Holiday Quarter Exceeded Expectations
Underscoring Power of Acceleration Program
- Drove Significant Sequential Improvement in Revenue
Trends
- Generated Triple-Digit Increase in Global Digital
Sales
- Delivered Strong Gross Margin Expansion of Approximately 300
Basis Points
- Achieved Second Consecutive Quarter of Operating Income and
EPS Growth
Tapestry, Inc. (NYSE: TPR), a leading New York-based house of
modern luxury accessories and lifestyle brands, today reported
results for the fiscal second quarter ended December 26, 2020.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210204005250/en/
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Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc.,
said, “Our results significantly outpaced expectations driven by
the successful execution of our Acceleration Program. Our sharpened
focus on the consumer fueled new customer acquisition across all
brands with notable sales gains in Digital and China. Importantly,
for the second consecutive quarter, we generated strong operating
income growth supported by a reduction in promotional activity and
higher AUR, as well as disciplined inventory and expense
management. Further, we delivered this profit growth in the face of
unprecedented Covid-related external headwinds, including pressured
bricks and mortar traffic, store closures and capacity limits, as
well as higher freight costs and shipping constraints. I’m
incredibly proud of our teams around the world for their unwavering
passion, agility, and resilience this holiday season.”
“As we enter the second half of our fiscal year, we are
optimistic for the future in spite of the uncertain backdrop. We
are listening closely to consumers and responding in real-time to
changes in their values, shopping behaviors, and brand engagement.
We are leaning into the competitive advantages of our platform,
bringing innovation to both product and how we connect with
customers. As a result, we are driving demand for our categories
and stretching what’s possible for our brands. Looking forward, I
am confident that Tapestry will emerge from the pandemic stronger,
well-positioned to both capture market share at higher levels of
profitability and fully unlock the flywheel of sustainable,
long-term growth,” Ms. Crevoiserat concluded.
Tapestry, Inc. Fiscal Second Quarter
2021 Highlights
- Achieved significant sequential improvement in revenue trends
across all brands, led by North America
- Drove triple-digit e-commerce growth versus prior year, with
digital representing approximately one-third of global sales,
including nearly half of revenue in North America
- Posted over 30% year-over-year revenue growth in Mainland
China
- Increased gross margin, primarily driven by lower, more
disciplined promotional activity, resulting approximately 300 basis
points of improvement year-over-year
- Reduced SG&A costs, which declined high-single digits
versus prior year, reflecting effective expense management and
previously announced actions to transform the Company’s operating
model, while reinvesting in the business and increasing marketing
spend
- Generated strong operating income growth and margin expansion
for the second consecutive quarter
- Funded the pay down of $500 million of the Company’s $700
million revolver with positive free cash flow of $697 million
year-to-date; paid down remaining $200 million balance subsequent
to quarter-end
Acceleration Program
Highlights
In the fiscal second quarter, the Company made meaningful
progress against its Acceleration Program to sharpen its focus on
the consumer, leverage data to lead with a digital-first mindset
and transform into a leaner and more responsive organization:
- Recruited over 1.5 million new customers in North
America across brands through our e-commerce channels, a
meaningful increase versus prior year, as we continue to meet
consumers where they choose to shop and utilize marketing
capabilities to drive engagement and enhance the customer’s digital
journey;
- Leveraged Tapestry’s scale and agility to deliver
triple-digit digital growth by expanding our network through
added fulfillment capacity and the diversification of parcel
carrier partnerships, swiftly adapting to the current environment
and navigating market constraints to support increased customer
demand;
- Drove significant growth in China through compelling
product assortments, enhanced marketing and expanded reach across
direct channels and third party online distribution;
- Achieved record sales during the 11.11 Global Shopping
Festival on Tmall Luxury Pavilion, with Coach as the number one
ranked brand in the handbags, luggage, and leather goods category
and Stuart Weitzman as the number one ranked footwear brand over
this key holiday period;
- Deployed new data and analytics tools to drive
strategic, data-driven decision making to optimize marketing
messaging, assortment planning, and promotional levels, supporting
higher AUR and conversion rates;
- Continued to enhance the flexibility of our operating
model, with a streamlined organizational structure and
empowered teams, while optimizing our global fleet with 18
net closures in the fiscal first half representing a net decrease
of 84 stores from the prior year; Remain on track to achieve gross
run-rate savings of $300 million, including gross savings of $200
million in fiscal 2021.
