--- ticker: RL company: RL filing_type: 10-K year_current: 2026 year_prior: 2025 risks_added: 1 risks_removed: 0 risks_modified: 7 risks_unchanged: 23 source: SEC EDGAR url: https://riskdiff.com/rl/2026-vs-2025/ markdown_url: https://riskdiff.com/rl/2026-vs-2025/index.md generated: 2026-06-01 --- # RL: 10-K Risk Factor Changes 2026 vs 2025 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 1 | | Risks removed | 0 | | Risks modified | 7 | | Unchanged | 23 | --- ## New in Current Filing: Our use and integration of artificial intelligence across our business presents risks and challenges that could adversely affect our business. We are increasingly evaluating and deploying AI technologies, including generative AI and machine learning, across various aspects of our business. AI presents evolving risks that may be difficult to predict or mitigate. These risks include heightened data privacy, cybersecurity, and data protection risks, as the use of AI may involve processing sensitive data and, in some cases, sharing data with third-party providers. Such use may increase the risk of unauthorized access to, misuse, or disclosure of confidential information or personal data, introduce system vulnerabilities, and enable more sophisticated fraud and cyber-attacks. Any such event could result in operational disruptions, remediation costs, litigation, regulatory scrutiny, and reputational damage. AI tools and systems may be unavailable, fail to perform as intended, or produce inaccurate or misleading outputs, and may be vulnerable to manipulation. When incorporated into our business processes, such risks could result in errors, inefficiencies, operational disruptions, or diminished customer experiences, and employees' use of AI tools may not always comply with our policies or controls. Further, we may rely on third-party AI technologies, cloud infrastructure, and data sets that could be subject to outages, security incidents, or changes in pricing or contractual terms, which may result in operational disruptions or the termination of our relationship with the providers of such technologies. AI-related activities also raise intellectual property, confidentiality, and content integrity risks, including potential claims that training data or outputs infringe third-party rights or that AI-generated content is inappropriate or inaccurate. Such risks could result in disputes, liability, regulatory inquiries, and reputational damage. Our ability to successfully develop and deploy AI depends on attracting, developing, and retaining talent with AI-related skills and expertise. Competition for such talent is intense. If we are unable to build and maintain necessary AI capabilities, including such talent, we may not realize anticipated efficiencies or innovation benefits, or we may be competitively disadvantaged relative to peers that more effectively leverage AI. Conversely, investments in AI may not deliver expected returns, particularly in the near term, if adoption is limited or performance does not meet expectations. The legal and regulatory environment governing AI is rapidly evolving. Emerging laws and regulations in jurisdictions where we operate may impose new obligations, limit the use of AI, or require changes to our products, processes, or controls. Compliance with such requirements could increase costs and expose us to investigations, enforcement actions, fines, or litigation. Any perceived or actual failure to use AI responsibly, including with respect to fairness, bias, transparency, or governance, or to meet evolving stakeholder expectations, could harm our brand and reputation, reduce customer trust, negatively impact our workforce, and subject us to increased regulatory scrutiny or litigation, any of which could adversely affect our business, financial condition, and results of operations. --- ## Modified: Our business is exposed to domestic and foreign currency fluctuations. **Key changes:** - Reworded sentence: "Changes in exchange rates between the U.S." - Reworded sentence: "Given that we source the vast majority of our products overseas, the cost of these products to our foreign operations may be affected by changes in the value of their respective local currencies." - Reworded sentence: "Factors that could impact the effectiveness of our hedging activities include the volatility of currency markets, the accuracy of forecasted transactions, and the availability of hedging instruments." **Prior (2025):** Our business is exposed to foreign currency exchange risk. Specifically, changes in exchange rates between the U.S. Dollar and other currencies impact our financial results from a transactional perspective, as our foreign operations generally purchase inventory in U.S. Dollars. Given that we source most of our products overseas, the cost of these products may be affected by changes in the value of the relevant currencies. Changes in currency exchange rates may also impact consumers' willingness or ability to travel abroad and/or purchase our products while traveling, as well as affect the U.S. Dollar value of the foreign currency denominated prices at which our international businesses sell products. Additionally, the operating results and financial position of our international subsidiaries are exposed to foreign exchange rate fluctuations as their financial results are translated from the respective local currency into U.S. Dollars during the financial statement consolidation process. The foreign currencies to which we are exposed to from a transactional and translational perspective primarily include the Euro, the Japanese Yen, the British Pound Sterling, the South Korean Won, the Chinese Renminbi, the Canadian Dollar, the Swiss Franc, and the Australian Dollar. The expansion of our international business increases our exposure to foreign currency exchange risk. Although we hedge certain exposures to changes in foreign currency exchange rates arising in the ordinary course of business, we cannot fully anticipate all of our currency exposures and therefore foreign currency fluctuations may have a material adverse impact on our business. In addition, factors that could impact the effectiveness of our hedging activities include the volatility of currency markets, the accuracy