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Taxes
 12 Months Ended
Mar. 30, 2024
Income Tax Disclosure [Abstract]  
Taxes Taxes
The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands. Capri’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions are aggregated in the “Non-United States” information captioned below.
(Loss) income before (benefit) provision for income taxes consisted of the following (in millions):
 Fiscal Years Ended
 March 30,
2024		April 1,
2023		April 2,
2022
United States $(15)$85 $247 
Non-United States (268)563 668 
Total (loss) income before (benefit) provision for income taxes$(283)$648 $915 
The (benefit) provision for income taxes was as follows (in millions):
 Fiscal Years Ended
 March 30,
2024		April 1,
2023		April 2,
2022
Current
United States - Federal$14 $62 $36 
United States - State5 22 16 
Non-United States114 (1)46 (3)98 
Total current provision for income taxes133 130 150 
Deferred
United States - Federal(12)(40)24 (4)
United States - State(5)(6)7 
Non-United States (170)(2)(55)(89)(5)
Total deferred provision for income taxes(187)(101)(58)
Total (benefit) provision for income taxes$(54)$29 $92 
(1)Primarily relates to the UK tax restructuring activities in Fiscal 2024.
(2)Primarily relates to the impairment of Jimmy Choo and Versace indefinite-lived intangible assets in Fiscal 2024.
(3)Primarily relates to the remeasurement of an Asian income tax reserve.
(4)Relates to the impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization.
(5)Primarily relates to a valuation allowance reversal in Italy during Fiscal 2022.
The Company’s benefit for income taxes for the year ended March 30, 2024 and provision for income taxes for the years ended April 1, 2023 and April 2, 2022 were different from the amount computed by applying the statutory U.K. income tax rates to the underlying (Loss) income before (benefit) provision for income taxes as a result of the following (amounts in millions):
 Fiscal Years Ended
 March 30,
2024		April 1,
2023		April 2,
2022
Amount
% (1)
Amount
% (1)
Amount
% (1)
(Benefit) provision for income taxes at the U.K. statutory tax rate (2)
$(71)25.0 %$123 19.0 %174 19.0 %
Effects of global financing arrangements (3)
(28)9.9 %(78)(12.1)%(61)(6.7)%
Differences in tax effects on foreign income(25)8.8 %(1)(0.2)%10 1.1 %
Liability for uncertain tax positions(11)3.9 %(3)(0.4)%91 9.9 %
Effect of changes in valuation allowances on deferred tax assets(9)3.1 %(37)(5.8)%(67)(7.3)%
Non-deductible goodwill impairment (4)
48 (17.0)%15 2.4 %— — %
State and local income taxes, net of federal benefit11 (3.9)%10 1.5 %12 1.3 %
Share based compensation15 (5.4)%6 0.9 %3 0.4 %
Withholding tax5 (1.6)%3 0.5 %5 0.6 %
Merger related costs4 (1.5)%— — %— — %
Brand tax basis step-up— — %— — %(46)(5.0)%
CARES Act tax loss carryback— — %— — %(43)(4.6)%
Tax rate change impact on deferred items— — %— — %21 2.1 %
Other7 (2.3)%(9)(1.3)%(7)(0.7)%
Effective tax rate$(54)19.0 %$29 4.5 %$92 10.1 %
(1)Tax rates are calculated using unrounded numbers.
(2)The UK statutory tax rate increased from 19% to 25% on April 1, 2023.
(3)Includes the tax related impacts of hedge terminations in conjunction with global financing arrangements.
(4)Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2024.
Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):
Fiscal Years Ended
March 30,
2024		April 1,
2023
Deferred tax assets
Operating lease liabilities$458 $442 
Net operating loss carryforwards334 115 
Accrued interest108 70 
Depreciation47 61 
Sales allowances29 38 
Inventories23 21 
Capitalized research and development18 — 
Stock compensation4 6 
Payroll related accruals2 3 
Other18 29 
Total deferred tax assets1,041 785 
Valuation allowance(176)
(1)
(52)
(3)
Net deferred tax assets865 733 
Deferred tax liabilities
Goodwill and intangibles(333)
(2)
(420)
Operating lease right-of-use-assets(359)(339)
Derivative financial instruments(183)(186)
Total deferred tax liabilities(875)(945)
Net deferred tax liabilities$(10)$(212)
(1)Includes an incremental Swiss valuation allowance recorded during Fiscal 2024.
(2)Includes the impact of the Jimmy Choo and Versace indefinite-lived intangible asset impairment recorded during Fiscal 2024.
(3)Includes a U.K. valuation allowance reversal during Fiscal 2023.
The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured. The valuation allowance increased $124 million in Fiscal 2024 and decreased $40 million and $67 million in Fiscal 2023 and Fiscal 2022, respectively. In certain jurisdictions, the Company increased the valuation allowance by $135 million, $6 million and $34 million and released valuation allowances of $11 million, $14 million and $13 million in Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.
As of March 30, 2024, the Company had non-United States and United States net operating loss carryforwards of $1.797 billion, a portion of which will begin to expire in Fiscal 2025.
As of March 30, 2024 and April 1, 2023, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $188 million and $236 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets.
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate, was $173 million, $221 million and $234 million as of March 30, 2024, April 1, 2023 and April 2, 2022, respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2024, Fiscal 2023 and Fiscal 2022, are presented below (in millions):
Fiscal Years Ended
March 30,
2024		April 1,
2023		April 2,
2022
Unrecognized tax benefits beginning balance$200 $221 $107 
Additions related to prior period tax positions16 12 105 
Additions related to current period tax positions6 14 29 
Decreases related to audit settlements(46)(1)(2)(13)
Decreases related to prior period tax positions
(16)(42)(4)
Decreases in prior period positions due to lapses in statute of limitations
(3)(3)(3)
Unrecognized tax benefits ending balance$157 $200 $221 
(1)This amount is primarily related to settlements of Italian transfer pricing and Hong Kong corporate income tax audits during Fiscal 2024.
The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes. The Company recognized a reduction of $11 million interest and penalties in the consolidated statements of operations and comprehensive (loss) income for Fiscal 2024. The interest and penalties recognized in the consolidated statements of operations and comprehensive (loss) income for Fiscal 2023 and Fiscal 2022 was $14 million and $13 million, respectively.
The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by $36 million during the next 12 months, primarily due to the anticipated settlement of tax examinations as well as statute of limitation expirations. However, the outcomes and timing of such events are highly uncertain and changes in the occurrence, expected outcomes and timing of such events could cause the Company’s current estimate to change materially in the future.
The Company files income tax returns in the United States and in various foreign, state and local jurisdictions. Most examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and local income tax returns filed by the Company for years through Fiscal 2018.
Prior to the enactment of the Tax Cuts and Jobs Act (“Tax Act”), the Company’s undistributed foreign earnings were considered permanently reinvested and, as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated. It remains the Company’s intent to either reinvest indefinitely substantially all of its foreign earnings outside of the United States or repatriate them tax neutrally. However, if future earnings are repatriated, the potential exists that the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding tax and income taxes. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.