Tapestry (TPR) 10-K risk factor changes: FY2019 vs FY2018

[removed: You] [added: *You] should consider carefully all of the information set forth or incorporated by reference in this document and, in particular, the following risk factors associated with the business of the Company and forward-looking information in this document.

If any of the risks below actually occur, our business, results of operations, cash flows or financial condition could [removed: suffer.][added: suffer.*]

[removed: Acquisitions] [added: Acquisitions] may not be successful in achieving intended benefits, cost savings and synergies and may disrupt current [removed: operations.][added: operations.]

Our management team has [removed: and] [added: and, in the future,] will consider growth strategies and expected synergies when considering any [removed: acquisition, and while we continually review potential acquisition opportunities,] [added: acquisition; however,] there can be no assurance that we will be able to identify suitable candidates or consummate these transactions on acceptable terms.

Our failure to successfully complete the integration of any acquired [removed: business, including Stuart Weitzman and/or Kate Spade,] [added: business] and any adverse consequences associated with future acquisition activities, could have an adverse effect on our business, financial condition and operating results.

We determined there was no impairment in fiscal [removed: 2018,] [added: 2019,] fiscal [removed: 2017] [added: 2018] and fiscal [removed: 2016;] [added: 2017;] however, we cannot accurately predict the amount and timing of any potential future impairment of assets.

[removed: A] [added: 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 [removed: flow.][added: flow.]

The Company [removed: has] embarked on a multi-year ERP [removed: implementation.][added: implementation in fiscal 2017.]

[removed: 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.

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

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

Refer to [removed: Part II,] Item [removed: 7, "Management's] [added: 2, Management’s] Discussion and Analysis of Financial Condition [removed: and] [added: &] Results of [removed: Operations"] [added: Operations - Executive Overview] and Note [removed: 5, "Restructuring Activities"] [added: 15, “Income Taxes,”] for further information [removed: regarding these initiatives.][added: on the provisions of the Tax Legislation and the currently expected impact on the Company.]

[removed: We] [added: We] face risks associated with operating in international [removed: markets.][added: markets.]

We operate on a global basis, with approximately [removed: 41.2%] [added: 43.7%] of our net sales 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. and E.U. announced in March 2018 an agreement in principle to 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. [added: As a consequence, the E.U. and U.K. agreed to postpone Brexit until October 31, 2019. This date will be accelerated to anytime between now and October 31, 2019 if a withdrawal agreement is successfully concluded between the parties and ratified by U.K. parliament. Increased uncertainty surrounds future Brexit talks due to the new leadership of the British government following Theresa May’s resignation as Prime Minister on June 7, 2019 and the election of Boris Johnson on July 23, 2019.] In the absence of [removed: such an] [added: a withdrawal] agreement there would be no transitional provisions and a "hard" Brexit would occur on [removed: March 29,] [added: October 31,] 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 [removed: relationship] [added: relationships] with our existing and future customers, suppliers and employees and resulting in increased cost by way of new or elevated [removed: Customs] [added: customs] duties or financial implications from operational challenges; |

| • | natural and other disasters; [added: and] |

| • | 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 and other environmental legislation, product safety regulations or other charges or [removed: restrictions] [added: restrictions.] |

[removed: Economic] [added: Economic] conditions could materially adversely affect our financial condition, results of operations and consumer purchases of luxury [removed: items.][added: items.]

Our results can be impacted by a number of macroeconomic factors, including but not limited to consumer confidence and spending levels, [added: tax rates,] unemployment, consumer credit availability, raw materials costs, fuel and energy costs (including oil prices), global factory production, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls and shopping centers.

[removed: A] [added: A] decline in the volume of traffic to our stores could have a negative impact on our net [removed: sales.][added: sales.]

[removed: Our] [added: Our] business may be subject to increased costs due to excess inventories and a decline in profitability as a result of increasing pressure on margins if we misjudge the demand for our [removed: products.][added: products.]

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 [added: in consumer spending patterns.]

Furthermore, the cost of transportation may fluctuate significantly if oil prices show [removed: volatility.]

[removed: Computer] [added: Computer] system disruption and cyber security threats, including a privacy or data security breach, could damage our relationships with our customers, harm our reputation, expose us to litigation and adversely affect our [removed: business.][added: business.]

We have [removed: confidential] [added: enterprise class and industry comparable] security measures in place to protect both our physical facilities and digital systems from attacks.

Despite these efforts, however, we may be vulnerable to targeted or random security breaches, acts of vandalism, computer [removed: viruses,] [added: malware,] misplaced or lost data, programming and/or human errors, or other similar events.

Any misappropriation of confidential or [removed: personally identifiable] [added: personal] information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees and investors.

Lastly, we could face sizable fines, significant [removed: breach-notification] [added: breach containment and notification] costs and increased litigation as a result of cyber security breaches.

Additionally, 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 site and [removed: invitation-only] Kate Spade flash sale site.

Despite our preventative efforts, our systems are vulnerable from time-to-time to damage, disruption or interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security breaches, email blocking lists, computer [removed: viruses] [added: malware] or power outages.

[removed: Significant] [added: Significant] competition in our industry could adversely affect our [removed: business.][added: business.]

[removed: The] [added: The] success of our business depends on our ability to retain the value of our brands and to respond to changing fashion and retail trends in a timely [removed: manner.][added: manner.]

Our success also depends in part on our ability to execute on our plans and [removed: strategies, including our operational efficiency initiatives and Transformation Plan.][added: strategies.]

[removed: Our] [added: Our] business is exposed to foreign currency exchange rate [removed: fluctuations.][added: fluctuations.]

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

[removed: Our] [added: Our] stock price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial performance, including our ability to return value to [removed: investors.][added: investors.]

We periodically return value to investors through payment of quarterly [removed: dividends.][added: dividends and common stock repurchases.]

Investors may have an expectation that we will continue to pay our quarterly dividend at certain [removed: levels.][added: levels and / or repurchase shares available under our common stock repurchase program.]

The market price of our securities could be adversely affected if our cash dividend rate [added: or common stock repurchase activity] differs from investors’ expectations.

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

The substantial majority of the implementation was completed during fiscal 2019 and the remainder implemented at the beginning of fiscal 2020.

Implementing new systems

We face risks associated with potential changes to international trade agreements and the imposition of additional duties on importing our products

Most of our imported products are subject to duties, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that we may import into the U.S. and other countries or may impact the cost of such products.

To maximize opportunities, we rely on free trade agreements and other supply chain initiatives and, as a result, we are subject to government regulations and restrictions with respect to our cross-border activity.

In May 2019, the United States increased the tariff rate from 10% to 25% on $200 billion of imports of select product categories into the U.S. from China.

On August 1, 2019, the Trump Administration announced that the U.S. plans to implement an additional tariff of 10% on the remaining $300 billion of products imported into the U.S. from China on September 1, 2019.

volatility.

| • | political unrest, including protests and other civil disruption; |

disrupt or harm our business.

As future guidance becomes available, adjustments may be made to reflect the impact of such guidance in the provision for income taxes.

The Company began this implementation in fiscal 2017 and it is expected to be substantially complete during fiscal 2019.

The successful execution of our operational efficiency and multi-year transformation initiatives is key to the long-term growth of our business.

During the fourth quarter of fiscal 2016, we announced a plan to enhance organizational efficiency, update core technology platforms and optimize international supply chain and office locations.

These initiatives were 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 began in the fourth quarter of fiscal 2016.

There is no assurance these actions will be successful in achieving our intended results.

During the fourth quarter of fiscal 2014, we announced a multi-year strategic plan with the objective of transforming the brand and reinvigorating growth.

Key operational and cost 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 time, however there is no assurance that such efforts will be successful in the long-term.

Actual costs incurred and the timeline of these initiatives may differ from our expectations.

in consumer spending patterns.

We believe that the Coach brand, established over 75 years ago, is regarded as America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men.

We attribute the prominence of the Coach brand to the unique combination of our original American attitude and design, our heritage of fine leather goods and custom fabrics, our superior product quality and durability and our commitment to customer service.

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.

Furthermore, the Stuart Weitzman brand is viewed as a leading design house of women's luxury footwear within North America, with a strong opportunity for growth globally, and is built upon the idea of crafting a beautifully-constructed shoe, merging fashion and function.

| • | political unrest; |

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

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

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.

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.

For example, we did not renew our agreement with our prior footwear licensing partner when it expired in late fiscal 2017 and brought the category in-house.