of forecasted transactions, and the availability of hedging instruments. As such, our hedging activities may not completely mitigate the impact of foreign currency fluctuations on our results of operations. **Current (2026):** Changes in exchange rates between the U.S. Dollar and other currencies impact our financial results from a transactional perspective, as our foreign operations generally purchase inventory in U.S. Dollars. Given that we source the vast majority of our products overseas, the cost of these products to our foreign operations may be affected by changes in the value of their respective local currencies. In addition, changes in exchange rates of non-U.S. Dollar currencies impact our financial results, as our operations incur certain other costs that are denominated in various other foreign currencies. Changes in currency exchange rates may also impact consumers' willingness or ability to travel abroad and/or purchase our products while traveling. Additionally, from a financial reporting perspective, the translation of our international subsidiaries' respective local currency operating results and financial position into U.S. Dollars is exposed to exchange rate fluctuations as part of the financial statement consolidation process. The foreign currencies to which we are exposed from transactional and translational perspectives primarily include the Euro, the Japanese Yen, the Chinese Renminbi, the South Korean Won, the Australian Dollar, the British Pound Sterling, the Swiss Franc, and the Canadian Dollar. The continued expansion of our international business naturally increases our exposure to such foreign currency exchange risks. Although we hedge certain exposures to changes in foreign currency exchange rates arising in the ordinary course of business, we cannot fully anticipate all of our currency exposures and therefore foreign currency fluctuations may have a material adverse impact on our business. Factors that could impact the effectiveness of our hedging activities include the volatility of currency markets, the accuracy of forecasted transactions, and the availability of hedging instruments. As such, our hedging activities may not completely mitigate the impact of foreign currency fluctuations on our business. --- ## Modified: The success of our business depends on our ability to retain the value and reputation of our brands. **Key changes:** - Reworded sentence: "Our success depends on the value and reputation of our brands and our ability to consistently anticipate, identify, and respond to customers' demands, preferences, and fashion trends in the design, pricing, and production of our products, including preferences for certain products to be manufactured in the U.S., and to deliver high-quality and sustainable products supported by engaging marketing campaigns." - Reworded sentence: "Lauren, other members of our management team, or our Company as a whole, especially through social media which can accelerate and increase the reach of such negative publicity, which could adversely impact the image of our brands with our customers and result in diminished loyalty to our 30 30 30 30 brands and potentially lead to adverse consumer actions, including boycotts, even if the subject of such publicity is unverified or inaccurate and we seek to correct it." **Prior (2025):** Our success depends on the value and reputation of our brands and our ability to consistently anticipate, identify, and respond to customers' demands, preferences, and fashion trends in the design, pricing, and production of our products, including the preference for certain products to be manufactured in the U.S., and deliver high-quality and sustainable products supported by engaging marketing campaigns. Any negative publicity regarding Mr. R. Lauren, or other members of our management team, or our Company as a whole, especially through social media which accelerates and increases the potential scope of negative publicity, could adversely impact the image of our brands with our customers and result in diminished loyalty to our brands and potentially lead to adverse consumer actions, including boycotts, even if the subject of such publicity is unverified or inaccurate and we seek to correct it. Consumer sentiment can also be influenced by our partnership with athletes and other public figures, our relationships with wholesale customers, licensees, and suppliers, our views on political and social issues, or our long-term initiatives and goals regarding our impact on the environment and society as a whole, among other factors. Even if we react appropriately to negative publicity, our customers' perception of our brand image and our reputation could be negatively impacted. Any failure on our part to retain the value and reputation of brands could adversely impact our business. **Current (2026):** Our success depends on the value and reputation of our brands and our ability to consistently anticipate, identify, and respond to customers' demands, preferences, and fashion trends in the design, pricing, and production of our products, including preferences for certain products to be manufactured in the U.S., and to deliver high-quality and sustainable products supported by engaging marketing campaigns. Any negative publicity regarding Mr. R. Lauren, other members of our management team, or our Company as a whole, especially through social media which can accelerate and increase the reach of such negative publicity, which could adversely impact the image of our brands with our customers and result in diminished loyalty to our 30 30 30 30 brands and potentially lead to adverse consumer actions, including boycotts, even if the subject of such publicity is unverified or inaccurate and we seek to correct it. Consumer perception may also be influenced by geopolitical developments, including periods of heightened anti-American sentiment in certain international markets, as well as our partnership with athletes and other public figures, our relationships with wholesale customers, licensees, and suppliers, our views on political and social issues, or our long-term environmental and social initiatives as a whole, among other factors. Even if we respond appropriately to negative publicity or other external