Through these initiatives, the Company is better meeting the
needs of each of its brands' unique customers to drive engagement
and desire for its products, creating a strong foundation for
profitable expansion.
Overview of Second Quarter 2021
Tapestry, Inc. Results
- Net sales totaled $1.69 billion for the second quarter
as compared to $1.82 billion in the prior year, representing a 7%
decline.
- Gross profit totaled $1.17 billion, while gross margin
was 69.6% on both a reported and non-GAAP basis. This compared to
prior year gross profit of approximately $1.21 billion on a
reported and non-GAAP basis and gross margin of 66.6% and 66.7% on
a reported and non-GAAP basis, respectively.
- SG&A expenses totaled $784 million on a reported
basis and represented 46.5% of sales compared to $847 million and
46.6%, respectively, in the year ago quarter. On a non-GAAP basis,
SG&A expenses were $763 million and represented 45.2% of sales
as compared to $838 million and 46.1%, respectively, in the year
ago period.
- Operating income was $389 million on a reported basis,
while operating margin was 23.1% versus operating income of $363
million and an operating margin of 20.0% in the prior year. On a
non-GAAP basis, operating income was $411 million, while operating
margin was 24.4% versus operating income of $373 million and an
operating margin of 20.6% in the prior year.
- Net interest expense was $19 million in the quarter as
compared to $14 million in the year ago period.
- Other income was $4 million versus $6 million in the
prior year.
- Net income for the quarter was $311 million on a
reported basis, with earnings per diluted share of $1.11. This
compared to net income of $299 million with earnings per diluted
share of $1.08 in the prior year period. The reported tax rate for
the quarter was 16.9% compared to 15.8% in the prior year period.
On a non-GAAP basis, net income for the quarter was $323 million
with earnings per diluted share of $1.15. This compared to non-GAAP
net income of $304 million with earnings per diluted share of $1.10
in the prior year period. The non-GAAP tax rate for the quarter was
18.5% compared to 16.9% in the prior year.
- Inventory was $632 million at the end of quarter versus
ending inventory of $748 million in the year ago period.
Fiscal second quarter results by brand were as follows:
Coach Second Quarter 2021
Results
- Net sales for Coach totaled $1.23 billion for the fiscal
second quarter as compared to $1.27 billion in the prior year,
representing a decline of 4%.
- Gross profit for Coach totaled $888 million, while gross
margin was 72.5% on a reported and non-GAAP basis. This compared to
prior year gross profit of $877 million and gross margin of 69.1%
on a reported and non-GAAP basis.
- SG&A expenses for Coach were $476 million on a
reported basis and represented 38.9% of sales compared to
approximately $494 million and 38.9%, respectively, in the year ago
period. On a non-GAAP basis, SG&A expenses were $470 million
and represented 38.4% of sales compared to expenses of $495 million
and 39.0% of sales in the prior year.
- Operating income for Coach was $412 million compared to
reported operating income of approximately $383 million in the
prior year, while operating margin was 33.6% versus 30.1% a year
ago. On a non-GAAP basis, operating income was $418 million
compared to $382 million in the prior year, while operating margin
was 34.1% versus 30.1% a year ago.
Kate Spade Second Quarter 2021
Results
- Net sales for Kate Spade totaled $376 million for the
fiscal second quarter as compared to $430 million in the prior
year, representing a decline of 13%, which included the impact
related to a strategic pullback in lower margin wholesale
disposition sales.
- Gross profit for Kate Spade totaled $233 million, while
gross margin was 62.1% on a reported and non-GAAP basis. This
compared to gross profit of $262 million and gross margin of 61.0%
in the prior year on a reported and non-GAAP basis.