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

[removed: EXECUTIVE OVERVIEW][added: EXECUTIVE OVERVIEW]

The fiscal years ended June [added: 29, 2019, June] 30, 2018 and July 1, 2017 were each 52-week [removed: periods, and the fiscal year ended July 2, 2016 was a 53-week period.][added: periods.]

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

[removed: As a result, the] [added: The] Company has three reportable segments:

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

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

| • | [removed: Stuart] [added: *Stuart] Weitzman [removed: -] [added: -*] Includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, [added: sales] to wholesale customers and through numerous independent third party distributors. |

[removed: Fiscal 2019] [added: Fiscal 2020] Strategic [removed: Initiatives][added: Initiatives]

Specifically, in fiscal [removed: 2019,] [added: 2020,] the Company intends to:

| • | [removed: Capture] [added: Harness] the [removed: full] benefit of [added: the] multi-brand structure [removed: and synergies] |

| • | Drive global [removed: growth] [added: growth,] with [removed: an emphasis] [added: a focus] on [added: maximizing opportunities with] the Chinese consumer |

| • | [removed: Advance] [added: Invest in] our digital and data analytic capabilities |

[removed: Recent Developments][added: Recent Developments]

[removed: Stuart] [added: Stuart] Weitzman Production [removed: Challenges][added: Challenges]

During [removed: the third quarter of] fiscal [removed: 2018,] [added: 2019,] Stuart Weitzman results [removed: were] [added: continued to be] negatively impacted by [added: the trailing impacts of the] supply chain operational challenges [added: which began in the third quarter of fiscal 2018,] 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 [removed: transitions] [added: transitioned] to a new creative vision.

[removed: Impact] [added: Impact] of Tax [removed: Legislation][added: Legislation]

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"), [added: (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.]

| • | Foreign earnings that [removed: may exist] [added: generated] after December 31, 2017 will generally be eligible for a 100% dividends received [removed: exemption,] [added: deduction,] however companies may be subject to the alternative BEAT and GILTI tax [removed: provisions] [added: regimes] which could increase the global effective tax rate. Conversely, [removed: Companies] [added: companies] may be eligible for a reduced rate to the extent their earnings qualify as FDII, which would reduce their global effective tax rate. [removed: These] [added: Of these] tax [added: provisions, the GILTI and FDII] provisions [removed: are expected to impact] [added: have impacted] the Company in fiscal year 2019. [removed: Based on current facts and circumstances the] [added: The] Company [removed: believes that GILTI is] [added: does not anticipate any impact under] the [removed: tax provision most likely to apply.] [added: BEAT provision.] Under GILTI, a portion of the Company’s foreign earnings will be subject to U.S. taxation. [removed: 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 [removed: ("FASB")] [added: (“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 [removed: 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 [removed: 2018] [added: 2019] 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. [removed: If Tax Legislation for QIP is adjusted in fiscal 2019 or beyond, it will impact] [added: To] the [removed: rate change adjustment, which in turn] [added: extent that legislative actions on Qualified Improvement Property ("QIP") are retroactive, the overall effect associated with the remeasurement of deferred taxes] will impact the [removed: Company’s estimated annual] [added: Company's] effective tax [removed: rate in the year the legislation is revised.] [added: rate.] |

| • | 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 [removed: 30, 2018] [added: 29, 2019] are recorded based on recent guidance or its historical approach to state tax expense. |

[removed: Integration] [added: Integration] and Acquisition [removed: Costs][added: Costs]

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

As a [removed: result,] [added: result of these acquisitions,] the Company incurred charges related to the integration and acquisition of the businesses.

These charges are primarily associated with [removed: purchase price accounting adjustments, acquisition] [added: organization-related] costs, [removed: inventory-related charges, contractual payments] [added: professional fees, one-time write-off of inventory] and [removed: organization-related expenses.][added: limited life purchase accounting adjustments.]

The Company currently estimates that it will incur approximately [removed: $50\-60] [added: $20 to $30] million in pre-tax charges, of which [removed: approximately $5\-10 million] [added: the majority] are expected to be [removed: non-cash] [added: cash] charges, in fiscal [removed: 2019.][added: 2020.]

Refer to Note [removed: 4,] [added: 5,] "Integration and Acquisition Costs," [added: Note 3, "Acquisitions,"] and [added: the] "GAAP to Non-GAAP Reconciliation," herein, for further information.

[removed: Operational] [added: Operational] Efficiency [removed: Plan][added: Plan]

The significant majority of the charges under [added: this plan were recorded within SG&A expense.]

[removed: The] [added: Under this plan, the] Company incurred charges [removed: life to date] of $87.4 million.

Refer to Note [removed: 5,] [added: 6,] "Restructuring Activities," and "GAAP to Non-GAAP Reconciliation," herein, for further information.

[removed: Current] [added: Current] Trends and [removed: Outlook][added: Outlook]

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

Risk of volatility or a worsening of the macroeconomic environment [removed: remains] [added: remains, including currency devaluation,] due to political uncertainty and potential changes to international trade agreements.

[removed: The Trump Administration recently announced that] [added: During] the [removed: U.S. is beginning] [added: first quarter of fiscal 2019,] the [removed: process] [added: Trump Administration began] to impose duties [added: of 10%] related to [removed: Chinese made] [added: certain Chinese-made] imported products.

Additional macroeconomic impacts include but are not limited to 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. and E.U. announced in March 2018 an agreement in principle to transitional provisions under which E.U. law would remain in force in the U.K. [removed: until the end of December 2020,] [added: for an agreed period,] but this remains subject to the successful conclusion of a final withdrawal agreement between the [removed: parties.][added: parties and the ratification by U.K. parliament.]

[removed: FISCAL 2018 COMPARED] [added: FISCAL 2018 COMPARED] TO [removed: FISCAL 2017][added: FISCAL 2017]

The following table summarizes results of operations for fiscal [removed: 2018] [added: 2019] compared to fiscal [removed: 2017.][added: 2018.]

| | [removed: Fiscal] [added: Fiscal] Year [removed: Ended] [added: Ended] | | | | | | | | | | | | | | | | | | | |

| | [removed: June 30, 2018] [added: June 29, 2019] | | | | | | | [removed: July 1, 2017] [added: June 30, 2018] | | | | | | | Variance | | | | | |

The company continues to focus on execution in fiscal 2020.

| • | Ignite brand growth driven by innovation |

ERP Implementation

During fiscal 2018, the Company implemented a global consolidation system which provides a common platform for financial reporting, a point-of-sale system for Coach in North America as well as a human resource information system for Corporate, Coach and Stuart Weitzman employees.

During the second quarter of fiscal 2019, the Company deployed global finance and accounting systems for Corporate, Coach and Stuart Weitzman.

During the third quarter of fiscal 2019, the Company deployed global finance, accounting, supply chain and human resource information systems for Kate Spade.

The ERP implementation was substantially completed in fiscal 2019, with the supply chain functions for Coach and Stuart Weitzman implemented in the beginning of fiscal 2020.

The Company expects to incur charges of approximately $30 to $40 million in fiscal 2020 related to this project.

The Company has addressed these challenges through investment in talent, as well as added infrastructure and manufacturing capacity.

As a result of these investments, Stuart Weitzman returned to sales growth in fiscal 2019.

| • | The Company applied the guidance in SEC Staff Accounting Bulletin (“SAB”) 118 when accounting for the enactment- date of the Tax Legislation for the twelve-month period following the date of the enactment. As of the fiscal year ended June 29, 2019, the Company completed the accounting for the enactment date income tax effects of the Tax Legislation pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, for the measurement of deferred tax assets and liabilities and one-time transition tax. The amounts recorded were further adjusted due to additional guidance released during the third quarter of fiscal 2019. The amounts recorded are subject to adjustment as further regulations or additional guidance becomes available. |

During fiscal 2019, the Company acquired certain distributors for the Kate Spade and Stuart Weitzman brands.

Several organizations that monitor the world's economy, including the International Monetary Fund, observed that global expansion is slowing at a rate that is somewhat faster than expected.

These organizations expect continued softening of the growth rates in the United States throughout the next two years, and also observed challenging economic growth across markets around the globe recently.

Furthermore, there are factors noted that may pressure the economic growth levels currently anticipated.

As a result, the current global outlook remains uncertain.

In May 2019, the United States increased the tariff rate from 10% to 25% on $200 billion of imports of select product categories into the U.S. from China.

On August 1, 2019, the Trump Administration announced that the U.S. plans to implement an additional tariff of 10% on the remaining $300 billion of products imported into the U.S. from China on September 1, 2019.

The Company continues to monitor this development closely and supports strategies that help diffuse these trade tensions with China.

We expect these changes to have a modest impact on gross margin in fiscal 2020.

Continued increases in trade tensions could impact the Company's ability to grow its business with the Chinese consumer globally.

Beginning in the second quarter of fiscal 2019, the Company noted volatility in the spending patterns of certain North American customers, believed to be resellers, in advance of changes in Chinese e-commerce laws effective January 1, 2019.

The volatility experienced during this period may continue in the near-term.

The Company also observed an acceleration in local customer demand in mainland China which has helped to partially offset this trend.

As of the date of this report, the withdrawal agreement has been voted against three times by U.K. parliament.

As a consequence, the E.U. and U.K. agreed to postpone Brexit until October 31, 2019.

This date will be accelerated to anytime between now and October 31, 2019 if a withdrawal agreement is successfully concluded between the parties and ratified by U.K. parliament.

Increased uncertainty surrounds future Brexit talks due to the new leadership of the British government following Theresa May's resignation as Prime Minister on June 7, 2019 and the election of Boris Johnson on July 23, 2019.

In the absence of a withdrawal agreement there would be no transitional provisions and a "hard" Brexit would occur on October 31, 2019, resulting in potential increased legal and regulatory complexities and divergent laws between the U.K. and the E.U.

FISCAL 2019 COMPARED TO FISCAL 2018

| Gross profit | 4,053.7 | | | | 67.3 | | | 3,848.5 | | | | 65.5 | | | 205.2 | | | | 5.3 | |

| SG&A expenses | 3,239.6 | | | | 53.8 | | | 3,177.7 | | | | 54.0 | | | 61.9 | | | | 1.9 | |

| Operating income | 814.1 | | | | 13.5 | | | 670.8 | | | | 11.4 | | | 143.3 | | | | 21.4 | |

| Interest expense, net | 47.9 | | | | 0.8 | | | 74.0 | | | | 1.3 | | | (26.1 | | ) | | (35.2 | ) |

| Net income | 643.4 | | | | 10.7 | | | 397.5 | | | | 6.8 | | | 245.9 | | | | 61.8 | |

| Basic | $ | 2.22 | | | | | | $ | 1.39 | | | | | | $ | 0.83 | | | 59.7 | % |

| Diluted | $ | 2.21 | | | | | | $ | 1.38 | | | | | | $ | 0.83 | | | 60.6 | % |

The reported results during fiscal 2019 and fiscal 2018 reflect certain items which affect the comparability of our results, as noted in the following tables.

| | June 29, 2019 | | | | | | | | | | | | | | | | | | |

| SG&A expenses | 3,239.6 | | | | 36.9 | | | | 66.6 | | | | — | | | | 3,136.1 | | |

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.

| | |

| --- | --- |

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.

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

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.

(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.

| • | 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. |

| • | 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. |

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

Strategic Repositioning of Coach Brand in North America Department Stores

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

this plan were recorded within SG&A expense.

Transformation Plan

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

Key operational and cost measures of the Transformation 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 the Coach brand, drive sales growth and promote our new strategy, which started in fiscal 2015; and (v) the significant scale-back of our promotional cadence in an increased global promotional environment, particularly within our outlet Internet sales site, which began in fiscal 2014.

The Company's execution of these key operational and cost measures was concluded during fiscal 2016, and we believe that long-term growth will be realized through these transformational efforts over time.

After strong economic performance in calendar 2017 and the first half of 2018, including improvements in the labor market as well as modest growth in overall consumer spending, the U.S. economic outlook has improved and moderate economic growth is expected to continue in the next year.

Several organizations that monitor the world’s economy, including the International Monetary Fund, observed economic strengthening across the majority of the globe recently and are projecting continued economic strengthening over the next year, but anticipate that the growth will be inconsistent among different markets.

Certain of the Company's offerings are included in this proposal, however the Company believes that there will be minimal impact given the diversity of its sourcing activities.

In the absence of such an agreement, there would be no transitional provisions and a "hard" Brexit would occur on March 29, 2019.

All percentages shown in the tables below and the related discussion that follows have been calculated using unrounded numbers.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross profit | 3,853.9 | | | | 65.5 | | | 3,081.1 | | | | 68.6 | | | 772.8 | | | | 25.1 | |

| SG&A expenses | 3,183.1 | | | | 54.1 | | | 2,293.7 | | | | 51.1 | | | 889.4 | | | | 38.8 | |

| Operating income | 670.8 | | | | 11.4 | | | 787.4 | | | | 17.5 | | | (116.6 | | ) | | (14.8 | ) |

| Interest expense, net | 74.0 | | | | 1.3 | | | 28.4 | | | | 0.6 | | | 45.6 | | | | 160.8 | |

| Net income | 397.5 | | | | 6.8 | | | 591.0 | | | | 13.2 | | | (193.5 | | ) | | (32.7 | ) |

| Basic | $ | 1.39 | | | | | | $ | 2.11 | | | | | | $ | (0.72 | ) | | (33.9 | )% |

| Diluted | $ | 1.38 | | | | | | $ | 2.09 | | | | | | $ | (0.71 | ) | | (34.1 | )% |

The reported results during fiscal 2018 and fiscal 2017 reflect the impact of the Operational Efficiency Plan, Integration and Acquisition costs and the impact of the new Tax Legislation in fiscal 2018, as noted in the following tables.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| COGS | | | | | | | | | | | | | | | | | | | | | | | |

| SG&A | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | |

[removed: Market Risk][added: Market Risk]

[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]

The Company is exposed to risk from foreign currency exchange rate fluctuations resulting from its operating subsidiaries’ [removed: U.S. dollar and Euro] [added: transactions] denominated [removed: inventory purchases.][added: in foreign currencies.]

As of June [removed: 30, 2018] [added: 29, 2019] and [removed: July 1, 2017,] [added: June 30, 2018,] forward currency contracts designated as cash flow hedges with a notional amount of [removed: $257.4] [added: $398.4] million and [removed: $146.9] [added: $257.4] 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 June [removed: 30, 2018.][added: 29, 2019.]

The Company is also exposed to transaction risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany [removed: loans which are not long term in investment nature.][added: loans.]

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

As of June [removed: 30, 2018] [added: 29, 2019] and [removed: July 1, 2017,] [added: June 30, 2018,] the total notional values of outstanding forward foreign currency contracts related to these loans were [removed: $160.7] [added: $14.5] million and [removed: $95.5] [added: $160.7] million, respectively.

The fair value of outstanding [removed: foreign] [added: forward] currency contracts included in current assets at June [added: 29, 2019 and June] 30, 2018 [removed: and July 1, 2017] was [removed: $6.0] [added: $1.1] million and [removed: $3.5] [added: $6.0] million, respectively.

The fair value of outstanding foreign currency contracts included in current liabilities at June [added: 29, 2019 and June] 30, 2018 [removed: and July 1, 2017] was [removed: $2.4] [added: $4.9] million and [removed: $1.7] [added: $2.4] million, respectively.

As of June [removed: 30, 2018,] [added: 29, 2019,] 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.

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

A hypothetical 10% change in the credit agreement interest rate would have resulted in an immaterial change in interest expense in fiscal [removed: 2018.][added: 2019.]

At [removed: July 1, 2017,] [added: June 29, 2019,] the fair value of the 2025 Senior Notes, 2022 Senior Notes and 2027 Senior Notes [added: was approximately $630 million, $399 million and $606 million, respectively.]

[removed: 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 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, 2017) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the respective [removed: senior note] [added: Senior Notes] of such series.

These fair values are based on external pricing data,

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

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

[removed: GENERAL] [added: GENERAL] DEVELOPMENT OF [removed: BUSINESS][added: BUSINESS]

[removed: Since October 2000, the] [added: The] Company's international expansion strategy [removed: for Coach] has been to enter into joint ventures and 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 [removed: brand,] [added: brands,] the Company has historically acquired its joint venture partner’s interests or [removed: distributor] [added: distribution] rights in these international regions.

[removed: During] [added: | (1) | Fiscal 2018 includes] the [removed: third quarter] [added: addition] of [removed: fiscal 2018, the Company] [added: 21 stores] acquired [removed: designated assets] [added: as a result] of [removed: its] [added: the] Coach distributor [added: acquisition] in Australia and New [removed: Zealand.][added: Zealand completed during the third quarter of fiscal 2018. |]

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

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

[removed: As a result of this acquisition, on October 31, 2017,] [added: During fiscal 2018,] the Company changed its name to Tapestry, Inc., a leading luxury lifestyle company with a diverse multi-brand portfolio supported by significant expertise in handbag design, merchandising, supply chain and retail operations as well as solid financial acumen.