influences, our customers' perception of our brand image and our reputation could be negatively impacted. Any failure on our part to retain the value and reputation of brands could adversely impact our business. --- ## Modified: Our business is subject to risks associated with importing products and the ability of our manufacturers to produce our goods on time and to our specifications. **Key changes:** - Reworded sentence: "In Fiscal 2026, the vast majority of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 21% of our products sourced from Vietnam, 16% from Cambodia, and 11% from India." - Reworded sentence: "There can be no assurance that we will be able to offset potential increased product costs through higher sales prices to our consumers, supply chain diversification, or other mitigating measures, which in turn could have a material adverse effect on our business due to lower profitability." **Prior (2025):** We do not own or operate any manufacturing facilities and depend exclusively on independent third parties for the manufacture of our products. Our products are manufactured to our specifications through arrangements with approximately 300 foreign manufacturers in various countries. In Fiscal 2025, approximately 96% of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 20% of our products sourced from Vietnam, 16% from Cambodia, and 12% from China. Risks inherent in importing our products include (i) the imposition of additional tariffs, duties, taxes, and other charges on imports or exports, such as those recently announced by the U.S. as discussed below; (ii) changes in diplomatic and trade relationships, including the imposition of any sanctions, restrictions, and other responses; (iii) the imposition of additional regulations, quotas, trade sanctions, or safeguards relating to imports or exports, and costs of complying with such regulations and other laws relating to the identification and reporting of the sources of raw materials used in our products, which could lead to the detention, exclusion, or seizure of goods and imposition of monetary penalties and fines; (iv) adverse changes in local economic conditions, such as prolonged periods of recession, high inflation and/or interest rates, or other factors described herein; (v) changes in social or political conditions, including those resulting from military conflicts, terrorist acts, or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located; (vi) pandemic diseases, which could result in closed factories, reduced workforces, scarcity of raw materials, port congestion, and scrutiny or embargoing of goods produced in infected areas; (vii) unfavorable changes in the availability, cost, or quality of raw materials and commodities; (viii) labor shortages within our supply chain resulting from labor disputes, strikes, or otherwise; (ix) increases in the cost of labor or transportation; (x) disruptions of shipping and international trade caused by natural and man-made disasters, severe weather, military conflicts, terrorist acts, or other hostilities (such as militant attacks on cargo vessels in the Red Sea), or other unforeseen events, including any resulting impact to shipping prices and shipping times; (xi) heightened terrorism-related cargo and supply chain security concerns, which could subject imported or exported goods to additional, more frequent, or more thorough inspections, leading to delays in the delivery of cargo; and (xii) decreased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures, and damage to the reputation of our brands. As previously discussed, in April 2025, the U.S. announced significant changes to its trade policies, including a universal baseline tariff of 10% on all U.S. imported goods, plus additional country-specific tariffs. In return, many countries have announced retaliatory tariffs on U.S. exports, resulting in uncertainty of the future relationship between the U.S. and other countries, as well as the potential of an ensuing global trade war and recession. While the U.S. implemented a 90-day pause on the majority of its proposed tariffs, we cannot predict at this time if and when any of the proposed tariffs will become effective. As approximately 96% of our products are currently produced outside of the U.S., any material change in tariffs or other trade restrictions could result in a significant increase to our product costs. There can be no assurance that we will be able to offset 29 29 29 29 potential increased product costs through higher sales prices to our consumers, supply chain diversification, or other mitigating measures, which in turn could have a material adverse effect on our business due to lower profitability. In addition, the entire apparel industry, including our Company, has faced, and could continue to face, supply chain challenges as a result of inflationary pressures, political instability, severe weather, military conflicts and other hostilities, pandemic diseases, and other factors, including reduced freight availability, port congestion, labor shortages, and rising wages and energy costs, among other factors. The inability of a manufacturer to ship orders of our products in a timely manner or to meet our strict quality standards could cause us to miss the delivery date requirements of our customers for those items, which could result in cancellation of orders, refusal to accept deliveries, or a substantial reduction in purchase prices. We have also incurred, and may continue to incur, higher freight and other logistic costs as a result of certain of the beforementioned factors. In addition, the cost and availability of raw materials used to manufacture our products are subject to significant fluctuation as a result of certain of the beforementioned factors (including inflationary pressures), as well as crop yields which could be negatively impacted by severe weather conditions. We may not be able to implement price increases that fully offset increases in raw materials, freight, or other sourcing costs and/or any such price increases could have an adverse impact on consumer demand for our products. Any one of these factors could have a material adverse effect on our business. **Current (2026):** We do not own or operate any manufacturing facilities and depend exclusively on independent third parties for the manufacture of our products. Our products are manufactured to our specifications through arrangements with approximately 300 foreign manufacturers in various countries. In Fiscal 2026, the vast majority of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 21% of our products sourced from Vietnam, 16% from Cambodia, and 11% from India. Risks inherent in importing our products include (i) the imposition of additional tariffs, duties, taxes, and other charges on imports or exports, such as those announced by the U.S. as discussed below; (ii) changes in diplomatic and trade relationships, including sanctions, trade restrictions, and other retaliatory measures; (iii) the imposition of additional regulations, quotas, trade sanctions, or safeguards or sourcing and reporting requirements that could increase compliance costs or lead to the detention, exclusion, or seizure of goods and imposition of monetary penalties and fines; (iv) adverse changes in local economic conditions, such as prolonged periods of economic weakness, high inflation and/or interest rates, or other factors described herein; (v) changes in social or political conditions, including those resulting from military conflicts, terrorist acts, or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located; (vi) unfavorable changes in the availability, cost, or quality of raw materials and commodities; (vii) labor shortages within our supply chain resulting from labor disputes, strikes, or otherwise; (viii) increases in the cost of labor or transportation; (ix) disruptions of shipping and international trade caused by natural and man-made disasters, severe weather, military conflicts, terrorist acts, or other hostilities, pandemic diseases, or other unforeseen events, including any resulting impact to shipping prices and shipping times; (x) heightened supply chain security concerns leading to increased inspections and delays in the delivery of cargo; and (xi) insufficient enforcement by customs officials against counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures, and damage to the reputation of our brands. As previously discussed, recent changes in U.S. trade policies, including tariff-related developments surrounding the IEEPA and other authorities, have increased uncertainty regarding the future relationship between the U.S. and other countries, as well as the potential for an ensuing global trade war and economic slowdown. The imposition of new tariffs could result in potential retaliatory tariffs from other countries and could continue to impact our supply chain costs. As approximately 96% of our products are currently produced outside of the U.S., any material change in tariffs or other trade restrictions could result in a significant increase to our product costs. There can be no assurance that we will be able to offset potential increased product costs through higher sales prices to our consumers, supply chain diversification, or other mitigating measures, which in turn could have a material adverse effect on our business due to lower profitability. In addition, the entire apparel industry, including our Company, has faced, and could continue to face, supply chain challenges, including reduced freight availability, port congestion, labor shortages, and rising wages, oil prices and other energy costs, among others, as a result of unfavorable macroeconomic conditions and other factors. The inability of a manufacturer to ship orders of our products in a timely manner or to meet our strict quality standards could cause us to miss the delivery date requirements of our customers for those items, which could result in cancellation of orders, refusal to accept deliveries, or a substantial reduction in purchase prices. We have also incurred, and may continue to incur, higher freight and other logistic costs as a result of certain of the beforementioned factors. In addition, the cost and availability of raw materials used to manufacture our products are subject to significant fluctuation as a result of certain of the beforementioned factors (including inflationary pressures), as well as crop yields which could be negatively impacted by severe weather conditions. We may not be able to implement price increases that fully offset increases in raw materials, freight, or other sourcing costs and/or any such price increases could have an adverse impact on consumer demand for our products. Any one of these factors could have a material adverse effect on our business. 29 29 29 29 --- ## Modified: Economic, political, and other conditions, including the imposition of significant new tariffs or other changes to existing trade policies and agreements, may adversely affect the global economy and/or the level of consumer purchases of discretionary items and luxury retail products, including our products. **Key changes:** - Reworded sentence: "The global economy and retail industry are affected by numerous factors beyond our control, including, among others, changes in diplomatic and trade relationships (including the imposition of new tariffs or other changes to international trade policies or agreements); domestic and international political conditions; consumer perceptions of current and future economic conditions (including an economic slowdown or potential downturn, inflation, interest rates, foreign currency exchange rates, commodity availability and price (including fuel and energy costs)); employment levels and wage rates; stock market performance; housing market conditions; consumer debt levels and access to consumer credit; the health and stability of the banking sector; global food supplies; taxation; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; consumer perceptions of personal well-being and safety; man-made or natural disasters (including pandemic diseases); and weather conditions." - Reworded sentence: "In February 2026, the U.S." - Reworded sentence: "The global economy has also been negatively impacted by ongoing military conflicts, including the conflicts involving Iran and other hostilities in the Middle East." - Reworded sentence: "Accordingly, a downturn 24 24 24 24 or an uncertain outlook in the economies in which we, or our