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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Michael Kors Holdings Limited Ordinary Shares (delisted) | NYSE:KORS | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 37.92 | 0.00 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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British Virgin Islands
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N/A
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on which Registered
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Ordinary Shares, no par value
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New York Stock Exchange
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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x
Yes
¨
No
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Indicate by check mark whether the registrant has submitted electronically 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).
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x
Yes
¨
No
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if smaller reporting company)
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Smaller reporting company
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¨
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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¨
Yes
x
No
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Page
No.
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PART I FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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3
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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October 1,
2016 |
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April 2,
2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
186.4
|
|
|
$
|
702.0
|
|
Receivables, net
|
288.0
|
|
|
307.9
|
|
||
Inventories
|
695.7
|
|
|
546.8
|
|
||
Prepaid expenses and other current assets
|
146.0
|
|
|
113.1
|
|
||
Total current assets
|
1,316.1
|
|
|
1,669.8
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|
||
Property and equipment, net
|
801.0
|
|
|
758.2
|
|
||
Intangible assets, net
|
463.4
|
|
|
67.4
|
|
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Goodwill
|
119.7
|
|
|
23.2
|
|
||
Deferred tax assets
|
19.0
|
|
|
24.5
|
|
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Other assets
|
36.1
|
|
|
23.7
|
|
||
Total assets
|
$
|
2,755.3
|
|
|
$
|
2,566.8
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
179.7
|
|
|
$
|
131.4
|
|
Accrued payroll and payroll related expenses
|
45.8
|
|
|
59.7
|
|
||
Accrued income taxes
|
45.5
|
|
|
51.6
|
|
||
Short-term debt
|
384.4
|
|
|
—
|
|
||
Accrued expenses and other current liabilities
|
176.9
|
|
|
192.8
|
|
||
Total current liabilities
|
832.3
|
|
|
435.5
|
|
||
Deferred rent
|
126.2
|
|
|
106.4
|
|
||
Deferred tax liabilities
|
88.6
|
|
|
3.5
|
|
||
Long-term debt
|
—
|
|
|
2.3
|
|
||
Other long-term liabilities
|
24.9
|
|
|
19.6
|
|
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Total liabilities
|
1,072.0
|
|
|
567.3
|
|
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Commitments and contingencies
|
|
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|
||||
Shareholders’ equity
|
|
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|
||||
Ordinary shares, no par value; 650,000,000 shares authorized; 209,020,770 shares issued and 164,233,915 outstanding at October 1, 2016; 208,084,175 shares issued and 176,441,891 outstanding at April 2, 2016
|
—
|
|
|
—
|
|
||
Treasury shares, at cost (44,786,855 shares at October 1, 2016 and 31,642,284 shares at April 2, 2016)
|
(2,304.8
|
)
|
|
(1,650.1
|
)
|
||
Additional paid-in capital
|
749.3
|
|
|
718.9
|
|
||
Accumulated other comprehensive loss
|
(79.8
|
)
|
|
(80.9
|
)
|
||
Retained earnings
|
3,315.8
|
|
|
3,007.8
|
|
||
Total shareholders’ equity of MKHL
|
1,680.5
|
|
|
1,995.7
|
|
||
Noncontrolling interest
|
2.8
|
|
|
3.8
|
|
||
Total equity
|
1,683.3
|
|
|
1,999.5
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,755.3
|
|
|
$
|
2,566.8
|
|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
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October 1,
2016 |
|
September 26,
2015 |
||||||||
Net sales
|
$
|
1,049.4
|
|
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$
|
1,086.8
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$
|
2,006.7
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$
|
2,034.1
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Licensing revenue
|
38.8
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|
43.2
|
|
|
69.4
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|
81.9
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|
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Total revenue
|
1,088.2
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1,130.0
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2,076.1
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2,116.0
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||||
Cost of goods sold
|
443.5
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465.5
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840.1
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|
847.9