[removed: OUR BRANDS][added: OUR BRANDS]

[removed: As a result, the] [added: The] Company has three reportable segments:

| • | Coach includes global sales of Coach [removed: brand] products to customers through Coach operated stores, including the Internet and concession shop-in-shops, and sales to wholesale customers and through independent third party distributors. This segment represented [removed: 71.8%] [added: 70.9%] of total net sales in fiscal [removed: 2018.] [added: 2019.] |

| • | Kate Spade includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including the Internet, [added: sales] to wholesale customers, through concession shop-in-shops and through independent third party distributors. This segment represented [removed: 21.8%] [added: 22.7%] of total net sales in fiscal [removed: 2018.] [added: 2019.] |

| • | Stuart Weitzman includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, including the Internet, [added: sales] to wholesale customers and through [removed: numerous] independent third party distributors. This segment represented 6.4% of total net sales in fiscal [removed: 2018.] [added: 2019.] |

[removed: Coach][added: Coach]

[removed: Stores] [added: Stores] — Coach operates freestanding flagship, [removed: retail,] [added: retail and] outlet stores [removed: and] [added: as well as] concession shop-in-shop locations.

The [removed: change in] [added: following table shows] the number of Coach [removed: stores] [added: directly-operated locations] and their total and average square [removed: footage is shown in the following table:][added: footage:]

| | | [removed: Coach] [added: Coach] | | | | | | | |

| | | [removed: North America] [added: North America] | | | [removed: International(1)] [added: International(1)] | | | [removed: Total] [added: Total] | |

| [removed: Store Count] [added: Store Count] | | | | | | | | | |

| [removed: Net] [added: Net] change vs. prior [removed: year] [added: year] | | [removed: (30] [added: (11] | [removed: )] [added: )] | | [removed: 19] [added: 10] | | | [removed: (11] [added: (1] | [removed: )] [added: )] |

| [removed: %] [added: %] change vs. prior [removed: year] [added: year] | | [removed: (6.5] [added: (1.8] | [removed: )%] [added: )%] | | [removed: 3.8] [added: 3.8] | [removed: %] [added: %] | | [removed: (1.1] [added: 0.5] | [removed: )%] [added: %] |

| [removed: Square Footage] [added: Square Footage] | | | | | | | | | |

| [removed: Net] [added: Net] change vs. prior [removed: year] [added: year] | | [removed: (25,705] [added: 13] | [removed: )] | | [removed: 55,620] [added: 52] | | | [removed: 29,915] [added: 65] | |

| [removed: %] [added: Net] change vs. prior [removed: year] [added: year] | | [removed: (1.3] [added: 3] | [removed: )%] | | [removed: 5.4] [added: 41] | [removed: %] | | [removed: 1.0] [added: 44] | [removed: %] |

| [removed: Average] [added: Average] Square [removed: Footage] [added: Footage] | | | | | | | | | |

| (1) | Fiscal [removed: 2018] [added: 2019] includes the addition of [removed: 21 retail] [added: 18] stores acquired as a result of the [removed: Coach] distributor [removed: acquisition] [added: acquisitions] in [removed: Australia] [added: Southern China] and [removed: New Zealand completed] [added: Australia] during [added: fiscal 2019. Fiscal 2018 includes] the [removed: third quarter] [added: addition] of [added: 20 stores acquired as a result of the Stuart Weitzman distributor acquisition in Northern China during] fiscal 2018. |

[removed: Internet] [added: 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 [added: directly to customers.]

To a lesser extent, our e-commerce programs also include our [removed: invitation-only] outlet flash sales site.

[removed: Today, we] [added: Wholesale — We] work closely with our [added: wholesale] partners to ensure a clear and consistent product presentation.

As of June [removed: 30, 2018,] [added: 29, 2019,] Coach's products are sold in [added: over] approximately [removed: 1,630] [added: 1,600] wholesale and distributor locations globally.

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

[removed: As of] [added: During the fiscal year ended] June [removed: 30, 2018,] [added: 29, 2019,] Coach's most significant distributors are [added: Korea Duty Free,] the DFS Group, [removed: King Power Thailand, Ever Rich Duty Free and] Al Tayer [removed: Insignia.][added: Insignia and China Duty Free.]

As of June [removed: 30, 2018] [added: 29, 2019] and [removed: July 1, 2017,] [added: June 30, 2018,] Coach did not have any customers who individually accounted for more than 10% of the segment's total net sales.

[removed: Kate Spade][added: Kate Spade]

[removed: Stores] [added: Stores] — Kate Spade operates freestanding flagship, specialty [removed: retail,] [added: retail and] outlet stores [removed: and] [added: as well as] concession shop-in-shops.

Kate Spade flagship locations, which offer the fullest expression of the Kate Spade brand, are located in [removed: high-visibility locations.][added: key strategic markets including tourist-heavy, densely populated cities globally.]

The [added: following table shows the] number of Kate Spade [removed: stores as of June 30, 2018] [added: directly-operated locations] and their total and average square [removed: footage is shown in the following table:][added: footage:]

| | | [removed: Kate Spade] [added: Kate Spade(1)] | | | | | | | |

| | | [removed: North America] [added: North America] | | | [removed: International(2)] [added: International(2)] | | | [removed: Total] [added: Total] | |

| Fiscal [removed: 2018(1)] [added: 2018] | | 200 | | | 142 | | | 342 | |

Tapestry acquired or obtained operational control of the retail businesses from its distributors or its joint venture partners during fiscal 2018 and fiscal 2019 as follows:

Fiscal 2018

- Coach: Australia and New Zealand

- Stuart Weitzman: Northern China

- Kate Spade: Greater China (including mainland China, Hong Kong, Macau and Taiwan)

Fiscal 2019

- Stuart Weitzman: Southern China and Australia

- Kate Spade: Australia, Singapore and Malaysia

| Fiscal 2019 | | 391 | | | 595 | | | 986 | |

| Fiscal 2019 | | 1,802,410 | | | 1,304,618 | | | 3,107,028 | |

| Fiscal 2019 | | 4,610 | | | 2,193 | | | 3,151 | |

In fiscal 2020, we expect little change in overall store count.

The wholesale business for Coach brand comprised approximately 8% of total brand net sales for fiscal 2019.

Since its launch in 1993 with a collection of six essential handbags, Kate Spade has always stood for optimistic femininity.

Today, the brand is a global life and style house with handbags, ready-to-wear, jewelry, footwear, gifts, home décor and more.

Polished ease, thoughtful details and a modern, sophisticated use of color—Kate Spade’s founding principles define a unique style synonymous with joy.

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

| Fiscal 2019 | | 213 | | | 194 | | | 407 | |

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

| Fiscal 2019 | | 578,649 | | | 267,349 | | | 845,998 | |

| Net change vs. prior year | | 83,528 | | | 95,595 | | | 179,123 | |

| % change vs. prior year | | 16.9 | % | | 55.7 | % | | 26.9 | % |

| Average Square Footage | | | | | | | | | |

| Fiscal 2019 | | 2,717 | | | 1,378 | | | 2,079 | |

We expect to modestly grow in store count in the next fiscal year within North America and internationally.

The wholesale business for Kate Spade brand comprised approximately 13% of total brand net sales for fiscal 2019.

During the fiscal year ended June 29, 2019, Kate Spade's most significant distributors are Al-Futtaim Group, Valiram, DFS Group, Starboard and Pangea.

Stuart Weitzman flagship locations, which offer the fullest expression of the brand, are located in key strategic markets including tourist-heavy, densely populated cities globally.

Retail stores carry an assortment of products depending on their size, location and customer preferences.

Through outlet stores, we target value-oriented customers in established outlet centers that are close to major markets.

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

| Fiscal 2019 | | 71 | | | 76 | | | 147 | |

| % change vs. prior year | | 4.4 | % | | 117.1 | % | | 42.7 | % |

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

| Fiscal 2019 | | 125,336 | | | 90,300 | | | 215,636 | |

| % change vs. prior year | | 6.3 | % | | 90.1 | % | | 30.4 | % |

| | | | | | | | | | |

| | | | | | | | | | |

| Average Square Footage | | | | | | | | | |

| Fiscal 2019 | | 1,765 | | | 1,188 | | | 1,467 | |

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

During fiscal 2016, the Company acquired the Stuart Weitzman Canadian retail distributor.

