Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 27, 2014

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to use judgment and make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory recovery, the valuation of share-based compensation, valuation of deferred taxes and the estimated useful lives used for amortization and depreciation of intangible assets and property and equipment. Actual results could differ from those estimates.

Store Pre-opening Costs

Store Pre-opening Costs

Costs associated with the opening of new retail stores and start up activities are expensed as incurred.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization (carrying value). Depreciation is provided on a straight-line basis over the expected remaining useful lives of the related assets. Equipment, furniture and fixtures are depreciated over five to seven years, computer hardware and software are depreciated over three to five years, and in-store shops are amortized over three to four years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated remaining useful lives of the related assets or remaining lease term. The Company includes all amortization and depreciation expense as a component of total operating expenses, as the underlying long-lived assets are not directly or indirectly related to bringing the Company’s products to their existing location and condition.

Derivative Financial Instruments

Derivative Financial Instruments

The Company uses forward currency exchange contracts to manage its exposure to fluctuations in foreign currency for certain of its transactions. The Company in its normal course of business enters into transactions with foreign suppliers and seeks to minimize risks related to these transactions. The Company employs these forward currency contracts to hedge the Company’s cash flows, as they relate to foreign currency transactions, of which certain of these contracts are designated as hedges for accounting purposes, while others are undesignated hedges for hedge accounting purposes. These derivative instruments are recorded on the Company’s consolidated balance sheets at fair value, regardless of if they are designated or undesignated as hedges.

The Company designates the majority of these forward currency contracts as hedges for hedge accounting purposes which are related to the purchase of inventory. Accordingly, the effective portion of changes in the fair value for contracts entered into during the six months ended September 27, 2014, designated as hedges, are recorded in equity as a component of accumulated other comprehensive income, and to cost of sales for any portion of those contracts deemed ineffective. The Company will continue to record changes in the fair value of hedge designated contracts in this manner until their maturity, where the unrealized gain or loss will be recognized into earnings in that period. For those contracts that are entered into that are not designated as hedges, changes in the fair value, as of each balance sheet date and upon maturity, are recorded in other income, within the Company’s consolidated statements of operations. During the six months ended September 27, 2014, a gain of approximately $0.2 million related to the change in fair value of these contracts was recorded in other income. In addition, the net unrealized gain related to contracts designated as hedges for $10.6 million, was charged to equity as a component of accumulated other comprehensive income during the six months ended September 27, 2014. For the six months ended September 27, 2014, amounts related to the ineffectiveness of these contracts were de minimis. The following table details the fair value of these contracts as of September 27, 2014, and March 29, 2014 (in thousands):

	September 27, 2014			March 29, 2014
Prepaid expenses and other current assets	$	10,604		$	12
Accrued expenses and other current liabilities	$	(385	)	$	(1,875	)

The Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. In attempts to mitigate counterparty credit risk, the Company enters into contracts with carefully selected financial institutions based upon their credit ratings and certain other financial factors, adhering to established limits for credit exposure. The aforementioned forward contracts generally have a term of no more than 12 months. The period of these contracts is directly related to the foreign transaction they are intended to hedge. The notional amount of these contracts outstanding at September 27, 2014 was approximately $194.0 million, which was comprised predominately of those designated as hedges.

Net Income Per Share

Net Income Per Share

The Company’s basic net income per share excludes the dilutive effect of share options and units, as well as unvested restricted shares. It is based upon the weighted average number of ordinary shares outstanding during the period divided into net income.

Diluted net income per share reflects the potential dilution that would occur if share option grants or any other dilutive equity instruments were exercised or converted into ordinary shares. These equity instruments are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods.

The components of the calculation of basic net income per ordinary share and diluted net income per ordinary share are as follows (in thousands except share and per share data):

	Three Months Ended				Six Months Ended
	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Numerator:
Net Income	$	206,990	$	145,808	$	394,706	$	270,804
Denominator:
Basic weighted average ordinary shares		204,464,952		202,560,870		204,107,262		202,686,313
Weighted average dilutive share equivalents:
Share options and restricted shares/units		2,967,298		2,593,822		3,196,985		2,860,878
Diluted weighted average ordinary shares		207,432,250		205,154,692		207,304,247		205,547,191
Basic net income per ordinary share	$	1.01	$	0.72	$	1.93	$	1.34
Diluted net income per ordinary share	$	1.00	$	0.71	$	1.90	$	1.32

Share equivalents for the three and six months ended September 27, 2014 for 231,893 shares and 135,720 shares, respectively, have been excluded from the above calculation as they were anti-dilutive. Share equivalents for the three and six months ended September 28, 2013 for 86,516 shares and 75,116 shares, respectively, have been excluded from the above calculation as they were anti-dilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements—The Company has considered all new accounting pronouncements and, and with the exception of the below, has concluded that there are no new pronouncements that have a material impact on results of operations, financial condition, or cash flows, based on current information.

In May, 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which amends how an entity is currently required to recognize revenue from contracts with its customers. The ASU will replace the existing revenue recognition guidance in GAAP when it becomes effective for entities in January 2017. Early application is not permitted. The Company is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures.