Tapestry (TPR) 10-K risk factor changes: FY2018 vs FY2017

One component of our growth strategy is acquisitions, such as our acquisition of Stuart Weitzman Holdings, LLC during fiscal 2015 and our [removed: recent] acquisition of Kate Spade & Company [removed: on July 11, 2017.][added: during the first quarter of fiscal 2018.]

We are required annually, or as facts and circumstances exist, to [removed: test] [added: assess] goodwill and other intangible assets to determine if impairment has occurred.

We determined there was no impairment in fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016] [added: 2017] and fiscal [removed: 2015;] [added: 2016;] however, we cannot accurately predict the amount and timing of any [added: potential future] impairment of assets.

During the fourth quarter of fiscal 2016, we announced a plan to enhance organizational efficiency, update core technology platforms and [removed: streamline the Company’s] [added: optimize international] supply chain [removed: network.][added: and office locations.]

These initiatives were [removed: undertaken] [added: adopted] as a result of a strategic review of the Company’s corporate structure which focused on creating an agile and scalable business model.

The charges under this plan [added: began in the fourth quarter of fiscal 2016.]

During the fourth quarter of fiscal 2014, we announced a multi-year strategic plan with the objective of transforming the brand and reinvigorating [removed: growth, which will enable the Company to return to 'best-in-class' profitability.][added: growth.]

[removed: The Company's execution of these key] [added: Key] operational and cost [removed: measures] [added: elements in order to fund and execute this plan] concluded during fiscal 2016.

The Company believes that long-term growth will be realized through these transformational efforts over [removed: time.][added: time, however there is no assurance that such efforts will be successful in the long-term.]

Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note [removed: 3,] [added: 5,] "Restructuring Activities" for further information regarding these initiatives.

The growth of our business depends on the successful execution of our growth strategies, including our efforts to expand internationally into a global [added: house of] lifestyle [removed: brand.][added: brands.]

We currently plan to open additional [removed: Coach] [added: Coach, Kate Spade] and Stuart Weitzman stores [removed: in mainland China, Europe] [added: throughout Asia] and other international markets, both directly and through strategic partners.

We operate on a global basis, with approximately [removed: 46%] [added: 41.2%] of our net sales [removed: from the Coach and Stuart Weitzman brands] coming from operations outside of United States.

| • | political or economic instability or changing macroeconomic conditions in our major markets, including the potential impact of (1) new policies that may be implemented by the U.S. or other jurisdictions, particularly with respect to tax and trade policies or (2) the United Kingdom ("U.K.") voting to leave the European Union ("E.U."), commonly known as Brexit. On March 29, 2017, the U.K. triggered Article 50 of the Lisbon Treaty formally starting negotiations with the E.U. The U.K. [removed: has two years] [added: and E.U. announced in March 2018 an agreement in principle] to [removed: complete these negotiations.] [added: transitional provisions under which E.U. law would remain in force in the U.K. until the end of December 2020, but this remains subject to the successful conclusion of a final withdrawal agreement between the parties. In the absence of such an agreement there would be no transitional provisions and a "hard" Brexit would occur on March 29, 2019.] Although the terms of the U.K.'s future relationship with the E.U. are still unknown, it is possible that there will be increased regulatory and legal complexities, including potentially divergent national laws and regulations between the U.K. and E.U. Brexit may also cause disruption and create uncertainty surrounding our business, including affecting our relationship with our existing and future customers, suppliers and [removed: employees;] [added: employees and resulting in increased cost by way of new or elevated Customs duties or financial implications from operational challenges;] |

| • | changes in legal and regulatory requirements, including, but not limited to safeguard measures, anti-dumping duties, cargo restrictions to prevent terrorism, restrictions on the transfer of currency, climate change [added: and other environmental] legislation, product safety regulations or other charges or restrictions |

| • | changes to the U.S.'s participation in, withdrawal out of, renegotiation of certain international trade agreements or other major trade related issues including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas, [added: and retaliatory tariffs (including, but not limited to, the Trump Administration's tariffs on China and China's retaliatory tariffs on certain products from the U.S.),] trade sanctions, new or onerous trade restrictions, [removed: retaliatory tariffs,] embargoes and other stringent government [removed: controls] [added: controls;] |

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 [removed: in consumer spending patterns.]

We may also incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with [added: current and new] state, federal and international laws governing the unauthorized disclosure of confidential information [added: which are continuously being enacted and proposed such] as [added: the General Data Protection Regulation in the E.U. and the California Consumer Privacy Act in California, U.S.A., as] well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, [removed: and] engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information including our intellectual property.

In addition, we [removed: maintain] [added: have] e-commerce sites in [added: certain countries throughout] the [added: world, including the] U.S., Canada, Japan, mainland China, [removed: South Korea and] several throughout Europe and [added: South Korea and] have plans for additional e-commerce sites in other parts of the world.

Additionally, [removed: Coach] [added: Tapestry] has informational websites in various countries, as described in Item I, "Business." Our e-commerce programs also include an invitation-only Coach outlet flash sale [added: site and invitation-only Kate Spade flash sale] site.

The Company began [added: this] implementation in fiscal 2017 and [removed: will continue in fiscal 2018 and] [added: it is expected to be substantially complete during] fiscal 2019.

In order to minimize the impact on earnings [removed: of] [added: related to] foreign currency rate movements, we hedge [added: a portion of] our subsidiaries’ U.S. dollar-denominated inventory purchases in [removed: Japan and] [added: Japan,] Canada and [added: China and] Euro-denominated inventory purchases in Spain, as well as the Company's cross currency denominated intercompany loan portfolio.

As a result of [removed: operating retail stores] [added: having operations] outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates.

At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of net sales, [added: operating income, net interest expense,] earnings per [added: diluted] share and other financial metrics or projections.

[removed: See] [added: Refer to] “If we are unable to pay quarterly dividends at intended levels, our reputation and stock price may be harmed” for addition discussion of our quarterly dividend.

Copies of our Global Business Integrity Program, Global Operating Principles and Supplier Code of Conduct are available through our website, [removed: www.coach.com.][added: www.tapestry.com.]

[removed: The violation of labor, environmental or other laws by an independent manufacturer or supplier, or divergence of an independent] manufacturer’s or supplier’s labor practices from those generally accepted as ethical or appropriate in the U.S., could interrupt or otherwise disrupt the shipment of our products, harm our trademarks or damage our reputation.

We maintain a distribution center in Jacksonville, Florida, operated by [removed: Coach.][added: Tapestry.]

To support our growth in mainland China and Europe, we established distribution centers in [removed: Shanghai,] [added: mainland] China and [removed: Oldenzaal, The] [added: the] Netherlands, owned and operated by a third-party, allowing us to better manage the logistics in these regions while reducing costs.

We also operate distribution centers, through third-parties, in Japan, mainland China, Hong Kong, Macau, Singapore, Taiwan, Malaysia, [removed: The United States,] [added: the U.S.,] Spain, [added: Italy, the U.K.,] Canada and South Korea.

If we determine that it is no longer economical to operate a retail store subject to a lease and decide to close it as we have done in the past and will do in the future, we may remain obligated under the applicable lease for, among other things, [added: payment of the base rent for the balance of the lease term.]

Our [removed: North American] wholesale business could suffer as a result of consolidations, liquidations, restructurings and other ownership changes in the retail industry.

Our [removed: North American] wholesale business comprised approximately [removed: 3%] [added: 13%] of total net sales for fiscal [removed: 2017.][added: 2018.]

Despite our [added: continued] reduction in markdown allowances during fiscal [removed: 2017,] [added: 2018,] such promotional activity could negatively impact our brands, which could affect our business, results of operations, and financial condition.

[removed: The Coach brand] [added: Our brands] currently [removed: has] [added: have] multi-year agreements with licensing partners for [removed: our eyewear, watches and fragrance] [added: certain] products.

[removed: See] [added: Refer to] Item 1 - “Business - [removed: Products”] [added: Licensing”] for additional discussion of our [added: key] licensing arrangements.

Further, while we believe that we could replace our existing licensing partners if required, our inability to do so for any period of time could [removed: materially] adversely affect our revenues and harm our business.

Any failure to pay [added: dividends, or pay] dividends [added: at expected levels,] after we have announced our intention to do so may negatively impact our reputation, investor confidence in us and negatively impact our stock price.

As of [removed: July 1, 2017,] [added: June 30, 2018,] our consolidated indebtedness was approximately $1.6 billion.

We also have [removed: $600 million of additional senior unsecured notes outstanding and] [added: the] capacity to borrow up to $900 million of additional indebtedness under our undrawn revolving credit facility, which may be used to finance our working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes.

A delay, disruption in, failure of, or inability to upgrade our information technology systems precisely and efficiently could materially adversely affect our business, financial condition or results of operations and cash flow.

We rely heavily on various information and other business systems to manage our operations, including management of our supply chain, point-of-sale processing in our brands’ stores, our online businesses associated with each brand and various other processes.

We are continually evaluating and implementing upgrades and changes to our systems.

Implementing new systems carries substantial risk, including failure to operate as designed, failure to properly integrate with other systems, potential loss of data or information, cost overruns, implementation delays and disruption of operations.

Third-party vendors are also relied upon to design, program, maintain and service our ERP implementation program.

Any failures of these vendors to properly deliver their services could similarly have a material effect on our business.

Other substantial risks associated with the multi-year ERP implementation include the inability to deliver the optimal level of merchandise to our brands’ stores or customers in a timely manner.

In addition, any disruptions or malfunctions affecting our ERP implementation plan could cause critical information upon which we rely to be delayed, defective, corrupted, inadequate or inaccessible.

Furthermore, failure of the computer systems due to inadequate system capacity, computer viruses, human error, changes in programming, security breaches, system upgrades or migration of these services, as well as consumer privacy concerns and new global government regulations, individually or in accumulation, could have a material effect on our business, financial condition or results of operations and cash flow.

in consumer spending patterns.

Tapestry, Inc. is a New York-based house of modern luxury lifestyle brands.

Our Company and our brands are founded upon a consumer-led view of luxury that stands for inclusivity and approachability.

Kate Spade is known for its crisp color, graphic prints, and playful sophistication; its exuberant approach to the everyday encourages personal style with a dash of incandescent charm.

Substantial changes in foreign currency exchange rates could cause our sales and profitability to be negatively impacted.

If the Trump Administration follows through on its proposed China tariffs, or if additional tariffs or trade restrictions are implemented by other countries or by the U.S., the cost of our products manufactured in China or other countries and imported into the U.S. or other countries could increase.

This could in turn adversely affect the profitability for these products and have an adverse effect on our business, financial conditions and results of operations.

The violation of labor, environmental or other laws by an independent manufacturer or supplier, or divergence of an independent

On December 22, 2017, “H.R.1,” formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”) was signed into law.

The Tax Legislation, which became effective on January 1, 2018, significantly revised the U.S. tax code.

Refer to Item 2, Management’s Discussion and Analysis of Financial Condition & Results of Operations - Executive Overview and Note 14, “Income Taxes,” for further information on the provisions of the Tax Legislation and the currently expected impact on the Company.

The Company has recorded its best estimate of impact of the Tax Legislation through its provision for income taxes in the fiscal year ended June 30, 2018 pursuant to Accounting Standards Codification ("ASC") 740, Income Taxes, and the SEC Staff Accounting Bulletin (“SAB”) 118.

All amounts recorded were based on available guidance on interpretation of the Tax

Legislation and, the Company believes, reasonable approaches to estimating its impact; however, such amounts are the Company’s

provisional estimates at this time.

For elements of the Tax Legislation where the Company was not yet able to make reasonable estimates of the impact, the Company has not recorded any adjustments and has continued accounting for these elements in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Legislation.

The Company cannot determine the amount of any such impacts at this time and amounts that have been estimated and recorded in the fiscal year ended June 30, 2018 are subject to adjustment as future guidance becomes available, additional facts become known or estimation approaches are refined.

The overall impact of the Tax Legislation is currently uncertain, and the Company’s business and financial condition could be adversely affected.

