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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 9 Months Ended
Mar. 28, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to foreign currency exchange risk related to its sale of inventory, cross-currency intercompany loans and payables, and the remeasurement and translation of foreign operations. The Company is also exposed to interest rate risk related to changes in the fair value of the Company's fixed-rate debt. The Company uses derivative financial instruments to manage these risks. These derivative transactions are in accordance with the Company’s risk management policies. Each derivative instrument entered into by the Company that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. The Company does not enter into derivative transactions for speculative or trading purposes.
The Company records all derivative contracts at fair value on the Condensed Consolidated Balance Sheets on a gross basis. As a result of the use of derivative instruments, the Company may be exposed to the risk that the counterparties to such contracts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings, among other factors.
The fair values of the Company’s derivative instruments are based on the forward curves of the specific indices upon which settlement is based and include an adjustment for the counterparty's or Company’s credit risk. Judgment is required of
management in developing estimates of fair value. The use of different market assumptions or methodologies could affect the estimated fair value.
Cash Flow Hedges
The Company enters into forward foreign currency exchange contracts primarily to reduce its risks related to exchange rate fluctuations on foreign currency denominated inventory transactions. This primarily includes exposure to exchange rate fluctuations in Chinese Renminbi, Japanese Yen, Canadian Dollar and Euro. The derivative instrument gains (losses) are initially deferred in accumulated other comprehensive income ("AOCI") and subsequently recognized in the Condensed Consolidated Statements of Operations within Cost of sales, when the related inventory is sold to a third-party.
If it is determined that a derivative instrument has not been highly effective or will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are recognized in earnings. Upon discontinuance of hedge accounting, amounts previously recorded in AOCI are recognized in earnings when the related hedged item affects earnings, unless it is probable that the forecasted transaction will not occur, in which case the accumulated amount is immediately recognized in earnings.
For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of the cash flow hedging instruments in the same manner as the related item being hedged, primarily within cash from operating activities.
The Company expects that $14.9 million of net derivative gain related to inventory purchases included in AOCI at March 28, 2026 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in foreign currency exchange rates.
Net Investment Hedges
The Company enters into cross-currency swaps and forward foreign currency exchange contracts to reduce its risks related to exchange rate fluctuations on net investments in foreign subsidiaries, including our Euro, Japanese Yen and Chinese Renminbi denominated subsidiaries, against future volatility in the exchange rates between the United States dollar and their local currencies. The related gains (losses) are deferred within cumulative translation adjustment (“CTA”) in AOCI until the net investment is sold or liquidated, and current maturity dates range from September 2029 to November 2038.
The Company assesses net investment hedges under the spot method, resulting in cross-currency basis spread on swaps and the spot to forward rate difference on forward exchanges being excluded from the assessment of hedge effectiveness. The portion of change in fair value attributable to excluded components is recorded in AOCI and amortized to earnings within Interest expense, net.
Upon termination of derivative instruments that are designated as a net investment hedge, the changes in the fair value of the instruments recognized as a component within AOCI remain in CTA until the net investment is sold or liquidated. If it is determined that a derivative instrument has not been highly effective or will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are recognized in earnings.
For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a net investment hedge are included within cash from investing activities, unless the derivative instrument includes an other-than-insignificant financing element, for which these cash flows are primarily classified within cash from financing activities.
Fair Value Hedges
The Company enters into cross-currency swaps to reduce its risks related to foreign exchange rate fluctuations associated with certain cross-currency intercompany loans. Changes in the fair value of the cross-currency swaps designated as fair value hedges are recognized within Other expense (income) on the Company's Condensed Consolidated Statement of Operations, which generally offset the adjustment to the carrying amount of the hedged item. The portion of the change in the fair value of designated cross-currency swap contracts attributable to the excluded component is recorded in AOCI and amortized to earnings within Other expense (income). If it is determined that a derivative instrument has not been highly effective or will continue not to be highly effective in hedging the designated exposure, any amounts associated with excluded components in AOCI would be reclassified into earnings immediately.