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.

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.

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

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

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

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

We expect to modestly grow our store count over the next few years, particularly within Greater China.

directly to customers.

Wholesale — Coach began as a U.S. wholesaler to department stores, and this channel continues to remain a part of our overall consumer reach.

Established in 1993, the Kate Spade brand is known for its crisp color, graphic prints and playful sophistication.

The brand's exuberant approach to the everyday encourages personal style with a dash of incandescent charm.

From handbags and clothing to decor and fragrance our products invite women around the world to live every day uniquely and to the fullest.

We expect to modestly grow the number of North America stores in fiscal 2019, as we continue to optimize our real estate position.

Internationally, we expect to continue to modestly grow in store count over the next few years, particularly within mainland China and Europe.

As of June 30, 2018, Kate Spade's most significant distributors are Valiram Group, Al-Futtaim Group, Luxury Concept Limited, Pangea and Stores Specialists, Inc.

| Fiscal 2016 | | 64 | | | 11 | | | 75 | |

| Fiscal 2016 | | 105,264 | | | 12,556 | | | 117,820 | |

| Fiscal 2016 | | 1,645 | | | 1,141 | | | 1,571 | |

(1) Includes the addition of 14 retail stores related to the Canadian retail distributor acquisition in the fourth quarter of fiscal 2016.

(2) Includes the addition of 20 retail stores related to the Northern China distributor acquisition in the third quarter of fiscal 2018.

Furthermore, we expect to continue to grow the store count and square footage over the next few years as we grow our business internationally.

The Company utilizes and continues to explore digital technologies such as blogs and social media websites,

During fiscal 2018, Stuart Weitzman had three vendors, all located in Spain, who individually provided over 10% of the brands total units (or approximately 40% in the aggregate).

The facilities also ship direct to consumer orders.

In North America, the Company operates an 850,000 square foot distribution and consumer care facility in Jacksonville, Florida for Coach brand products.

For Coach brand products, these centers are located in mainland China and Netherlands.

These facilities are located in the United States, Canada, Spain, Italy and mainland China.

Each of our brands currently operates on their respective legacy systems that support finance and accounting, procurement, inventory control, point-of-sale transactions, store replenishment, supply chain management which support product development, procurement, inventory planning and reporting functions.

In the fourth quarter of fiscal 2016, the Company announced a series of operational efficiency initiatives focused on creating an agile and scalable business model, including the replacing and updating of our core technology platforms and the retirement of certain information systems.

Efforts are currently underway to harmonize and consolidate these systems across the current three brands, as well as serving as a common platform for future acquisitions.

This project is a key area of focus and priority and is expected to be substantially completed during fiscal 2019.

The Company expects to incur charges of approximately $10-15 million in fiscal 2019 related to this project.

This system began rolling out for Coach in North America, and will be extended to other brands and regions in the future.

No information contained on any of our websites is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

| [removed: þ] [added: ☑] | | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the Fiscal Year [removed: Ended June 30, 2018][added: Ended June 29, 2019]

| [removed: o] [added: ☐] | | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: Commission] [added: Commission] file [removed: number: 1-16153][added: number: 1-16153]

[removed: Tapestry, Inc.][added: Tapestry, Inc.]

| [removed: Maryland] [added: Maryland] | | [removed: 52-2242751] [added: 52-2242751] |

[removed: 10] [added: 10] Hudson [removed: Yards, New York, NY 10001][added: Yards, New York, NY 10001]

[removed: (212) 594-1850][added: (212) 594-1850]

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Trading Symbol | | Name] of Each Exchange on which [removed: Registered] [added: Registered] |

| Common Stock, par value $.01 per share | | [added: TPR | |] New York Stock Exchange |

[removed: Securities] [added: Securities] Registered Pursuant to Section 12(g) of the Act: [removed: None][added: None]

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities [removed: Act.Yes þ No o][added: Act.]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [removed: Act.Yes o No þ][added: Act.]

Yes [removed: þ] [added: ☑] No [removed: o][added: ☐]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Website, if any,] every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

| Large accelerated filer [removed: þ] | [added: ☑] | [added: |] Accelerated filer [removed: o] | [added: ☐] | [added: |] Non-accelerated filer [removed: o] | [added: ☐] | [added: |] Smaller reporting company [removed: o] | [added: ☐ |]

| Emerging growth company [removed: o] | [added: ☐] | | | | | | [added: | | | |]

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Act).Yes [removed: o] [added: ☐] No [removed: þ][added: ☑]

The aggregate market value of Tapestry, Inc. common stock held by non-affiliates as of December [removed: 29, 2017] [added: 28, 2018] (the last business day of the most recently completed second fiscal quarter) was approximately [removed: $12.4] [added: $9.6] billion.

On August [removed: 3, 2018,] [added: 2, 2019,] the Registrant had [removed: 288,038,993] [added: 286,849,656] shares of common stock outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

| [removed: Documents] [added: Documents] | | [removed: Form] [added: Form] 10-K [removed: Reference] [added: Reference] |

| Proxy Statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders | | Part III, Items 10 – 14 |

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: Page Number] [added: Page Number] |

| | [removed: PART I] [added: PART I] | |

| [Item [removed: 1.](#sF84957B4522654C3AAFED233B9D826D1)] [added: 1.](#s9B51A3CDFD175929ABC90A180ACA3848)] | [removed: [Business](#sF84957B4522654C3AAFED233B9D826D1)] [added: [Business](#s9B51A3CDFD175929ABC90A180ACA3848)] | [removed: [2](#sF84957B4522654C3AAFED233B9D826D1)] [added: [2](#s9B51A3CDFD175929ABC90A180ACA3848)] |

| [Item [removed: 1A.](#s99533e9ddd484b8c9a36da6a2f68e506)] [added: 1A.](#s66D386D42213567E9D11288233C2BFEE)] | [Risk [removed: Factors](#s99533e9ddd484b8c9a36da6a2f68e506)] [added: Factors](#s66D386D42213567E9D11288233C2BFEE)] | [removed: [13](#s99533e9ddd484b8c9a36da6a2f68e506)] [added: [13](#s66D386D42213567E9D11288233C2BFEE)] |

| [Item [removed: 1B.](#s6d379b8fcab74c94a2561d474103ac08)] [added: 1B.](#s4B625B049A7854BA9077EE1FEFC5BECA)] | [Unresolved Staff [removed: Comments](#s6d379b8fcab74c94a2561d474103ac08)] [added: Comments](#s4B625B049A7854BA9077EE1FEFC5BECA)] | [removed: [21](#s6d379b8fcab74c94a2561d474103ac08)] [added: [21](#s4B625B049A7854BA9077EE1FEFC5BECA)] |

| [Item [removed: 2.](#se606c852bac74487a6842a9eb79f3a73)] [added: 2.](#s46785F80ED5A5BFEB36443C898630E16)] | [removed: [Properties](#se606c852bac74487a6842a9eb79f3a73)] [added: [Properties](#s46785F80ED5A5BFEB36443C898630E16)] | [removed: [22](#se606c852bac74487a6842a9eb79f3a73)] [added: [22](#s46785F80ED5A5BFEB36443C898630E16)] |

| [Item [removed: 3.](#sea3089c9730e424089792174aa7235c8)] [added: 3.](#sEB1D17ADDB085DFA9070A75AADFFFBC1)] | [Legal [removed: Proceedings](#sea3089c9730e424089792174aa7235c8)] [added: Proceedings](#sEB1D17ADDB085DFA9070A75AADFFFBC1)] | [removed: [23](#sea3089c9730e424089792174aa7235c8)] [added: [22](#sEB1D17ADDB085DFA9070A75AADFFFBC1)] |

| [Item [removed: 4.](#s8c6c9b4115cd439da9e099b823b794f0)] [added: 4.](#s75133D21BB175F7B92F38A515D120641)] | [Mine Safety [removed: Disclosures](#s8c6c9b4115cd439da9e099b823b794f0)] [added: Disclosures](#s75133D21BB175F7B92F38A515D120641)] | [removed: [23](#s8c6c9b4115cd439da9e099b823b794f0)] [added: [23](#s75133D21BB175F7B92F38A515D120641)] |

| | [removed: PART II] [added: PART II] | |

| [Item [removed: 5.](#scacb742d4bc74111a9dd7af5bd5f0d4a)] [added: 5.](#s77634071FC8456B6B52E510020C33F4B)] | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#scacb742d4bc74111a9dd7af5bd5f0d4a)] [added: Securities](#s77634071FC8456B6B52E510020C33F4B)] | [removed: [24](#scacb742d4bc74111a9dd7af5bd5f0d4a)] [added: [24](#s77634071FC8456B6B52E510020C33F4B)] |

| [Item [removed: 6.](#s955192f788a340b99cf75f84de640de7)] [added: 6.](#s1173671E4CBD58F09F4D248517B9C8FE)] | [Selected Financial [removed: Data](#s955192f788a340b99cf75f84de640de7)] [added: Data](#s1173671E4CBD58F09F4D248517B9C8FE)] | [removed: [27](#s955192f788a340b99cf75f84de640de7)] [added: [26](#s1173671E4CBD58F09F4D248517B9C8FE)] |

OR

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

Yes ☐ No ☑

Yes ☑ No ☐

Yes ☑ No ☐

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | |

TAPESTRY, INC.

| [Signatures](#s63B9C5C0E583502DA619E1899215E7DA) | | [52](#s63B9C5C0E583502DA619E1899215E7DA) |

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

| | | |

| --- | --- | --- |

OR

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

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

The following table sets forth the location, use and size of the Company's key distribution, corporate and product development facilities as of June [removed: 30, 2018.][added: 29, 2019.]