After this period, a combination of this type must be approved by two super-majority stockholder votes, unless common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by our Board prior to the time that the interested stockholder becomes an interested stockholder.

| | |

| --- | --- |

| • | unanticipated issues in integrating manufacturing, logistics, information, communications and other systems; |

began in the fourth quarter of fiscal 2016 and were substantially completed by the end of fiscal year 2017.

Key operational and cost elements in order to fund and execute this plan included: (i) the investment in capital improvements in our stores and wholesale locations to drive comparable sales improvement; (ii) the optimization and streamlining of our organizational model as well as the closure of underperforming stores in North America, and select International stores; (iii) the realignment of inventory levels and mix to reflect our elevated product strategy and consumer preferences; (iv) the investment in incremental advertising costs to elevate consumer perception of our Coach brand, drive sales growth and promote our new strategy; and (v) the significant scale-back of our promotional cadence in an increased global promotional environment, particularly within our outlet Internet sales site.

There is no assurance that such efforts will be successful in achieving long-term growth or changing the perception of the Company from an accessories brand to a global lifestyle brand.

If the execution of our plans falls short, our business, financial condition and results of operation could be materially adversely affected.

For example, the announcement of Brexit caused significant volatility in the global stock markets and currency exchange rate fluctuations.

A substantial weakening of foreign currencies against the U.S. dollar could impact consumers’ willingness or ability to travel abroad and/or purchase our products while traveling, as well as require us to raise our retail prices or reduce our profit margin in various locations outside of the U.S. In addition, our sales and profitability could be negatively impacted if consumers in those markets were unwilling to purchase our products at increased prices.

payment of the base rent for the balance of the lease term.

U.S. lawmakers are evaluating proposals for substantial changes to U.S. fiscal and tax policies, which could include comprehensive tax reform.

A variety of tax reform proposals that would significantly impact U.S. taxation of corporations are under consideration, including elimination of the interest deduction, taxation of previously unrepatriated foreign earnings and reductions in the U.S. corporate tax rate.

We cannot predict which, if any, of these proposals will be enacted into law or the resulting impact any such enactment will have on our financial results.

However, if new legislation were enacted, it could have a material adverse effect on our financial condition and results of operations.

Subsequent to fiscal year 2017, we borrowed $1.1 billion in term loans.

Together with our cash on hand and cash on hand at Kate Spade, along with the $1.0 billion of Senior Notes and $1.1 billion in term loans, we financed our acquisition of Kate Spade.

After this period, a combination of this type must be approved by two super-majority stockholder votes, unless some conditions are met or the business combination is exempted by the Company's Board.

Risks relating to our Hong Kong Depositary Receipts (“HDRs”)

An active trading market for the Hong Kong Depositary Receipts on the Hong Kong Stock Exchange might not develop or be sustained and their trading prices might fluctuate significantly.

We cannot assure you that an active trading market for the HDRs on the Hong Kong Stock Exchange will develop or be sustained.

If an active trading market of the HDRs on the Hong Kong Stock Exchange does not develop or is not sustained, the market price and liquidity of the HDRs could be materially and adversely affected.

As a result, the market price for HDRs in Hong Kong might not be indicative of the trading prices of Coach’s common stock on the NYSE, even allowing for currency differences.

The characteristics of the U.S. capital markets and the Hong Kong capital markets are different.

The NYSE and the Hong Kong Stock Exchange have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation).

As a result of these differences, the trading prices of common stock and the HDRs representing them might not be the same, even allowing for currency differences.

Fluctuations in the price of our common stock due to circumstances particular to the U.S. capital markets could materially and adversely affect the price of the HDRs.

Because of the different characteristics of the U.S. and Hong Kong equity markets, the historic market prices of our common stock may not be indicative of the performance of the HDRs.

We are a corporation incorporated in the State of Maryland in the United States and our corporate governance practices are principally governed by U.S. federal and Maryland state laws and regulations.

We are a corporation incorporated in the State of Maryland in the United States and our HDRs are listed on the Hong Kong Stock Exchange.

Our corporate governance practices are primarily governed by and subject to U.S. federal and Maryland laws and regulations.

U.S. federal and Maryland laws and regulations differ in a number of respects from comparable laws and regulations in Hong Kong.

There are certain differences between the stockholder protection regimes in Maryland and the United States and in Hong Kong.

We have obtained a ruling from the Securities and Futures Commission of Hong Kong (the “SFC”) that we will not be regarded as a public Company in Hong Kong for the purposes of the Code on Takeovers and Mergers and the Share Repurchases Code of Hong Kong and hence, these codes will not apply to us.

We have also obtained a partial exemption from the SFC in respect of the disclosure of interest provisions set out in the Securities and Futures Ordinance of Hong Kong.

In addition, we have been granted waivers or exemptions by the Hong Kong Stock Exchange from certain requirements under its listing rules.

Neither our stockholders nor the HDR holders will have the benefit of those Hong Kong rules, regulations and the listing rules of the Hong Kong Stock Exchange for which we have applied, and been granted, waivers or exemptions by the Hong Kong Stock Exchange and SFC.

Additionally, if any of these waivers or exemptions were to be revoked in circumstances including our non-compliance with applicable undertakings for any reason, additional legal and compliance obligations might be costly and time consuming, and might result in issues of interjurisdictional compliance, which could adversely affect us and HDR holders.

As the SFC does not have extra-territorial jurisdiction on any of its powers of investigation and enforcement, it will also have to rely on the regulatory regimes of Maryland state authorities and the SEC to enforce any corporate governance breaches committed by us in the United States.

Investors in the HDRs should be aware that it could be difficult to enforce any judgment obtained outside the United States against us or any of our associates.

Furthermore, prospective investors in the HDRs should be aware, among other things, that there are U.S. federal withholding and estate tax implications for HDR holders.

The following discussion of [removed: Coach’s] [added: the Company's] financial condition and results of operations should be read together with [removed: Coach’s] [added: the Company’s] consolidated financial statements and notes thereto, included elsewhere in this document.

When used herein, the terms [removed: “Company,” "Coach,"] [added: “the Company,” "Tapestry,"] “we,” “us” and “our” refer to [removed: Coach,] [added: Tapestry,] Inc., including consolidated subsidiaries.

The fiscal [removed: year] [added: years] ended [added: June 30, 2018 and] July 1, 2017 [removed: was a] [added: were each] 52-week [removed: period,] [added: periods, and] the fiscal year ended July 2, 2016 was a 53-week [removed: period and the fiscal year ended June 27, 2015 was a 52-week] period.

[removed: Coach, Inc.] [added: Tapestry] is a leading New York-based house of modern luxury accessories and lifestyle brands.

| • | [removed: North America] [added: Coach] - [removed: The North America segment includes] [added: Includes global] sales of Coach brand products to customers through [removed: Coach-operated] [added: Coach operated] stores, including the [removed: Internet,] [added: Internet] and [added: concession shop-in-shops, and] sales to wholesale customers [removed: in North America.] [added: and through independent third party distributors.] |

| • | Stuart Weitzman - [removed: The Stuart Weitzman segment includes] [added: Includes] global sales [removed: generated by the] [added: of] Stuart Weitzman [removed: brand,] [added: brand products] primarily through [removed: department stores in North America and international locations, within numerous independent third party distributors and within] Stuart Weitzman operated stores, including the Internet, [removed: in the United States, Canada] [added: to wholesale customers] and [removed: Europe.] [added: through numerous independent third party distributors.] |

[removed: As the Company's business model is based on multi-channel and brand global distribution, our] [added: Our] success does not depend solely on the performance of a single [removed: channel or] [added: channel,] geographic [removed: area.][added: area or brand.]

Kate Spade [removed: Acquisition]

In the beginning of fiscal 2017, the Company implemented a deliberate and strategic decision to elevate [removed: the Coach brand's] [added: Coach's] positioning in the channel by limiting participation in promotional events and closing approximately 25% of its wholesale doors during fiscal 2017.

These charges [removed: are] [added: were] associated with organizational efficiencies, primarily related to the reduction of corporate staffing levels globally, as well as accelerated depreciation, mainly associated with information systems retirement, technology infrastructure charges related to the initial costs of replacing and updating our core technology platforms, and international supply chain and office location optimization.

Refer to Note [removed: 3,] [added: 5,] "Restructuring [removed: Activities"] [added: Activities,"] and "GAAP to Non-GAAP [removed: Reconciliation"] [added: Reconciliation," herein,] for further information.

During the fourth quarter of fiscal 2014, [removed: Coach, Inc.] [added: the Company] announced a multi-year strategic plan with the objective of transforming the Coach brand and reinvigorating growth (the "Transformation Plan").

[removed: Global consumer retail traffic remains relatively weak and inconsistent, which] [added: This, along with other factors,] has led to a more promotional environment in the fragmented retail industry due to increased competition and a desire to offset traffic declines with increased levels of conversion.

[removed: Declines] [added: Further declines] in traffic could result in store impairment charges if expected future cash flows of the related asset group do not exceed the carrying value.

It is still, however, too early to understand what kind of sustained impact [removed: this] [added: these trends or changes in trade agreements and tax legislation] will have on consumer discretionary spending.

For a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations, [removed: see] [added: refer to] Part I, Item 1A - "Risk [removed: Factors" included in this Annual Report on Form 10-K.][added: Factors".]

All percentages shown in the [removed: table] [added: tables] below and the [added: related] discussion that follows have been calculated using unrounded numbers.

Refer to [removed: page 44] [added: "Non-GAAP Measures" herein] for further discussion on the Non-GAAP [removed: Measures.][added: measures.]

[removed: COACH, INC.][added: Coach]

| | (millions, except per share data) | | | | | | | | | | | | | | | [removed: | | | |]

| | July 2, 2016 | | | | | | | | | | | | | | | [removed: | | | |]

| | GAAP Basis (As Reported) | | | [removed: |] Transformation and Other Actions | | | [removed: |] Operational Efficiency Plan | | | [removed: |] Stuart Weitzman Acquisition-Related Costs | | | [removed: |] Non-GAAP Basis (Excluding Items) | | |

| Gross profit | $ | 3,051.3 | | [removed: |] $ | — | | [removed: |] $ | — | | [removed: |] $ | (1.1 | ) | [removed: |] $ | 3,052.4 | |

| SG&A expenses | 2,397.8 | | | [removed: |] 44.1 | | | [removed: |] 43.9 | | | [removed: |] 34.0 | | | [removed: |] 2,275.8 | | |

| Operating income | 653.5 | | | [removed: |] (44.1 | | ) | [removed: |] (43.9 | | ) | [removed: |] (35.1 | | ) | [removed: |] 776.6 | | |

| Income before provision for income taxes | 626.6 | | | [removed: |] (44.1 | | ) | [removed: |] (43.9 | | ) | [removed: |] (35.1 | | ) | [removed: |] 749.7 | | |

| Provision for income taxes | 166.1 | | | [removed: |] (10.7 | | ) | [removed: |] (10.3 | | ) | [removed: |] (10.9 | | ) | [removed: |] 198.0 | | |

| Net income | 460.5 | | | [removed: |] (33.4 | | ) | [removed: |] (33.6 | | ) | [removed: |] (24.2 | | ) | [removed: |] 551.7 | | |

| Diluted net income per share | 1.65 | | | [removed: |] (0.12 | | ) | [removed: |] (0.12 | | ) | [removed: |] (0.09 | | ) | [removed: |] 1.98 | | |

In fiscal [removed: 2017] [added: 2017,] the Company [removed: recorded] [added: incurred] pre-tax adjustments as follows:

| • | Operational Efficiency Plan - Total charges of [removed: $24.0] [added: $19.5] million primarily related to [removed: organizational efficiency costs,] technology infrastructure [removed: costs and, to a lesser extent, network optimization] costs. [removed: The Company expects that the remaining charges under this plan will approximate $10-15 million and will be incurred in fiscal 2018.] Refer to the "Executive Overview" herein and Note [removed: 3,] [added: 5,] "Restructuring Activities," for further information regarding this plan. |

| [removed: • |] Stuart Weitzman Acquisition-Related Costs [removed: - Total income of $6.2 million, primarily related to:] | [added: | | | | — | | | | (2.9 | | ) | | — | | | | | | |]

| [removed: ◦] [added: •] | [removed: Income] [added: Stuart Weitzman Acquisition-Related Costs - Total income] of [removed: $26.8 million was recorded within the Coach brand as corporate unallocated expense in SG&A expenses. This includes] [added: $6.2 million, primarily attributable to] the reversal of an accrual of $35.2 million related to estimated contingent purchase price payments which [removed: are] [added: were] not [removed: expected to be] paid, [removed: partially] offset by integration-related [removed: costs of $8.4 million.] [added: costs.] |

| • | Kate Spade Acquisition-Related Costs - Total charges of $16.9 million, of which $9.5 million is related to bridge financing fees and recorded in interest expense and $7.4 million is related to professional [removed: fees, all of which were recorded in corporate unallocated expenses within the Coach brand.] [added: fees.] |

These actions taken together increased the Company's SG&A expenses by $22.3 [added: million, interest expense by $9.5] million and cost of sales by $2.9 million, negatively impacting net income by $18.3 million, or $0.06 per diluted share.

Fiscal [removed: 2016] [added: 2018] Items

In fiscal [removed: 2016] [added: 2018] the Company incurred [removed: pre-tax] charges as follows:

| • | Transformation and Other Actions - [added: Total charges of] $44.1 million [removed: under our Coach brand Transformation Plan] primarily due to organizational efficiency costs, lease termination charges and accelerated depreciation as a result of store renovations within North America and select [removed: International] [added: international] stores. |

| • | Operational Efficiency Plan - [added: Total charges of] $43.9 million primarily related to organizational efficiency costs and, to a lesser extent, network optimization costs. |

| • | [added: Stuart Weitzman] Acquisition-Related Costs - [added: Total charges of] $35.1 million [removed: total charges] related to the acquisition of Stuart Weitzman Holdings LLC, of which $27.6 million is primarily related to charges attributable to contingent payments and integration-related activities [removed: (of which $19.4 million is recorded within unallocated corporate expenses within the Coach brand] and [removed: $8.2 million is recorded within the Stuart Weitzman segment, resulting in a decrease in operating income of $19.4 million and $8.2 million, respectively), and] $7.5 million is related to the limited life impact of purchase accounting, primarily due to the amortization of the fair value of the order backlog asset, distributor relationships and inventory [removed: step-up, all recorded within the Stuart Weitzman segment resulting in a $7.5 million decrease in operating income.] [added: step-up.] |

References to "Coach," "Stuart Weitzman," "Kate Spade" or "kate spade new york" refer only to the referenced brand.

Tapestry is powered by optimism, innovation and inclusivity.

Our brands are approachable and inviting and create joy every day for people around the world.

Defined by quality, craftsmanship and creativity, the brands that make up our house give global audiences the opportunity for exploration and self-expression.

Tapestry is comprised of the Coach, Kate Spade and Stuart Weitzman brands, all of which have been part of the American landscape for over 25 years.

Prior to fiscal 2018, the Company had three reportable segments: North America (Coach brand), International (Coach brand) and Stuart Weitzman.

Beginning in fiscal 2018 and as a result of the Kate Spade acquisition, the Company aligned its reportable segments with the new structure of its business.

As a result, the Company has three reportable segments:

| • | Kate Spade - Includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, to wholesale customers, through concession shop-in-shops and through independent third party distributors. |

Each of our brands is unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies.

Fiscal 2019 Strategic Initiatives

The company is focused first and foremost on execution in fiscal 2019.

The goal is to deliver strong revenue and operating income growth in fiscal 2019, while making the right strategic investments to support our long-term vision.

Specifically, in fiscal 2019, the Company intends to:

| • | Capture the full benefit of multi-brand structure and synergies |

| • | Fuel brand innovation by accelerating product newness across all brands |

| • | Drive global growth with an emphasis on the Chinese consumer |

| • | Advance our digital and data analytic capabilities |

Stuart Weitzman Production Challenges

During the third quarter of fiscal 2018, Stuart Weitzman results were negatively impacted by supply chain operational challenges including production delays, which caused lower than expected sales, as the brand was not prepared for the level of complexity and new development as it transitions to a new creative vision.

The Company added infrastructure and capacity to support this vision with quality and on-time deliveries.

The Company expects to experience some negative impacts through the Fall/Winter Season in fiscal 2019.

Impact of Tax Legislation

On December 22, 2017, H.R.1, formerly known as the Tax Cuts and Jobs Act (the "Tax Legislation") was enacted.

The Tax Legislation significantly revises the U.S. tax code by (i) lowering the U.S. federal statutory income tax rate from 35% to 21%, (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries ("Transition Tax"), (iv) requiring current inclusion of global intangible low taxed income ("GILTI") of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax ("BEAT"),

(vi) implementing bonus depreciation that will allow for full expensing of qualified property, (vii) enacting a beneficial rate to be applied against Foreign Derived Intangible Income (“FDII”) and (viii) limiting deductibility of interest and executive compensation expense, among other changes.

Notable changes include the following:

| • | The Company expects to receive the full benefit of the rate reduction in fiscal 2019, as compared with the partial rate reduction during fiscal 2018 based on the pro-rated number of days the new rate applied in fiscal 2018. In the current year, the U.S federal statutory income tax rate was approximately 28%, which is expected to decline to 21% in fiscal 2019. |

| • | Foreign earnings that may exist after December 31, 2017 will generally be eligible for a 100% dividends received exemption, however companies may be subject to the alternative BEAT and GILTI tax provisions which could increase the global effective tax rate. Conversely, Companies may be eligible for a reduced rate to the extent their earnings qualify as FDII, which would reduce their global effective tax rate. These tax provisions are expected to impact the Company in fiscal year 2019. Based on current facts and circumstances the Company believes that GILTI is the tax provision most likely to apply. Under GILTI, a portion of the Company’s foreign earnings will be subject to U.S. taxation. To the extent a company’s foreign operations are subject to GILTI and there is an existing outside basis difference in the Company’s foreign investments that exists within the reporting period, the Company may need to record a deferred tax liability for some portion of the anticipated additional tax resulting from future GILTI inclusions. Outside-basis difference is generally defined as the difference between an entity’s financial statement carrying amount and the tax basis of the parent’s investment in that entity’s stock. Outside basis differences typically arise from things such as the entity earning income, that has yet to be distributed to the parent company, or from purchase accounting adjustments not recognized for tax purposes. For companies subject to GILTI, the Financial Accounting Standards Board ("FASB") has indicated that companies are allowed to record tax associated with GILTI as a period cost in the period the earnings are included on the U.S. tax return. The Company has chosen to adopt this policy. |

| • | The Tax Legislation includes, what many believe, is an unintended consequence that results in certain leasehold improvements, being ineligible for bonus depreciation. The Company has estimated fiscal year 2018 depreciation expense based on how the law was drafted, with no consideration of the perceived legislative intent. The Company has estimated its capital expenditures by class to estimate depreciation expense for purposes of calculating the rate change adjustment of our deferred tax balance. If Tax Legislation for QIP is adjusted in fiscal 2019 or beyond, it will impact the rate change adjustment, which in turn will impact the Company’s estimated annual effective tax rate in the year the legislation is revised. |

| • | At this time, it is unknown whether certain states in which the Company operates will conform to the Tax Legislation or adopt an alternative regime. The Company continues to monitor developments; at this time all material aspects of its provision for income tax for the fiscal year ended June 30, 2018 are recorded based on recent guidance or its historical approach to state tax expense. |

| • | Other provisions of the new legislation that are not applicable to the Company until fiscal 2019 include, but are not limited to, the provisions limiting deductibility of interest and executive compensation expense. Based on current facts and circumstances, we do not anticipate the impact of these provisions to be material to the overall financial statements. |

Integration and Acquisition Costs

During the first quarter of fiscal 2018, the Company completed its acquisition of Kate Spade & Company.

During the third quarter of fiscal 2018, the Company completed its acquisition of certain distributors for the Coach and Stuart Weitzman brands and obtained operational control of the Kate Spade Joint Ventures.

The operating results of the respective entities have been consolidated in the Company's operating results commencing on the date of each acquisition.

As a result, the Company incurred charges related to the integration and acquisition of the businesses.

These charges are primarily associated with purchase price accounting adjustments, acquisition costs, inventory-related charges, contractual payments and organization-related expenses.

The Company currently estimates that it will incur approximately $50\-60 million in pre-tax charges, of which approximately $5\-10 million are expected to be non-cash charges, in fiscal 2019.

Refer to Note 4, "Integration and Acquisition Costs," and "GAAP to Non-GAAP Reconciliation," herein, for further information.

Unless the context requires otherwise, references to the "Coach brand" do not include the Stuart Weitzman brand and references to the "Stuart Weitzman brand" do not include the Coach brand and references to the Company, Coach, we, our or us do not include Kate Spade & Company ("Kate Spade").

The Coach brand was established in New York City in 1941, and has a rich heritage of pairing exceptional leathers and materials with innovative design.

Coach, Inc. acquired Stuart Weitzman, a leader in women's designer footwear, during the fourth quarter of fiscal 2015.

Coach, Inc. operates in three segments:

| • | International - The International segment includes sales of Coach brand products to customers through Coach-operated stores and concession shop-in-shops in Japan, mainland China, Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany, Italy, Austria, Belgium, the Netherlands and Switzerland. Additionally, International includes sales to consumers through the Internet in Japan, mainland China, South Korea, the United Kingdom, France, Spain, Germany and Italy, as well as sales to wholesale customers and distributors in approximately 55 countries. |

Other, which is not a reportable segment, consists of sales and expenses generated by the Coach brand other ancillary channels, licensing and disposition.

We are focused on driving long-term growth and profitability through the following key initiatives:

Build an infrastructure to support future growth initiatives

| • | Through the acquisition of Kate Spade, we created the first New York-based house of modern luxury lifestyle brands, defined by authentic, distinctive products and fashion innovation. |

| • | Create an agile and scalable business model to support sustainable/future growth for a multi-brand Coach, Inc. |

Drive brand relevance

| • | Continue to evolve the Coach brand across the key consumer touchpoints of product, stores and marketing. |

| • | Reinvigorate growth and brand relevance through our differentiated positioning, which combines our history of heritage and craftsmanship with Stuart Vevers's modern creative vision. |

| • | Raise brand awareness and increase market share for the Stuart Weitzman brand globally, building upon the company's strong momentum and core brand equities of fusing fashion with fit. |

Grow our business internationally

| • | Continue to increase the Coach brand's penetration internationally. |

| • | Support the development of the Stuart Weitzman brand, particularly in Asia. |

Harness the power of the digital world

| • | Continue to accelerate the development of our digital programs and capabilities world-wide, reflecting the change in consumer shopping behavior globally. |

On July 11, 2017, the Company completed its acquisition of Kate Spade & Company for $18.50 per share in cash for a total of approximately $2.4 billion.

The combination of Coach, Inc. and Kate Spade & Company creates a leading luxury lifestyle company with a more diverse multi-brand portfolio supported by significant expertise in handbag design, merchandising, supply chain and retail operations as well as solid financial acumen.

The significant majority of the charges under this plan will be recorded within SG&A expenses, and was substantially completed by the end of fiscal 2017.

The remaining charges under this plan approximate $10-15 million which will be incurred in fiscal 2018.

While certain developed geographic regions are withstanding these pressures better than others, the level of consumer travel and spending on discretionary items remains constrained due to the economic uncertainty.

Political and economic instability or changing macroeconomic conditions that exist in our major markets have further contributed to this uncertainty, including the potential impact of (1) new policies that may be implemented by the U.S. presidential administration and government, particularly with respect to tax and trade policies or (2) the United Kingdom ("U.K.") voting to leave the European Union ("E.U."), commonly known as “Brexit.” On March 29, 2017, the U.K. triggered Article 50 of the Lisbon Treaty formally starting negotiations with the E.U. The U.K. has two years to complete these negotiations.

Although the terms of the U.K.'s future relationship with the E.U. are still unknown, it is possible that there will be increased regulatory and legal complexities, including potentially divergent national laws and regulations between the U.K. and E.U. Brexit may also cause disruption and create uncertainty surrounding our business, including affecting our relationship with our existing and future customers, suppliers and employees.