wholesale customers and licensing partners, sell our products, or other changes in consumer preferences, may materially adversely affect our business." **Prior (2025):** The global economy and retail industry are impacted by many uncontrollable factors, including, among others, diplomatic and trade relationships, including potential changes to international trade policies or agreements, such as the imposition of new tariffs; general domestic and international political conditions; consumer perceptions of current and future economic conditions, including any recessionary fears; inflation; interest rates; foreign currency exchange rates; the availability and price of commodities, including fuel and energy costs; employment levels and wage rates; stock market performance; the housing market; consumer debt levels; the availability of consumer credit; the health and stability of the banking sector; global food supplies; taxation; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; consumer perceptions of personal well-being and safety; man-made or natural disasters, including pandemic diseases; and weather conditions. Most recently, the U.S. announced significant changes to its trade policies, including widespread tariff increases on imported goods (including on those countries from which we import a substantial amount of our finished products, most notably Vietnam, Cambodia, and China) with potential further increases and revisions or terminations to existing trade agreements. In response, many countries have announced or are otherwise considering retaliatory tariffs on U.S. exports and other trade restrictions. This has led to significant uncertainty regarding the future relationship between the U.S. and other countries, as well as growing concerns about a global trade war, higher inflation, and a potential global recession, which has already caused significant volatility of global stock markets and foreign currency exchange rates. Other recent economic conditions, including ongoing inflationary pressures, organized labor disputes, high interest rates, significant foreign currency volatility, and military conflicts (as discussed below), continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as to reduce elevated inventory levels, many retailers (particularly in the U.S.) continue to resort to promotional activity in an attempt to offset traffic declines and increase conversion. Our gross margins could be adversely impacted if we were to apply a similar strategy over a prolonged period of time. The global economy has also been negatively impacted by ongoing military conflicts, including the Russia-Ukraine and Israel-Hamas wars, militant attacks on cargo vessels in the Red Sea, and other hostilities in the Middle East. Although our voluntary decision to suspend operations in Russia has not resulted in a material impact to our consolidated financial statements and our ongoing operations in Israel are also not material, our business has been, and may continue to be, affected by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and financial market volatility, among other factors, which have adversely impacted consumer sentiment and confidence. Although our business has not been significantly impacted by the Red Sea crisis, it could lead to shipping delays, inventory shortages, and/or higher freight costs in the near future and beyond. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries declaring war against each other, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global recession. Consumer purchases of discretionary items and luxury retail products, including our products, tend to decline during periods of recession, high inflation, or rising interest rates, and at other times when disposable income is lower. Unfavorable economic conditions and other factors, such as pandemic diseases and other health-related concerns, political unrest, military conflicts, and acts of terrorism, may also reduce consumers' willingness and ability to travel to major cities and vacation destinations in which our stores and shop-within-shops are located. Further, consumers may prefer to spend more of their discretionary income on "experiences," such as dining and entertainment, over consumer goods. Stay-at-home orders, social gathering restrictions, and work-from-home arrangements, such as those resulting from pandemic diseases, may also diminish consumers' demand for luxury apparel products. Accordingly, a downturn or an uncertain outlook in the economies in which 24 24 24 24 we, or our wholesale customers and licensing partners, sell our products, or other changes in consumer preferences, may materially adversely affect our business. **Current (2026):** The global economy and retail industry are affected by numerous factors beyond our control, including, among others, changes in diplomatic and trade relationships (including the imposition of new tariffs or other changes to international trade policies or agreements); domestic and international political conditions; consumer perceptions of current and future economic conditions (including an economic slowdown or potential downturn, inflation, interest rates, foreign currency exchange rates, commodity availability and price (including fuel and energy costs)); employment levels and wage rates; stock market performance; housing market conditions; consumer debt levels and access to consumer credit; the health and stability of the banking sector; global food supplies; taxation; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; consumer perceptions of personal well-being and safety; man-made or natural disasters (including pandemic diseases); and weather conditions. In April 2025, the U.S. announced significant changes to its trade policies under the authority of the International Emergency Economic Powers Act ("IEEPA"), including widespread tariff increases on imported goods and the potential for additional tariffs and further increases to existing tariffs, and revisions or terminations of existing trade agreements. In response, many countries announced retaliatory tariffs on U.S. exports and other trade restrictions. In February 2026, the U.S. Supreme Court invalidated the IEEPA tariffs previously applied to our imports, after which