TAPESTRY, INC.TPR
TAPESTRY, INC. Leases Disclosure
LEASES
The Company leases retail space, office space, warehouse facilities, fulfillment centers, storage space, machinery, equipment and certain other items under operating leases. The Company's leases have initial terms ranging from to twenty years and may have renewal or early termination options ranging from to ten years. These leases may also include rent escalation clauses or lease incentives. In determining the lease term used in the lease ROU asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease ROU asset and lease liability. The Company is typically required to make fixed minimum rent payments, variable rent payments primarily based on performance (i.e., percentage-of-sales-based payments), or a combination thereof, directly related to its ROU asset. The Company is also often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance fees and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement. To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities.
The Company calculates lease ROU assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. The Company is required to use the implicit rate to determine the present value of lease payments. As the rate implicit in the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the Company's credit rating, credit spread and adjustments for the impact of collateral, lease tenors, economic environment and currency.
For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred.
The Company acts as sublessor in certain leasing arrangements, primarily related to a sublease of a portion of the Company's leased headquarters space as well as certain retail locations. Fixed sublease payments received are recognized on a straight-line basis over the sublease term.
ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.
The following table summarizes the ROU assets and lease liabilities recorded on the Company's Consolidated Balance Sheets as of June 28, 2025 and June 29, 2024:
| June 28, 2025 | June 29, 2024 | Location Recorded on the Consolidated Balance Sheets | |||||||||||||||
| (millions) | |||||||||||||||||
| Assets: | |||||||||||||||||
| Operating leases | $ | 1,331.0 | $ | 1,314.4 | Operating lease right-of-use assets | ||||||||||||
| Finance leases | — | 0.6 | |||||||||||||||
| Total lease assets | $ | 1,331.0 | $ | 1,315.0 | |||||||||||||
| Liabilities: | |||||||||||||||||
| Operating leases: | |||||||||||||||||
| Current lease liabilities | $ | 299.0 | $ | 299.7 | Current portion of operating lease liabilities | ||||||||||||
| Long-term lease liabilities | 1,205.6 | 1,224.2 | Long-term operating lease liabilities | ||||||||||||||
| Total operating lease liabilities | $ | 1,504.6 | $ | 1,523.9 | |||||||||||||
| Finance leases: | |||||||||||||||||
| Current lease liabilities | $ | — | $ | 1.2 | |||||||||||||
| Long-term lease liabilities | — | — | |||||||||||||||
| Total finance lease liabilities | $ | — | $ | 1.2 | |||||||||||||
| Total lease liabilities | $ | 1,504.6 | $ | 1,525.1 | |||||||||||||
The following table summarizes the composition of net lease costs, primarily recorded within SG&A expenses on the Company's Consolidated Statement of Operations for the fiscal year ended June 28, 2025 and June 29, 2024:
| Fiscal Year Ended | |||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||
| (millions) | |||||||||||
| Finance lease cost: | |||||||||||
| Amortization of right-of-use assets | $ | 1.2 | $ | 1.2 | |||||||
Interest on lease liabilities(1) | 0.1 | 0.2 | |||||||||
| Total finance lease cost | 1.3 | 1.4 | |||||||||
| Operating lease cost | 360.6 | 360.7 | |||||||||
| Short-term lease cost | 22.8 | 19.5 | |||||||||
| Variable lease cost | 204.8 | 205.3 | |||||||||
| Operating lease right-of-use impairment | 3.0 | — | |||||||||
| Less: sublease income | (16.4) | (17.8) | |||||||||
| Total net lease cost | $ | 576.1 | $ | 569.1 | |||||||
(1) Interest on lease liabilities is recorded within Interest expense, net on the Company's Consolidated Statement of Operations.
The following table summarizes certain cash flow information related to the Company's leases for the fiscal year ended June 28, 2025 and June 29, 2024:
| Fiscal Year Ended | |||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||
| (millions) | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | 414.8 | $ | 420.4 | |||||||
| Operating cash flows from finance leases | 0.1 | 0.2 | |||||||||
| Financing cash flows from finance leases | 1.2 | 1.2 | |||||||||
| Non-cash transactions: | |||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | 327.7 | 246.2 | |||||||||
The following table provides a maturity analysis of the Company's lease liabilities recorded on the Consolidated Balance Sheets as of June 28, 2025:
| June 28, 2025 | |||||
| Operating Leases | |||||
| (millions) | |||||
| Fiscal 2026 | $ | 372.7 | |||
| Fiscal 2027 | 315.2 | ||||
| Fiscal 2028 | 231.6 | ||||
| Fiscal 2029 | 178.0 | ||||
| Fiscal 2030 | 135.9 | ||||
| Fiscal 2031 and thereafter | 554.3 | ||||
| Total lease payments | 1,787.7 | ||||
| Less: imputed interest | (283.1) | ||||
| Total lease liabilities | $ | 1,504.6 | |||
The future minimum fixed sublease receipts under non-cancelable operating lease agreements as of June 28, 2025 are as follows:
| June 28, 2025 | |||||
| (millions) | |||||
| Fiscal 2026 | $ | 14.8 | |||
| Fiscal 2027 | 14.8 | ||||
| Fiscal 2028 | 14.8 | ||||
| Fiscal 2029 | 15.3 | ||||
| Fiscal 2030 | 16.0 | ||||
| Fiscal 2031 and thereafter | 96.2 | ||||
| Total sublease income | $ | 171.9 | |||
The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating leases and finance leases recorded on the Consolidated Balance Sheets as of June 28, 2025 and June 29, 2024:
| June 28, 2025 | June 29, 2024 | ||||||||||
| Weighted average remaining lease term (years): | |||||||||||
| Operating leases | 7.4 | 7.8 | |||||||||
| Finance leases | — | 0.9 | |||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | 4.4 | % | 4.4 | % | |||||||
| Finance leases | — | % | 11.3 | % | |||||||
Additionally, the Company had approximately $237.6 million of future payment obligations related to executed lease agreements for which the related lease had not yet commenced as of June 28, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 14, 2025 | Showing above |
| 2024 | Aug 15, 2024 | |
| 2023 | Aug 17, 2023 | |
| 2022 | Aug 18, 2022 | |
| 2021 | Aug 19, 2021 | |
| 2020 | Aug 13, 2020 | |
| 2019 | Aug 15, 2019 | |
| 2018 | Aug 16, 2018 | |
| 2017 | Aug 18, 2017 | |
| 2016 | Aug 19, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.