v3.26.1
INCOME TAXES
 12 Months Ended
Jun. 27, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Taxes on Income
The United States and foreign income before provision for income taxes are as follows:
Fiscal Years Ended
June 27,
2026		June 28,
2025		June 29,
2024
(millions)
United States (1)
$877.5 $(655.8)$139.0 
Foreign983.1 871.9 872.9 
Total income before provision for income taxes$1,860.6 $216.1 $1,011.9 
(1)The United States jurisdiction includes foreign pre-tax earnings allocated to the Company through its interest in a foreign partnership.
Current and deferred tax provision (benefit) are as follows:
Fiscal Year Ended
June 27, 2026June 28, 2025June 29, 2024
CurrentDeferredCurrentDeferredCurrentDeferred
(millions)
Federal$121.6 $44.2 $60.6 $(144.1)$71.0 $14.2 
Foreign129.8 (2.1)88.8 16.3 103.5 (14.6)
State30.7 8.7 23.3 (12.0)18.9 2.9 
Total current and deferred tax provision (benefit)$282.1 $50.8 $172.7 $(139.8)$193.4 $2.5 
Tax Rate Reconciliation
The following table reconciles the provision for income taxes computed by applying the U.S. statutory rate to income before taxes to the actual provision for fiscal 2026. Refer to Note 3, "Significant Accounting Policies," for information regarding the Company's prospective adoption of ASU 2023-09.
Fiscal Year Ended
June 27, 2026
AmountPercentage
(millions)
Tax expense at U.S. statutory rate390.7 21.0 %
State and local income taxes (1)
33.4 1.8 
Effect of cross-border tax laws (2)
GILTI (3)
84.2 4.5 
U.S. tax on branch income or loss36.7 2.0 
Other(2.2)(0.1)
Tax credits
Foreign tax credits(111.3)(6.0)
Other(2.0)(0.1)
Non-taxable or non-deductible items
Share-based compensation(22.0)(1.2)
Other1.5 0.1 
Foreign tax effects
Singapore
Effect of rates different than U.S. statutory rate(124.6)(6.7)
Qualified Domestic Minimum Top-up Tax ("QDMTT")42.4 2.3 
Other7.3 0.4 
Other foreign jurisdictions(1.9)(0.1)
Changes in unrecognized tax benefits12.1 0.6 
Other adjustments(11.4)(0.6)
Taxes at effective worldwide rates$332.9 17.9 %
(1)For the year ended June 27, 2026, state and local taxes primarily relate to California, New York City, New York, Florida, and Illinois.
(2)Excludes the impact of foreign tax credits.
(3)This item represents Global Intangible Low-Taxed Income ("GILTI").
In accordance with the disclosure requirements in effect prior to the adoption of ASU 2023-09, the provisions for income taxes computed by applying the U.S. statutory rate to income before taxes were reconciled to the actual provisions as follows:
Fiscal Years Ended
June 28, 2025June 29, 2024
AmountPercentageAmountPercentage
(millions)
Tax expense at U.S. statutory rate$45.3 21.0 %$212.5 21.0 %
State taxes, net of federal benefit5.5 2.5 18.1 1.8 
Effects of foreign operations(1)
19.8 9.2 20.5 2.0 
Effects of tax credits, acquisition costs and reorganization costs(95.5)(44.2)(64.6)(6.4)
Effects of impairment(2)
51.3 23.7 — — 
Share-based compensation(7.8)(3.6)2.3 0.2 
Other, net14.3 6.6 7.1 0.8 
Taxes at effective worldwide rates$32.9 15.2 %$195.9 19.4 %
(1)This includes the tax related to GILTI. The Company has elected to account for the tax associated with GILTI as a period cost and, accordingly, has not recorded deferred taxes associated with GILTI.
(2)This item represents the effective tax-rate impact of the Kate Spade goodwill impairment activity recorded in the U.S. in fiscal 2025.
Cash Paid for Taxes
In connection with the Company’s prospective adoption of ASU 2023-09, cash paid for income taxes, net of refunds, was disaggregated as follows:
Fiscal Year Ended
June 27, 2026
(millions)
U.S. Federal$84.6 
U.S. State and local30.3 
Foreign
Singapore38.4 
China12.4 
Japan12.3 
Other22.7 
Cash paid for income taxes, net of refunds$200.7 
Deferred Taxes
The components of deferred tax assets and liabilities were:
June 27,
2026		June 28,
2025
(millions)
Share-based compensation$17.3 $17.4 
Reserves not deductible until paid59.4 44.4 
Employee benefits33.6 41.9 
Net operating loss27.0 29.2 
Prepaid expenses0.5 — 
Inventory15.4 16.4 
Lease liability326.6 332.1 
Other— 66.9 
Gross deferred tax assets479.8 548.3 
Valuation allowance12.0 17.6 
Deferred tax assets after valuation allowance$467.8 $530.7 
Goodwill 48.9 55.5 
Other intangibles178.0 163.4 
Property and equipment19.2 15.2 
Foreign investments50.8 38.7 
Right-of-use assets300.7 302.7 
Prepaid expenses— 1.2 
Other7.3 — 
Gross deferred tax liabilities604.9 576.7 
Net deferred tax (liabilities) assets$(137.1)$(46.0)
Consolidated Balance Sheets Classification
Deferred income taxes – non-current asset35.7 33.8 
Deferred income taxes – non-current liability(172.8)(79.8)
Net deferred tax (liabilities) assets$(137.1)$(46.0)
Unrecognized Tax Benefits
Significant judgment is required in determining the worldwide provision for income taxes, and there are many transactions for which the ultimate tax outcome is uncertain. It is the Company’s policy to establish provisions for taxes that may become payable in future years, including those due to an examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure associated with uncertain tax positions. The provisions are analyzed at least quarterly.