- SG&A expenses for Kate Spade were $174 million on a
reported basis and represented 46.4% of sales. This compared to
reported SG&A expenses of $194 million in the year ago period,
which represented 45.2% of sales. On a non-GAAP basis, SG&A
expenses were $172 million and represented 45.8% of sales. This
compared to SG&A expenses of approximately $194 million in the
prior year, which represented 45.0% of sales on a non-GAAP
basis.
- Operating income for Kate Spade was $59 million on a
reported basis, representing an operating margin of 15.7%. This
compared to operating income of $68 million and an operating margin
of 15.8% on a reported basis in the year ago period. On a non-GAAP
basis, operating income was $61 million, while operating margin was
16.3%. This compared to operating income of $69 million and an
operating margin of 15.9% on a non-GAAP basis in the previous
year.
Stuart Weitzman Second Quarter 2021
Results
- Net sales for Stuart Weitzman totaled $85 million for
the fiscal second quarter compared to $116 million in the same
period of the prior year, representing a 27% decline.
- Gross profit for Stuart Weitzman totaled $53 million on
both a reported and non-GAAP basis, while gross margin for the
quarter was 62.2%. This compared to prior year reported gross
profit of $70 million and gross margin of 60.5%. On a non-GAAP
basis, prior year gross profit was $72 million, while gross margin
was 61.8%.
- SG&A expenses for Stuart Weitzman were $41 million
on a reported basis and represented 48.0% of sales. This compared
to reported SG&A expenses of approximately $60 million in the
year ago period, which represented 52.3% of sales. On a non-GAAP
basis, SG&A expenses were approximately $43 million and
represented 50.9% of sales as compared to $60 million or 52.0% of
sales in the prior year period.
- Operating income was $12 million on a reported basis,
representing an operating margin of 14.1%, compared to operating
income of $10 million and operating margin of 8.2% in the year ago
period. On a non-GAAP basis, operating income was approximately $10
million, while operating margin was 11.3% versus operating income
of $11 million and operating margin of 9.8% in the prior year.
Non-GAAP Reconciliation
During the fiscal second quarter of 2021, the Company recorded
the following on a reported basis:
- Acceleration Program: $22 million of pre-tax charges
primarily associated with professional fees incurred as a result of
the development and execution of the Company’s comprehensive
strategic initiatives, as well as actions to streamline the
Company's organization, which includes severance. The Company
continues to expect to incur total charges of $185 to $200 million
over the life of the Acceleration Program, including $50 to $65
million in remaining charges. The majority of these future costs
are estimated to be cash and recorded primarily in fiscal
2021.
- CARES Act Tax Impact: $3 million of tax benefits under
the Coronavirus Aid, Relief, and Economic Securities Act, most
notably the NOL carryback claim. This reflects the adjustment to
the Company’s provisional estimate.
Taken together, these items decreased the Company’s net income
and earnings per diluted share by $12 million and $0.04,
respectively. Please refer to the financial tables included herein
for a detailed reconciliation of the Company’s reported to non-GAAP
results.
Fiscal Year 2021 Outlook
Due to the dynamic nature of the Covid-19 crisis and lack of
visibility, the Company is not providing detailed guidance for
fiscal 2021. However, given Tapestry’s better-than-anticipated
results in the fiscal first half, and assuming a continued recovery
emerging from the pandemic, the Company now expects revenue for the
fiscal year to increase at a high-single digit rate on a 52-week
basis and in the area of 10% on 53-week basis. This outlook
continues to include the expectation for a topline inflection and
strong bottom line growth during the second half of the fiscal
year.
The Company also notes that fiscal 2021 includes a 53rd week in
its fourth fiscal quarter.
Conference Call Details
The Company will host a conference call to review these results
at 7:30 a.m. (ET) today, February 4, 2021. Interested parties may
listen to the conference call via live webcast by accessing
www.tapestry.com/investors on the Internet or calling
1-877-510-8087 or 1-862-298-9015 and providing the Conference ID
4990276. A telephone replay will be available starting at 12:00
p.m. (ET) today, for a period of five business days. To access the
telephone replay, call 1-800-585-8367 or 1-404-537-3406 and enter
the Conference ID 4990276. A webcast replay of the earnings
conference call will also be available for five business days on
the Tapestry website. Presentation slides have also been posted to
the Company’s website at www.tapestry.com/investors.