the current administration announced a new round of tariffs under an alternative U.S. Trade Act authority. In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to refund IEEPA tariffs that were previously collected, and in April 2026, U.S. Customs and Border Protection announced the refund process leveraging the Consolidated Administration and Processing of Entries Claim Portal through a phased rollout. Although we have taken steps to preserve our rights with respect to potential refunds, there can be no assurance that we will receive any refunds, in whole or in part. These developments have increased uncertainty regarding the future relationship between the U.S. and other countries and could contribute to a global trade war, higher inflation, and a global economic slowdown, any of which has caused, and could continue to cause, volatility in global stock markets and foreign currency exchange rates. Other recent economic conditions, including increases in oil and other energy prices, ongoing inflationary pressures, organized labor disputes, high interest rates, significant foreign currency volatility, and military conflicts (as discussed below), continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as to reduce elevated inventory levels, many retailers (particularly in the U.S. and Europe) continue to resort to promotional activity in an attempt to offset traffic declines and increase conversion. Our gross margins could be adversely impacted if we were to apply a similar strategy over a prolonged period of time. The global economy has also been negatively impacted by ongoing military conflicts, including the conflicts involving Iran and other hostilities in the Middle East. Although our ongoing operations in the Middle East are not material, our business has been, and may continue to be, affected by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and financial market volatility, among other factors, which have adversely impacted consumer sentiment and confidence. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries taking part, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global economic slowdown or recession. Consumer purchases of discretionary items and luxury retail products, including our products, tend to decline during periods of economic weakness, high inflation, or rising interest rates, and at other times when disposable income is lower. Unfavorable economic conditions and other factors, such as pandemic diseases and other health-related concerns, political unrest, military conflicts, and acts of terrorism, may also reduce consumers' willingness and ability to travel to major cities and vacation destinations in which our stores and shop-within-shops are located. Further, consumers may prefer to spend more of their discretionary income on "experiences," such as dining and entertainment, over consumer goods. Accordingly, a downturn 24 24 24 24 or an uncertain outlook in the economies in which we, or our wholesale customers and licensing partners, sell our products, or other changes in consumer preferences, may materially adversely affect our business. --- ## Modified: Our business could suffer if we fail to meet our global citizenship and sustainability goals or if such goals do not meet the expectations of our stakeholders. **Key changes:** - Reworded sentence: "Further, we could incur additional costs, face market and technological barriers, and require additional resources to monitor, report, and comply with various citizenship and 35 35 35 35 sustainability practices." - Reworded sentence: "Executive actions at the U.S." **Prior (2025):** There is an increased focus from consumers, employees, investors, advocacy groups, and other stakeholders regarding environmental, social, and governance ("ESG") matters. Furthermore, investors have placed increased importance on the social cost of their investments. We have established certain long-term initiatives and goals regarding our impact on natural resources and society as a whole as part of our Global Citizenship & Sustainability strategy, with the aim of future-proofing our business for years to come. However, there can be no assurance that our various stakeholders will agree with our initiatives, or if we will be successful in achieving our goals by our targeted dates or at all. Further, we could incur additional costs, face market and 35 35 35 35 technological barriers, and require additional resources to monitor, report, and comply with various citizenship and sustainability practices. Our failure, or perceived failure, to achieve our goals could damage the reputation of our brands and lead to adverse consumer actions and/or investment decisions by investors, as well as our ability to attract and retain employees. Conversely, in recent years, negative sentiment towards corporate goals and initiatives related to these areas has gained momentum in the U.S., which has been accompanied by the proposal or enactment of policies, legislation, or initiatives by several state legislatures and by the U.S. federal government intended to prohibit or limit consideration of ESG matters by corporations and investors. Additionally, we could also be criticized by stakeholders who share such sentiment for having certain initiatives and goals or for any revisions to such initiatives or goals. We may not be able to meet the increasingly diverging expectations and perspectives on these topics and could be subjected to scrutiny that could adversely affect our reputation, business, financial performance and growth. **Current (2026):** There is an increased focus from consumers, employees, investors, advocacy groups, and other stakeholders regarding environmental, social, and governance ("ESG") matters. Furthermore, investors have placed increased importance on the social cost of their investments. We have established certain long-term initiatives and goals regarding our impact on natural resources and society as a whole as part of our Global Citizenship & Sustainability strategy, with the aim of future-proofing our business for years to come. However, there can be no assurance that our various stakeholders will agree with our initiatives, or if we will be successful in achieving our goals by our targeted dates or at