MICHAEL KORS HOLDINGS LTD, 10-Q filed on 8/6/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Jun. 27, 2015
Jul. 30, 2015
Document Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 27, 2015 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
KORS 
 
Entity Registrant Name
MICHAEL KORS HOLDINGS LTD 
 
Entity Central Index Key
0001530721 
 
Current Fiscal Year End Date
--04-02 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
193,421,983 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Current assets
 
 
Cash and cash equivalents
$ 808,540 
$ 978,922 
Receivables, net
252,502 
363,419 
Inventories
606,450 
519,908 
Deferred tax assets
28,214 
27,739 
Prepaid expenses and other current assets
118,145 
127,443 
Total current assets
1,813,851 
2,017,431 
Property and equipment, net
624,194 
562,934 
Intangible assets, net
68,899 
61,541 
Goodwill
14,005 
14,005 
Deferred tax assets
4,627 
2,484 
Other assets
31,092 
33,498 
Total assets
2,556,668 
2,691,893 
Current liabilities
 
 
Accounts payable
172,123 
142,818 
Accrued payroll and payroll related expenses
38,706 
62,869 
Accrued income taxes
29,679 
25,507 
Deferred tax liabilities
3,585 
3,741 
Accrued expenses and other current liabilities
94,907 
95,146 
Total current liabilities
339,000 
330,081 
Deferred rent
94,843 
88,320 
Deferred tax liabilities
13,769 
10,490 
Other long-term liabilities
19,867 
22,037 
Total liabilities
467,479 
450,928 
Commitments and contingencies
   
   
Shareholders' equity
 
 
Ordinary shares, no par value; 650,000,000 shares authorized; 207,184,790 shares issued and 193,372,032 outstanding at June 27, 2015; 206,486,699 shares issued and 199,656,833 outstanding at March 28, 2015
Treasury shares, at cost (13,812,758 shares at June 27, 2015 and 6,829,866 shares at March 28, 2015)
(848,819)
(497,724)
Additional paid-in capital
662,516 
636,732 
Accumulated other comprehensive loss
(67,624)
(66,804)
Retained earnings
2,343,116 
2,168,761 
Total shareholders' equity
2,089,189 
2,240,965 
Total liabilities and shareholders' equity
$ 2,556,668 
$ 2,691,893 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 27, 2015
Mar. 28, 2015
Ordinary shares, par value
$ 0 
$ 0 
Ordinary shares, shares authorized
650,000,000 
650,000,000 
Ordinary shares, shares issued
207,184,790 
206,486,699 
Ordinary shares, shares outstanding
193,372,032 
199,656,833 
Treasury shares
13,812,758 
6,829,866 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Net sales
$ 947,259 
$ 887,037 
Licensing revenue
38,716 
32,117 
Total revenue
985,975 
919,154 
Cost of goods sold
382,340 
347,521 
Gross profit
603,635 
571,633 
Selling, general and administrative expenses
313,459 
265,864 
Depreciation and amortization
41,553 
28,998 
Total operating expenses
355,012 
294,862 
Income from operations
248,623 
276,771 
Other expense (income), net
825 
(343)
Interest expense (income), net
109 
(41)
Foreign currency losses
677 
1,153 
Income before provision for income taxes
247,012 
276,002 
Provision for income taxes
72,657 
88,286 
Net income
174,355 
187,716 
Weighted average ordinary shares outstanding:
 
 
Basic
196,977,021 
203,749,572 
Diluted
200,054,494 
207,176,243 
Net income per ordinary share:
 
 
Basic
$ 0.89 
$ 0.92 
Diluted
$ 0.87 
$ 0.91 
Statements of Comprehensive Income:
 
 
Net income
174,355 
187,716 
Foreign currency translation adjustments
9,814 
3,067 
Net gains (losses) on derivatives
(10,634)
1,464 
Comprehensive income
$ 173,535 
$ 192,247 
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)
In Thousands, except Share data
Total
USD ($)
Ordinary Shares
Additional Paid-in Capital
USD ($)
Treasury Shares
USD ($)
Accumulated Other Comprehensive Loss
USD ($)
Retained Earnings
USD ($)
Beginning Balance at Mar. 28, 2015
$ 2,240,965 
 
$ 636,732 
$ (497,724)
$ (66,804)
$ 2,168,761 
Beginning Balance (in shares) at Mar. 28, 2015
206,486,699 
206,486,699 
 
(6,829,866)
 
 
Net income
174,355 
 
 
 
 
174,355 
Other comprehensive income
(820)
 
 
 
(820)
 
Comprehensive income
173,535 
 
 
 
 
 
Forfeitures of restricted shares
 
(8,252)
 
 
 
 
Exercise of employee share options (in shares)
706,343 
706,343 
 
 
 
 
Exercise of employee share options
4,946 
 
4,946 
 
 
 
Equity compensation expense
12,506 
 
12,506 
 
 
 
Tax benefits on exercise of share options
8,332 
 
8,332 
 
 
 
Purchase of treasury shares
 
 
 
(6,982,892)
 
 
Purchase of treasury shares
(351,095)
 
 
(351,095)
 
 
Ending Balance at Jun. 27, 2015
$ 2,089,189 
 
$ 662,516 
$ (848,819)
$ (67,624)
$ 2,343,116 
Ending Balance (in shares) at Jun. 27, 2015
207,184,790 
207,184,790 
 
(13,812,758)
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Cash flows from operating activities
 
 
Net income
$ 174,355 
$ 187,716 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
41,553 
28,998 
Equity compensation expense
12,506 
8,154 
Deferred income taxes
1,623 
(905)
Amortization of deferred rent
502 
1,537 
Loss on disposal of fixed assets
631 
738 
Amortization of deferred financing costs
187 
187 
Tax benefits on exercise of share options
(8,332)
(18,686)
Foreign currency losses
624 
305 
Loss (income) earned on joint venture
907 
(203)
Change in assets and liabilities:
 
 
Receivables, net
112,510 
85,970 
Inventories
(80,627)
(99,958)
Prepaid expenses and other current assets
(5,393)
(4,020)
Other assets
2,030 
(190)
Accounts payable
29,174 
10,186 
Accrued expenses and other current liabilities
(6,063)
13,950 
Other long-term liabilities
3,484 
8,606 
Net cash provided by operating activities
279,671 
222,385 
Cash flows from investing activities
 
 
Capital expenditures
(105,998)
(73,187)
Purchase of intangible assets
(7,399)
(4,504)
Equity method investments
(907)
Net cash used in investing activities
(114,304)
(77,691)
Cash flows from financing activities
 
 
Repurchase of treasury shares
(351,095)
(1,037)
Tax benefits on exercise of share options
8,332 
18,686 
Exercise of employee share options
4,946 
5,173 
Net cash (used in) provided by financing activities
(337,817)
22,822 
Effect of exchange rate changes on cash and cash equivalents
2,068 
3,060 
Net (decrease) increase in cash and cash equivalents
(170,382)
170,576 
Beginning of period
978,922 
971,194 
End of period
808,540 
1,141,770 
Supplemental disclosures of cash flow information
 
 
Cash paid for interest
190 
173 
Cash paid for income taxes
61,351 
51,170 
Supplemental disclosure of noncash investing and financing activities
 
 
Accrued capital expenditures
$ 25,610 
$ 24,212 
Business and Basis of Presentation
Business and Basis of Presentation

1. Business and Basis of Presentation

Michael Kors Holdings Limited (“MKHL,” and together with its subsidiaries, the “Company”) was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002. The Company is a leading designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks “MICHAEL KORS,” “MICHAEL MICHAEL KORS,” and various other related trademarks and logos. The Company’s business consists of retail, wholesale and licensing segments. Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the United States, Canada, Europe and Japan, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the United States, Canada and Europe. The Company licenses its trademarks on products such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.

The interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements as of June 27, 2015, and for the three months ended June 27, 2015 and June 28, 2014, are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The interim financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation in conformity with U.S. GAAP. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended March 28, 2015, as filed with the Securities and Exchange Commission on May 27, 2015, in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods should not be considered indicative of results to be expected for the full fiscal year.

The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31. As such, the term “Fiscal Year” or “Fiscal” refers to the 52-week or 53-week period, ending on that day. The results for the three months ended June 27, 2015 and June 28, 2014, are based on 13-week periods.

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory recovery, the valuation of share-based compensation, valuation of deferred taxes and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.

Seasonality

The Company experiences certain effects of seasonality with respect to its wholesale and retail segments. The Company’s wholesale segment generally experiences its greatest sales in our third and fourth fiscal quarters while its first fiscal quarter experiences the lowest sales. The Company’s retail segment generally experiences greater sales during our third fiscal quarter as a result of Holiday season sales. In the aggregate, the Company’s first fiscal quarter typically experiences significantly less sales volume relative to the other three quarters and its third fiscal quarter generally has higher sales volume relative to other three quarters. However, given the Company’s recent growth, the effects of any seasonality are further muted by incremental sales related to its new retail stores, wholesale doors and shop-in-shops.

 

Derivative Financial Instruments

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument, the risk being hedged, and the manner in which hedge effectiveness will be assessed prospectively and retrospectively. The effective portion of changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item effects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss). If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency gain (loss) in the Company’s consolidated statements of operations. The Company classifies cash flows relating to its derivative instruments consistently with the classification of the hedged item, within cash from operating activities.

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

Net Income per Share

The Company’s basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and units (“RSUs”), were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.

The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in thousands except share and per share data):

 

     Fiscal Years Ended  
     June 27,      June 28,  
     2015      2014  

Numerator:

     

Net income

   $ 174,355       $ 187,716   

Denominator:

     

Basic weighted average shares

     196,977,021        203,749,572  

Weighted average dilutive share equivalents:

     

Share options and restricted shares/units

     3,077,473        3,426,671  
  

 

 

    

 

 

 

Diluted weighted average shares

     200,054,494        207,176,243  

Basic net income per share

   $ 0.89       $ 0.92   
  

 

 

    

 

 

 

Diluted net income per share

   $ 0.87       $ 0.91   
  

 

 

    

 

 

 

Share equivalents of 1,811,380 shares and 39,546 shares for the three months ended June 27, 2015 and June 28, 2014, respectively, have been excluded from the above calculation due to their anti-dilutive effect.

 

Recent Accounting Pronouncements — The Company has considered all new accounting pronouncements and has concluded that, with the exception of the below, there are no new pronouncements that are currently expected to have a material impact on results of operations, financial condition, or cash flows.

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” ASU 2014-12 requires that a performance target under stock-based compensation arrangements that could be achieved after the service period is treated as a performance condition and not reflected in the grant-date fair value of the award. Rather, the related compensation cost should be recognized when it becomes probable that the performance targets will be achieved. ASU 2014-12 is effective beginning with the Company’s fiscal year 2017, with early adoption and retrospective application permitted. The Company does not expect that ASU 2014-12 will have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides new guidance for revenues recognized from contracts with customers, and will replace the existing revenue recognition guidance. ASU No. 2014-09 requires that revenue is recognized at an amount the company is entitled to upon transferring control of goods or services to customers, as opposed to when risks and rewards transfer to a customer. In July 2015, the FASB approved a one-year deferral of the effective date for this standard and to make it effective for the interim reporting periods within the annual reporting period beginning after December 15, 2017, or beginning with the Company’s fiscal year 2019. This standard may be applied retrospectively to all prior periods presented, or retrospectively with a cumulative adjustment to retained earnings in the year of adoption. The Company is currently evaluating the adoption method and the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures.

Receivables, net
Receivables, net

3. Receivables, net

Receivables, net consist of (in thousands):

 

     June 27,      March 28,  
     2015      2015  

Trade receivables:

     

Credit risk assumed by factors/insured

   $ 261,934       $ 374,150   

Credit risk retained by Company

     62,504         67,530   

Receivables due from licensees

     13,228         11,763   
  

 

 

    

 

 

 
     337,666         453,443   

Less allowances:

     (85,164      (90,024
  

 

 

    

 

 

 
   $ 252,502       $ 363,419   
  

 

 

    

 

 

 

Receivables are presented net of allowances for sales returns, discounts, markdowns, operational chargebacks and doubtful accounts. Sales returns are determined based on an evaluation of current market conditions and historical returns experience. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on retail sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in net sales.

The allowance for doubtful accounts is determined through analysis of periodic aging of receivables for which credit risk is not assumed by the factors, or which are not covered by insurance, and assessments of collectability based on an evaluation of historic and anticipated trends, the financial conditions of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowances for doubtful accounts were $1.0 million and $0.7 million, at June 27, 2015 and March 28, 2015, respectively.

Property and Equipment, net
Property and Equipment, net

4. Property and Equipment, net

Property and equipment, net consist of (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Leasehold improvements

   $ 331,531       $ 294,225   

In-store shops

     202,977         189,308   

Furniture and fixtures

     174,438         160,178   

Computer equipment and software

     121,043         104,372   

Equipment

     75,034         73,609   

Land

     15,099         —     
  

 

 

    

 

 

 
     920,122         821,692   

Less: accumulated depreciation and amortization

     (369,760      (337,755
  

 

 

    

 

 

 
     550,362         483,937   

Construction-in-progress

     73,832         78,997   
  

 

 

    

 

 

 
   $ 624,194       $ 562,934   
  

 

 

    

 

 

 

Depreciation and amortization of property and equipment for the three-month periods ended June 27, 2015 and June 28, 2014 was $39.7 million and $27.4 million, respectively.

Current Assets and Current Liabilities
Current Assets and Current Liabilities

5. Current Assets and Current Liabilities

Prepaid expenses and other current assets consist of the following (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Prepaid taxes

   $ 65,475       $ 60,637   

Unrealized gains on forward foreign exchange contracts

     8,928         25,004   

Leasehold incentive receivable

     8,573         12,289   

Prepaid rent

     13,868         11,681   

Other

     21,301         17,832   
  

 

 

    

 

 

 
   $ 118,145       $ 127,443   
  

 

 

    

 

 

 

Accrued expenses and other current liabilities consist of the following (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Other taxes payable

   $ 23,210       $ 20,202   

Accrued rent

     22,750         27,058   

Advance royalties

     7,382         5,081   

Accrued litigation

     6,254         5,539   

Accrued advertising

     6,035         5,653   

Professional services

     4,372         7,347   

Accrued samples

     469         816   

Unrealized loss on forward foreign exchange contracts

     157         600   

Other

     24,278         22,850   
  

 

 

    

 

 

 
   $ 94,907       $ 95,146   
  

 

 

    

 

 

 

 

Credit Facilities
Credit Facilities

6. Credit Facilities

Senior Unsecured Revolving Credit Facility

On February 8, 2013, the Company entered into a senior unsecured credit facility (“2013 Credit Facility”). Pursuant to the agreement, the 2013 Credit Facility provides for up to $200.0 million of borrowings, and expires on February 8, 2018. The agreement also provides for loans and letters of credit to the Company’s European subsidiaries of up to $100.0 million. The 2013 Credit Facility contains financial covenants, such as requiring an adjusted leverage ratio of 3.5 to 1.0 (with the ratio being total consolidated indebtedness plus 8.0 times consolidated rent expense to EBITDA plus consolidated rent expense) and a fixed charge coverage ratio of 2.0 to 1.0 (with the ratio being EBITDA plus consolidated rent expense to the sum of fixed charges plus consolidated rent expense), restricts and limits additional indebtedness, and restricts the incurrence of additional liens and cash dividends. As of June 27, 2015, the Company was in compliance with all covenants related to this agreement.