Upcoming Events
The Company expects to report fiscal 2021 third quarter results
on Thursday, May 6, 2021. To receive notification of future
announcements, please register at www.tapestry.com/investors
("Subscribe to E-Mail Alerts").
Tapestry, Inc. is a New York-based house of modern luxury
lifestyle brands. The Company’s portfolio includes Coach, Kate
Spade and Stuart Weitzman. Our Company and our brands are founded
upon a creative and consumer-led view of luxury that stands for
inclusivity and approachability. Each of our brands are unique and
independent, while sharing a commitment to innovation and
authenticity defined by distinctive products and differentiated
customer experiences across channels and geographies. To learn more
about Tapestry, please visit www.tapestry.com. For important news
and information regarding Tapestry, visit the Investor Relations
section of our website at www.tapestry.com/investors. In addition,
investors should continue to review our news releases and filings
with the SEC. We use each of these channels of distribution as
primary channels for publishing key information to our investors,
some of which may contain material and previously non-public
information. The Company’s common stock is traded on the New York
Stock Exchange under the symbol TPR.
This information to be made available in this press release may
contain forward-looking statements based on management's current
expectations. Forward-looking statements include, but are not
limited to, the statements under “Fiscal Year 2021 Outlook,” and
statements regarding the Acceleration Program, including future
charges under and future impacts of this program, the potential
impact of the Covid-19 pandemic and success of mitigating actions,
and statements that can be identified by the use of forward-looking
terminology such as "may," "will," “can,” "should," "expect,"
"intend," "estimate," "continue," "project," "guidance,"
"forecast," “outlook,” "anticipate," “leveraging,” “sharpening,”
transforming,” “creating,” accelerating,” “enhancing,” leaning
into,” “innovation,” “drive,” “targeting,” “assume,” “plan,”
“progress,” “optimistic,” “future,” “uncertain backdrop,” “emerge,”
“on track,” “well positioned to,” “look forward to,” “looking
ahead,” “to acquire,” “achieve,” “strategic,” “steady recovery,”
“growth,” “view,” “stretching what’s possible,” or comparable
terms. Future results may differ materially from management's
current expectations, based upon a number of important factors,
including risks and uncertainties such as the impact of the
Covid-19 pandemic, the ability to control costs and successfully
execute our growth strategies, expected economic trends, the
ability to anticipate consumer preferences, risks associated with
operating in international markets and our global sourcing
activities, our ability to achieve intended benefits, cost savings
and synergies from acquisitions, the risk of cybersecurity threats
and privacy or data security breaches, the impact of pending and
potential future legal proceedings, and the impact of legislation,
etc. Please refer to the Company’s latest Annual Report on Form
10-K, quarterly report on 10-Q and its other filings with the
Securities and Exchange Commission for a complete list of risks and
important factors. The Company assumes no obligation to revise or
update any such forward-looking statements for any reason, except
as required by law.