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

| [removed: Location] [added: Location] | | [removed: Use] [added: Use] | | [removed: Approximate Square Footage] [added: Approximate Square Footage] | |

| New York, New York | | Corporate, design, sourcing and product development | | [removed: 695,000] [added: 546,000(1)] | |

| Westchester, Ohio | | Kate Spade North America distribution [removed: and customer service] | | 601,000 | |

| North Bergen, New Jersey | | Corporate office [added: and customer service] | | 106,000 | |

| Tokyo, Japan | | [removed: Coach Japan] [added: Corporate and] regional management | | 24,900 | |

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

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

| Hong Kong, China | | Coach sourcing and quality control | | [removed: 17,000(1)] [added: 17,000(2)] | |

| Dongguan, China | | [removed: Coach] [added: Corporate] sourcing, quality control and product development | | 16,700 | |

| Tokyo, Japan | | Kate Spade Japan regional management | | [removed: 14,200] [added: 11,000] | |

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

| Fort Lauderdale, Florida | | Stuart Weitzman corporate office | | [removed: 12,100] [added: 7,700] | |

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

| Singapore | | Coach Singapore regional management, sourcing and quality control | | [removed: 5,000] [added: 12,600] | |

| [removed: (1)] [added: (2)] | Represents a Company-owned location. |

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

| (1) | The Company has subleased approximately 148,800 square feet in its global headquarters. Refer to Note 21, "Headquarters Transactions," in the Notes to the Financial Statements for further information. |

| | |

| --- | --- |

| Hong Kong, China | | Corporate regional management | | 23,900 | |

| Taipei City, Taiwan | | Coach Taiwan regional management | | 6,400 | |

| Paris, France | | Coach Europe regional management | | 5,900 | |

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

| Kuala Lumpur, Malaysia | | Coach Malaysia regional management | | 3,800 | |

| Beijing, China | | Coach Greater China regional management | | 3,000 | |

| 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 | |

| Clark, Philippines | | Coach sourcing and quality control | | 2,400 | |

[removed: PART II][added: PART II]

[removed: Market] [added: Market] and Dividend [removed: Information][added: Information]

Tapestry, Inc.’s common stock is listed on the New York Stock Exchange and is traded under the symbol “TPR.” [removed: 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.]

As of August [removed: 3, 2018,] [added: 2, 2019,] there were [removed: 2,325] [added: 2,193] holders of record of Tapestry’s common stock.

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: 8, 2018,] [added: 7, 2019,] to be filed with the Securities and Exchange Commission [removed: (The] [added: (the] “Proxy Statement”), is incorporated herein by reference.

[removed: Performance Graph][added: Performance Graph]

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 June [removed: 30, 2018,] [added: 29, 2019,] the last day of Tapestry’s most recent fiscal year.

The graph assumes that $100 was invested on June [removed: 29, 2013] [added: 28, 2014] at the per share closing price in each of 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.

| • | [added: Capri Holdings Limited (formerly known as] Michael Kors Holdings [removed: Limited] [added: Limited)] |

[removed: ][added: ]

| | | [removed: Fiscal 2013] [added: Fiscal 2014] | | [removed: Fiscal 2014] [added: Fiscal 2015] | | [removed: Fiscal 2015] [added: Fiscal 2016] | | [removed: Fiscal 2016] [added: Fiscal 2017] | | [removed: Fiscal 2017] [added: Fiscal 2018] | | [removed: Fiscal 2018] [added: Fiscal 2019] |

| TPR | | $100.00 | | $108.65 | | $127.46 | | $153.26 | | $155.88 | | $109.86 |

| Peer Set | | $100.00 | | $115.94 | | $108.25 | | $108.19 | | $150.34 | | $154.83 |

| S&P 500 | | $100.00 | | $109.37 | | $111.91 | | $131.66 | | $150.59 | | $166.27 |

Stock Repurchase Program

The Company's share repurchases during the fourth quarter of fiscal 2019 were as follows:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| Fiscal Period | | Total Number of Shares Repurchased | | | Average Price per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1) | | |

| | | (in millions, except share data and per share data) | | | | | | | | | | | | |

| March 31, 2019 - May 4, 2019 | | — | | | $ | — | | | — | | | $ | — | |

| May 5, 2019 - June 1, 2019 | | 2,255,249 | | | 29.44 | | | | 2,255,249 | | | 933.6 | | |

| June 2, 2019 - June 29, 2019 | | 1,156,824 | | | 29.06 | | | | 1,156,824 | | | 900.0 | | |

| Total | | 3,412,073 | | | | | | | 3,412,073 | | | | | |

(1) The company repurchases its common shares under repurchase programs that were approved by the Board as follows:

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| Date Share Repurchase Programs were Publicly Announced | | Total Dollar Amount Approved | | Expiration Date of Plan |

| May 9, 2019 | | $1.00 billion | | N/A |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | High | | | | Low | | | | Closing | | | | Dividends Declared per Common Share | | |

| Fiscal 2018 Quarter ended: | | | | | | | | | | | | | | | |

| 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 | | |

| Fiscal 2017 Quarter ended: | | | | | | | | | | | | | | | |

| October 1, 2016 | $ | 43.71 | | | $ | 34.55 | | | | | | | $ | 0.3375 | |

| December 31, 2016 | 38.86 | | | | 34.07 | | | | | | | | 0.3375 | | |

| April 1, 2017 | 41.70 | | | | 34.33 | | | | | | | | 0.3375 | | |

| July 1, 2017 | 47.76 | | | | 38.47 | | | | $ | 47.34 | | | 0.3375 | | |

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

| | |

| --- | --- |

| • | L Brands, Inc., |

| • | PVH Corp., |

| • | Ralph Lauren Corporation, |

| • | Tiffany & Co., |

| • | V.F. Corporation, |

| • | Estee Lauder, Inc., |

The Company's old peer group consisted of:

| • | Kate Spade & Company, |

| • | Abercrombie & Fitch Co., and |

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 |

The selected historical financial data presented below as of and for each of the fiscal years in the five-year period ended June [removed: 30, 2018] [added: 29, 2019] has been derived from the Company’s audited Consolidated Financial Statements.

| | [removed: Fiscal] [added: Fiscal] Year [removed: Ended(5)] [added: Ended(4)] | | | | | | | | | | | | | | | | | | |

| | [added: June 29, 2019 | | | |] June 30, [removed: 2018(1)] [added: 2018] | | | | July 1, 2017 | | | | July 2, [removed: 2016(2)] [added: 2016] | | | | June 27, 2015(3) | | | [removed: | June 28, 2014(4) | | |]