all. Further, we could incur additional costs, face market and technological barriers, and require additional resources to monitor, report, and comply with various citizenship and 35 35 35 35 sustainability practices. Our failure, or perceived failure, to achieve our goals could damage the reputation of our brands and lead to adverse consumer actions and/or investment decisions by investors, as well as our ability to attract and retain employees. Executive actions at the U.S. federal level and legislation in multiple U.S. states have sought to restrict or penalize corporate consideration of ESG factors, while jurisdictions in Europe and certain U.S. states have simultaneously expanded ESG-related mandates and disclosure requirements. This increasingly divergent regulatory environment creates operational complexity and legal risk, as actions taken to comply with or advance citizenship and sustainability objectives in one jurisdiction may expose us to criticism, regulatory scrutiny, or potential penalties in another, including limitations on our ability to do business. Any failure to effectively navigate these conflicting requirements, or the perception that we have insufficiently or excessively pursued such initiatives, could adversely affect our reputation, business, financial performance and growth. --- ## Modified: We face intense competition worldwide in the markets in which we operate. **Key changes:** - Reworded sentence: "We face increasing competition from companies selling apparel, handbags, footwear, accessories, home, and other of our product categories, including through the Internet." - Reworded sentence: "We compete with these companies primarily on the basis of brand strength, timeless style, quality, value, and service as further described in Item 1 - "Business - Competition." Some of our competitors may be significantly larger and more diversified and may have greater financial, marketing, and distribution resources, more desirable store locations, and/or greater digital commerce presence than us, among other competitive advantages." **Prior (2025):** We face increasing competition from companies selling apparel, footwear, accessories, home, and other of our product categories, including through the Internet. Although we sell our products through the Internet, increased competition and promotional activity in the worldwide apparel, footwear, accessory, and home product industries from Internet-based competitors could reduce our sales, prices, and margins. We also face intense competition from other domestic and foreign apparel, footwear, and accessory companies that sell products through brick and mortar stores and wholesale and licensing channels. We compete with these companies primarily on the basis of: (i) anticipating and responding in a timely manner to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; (ii) creating and maintaining favorable brand recognition, 30 30 30 30 loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; (iii) developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying demographics; (iv) competitively pricing our products and creating a compelling value proposition for consumers; (v) providing strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; (vi) establishing relationships with athletes, musicians, influencers, and other celebrities to promote our brands and products; (vii) providing attractive, reliable, secure, and user-friendly digital commerce sites; (viii) adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; (ix) obtaining sufficient and desirable retail floor space and effective presentation of our products at stores and shop-within-shops; (x) attracting consumer traffic to stores, shop-within-shops, and digital commerce sites; (xi) sourcing sustainable and traceable raw materials at cost-effective prices; (xii) anticipating and maintaining proper inventory levels; (xiii) ensuring product availability and optimizing supply chain and distribution efficiencies with third-party manufacturers and retailers; (xiv) maintaining and growing market share; (xv) recruiting and retaining talent to operate our retail stores, distribution centers, and various corporate functions; (xvi) protecting our intellectual property; and (xvii) ability to withstand prolonged periods of adverse economic conditions or business disruptions. Some of our competitors may be significantly larger and more diversified and may have greater financial, marketing, and distribution resources, more desirable store locations, and/or greater digital commerce presence than us, among other competitive advantages. Such competitive advantages may enable them to better withstand unfavorable economic conditions, compete more effectively on the basis of price and production, and/or more quickly respond to rapidly changing fashion trends and consumer preferences than us. In addition, technological advances and the retail industry's low barriers to entry allow for the introduction of new competitors and products at a rapid pace, which has been further compounded by the increasing shift to digital shopping channels. Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced market share or sales, which could adversely affect our business. **Current (2026):** We face increasing competition from companies selling apparel, handbags, footwear, accessories, home, and other of our product categories, including through the Internet. Although we sell our products through the Internet, increased competition and promotional activity in the worldwide apparel, handbags, footwear, accessory, and home product industries from Internet-based competitors could reduce our sales, prices, and margins. We also face intense competition from other domestic and foreign apparel, footwear, and accessory companies that sell products through brick and mortar stores and wholesale and licensing channels. We compete with these companies primarily on the basis of brand strength, timeless style, quality, value, and service as further described in Item 1 - "Business - Competition." Some of our competitors may be significantly larger and more diversified and may have greater financial, marketing, and distribution resources, more desirable store locations, and/or greater digital commerce presence than us, among other competitive advantages. Such competitive advantages may enable them to better withstand unfavorable economic conditions, compete more effectively on the basis of price and production, and/or more quickly respond to rapidly changing fashion trends and consumer preferences than us. In addition, technological advances and the retail industry's low barriers to entry allow for the introduction of new competitors and products at a rapid pace, which has been further compounded by the increasing shift to digital shopping channels. Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced market share or sales, which could adversely affect our business. --- ## Modified: Infectious disease outbreaks could have a material adverse effect on our business. **Key changes:** - Reworded sentence: "Widespread public health emergencies and infectious disease outbreaks (including pandemics, epidemics, resurgences of endemic diseases, and the emergence of new or more transmissible variants or pathogens), whether occurring domestically or internationally, have had, and could again in the future, have a material adverse effect on our business, results of operations, and financial condition." **Prior (2025):** Widespread public health emergencies or infectious disease outbreaks, such as the novel strain of coronavirus commonly referred to as COVID-19, have had, and could again in the future have, a material adverse effect on our business, results of operations, and financial condition. Potential impacts to our business include, but are not limited to: (i) our ability to successfully execute our long-term growth strategy; (ii) supply chain disruptions resulting from closed factories, reduced workforces, scarcity of raw materials, shipping and loading capacity constraints, and scrutiny or embargoing of goods produced in infected areas, including any related cost increases; (iii) reduced retail traffic at our stores and those of our wholesale 25 25 25 25 customers and licensing partners due to forced closures or other operational restrictions, such as reduced capacity limits and operating hours, declines in tourism, and/or potential changes in consumer behavior and shopping preferences, such as their willingness to congregate in shopping centers or other populated locations and the overall growing preference to shop online versus at traditional brick and mortar locations; (iv) potential declines in the level of consumer purchases of discretionary items and luxury retail products, including our products, caused by higher unemployment and lower disposable income levels, inflationary pressures, travel and social gathering restrictions, work-from-home arrangements, or other factors beyond our control; (v) the potential build-up of excess inventory as a result of store closures and/or lower consumer demand; (vi) temporary closures or other operational restrictions of our distribution centers and/or corporate facilities; (vii) our ability to attract, retain, and manage employees; (viii) additional costs to protect the health and safety of our employees, customers, and communities, such as more frequent and thorough cleanings of our facilities and supplying personal protection equipment; (ix) the potential loss of one or more of our significant wholesale customers or licensing partners, or the loss of a large number of smaller wholesale customers or licensing partners, if they are not able to withstand prolonged periods of adverse economic conditions, and our ability to collect outstanding receivables; (x) increased vulnerability to data security or privacy breaches as a result of remote working arrangements; (xi) our ability to successfully negotiate with landlords to obtain rent abatements, rent deferrals, and other relief; (xii) our ability to access capital markets and maintain compliance with covenants associated with our existing debt instruments, as well as the ability of our key customers, suppliers, and vendors to do the same with regard to their own obligations; (xiii) our ability to generate sufficient cash flows to support our operations, including repayment of our debt obligations as they become due, as well as to return value to our shareholders in the form of dividend payments and repurchases of our common stock; (xiv) diversion of management attention and resources from ongoing business activities and/or a decrease in employee morale; and (xv) our ability to maintain an effective system of internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002. **Current (2026):** Widespread public health emergencies and infectious disease outbreaks (including pandemics, epidemics, resurgences of endemic diseases, and the emergence of new or more transmissible variants or pathogens), whether occurring domestically or internationally, have had, and could again in the future, have a material adverse effect on our business, results of operations, and financial condition. Such events may result in, among other things, government mandates or recommendations (including quarantines, travel restrictions, or other public safety measures), changes in consumer behavior and demand, and operational disruptions. Potential impacts to our business include, but are not limited to: (i) global supply chain disruptions due to factory closures, labor shortages, scarcity of raw materials, shipping and sourcing limitations, and any related cost increases; (ii) 25 25 25 25 reduced retail traffic and the potential build-up of excess inventory as a result of store closures, other operational restrictions, and/or lower consumer demand; (iii) operational disruptions at our distribution centers and/or corporate facilities; (iv) potential declines in the level of consumer purchases of discretionary items; (v) our ability to attract, retain, and manage employees; (vi) the financial condition of our significant wholesale customers or licensing partners and their ability to meet obligations; (vii) our ability to successfully negotiate rent concessions and other relief with landlords; (viii) our ability to access capital markets and maintain compliance with debt covenants; and (ix) diversion of management attention and resources from ongoing business activities. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*