TAPESTRY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarter & Six Months Ended
December 26, 2020 and December 28, 2019 (in millions, except per share data)
(unaudited) (unaudited) QUARTER ENDED SIX
MONTHS ENDED December 26, 2020 December 28, 2019
December 26, 2020 December 28, 2019 Net sales
$
1,685.4
$
1,816.0
$
2,857.6
$
3,173.9
Cost of sales
511.7
606.3
853.7
1,049.7
Gross profit
1,173.7
1,209.7
2,003.9
2,124.2
Selling, general and administrative expenses
784.3
846.6
1,412.3
1,709.5
Operating income (loss)
389.4
363.1
591.6
414.7
Interest expense, net
18.7
14.0
38.1
26.3
Other expense (gain)
(3.6
)
(5.9
)
(6.2
)
6.8
Income before provision for income taxes
374.3
355.0
559.7
381.6
Provision for income taxes
63.3
56.2
17.0
62.8
Net income (loss)
$
311.0
$
298.8
$
542.7
$
318.8
Net income (loss) per share: Basic
$
1.12
$
1.08
$
1.96
$
1.14
Diluted
$
1.11
$
1.08
$
1.94
$
1.13
Shares used in computing net income per share: Basic
277.5
276.0
277.1
280.8
Diluted
281.0
276.7
279.4
281.8
TAPESTRY, INC. DETAIL TO NET SALES For the Quarter & Six Months Ended December 26, 2020
and December 28, 2019 (in
millions) (unaudited)
QUARTER ENDED
December 26, 2020
December 28, 2019
% Change
Constant Currency
% Change
Coach
$ 1,225.3
$ 1,269.9
(4
)%
(5
)%
Kate Spade
375.6
430.4
(13
)%
(13
)%
Stuart Weitzman
84.5
115.7
(27
)%
(28
)%
Total Tapestry
$ 1,685.4
$ 1,816.0
(7
)%
(8
)%
SIX MONTHS ENDED
December 26, 2020
December 28, 2019
% Change
Constant Currency
% Change
Coach
$ 2,100.7
$ 2,235.8
(6
)%
(7
)%
Kate Spade
616.0
735.9
(16
)%
(17
)%
Stuart Weitzman
140.9
202.2
(30
)%
(31
)%
Total Tapestry
$ 2,857.6
$ 3,173.9
(10
)%
(11
)%
TAPESTRY, INC. GAAP TO NON-GAAP RECONCILIATION
(in millions, except per share
data) (unaudited)
For the Quarter Ended December
26, 2020
Items Affecting
Comparability
GAAP Basis (As
Reported)
CARES Act Tax
Impact
Acceleration
Program
Non-GAAP Basis (Excluding
Items)
Cost of sales Coach
888.1
-
-
888.1
Kate Spade
233.1
-
-
233.1
Stuart Weitzman
52.5
-
-
52.5
Gross profit(1)
$
1,173.7
$
-
$
-
$
1,173.7
SG&A expenses Coach
476.1
-
5.8
470.3
Kate Spade
174.3
-
2.4
171.9
Stuart Weitzman
40.6
-
(2.3
)
42.9
Corporate
93.3
-
15.8
77.5
SG&A expenses
$
784.3
$
-
$
21.7
$
762.6
-
Operating income (loss) Coach
412.0
-
(5.8
)
417.8
Kate Spade
58.8
-
(2.4
)
61.2
Stuart Weitzman
11.9
-
2.3
9.6
Corporate
(93.3
)
-
(15.8
)
(77.5
)
Operating income (loss)
$
389.4
$
-
$
(21.7
)
$
411.1
Provision for income taxes
63.3
(3.3
)
(6.4
)
73.0
Net income (loss)
$
311.0
$
3.3
$
(15.3
)
$
323.0
Net income (loss) per diluted common share
$
1.11
$
0.01
$
(0.05
)
$
1.15
(1) Adjustments within Gross profit are recorded within Cost
of sales.
TAPESTRY, INC.
GAAP TO NON-GAAP RECONCILIATION
(in millions, except per share
data) (unaudited)
For the Six Months Ended
December 26, 2020
Items Affecting
Comparability
GAAP Basis (As
Reported)
CARES Act Tax
Impact
Acceleration
Program
Non-GAAP Basis (Excluding
Items)
Cost of sales Coach
1,533.0
-
-
1,533.0
Kate Spade
387.2
-
-
387.2
Stuart Weitzman
83.7
-
-
83.7
Gross profit(1)
$
2,003.9
$
-
$
-
$
2,003.9
SG&A expenses Coach
851.0
-
16.5
834.5
Kate Spade
305.2
-
3.4
301.8
Stuart Weitzman
71.8
-
(4.7
)
76.5
Corporate
184.3
-
33.1
151.2
SG&A expenses
$
1,412.3
$
-
$
48.3
$
1,364.0
Operating income (loss) Coach
682.0
-
(16.5
)
698.5
Kate Spade
82.0
-
(3.4
)
85.4
Stuart Weitzman
11.9
-
4.7
7.2
Corporate
(184.3
)
-
(33.1
)
(151.2
)
Operating income (loss)
$
591.6
$
-
$
(48.3
)
$
639.9
Provision for income taxes
17.0
(95.0
)
(12.2
)
124.2
Net income (loss)
$
542.7
$
95.0
$
(36.1
)
$
483.8
Net income (loss) per diluted common share
$
1.94
$
0.34
$
(0.13
)
$
1.73
(1) Adjustments within Gross profit are recorded within Cost
of sales.