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
June 27,
2026		June 28,
2025		June 29,
2024
(millions)
Balance at beginning of fiscal year$110.7 $115.8 $91.8 
Gross increase due to tax positions related to prior periods4.4 15.9 20.5 
Gross decrease due to tax positions related to prior periods(2.6)(15.5)(0.9)
Gross increase due to tax positions related to current period5.1 4.5 6.5 
Decrease due to lapse of statutes of limitation(0.4)(2.4)(2.1)
Decrease due to settlements with taxing authorities(1.5)(7.6)— 
Balance at end of fiscal year$115.7 $110.7 $115.8 
Of the $115.7 million ending gross unrecognized tax benefit balance as of June 27, 2026, $112.4 million relates to items which, if recognized, would impact the effective tax rate. Of the $110.7 million ending gross unrecognized tax benefit balance as of June 28, 2025, $107.1 million relates to items which, if recognized, would impact the effective tax rate. As of June 27, 2026 and June 28, 2025, gross interest and penalties payable was $34.3 million and $26.9 million, respectively, which are included in Other liabilities. During fiscal 2026, fiscal 2025 and fiscal 2024, the Company recognized gross interest and penalty expense of $7.5 million, $7.1 million and $9.5 million, respectively.
The Company files income tax returns in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. Tax examinations are currently in progress in select foreign and state jurisdictions that are extending the years open under the statutes of limitation. Fiscal years 2018 through the present are open to examination in the U.S. federal jurisdiction, fiscal years 2018 through the present in select state jurisdictions and fiscal years 2019 through the present in select foreign jurisdictions. The Company is currently under U.S. federal audit for fiscal years 2018 through 2020. The IRS is examining carryback claims to fiscal 2014 through fiscal 2020 as part of Joint Committee procedures for tax refund claims. The Company anticipates that one or more of these audits may be finalized and certain statutes of limitation may expire in the foreseeable future. However, based on the status of these examinations and the average time typically incurred in finalizing audits with the relevant tax authorities, the Company cannot reasonably estimate the impact these audits may have in the next 12 months, if any, on previously recorded uncertain tax positions. The Company accrues for certain known and reasonably anticipated income tax obligations after assessing the likely outcome based on the weight of available evidence. Although the Company believes that the estimates and assumptions used are reasonable and legally supportable, the final determination of tax audits could be different than that which is reflected in historical income tax provisions and recorded assets and liabilities. With respect to all jurisdictions, the Company has made adequate provision for all income tax uncertainties.
As of June 27, 2026, the Company had the following tax loss carryforwards available: U.S. state tax loss carryforwards of $374.0 million and tax loss carryforwards of various foreign jurisdictions of $31.4 million. As of June 28, 2025, the Company had the following tax loss carryforwards available: U.S. state tax loss carryforwards of $370.0 million and tax loss carryforwards of various foreign jurisdictions of $38.3 million. The state net operating loss carryforwards generally start to expire in fiscal 2027. The majority of the foreign net operating loss carryforwards may be carried forward indefinitely. Deferred tax assets, including the deferred tax assets recognized on these net operating losses, have been reduced by a valuation allowance of $12.0 million as of June 27, 2026 and $17.6 million as of June 28, 2025.
The Company is not permanently reinvested with respect to the earnings of a limited number of foreign entities and has recorded the tax consequences of remitting earnings from these entities. The Company is permanently reinvested with respect to all other earnings. The total estimated amount of unremitted earnings of foreign subsidiaries as of June 27, 2026 and June 28, 2025 was $795.1 million and $1.33 billion, respectively. The Company intends to distribute $686.2 million of earnings that were previously subject to U.S. federal tax and has recorded a deferred tax liability of $1.9 million during fiscal 2026 for U.S. state taxes and foreign withholding taxes related to the future distribution. Based on the Company's current analysis, there is a further unrecognized deferred tax liability of approximately $4 million to $6 million on the remaining unremitted earnings.