Borrowings under the 2013 Credit Facility accrue interest at the rate per annum announced from time to time by the agent based on the rates applicable for deposits in the London interbank market for U.S. dollars or the applicable currency in which the loans are made (the “Adjusted LIBOR”) plus an applicable margin. The applicable margin may range from 1.25% to 1.75%, and is based, or dependent upon, a particular threshold related to the adjusted leverage ratio calculated during the period of borrowing. The 2013 Credit Facility requires an annual facility fee of $0.1 million and an annual commitment fee of 0.25% to 0.35% on the unused portion of the available credit under the facility.

As of June 27, 2015 and March 28, 2015, there were no borrowings outstanding under the 2013 Credit Facility. At June 27, 2015, stand-by letters of credit of $10.9 million were outstanding. The amount available for future borrowings under the agreement was $189.1 million as of June 27, 2015.

Commitments and Contingencies
Commitments and Contingencies

7. Commitments and Contingencies

In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company’s management does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.

Fair Value of Financial Instruments
Fair Value of Financial Instruments

8. Fair Value of Financial Instruments

Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date.

Level 2 – Valuations based on quoted inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

At June 27, 2015 and March 28, 2015, the fair values of the Company’s foreign currency forward contracts, the Company’s only derivative instruments, were determined using broker quotations, which were calculations derived from observable market information: the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception. The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate. The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or (liabilities) to the Company, as detailed in Note 9. All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in thousands):

 

    Fair value at June 27, 2015, using:     Fair value at March 28, 2015, 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)
 

Foreign currency forward contracts- Euro

  $ —        $ 8,546      $ —        $ —        $ 23,590      $ —     

Foreign currency forward contracts- Canadian Dollar

    —          382        —          —          1,404        —     

Foreign currency forward contracts- U.S. Dollar

    —          (157     —          —          (590     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ —        $ 8,771      $ —        $ —        $ 24,404      $ —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The Company’s cash and cash equivalents, accounts receivable and accounts payable, are recorded at carrying value, which approximates fair value. Borrowings under the 2013 Credit Facility, if outstanding, are recorded at carrying value, which resembles fair value due to the short-term nature of the revolving 2013 Credit Facility.

Derivative Financial Instruments
Derivative Financial Instruments

9. Derivative Financial Instruments

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risks related to certain forecasted inventory purchases by using foreign currency forward exchange contracts. The Company only enters into derivative instruments with highly credit-rated counterparties. The Company’s derivative financial instruments are not currently subject to master netting arrangements. The Company does not enter into derivative contracts for trading or speculative purposes.

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of June 27, 2015 and March 28, 2015 (in thousands):

 

                   Fair Values  
     Notional Amounts      Current Assets (1)      Current Liabilities (2)  
     June 27,
2015
     March 28,
2015
     June 27,
2015
     March 28,
2015
     June 27,
2015
     March 28,
2015
 

Designated forward currency exchange contracts

   $ 295,785       $ 226,090       $ 8,546       $ 23,590       $ 137       $ 522   

Undesignated forward currency exchange contracts

     12,264         25,788         382         1,414         20         78   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 308,049       $ 251,878       $ 8,928       $ 25,004       $ 157       $ 600   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(1) 

Recorded within prepaid expenses and other current assets in the Company’s audited consolidated balance sheets.

(2) 

Recorded within accrued expenses and other current liabilities in the Company’s audited consolidated balance sheets.

Changes in the fair value of the effective portion of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income, and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations. The following table summarizes the impact of the effective portion of gains and losses of the forward contracts designated as hedges for the three-month periods ended June 27, 2015 and June 28, 2014 (in thousands):

 

     Three Months Ended  
     June 27, 2015      June 28, 2014  
     Pre-Tax Loss
Recognized
in OCI
(Effective Portion)
     Pre-Tax Loss
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
     Pre-Tax Gain
Recognized
in OCI
(Effective Portion)
     Pre-Tax Loss
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
 

Forward currency exchange contracts

     (11,706      (48    $ 539       $ (1,134

Amounts related to ineffectiveness were not material during all periods presented. The Company expects that substantially all of the amounts currently recorded in accumulated other comprehensive loss will be reclassified into earnings during the next twelve months, based upon the timing of inventory purchases and turns. These amounts are subject to fluctuations in the applicable currency exchange rates.

 

During the three-month periods ended June 27, 2015 and June 28, 2014, the Company recognized $1.0 million and $0.8 million, respectively, in losses related to the change in the fair value of undesignated forward currency exchange contracts within foreign currency gains (losses) in the Company’s consolidated statement of operations.

Shareholders' Equity
Shareholders' Equity

10. Shareholders’ Equity

Share Repurchase Program

On October 30, 2014, the Company’s Board of Directors authorized a $1.0 billion share repurchase program, which authorized the repurchase of the Company’s shares for a period of two years. On May 20, 2015, the Company’s Board of Directors authorized the repurchase of up to an additional $500 million under the Company’s existing share repurchase program and extended the program through May 2017. During the three months ended June 27, 2015, the Company repurchased 6,960,352 shares at a cost of $350.0 million under its current share-repurchase program through open market transactions. As of June 27, 2015, the remaining availability under the Company’s share repurchase program was $658.1 million.

The Company also has in place a “withhold to cover” repurchase program, which allows the Company to withhold ordinary shares from certain executive officers to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards. During the three-month periods ended June 27, 2015 and June 28, 2014, the Company withheld 22,540 shares and 11,022 shares, respectively, at a cost of $1.1 million and $1.0 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.

Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income

11. Accumulated Other Comprehensive Income

The following table details changes in the components of accumulated other comprehensive income, net of taxes for the three-month periods ended June 27, 2015 and June 28, 2014, respectively (in thousands):

 

     Foreign Currency
Translation
Income (Loss)
    Net Gains
(Losses) on
Derivatives (1)
    Total
Accumulated Other
Comprehensive
Income (Loss)
 

Balance at March 29, 2014

   $ (4,775   $ (1,598   $ (6,373

Other comprehensive income before reclassifications

     3,067        468        3,535   

Less: amounts reclassified from AOCI to earnings (2)

     —          (996     (996
  

 

 

   

 

 

   

 

 

 

Other comprehensive income net of tax

     3,067        1,464        4,531   
  

 

 

   

 

 

   

 

 

 

Balance at June 28, 2014

   $ (1,708   $ (134   $ (1,842
  

 

 

   

 

 

   

 

 

 

Balance at March 28, 2015

   $ (96,068   $ 29,264        (66,804

Other comprehensive income (loss) before reclassifications

     9,814        (10,642     (828

Less: amounts reclassified from AOCI to earnings (2)

     —          (8     (8
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss) net of tax

     9,814        (10,634     (820
  

 

 

   

 

 

   

 

 

 

Balance at June 27, 2015

   $ (86,254   $ 18,630      $ (67,624
  

 

 

   

 

 

   

 

 

 

 

 

(1) 

Accumulative other comprehensive income balance related to net gains on derivative financial instruments as of June 27, 2015 and March 28, 2015 is net of tax provisions of $2.3 million and $3.3 million, respectively. Other comprehensive loss before reclassification related to derivative financial instruments for the three months ended June 27, 2015 is net of a tax benefit of $1.0 million. Tax effects related to all other amounts were not material.

 

(2) 

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. The related tax effects recorded within income tax expense in the Company’s consolidated statements of operations were not material.

Share-Based Compensation
Share-Based Compensation

12. Share-Based Compensation

The Company issues equity grants to certain employees and directors of the Company at the discretion of the Company’s Compensation Committee. The Company has two equity plans, one adopted in Fiscal 2008, the Michael Kors (USA), Inc. Stock Option Plan (as amended and restated, the “2008 Plan”), and the other adopted in the third fiscal quarter of Fiscal 2012, the Michael Kors Holdings Limited Omnibus Incentive Plan (the “2012 Plan”). The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares. As of June 27, 2015, there were no shares available to grant equity awards under the 2008 Plan. The 2012 Plan allows for grants of share options, restricted shares and restricted share units, and other equity awards, and authorizes a total issuance of up to 15,246,000 ordinary shares. At June 27, 2015, there were 9,170,884 ordinary shares available for future grants of equity awards under the 2012 Plan. Option grants issued from the 2008 Plan generally expire ten years from the date of the grant, and those issued under the 2012 Plan generally expire seven years from the date of the grant.

 

Share Options

Share options are generally exercisable at no less than the fair market value on the date of grant. The Company has issued two types of option grants, those that vest based on the attainment of a performance target and those that vest based on the passage of time. Performance-based share options may vest based upon the attainment of one of two performance measures. One performance measure is an individual performance target, which is based upon certain performance targets unique to the individual grantee, and the other measure is a company-wide performance target, which is based on a cumulative minimum growth requirement in consolidated net equity. The individual performance target vests 20% of the total option grant each year the target is satisfied. The individual has ten years in which to achieve five individual performance vesting tranches. The company-wide performance target must be achieved over the ten-year term. Performance is measured at the end of the term, and any unvested options vest if the target is achieved. The Company-wide performance target is established at the time of the grant. The target metrics underlying individual performance vesting requirements are established for each recipient each year up until such time as the grant is fully vested. Options subject to time-based vesting requirements become vested in four equal increments on each of the first, second, third and fourth anniversaries of the date on which such options were awarded.

The following table summarizes the share option activity during the three months ended June 27, 2015:

 

     Number of
Options
     Weighted
Average
Exercise price
 

Outstanding at March 28, 2015

     7,187,003       $ 23.14   

Granted

     511,281       $ 47.12   

Exercised

     (706,343    $ 6.79   

Canceled/forfeited

     (22,955    $ 49.27   
  

 

 

    

Outstanding at June 27, 2015

     6,968,986       $ 26.47   
  

 

 

    

The weighted average grant date fair value for options granted during the three months ended June 27, 2015 and June 28, 2014 was $14.37 and $29.20 respectively. The following table represents assumptions used to estimate the fair value of options:

 

     Three Months Ended  
     June 27,
2015
    June 28,
2014
 

Expected dividend yield

     0.0     0.0

Volatility factor

     31.1     33.3

Weighted average risk-free interest rate

     1.6     1.5

Expected life of option

     4.75 years        4.75 years   

Restricted Shares and Restricted Share Units

The Company grants restricted shares and restricted share units at the fair market value on the date of the grant. Expense for restricted share awards is based on the closing market price of the Company’s shares on the date of grant and is recognized ratably over the vesting period, which is generally three to four years from the date of the grant, net of expected forfeitures.

Restricted share grants generally vest in equal increments on each of the four anniversaries of the date of grant. In addition, the Company grants two types of restricted share unit (“RSU”) awards: time-based RSUs and performance-based RSUs. Time-based RSUs generally vest in full either on the first anniversary of the date of the grant, or in equal increments on each of the four anniversaries of the date of grant. Performance-based RSUs vest in full on the three-year anniversary of the date of grant, subject to the employee’s continued employment during the vesting period and only if certain pre-established cumulative performance targets are met at the end of the three-year performance period. Expense related to performance-based RSUs is recognized ratably over the three-year performance period, net of forfeitures, based on the probability of attainment of the related performance targets. The potential number of shares that may be earned ranges between 0%, if the minimum level of performance is not attained, and 150%, if the level of performance is at or above the pre-determined maximum achievement level.

 

The following table summarizes the restricted share activity during the three months ended June 27, 2015:

 

     Restricted Shares  
     Number of Unvested
Restricted Shares
     Weighted
Average Grant
Date Fair Value
 

Unvested at March 28, 2015

     770,592       $ 68.77   

Granted

     —         $ —     

Vested

     (132,565    $ 80.64   

Canceled/forfeited

     (8,252    $ 77.29   
  

 

 

    

Unvested at June 27, 2015

     629,775       $ 66.16   
  

 

 

    

The following table summarizes the restricted share unit activity during the three months ended June 27, 2015:

 

     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 March 28, 2015

     35,940       $ 66.26         317,201       $ 76.69   

Granted

     801,751       $ 47.57         287,476       $ 47.10   

Vested

     —         $ —           —         $ —     

Canceled/forfeited

     (318    $ 47.10         —         $ —     
  

 

 

       

 

 

    

Unvested at June 27, 2015

     837,373       $ 48.37         604,677       $ 62.62   
  

 

 

       

 

 

    

Compensation expense attributable to share-based compensation for the three months ended June 27, 2015 and June 28, 2014 was $12.5 million and $8.2 million, respectively. The associated tax benefits recognized during the three months ended June 27, 2015 and June 28, 2014 were $5.0 million and $3.0 million, respectively. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on its historical forfeiture rate to date. The estimated value of future forfeitures for equity grants as of June 27, 2015 is approximately $2.6 million.

Segment Information
Segment Information

13. Segment Information

The Company operates its business through three operating segments—Retail, Wholesale and Licensing—which are based on its business activities and organization. The operating segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by executive management in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are net sales or revenue (in the case of Licensing) and operating income for each segment. The Company’s reportable segments represent channels of distribution that offer similar merchandise, customer experience and sales/marketing strategies. The Company’s Retail segment includes sales through the Company owned stores, including “Collection,” “Lifestyle” including “concessions,” and outlet stores located throughout North America, Europe, and Japan, as well as the Company’s e-commerce sales. Products sold through the Retail segment include women’s apparel, accessories (which include handbags and small leather goods such as wallets), footwear and licensed products, such as watches, jewelry, fragrances and beauty, and eyewear. The Wholesale segment includes sales primarily to major department stores and specialty shops throughout North America, Europe and Asia. Products sold through the Wholesale segment include accessories (which include handbags and small leather goods such as wallets), footwear and women’s and men’s apparel. We also have wholesale arrangements pursuant to which we sell products to certain of our licensees, including our licensees in Asia (which were previously reported within our North American wholesale operations). The Licensing segment includes royalties earned on licensed products and use of the Company’s trademarks, and rights granted to third parties for the right to sell the Company’s products in certain geographic regions such as the Middle East, Eastern Europe, Latin America and the Caribbean, throughout all of Asia (excluding Japan), as well as Australia. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Corporate overhead expenses are allocated to the segments based upon specific usage or other allocation methods.

 

The Company has allocated $12.1 million and $1.9 million of its recorded goodwill to its Wholesale and Licensing segments, respectively. The Company does not have identifiable assets separated by segment. The following table presents the key performance information of the Company’s reportable segments (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Revenue:

     

Net sales: Retail

   $ 523,300       $ 480,242   

                Wholesale

     423,959         406,795   

Licensing

     38,716         32,117   
  

 

 

    

 

 

 

Total revenue

   $ 985,975       $ 919,154   
  

 

 

    

 

 

 

Income from operations:

     

Retail

   $ 120,874       $ 142,689   

Wholesale

     106,310         117,652   

Licensing

     21,439         16,430   
  

 

 

    

 

 

 

Income from operations

   $ 248,623       $ 276,771   
  

 

 

    

 

 

 

Depreciation and amortization expense for each segment are as follows (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Depreciation and amortization:

     

Retail

   $ 25,091       $ 17,965   

Wholesale

     16,102         10,775   

Licensing

     360         258   
  

 

 

    

 

 

 

Total depreciation and amortization

   $ 41,553       $ 28,998   
  

 

 

    

 

 

 

Total revenue (as recognized based on country of origin), and long-lived assets by geographic location of the consolidated Company are as follows (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Revenues:

     

North America (U.S. and Canada)(1)

   $ 727,295       $ 718,889   

Europe

     216,813         185,497   

Other regions

     41,867         14,768   
  

 

 

    

 

 

 

Total revenues

   $ 985,975       $ 919,154   
  

 

 

    

 

 

 

 

     As of  
     June 27,
2015
     March 28,
2015
 

Long-lived assets:

     

North America (U.S. and Canada)(1)

   $ 468,355       $ 443,816   

Europe

     208,348         169,243   

Other regions

     16,390         11,416   
  

 

 

    

 

 

 

Total Long-lived assets

   $ 693,093       $ 624,475   
  

 

 

    

 

 

 

 

(1) 

Net revenues earned in the U.S. during the three months ended June 27, 2015 and June 28, 2014 were $684.8 million and $674.3 million, respectively. Long-lived assets located in the U.S. as of June 27, 2015 and March 28, 2015 were $441.9 million and $418.8 million, respectively.