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

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

| Net sales | [removed: $] [added: $] | [removed: 5,880.0] [added: 6,027.1] | | | $ | [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] | |

| Gross profit | [removed: 3,853.9] [added: 4,053.7] | | | | [removed: 3,081.1] [added: 3,848.5] | | | | [removed: 3,051.3] [added: 3,081.1] | | | | [removed: 2,908.6] [added: 3,051.3] | | | | [removed: 3,297.0] [added: 2,908.6] | | |

| Selling, general and administrative ("SG&A") expenses | [removed: 3,183.1] [added: 3,239.6] | | | | [removed: 2,293.7] [added: 3,177.7] | | | | [removed: 2,397.8] [added: 2,293.7] | | | | [removed: 2,290.6] [added: 2,397.8] | | | | [removed: 2,176.9] [added: 2,290.6] | | |

| Operating income | [removed: 670.8] [added: 814.1] | | | | [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] | | |

| Net income | [removed: 397.5] [added: $] | [added: 643.4] | | | [removed: 591.0] [added: 397.5] | | | | [removed: 460.5] [added: 591.0] | | | | [removed: 402.4] [added: 460.5] | | | | [removed: 781.3] [added: 402.4] | | |

| Basic | [removed: $] [added: $] | [removed: 1.39] [added: 2.22] | | | $ | [removed: 2.11] [added: 1.39] | | | $ | [removed: 1.66] [added: 2.11] | | | $ | [removed: 1.46] [added: 1.66] | | | $ | [removed: 2.81] [added: 1.46] | |

| Diluted | [removed: $] [added: $] | [removed: 1.38] [added: 2.21] | | | $ | [removed: 2.09] [added: 1.38] | | | $ | [removed: 1.65] [added: 2.09] | | | $ | [removed: 1.45] [added: 1.65] | | | $ | [removed: 2.79] [added: 1.45] | |

| Weighted-average basic shares outstanding | [removed: 285.4] [added: 289.4] | | | | [removed: 280.6] [added: 285.4] | | | | [removed: 277.6] [added: 280.6] | | | | [removed: 275.7] [added: 277.6] | | | | [removed: 277.8] [added: 275.7] | | |

| Weighted-average diluted shares outstanding | [removed: 288.6] [added: 290.8] | | | | [removed: 282.8] [added: 288.6] | | | | [removed: 279.3] [added: 282.8] | | | | [removed: 277.2] [added: 279.3] | | | | [removed: 280.4] [added: 277.2] | | |

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

| [removed: Consolidated] [added: Consolidated] Percentage of Net Sales [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Gross margin | [removed: 65.5] [added: 67.3] | | [removed: %] [added: %] | | [removed: 68.6] [added: 65.5] | | % | | [removed: 67.9] [added: 68.6] | | % | | [removed: 69.4] [added: 67.9] | | % | | [removed: 68.6] [added: 69.4] | | % |

| SG&A expenses | [removed: 54.1] [added: 53.8] | | [removed: %] [added: %] | | [removed: 51.1] [added: 54.0] | | % | | [removed: 53.4] [added: 51.1] | | % | | [removed: 54.6] [added: 53.4] | | % | | [removed: 45.3] [added: 54.6] | | % |

| Operating margin | [removed: 11.4] [added: 13.5] | | [removed: %] [added: %] | | [removed: 17.5] [added: 11.4] | | % | | [removed: 14.5] [added: 17.5] | | % | | [removed: 14.7] [added: 14.5] | | % | | [removed: 23.3] [added: 14.7] | | % |

| Net income | [removed: 6.8] [added: 10.7] | | [removed: %] [added: %] | | [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: Consolidated] [added: Consolidated] Balance Sheet [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Working capital | [removed: $] [added: $] | [removed: 1,494.4] [added: 1,638.8] | | | $ | [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] | |

| Total assets | [removed: 6,678.3] [added: 6,877.3] | | | | [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] | | |

| Cash, cash equivalents and investments | [removed: 1,250.0] [added: 1,233.9] | | | | [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] | | |

| Inventory | [removed: 673.8] [added: 778.3] | | | | [removed: 469.7] [added: 673.8] | | | | [removed: 459.2] [added: 469.7] | | | | [removed: 485.1] [added: 459.2] | | | | [removed: 526.2] [added: 485.1] | | |

| Total debt | [removed: 1,600.6] [added: 1,602.7] | | | | [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] | | |

| Stockholders' equity | [removed: 3,244.6] [added: 3,513.4] | | | | [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: Fiscal] [added: Fiscal] Year [removed: Ended] [added: Ended] | | | | | | | | | | | | | |

| | [added: June 29, 2019(1) | | |] June 30, 2018(1) | | | July 1, 2017 | | | July 2, 2016(2) | | | June 27, 2015(3) | | [removed: | June 28, 2014(4) | |]

| [removed: Store Data:] [added: Store Data:] | | | | | | | | | | | | | | |

| Coach North America stores | [added: 391 | | |] 402 | | | 419 | | | 432 | | | 462 | | [removed: | 539 | |]

| Coach International stores | [added: 595 | | |] 585 | | | 543 | | | 522 | | | 503 | | [removed: | 475 | |]

| Kate Spade North America stores | [removed: 200] [added: 213] | | | [removed: —] [added: 200] | | | — | | | — | | | — | |

| Kate Spade International stores | [removed: 142] [added: 194] | | | [removed: —] [added: 142] | | | — | | | — | | | — | |

| Stuart Weitzman North America stores | [added: 71 | | |] 68 | | | 69 | | | 64 | | | 46 | | [removed: | — | |]

| Stuart Weitzman International stores | [added: 76 | | |] 35 | | | 12 | | | 11 | | | 8 | | [removed: | — | |]

| Total stores open at fiscal year-end | [added: 1,540 | | |] 1,432 | | | 1,043 | | | 1,029 | | | 1,019 | | [removed: | 1,014 | |]

| Coach North America stores | [added: 1,802,410 | | |] 1,835,543 | | | 1,884,204 | | | 1,892,146 | | | 1,917,851 | | [removed: | 2,042,717 | |]

| Coach International stores | [added: 1,304,618 | | |] 1,256,525 | | | 1,166,920 | | | 1,086,315 | | | 1,030,695 | | [removed: | 918,995 | |]

| Kate Spade North America stores | [removed: 495,121] [added: 578,649] | | | [removed: —] [added: 495,121] | | | — | | | — | | | — | |

| (1) | Refer to Part I, Item 1, "Business" for the number of stores acquired during the respective fiscal year for each brand. |

| (4) | The Company recorded certain items which affect the comparability of our results. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information on the items related to fiscal 2019 and fiscal 2018. During fiscal 2017, the Company recorded adjustments in cost of sales and SG&A expenses of $2.9 million and $22.3 million, respectively, related to the Operational Efficiency plan and its Integration and Acquisition efforts. During fiscal 2016, the Company recorded adjustments in cost of sales and SG&A expenses of $1.1 million and $122.0 million related to the Company's multi-year strategic plan to transform the Coach brand, announced in fiscal 2014, the Operational Efficiency Plan and Stuart Weitzman acquisition-related costs. 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) | $ | 4,053.7 | | | $ | 3,239.6 | | | $ | 814.1 | | | $ | 643.4 | | | $ | 2.21 | |

| Excluding Non-GAAP Adjustments | 27.8 | | | | (103.5 | | ) | | 131.3 | | | | 105.3 | | | | 0.36 | | |

| Adjusted: (Non-GAAP Basis) | $ | 4,081.5 | | | $ | 3,136.1 | | | $ | 945.4 | | | $ | 748.7 | | | $ | 2.57 | |

| | |

| --- | --- |

| (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. |

| (5) | For all fiscal years presented below, the Company recorded certain items which affect the comparability of our results. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information on the items related to fiscal 2018, fiscal 2017 and fiscal 2016. During fiscal 2015, the Company recorded adjustments in cost of sales and SG&A expenses of $5.0 million and $140.9 million, respectively, related to accelerated depreciation and 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 the destruction of inventory. In fiscal 2015 the Company also recorded adjustments in cost of sales and SG&A expenses of $4.7 million and $19.9 million, respectively, related to the acquisition of Stuart Weitzman. During fiscal 2014, the Company recorded adjustments in cost of sales and SG&A expenses of $82.2 million and |

$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) | $ | 3,297.0 | | | $ | 2,176.9 | | | $ | 1,120.1 | | | $ | 781.3 | | | $ | 2.79 | |

| Excluding Non-GAAP Adjustments | 82.2 | | | | (49.3 | | ) | | 131.5 | | | | 88.3 | | | | 0.31 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,379.2 | | | $ | 2,127.6 | | | $ | 1,251.6 | | | $ | 869.6 | | | $ | 3.10 | |

[removed: Disclosure] [added: Disclosure] Controls and [removed: Procedures][added: Procedures]

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 June [removed: 30, 2018.][added: 29, 2019.]

[removed: Management’s] [added: Management’s] Report on Internal Control over Financial [removed: Reporting][added: Reporting]

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 June [removed: 30, 2018] [added: 29, 2019] 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 June [removed: 30, 2018] [added: 29, 2019] as included elsewhere herein.