The Company also enters into interest rate contracts to reduce exposure to changes in the fair value of certain fixed‑rate debt resulting from fluctuations in benchmark interest rates. The gains and losses on the interest rate contracts designated as fair value hedges are recognized in the Condensed Consolidated Statements of Operations as Interest expense, net and are generally offset by corresponding changes in the fair value of the hedged liabilities. If it is determined that a derivative instrument has not been highly effective or will continue not to be highly effective in hedging the designated exposure, the hedged asset or liability
is no longer adjusted for changes in fair value and any basis adjustment is amortized to earnings over the remaining term of the hedged item, unless the hedged item is derecognized, in which case the basis adjustment is recognized in earnings immediately. Additionally, any amounts associated with excluded components in AOCI are reclassified into earnings in the same manner.
For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item being hedged, primarily within cash from operating activities.
Undesignated Hedges
The Company also enters into forward foreign currency exchange contracts, which are not designated as hedges, to reduce its risks related to exchange rate fluctuations associated with certain cross-currency intercompany loans and payables. The changes in the fair value of these instruments are recorded through earnings within Other expense (income) on the Company's Condensed Consolidated Statement of Operations, which offset the revaluation of the hedged underlying assets and liabilities.
For cash flow reporting purposes, the Company classifies proceeds received or amounts paid upon the settlement of a derivative instrument in the same manner as the related item being hedged, primarily within cash from operating activities.
The following tables provide information related to the Company's derivative instruments recorded on the Company's Condensed Consolidated Balance Sheets as of March 28, 2026 and June 28, 2025:
Notional ValueDerivative AssetsDerivative Liabilities
Fair ValueFair Value
March 28, 2026June 28, 2025March 28, 2026June 28, 2025March 28, 2026June 28, 2025
(millions)
Designated as cash flow hedges
Foreign exchange risk(1)
$878.7 $735.0 $27.1 $6.5 $6.8 $7.9 
Designated as net investment hedges
Foreign exchange risk(3)
1,819.6 1,690.0 49.2 15.6218.8 263.0
Designated as fair value hedges
Foreign exchange risk(2)
103.8 — — — 3.2 — 
Interest rate risk(2)
250.0 — — — 2.9 — 
Undesignated hedges
Foreign exchange risk(1)
77.2 157.0 0.1 0.3 0.2 0.1 
Total$3,129.3 $2,582.0 $76.4 $22.4 $231.9 $271.0 
(1)In Other Current Assets and Accrued Liabilities.
(2)In Other Assets and Other Liabilities.
(3)As of March 28, 2026, the Company recorded $7.8 million within Other Current Assets, $41.4 million within Other Assets, $1.7 million within Accrued Liabilities and $217.1 million within Other Liabilities. As of June 28, 2025, the Company recorded $15.6 million within Other Current Assets, $0.0 million within Other Assets, $6.9 million within Accrued Liabilities and $256.1 million within Other Liabilities.
The following tables provide the pre-tax impact of gains and losses from the Company's designated derivative instruments on its Condensed Consolidated Financial Statements as of March 28, 2026 and March 29, 2025:
Amount of Gain (Loss) Recognized in OCI on Derivatives
Nine Months Ended
March 28, 2026March 29, 2025
(millions)
Designated as cash flow hedges
Foreign exchange risk
$36.7 $(7.9)
Designated as net investment hedges
Foreign exchange risk74.0 (16.1)
Designated as fair value hedges
Foreign exchange risk(1.5)— 
Total$109.2 $(24.0)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Statement of Operations ClassificationNine Months Ended
March 28, 2026March 29, 2025
(millions)
Designated as cash flow hedges
Foreign exchange risk
Cost of Sales$17.5 $35.3 
Interest rate riskOther income (expense)— (0.9)
Designated as net investment hedges
Foreign exchange riskInterest income (expense)11.2 13.5 
Total hedges$28.7 $47.9 
Amount of Net Gain (Loss) Recognized in Income
Nine Months Ended
Statement of Operations ClassificationMarch 28, 2026March 29, 2025
(millions)
Designated as fair value hedges
Foreign exchange risk
Derivative designated as hedging instrumentOther income (expense)$(1.7)$— 
Amount excluded from hedge effectivenessOther income (expense)— — 
Interest rate risk
Hedged ItemInterest income (expense)(2.9)— 
Derivative designated as hedging instrumentInterest income (expense)2.9 — 
Amount excluded from hedge effectivenessInterest income (expense)0.1 — 
Designated as net investment hedges
Foreign exchange risk
Amount excluded from hedge effectiveness(1)
Interest income (expense)22.5 23.1 
Total hedges$20.9 $23.1 
(1)Includes $11.2 million attributable to excluded components recorded in AOCI and reclassified into income.