Additional macroeconomic events including foreign exchange rate volatility in various parts of the world, recent and evolving impacts of economic and geopolitical events in Hong Kong, Macau and mainland China ("Greater China"), the impact of terrorist

acts (particularly in Europe), disease epidemics and a slowdown in emerging market growth (particularly in Asia) have contributed to this uncertainty.

Our results have been impacted by foreign exchange rate fluctuations, and will continue to fluctuate with future volatility.

Certain limited and recent factors within the U.S., including an improvement in the labor and housing markets and modest growth in overall consumer spending, suggest a potential moderate strengthening in the U.S. economic outlook.

If the global macroeconomic environment remains volatile or worsens, the constrained level of worldwide consumer spending and modified consumption behavior may continue to have a negative effect on our outlook.

Several organizations that monitor the world's economy, including the International Monetary Fund, are projecting slightly accelerated economic strengthening with modest overall global growth for the remainder of calendar 2017 but caution that there is considerable uncertainty surrounding the underlying assumptions of the forecast.

GAAP to Non-GAAP Reconciliation

For the Years Ended July 1, 2017 and July 2, 2016

| ◦ | Integration charges of $17.7 million were recorded in SG&A expenses and $2.9 million was recorded to cost of sales within the Stuart Weitzman brand. |

Gross profit increased by 1.0% to $3.08 billion during fiscal 2017 as compared to $3.05 billion in fiscal 2016.

SG&A expenses decreased by 4.3% to $2.29 billion in fiscal 2017.

Net income increased 28.3% in fiscal 2017 as compared to fiscal 2016, primarily due to an increase in operating income of $133.9 million.

Net income per diluted share increased 26.7% to $2.09, primarily due to higher net income.

The impact of the 53rd week in fiscal 2016 contributed approximately $0.07 to net income per diluted share.

[removed: Coach] [added: The Company] manages these exposures through operating and financing activities and, when appropriate, through the use of derivative financial instruments.

To mitigate such risk, [removed: Coach Japan, Coach Canada and Stuart Weitzman] [added: certain subsidiaries] enter into forward currency [removed: contracts, primarily forward currency] contracts.

As of [removed: July 1, 2017] [added: June 30, 2018] and July [removed: 2, 2016,] [added: 1, 2017,] forward currency contracts designated as cash flow hedges with a notional amount of [removed: $146.9] [added: $257.4] million and [removed: $126.7] [added: $146.9] million, respectively, were outstanding.

As a result of the above considerations, we do not believe that we are exposed to any undue concentration of counterparty credit risk associated with our derivative contracts as of [removed: July 1, 2017.][added: June 30, 2018.]

This primarily includes exposure to exchange rate fluctuations in the Euro, the [added: Japanese Yen, the] Chinese Renminbi, the [removed: British Pound Sterling] [added: Australian dollar] and the [removed: Singapore Dollar.][added: British Pound Sterling.]

To manage the exchange rate risk related to these loans, the Company [removed: primarily] enters into forward currency contracts.

As of [removed: July 1, 2017] [added: June 30, 2018] and July [removed: 2, 2016,] [added: 1, 2017,] the total notional values of outstanding forward foreign currency contracts related to these loans were [removed: $95.5] [added: $160.7] million and [removed: $75.5] [added: $95.5] million, respectively.

The fair value of outstanding foreign currency contracts included in current assets at [added: June 30, 2018 and] July 1, 2017 [removed: and July 2, 2016] was [removed: $3.5] [added: $6.0] million and [removed: $0.6] [added: $3.5] million, respectively.

The fair value of outstanding foreign currency contracts included in current liabilities at [added: June 30, 2018 and] July 1, 2017 [removed: and July 2, 2016] was [removed: $1.7] [added: $2.4] million and [removed: $11.1] [added: $1.7] million, respectively.

As of [removed: July 1, 2017,] [added: June 30, 2018,] a 10% devaluation of the U.S. Dollar against the exchange rates for foreign currencies under contract would result in an immaterial impact on derivative contract fair values.

The Company is exposed to interest rate risk in relation to its Revolving Credit Facility [removed: and the Term Loan Facilities (collectively "the Facility")] entered into under the credit agreement dated May 30, 2017, the 2025 Senior Notes, 2022 Senior Notes, 2027 Senior Notes (collectively the "Senior Notes") and investments.

Our exposure to changes in interest rates is primarily attributable to debt outstanding under the [added: Revolving Credit] Facility.

Borrowings under the Facility bear interest at a rate per annum equal to, at [removed: Coach’s] [added: the Company’s] option, either (a) an alternate base rate (which is a rate equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1% or (iii) the Adjusted LIBO Rate for a one month Interest Period on such day plus 1%) or (b) a rate based on the rates applicable for deposits in the interbank market for U.S. dollars or the applicable currency in which the loans are made plus, in each case, an applicable margin.

A hypothetical 10% change in the credit agreement interest rate would have resulted in an immaterial change in interest expense in fiscal [removed: 2017.][added: 2018.]

The Company is exposed to changes in interest rates related to the fair value of [removed: our] [added: the] Senior Notes.

At July 1, 2017, the fair value of the 2025 Senior Notes, 2022 Senior Notes and 2027 Senior Notes [removed: was approximately $624 million, $395 million and $596 million, respectively.]

[added: The interest rate payable on the 2022 and 2027 Senior Notes will be subject to adjustments from time to time] if either Moody’s or S&P or a substitute rating agency (as defined in the Prospectus Supplement furnished with the SEC on June 7, [removed: 2017),] [added: 2017)] downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the [removed: Senior Notes] [added: respective senior note] of such series.

At June 30, 2018, the fair value of the 2025 Senior Notes, 2022 Senior Notes and 2027 Senior Notes was approximately $593 million, $389 million and $574 million, respectively.

was approximately $624 million, $395 million and $596 million, respectively.

These fair values are based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and are classified as Level 2 measurements within the fair value hierarchy.

The interest rate payable on each series of the Senior Notes will be subject to adjustments from time to time

[added: Tapestry, Inc., previously known as] Coach, [removed: Inc.] [added: Inc.,] is a leading New York-based house of modern luxury accessories and lifestyle brands.

We present a sophisticated, modern and inviting [removed: environment] [added: environment, both in bricks & mortar stores and online,] to showcase our product assortment and reinforce a consistent brand [removed: positioning wherever our consumer may choose to shop.][added: positioning.]

[removed: NARRATIVE DESCRIPTION OF STUART WEITZMAN BRAND][added: Stuart Weitzman]

These [added: independent] manufacturers [added: each or] in aggregate support a broad mix of [added: product types,] materials and [added: a] seasonal influx of new, [removed: fashion oriented] [added: fashion-oriented] styles, which allows [removed: the Stuart Weitzman brand] [added: us] to [removed: quickly] meet [added: shifts in] marketplace [removed: demands] [added: demand] and [removed: changing] [added: changes in] consumer preferences.

Founded in 1941, [removed: Coach Inc.] [added: Coach, Inc., the predecessor company to Tapestry, Inc.,] was acquired by Sara Lee Corporation (“Sara Lee”) in 1985.

In June 2000, [removed: the Company] [added: Coach, Inc.] was incorporated in the state of Maryland.

In October 2000, [removed: Coach] [added: Coach, Inc.] was listed on the New York Stock Exchange and sold approximately 19.5% of the then outstanding shares.

In April 2001, Sara Lee completed a distribution of its remaining ownership in [removed: Coach] [added: Coach, Inc.] via an exchange offer, which allowed Sara Lee stockholders to tender Sara Lee common stock for [removed: Coach] [added: Coach, Inc.] common stock.

[removed: The] [added: Since October 2000, the] Company's international expansion strategy for [removed: the] Coach [removed: brand] has been to enter into joint ventures and [added: establish] distributor relationships to build market presence and capability.

To further accelerate brand awareness, aggressively grow market share and to exercise greater control of our brand, [removed: Coach] [added: the Company] has historically acquired its [added: joint venture] partner’s [removed: interests.][added: interests or distributor rights in these international regions.]

During fiscal 2015, the Company acquired Stuart [removed: Weitzman,] [added: Weitzman Holdings LLC,] a luxury women's footwear company, to complement its leadership position in premium handbags and accessories.

[added: | (1) | On July 11, 2017, the Company completed its acquisition of Kate Spade.] The operating results of the [removed: Stuart Weitzman] [added: Kate Spade] brand have been consolidated in the Company's operating results commencing on [removed: May 4, 2015.][added: July 11, 2017. |]

During [removed: the fourth quarter of] fiscal 2016, the Company acquired the Stuart Weitzman Canadian retail distributor.

[removed: On July 11, 2017,] [added: During] the [added: first quarter of fiscal 2018, the] Company completed its acquisition of Kate Spade & [removed: Company] [added: Company, a lifestyle accessories and ready-to-wear company,] for $18.50 per share in cash for a total of $2.4 billion.

As a [removed: result, Kate Spade has become a wholly owned subsidiary of Coach, Inc. The combination] [added: result] of [removed: Coach, Inc. and Kate Spade &] [added: this acquisition, on October 31, 2017, the] Company [removed: creates] [added: changed its name to Tapestry, Inc.,] a leading luxury lifestyle company with a [removed: more] diverse multi-brand portfolio supported by significant expertise in handbag design, merchandising, supply chain and retail operations as well as solid financial acumen.

[removed: In fiscal 2017,] [added: As a result,] the Company has three reportable segments:

| • | [removed: North America, which is composed] [added: Coach includes global sales] of Coach brand [removed: sales] [added: products] to [removed: consumers] [added: customers] through [added: Coach operated] stores, including the [removed: Internet,] [added: Internet] and [added: concession shop-in-shops, and] sales to wholesale customers [removed: in North America.] [added: and through independent third party distributors.] This segment represented [removed: 52.3%] [added: 71.8%] of [removed: Coach's] total net sales in fiscal [removed: 2017.] [added: 2018.] |

| • | Stuart [removed: Weitzman, which] [added: Weitzman] includes global sales [removed: generated by the] [added: of] Stuart Weitzman [removed: brand,] [added: brand products] primarily [removed: within international locations] through [removed: independent distributors, department stores in North America and within] Stuart Weitzman [removed: directly] operated [removed: stores and e-commerce in] [added: stores, including] the [removed: United States, Europe] [added: Internet, to wholesale customers] and [removed: Canada.] [added: through numerous independent third party distributors.] This segment represented [removed: 8.3%] [added: 6.4%] of total net sales in fiscal [removed: 2017.] [added: 2018.] |

[removed: North America Retail Stores — Coach retail] [added: These] stores are located in [removed: both] regional shopping [removed: centers and] [added: centers,] metropolitan areas throughout the [removed: U.S., Canada] [added: world] and [removed: Puerto Rico.][added: established outlet centers.]

[removed: The retail] [added: Retail] stores carry an assortment of products depending on their size, location and customer preferences.

[removed: Our] [added: Kate Spade] flagship [removed: stores,] [added: locations,] which offer the fullest expression of the [removed: Coach] [added: Kate Spade] brand, are located in high-visibility locations.

The change in the number of [removed: North America] Coach [removed: retail] stores and their total and average square footage is shown in the following table:

| | [added: June 30, 2018] | [added: | | | | | |] July 1, 2017 | | | [added: | | | |] July 2, 2016 | | | [removed: June 27, 2015] | | [added: |]

| Net [removed: decrease] [added: change] vs. prior year | | [removed: (7] [added: (17] | ) | | [removed: (30] [added: 42] | [removed: )] | | [removed: (74] [added: 25] | [removed: )] |

| Average [removed: square footage] [added: Square Footage] | | [removed: 3,006] | | | [removed: 2,892] | | | [removed: 2,825] | |

[removed: North America Outlet Stores —] Coach [removed: brand's] outlet stores serve as an efficient means to sell manufactured-for-outlet [removed: product, including outlet exclusives,] [added: product] and [removed: to a lesser extent,] discontinued retail inventory outside the retail channel.

[removed: Our] [added: The] outlet store design, visual presentations and customer service levels support and reinforce the brand's image.

Through these outlet stores, we target value-oriented [removed: customers.][added: customers in established outlet centers that are close to major markets.]

