal 2022 also included incremental revenue
attributable to the inclusion of the 53rd week.

Income from operations

During Fiscal 2022, Michael Kors recorded income from operations of $1.005
billion compared to $595 million for Fiscal 2021. Operating margin increased
from 20.3% for Fiscal 2021 to 25.4% for Fiscal 2022, primarily due to a higher
average unit price and leveraging of operating expenses due to higher revenue,
partially offset by increases in supply chain costs.
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Liquidity and Capital Resources

Our primary sources of liquidity are the cash flows generated from our
operations, along with borrowings available under our credit facilities (see
below discussion regarding "Revolving Credit Facilities") and available cash and
cash equivalents. Our primary use of this liquidity is to fund the ongoing cash
requirements, including our working capital needs and capital investments in our
business, debt repayments, acquisitions, returns of capital, including share
repurchases and other corporate activities. We believe that the cash generated
from our operations, together with borrowings available under our revolving
credit facilities and available cash and cash equivalents, will be sufficient to
meet our working capital needs for the next 12 months and beyond, including
investments made and expenses incurred in connection with our store growth
plans, investments in corporate and distribution facilities, continued systems
development, e-commerce and marketing initiatives. We spent $131 million on
capital expenditures during Fiscal 2022 and expect to spend approximately $300
million during Fiscal 2023. This anticipated increase reflects continued
expenditures related to our retail operations (including e-commerce), ERP system
implementation and Capri transformation programs. The majority of the Fiscal
2022 expenditures related to our retail operations (including e-commerce) and
our corporate offices.

The following table sets forth key indicators of our liquidity and capital
resources (in millions):

                                      As of
                             April 2,      March 27,
                               2022           2021
Balance Sheet Data:
Cash and cash equivalents   $    169      $      232
Working capital             $    325      $      (75)
Total assets                $  7,480      $    7,481
Short-term debt             $     29      $      123
Long-term debt              $  1,131      $    1,219


                                                                         Fiscal Years Ended
                                                        April 2,              March 27,             March 28,
                                                          2022                  2021                  2020
Cash flows provided by (used in):
Operating activities                                $         704          $        624          $        859
Investing activities                                           58                  (124)                   62
Financing activities                                         (800)                 (870)                 (497)
Effect of exchange rate changes                               (24)                   12                    (4)
Net (decrease) increase in cash, cash equivalents
and restricted cash                                 $         (62)         $       (358)         $        420


Cash flow from operating activities

Cash provided by operating activities increased $80 million to $704 million
during Fiscal 2022, as compared to $624 million for Fiscal 2021, which was due
to an increase in our net income after non-cash adjustments, partially offset by
decreases related to changes in our working capital. The decreases related to
the changes in our working capital are primarily attributable to an increase in
our inventory levels and fluctuations in the timing of payments and receipts
when compared to the prior year.

Cash provided by operating activities decreased $235 million to $624 million
during Fiscal 2021, as compared to $859 million for Fiscal 2020, which was due
to a decrease in our net income after non-cash adjustments, primarily driven by
a decrease in impairments and a decrease in net loss, partially offset by
increases related to changes in our working capital, primarily attributable to
fluctuations in the timing of payments and receipts due to the impact of
COVID-19.

Cash provided by (used in) investing activities

Net cash provided by investing activities was $58 million during Fiscal 2022, as
compared to net cash used in investing activities of $124 million during Fiscal
2021. The $182 million increase in cash provided by investing activities was
primarily attributable to $189 million cash received on the settlement of
certain net investment hedges during Fiscal 2022.
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Net cash used in investing activities was $124 million during Fiscal 2021, as
compared to net cash provided by investing activities of $62
million during Fiscal 2020. The $186 million increase in cash used in investing
activities was primarily attributable to a $298 million settlement of net
investment hedges during Fiscal 2020, partially offset by a $112 million
decrease in capital expenditures compared to Fiscal 2020.

Cash used in financing activities

Net cash used in financing activities was $800 million during Fiscal 2022, as
compared to $870 million during Fiscal 2021. The decrease in cash used by
financing activities of $70 million was primarily due to a decrease in net debt
repayments of $681 million, higher cash proceeds from other financing activities
and employee option exercises, partially offset by an increase of $660 million
in cash payments to repurchase our ordinary shares during Fiscal 2022.

Net cash used in financing activities was $870 million during Fiscal 2021, as
compared to $497 million during Fiscal 2020. The increase in cash used by
financing activities of $373 million was primarily due to an increase in net
debt repayments of $474 million, partially offset by a decrease of $101 million
in cash payments to repurchase our ordinary shares during Fiscal 2021.