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|
||||
Gross profit
|
644.7
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|
664.5
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1,236.0
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1,268.1
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Selling, general and administrative expenses
|
379.7
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345.3
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|
|
733.7
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|
658.7
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Depreciation and amortization
|
56.4
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46.1
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|
|
106.8
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|
|
87.7
|
|
||||
Impairment of long-lived assets
|
4.9
|
|
|
—
|
|
|
4.9
|
|
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—
|
|
||||
Total operating expenses
|
441.0
|
|
|
391.4
|
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|
845.4
|
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|
746.4
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Income from operations
|
203.7
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|
|
273.1
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|
|
390.6
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|
|
521.7
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|
||||
Other (income) expense, net
|
(0.3
|
)
|
|
0.1
|
|
|
(0.6
|
)
|
|
0.9
|
|
||||
Interest expense, net
|
1.4
|
|
|
0.4
|
|
|
1.7
|
|
|
0.5
|
|
||||
Foreign currency loss
|
—
|
|
|
1.4
|
|
|
1.3
|
|
|
2.1
|
|
||||
Income before provision for income taxes
|
202.6
|
|
|
271.2
|
|
|
388.2
|
|
|
518.2
|
|
||||
Provision for income taxes
|
41.9
|
|
|
78.4
|
|
|
81.2
|
|
|
151.0
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|
||||
Net income
|
160.7
|
|
|
192.8
|
|
|
307.0
|
|
|
367.2
|
|
||||
Less: Net loss attributable to noncontrolling interest
|
(0.2
|
)
|
|
(0.3
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)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
||||
Net income attributable to MKHL
|
$
|
160.9
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|
$
|
193.1
|
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$
|
308.0
|
|
|
$
|
367.5
|
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||||||||
Weighted average ordinary shares outstanding:
|
|
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||||||||
Basic
|
166,695,631
|
|
|
188,857,398
|
|
|
170,427,101
|
|
|
192,917,209
|
|
||||
Diluted
|
168,839,967
|
|
|
191,524,156
|
|
|
172,726,859
|
|
|
195,789,325
|
|
||||
Net income per ordinary share attributable to MKHL:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.97
|
|
|
$
|
1.02
|
|
|
$
|
1.81
|
|
|
$
|
1.90
|
|
Diluted
|
$
|
0.95
|
|
|
$
|
1.01
|
|
|
$
|
1.78
|
|
|
$
|
1.88
|
|
|
|
|
|
|
|
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|
||||||||
Statements of Comprehensive Income:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
160.7
|
|
|
$
|
192.8
|
|
|
$
|
307.0
|
|
|
$
|
367.2
|
|
Foreign currency translation adjustments
|
(0.3
|
)
|
|
(5.6
|
)
|
|
(0.7
|
)
|
|
4.2
|
|
||||
Net gain (loss) on derivatives
|
(1.3
|
)
|
|
(7.9
|
)
|
|
1.8
|
|
|
(18.6
|
)
|
||||
Comprehensive income
|
159.1
|
|
|
179.3
|
|
|
308.1
|
|
|
352.8
|
|
||||
Less: Net loss attributable to noncontrolling interest
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
||||
Less: Other comprehensive income attributable to noncontrolling interest
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income attributable to MKHL
|
$
|
159.4
|
|
|
$
|
179.6
|
|
|
$
|
309.1
|
|
|
$
|
353.1
|
|
|
Ordinary Shares
|
|
Additional
Paid-in
Capital
|
|
Treasury Shares
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total Equity of MKHL
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
|
Amounts
|
|
|
Shares
|
|
Amounts
|
|
|
|
||||||||||||||||||||||||||
Balance at April 2, 2016
|
208,084
|
|
|
$
|
—
|
|
|
$
|
718.9
|
|
|
(31,642
|
)
|
|
$
|
(1,650.1
|
)
|
|
$
|
(80.9
|
)
|
|
$
|
3,007.8
|
|
|
$
|
1,995.7
|
|
|
$
|
3.8
|
|
|
$
|
1,999.5
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308.0
|
|
|
308.0
|
|
|
(1.0
|
)
|
|
307.0
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309.1
|
|
|
(1.0
|
)
|
|
308.1
|
|
||||||||
Vesting of restricted awards, net of forfeitures
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Exercises of employee share options
|
483
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
6.2
|
|
||||||||
Equity compensation expense
|
|
|
|
—
|
|
|
21.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.4
|
|
|
—
|
|
|
21.4
|
|
||||||||
Tax benefits on exercise of share options
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,145
|
)
|
|
(654.7
|
)
|
|
—
|
|
|
—
|
|
|
(654.7
|
)
|
|
—
|
|
|
(654.7
|
)
|
||||||||
Balance at October 1, 2016
|
209,021
|
|
|
$
|
—
|
|
|
$
|
749.3
|
|
|
(44,787
|
)
|
|
$
|
(2,304.8
|
)
|
|
$
|
(79.8
|
)
|
|
$
|
3,315.8
|
|
|
$
|
1,680.5
|
|
|
$
|
2.8
|
|
|
$
|
1,683.3
|
|
|
Six Months Ended
|
||||||
|
October 1,
2016 |
|
September 26,
2015 |
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
307.0
|
|
|
$
|
367.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
106.8
|
|
|
87.7
|
|
||
Equity compensation expense
|
21.4
|
|
|
25.9
|
|
||
Deferred income taxes
|
5.5
|
|
|
(0.9
|
)
|
||
Amortization of deferred rent
|
2.1
|
|
|
1.7
|
|
||
Loss on disposal of fixed assets
|
0.8
|
|
|
1.5
|
|
||
Impairment of property and equipment
|
4.9
|
|
|
—
|
|
||
Amortization of deferred financing costs
|
0.4
|
|
|
0.4
|
|
||
Tax benefits on exercise of share options
|
(2.8
|
)
|
|
(9.1
|
)
|
||
Foreign currency losses
|
1.4
|
|
|
(0.7
|
)
|
||
Loss on joint venture
|
—
|
|
|
0.9
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Receivables, net
|
45.2
|
|
|
14.5
|
|
||
Inventories
|
(120.2
|
)
|
|
(180.0
|
)
|
||
Prepaid expenses and other current assets
|
(29.4
|
)
|
|
2.5
|
|
||
Other assets
|
(4.0
|
)
|
|
2.0
|
|
||
Accounts payable
|
38.3
|
|
|
58.7
|
|
||
Accrued expenses and other current liabilities
|
(47.4
|
)
|
|
10.5
|
|
||
Other long-term liabilities
|
15.0
|
|
|
10.1
|
|
||
Net cash provided by operating activities
|
345.0
|
|
|
392.9
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures
|
(99.2
|
)
|
|
(193.4
|
)
|
||
Purchase of intangible assets
|
(5.7
|
)
|
|
(9.3
|
)
|
||
Cash paid for business acquisition, net of cash acquired
|
(480.6
|
)
|
|
1.1
|
|
||
Equity method investments
|
—
|
|
|
(0.9
|
)
|
||
Net cash used in investing activities
|
(585.5
|
)
|
|
(202.5
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from debt borrowings
|
377.9
|
|
|
—
|
|
||
Repayments of debt borrowings
|
(2.2
|
)
|
|
—
|
|
||
Repurchases of treasury shares
|
(654.7
|
)
|
|
(751.1
|
)
|
||
Exercises of employee share options
|
6.2
|
|
|
6.0
|
|
||
Tax benefits on exercise of share options
|
2.8
|
|
|
9.1
|
|
||
Other financing activities
|
—
|
|
|
—
|
|
||
Net cash used in financing activities
|
(270.0
|
)
|
|
(736.0
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(5.1
|
)
|
|
(1.8
|
)
|
||
Net decrease in cash and cash equivalents
|
(515.6
|
)
|
|
(547.4
|
)
|
||
Beginning of period
|
702.0
|
|
|
978.9
|
|
||
End of period
|
$
|
186.4
|
|
|
$
|
431.5
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
1.7
|
|
|
$
|
0.4
|
|
Cash paid for income taxes
|
$
|
103.0
|
|
|
$
|
133.7
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
||||
Accrued capital expenditures
|
$
|
31.7
|
|
|
$
|
28.2
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to MKHL
|
$
|
160.9
|
|
|
$
|
193.1
|
|
|
$
|
308.0
|
|
|
$
|
367.5
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares
|
166,695,631
|
|
|
188,857,398
|
|
|
170,427,101
|
|
|
192,917,209
|
|
||||
Weighted average dilutive share equivalents:
|
|
|
|
|
|
|
|
||||||||
Share options, restricted shares/units, and performance restricted share units
|
2,144,336
|
|
|
2,666,758
|
|
|
2,299,758
|
|
|
2,872,116
|
|
||||
Diluted weighted average shares
|
168,839,967
|
|
|
191,524,156
|
|
|
172,726,859
|
|
|
195,789,325
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per share
|
$
|
0.97
|
|
|
$
|
1.02
|
|
|
$
|
1.81
|
|
|
$
|
1.90
|
|
Diluted net income per share
|
$
|
0.95
|
|
|
$
|
1.01
|
|
|
$
|
1.78
|
|
|
$
|
1.88
|
|
|
May 31, 2016
|
||
Cash and cash equivalents
|
$
|
19.4
|
|
Accounts receivable
|
22.3
|
|
|
Inventory
|
36.1
|
|
|
Other current assets
|
5.5
|
|
|
Current assets
|
83.3
|
|
|
Property and equipment
|
46.6
|
|
|
Goodwill
|
96.5
|
|
|
Reacquired rights
|
400.4
|
|
|
Favorable lease assets
|
1.8
|
|
|
Customer relationships
|
0.7
|
|
|
Deferred tax assets
|
7.8
|
|
|
Other assets
|
6.6
|
|
|
Total assets acquired
|
$
|
643.7
|
|
|
|
||
Accounts payable
|
$
|
8.9
|
|
Short-term debt
|
5.8
|
|
|
Other current liabilities
|
27.8
|
|
|
Current liabilities
|
42.5
|
|
|
Unfavorable lease liabilities
|
4.8
|
|
|
Deferred tax liabilities
|
92.3
|
|
|
Other liabilities
|
4.1
|
|
|
Total liabilities assumed
|
$
|
143.7
|
|
|
|
||
Fair value of net assets acquired
|
$
|
500.0
|
|
|
|
||
Fair value of acquisition consideration
|
$
|
500.0
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
October 1,
2016 |
|
September 26,
2015 |
||||||||
Pro-forma total revenue
|
$
|
1,088.2
|
|
|
$
|
1,155.9
|
|
$
|
2,102.5
|
|
|
$
|
2,171.3
|
|
Pro-forma net income
|
157.8
|
|
|
189.4
|
|
313.0
|
|
|
363.0
|
|
||||
Pro-forma net income per ordinary share attributable to MKHL:
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.95
|
|
|
$
|
1.00
|
|
1.84
|
|
|
1.88
|
|
||
Diluted
|
$
|
0.93
|
|
|
$
|
0.99
|
|
1.81
|
|
|
1.85
|
|
|
October 1,
2016 |
|
April 2,
2016 |
||||
Trade receivables:
|
|
|
|
||||
Credit risk insured/factored
|
$
|
316.2
|
|
|
$
|
353.7
|
|
Credit risk retained by Company
|
63.5
|
|
|
61.8
|
|
||
Receivables due from licensees
|
20.8
|
|
|
9.5
|
|
||
|
400.5
|
|
|
425.0
|
|
||
Less: allowances
|
(112.5
|
)
|
|
(117.1
|
)
|
||
|
$
|
288.0
|
|
|
$
|
307.9
|
|
|
October 1,
2016 |
|
April 2,
2016 |
||||
Leasehold improvements
|
$
|
479.3
|
|
|
$
|
414.6
|
|
In-store shops
|
250.7
|
|
|
242.9
|
|
||
Furniture and fixtures
|
231.9
|
|
|
212.7
|
|
||
Computer equipment and software
|
211.1
|
|
|
167.9
|
|
||
Equipment
|
100.5
|
|
|
79.1
|
|
||
Building
|
42.2
|
|
|
—
|
|
||
Land
|
14.8
|
|
|
15.1
|
|
||
|
1,330.5
|
|
|
1,132.3
|
|
||
Less: accumulated depreciation and amortization
|
(585.1
|
)
|
|
(490.9
|
)
|
||
|
745.4
|
|
|
641.4
|
|
||
Construction-in-progress
|
55.6
|
|
|
116.8
|
|
||
|
$
|
801.0
|
|
|
$
|
758.2
|
|
|
October 1, 2016
|
|
April 2, 2016
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Reacquired rights
|
$
|
400.3
|
|
|
$
|
5.4
|
|
|
$
|
394.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Lease rights
|
77.7
|
|
|
21.0
|
|
|
56.7
|
|
|
73.3
|
|
|
17.8
|
|
|
55.5
|
|
||||||
Trademarks
|
23.0
|
|
|
15.7
|
|
|
7.3
|
|
|
23.0
|
|
|
15.1
|
|
|
7.9
|
|
||||||
Customer relationships
|
5.1
|
|
|
0.6
|
|
|
4.5
|
|
|
4.2
|
|
|
0.2
|
|
|
4.0
|
|
||||||
|
$
|
506.1
|
|
|
$
|
42.7
|
|
|
$
|
463.4
|
|
|
$
|
100.5
|
|
|
$
|
33.1
|
|
|
$
|
67.4
|
|
Remainder of Fiscal 2017
|
$
|
12.5
|
|
Fiscal 2018
|
25.0
|
|
|
Fiscal 2019
|
25.0
|
|
|
Fiscal 2020
|
25.0
|
|
|
Fiscal 2021
|
24.7
|
|
|
Thereafter
|
351.2
|
|
|
|
$
|
463.4
|
|
|
Retail
|
|
Wholesale
|
|
Licensing
|
|
Total
|
||||||||
Balance at April 2, 2016
|
$
|
8.0
|
|
|
$
|
13.3
|
|
|
$
|
1.9
|
|
|
$
|
23.2
|
|
Acquisition of MKHKL
|
83.9
|
|
|
12.6
|
|
|
—
|
|
|
96.5
|
|
||||
Balance at October 1, 2016
|
$
|
91.9
|
|
|
$
|
25.9
|
|
|
$
|
1.9
|
|
|
$
|
119.7
|
|
|
October 1,
2016 |
|
April 2,
2016 |
||||
Accrued capital expenditures
|
$
|
31.1
|
|
|
$
|
33.6
|
|
Other taxes payable
|
36.5
|
|
|
38.2
|
|
||
Accrued rent
|
29.6
|
|
|
30.5
|
|
||
Gift cards and retail store credits
|
12.6
|
|
|
13.1
|
|
||
Accrued advertising
|
12.3
|
|
|
5.2
|
|
||
Professional services
|
7.7
|
|
|
7.0
|
|
||
Advance royalties
|
5.6
|
|
|
30.2
|
|
||
Unrealized loss on forward foreign currency exchange contracts
|
2.4
|
|
|
5.5
|
|
||
Other
|
39.1
|
|
|
29.5
|
|
||
|
$
|
176.9
|
|
|
$
|
192.8
|
|
|
Fair value at October 1, 2016 using:
|
|
Fair value at April 2, 2016 using:
|
||||||||||||||||||||
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant
other observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant
other observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||||||
Forward foreign currency exchange contracts - assets
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts - liabilities
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
|
$
|
—
|
|
|
|
|
|
|
Fair Values
|
||||||||||||||||||
|
Notional Amounts
|
|
Current Assets
(1)
|
|
Current Liabilities
(2)
|
||||||||||||||||||
|
October 1,
2016 |
|
April 2,
2016 |
|
October 1,
2016 |
|
April 2,
2016 |
|
October 1,
2016 |
|
April 2,
2016 |
||||||||||||
Designated forward foreign currency exchange contracts
|
$
|
173.5
|
|
|
$
|
174.1
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
2.4
|
|
|
$
|
5.1
|
|
Undesignated forward foreign currency exchange contracts
|
—
|
|
|
30.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||||
Total
|
$
|
173.5
|
|
|
$
|
204.1
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
2.4
|
|
|
$
|
5.5
|
|
|
|
(1)
|
Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets.
|
(2)
|
Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
|
|
Three Months Ended
|
||||||||||||||
|
October 1, 2016
|
|
September 26, 2015
|
||||||||||||
|
Pre-Tax Loss
Recognized
in OCI
(Effective Portion)
|
|
Pre-Tax Gain
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
|
|
Pre-Tax Loss
Recognized
in OCI
(Effective Portion)
|
|
Pre-Tax Gain
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
|
||||||||
Forward foreign currency exchange contracts
|
$
|
(1.2
|
)
|
|
$
|
0.3
|
|
|
$
|
(6.6
|
)
|
|
$
|
2.4
|
|
|
Six Months Ended
|
||||||||||||||
|
October 1, 2016
|
|
September 26, 2015
|
||||||||||||
|
Pre-Tax Gain
Recognized in OCI (Effective Portion) |
|
Pre-Tax Gain
Reclassified from Accumulated OCI into Earnings (Effective Portion) |
|
Pre-Tax Loss
Recognized in OCI (Effective Portion) |
|
Pre-Tax Gain
Reclassified from Accumulated OCI into Earnings (Effective Portion) |
||||||||
Forward foreign currency exchange contracts
|
$
|
2.1
|
|
|
$
|
0.2
|
|
|
$
|
(18.3
|
)
|
|
$
|
2.4
|
|
|
Foreign Currency
Translation
(Losses) Gains
|
|
Net Gains
(Losses) on
Derivatives
(1)
|
|
Total
Accumulated Other
Comprehensive
(Loss) Income
|
||||||
Balance at March 28, 2015
|
$
|
(96.1
|
)
|
|
$
|
29.3
|
|
|
$
|
(66.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
4.3
|
|
|
(16.4
|
)
|
|
(12.1
|
)
|
|||
Less: net gains reclassified from AOCI to earnings
|
—
|
|
|
2.2
|
|
|
2.2
|
|
|||
Other comprehensive income (loss), net of tax
|
4.3
|
|
|
(18.6
|
)
|
|
(14.3
|
)
|
|||
Balance at September 26, 2015
|
$
|
(91.8
|
)
|
|
$
|
10.7
|
|
|
$
|
(81.1
|
)
|
|
|
|
|
|
|
||||||
Balance at April 2, 2016
|
$
|
(77.6
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(80.8
|
)
|
Other comprehensive (loss) income before reclassifications
|
(0.7
|
)
|
|
1.9
|
|
|
1.2
|
|
|||
Less: net gains reclassified from AOCI to earnings
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Other comprehensive (loss) income, net of tax
|
(0.7
|
)
|
|
1.8
|
|
|
1.1
|
|
|||
Balance at October 1, 2016
|
$
|
(78.3
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(79.7
|
)
|
Less: other comprehensive income attributable to noncontrolling interest
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Other comprehensive loss attributable to MKHL at October 1, 2016
|
$
|
(78.4
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(79.8
|
)
|
(1)
|
Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations. All tax effects were not material for the periods presented.
|
|
Six Months Ended
|
||||
|
October 1
2016 |
|
September 26
2015 |
||
Expected dividend yield
|
0.0
|
%
|
|
0.0
|
%
|
Volatility factor
|
30.1
|
%
|
|
31.1
|
%
|
Weighted average risk-free interest rate
|
1.1
|
%
|
|
1.6
|
%
|
Expected life of option
|
4.75 years
|
|
|
4.75 years
|
|
|
Restricted Shares
|
|||||
|
Number of Unvested
Restricted Shares
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at April 2, 2016
|
390,229
|
|
|
$
|
82.38
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Vested
|
(131,672
|
)
|
|
$
|
80.00
|
|
Canceled/forfeited
|
(38,466
|
)
|
|
$
|
83.06
|
|
Unvested at October 1, 2016
|
220,091
|
|
|
$
|
83.69
|
|
|
Service-based
|
|
Performance-based
|
||||||||||
|
Number of
Restricted
Share Units
|
|
Weighted
Average Grant
Date Fair Value
|
|
Number of
Restricted
Share Units
|
|
Weighted
Average Grant
Date Fair Value
|
||||||
Unvested at April 2, 2016
|
1,071,058
|
|
|
$
|
47.13
|
|
|
579,774
|
|
|
$
|
61.84
|
|
Granted
|
768,336
|
|
|
$
|
50.24
|
|
|
98,237
|
|
|
$
|
49.88
|
|
Achievement of performance condition
|
—
|
|
|
$
|
—
|
|
|
80,093
|
|
|
$
|
62.24
|
|
Vested
|
(251,630
|
)
|
|
$
|
47.10
|
|
|
(240,278
|
)
|
|
$
|
62.24
|
|
Canceled/forfeited
|
(103,761
|
)
|
|
$
|
45.97
|
|
|
(23,427
|
)
|
|
$
|
74.28
|
|
Unvested at October 1, 2016
|
1,484,003
|
|
|
$
|
48.83
|
|
|
494,399
|
|
|
$
|
58.75
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Share-based compensation expense
|
$
|
11.6
|
|
|
$
|
13.4
|
|
|
$
|
21.4
|
|
|
$
|
25.9
|
|
Tax benefits related to share-based compensation expense
|
$
|
3.8
|
|
|
$
|
4.4
|
|
|
$
|
7.5
|
|
|
$
|
8.8
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||
U.K. statutory tax rate
|
20.0
|
%
|
|
20.0
|
%
|
|
20.0
|
%
|
|
20.0
|
%
|
Effect of operations in non-U.K. jurisdictions
|
7.6
|
%
|
|
8.6
|
%
|
|
7.4
|
%
|
|
8.5
|
%
|
Global financing activities
|
(10.0
|
)%
|
|
(2.4
|
)%
|
|
(9.6
|
)%
|
|
(2.2
|
)%
|
State and local income taxes, net of federal benefit
|
1.1
|
%
|
|
1.4
|
%
|
|
1.1
|
%
|
|
1.8
|
%
|
Other
|
2.0
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
|
1.0
|
%
|
Effective tax rate
|
20.7
|
%
|
|
28.9
|
%
|
|
20.9
|
%
|
|
29.1
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Net sales: Retail
|
$
|
597.2
|
|
|
$
|
532.8
|
|
|
$
|
1,160.1
|
|
|
$
|
1,056.1
|
|
Wholesale
|
452.2
|
|
|
554.0
|
|
|
846.6
|
|
|
978.0
|
|
||||
Licensing
|
38.8
|
|
|
43.2
|
|
|
69.4
|
|
|
81.9
|
|
||||
Total revenue
|
$
|
1,088.2
|
|
|
$
|
1,130.0
|
|
|
$
|
2,076.1
|
|
|
$
|
2,116.0
|
|
|
|
|
|
|
|
|
|
||||||||
Income from operations:
|
|
|
|
|
|
|
|
||||||||
Retail
|
$
|
69.6
|
|
|
$
|
99.9
|
|
|
$
|
136.2
|
|
|
$
|
220.8
|
|
Wholesale
|
122.0
|
|
|
156.9
|
|
|
227.0
|
|
|
263.2
|
|
||||
Licensing
|
12.1
|
|
|
16.3
|
|
|
27.4
|
|
|
37.7
|
|
||||
Income from operations
|
$
|
203.7
|
|
|
$
|
273.1
|
|
|
$
|
390.6
|
|
|
$
|
521.7
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Retail
|
$
|
40.5
|
|
|
$
|
28.4
|
|
|
$
|
74.5
|
|
|
$
|
53.5
|
|
Wholesale
|
15.3
|
|
|
17.4
|
|
|
31.2
|
|
|
33.5
|
|
||||
Licensing
|
0.6
|
|
|
0.3
|
|
|
1.1
|
|
|
0.7
|
|
||||
Total depreciation and amortization
|
$
|
56.4
|
|
|
$
|
46.1
|
|
|
$
|
106.8
|
|
|
$
|
87.7
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
The Americas (U.S., Canada and L. America)
(1)
|
$
|
745.1
|
|
|
$
|
838.2
|
|
|
$
|
1,435.9
|
|
|
$
|
1,565.5
|
|
Europe
|
248.0
|
|
|
243.4
|
|
|
472.0
|
|
|
460.2
|
|
||||
Asia
|
95.1
|
|
|
48.4
|
|
|
168.2
|
|
|
90.3
|
|
||||
Total revenue
|
$
|
1,088.2
|
|
|
$
|
1,130.0
|
|
|
$
|
2,076.1
|
|
|
$
|
2,116.0
|
|
|
As of
|
||||||
|
October 1,
2016 |
|
April 2,
2016 |
||||
Long-lived assets:
|
|
|
|
||||
The Americas (U.S., Canada and Latin America)
(1)
|
$
|
485.5
|
|
|
$
|
507.7
|
|
Europe
|
297.6
|
|
|
284.2
|
|
||
Asia
|
481.3
|
|
|
33.7
|
|
||
Total Long-lived assets
|
$
|
1,264.4
|
|
|
$
|
825.6
|
|
|
|
(1)
|
Net revenues earned in the U.S. were
$693.7 million
and
$1.335 billion
, respectively, during the
three and six
months ended
October 1, 2016
, and were
$786.5 million
and
$1.471 billion
, respectively for the
three and six
months ended
September 26, 2015
. Long-lived assets located in the U.S. as of
October 1, 2016
and
April 2, 2016
were
$451.4 million
and
$472.2 million
, respectively.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
Retail
|
$
|
597.2
|
|
|
$
|
532.8
|
|
|
$
|
1,160.1
|
|
|
$
|
1,056.1
|
|
|
Wholesale
|
452.2
|
|
|
554.0
|
|
|
846.6
|
|
|
978.0
|
|
||||
Licensing
|
|
38.8
|
|
|
43.2
|
|
|
69.4
|
|
|
81.9
|
|
||||
Total revenue
|
$
|
1,088.2
|
|
|
$
|
1,130.0
|
|
|
$
|
2,076.1
|
|
|
$
|
2,116.0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from operations:
|
|
|
|
|
|
|
|
|||||||||
Retail
|
$
|
69.6
|
|
|
$
|
99.9
|
|
|
$
|
136.2
|
|
|
$
|
220.8
|
|
|
Wholesale
|
122.0
|
|
|
156.9
|
|
|
227.0
|
|
|
263.2
|
|
|||||
Licensing
|
12.1
|
|
|
16.3
|
|
|
27.4
|
|
|
37.7
|
|
|||||
Income from operations
|
$
|
203.7
|
|
|
$
|
273.1
|
|
|
$
|
390.6
|
|
|
$
|
521.7
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||
|
October 1,
2016 |
|
September 26,
2015 |
October 1,
2016 |
|
September 26,
2015 |
||||
Full price retail stores including concessions:
|
|
|
|
|
|
|
||||
Number of stores
|
583
|
|
|
427
|
|
583
|
|
|
427
|
|
Increase during period
|
8
|
|
|
35
|
|
91
|
|
|
54
|
|
Percentage increase vs. prior year
|
36.5
|
%
|
|
29.8
|
%
|
36.5
|
%
|
|
29.8
|
%
|
Total gross square footage
|
1,347,984
|
|
|
1,002,794
|
|
1,347,984
|
|
|
1,002,794
|
|
Average square footage per store
|
2,312
|
|
|
2,348
|
|
2,312
|
|
|
2,348
|
|
Outlet stores:
|
|
|
|
|
|
|
||||
Number of stores
|
204
|
|
|
162
|
|
204
|
|
|
162
|
|
Increase during period
|
8
|
|
|
4
|
|
28
|
|
|
9
|
|
Percentage increase vs. prior year
|
25.9
|
%
|
|
12.5
|
%
|
25.9
|
%
|
|
12.5
|
%
|
Total gross square footage
|
773,028
|
|
|
583,918
|
|
773,028
|
|
|
583,918
|
|
Average square footage per store
|
3,789
|
|
|
3,604
|
|
3,789
|
|
|
3,604
|
|
|
As of
|
||||
|
October 1,
2016 |
|
September 26,
2015 |
||
Store count by region:
|
|
|
|
||
The Americas (U.S., Canada and Latin America)
|
392
|
|
|
377
|
|
Europe
|
188
|
|
|
155
|
|
Asia
|
207
|
|
(1)
|
57
|
|
Total
|
787
|
|
|
589
|
|
|
|
(1)
|
Includes 102 stores associated with the previously licensed business in Greater China acquired on May 31, 2016 and 35 stores associated the previously licensed business in South Korea acquired on January 1, 2016. Please refer to
Note 3
to the accompanying consolidated financial statements for additional information.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
||||
Number of full-price wholesale doors
|
3,662
|
|
|
3,993
|
|
|
3,662
|
|
|
3,993
|
|
Increase (decrease) during period
|
(142
|
)
|
|
(83
|
)
|
|
(227
|
)
|
|
(45
|
)
|
Percentage increase (decrease) vs. prior year
|
(8.3
|
)%
|
|
0.8
|
%
|
|
(8.3
|
)%
|
|
0.8
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1, 2016
|
|
September 26, 2015
|
|
October 1, 2016
|
|
September 26, 2015
|
||||||||
Total revenue
|
$
|
1,088.2
|
|
|
$
|
1,130.0
|
|
|
$
|
2,076.1
|
|
|
$
|
2,116.0
|
|
Gross profit as a percent of total revenue
|
59.2
|
%
|
|
58.8
|
%
|
|
59.5
|
%
|
|
59.9
|
%
|
||||
Income from operations
|
$
|
203.7
|
|
|
$
|
273.1
|
|
|
$
|
390.6
|
|
|
$
|
521.7
|
|
|
|
|
|
|
|
|
|
||||||||
Retail net sales - the Americas
|
$
|
385.6
|
|
|
$
|
384.8
|
|
|
$
|
777.8
|
|
|
$
|
781.5
|
|
Retail net sales - Europe
|
$
|
131.2
|
|
|
$
|
125.6
|
|
|
$
|
250.3
|
|
|
$
|
232.6
|
|
Retail net sales - Asia
|
$
|
80.4
|
|
|
$
|
22.4
|
|
|
$
|
132.0
|
|
|
$
|
42.0
|
|
Decreases in comparable store net sales
|
(5.4
|
)%
|
|
(8.5
|
)%
|
|
(6.4
|
)%
|
|
(9.0
|
)%
|
||||
|
|
|
|
|
|
|
|
||||||||
Wholesale net sales - the Americas
|
$
|
332.6
|
|
|
$
|
426.2
|
|
|
$
|
614.7
|
|
|
$
|
735.3
|
|
Wholesale net sales - Europe
|
$
|
104.9
|
|
|
$
|
101.8
|
|
|
$
|
195.7
|
|
|
$
|
194.4
|
|
Wholesale net sales - Asia
|
$
|
14.7
|
|
|
$
|
26.0
|
|
|
$
|
36.2
|
|
|
$
|
48.3
|
|
|
Three Months Ended
|
|
$ Change
|
|
% Change
|
|
% of Total Revenue for
the Three Months Ended |
|||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1,
2016 |
|
September 26,
2015 |
|||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales
|
$
|
1,049.4
|
|
|
$
|
1,086.8
|
|
|
$
|
(37.4
|
)
|
|
(3.4
|
)%
|
|
|
|
|
||
Licensing revenue
|
38.8
|
|
|
43.2
|
|
|
(4.4
|
)
|
|
(10.2
|
)%
|
|
|
|
|
|||||
Total revenue
|
1,088.2
|
|
|
1,130.0
|
|
|
(41.8
|
)
|
|
(3.7
|
)%
|
|
|
|
|
|||||
Cost of goods sold
|
443.5
|
|
|
465.5
|
|
|
(22.0
|
)
|
|
(4.7
|
)%
|
|
40.8
|