TAPESTRY, INC.
GAAP TO NON-GAAP RECONCILIATION
(in millions, except per share data) (unaudited)
For the Quarter Ended December
28, 2019
Items Affecting
Comparability
GAAP Basis (As
Reported)
ERP Implementation
Organization-related
& Integration
costs
Non-GAAP Basis
(Excluding Items)
Cost of sales Coach
877.3
-
-
877.3
Kate Spade
262.4
-
-
262.4
Stuart Weitzman
70.0
-
(1.5
)
71.5
Gross profit(1)
$
1,209.7
$
-
$
(1.5
)
$
1,211.2
SG&A expenses Coach
494.5
-
(0.4
)
494.9
Kate Spade
194.5
-
0.7
193.8
Stuart Weitzman
60.4
-
0.3
60.1
Corporate
97.2
6.3
1.8
89.1
SG&A expenses
$
846.6
$
6.3
$
2.4
$
837.9
Operating income (loss) Coach
382.8
-
0.4
382.4
Kate Spade
67.9
-
(0.7
)
68.6
Stuart Weitzman
9.6
-
(1.8
)
11.4
Corporate
(97.2
)
(6.3
)
(1.8
)
(89.1
)
Operating income (loss)
$
363.1
$
(6.3
)
$
(3.9
)
$
373.3
Provision for income taxes
56.2
(1.5
)
(4.0
)
61.7
Net income (loss)
$
298.8
$
(4.8
)
$
0.1
$
303.5
Net income (loss) per diluted common share
$
1.08
$
(0.02
)
$
-
$
1.10
(1) Adjustments within Gross profit are recorded within Cost
of sales.
TAPESTRY, INC.
GAAP TO NON-GAAP RECONCILIATION
(in millions, except per share data) (unaudited)
For the Six Months Ended
December 28, 2019
Items Affecting
Comparability
GAAP Basis (As
Reported)
ERP Implementation
Organization-related
& Integration
costs
Impairment
Non-GAAP Basis
(Excluding Items)
Cost of sales Coach
1,554.9
-
(0.1
)
-
1,555.0
Kate Spade
453.9
-
(1.2
)
-
455.1
Stuart Weitzman
115.4
-
(4.3
)
-
119.7
Gross profit(1)
$
2,124.2
$
-
$
(5.6
)
$
-
$
2,129.8
SG&A expenses Coach
972.6
-
(0.1
)
41.5
931.2
Kate Spade
393.2
-
0.8
25.2
367.2
Stuart Weitzman
125.1
-
(2.1
)
8.9
118.3
Corporate
218.6
20.8
24.5
-
173.3
SG&A expenses
$
1,709.5
$
20.8
$
23.1
$
75.6
$
1,590.0
Operating income (loss) Coach
582.3
-
-
(41.5
)
623.8
Kate Spade
60.7
-
(2.0
)
(25.2
)
87.9
Stuart Weitzman
(9.7
)
-
(2.2
)
(8.9
)
1.4
Corporate
(218.6
)
(20.8
)
(24.5
)
-
(173.3
)
Operating income (loss)
$
414.7
$
(20.8
)
$
(28.7
)
$
(75.6
)
$
539.8
Provision for income taxes
62.8
(5.0
)
(9.4
)
(12.1
)
89.3
Net income (loss)
$
318.8
$
(15.8
)
$
(19.3
)
$
(63.5
)
$
417.4
Net income (loss) per diluted common share
$
1.13
$
(0.06
)
$
(0.07
)
$
(0.22
)
$
1.48
(1) Adjustments within Gross profit are recorded within Cost
of sales.