The [removed: change in the] number of [removed: North America Coach outlet] [added: Kate Spade] stores [added: as of June 30, 2018] and their total and average square footage is shown in the following table:

| Net [removed: decrease] [added: change] vs. prior year | | [removed: (6] [added: (13] | ) | | [removed: —] [added: 21] | | | [removed: (3] [added: 8] | [removed: )] |

| % [removed: decrease] [added: change] vs. prior year | | [removed: (2.9] [added: (1.4] | )% | | [removed: —] [added: 191.7] | % | | [removed: (1.4] [added: 27.2] | [removed: )%] [added: %] |

| Net [removed: (decrease) increase] [added: change] vs. prior year | | [removed: (12,948] [added: (30] | ) | | [removed: 43,752] [added: 19] | | | [removed: 56,304] [added: (11] | [added: )] |

| Average [removed: square footage] [added: Square Footage] | | [removed: 6,161] | | | [removed: 6,043] | | | [removed: 5,829] | |

Internet — We view our www.coach.com website as a key communications vehicle for the brand to promote traffic in retail stores and department store locations and build brand awareness, as well as an additional channel to sell Coach brand products [removed: directly to customers.]

[removed: With approximately 59 million unique visits to www.coach.com in fiscal 2017, our] [added: Our] online store provides a showcase environment where consumers can browse through a selected offering of the latest styles and colors.

[removed: North America] Wholesale — [removed: The] Coach [removed: brand] began as a U.S. wholesaler to department [removed: stores] [added: stores,] and this channel continues to remain a part of our overall consumer reach.

As of [removed: July 1, 2017, Coach brand's] [added: June 30, 2018, Coach's] products are sold in approximately [removed: 750] [added: 1,630] wholesale [removed: locations in the U.S.] and [removed: Canada.][added: distributor locations globally.]

[removed: Our] [added: Coach's most significant] wholesale partnerships [removed: include national and regional] [added: are with] department stores including Macy's (including Bloomingdale's), Dillard's, [removed: Nordstrom,] [added: Hudson's Bay Company (including] Lord & [removed: Taylor, The Bay,] [added: Taylor and] Saks 5th [removed: Ave, Bon Ton, Belk,] [added: Ave), Nordstrom, Zappos,] Von [removed: Maur] [added: Maur, The Bay] and Neiman Marcus.

As of [removed: July 1, 2017] [added: June 30, 2018] and July [removed: 2, 2016, we] [added: 1, 2017, Coach] did not have any customers who individually accounted for more than 10% of the [removed: North America] segment's total net sales.

[removed: Flagship] [added: Coach flagship] stores, which offer the fullest expression of the Coach brand, are located in [removed: select high-visibility shopping districts.][added: tourist-heavy, densely populated cities globally.]

Tapestry is powered by optimism, innovation and inclusivity.

Our brands are approachable and inviting and create joy every day for people around the world.

Defined by quality, craftsmanship and creativity, the brands that make up our house give global audiences the opportunity for exploration and self-expression.

Tapestry is comprised of the Coach, Kate Spade and Stuart Weitzman brands, all of which have been part of the American fashion landscape for over 25 years.

Such regions include Japan, Greater China, Singapore, Taiwan, Malaysia, South Korea and Europe.

During the third quarter of fiscal 2018, the Company acquired designated assets of its Coach distributor in Australia and New Zealand.

During the third quarter of fiscal 2018, the Company acquired designated assets of its Stuart Weitzman distributor in Northern China.

During the third quarter of fiscal 2018, the Company entered into an agreement to take operational control of the KS China Co., Limited and KS HMT Co., Limited joint ventures ("Kate Spade Joint Ventures") that operate in mainland China, Hong Kong, Macau and Taiwan in which the Company has 50% interest.

OUR BRANDS

Prior to fiscal 2018, the Company had three reportable segments: North America (Coach brand), International (Coach brand) and Stuart Weitzman.

Beginning in fiscal 2018 and as a result of the Kate Spade acquisition, the Company aligned its reportable segments with the new structure of its business.

| • | Kate Spade includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, to wholesale customers, through concession shop-in-shops and through independent third party distributors. This segment represented 21.8% of total net sales in fiscal 2018. |

Corporate, which is not a reportable segment, represents certain costs that are not directly attributable to a brand.

These costs primarily include administrative and information systems expense.

Coach is a leading design house of modern luxury accessories and lifestyle collections, with a long-standing reputation built on quality craftsmanship.

As a pioneer in the leather goods and accessories space, the brand established itself as the original American house of leather.

Coach remains inspired by its rich heritage, with the spirit of innovation it has had for more than 75 years.

Defined by a free-spirited, all-American attitude, the brand approaches design with a modern vision, reimagining luxury for today with an authenticity that is uniquely Coach.

All over the world, the Coach name is synonymous with effortless New York style.

Stores — Coach operates freestanding flagship, retail, outlet stores and concession shop-in-shop locations.

| | | North America | | | International(1) | | | Total | |

| Store Count | | | | | | | | | |

| Fiscal 2018 | | 402 | | | 585 | | | 987 | |

| % change vs. prior year | | (4.1 | )% | | 7.7 | % | | 2.6 | % |

| Fiscal 2017 | | 419 | | | 543 | | | 962 | |

| Fiscal 2016 | | 432 | | | 522 | | | 954 | |

| % change vs. prior year | | (6.5 | )% | | 3.8 | % | | (1.1 | )% |

| Square Footage | | | | | | | | | |

| Fiscal 2018 | | 1,835,543 | | | 1,256,525 | | | 3,092,068 | |

| % change vs. prior year | | (2.6 | )% | | 7.7 | % | | 1.3 | % |

| Fiscal 2017 | | 1,884,204 | | | 1,166,920 | | | 3,051,124 | |

| Net change vs. prior year | | (7,942 | ) | | 80,605 | | | 72,663 | |

| Fiscal 2016 | | 1,892,146 | | | 1,086,315 | | | 2,978,461 | |

| Net change vs. prior year | | (25,705 | ) | | 55,620 | | | 29,915 | |

| % change vs. prior year | | (1.3 | )% | | 5.4 | % | | 1.0 | % |

| Fiscal 2018 | | 4,566 | | | 2,148 | | | 3,133 | |

| Fiscal 2017 | | 4,497 | | | 2,149 | | | 3,172 | |

| Fiscal 2016 | | 4,380 | | | 2,081 | | | 3,122 | |

| (1) | Fiscal 2018 includes the addition of 21 retail stores acquired as a result of the Coach distributor acquisition in Australia and New Zealand completed during the third quarter of fiscal 2018. |

In fiscal 2019, we expect to close a select number of stores in North America.

The Coach brand was established in New York City in 1941, and has a rich heritage of pairing exceptional leathers and materials with innovative design.

The Stuart Weitzman brand ("Stuart Weitzman") is a leader in women's designer footwear and is built upon the concept of crafting a beautifully-constructed shoe, merging fashion and function.

NARRATIVE DESCRIPTION OF COACH BRAND

The Coach brand is one of the most recognized fine accessories and modern luxury lifestyle brands in both North America and in targeted international markets.

The Coach brand offers premium lifestyle accessories to an engaged customer base and provides consumers with fresh, compelling and innovative products that are extremely well made, at an attractive price.

Our product offering uses a broad range of high quality leathers, fabrics and materials.

In response to our customer’s demands for both fashion and function, the Coach brand offers updated styles and multiple product categories which address an increasing share of our customer’s accessory wardrobe.

We utilize a flexible, cost-effective global sourcing model, in which independent manufacturers supply our products, allowing us to efficiently bring our broad range of products to market.

We offer a number of key differentiating elements, including:

A Distinctive Brand — The Coach brand represents a blend of classic American style with a distinctive New York spirit, offering a design that is known for a distinguishing combination of style and function.

Coach brand offers lifestyle products that are relevant, extremely well made and provide excellent value.

A Market Leadership Position With Growing International Recognition — The Coach brand is a global leader in premium handbags and lifestyle accessories.

Our long-standing reputation and distinctive image have been consistently developed across an expanding number of products, sales channels and international markets.

A Loyal And Involved Consumer — Consumers have maintained a strong emotional connection with the Coach brand.

Part of our everyday mission is to continue to cultivate consumer relationships by strengthening this sentiment and brand loyalty.

A Multi-Channel Global Distribution Model — Products are available in image-enhancing environments globally wherever our consumer chooses to shop including: retail and outlet stores, directly operated concession shop-in-shops, online, and department and specialty stores.

This allows us to maintain a dynamic balance as results do not depend solely on the performance of a single channel or geographic area.

Our stores showcase our products and enhance the shopping experience while reinforcing the image of our brand.

The modern luxury store design creates a distinctive environment to display our products.

We continue to be committed to the elevation and enhancement of our in-store imagery through strategic investments in Coach branded stores and wholesale locations.

Furthermore, store associates are trained to maintain high standards of visual presentation, merchandising and customer service.

Innovation With A Consumer-Centric Focus — We listen to our consumers through rigorous consumer research and strong consumer orientation.

To truly understand globalization and its related impact, we understand the local context in each market, learning about our consumer wherever our products are sold.

The Coach brand works to anticipate the consumer’s changing needs by keeping the product assortment fresh and compelling.

The Stuart Weitzman brand is a leading global women's premium footwear brand, with a strong opportunity for growth both within North America and international markets.

The design team, under Mr. Giovanni Morelli, is responsible for conceptualizing and directing the design of all products, and works closely with its manufacturing partners, primarily in Spain, to construct a broad mix of footwear styles.

Stuart Weitzman products, which substantially consist of footwear, are sold primarily within international locations through third party independent distributors, department stores in North America and within Stuart Weitzman directly operated stores and e-commerce in the United States, Europe and Canada.

| | |

| --- | --- |

| • | In fiscal 2001, Coach Japan was initially formed as a joint venture with Sumitomo Corporation. In fiscal 2005, we purchased Sumitomo’s 50% interest in Coach Japan. |

| • | In fiscal 2011, the Company purchased a non-controlling interest in a joint venture with Hackett Limited to expand the Coach business in Europe. Through the joint venture, the Company opened retail locations in Spain, Portugal and the United Kingdom in fiscal 2011, in France and Ireland in fiscal 2012 and in Germany in fiscal 2013. In the beginning of fiscal 2014, the Company purchased Hackett Limited’s remaining 50% interest in the joint venture, and has continued to expand its presence in Europe. |

| • | Coach acquired the domestic retail businesses from its distributors as follows: |

| \- | Fiscal 2009: Hong Kong, Macau and mainland China (“Greater China”). |

| \- | Fiscal 2012: Singapore and Taiwan. |

| \- | Fiscal 2013: Malaysia and South Korea. |

SEGMENTS

| • | International, which is composed of Coach brand sales to consumers through stores and concession shop-in-shops in Japan, mainland China, Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany, Italy, Austria, Belgium, the Netherlands and Switzerland. Additionally, International includes Coach brand sales to consumers through the Internet in Japan, mainland China, South Korea, the United Kingdom, France, Spain, Germany and Italy, as well as sales to wholesale customers and distributors in approximately 55 countries. This segment represented 38.2% of total net sales in fiscal 2017. |

Other, which is not a reportable segment, consists of Coach brand sales and expenses generated in other ancillary channels, licensing and disposition, and represented 1.2% of total net sales in fiscal 2017.

Coach Brand North America Segment

In fiscal 2017, we have reduced the number of retail stores with a modest increase in total square footage, as we continue to optimize our real estate position.

The Company is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including proceedings to protect [removed: Coach] [added: Tapestry,] Inc.'s intellectual property rights, litigation instituted by persons alleged to have been injured by advertising claims or upon premises within the Company's control, and litigation with present or former employees.

As part of [removed: Coach’s] [added: Tapestry’s] policing program for its intellectual property rights, from time to time, the Company files lawsuits in the U.S. and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, copyright infringement, unfair competition, trademark dilution and/or state or foreign law claims.

At any given point in time, [removed: Coach] [added: Tapestry] may have a number of such actions pending.

From time to time, defendants will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of certain of [removed: Coach’s] [added: Tapestry’s] intellectual properties.

Although the Company's litigation as a defendant is routine and incidental to the conduct of [removed: Coach’s] [added: Tapestry’s] business, as well as for any business of its size, such litigation can result in large monetary [removed: awards] [added: awards, such as] when a civil jury is allowed to determine compensatory and/or punitive damages.