%
|
|
41.2
|
%
|
|||
Gross profit
|
644.7
|
|
|
664.5
|
|
|
(19.8
|
)
|
|
(3.0
|
)%
|
|
59.2
|
%
|
|
58.8
|
%
|
|||
Selling, general and administrative expenses
|
379.7
|
|
|
345.3
|
|
|
34.4
|
|
|
10.0
|
%
|
|
34.9
|
%
|
|
30.6
|
%
|
|||
Depreciation and amortization
|
56.4
|
|
|
46.1
|
|
|
10.3
|
|
|
22.3
|
%
|
|
5.2
|
%
|
|
4.1
|
%
|
|||
Impairment of long-lived assets
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|
100.0
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|||
Total operating expenses
|
441.0
|
|
|
391.4
|
|
|
49.6
|
|
|
12.7
|
%
|
|
40.5
|
%
|
|
34.6
|
%
|
|||
Income from operations
|
203.7
|
|
|
273.1
|
|
|
(69.4
|
)
|
|
(25.4
|
)%
|
|
18.7
|
%
|
|
24.2
|
%
|
|||
Other (income) expense, net
|
(0.3
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
|
(400.0
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Interest expense
|
1.4
|
|
|
0.4
|
|
|
1.0
|
|
|
250.0
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Foreign currency loss
|
—
|
|
|
1.4
|
|
|
(1.4
|
)
|
|
(100.0
|
)%
|
|
—
|
%
|
|
0.1
|
%
|
|||
Income before provision for income taxes
|
202.6
|
|
|
271.2
|
|
|
(68.6
|
)
|
|
(25.3
|
)%
|
|
18.6
|
%
|
|
24.0
|
%
|
|||
Provision for income taxes
|
41.9
|
|
|
78.4
|
|
|
(36.5
|
)
|
|
(46.6
|
)%
|
|
3.9
|
%
|
|
6.9
|
%
|
|||
Net income
|
160.7
|
|
|
192.8
|
|
|
(32.1
|
)
|
|
(16.6
|
)%
|
|
|
|
|
|||||
Less: Net loss attributable to noncontrolling interest
|
(0.2
|
)
|
|
(0.3
|
)
|
|
0.1
|
|
|
(33.3
|
)%
|
|
|
|
|
|||||
Net income attributable to MKHL
|
$
|
160.9
|
|
|
$
|
193.1
|
|
|
$
|
(32.2
|
)
|
|
(16.7
|
)%
|
|
|
|
|
•
|
an increase of $32.8 million due to the inclusion of the recently acquired businesses in the Greater China and South Korea regions in our operating results during the three months ended
October 1, 2016
; and
|
•
|
an increase of $13.5 million in retail store-related costs, excluding acquired businesses, primarily comprised of increased occupancy costs of $10.1 million due to the growth in our retail store network and increased advertising costs of $2.3 million; offset in part by
|
•
|
a decrease of $5.6 million in other corporate expenses, excluding acquired businesses.
|
|
Three Months Ended
|
|
|
|
|
|
% of Net Sales/
Revenue for the Three Months Ended |
|||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
$ Change
|
|
% Change
|
|
October 1,
2016 |
|
September 26,
2015 |
|||||||||
Income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retail
|
$
|
69.6
|
|
|
$
|
99.9
|
|
|
$
|
(30.3
|
)
|
|
(30.3
|
)%
|
|
11.7
|
%
|
|
18.8
|
%
|
Wholesale
|
122.0
|
|
|
156.9
|
|
|
(34.9
|
)
|
|
(22.2
|
)%
|
|
27.0
|
%
|
|
28.3
|
%
|
|||
Licensing
|
12.1
|
|
|
16.3
|
|
|
(4.2
|
)
|
|
(25.8
|
)%
|
|
31.2
|
%
|
|
37.7
|
%
|
|||
Income from operations
|
$
|
203.7
|
|
|
$
|
273.1
|
|
|
$
|
(69.4
|
)
|
|
(25.4
|
)%
|
|
18.7
|
%
|
|
24.2
|
%
|
|
Six Months Ended
|
|
$ Change
|
|
% Change
|
|
% of Total Revenue for
the Six Months Ended |
|||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
October 1, 2016
|
|
September 26, 2015
|
|||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales
|
$
|
2,006.7
|
|
|
$
|
2,034.1
|
|
|
$
|
(27.4
|
)
|
|
(1.3
|
)%
|
|
|
|
|
||
Licensing revenue
|
69.4
|
|
|
81.9
|
|
|
(12.5
|
)
|
|
(15.3
|
)%
|
|
|
|
|
|||||
Total revenue
|
2,076.1
|
|
|
2,116.0
|
|
|
(39.9
|
)
|
|
(1.9
|
)%
|
|
|
|
|
|||||
Cost of goods sold
|
840.1
|
|
|
847.9
|
|
|
(7.8
|
)
|
|
(0.9
|
)%
|
|
40.5
|
%
|
|
40.1
|
%
|
|||
Gross profit
|
1,236.0
|
|
|
1,268.1
|
|
|
(32.1
|
)
|
|
(2.5
|
)%
|
|
59.5
|
%
|
|
59.9
|
%
|
|||
Selling, general and administrative expenses
|
733.7
|
|
|
658.7
|
|
|
75.0
|
|
|
11.4
|
%
|
|
35.3
|
%
|
|
31.1
|
%
|
|||
Depreciation and amortization
|
106.8
|
|
|
87.7
|
|
|
19.1
|
|
|
21.8
|
%
|
|
5.1
|
%
|
|
4.1
|
%
|
|||
Impairment of long-lived assets
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|
100.0
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|||
Total operating expenses
|
845.4
|
|
|
746.4
|
|
|
99.0
|
|
|
13.3
|
%
|
|
40.7
|
%
|
|
35.3
|
%
|
|||
Income from operations
|
390.6
|
|
|
521.7
|
|
|
(131.1
|
)
|
|
(25.1
|
)%
|
|
18.8
|
%
|
|
24.7
|
%
|
|||
Other (income) expense, net
|
(0.6
|
)
|
|
0.9
|
|
|
(1.5
|
)
|
|
(166.7
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||