Subsequent Events
Subsequent Events

15. Subsequent Events

The Company has historically accounted for its investment in its Latin American joint venture, MK (Panama) Holdings, S.A. and subsidiaries (“MK Panama”), under the equity method of accounting. In July 2015, the Company made a capital contribution to the joint venture, obtaining a controlling interest in MK Panama. As such, the Company will consolidate MK Panama into its operations beginning with the second quarter of Fiscal 2016. The Company is currently in the process of finalizing the new ownership structure and accounting.

Summary of Significant Accounting Policies (Policies)

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory recovery, the valuation of share-based compensation, valuation of deferred taxes and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.

Seasonality

The Company experiences certain effects of seasonality with respect to its wholesale and retail segments. The Company’s wholesale segment generally experiences its greatest sales in our third and fourth fiscal quarters while its first fiscal quarter experiences the lowest sales. The Company’s retail segment generally experiences greater sales during our third fiscal quarter as a result of Holiday season sales. In the aggregate, the Company’s first fiscal quarter typically experiences significantly less sales volume relative to the other three quarters and its third fiscal quarter generally has higher sales volume relative to other three quarters. However, given the Company’s recent growth, the effects of any seasonality are further muted by incremental sales related to its new retail stores, wholesale doors and shop-in-shops.

Derivative Financial Instruments

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions. Certain of these contracts are designated as hedges for accounting purposes, while others remain undesignated. All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.

The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges. Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument, the risk being hedged, and the manner in which hedge effectiveness will be assessed prospectively and retrospectively. The effective portion of changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item effects earnings. When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold. The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item. Effectiveness is assessed on a quarterly basis and any portion of the designated hedge contracts deemed ineffective is recorded to foreign currency gain (loss). If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings. For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency gain (loss) in the Company’s consolidated statements of operations. The Company classifies cash flows relating to its derivative instruments consistently with the classification of the hedged item, within cash from operating activities.

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

Net Income per Share

The Company’s basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and units (“RSUs”), were exercised or converted into ordinary shares. These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.

Recent Accounting Pronouncements — The Company has considered all new accounting pronouncements and has concluded that, with the exception of the below, there are no new pronouncements that are currently expected to have a material impact on results of operations, financial condition, or cash flows.

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” ASU 2014-12 requires that a performance target under stock-based compensation arrangements that could be achieved after the service period is treated as a performance condition and not reflected in the grant-date fair value of the award. Rather, the related compensation cost should be recognized when it becomes probable that the performance targets will be achieved. ASU 2014-12 is effective beginning with the Company’s fiscal year 2017, with early adoption and retrospective application permitted. The Company does not expect that ASU 2014-12 will have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides new guidance for revenues recognized from contracts with customers, and will replace the existing revenue recognition guidance. ASU No. 2014-09 requires that revenue is recognized at an amount the company is entitled to upon transferring control of goods or services to customers, as opposed to when risks and rewards transfer to a customer. In July 2015, the FASB approved a one-year deferral of the effective date for this standard and to make it effective for the interim reporting periods within the annual reporting period beginning after December 15, 2017, or beginning with the Company’s fiscal year 2019. This standard may be applied retrospectively to all prior periods presented, or retrospectively with a cumulative adjustment to retained earnings in the year of adoption. The Company is currently evaluating the adoption method and the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures.

Receivables are presented net of allowances for sales returns, discounts, markdowns, operational chargebacks and doubtful accounts. Sales returns are determined based on an evaluation of current market conditions and historical returns experience. Discounts are based on open invoices where trade discounts have been extended to customers. Markdowns are based on retail sales performance, seasonal negotiations with customers, historical deduction trends and an evaluation of current market conditions. Operational chargebacks are based on deductions taken by customers, net of expected recoveries. Such provisions, and related recoveries, are reflected in net sales.

The allowance for doubtful accounts is determined through analysis of periodic aging of receivables for which credit risk is not assumed by the factors, or which are not covered by insurance, and assessments of collectability based on an evaluation of historic and anticipated trends, the financial conditions of the Company’s customers and the impact of general economic conditions. The past due status of a receivable is based on its contractual terms. Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered. Allowances for doubtful accounts were $1.0 million and $0.7 million, at June 27, 2015 and March 28, 2015, respectively.

Summary of Significant Accounting Policies (Tables)
Components of Calculation of Basic Net Income Per Ordinary Share and Diluted Net Income Per Ordinary Share

The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in thousands except share and per share data):

 

     Fiscal Years Ended  
     June 27,      June 28,  
     2015      2014  

Numerator:

     

Net income

   $ 174,355       $ 187,716   

Denominator:

     

Basic weighted average shares

     196,977,021        203,749,572  

Weighted average dilutive share equivalents:

     

Share options and restricted shares/units

     3,077,473        3,426,671  
  

 

 

    

 

 

 

Diluted weighted average shares

     200,054,494        207,176,243  

Basic net income per share

   $ 0.89       $ 0.92   
  

 

 

    

 

 

 

Diluted net income per share

   $ 0.87       $ 0.91   
  

 

 

    

 

 

 
Receivables, net (Tables)
Receivables, net

Receivables, net consist of (in thousands):

 

     June 27,      March 28,  
     2015      2015  

Trade receivables:

     

Credit risk assumed by factors/insured

   $ 261,934       $ 374,150   

Credit risk retained by Company

     62,504         67,530   

Receivables due from licensees

     13,228         11,763   
  

 

 

    

 

 

 
     337,666         453,443   

Less allowances:

     (85,164      (90,024
  

 

 

    

 

 

 
   $ 252,502       $ 363,419   
  

 

 

    

 

 

Property and Equipment, net (Tables)
Property and Equipment, Net

Property and equipment, net consist of (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Leasehold improvements

   $ 331,531       $ 294,225   

In-store shops

     202,977         189,308   

Furniture and fixtures

     174,438         160,178   

Computer equipment and software

     121,043         104,372   

Equipment

     75,034         73,609   

Land

     15,099         —     
  

 

 

    

 

 

 
     920,122         821,692   

Less: accumulated depreciation and amortization

     (369,760      (337,755
  

 

 

    

 

 

 
     550,362         483,937   

Construction-in-progress

     73,832         78,997   
  

 

 

    

 

 

 
   $ 624,194       $ 562,934   
  

 

 

    

 

 

Current Assets and Current Liabilities (Tables)

Prepaid expenses and other current assets consist of the following (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Prepaid taxes

   $ 65,475       $ 60,637   

Unrealized gains on forward foreign exchange contracts

     8,928         25,004   

Leasehold incentive receivable

     8,573         12,289   

Prepaid rent

     13,868         11,681   

Other

     21,301         17,832   
  

 

 

    

 

 

 
   $ 118,145       $ 127,443   
  

 

 

    

 

 

Accrued expenses and other current liabilities consist of the following (in thousands):

 

     June 27,
2015
     March 28,
2015
 

Other taxes payable

   $ 23,210       $ 20,202   

Accrued rent

     22,750         27,058   

Advance royalties

     7,382         5,081   

Accrued litigation

     6,254         5,539   

Accrued advertising

     6,035         5,653   

Professional services

     4,372         7,347   

Accrued samples

     469         816   

Unrealized loss on forward foreign exchange contracts

     157         600   

Other

     24,278         22,850   
  

 

 

    

 

 

 
   $ 94,907       $ 95,146   
  

 

 

    

 

 

 
Fair Value of Financial Instruments (Tables)
Contracts Measured and Recorded at Fair Value on Recurring and Categorized in Level 2 of Fair Value Hierarchy

All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in thousands):

 

    Fair value at June 27, 2015, using:     Fair value at March 28, 2015, 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)
 

Foreign currency forward contracts- Euro

  $ —        $ 8,546      $ —        $ —        $ 23,590      $ —     

Foreign currency forward contracts- Canadian Dollar

    —          382        —          —          1,404        —     

Foreign currency forward contracts- U.S. Dollar

    —          (157     —          —          (590     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ —        $ 8,771      $ —        $ —        $ 24,404      $ —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Derivative Financial Instruments (Tables)

The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of June 27, 2015 and March 28, 2015 (in thousands):

 

                   Fair Values  
     Notional Amounts      Current Assets (1)      Current Liabilities (2)  
     June 27,
2015
     March 28,
2015
     June 27,
2015
     March 28,
2015
     June 27,
2015
     March 28,
2015
 

Designated forward currency exchange contracts

   $ 295,785       $ 226,090       $ 8,546       $ 23,590       $ 137       $ 522   

Undesignated forward currency exchange contracts

     12,264         25,788         382         1,414         20         78   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 308,049       $ 251,878       $ 8,928       $ 25,004       $ 157       $ 600   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(1) 

Recorded within prepaid expenses and other current assets in the Company’s audited consolidated balance sheets.

(2) 

Recorded within accrued expenses and other current liabilities in the Company’s audited consolidated balance sheets.

The following table summarizes the impact of the effective portion of gains and losses of the forward contracts designated as hedges for the three-month periods ended June 27, 2015 and June 28, 2014 (in thousands):

 

     Three Months Ended  
     June 27, 2015      June 28, 2014  
     Pre-Tax Loss
Recognized
in OCI
(Effective Portion)
     Pre-Tax Loss
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
     Pre-Tax Gain
Recognized
in OCI
(Effective Portion)
     Pre-Tax Loss
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
 

Forward currency exchange contracts

     (11,706      (48    $ 539       $ (1,134

Accumulated Other Comprehensive Income (Tables)
Changes in Components of Accumulated Other Comprehensive Income, Net of Taxes

The following table details changes in the components of accumulated other comprehensive income, net of taxes for the three-month periods ended June 27, 2015 and June 28, 2014, respectively (in thousands):

 

     Foreign Currency
Translation
Income (Loss)
    Net Gains
(Losses) on
Derivatives (1)
    Total
Accumulated Other
Comprehensive
Income (Loss)
 

Balance at March 29, 2014

   $ (4,775   $ (1,598   $ (6,373

Other comprehensive income before reclassifications

     3,067        468        3,535   

Less: amounts reclassified from AOCI to earnings (2)

     —          (996     (996
  

 

 

   

 

 

   

 

 

 

Other comprehensive income net of tax

     3,067        1,464        4,531   
  

 

 

   

 

 

   

 

 

 

Balance at June 28, 2014

   $ (1,708   $ (134   $ (1,842
  

 

 

   

 

 

   

 

 

 

Balance at March 28, 2015

   $ (96,068   $ 29,264        (66,804

Other comprehensive income (loss) before reclassifications

     9,814        (10,642     (828

Less: amounts reclassified from AOCI to earnings (2)

     —          (8     (8
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss) net of tax

     9,814        (10,634     (820
  

 

 

   

 

 

   

 

 

 

Balance at June 27, 2015

   $ (86,254   $ 18,630      $ (67,624
  

 

 

   

 

 

   

 

 

 

 

 

(1) 

Accumulative other comprehensive income balance related to net gains on derivative financial instruments as of June 27, 2015 and March 28, 2015 is net of tax provisions of $2.3 million and $3.3 million, respectively. Other comprehensive loss before reclassification related to derivative financial instruments for the three months ended June 27, 2015 is net of a tax benefit of $1.0 million. Tax effects related to all other amounts were not material.

 

(2) 

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. The related tax effects recorded within income tax expense in the Company’s consolidated statements of operations were not material.

Share-Based Compensation (Tables)

The following table summarizes the share option activity during the three months ended June 27, 2015:

 

     Number of
Options
     Weighted
Average
Exercise price
 

Outstanding at March 28, 2015

     7,187,003       $ 23.14   

Granted

     511,281       $ 47.12   

Exercised

     (706,343    $ 6.79   

Canceled/forfeited

     (22,955    $ 49.27   
  

 

 

    

Outstanding at June 27, 2015

     6,968,986       $ 26.47   
  

 

 

    

The following table represents assumptions used to estimate the fair value of options:

 

     Three Months Ended  
     June 27,
2015
    June 28,
2014
 

Expected dividend yield

     0.0     0.0

Volatility factor

     31.1     33.3

Weighted average risk-free interest rate

     1.6     1.5

Expected life of option

     4.75 years        4.75 years   

The following table summarizes the restricted share activity during the three months ended June 27, 2015:

 

     Restricted Shares  
     Number of Unvested
Restricted Shares
     Weighted
Average Grant
Date Fair Value
 

Unvested at March 28, 2015

     770,592       $ 68.77   

Granted

     —         $ —     

Vested

     (132,565    $ 80.64   

Canceled/forfeited

     (8,252    $ 77.29   
  

 

 

    

Unvested at June 27, 2015

     629,775       $ 66.16   
  

 

 

    

The following table summarizes the restricted share unit activity during the three months ended June 27, 2015:

 

     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 March 28, 2015

     35,940       $ 66.26         317,201       $ 76.69   

Granted

     801,751       $ 47.57         287,476       $ 47.10   

Vested

     —         $ —           —         $ —     

Canceled/forfeited

     (318    $ 47.10         —         $ —     
  

 

 

       

 

 

    

Unvested at June 27, 2015

     837,373       $ 48.37         604,677       $ 62.62   
  

 

 

       

 

 

    
Segment Information (Tables)

The following table presents the key performance information of the Company’s reportable segments (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Revenue:

     

Net sales: Retail

   $ 523,300       $ 480,242   

                Wholesale

     423,959         406,795   

Licensing

     38,716         32,117   
  

 

 

    

 

 

 

Total revenue

   $ 985,975       $ 919,154   
  

 

 

    

 

 

 

Income from operations:

     

Retail

   $ 120,874       $ 142,689   

Wholesale

     106,310         117,652   

Licensing

     21,439         16,430   
  

 

 

    

 

 

 

Income from operations

   $ 248,623       $ 276,771   
  

 

 

    

 

 

Depreciation and amortization expense for each segment are as follows (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Depreciation and amortization:

     

Retail

   $ 25,091       $ 17,965   

Wholesale

     16,102         10,775   

Licensing

     360         258   
  

 

 

    

 

 

 

Total depreciation and amortization

   $ 41,553       $ 28,998   
  

 

 

    

 

 

Total revenue (as recognized based on country of origin), and long-lived assets by geographic location of the consolidated Company are as follows (in thousands):

 

     Three Months Ended  
     June 27,
2015
     June 28,
2014
 

Revenues:

     

North America (U.S. and Canada)(1)

   $ 727,295       $ 718,889   

Europe

     216,813         185,497   

Other regions

     41,867         14,768   
  

 

 

    

 

 

 

Total revenues

   $ 985,975       $ 919,154   
  

 

 

    

 

 

 

 

(1) 

Net revenues earned in the U.S. during the three months ended June 27, 2015 and June 28, 2014 were $684.8 million and $674.3 million, respectively. Long-lived assets located in the U.S. as of June 27, 2015 and March 28, 2015 were $441.9 million and $418.8 million, respectively.


     As of  
     June 27,
2015
     March 28,
2015
 

Long-lived assets:

     

North America (U.S. and Canada)(1)

   $ 468,355       $ 443,816   

Europe

     208,348         169,243   

Other regions

     16,390         11,416   
  

 

 

    

 

 

 

Total Long-lived assets

   $ 693,093       $ 624,475   
  

 

 

    

 

 

 

 

(1) 

Net revenues earned in the U.S. during the three months ended June 27, 2015 and June 28, 2014 were $684.8 million and $674.3 million, respectively. Long-lived assets located in the U.S. as of June 27, 2015 and March 28, 2015 were $441.9 million and $418.8 million, respectively.

Summary of Significant Accounting Policies - Additional Information (Detail)
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Significant Accounting Policies [Line Items]
 
 
Forward contracts term, maximum
12 months 
 
Anti-dilutive securities excluded from computation of earning per share captured in the above table per client request.
1,811,380 
39,546 
Components of Calculation of Basic Net Income Per Ordinary Share and Diluted Net Income Per Ordinary Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Numerator:
 
 
Net income
$ 174,355 
$ 187,716 
Denominator:
 
 
Basic weighted average shares
196,977,021 
203,749,572 
Weighted average dilutive share equivalents:
 
 
Share options and restricted shares/units
3,077,473 
3,426,671 
Diluted weighted average shares
200,054,494 
207,176,243 
Basic net income per share
$ 0.89 
$ 0.92 
Diluted net income per share
$ 0.87 
$ 0.91 
Receivables, net (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Receivables due from licensees
$ 13,228 
$ 11,763 
Receivables, Gross, Current
337,666 
453,443 
Less allowances
(85,164)
(90,024)
Receivables, net
252,502 
363,419 
Credit Risk Assumed by Factors/Insured
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Trade receivables
261,934 
374,150 
Credit Risk Retained by Company
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Trade receivables
$ 62,504 
$ 67,530 
Receivables - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Allowance for doubtful accounts
$ 1.0 
$ 0.7 
Property and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Property, Plant and Equipment [Line Items]
 
 
Leasehold improvements
$ 331,531 
$ 294,225 
In-store shops
202,977 
189,308 
Furniture and fixtures
174,438 
160,178 
Computer equipment and software
121,043 
104,372 
Equipment
75,034 
73,609 
Land
15,099 
Property, plant and equipment, gross
920,122 
821,692 
Less: accumulated depreciation and amortization
(369,760)
(337,755)
Subtotal
550,362 
483,937 
Construction-in-progress
73,832 
78,997 
Property and equipment, net
$ 624,194 
$ 562,934 
Property and Equipment, net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Property, Plant and Equipment [Line Items]
 
 
Depreciation and amortization of property and equipment
$ 39.7 
$ 27.4 
Prepaid Expenses and Other Current Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Accrued Expenses and Other Current Liabilities [Line Items]
 
 
Prepaid taxes
$ 65,475 
$ 60,637 
Unrealized gains on forward foreign exchange contracts
8,928 
25,004 
Leasehold incentive receivable
8,573 
12,289 
Prepaid rent
13,868 
11,681 
Other
21,301 
17,832 
Prepaid expenses and other current assets
$ 118,145 
$ 127,443 
Accrued Expenses and Other Current Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Accrued Expenses and Other Current Liabilities [Line Items]
 
 
Other taxes payable
$ 23,210 
$ 20,202 
Accrued rent
22,750 
27,058 
Advance royalties
7,382 
5,081 
Accrued litigation
6,254 
5,539 
Accrued advertising
6,035 
5,653 
Professional services
4,372 
7,347 
Accrued samples
469 
816 
Unrealized loss on forward foreign exchange contracts
157 
600 
Other
24,278 
22,850 
Accrued expenses and other current liabilities
$ 94,907 
$ 95,146 
Credit Facilities - Additional Information (Detail) (USD $)
3 Months Ended
Jun. 27, 2015
Mar. 28, 2015
Line of Credit Facility [Line Items]
 
 
Line of credit facility maximum borrowing capacity
$ 200,000,000 
 
Secured revolving credit facility, Expiration date
Feb. 08, 2018 
 
Line of credit facility covenant adjusted leverage ratio
350.00% 
 
Line of credit facility, rent multiplier for leverage ratio
8.0 
 
Minimum fixed charge coverage ratio
200.00% 
 
Line of Credit Annual Facility fee on unused portion
100,000 
 
Line of credit facility amount outstanding
Stand by letter of credit issued
10,900,000 
 
Line of credit facility available for future borrowings
189,100,000 
 
Minimum
 
 
Line of Credit Facility [Line Items]
 
 
Interest rate margin
1.25% 
 
Line of Credit Annual Commitment fees on unused portion
0.25% 
 
Maximum
 
 
Line of Credit Facility [Line Items]
 
 
Interest rate margin
1.75% 
 
Line of Credit Annual Commitment fees on unused portion
0.35% 
 
Europe
 
 
Line of Credit Facility [Line Items]
 
 
Line of credit facility maximum borrowing capacity
$ 100,000,000 
 
Contracts Measured and Recorded at Fair Value on Recurring and Categorized in Level 2 of Fair Value Hierarchy (Detail) (Fair Value, Inputs, Level 2, USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Forward currency forward contracts
$ 8,771 
$ 24,404 
Euro
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Forward currency forward contracts
8,546 
23,590 
Canadian Dollar
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Forward currency forward contracts
382 
1,404 
U.S. Dollar
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Forward currency forward contracts
$ (157)
$ (590)
Fair Value of Derivative Contracts Recorded on Gross Basis in Consolidated Balance Sheets (Detail) (Foreign Exchange Forward, USD $)
In Thousands, unless otherwise specified
Jun. 27, 2015
Mar. 28, 2015
Derivatives, Fair Value [Line Items]
 
 
Notional amounts
$ 308,049 
$ 251,878 
Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional amounts
295,785 
226,090 
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Notional amounts
12,264 
25,788 
Prepaid Expenses and Other Current Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
8,928 1
25,004 1
Prepaid Expenses and Other Current Assets |
Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
8,546 1
23,590 1
Prepaid Expenses and Other Current Assets |
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
382 1
1,414 1
Accrued Expenses and Other Current Liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative liabilities
157 2
600 2
Accrued Expenses and Other Current Liabilities |
Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative liabilities
137 2
522 2
Accrued Expenses and Other Current Liabilities |
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative liabilities
$ 20 2
$ 78 2
Impact of Effective Portion of Gains and Losses of Forward Contracts Designated as Hedges (Detail) (Foreign Exchange Contract, Designated as Hedging Instrument, USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Foreign Exchange Contract |
Designated as Hedging Instrument
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Pre-Tax Gain (Loss) Recognized in OCI (Effective Portion)
$ (11,706)
$ 539 
Pre-Tax Loss Reclassified from Accumulated OCI into Earnings (Effective Portion)
$ (48)
$ (1,134)
Derivative Financial Instruments - Additional Information (Detail) (Foreign Exchange Forward, Not Designated as Hedging Instrument, USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Foreign Exchange Forward |
Not Designated as Hedging Instrument
 
 
Derivative [Line Items]
 
 
Losses on undesignated derivative contracts
$ (1.0)
$ (0.8)
Shareholders' Equity - Additional Information (Detail) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended
Jun. 27, 2015
Oct. 30, 2014
Share Repurchase Program
Jun. 27, 2015
Share Repurchase Program
May 20, 2015
Share Repurchase Program
Oct. 30, 2014
Share Repurchase Program
Jun. 27, 2015
Withholding Taxes
Jun. 28, 2014
Withholding Taxes
Equity [Line Items]
 
 
 
 
 
 
 
Ordinary shares repurchased, shares
 
 
6,960,352 
 
 
22,540 
11,022 
Ordinary shares repurchased, value
$ 351,095,000 
 
$ 350,000,000 
 
 
$ 1,100,000 
$ 1,000,000 
Ordinary shares repurchased, remaining availability
 
 
658,100,000 
 
 
 
 
Ordinary shares repurchased, authorized amount
 
 
 
$ 500,000,000 
$ 1,000,000,000 
 
 
Share repurchase program, repurchase period
 
2 years 
 
 
 
 
 
Changes in Components of Accumulated Other Comprehensive Income, Net of Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Beginning Balance
$ (66,804)
$ (6,373)
Other comprehensive income (loss) before reclassifications
(828)
3,535 
Less: amounts reclassified from AOCI to earnings
(8)1
(996)1
Other comprehensive income (loss) net of tax
(820)
4,531 
Ending Balance
(67,624)
(1,842)
Foreign Currency Translation Income(Loss)
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Beginning Balance
(96,068)
(4,775)
Other comprehensive income (loss) before reclassifications
9,814 
3,067 
Other comprehensive income (loss) net of tax
9,814 
3,067 
Ending Balance
(86,254)
(1,708)
Net Gains (Losses) on Derivatives
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Beginning Balance
29,264 2
(1,598)2
Other comprehensive income (loss) before reclassifications
(10,642)2
468 2
Less: amounts reclassified from AOCI to earnings
(8)1 2
(996)1 2
Other comprehensive income (loss) net of tax
(10,634)2
1,464 2
Ending Balance
$ 18,630 2
$ (134)2
Changes in Components of Accumulated Other Comprehensive Income, Net of Taxes (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 27, 2015
Net Gains (Losses) on Derivatives
Mar. 28, 2015
Net Gains (Losses) on Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Accumulative other comprehensive income, tax provisions
 
$ 2.3 
$ 3.3 
Other comprehensive income (loss) before reclassifications related to derivative instruments, tax benefit
$ (1)
 
 
Share-Based Compensation - Additional Information (Detail) (USD $)
3 Months Ended
Jun. 27, 2015
OptionPlan
EquityPlan
Jun. 28, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Number of equity plans
 
Number of share option grant types
 
Weighted average grant date fair value of option
$ 14.37 
$ 29.20 
Equity compensation expense
$ 12,506,000 
$ 8,154,000 
Share-based compensation, tax benefits recognized
5,000,000 
3,000,000 
Estimated value of future forfeitures
$ 2,600,000 
 
Stock Option Plan 2008
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share authorized for issuance
23,980,823 
 
Shares available for grant
 
Option expiration period
10 years 
 
Omnibus Incentive Plan, Twenty Twelve
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share authorized for issuance
15,246,000 
 
Shares available for grant
9,170,884 
 
Option expiration period
7 years 
 
Individual Performance Based Stock Option
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Potential number of shares that may be earned each year
20.00% 
 
Performance target achievement term
10 years 
 
Individual performance vesting tranches
 
Company-wide Performance Vesting
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Performance target achievement term
10 years 
 
Time Based Option Award
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
4 years 
 
Restricted Shares and Restricted Share Units |
Minimum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
3 years 
 
Restricted Shares and Restricted Share Units |
Maximum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
4 years 
 
Time-based RSUs |
Minimum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
1 year 
 
Time-based RSUs |
Maximum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
4 years 
 
Performance-based RSU
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation, vesting period
3 years 
 
Expense related to grants recognizable period
3 years 
 
Performance-based RSU |
Minimum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Potential number of shares that may be earned each year
0.00% 
 
Performance-based RSU |
Maximum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Potential number of shares that may be earned each year
150.00% 
 
Summary Of Share Option Activity (Detail) (USD $)
3 Months Ended
Jun. 27, 2015
Number of options
 
Outstanding at beginning of period
7,187,003 
Granted
511,281 
Exercised
(706,343)
Canceled/forfeited
(22,955)
Outstanding at end of period
6,968,986 
Weighted Average Exercise Price
 
Outstanding at beginning of period
$ 23.14 
Granted
$ 47.12 
Exercised
$ 6.79 
Canceled/forfeited
$ 49.27 
Outstanding at end of period
$ 26.47 
Assumptions Used to Estimate Fair Value of Options (Detail)
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Expected dividend yield
0.00% 
0.00% 
Volatility factor
31.10% 
33.30% 
Weighted average risk-free interest rate
1.60% 
1.50% 
Expected life of option
4 years 9 months 
4 years 9 months 
Restricted Shares and Restricted Share Units (Detail) (USD $)
3 Months Ended
Jun. 27, 2015
Restricted Shares
 
Number of Unvested Restricted Shares/Units
 
Unvested at beginning of period
770,592 
Vested
(132,565)
Canceled/forfeited
(8,252)
Unvested at end of period
629,775 
Weighted Average Grant Date Fair Value
 
Unvested at beginning of period
$ 68.77 
Vested
$ 80.64 
Canceled/forfeited
$ 77.29 
Unvested at end of period
$ 66.16 
Restricted Share Units |
Service-based RSU
 
Number of Unvested Restricted Shares/Units
 
Unvested at beginning of period
35,940 
Granted
801,751 
Canceled/forfeited
(318)
Unvested at end of period
837,373 
Weighted Average Grant Date Fair Value
 
Unvested at beginning of period
$ 66.26 
Granted
$ 47.57 
Canceled/forfeited
$ 47.10 
Unvested at end of period
$ 48.37 
Restricted Share Units |
Performance-based RSU
 
Number of Unvested Restricted Shares/Units
 
Unvested at beginning of period
317,201 
Granted
287,476 
Unvested at end of period
604,677 
Weighted Average Grant Date Fair Value
 
Unvested at beginning of period
$ 76.69 
Granted
$ 47.10 
Unvested at end of period
$ 62.62 
Segment Information - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Segment
Mar. 28, 2015
Segment Reporting Information [Line Items]
 
 
Number of operating segments
 
Goodwill
$ 14,005 
$ 14,005 
Wholesale
 
 
Segment Reporting Information [Line Items]
 
 
Goodwill
12,100 
 
Licensing
 
 
Segment Reporting Information [Line Items]
 
 
Goodwill
$ 1,900 
 
Key Performance Information of Reportable Segments (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Segment Reporting Information [Line Items]
 
 
Net sales
$ 947,259 
$ 887,037 
Licensing revenue
38,716 
32,117 
Revenue
985,975 
919,154 
Income from operations
248,623 
276,771 
Retail
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
523,300 
480,242 
Income from operations
120,874 
142,689 
Wholesale
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
423,959 
406,795 
Income from operations
106,310 
117,652 
Licensing
 
 
Segment Reporting Information [Line Items]
 
 
Licensing revenue
38,716 
32,117 
Income from operations
$ 21,439 
$ 16,430 
Depreciation and Amortization Expense for Each Segment (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Depreciation By Segment [Line Items]
 
 
Depreciation and amortization
$ 41,553 
$ 28,998 
Retail
 
 
Depreciation By Segment [Line Items]
 
 
Depreciation and amortization
25,091 
17,965 
Wholesale
 
 
Depreciation By Segment [Line Items]
 
 
Depreciation and amortization
16,102 
10,775 
Licensing
 
 
Depreciation By Segment [Line Items]
 
 
Depreciation and amortization
$ 360 
$ 258 
Total Revenue (as Recognized Based on Country of Origin), and Long-Lived Assets by Geographic Location (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Mar. 28, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
$ 985,975 
$ 919,154 
 
Long-lived assets
693,093 
 
624,475 
North America (U.S. and Canada)
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
727,295 1
718,889 1
 
Long-lived assets
468,355 1
 
443,816 1
Europe
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
216,813 
185,497 
 
Long-lived assets
208,348 
 
169,243 
Other Regions
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
41,867 
14,768 
 
Long-lived assets
$ 16,390 
 
$ 11,416 
Total Revenue (as Recognized Based on Country of Origin), and Long-Lived Assets by Geographic Location (Parenthetical) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Jun. 27, 2015
Jun. 28, 2014
Mar. 28, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
$ 985,975 
$ 919,154 
 
Long-lived assets
693,093 
 
624,475 
UNITED STATES
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Revenue
684,800 
674,300 
 
Long-lived assets
$ 441,900 
$ 418,800