[removed: Coach] [added: Tapestry] has not entered into any transactions that have been identified by the IRS as abusive or that have a significant tax avoidance purpose.

For the Fiscal Year Ended [removed: July 1, 2017][added: June 30, 2018]

The aggregate market value of [removed: Coach,] [added: Tapestry,] Inc. common stock held by non-affiliates as of December [removed: 31, 2016] [added: 29, 2017] (the last business day of the most recently completed second fiscal quarter) was approximately [removed: $9.7] [added: $12.4] billion.

On August [removed: 4, 2017,] [added: 3, 2018,] the Registrant had [removed: 282,584,704] [added: 288,038,993] shares of common stock outstanding.

| Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders | | Part III, Items 10 – 14 |

| [Item [removed: 1.](#s4E0EE332A0C25766A1AD73D0F8D3628B)] [added: 1.](#sF84957B4522654C3AAFED233B9D826D1)] | [removed: [Business](#s4E0EE332A0C25766A1AD73D0F8D3628B)] [added: [Business](#sF84957B4522654C3AAFED233B9D826D1)] | [removed: [2](#s4E0EE332A0C25766A1AD73D0F8D3628B)] [added: [2](#sF84957B4522654C3AAFED233B9D826D1)] |

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| [Item [removed: 6.](#s9D7A76B25E545B95AC428B3FBE66EB4E)] [added: 6.](#s955192f788a340b99cf75f84de640de7)] | [Selected Financial [removed: Data](#s9D7A76B25E545B95AC428B3FBE66EB4E)] [added: Data](#s955192f788a340b99cf75f84de640de7)] | [removed: [27](#s9D7A76B25E545B95AC428B3FBE66EB4E)] [added: [27](#s955192f788a340b99cf75f84de640de7)] |

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| [Item [removed: 8.](#sB8959E7E6C23512EA0B1FB8F26165B38)] [added: 8.](#s0E76D01BF1025F9C9135E337883CBF84)] | [Financial Statements and Supplementary [removed: Data](#sB8959E7E6C23512EA0B1FB8F26165B38)] [added: Data](#s0E76D01BF1025F9C9135E337883CBF84)] | [removed: [53](#sB8959E7E6C23512EA0B1FB8F26165B38)] [added: [53](#s0E76D01BF1025F9C9135E337883CBF84)] |

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This document, and the documents incorporated by reference in this document, our press releases and oral statements made from time to time by us or on our behalf, may contain certain "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as [removed: amended.][added: amended, and are based on management's current expectations, that involve risks and uncertainties that could cause our actual results to differ materially from our current expectations.]

In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as [added: "may," "can," "continue," "project," "should,"] "expect," [added: "confidence," "trends,"] "anticipate," "intend," [added: "estimate," "on track," "well positioned to,"] "plan," [added: "potential,"] "position," "believe," "seek," "see," "will," "would," [removed: "target",] [added: "target,"] similar expressions, and variations or negatives of these words.

If such risks or uncertainties materialize or such assumptions prove incorrect, the results of [removed: Coach,] [added: Tapestry,] Inc. and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions.

[removed: Coach,] [added: Tapestry,] Inc.’s actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this Form 10-K filing entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These factors are not necessarily all of the factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements.

In this Form 10-K, references to “we,” “our,” “us,” [removed: "Coach"] [added: "Tapestry"] and the “Company” refer to [removed: Coach,] [added: Tapestry,] Inc., including consolidated subsidiaries as of [removed: July 1, 2017] [added: June 30, 2018] ("fiscal [removed: 2017").][added: 2018").]

The fiscal [removed: year] [added: years] ended [added: June 30, 2018 ("fiscal 2018") and] July 1, 2017 ("fiscal 2017") [removed: was a] [added: were] 52-week [removed: period,] [added: periods, and] the fiscal year ended July 2, 2016 (“fiscal 2016”) was a 53-week [removed: period and the fiscal year ended June 27, 2015 (“fiscal 2015") was a 52-week] period.

10-K 1 tpr6302018-10k.htm 10-K

Tapestry, Inc.

TAPESTRY, INC.

| [Signatures](#sd9b27469bf9a42fcbc972be6faf7631f) | | [56](#sd9b27469bf9a42fcbc972be6faf7631f) |

Tapestry, Inc. assumes no obligation to revise or update any such forward-looking statements for any reason, except as required by law.

References to "Coach," "Kate Spade," "kate spade new york" or "Stuart Weitzman" refer only to the referenced brand.

10-K 1 coh7012017-10k.htm 10-K

Coach, Inc.

| [Signatures](#sCFF56A8A91925A628C40DA49C119BECE) | | [56](#sCFF56A8A91925A628C40DA49C119BECE) |

INFORMATION REGARDING HONG KONG DEPOSITARY RECEIPTS

Coach’s Hong Kong Depositary Receipts are traded on The Stock Exchange of Hong Kong Limited under the symbol 6388.

Neither the Hong Kong Depositary Receipts nor the Hong Kong Depositary Shares evidenced thereby have been or will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to, or for the account of, a U.S. Person (within the meaning of Regulation S under the Securities Act), absent registration or an applicable exemption from the registration requirements.

Hedging transactions involving these securities may not be conducted unless in compliance with the Securities Act.

Unless the context requires otherwise, references to the "Coach brand" do not include the Stuart Weitzman brand and references to the "Stuart Weitzman brand" do not include the Coach brand and references to the Company, Coach, we, our or us do not include Kate Spade & Company ("Kate Spade").

The following table sets forth the location, use and size of the Company's key distribution, corporate and product development facilities as of [removed: July 1, 2017.][added: June 30, 2018.]

The majority of the properties are leased, with the leases expiring at various times through [removed: 2036,] [added: 2037,] subject to renewal options.

| New York, New York | | Corporate, design, sourcing and product development | | [removed: 694,000] [added: 695,000] | |

| Carlstadt, New Jersey | | Corporate [removed: offices] [added: office] | | 65,000 | |

| Shanghai, China | | Coach Greater China (including Hong Kong, Macau, and mainland China) regional management | | [removed: 23,400] [added: 23,000] | |

| Hong Kong, China | | Corporate regional management | | [removed: 20,300] [added: 23,900] | |

| Shanghai, China | | Coach Asia regional management | | [removed: 17,700] [added: 10,400] | |

| [removed: Alicante,] [added: Elda,] Spain | | Stuart Weitzman regional management, sourcing and quality control | | [removed: 13,000] [added: 19,000] | |

| London, U.K. | | Coach Europe regional management | | [removed: 12,400] [added: 12,300] | |

| Fort Lauderdale, Florida | | Stuart Weitzman corporate [removed: management] [added: office] | | 12,100 | |

| Seoul, South Korea | | [removed: Corporate] [added: Coach] South Korea regional management | | [removed: 11,700] [added: 18,000] | |

| Ho Chi Minh City, Vietnam | | Coach sourcing and quality control | | [removed: 8,500] [added: 8,600] | |

| Paris, France | | Coach Europe regional management | | [removed: 6,900] [added: 5,900] | |

| Kuala Lumpur, Malaysia | | Coach Malaysia regional management | | [removed: 4,500] [added: 3,800] | |

| Beijing, China | | Coach Greater China regional management | | [removed: 2,800] [added: 3,000] | |

| (1) | Represents a [removed: Coach-owned] [added: Company-owned] location. |

These leases expire at various times through [removed: 2031.][added: 2032.]

[removed: Coach] [added: The Company] considers these properties to be in generally good [removed: condition] [added: condition,] and believes that its facilities are adequate for its operations and provide sufficient capacity to meet its anticipated requirements.

| Westchester, Ohio | | Kate Spade North America distribution and customer service | | 601,000 | |

| New York, New York | | Kate Spade corporate management | | 135,000 | |

| North Bergen, New Jersey | | Corporate office | | 106,000 | |

| Tokyo, Japan | | Kate Spade Japan regional management | | 14,200 | |

| Montreal, Canada | | Stuart Weitzman Canada regional management and distribution | | 9,100 | |

| London, England | | Kate Spade Europe regional management | | 5,000 | |

| Singapore | | Coach Singapore regional management, sourcing and quality control | | 5,000 | |

| Shanghai, China | | Kate Spade regional management | | 2,700 | |

| Milan, Italy | | Stuart Weitzman corporate office | | 2,700 | |

| Lincoln, Rhode Island | | Kate Spade regional management | | 2,500 | |

In addition to the above properties, the Company occupies leased retail and outlet store locations located in North America and internationally for each of our brands.

Refer to Item 1.

"Business," and Item 6.

"Selected Financial Data," for further information.

| Ngee Ann City, Singapore | | Coach Singapore regional management | | 7,600 | |

As of July 1, 2017, the Company also occupied 221 Coach retail and 198 Coach outlet leased stores located in North America, 543 Coach-operated concession shop-in-shops within department stores, Coach retail and outlet stores in our international locations, and 81 Stuart Weitzman stores globally.

[added: Tapestry, Inc.’s common stock is listed on the New York Stock Exchange and is traded under the symbol “TPR.”] The following table sets forth, for the fiscal periods indicated, the high, low and closing prices per share of the Company's common stock as reported on the New York Stock Exchange Composite Index.

| Fiscal [removed: 2016] [added: 2018] Quarter ended: | | | | | | | | | | | | | | | |

As of August [removed: 4, 2017,] [added: 3, 2018,] there were [removed: 3,964] [added: 2,325] holders of record of [removed: Coach’s] [added: Tapestry’s] common stock.

Any future determination to pay cash dividends will be at the discretion of [removed: Coach’s] [added: Tapestry’s] Board and will be dependent upon [removed: Coach’s] [added: Tapestry’s] financial condition, operating results, capital requirements and such other factors as the Board deems relevant.

The information under the principal heading “Securities Authorized For Issuance Under Equity Compensation Plans” in the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November [removed: 9, 2017,] [added: 8, 2018,] to be filed with the Securities and Exchange Commission (The “Proxy Statement”), is incorporated herein by reference.

The following graph compares the cumulative total stockholder return (assuming reinvestment of dividends) of the Company's common stock with the cumulative total return of the S&P 500 Stock Index and the “peer set" companies listed below over the five-fiscal-year period ending [removed: July 1, 2017,] [added: June 30, 2018,] the last day of [removed: Coach’s] [added: Tapestry’s] most recent fiscal year.

The graph assumes that $100 was invested on June [removed: 30, 2012] [added: 29, 2013] at the per share closing price in each of [removed: Coach’s] [added: Tapestry’s] common stock, the S&P 500 Stock Index and a peer set index tracking the peer group companies listed below, and that all dividends were reinvested.

[removed: ][added: ]

| | | Fiscal [removed: 2012 | | Fiscal] 2013 | | Fiscal 2014 | | Fiscal 2015 | | Fiscal 2016 | | Fiscal 2017 | [added: | Fiscal 2018 |]

| September 30, 2017 | $ | 48.85 | | | $ | 39.11 | | | | | | | $ | 0.3375 | |

| December 30, 2017 | 45.28 | | | | 38.70 | | | | | | | | 0.3375 | | |

| March 31, 2018 | 53.57 | | | | 44.23 | | | | | | | | 0.3375 | | |

| June 30, 2018 | 55.50 | | | | 43.54 | | | | 46.71 | | | | 0.3375 | | |

During fiscal 2018, the Company established a new peer group consisting of:

The Company's old peer group consisted of:

| • | L Brands, Inc., |

| • | PVH Corp., |

| | |

| --- | --- |

| • | Ralph Lauren Corporation, |

| | |

| --- | --- |

| • | Tiffany & Co., |

| | |

| --- | --- |

| • | V.F. Corporation, |

| | |

| --- | --- |

| • | Estee Lauder, Inc., |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

| • | Michael Kors Holdings Limited |

The Company removed Kate Spade & Company from the peer set due to our acquisition.