Interest expense, net
|
1.7
|
|
|
0.5
|
|
|
1.2
|
|
|
240.0
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|||
Foreign currency losses
|
1.3
|
|
|
2.1
|
|
|
(0.8
|
)
|
|
(38.1
|
)%
|
|
0.1
|
%
|
|
0.1
|
%
|
|||
Income before provision for income taxes
|
388.2
|
|
|
518.2
|
|
|
(130.0
|
)
|
|
(25.1
|
)%
|
|
18.7
|
%
|
|
24.5
|
%
|
|||
Provision for income taxes
|
81.2
|
|
|
151.0
|
|
|
(69.8
|
)
|
|
(46.2
|
)%
|
|
3.9
|
%
|
|
7.1
|
%
|
|||
Net income
|
307.0
|
|
|
367.2
|
|
|
(60.2
|
)
|
|
(16.4
|
)%
|
|
|
|
|
|||||
Less: Net loss attributable to noncontrolling interest
|
(1.0
|
)
|
|
(0.3
|
)
|
|
(0.7
|
)
|
|
233.3
|
%
|
|
|
|
|
|||||
Net income attributable to MKHL
|
$
|
308.0
|
|
|
$
|
367.5
|
|
|
$
|
(59.5
|
)
|
|
(16.2
|
)%
|
|
|
|
|
•
|
an increase of $51.7 million due to the inclusion of the recently acquired businesses in the Greater China and South Korea regions in our operating results during the
six months ended
October 1, 2016
;
|
•
|
approximately $11.3 million in transaction costs recorded during the
six months ended
October 1, 2016
in connection with our acquisition of the Greater China business; and
|
•
|
an increase of $34.0 million in retail store-related costs, excluding acquired businesses, primarily comprised of increased occupancy costs of $22.4 million, increased compensation-related costs of $4.8 million and increased advertising costs of $3.8 million. These increases were primarily attributable to the growth in our retail store network and our e-commerce business; offset in part by
|
•
|
a decrease of $12.5 million in other corporate expenses, excluding transaction costs and expenses related to acquired businesses.
|
|
Six Months Ended
|
|
|
|
|
|
% of Net Sales/Revenue for
the Six Months Ended |
|||||||||||||
|
October 1,
2016 |
|
September 26,
2015 |
|
$ Change
|
|
% Change
|
|
October 1,
2016 |
|
September 26,
2015 |
|||||||||
Income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retail
|
$
|
136.2
|
|
|
$
|
220.8
|
|
|
$
|
(84.6
|
)
|
|
(38.3
|
)%
|
|
11.7
|
%
|
|
20.9
|
%
|
Wholesale
|
227.0
|
|
|
263.2
|
|
|
(36.2
|
)
|
|
(13.8
|
)%
|
|
26.8
|
%
|
|
26.9
|
%
|
|||
Licensing
|
27.4
|
|
|
37.7
|
|
|
(10.3
|
)
|
|
(27.3
|
)%
|
|
39.5
|
%
|
|
46.0
|
%
|
|||
Income from operations
|
$
|
390.6
|
|
|
$
|
521.7
|
|
|
$
|
(131.1
|
)
|
|
(25.1
|
)%
|
|
18.8
|
%
|
|
24.7
|
%
|
|
As of
|
||||
|
October 1,
2016 |
|
April 2,
2016 |
||
Balance Sheet Data:
|
|
|
|
||
Cash and cash equivalents
|
$
|
186.4
|
|
|
702.0
|
Working capital
|
483.8
|
|
|
1,234.3
|
|
Total assets
|
2,755.3
|
|
|
2,566.8
|
|
Six Months Ended
|
||||||
|
October 1,
2016 |
|
September 26,
2015 |
||||
Cash Flows Provided By (Used In):
|
|
|
|
||||
Operating activities
|
$
|
345.0
|
|
|
$
|
392.9
|
|
Investing activities
|
(585.5
|
)
|
|
(202.5
|
)
|
||
Financing activities
|
(270.0
|
)
|
|
(736.0
|
)
|
||
Effect of exchange rate changes
|
(5.1
|
)
|
|
(1.8
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(515.6
|
)
|
|
$
|
(547.4
|
)
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number (or
Approximated Dollar Value)
of Shares (or Units) That
May Yet Be Purchased
Under the Plans or Programs
|
||||||
July 2-July 30
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
600,000,020
|
|
July 31-August 27
|
3,467,300
|
|
|
$
|
49.95
|
|
|
3,467,300
|
|
|
$
|
426,813,223
|
|
August 28-October 1
|
1,557,371
|
|
|
$
|
49.50
|
|
|
1,551,783
|
|
|
$
|
350,000,055
|
|
|
5,024,671
|
|
|
|
|
|
5,019,083
|
|
|
|
|
|
|
|
MICHAEL KORS HOLDINGS LIMITED
|
|
|
|
|
|
By:
|
/s/ John D. Idol
|
|
Name:
|
John D. Idol
|
|
Title:
|
Chairman & Chief Executive Officer
|
|
|
|
|
By:
|
/s/ Joseph B. Parsons
|
|
Name:
|
Joseph B. Parsons
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002.
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.1
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.2
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.1
|
|
|
The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended October 1, 2016, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
1 Year Michael Kors Holdings Limited Ordinary Shares (delisted) Chart |
1 Month Michael Kors Holdings Limited Ordinary Shares (delisted) Chart |
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