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Borrowing facilities

The following table presents a summary of the Company's borrowing capacity and
amounts outstanding as of April 2, 2022 and March 27, 2021 (dollars in
millions):

                                                                                Fiscal Years Ended
                                                                          April 2,              March 27,
                                                                            2022                   2021
Senior Secured Revolving Credit Facility:
Revolving Credit Facility (excluding up to a $500 million accordion
feature) (1)
Total Availability                                                    $     1,000             $     1,000
Borrowings outstanding (2)                                                    175                       -
Letter of credit outstanding                                                   21                      27
Remaining availability                                                $       804             $       973

Term Loan Facility ($1.6 billion)
Borrowings Outstanding, net of debt issuance costs (2)                $       495             $       865
Remaining availability                                                $         -             $         -

364 Credit Facility ($230 million)
Total availability                                                    $         -             $       230
Remaining availability                                                $         -             $       230

Senior Notes due 2024
Borrowings Outstanding, net of debt issuance costs and discount
amortization (2)                                                      $       448             $       447

Other Borrowings (3)                                                  $        42             $        21

Hong Kong Uncommitted Credit Facility:
Total availability (80 million and 100 million Hong Kong Dollar) (4)  $        10             $        13
Borrowings outstanding                                                          -                       -

Remaining availability (80 million and HK$100 million) $

    10             $        13

China Uncommitted Credit Facility:
Total availability (45 million and 100 million Chinese Yuan) (4)      $         7             $        15
Borrowings outstanding                                                          -             $         -

Remaining availability (45 million and 100 million Chinese Yuan) $

     7             $        15

Japan Credit Facility:
Total availability (1.0 billion Japanese Yen)                         $         8             $         9

Outstanding borrowings (0.0 billion and 1.0 billion Japanese yen) (5)

     -                       9

Remaining availability (1.0 billion and 0.0 billion Japanese yen) $

     8             $         -

Versace Uncommitted Credit Facility:
Total availability (48 million and 57 million Euro) (4)               $        52             $        67
Borrowings outstanding (0 million Euro)                                         -                       -
Remaining availability (48 million and 57 million Euro)               $        52             $        67

Total borrowings outstanding (1)                                      $     1,160             $     1,342
Total remaining availability                                          $       881             $     1,298




(1)The financial covenant in our 2018 Credit Facility requiring us to maintain a
ratio of the sum of total indebtedness plus the capitalized amount of all
operating lease obligations for the last four fiscal quarters to Consolidated
EBITDAR of no greater than 3.75 to 1 was previously waived through the fiscal
quarter ending June 26, 2021. We terminated the waiver period effective May 26,
2021. Effective as of that date, the Company was required to comply with the
quarterly maximum net leverage ratio test of 4.00 to 1.0. As of April 2, 2022
and March 27, 2021, we were
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in compliance with all covenants related to our agreements then in effect
governing our debt.
(2)As of April 2, 2022, all amounts are recorded as long-term debt in our
consolidated balance sheets. As of March 27, 2021, all amounts were recorded as
long-term debt, except for the current portion of $97 million outstanding under
the 2018 Term Loan Facility, which was recorded within short-term debt in our
consolidated balance sheets.
(3)The balance as of April 2, 2022 consists of $21 million related to our
supplier finance program recorded within short-term debt in our consolidated
balance sheets, $18 million related to the sale of certain Versace tax
receivables, with $8 million and $10 million, respectively, recorded within
short-term debt and long-term debt in our consolidated balance sheets and $3
million of other loans recorded as long-term debt in our consolidated balance
sheets. The balance as of March 27, 2021 consists of $17 million related to our
supplier finance program recorded within short term debt in our consolidated
balance sheets and $4 million of other loans recorded as long-term debt in our
consolidated balance sheets.
(4)The balance as of April 2, 2022 represents the total availability of the
credit facility, which excludes bank guarantees.
(5)Recorded as short-term debt in our consolidated balance sheets as of
March 27, 2021.

We believe that our 2018 Credit Facility is adequately diversified with no undue
concentration in any one financial institution. As of April 2, 2022, there were
25 financial institutions participating in the facility, with none maintaining a
maximum commitment percentage in excess of 10%. We have no reason to believe
that the participating institutions will be unable to fulfill their obligations
to provide financing in accordance with the terms of the 2018 Credit Facility.

See Note 11 to the accompanying consolidated financial statements for detailed information on our credit facilities and debt securities.

Share buyback program

The following table shows our buybacks of own shares during the financial years ended April 2, 2022 and March 27, 2021 (in millions of dollars):

Closed fiscal years

                                                                        April 2,              March 27,
                                                                          2022                  2021
Cost of shares repurchased under share repurchase program           $       

$650 – Fair value of shares withheld to cover tax liability for vested restricted stock awards

                                                        11                     1
Total cost of treasury shares repurchased                           $       

$661 1

Shares repurchased under share repurchase program                      11,014,541                     -
Shares withheld to cover tax withholding obligations                      203,863                48,528
                                                                       11,218,404                48,528


During the first quarter of Fiscal 2021, the Company suspended its $500 million
share-repurchase program in response to the continued impact of the COVID-19
pandemic. See Note 15 in the accompanying financial statements for additional
information.

On November 3, 2021, we announced that our Board of Directors had terminated our
existing $500 million share repurchase program (the "Prior Plan"), with
$250 million of availability remaining, and authorized a new share repurchase
program (the "Fiscal 2022 Plan") pursuant to which we may, from time to time,
repurchase up to $1.0 billion of our outstanding ordinary shares within a period
of two years from the effective date of the program. As of April 2, 2022, the
remaining availability under the Fiscal 2022 Plan was $500 million. Share
repurchases may be made in open market or privately negotiated transactions,
subject to market conditions, applicable legal requirements, trading
transactions under our insider trading policy and other relevant factors. The
program may be suspended or discontinued at any time.

On June 1, 2022, we announced that its Board of Directors has terminated our
Fiscal 2022 Plan, with $500 million of availability remaining, and authorized a
new share repurchase program pursuant to which we may, from time to time,
repurchase up to $1.0 billion of our outstanding ordinary shares within period
of two years from the effective date of the program. Share repurchases may be
made in open market or privately negotiated transactions, subject to market
conditions, applicable legal requirements, trading restrictions under our
insider trading policy and other relevant factors. The program may be suspended
or discontinued at any time.

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Contents

See Notes 15 and 20 to the accompanying consolidated financial statements for more information.

Contractual obligations and commercial commitments

As of April 2, 2022, our contractual obligations and commercial commitments were
as follows (in millions):

                                                                    Fiscal              Fiscal            Fiscal 2028 and
Fiscal Years                                 Fiscal 2023           2024-2025           2026-2027            thereafter             Total
Operating leases                           $        482          $      734 

$422 $426 $2,064
Net interest (1)

                                     -                   -                   -                       -                -
Inventory purchase obligations                    1,016                   -                   -                       -            1,016
Other commitments                                    77                  26                   5                       -              108
Short-term debt                                      29                   -                   -                       -               29
Long-term debt                                        -               1,135                   -                       -            1,135
Total                                      $      1,604          $    1,895          $      427          $          426          $ 4,352



(1) As of fiscal year 2023, we will be in an interest income position, therefore we would not have any interest expense obligations due during the above periods.

Operating lease obligations represent equipment leases and the minimum lease
rental payments due under non-cancelable operating leases for our real estate
locations globally. In addition to the above amounts, we are typically required
to pay real estate taxes, contingent rent based on sales volume and other
occupancy costs relating to leased properties for our retail stores.

Interest, net represents the estimated net interest expense associated with our
term loan based on the current interest rate and interest from our interest rate
swap. It also includes the estimated net interest income from our net investment
hedges.

Inventory purchase obligations represent contractual obligations for future inventory purchases.

Other commitments include non-cancellable contractual obligations related to marketing and advertising agreements, information technology agreements and supply agreements.

The above table excludes current liabilities (other than short-term debt and
short-term operating lease liabilities) recorded as of April 2, 2022, as these
items will be paid within one year, and non-current liabilities that have no
cash outflows associated with them (e.g., deferred taxes).

Off-balance sheet arrangements

We have not created, and are not party to, any special-purpose or off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
our business. In addition to the commitments in the above table, our off-balance
sheet commitments relating to our outstanding letters of credit were $36 million
at April 2, 2022, including $15 million in letters of credit issued outside of
the 2018 Credit Facility. In addition, as of April 2, 2022, bank guarantees of
approximately $30 million were supported by our various credit facilities. We do
not have any other off-balance sheet arrangements or relationships with entities
that are not consolidated into our financial statements that have or are
reasonably likely to have a material current or future effect on our financial
condition, changes in financial condition, revenues, expenses, results of
operations, liquidity, capital expenditures or capital resources.

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