Furthermore, Tapestry management selected the "revised peer set" on an industry/line-of-business basis and believes this updated set of companies represent good faith comparables based on their history, size, and business models in relation to Tapestry, Inc.

| TPR | | $100.00 | | $62.10 | | $67.47 | | $79.15 | | $95.17 | | $96.80 |

| Revised Peer Set | | $100.00 | | $126.45 | | $146.61 | | $136.88 | | $136.80 | | $190.10 |

| Former Set | | $100.00 | | $127.88 | | $146.25 | | $137.03 | | $136.15 | | $189.61 |

| S&P 500 | | $100.00 | | $124.65 | | $136.33 | | $139.50 | | $164.11 | | $187.70 |

Coach, Inc.’s common stock is listed on the New York Stock Exchange and is traded under the symbol “COH.” Coach’s Hong Kong Depositary Receipts have been listed on the Hong Kong Stock Exchange since December 2011 and the issuance from time-to-time of these Hong Kong Depositary Receipts has not been registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States and is being made pursuant to Regulation S of the Securities Act.

Accordingly, they may not be re-offered, resold, pledged or otherwise transferred in the United States or to, or for the account of, a “U.S. person” (within the meaning of Regulation S promulgated under the Securities Act), unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and hedging transactions involving the Hong Kong Depositary Receipts may not be conducted unless in compliance with the Securities Act.

No additional common stock was issued, nor capital raised through this listing.

| September 26, 2015 | $ | 35.98 | | | $ | 27.62 | | | | | | | $ | 0.3375 | |

| December 26, 2015 | 33.45 | | | | 27.22 | | | | | | | | 0.3375 | | |

| March 26, 2016 | 39.95 | | | | 30.06 | | | | | | | | 0.3375 | | |

| July 2, 2016 | 42.13 | | | | 36.64 | | | | $ | 40.73 | | | 0.3375 | | |

| COH | | $100.00 | | $99.80 | | $61.98 | | $67.33 | | $78.99 | | $94.99 |

| Peer Set | | $100.00 | | $142.87 | | $182.70 | | $208.95 | | $195.78 | | $194.52 |

| S&P 500 | | $100.00 | | $120.60 | | $150.32 | | $164.41 | | $168.23 | | $197.92 |

The selected historical financial data presented below as of and for each of the fiscal years in the five-year period ended [removed: July 1, 2017] [added: June 30, 2018] has been derived from [removed: Coach’s] [added: the Company’s] audited Consolidated Financial Statements.

| | Fiscal Year [removed: Ended(1)(5)] [added: Ended(5)] | | | | | | | | | | | | | | | | | | |

| | [added: June 30, 2018(1) | | | |] July 1, 2017 | | | | July 2, 2016(2) | | | | June 27, 2015(3) | | | | June 28, 2014(4) | | | [removed: | June 29, 2013(4) | | |]

| Consolidated Statements of [removed: Income:] [added: Operations:] | | | | | | | | | | | | | | | | | | | |

| Net sales | $ | [removed: 4,488.3] [added: 5,880.0] | | | $ | [removed: 4,491.8] [added: 4,488.3] | | | $ | [removed: 4,191.6] [added: 4,491.8] | | | $ | [removed: 4,806.2] [added: 4,191.6] | | | $ | [removed: 5,075.4] [added: 4,806.2] | |

| Gross profit | [removed: 3,081.1] [added: 3,853.9] | | | | [removed: 3,051.3] [added: 3,081.1] | | | | [removed: 2,908.6] [added: 3,051.3] | | | | [removed: 3,297.0] [added: 2,908.6] | | | | [removed: 3,698.1] [added: 3,297.0] | | |

| Selling, general and administrative ("SG&A") expenses | [removed: 2,293.7] [added: 3,183.1] | | | | [removed: 2,397.8] [added: 2,293.7] | | | | [removed: 2,290.6] [added: 2,397.8] | | | | [removed: 2,176.9] [added: 2,290.6] | | | | [removed: 2,173.6] [added: 2,176.9] | | |

| Operating income | [removed: 787.4] [added: 670.8] | | | | [removed: 653.5] [added: 787.4] | | | | [removed: 618.0] [added: 653.5] | | | | [removed: 1,120.1] [added: 618.0] | | | | [removed: 1,524.5] [added: 1,120.1] | | |

| Net income | [removed: 591.0] [added: 397.5] | | | | [removed: 460.5] [added: 591.0] | | | | [removed: 402.4] [added: 460.5] | | | | [removed: 781.3] [added: 402.4] | | | | [removed: 1,034.4] [added: 781.3] | | |

| Basic | $ | [removed: 2.11] [added: 1.39] | | | $ | [removed: 1.66] [added: 2.11] | | | $ | [removed: 1.46] [added: 1.66] | | | $ | [removed: 2.81] [added: 1.46] | | | $ | [removed: 3.66] [added: 2.81] | |

| Diluted | $ | [removed: 2.09] [added: 1.38] | | | $ | [removed: 1.65] [added: 2.09] | | | $ | [removed: 1.45] [added: 1.65] | | | $ | [removed: 2.79] [added: 1.45] | | | $ | [removed: 3.61] [added: 2.79] | |

| Weighted-average basic shares outstanding | [removed: 280.6] [added: 285.4] | | | | [removed: 277.6] [added: 280.6] | | | | [removed: 275.7] [added: 277.6] | | | | [removed: 277.8] [added: 275.7] | | | | [removed: 282.5] [added: 277.8] | | |

| Weighted-average diluted shares outstanding | [removed: 282.8] [added: 288.6] | | | | [removed: 279.3] [added: 282.8] | | | | [removed: 277.2] [added: 279.3] | | | | [removed: 280.4] [added: 277.2] | | | | [removed: 286.3] [added: 280.4] | | |

| Dividends declared per common share | $ | 1.350 | | | $ | 1.350 | | | $ | 1.350 | | | $ | 1.350 | | | $ | [removed: 1.238] [added: 1.350] | |

| Gross margin | [removed: 68.6] [added: 65.5] | | % | | [removed: 67.9] [added: 68.6] | | % | | [removed: 69.4] [added: 67.9] | | % | | [removed: 68.6] [added: 69.4] | | % | | [removed: 72.9] [added: 68.6] | | % |

| SG&A expenses | [removed: 51.1] [added: 54.1] | | % | | [removed: 53.4] [added: 51.1] | | % | | [removed: 54.6] [added: 53.4] | | % | | [removed: 45.3] [added: 54.6] | | % | | [removed: 42.8] [added: 45.3] | | % |

| Operating margin | [removed: 17.5] [added: 11.4] | | % | | [removed: 14.5] [added: 17.5] | | % | | [removed: 14.7] [added: 14.5] | | % | | [removed: 23.3] [added: 14.7] | | % | | [removed: 30.0] [added: 23.3] | | % |

| Net income | [removed: 13.2] [added: 6.8] | | % | | [removed: 10.3] [added: 13.2] | | % | | [removed: 9.6] [added: 10.3] | | % | | [removed: 16.3] [added: 9.6] | | % | | [removed: 20.4] [added: 16.3] | | % |

| Working capital | $ | [removed: 3,199.5] [added: 1,494.4] | | | $ | [removed: 1,346.2] [added: 3,199.5] | | | $ | [removed: 1,671.8] [added: 1,346.2] | | | $ | [removed: 1,042.1] [added: 1,671.8] | | | $ | [removed: 1,348.4] [added: 1,042.1] | |

| Total assets | [removed: 5,831.6] [added: 6,678.3] | | | | [removed: 4,892.7] [added: 5,831.6] | | | | [removed: 4,666.9] [added: 4,892.7] | | | | [removed: 3,663.1] [added: 4,666.9] | | | | [removed: 3,531.9] [added: 3,663.1] | | |

| Cash, cash equivalents and investments | [removed: 3,158.7] [added: 1,250.0] | | | | [removed: 1,878.0] [added: 3,158.7] | | | | [removed: 1,931.8] [added: 1,878.0] | | | | [removed: 1,353.1] [added: 1,931.8] | | | | [removed: 1,332.2] [added: 1,353.1] | | |

| Inventory | [removed: 469.7] [added: 673.8] | | | | [removed: 459.2] [added: 469.7] | | | | [removed: 485.1] [added: 459.2] | | | | [removed: 526.2] [added: 485.1] | | | | [removed: 524.7] [added: 526.2] | | |

| Total debt | [removed: 1,579.5] [added: 1,600.6] | | | | [removed: 876.2] [added: 1,579.5] | | | | [removed: 890.4] [added: 876.2] | | | | [removed: 140.5] [added: 890.4] | | | | [removed: 1.0] [added: 140.5] | | |

| Stockholders' equity | [removed: 3,001.9] [added: 3,244.6] | | | | [removed: 2,682.9] [added: 3,001.9] | | | | [removed: 2,489.9] [added: 2,682.9] | | | | [removed: 2,420.6] [added: 2,489.9] | | | | [removed: 2,409.2] [added: 2,420.6] | | |

| | Fiscal Year [removed: Ended(1)] [added: Ended] | | | | | | | | | | | | | |

| | [added: June 30, 2018(1) | | |] July 1, 2017 | | | July 2, 2016(2) | | | June 27, 2015(3) | | | June 28, 2014(4) | | [removed: | June 29, 2013(4) | |]

| Coach International [added: stores] | [added: 585 | | |] 543 | | | 522 | | | 503 | | | 475 | | [removed: | 409 | |]

| Stuart Weitzman [added: International] stores | [removed: 81] [added: 35] | | | [removed: 75] [added: 12] | | | [removed: 54] [added: 11] | | | [removed: —] [added: 8] | | | — | |

| Total stores open at fiscal year-end | [added: 1,432 | | |] 1,043 | | | 1,029 | | | 1,019 | | | 1,014 | | [removed: | 953 | |]

| Coach International [added: stores] | [added: 1,256,525 | | |] 1,166,920 | | | 1,086,315 | | | 1,030,695 | | | 918,995 | | [removed: | 768,567 | |]

| Total store square footage at fiscal year-end | [added: 3,924,310 | | |] 3,187,876 | | | 3,096,281 | | | 3,039,647 | | | 2,961,712 | | [removed: | 2,703,191 | |]

| Coach International [added: stores] | [added: 2,148 | | |] 2,149 | | | 2,081 | | | 2,049 | | | 1,935 | | [removed: | 1,879 | |]

| (2) | The Company acquired the Stuart Weitzman Canada distributor in the fourth quarter of fiscal 2016 (which included the impact of an additional 14 retail [removed: stores).] [added: stores in North America).] |

| (3) | The Company acquired Stuart Weitzman [added: Holdings LLC] in the fourth quarter of fiscal 2015. |

| (5) | For all fiscal years presented below, the Company recorded certain items which affect the comparability of our results. See [removed: item] [added: Item] 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information on the items related to fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016,] [added: 2017] and fiscal [removed: 2015.] [added: 2016.] During fiscal [removed: 2014,] [added: 2015,] the Company recorded adjustments in cost of sales and SG&A expenses of [removed: $82.2] [added: $5.0] million and [removed: $49.3] [added: $140.9] million, respectively, related to [removed: inventory and fleet related costs, including impairment,] accelerated depreciation and [removed: severance] [added: lease termination charges as a result of store updates and closures within North America and select international stores, organizational efficiency charges and charges] related to [removed: store closures. During] [added: the destruction of inventory. In] fiscal [removed: 2013,] [added: 2015] the Company [added: also] recorded adjustments in [removed: SG&A expenses and] cost of sales [added: and SG&A expenses] of [removed: $48.4] [added: $4.7] million and [removed: $4.8] [added: $19.9] million, respectively, related to the [removed: strategic reassessment] [added: acquisition] of [removed: the Reed Krakoff business, streamlining our organizational model and reassessing] [added: Stuart Weitzman. During fiscal 2014,] the [removed: fleet] [added: Company recorded adjustments in cost] of [removed: our retail stores] [added: sales] and [removed: inventories. The following table reconciles the Company's reported results presented in accordance with accounting principles generally accepted in the United States] [added: SG&A expenses] of [removed: America ("GAAP") to our adjusted results that exclude these items:] [added: $82.2 million and] |

| Fiscal [removed: 2013] [added: 2018] | Gross Profit | | | | SG&A Expenses | | | | Operating Income | | | | Amount | | | | Per Diluted Share | | |