[removed: Changes] [added: Changes] in Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: There] [added: Other than the ERP system implementation noted above, there] were no [added: other] changes in [added: our] internal control over financial reporting [removed: that occurred] during the [removed: fourth] fiscal [removed: quarter] [added: year ended June 29, 2019] that have materially affected, or are reasonably likely to materially affect, [removed: the Company’s] [added: our] internal control over financial reporting.

During the second quarter of fiscal 2019, the Company completed the first phase of its ERP implementation, SAP’s S4/HANA, migrating the global finance functions for Corporate, Coach and Stuart Weitzman.

The second phase of this implementation which was the finance and supply chain functions were implemented for Kate Spade during the third quarter of fiscal 2019, with the supply chain functions for Coach and Stuart Weitzman to follow in early fiscal 2020.

As a result of the implementations to date, there were certain changes to processes and procedures, which resulted in changes to the Company’s internal control over financial reporting.

The implementation of SAP’s S4/HANA is expected to strengthen the financial controls by automating certain manual processes and standardizing business processes and reporting across the organization.

The Company will continue to evaluate and monitor the internal controls over financial reporting during this period of change and will continue to evaluate the operating effectiveness of related key controls.

For a discussion of risks related to the implementation of new systems, see Part I, Item 1A, Risk Factors herein.

[removed: PART III][added: PART III]

On August 12, 2019, the Human Resources Committee of the Board of Directors of the Company approved the Tapestry, Inc. Special Severance Plan (the “Plan”), which is intended to provide benefits to designated employees of the Company who are members of a select group of management or highly compensated employees (as determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA) in the event their employment is terminated by the Company without Cause or by the participant for Good Reason (each as defined in the Plan) upon or within 24 months following a Change in Control (a “Qualifying Termination”).

In the event of a Qualifying Termination, the Company shall provide the participants under the Plan with severance payment amounts equal to the sum of such participant’s Base Salary plus Bonus (each as defined in the Plan) multiplied by the Severance Multiple (as defined in the Plan) applicable to each participant, in addition to COBRA, accelerated vesting of unvested awards granted on or after August 12, 2019 and other benefits as described in the Plan.

The Severance Multiple for (i) the Company’s Chief Executive Officer shall by two and one-half times and (ii) for other executive officers, including the Company’s other named executive officers, shall be one and one-half times.

The Severance Multiples for other participants are described in the Plan.

The receipt of severance benefits under the Plan is conditioned on a participant’s execution and non-revocation of general release of claims in favor of the Company and its affiliates, except as expressly provided in the Plan.

Participants are also required to comply with certain post-termination restrictive covenants, including non-competition and employee and customer non-solicitation provisions.

If any payments or benefits under the Plan would be considered “parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and would be subject to the excise tax imposed by Section 4999 of the Code, then such payments will either be (i) reduced so than no portion of the payments is subject to the excise tax or (ii) delivered in full, whichever of the foregoing results in the participant receiving a greater amount on a net after-tax basis, taking into account all federal, state and local taxes and the excise tax imposed by Section 4999 of the Code.

The foregoing summary is not a complete summary of the terms of the Plan and is qualified in its entirety by reference to the text of the Plan, which is filed as Exhibit 10.40 to this Annual Report on Form 10-K for the fiscal year ended June 29, 2019.

None.

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the [removed: 2018] [added: 2019] 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: 2018] [added: 2019] Annual Meeting of Stockholders is incorporated herein by reference.

The information under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and “Tapestry Stock Ownership by Certain Beneficial Owners and Management” in the Company’s Proxy Statement for the [removed: 2018] [added: 2019] 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: 2018] [added: 2019] 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: 2018] [added: 2019] Annual Meeting of Stockholders.

[removed: PART IV][added: PART IV]

[removed: SIGNATURES][added: SIGNATURES]

[removed: TAPESTRY, INC.][added: TAPESTRY, INC.]

| Date: August [removed: 16, 2018] [added: 15, 2019] | 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: 16, 2018.][added: 15, 2019.]

| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] |

| /s/ [removed: Kevin Wills] [added: Joanne C. Crevoiserat] | | Chief Financial Officer |

| [removed: Kevin Wills] [added: Joanne C. Crevoiserat] | | (Principal Financial Officer) |

| [removed: Melinda Brown] [added: Brian Satenstein] | | (Principal Accounting Officer) |

[removed: INDEX] [added: INDEX] TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: INFORMATION][added: INFORMATION]

| [Reports of Independent Registered Public Accounting [removed: Firm](#s55AE8D9759DD57399831C127C3874740)] [added: Firm](#s67268733DF295234B0D0E05B26AE5E6E)] | [removed: [58](#s55AE8D9759DD57399831C127C3874740)] [added: [54](#s67268733DF295234B0D0E05B26AE5E6E)] |

[removed: | [Consolidated Balance Sheets](#sF1774D3F990954C7904CF6A25F8E179F) | [60](#sF1774D3F990954C7904CF6A25F8E179F) |][added: CONSOLIDATED BALANCE SHEETS]

[removed: | [Consolidated Statements of Operations](#sC65B312C4C825EC8A1EA13F341C1D9DF) | [61](#sC65B312C4C825EC8A1EA13F341C1D9DF) |][added: CONSOLIDATED STATEMENTS OF OPERATIONS]

[removed: | [Consolidated Statements of Comprehensive Income](#sA2C76F7516815DD9A6B45C171D140C26) | [62](#sA2C76F7516815DD9A6B45C171D140C26) |][added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME]

[removed: | [Consolidated Statements of Stockholders’ Equity](#s6795757E42A456559B3476282AD39EB0) | [63](#s6795757E42A456559B3476282AD39EB0) |][added: CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY]

[removed: | [Consolidated Statements of Cash Flows](#sEE23C1F701425E1397556115A4AFD323) | [64](#sEE23C1F701425E1397556115A4AFD323) |][added: CONSOLIDATED STATEMENTS OF CASH FLOWS]

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

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

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

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of Tapestry, Inc. and subsidiaries (the "Company") as of June [removed: 30, 2018 and July 1, 2017,] [added: 29, 2019] and [added: June 30, 2018,] the related consolidated statements of operations, comprehensive income, [removed: shareholders'] [added: stockholders'] equity, and cash [removed: flows] [added: flows,] for each of the three years in the period ended June [removed: 30, 2018,] [added: 29, 2019,] 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").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June [removed: 30, 2018] [added: 29, 2019] and [removed: July 1, 2017,] [added: June 30, 2018,] and the results of its operations and its cash flows for each of the three years in the period ended June [removed: 30, 2018,] [added: 29, 2019,] 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 States) [removed: ("PCAOB"),] [added: (PCAOB),] the Company's internal control over financial reporting as of June [removed: 30, 2018,] [added: 29, 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August [removed: 16, 2018,] [added: 15, 2019,] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited the internal control over financial reporting of Tapestry, Inc. and subsidiaries (the [removed: "Company")] [added: “Company”)] as of June [removed: 30, 2018,] [added: 29, 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: ("COSO").][added: (COSO).]

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June [removed: 30, 2018,] [added: 29, 2019,] based on [removed: the] criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: ("PCAOB"),] [added: (PCAOB),] the consolidated financial statements and financial statement schedule as of and for the year ended June [removed: 30, 2018] [added: 29, 2019,] of the Company and our report dated August [removed: 16, 2018,] [added: 15, 2019,] expressed an unqualified opinion on those financial statements and financial statement schedule.

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: CONSOLIDATED BALANCE SHEETS][added: | [Consolidated Balance Sheets](#s28AC51A380B0522798057454A5ED4E8E) | [56](#s28AC51A380B0522798057454A5ED4E8E) |]

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

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

| [removed: ASSETS] [added: ASSETS] | | | | | | | |

| [removed: Current Assets:] [added: Current Assets:] | | | | | | | |

| Cash and cash equivalents | [removed: $] [added: $] | [removed: 1,243.4] [added: 969.2] | | | $ | [removed: 2,672.9] [added: 1,243.4] | |

| Short-term investments | [removed: 6.6] [added: 264.6] | | | | [removed: 410.7] [added: 6.6] | | |

| Trade accounts receivable, less allowances of [removed: $1.5] [added: $4.4] and [removed: $1.9,] [added: $1.5,] respectively | [removed: 314.1] [added: 298.1] | | | | [removed: 268.0] [added: 314.1] | | |

| Inventories | [removed: 673.8] [added: 778.3] | | | | [removed: 469.7] [added: 673.8] | | |

| Income tax receivable | [removed: 25.8] [added: 55.8] | | | | [removed: 41.5] [added: 25.8] | | |