The Company reports information in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"). The Company's
management does not, nor does it suggest that investors should,
consider non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with
GAAP. Further, the non-GAAP measures utilized by the Company may be
unique to the Company, as they may be different from non-GAAP
measures used by other companies. The financial information
presented above, as well as gross margin, SG&A expense ratio,
and operating margin, have been presented both including and
excluding the effect of certain items related to the tax benefit
the Company received under the CARES Act and the Acceleration
Program for the second quarter and first six months of fiscal year
2021 and ERP Implementation and Organization-related &
Integration Costs for second quarter of fiscal year 2020 and ERP
Implementation, Organization-related & Integration Costs and
Impairment for the first six months of fiscal year 2020.
The Company operates on a global basis and reports financial
results in U.S. dollars in accordance with GAAP. Percentage
increases/decreases in net sales for the Company and each segment
have been presented both including and excluding currency
fluctuation effects from translating foreign-denominated sales into
U.S. dollars and compared to the same periods in the prior quarter
and fiscal year. The Company calculates constant currency net sales
results by translating current period net sales in local currency
using the prior year period’s currency conversion rate.
Net sales changes for the Company and each segment are based on
absolute sales dollar changes and are not presented in accordance
with the Company’s comparable sales definition utilized
historically due to the uncertain business environment resulting
from the impact of the Covid-19 pandemic.
Management utilizes these non-GAAP and constant currency
measures to conduct and evaluate its business during its regular
review of operating results for the periods affected and to make
decisions about Company resources and performance. The Company
believes presenting these non-GAAP measures, which exclude items
that are not comparable from period to period, is useful to
investors and others in evaluating the Company’s ongoing operating
and financial results in a manner that is consistent with
management’s evaluation of business performance and understanding
how such results compare with the Company’s historical performance.
Additionally, the Company believes presenting these metrics on a
constant currency basis will help investors and analysts to
understand the effect of significant year-over-year foreign
currency exchange rate fluctuations on these performance measures
and provide a framework to assess how business is performing and
expected to perform excluding these effects.
TAPESTRY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
At December 26, 2020 and June 27,
2020 (in millions)
(unaudited)
(audited)
December 26, 2020
June 27, 2020
ASSETS Cash, cash equivalents and short-term
investments
$
1,651.8
$
1,434.4
Receivables
331.7
193.3
Inventories
631.9
736.9
Other current assets
261.8
188.5
Total current assets
2,877.2
2,553.1
Property and equipment, net
730.2
775.2
Lease right-of-use assets
1,674.9
1,757.0
Other noncurrent assets
2,868.1
2,838.9
Total assets
$
8,150.4
$
7,924.2
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts
payable
$
386.3
$
130.8
Accrued liabilities
586.4
511.0
Short-term lease liabilities
360.4
388.8
Current debt
200.0
711.5
Total current liabilities
1,533.1
1,742.1
Long-term debt
1,589.3
1,587.9
Long-term lease liabilities
1,658.9
1,799.8
Other liabilities
478.4
518.0
Stockholders' equity
2,890.7
2,276.4
Total liabilities and stockholders' equity
$
8,150.4
$
7,924.2
TAPESTRY, INC. STORE COUNT At
September 26, 2020 and December 26, 2020 (unaudited)
As of As of Directly-Operated Store Count:
September 26, 2020
Openings
(Closures)
December
26, 2020
Coach North
America
374
1
(1
)
374
International
583
7
(4
)
586
Kate
Spade North America
216
-
-
216
International
208
2
(4
)
206
Stuart
Weitzman North America
55
1
(2
)
54
International
58
1
(4
)
55
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210204005250/en/
Tapestry, Inc. Analysts & Media: Andrea Shaw Resnick Interim
Chief Financial Officer Global Head of Investor Relations and
Corporate Communications 212/629-2618 aresnick@tapestry.com
Christina Colone Vice President, Investor Relations 212/946-7252
ccolone@tapestry.com
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