| Coach North America stores | 402 | | | 419 | | | 432 | | | 462 | | | 539 | |

| Kate Spade North America stores | 200 | | | — | | | — | | | — | | | — | |

| Kate Spade International stores | 142 | | | — | | | — | | | — | | | — | |

| Stuart Weitzman North America stores | 68 | | | 69 | | | 64 | | | 46 | | | — | |

| Coach North America stores | 1,835,543 | | | 1,884,204 | | | 1,892,146 | | | 1,917,851 | | | 2,042,717 | |

| Kate Spade North America stores | 495,121 | | | — | | | — | | | — | | | — | |

| Kate Spade International stores | 171,754 | | | — | | | — | | | — | | | — | |

| Stuart Weitzman North America stores | 117,869 | | | 117,944 | | | 105,264 | | | 81,877 | | | — | |

| Stuart Weitzman International stores | 47,498 | | | 18,808 | | | 12,556 | | | 9,224 | | | — | |

| Coach North America stores | 4,566 | | | 4,497 | | | 4,380 | | | 4,151 | | | 3,790 | |

| Kate Spade North America stores | 2,476 | | | — | | | — | | | — | | | — | |

| Kate Spade International stores | 1,210 | | | — | | | — | | | — | | | — | |

| Stuart Weitzman North America stores | 1,733 | | | 1,709 | | | 1,645 | | | 1,780 | | | — | |

| Stuart Weitzman International stores | 1,357 | | | 1,567 | | | 1,141 | | | 1,153 | | | — | |

| (1) | The Company acquired Kate Spade & Company in the first quarter of fiscal 2018 (which included the impact of an additional 180 stores in North America and 95 stores internationally). During the third quarter of fiscal 2018, the Company acquired designated assets of its Stuart Weitzman distributor in Northern China (which included the impact of an additional 20 stores internationally), entered into an agreement to obtain operational control of the Kate Spade Joint Ventures (which included the impact of an additional 50 stores) and acquired designated assets of its Coach distributor in Australia and New Zealand (which included the impact of an additional 21 stores internationally). |

| (4) | The Company acquired the remaining 50% interest in its Europe business for Coach from its former joint venture partner in the first quarter of fiscal 2014. |

$49.3 million, respectively, related to inventory and fleet related costs, including impairment, accelerated depreciation and severance related to store closures.

The following table reconciles the Company's reported results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") to our adjusted results that exclude these items:

| As Reported: (GAAP Basis) | $ | 3,853.9 | | | $ | 3,183.1 | | | $ | 670.8 | | | $ | 397.5 | | | $ | 1.38 | |

| Excluding Non-GAAP Adjustments | 116.4 | | | | (204.7 | | ) | | 321.1 | | | | 362.4 | | | | 1.25 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,970.3 | | | $ | 2,978.4 | | | $ | 991.9 | | | $ | 759.9 | | | $ | 2.63 | |

| North America retail stores | 221 | | | 228 | | | 258 | | | 332 | | | 351 | |

| North America outlet stores | 198 | | | 204 | | | 204 | | | 207 | | | 193 | |

| North America retail stores | 664,382 | | | 659,376 | | | 728,833 | | | 910,003 | | | 952,422 | |

| North America outlet stores | 1,219,822 | | | 1,232,770 | | | 1,189,018 | | | 1,132,714 | | | 982,202 | |

| Stuart Weitzman stores | 136,752 | | | 117,820 | | | 91,101 | | | — | | | — | |

| North America retail stores | 3,006 | | | 2,892 | | | 2,825 | | | 2,741 | | | 2,713 | |

| North America outlet stores | 6,161 | | | 6,043 | | | 5,829 | | | 5,472 | | | 5,089 | |

| Stuart Weitzman stores | 1,688 | | | 1,571 | | | 1,687 | | | — | | | — | |

| (1) | The Company’s fiscal year ends on the Saturday closest to June 30. Fiscal year 2017 was a 52-week year. Fiscal year 2016 was a 53-week year. Fiscal years 2015, 2014 and 2013 were each 52-week years. |

| (4) | The Company acquired its international businesses from its former distributors as follows: fiscal 2014 — the remaining 50% interest in Europe; fiscal 2013 — Malaysia and South Korea. |

| As Reported: (GAAP Basis) | $ | 3,698.1 | | | $ | 2,173.6 | | | $ | 1,524.5 | | | $ | 1,034.4 | | | $ | 3.61 | |

| Excluding Non-GAAP Adjustments | 4.8 | | | | (48.4 | | ) | | 53.2 | | | | 32.6 | | | | 0.11 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,702.9 | | | $ | 2,125.2 | | | $ | 1,577.7 | | | $ | 1,067.0 | | | $ | 3.73 | |

[removed: See] [added: Refer to] “Index to Financial Statements,” appearing at the end of this Annual Report on Form 10-K.

Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, the Chief Executive Officer of the Company and the Chief Financial Officer of the Company, have concluded that the Company’s disclosure controls and procedures are effective as of [removed: July 1, 2017.][added: June 30, 2018.]

Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of [removed: July 1, 2017] [added: June 30, 2018] and concluded that it is effective.

The Company’s independent auditors have issued an audit report on the Company's internal control over financial reporting as of [removed: July 1, 2017] [added: June 30, 2018] as included elsewhere herein.

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information regarding executive and director compensation set forth in the Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders is incorporated herein by reference.

The information under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and [removed: “Coach] [added: “Tapestry] Stock Ownership by Certain Beneficial Owners and Management” in the Company’s Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders is incorporated herein by reference.

The information required to be included by Item 13 of Form 10-K will be included in the Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information required by this item is incorporated herein by reference to the sections entitled “Fees For Audit and Other Services” and “Audit Committee Pre-Approval Policy” in the Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders.

| (a) | Financial Statements and Financial Statement Schedules. [removed: See] [added: Refer to] “Index to Financial [removed: Statements,”] [added: Statements”] appearing herein. |

| (b) | Exhibits. [removed: See] [added: Refer to] the exhibit index which is included herein. |

[removed: COACH, INC.][added: | Coach: | | | | | | | | | | | | | | | | | | | | |]

| Date: August [removed: 18, 2017] [added: 16, 2018] | By: | /s/ Victor Luis |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated below on August [removed: 18, 2017.][added: 16, 2018.]

| [Reports of Independent Registered Public Accounting [removed: Firm](#s829DE3698DC659D389EEF8F516DAE881)] [added: Firm](#s55AE8D9759DD57399831C127C3874740)] | [removed: [58](#s829DE3698DC659D389EEF8F516DAE881)] [added: [58](#s55AE8D9759DD57399831C127C3874740)] |

| [Consolidated Balance [removed: Sheets](#s88332BF3AD8055419243D5E4B0A6304F)] [added: Sheets](#sF1774D3F990954C7904CF6A25F8E179F)] | [removed: [60](#s88332BF3AD8055419243D5E4B0A6304F)] [added: [60](#sF1774D3F990954C7904CF6A25F8E179F)] |

| [Consolidated Statements of [removed: Income](#s8BD0F6E3CE6755EBBB7569AC8382E12E)] [added: Comprehensive Income](#sA2C76F7516815DD9A6B45C171D140C26)] | [removed: [61](#s8BD0F6E3CE6755EBBB7569AC8382E12E)] [added: [62](#sA2C76F7516815DD9A6B45C171D140C26)] |

| [Consolidated Statements of Stockholders’ [removed: Equity](#s8AAEE81FC3B857D8A7B280CBA3C2E1A6)] [added: Equity](#s6795757E42A456559B3476282AD39EB0)] | [removed: [63](#s8AAEE81FC3B857D8A7B280CBA3C2E1A6)] [added: [63](#s6795757E42A456559B3476282AD39EB0)] |

| [Consolidated Statements of Cash [removed: Flows](#sDF325585DC2F50EEADA75162A9D037D6)] [added: Flows](#sEE23C1F701425E1397556115A4AFD323)] | [removed: [64](#sDF325585DC2F50EEADA75162A9D037D6)] [added: [64](#sEE23C1F701425E1397556115A4AFD323)] |

| [Notes to Consolidated Financial [removed: Statements](#s87EE586F0E03527F81DA68D605BBC811)] [added: Statements](#sD62ECA7E90145DC3B84406204C490C5B)] | [removed: [65](#s87EE586F0E03527F81DA68D605BBC811)] [added: [65](#sD62ECA7E90145DC3B84406204C490C5B)] |

| [Schedule II — Valuation and Qualifying [removed: Accounts](#sAB81F8ECD72B5F418BF3669BC8CC514A)] [added: Accounts](#s9E8612EE2BEF5E179CFCD347C95113AB)] | [removed: [94](#sAB81F8ECD72B5F418BF3669BC8CC514A)] [added: [99](#s87B9CAC5F8325C56872A47CDDDF13275)] |

| [Quarterly Financial [removed: Data](#sDFE5BF42B85256EAA91F559E6FF5F8A1)] [added: Data](#sA5D91B7213E8532293CD298366670BE0)] | [removed: [95](#sDFE5BF42B85256EAA91F559E6FF5F8A1)] [added: [100](#sA5D91B7213E8532293CD298366670BE0)] |

To the [added: stockholders and the] Board of Directors [removed: and Stockholders] of [added: Tapestry, Inc.]

We have audited the accompanying consolidated balance sheets of [removed: Coach,] [added: Tapestry,] Inc. and subsidiaries (the "Company") as of [removed: July 1, 2017] [added: June 30, 2018] and July [removed: 2, 2016,] [added: 1, 2017,] and the related consolidated statements of [removed: income,] [added: operations,] comprehensive income, [removed: stockholders'] [added: shareholders'] equity, and cash flows for each of the three years in the period ended [removed: July 1, 2017.][added: June 30, 2018, and the related notes and the financial statement Schedule II listed in the Index to the Consolidated Financial Statements (collectively referred to as the "financial statements").]

These financial statements [removed: and financial statement schedule] are the responsibility of the Company's management.

Our responsibility is to express an opinion on the [added: Company's] financial statements [removed: and financial statement schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, [removed: such consolidated] [added: the] financial statements present fairly, in all material respects, the financial position of [removed: Coach, Inc.] [added: the Company as of June 30, 2018] and [removed: subsidiaries at] July 1, [removed: 2017 and July 2, 2016,] [added: 2017,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the three years in the period ended [removed: July 1, 2017,] [added: June 30, 2018,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) ("PCAOB"),] the Company's internal control over financial reporting as of [removed: July 1, 2017,] [added: June 30, 2018,] based on [removed: the] criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August [removed: 18, 2017] [added: 16, 2018,] expressed an unqualified opinion on the Company's internal control over financial reporting.

We have audited the internal control over financial reporting of [removed: Coach,] [added: Tapestry,] Inc. and subsidiaries (the "Company") as of [removed: July 1, 2017,] [added: June 30, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission ("COSO").]

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

A company's internal control over financial reporting is a process designed [removed: by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Also, projections of any evaluation of [removed: the] effectiveness [removed: of the internal control over financial reporting] to future periods are subject to the risk that [removed: the] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: July 1, 2017,] [added: June 30, 2018,] based on the criteria established in Internal Control - Integrated Framework (2013) issued by [removed: the Committee of Sponsoring Organizations of the Treadway Commission.][added: COSO.]

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) ("PCAOB"),] the consolidated financial statements and financial statement [removed: Schedule II] [added: schedule] as of and for the year ended [removed: July 1, 2017] [added: June 30, 2018] of the Company and our report dated August [removed: 18, 2017] [added: 16, 2018,] expressed an unqualified opinion on those financial statements and financial statement schedule.

| | [added: June 30, 2018 | | | |] July 1, 2017 | | | | July 2, 2016 | | |

| | (millions) | | | | | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Cash and cash equivalents | $ | [removed: 2,672.9] [added: 1,243.4] | | | $ | [removed: 859.0] [added: 2,672.9] | |

| Short-term investments | [removed: 410.7] [added: 6.6] | | | | [removed: 460.4] [added: 410.7] | | |

| Trade accounts receivable, less allowances of [removed: $1.9] [added: $1.5] and [removed: $2.2,] [added: $1.9,] respectively | [removed: 268.0] [added: 314.1] | | | | [removed: 245.2] [added: 268.0] | | |