Results Significantly Ahead of Expectations
With Operating Income Exceeding Pre-Pandemic Levels
- Drove Sequential Improvement in Topline Trends and
Outperformed Third Quarter Revenue Outlook
- Generated Triple-Digit Increase in Global Digital Sales,
Fueled by New Customer Acquisition
- Delivered Strong Gross Margin Expansion Across
Brands
- Now On Track to Exceed FY19 EPS for the Fiscal Year
Tapestry, Inc. (NYSE: TPR), a leading New York-based house of
modern luxury accessories and lifestyle brands, today reported
results for the fiscal third quarter ended March 27, 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210506005339/en/
(Photo: Business Wire)
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc.,
said, “Our third quarter results significantly outpaced
expectations, underscoring the power of the Acceleration Program
and enthusiasm for our brands. Through a sharpened focus on the
consumer, we fueled new customer acquisition at Coach, Kate Spade,
and Stuart Weitzman and delivered robust sales growth led by
Digital and China. Importantly, for the third consecutive quarter,
we achieved operating income gains – compared to both FY20 and FY19
– supported by a continued reduction in promotional activity,
higher AUR, and disciplined expense management. This performance is
a testament to our talented teams around the world, whose
creativity, agility, and resilience have enabled us to successfully
navigate a challenging backdrop and deliver for our customers,
while positioning Tapestry to emerge from the pandemic
stronger.”
Ms. Crevoiserat continued, “Building on this momentum, we are
increasingly optimistic about our ability to generate sustainable
top and bottom-line growth. Looking forward, while the environment
remains volatile, we see encouraging signs of recovery as
vaccination efforts progress, resulting in increased consumer
confidence, strong demand for our categories, and improving
in-store traffic trends. In this context, we remain focused on
driving brand relevance and customer engagement through product
innovation and compelling marketing, supported by data-driven
insights and a digital-first mindset. We will also continue to lean
into our competitive advantages, including our globally
diversified, direct-to-consumer model, and distort investments to
high-growth opportunities. We are confident that our clear,
consumer-centric strategy, powerful brands, and differentiated,
scalable platform uniquely position us to capture market share at
higher levels of profitability.”
Tapestry, Inc. Fiscal Third Quarter
2021 Highlights
- Achieved sequential improvement in year-over-year revenue
trends compared to both FY20 and FY19
- Realized continued momentum in Digital, driving triple-digit
growth versus prior year, while improving revenue trends in-stores
on both a one and two-year basis
- Posted a revenue increase of approximately 175% in Mainland
China versus FY20 and 40% growth compared to FY19
- Drove a mid-teens sales increase versus prior year in North
America, representing a return to pre-pandemic levels
- Expanded gross margin across brands year-over-year, primarily
driven by lower, more disciplined promotional activity overall
- Reduced SG&A costs compared to last 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
- Delivered operating income growth and margin expansion – ahead
of both FY20 and FY19 – for the third consecutive quarter
- Generated $876 million of free cash flow year-to-date,
underscoring the Company’s financial strength and flexibility
Acceleration Program
Highlights
In the fiscal third 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 approximately 700,000 new customers through our
e-commerce channels in North America, a meaningful increase
versus prior year, as we continue to meet consumers where they
choose to shop and leverage social media platforms to build
awareness and drive engagement, notably with Millennial and Gen Z
consumers;
- Delivered an increase in purchase frequency versus prior
year through enhanced and consistent brand experiences across
touchpoints and reactivated lapsed customers across
brands;
- Achieved significant growth in China compared to both FY20
and FY19 through integrated, comprehensive brand-building
strategies, bringing innovative product, marketing, and experiences
to Chinese consumers; Drove revenue gains with Chinese consumers
globally compared to pre-pandemic levels;
- Effectively reduced SKU counts by 30% to 50% and improved
assortment productivity, resulting in more focused product
messaging and compelling offerings, which in turn, contributed to
stronger overall AUR and gross margin through higher IMUs and lower
promotional activity;
- Utilized data and analytics tools across Tapestry’s
platform to provide us with a deeper understanding of customer
behavior through measurement, enabling a ‘test-and-learn’
environment that empowers our teams to more quickly respond to
changes in consumer preferences and demand as well as scale
opportunities across brands;
- Continued to enhance the flexibility of our operating
model, through a streamlined organizational structure and
optimized global fleet, with 49 net closures year-to-date,
representing a net decrease of 94 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 Third Quarter 2021
Tapestry, Inc. Results
- Net sales totaled $1.27 billion for the third quarter as
compared to $1.07 billion in the prior year, representing a 19%
increase.
- Gross profit totaled $912 million, while gross margin
was 71.6% on both a reported and non-GAAP basis. This compared to
prior year reported gross profit of $616 million and gross margin
of 57.4%. On a non-GAAP basis, prior year gross profit was $720
million, while gross margin was 67.1%.
- SG&A expenses totaled $795 million on a reported
basis and represented 62.5% of sales compared to $1.30 billion and
121.3%, respectively, in the year ago quarter. On a non-GAAP basis,
SG&A expenses were $729 million and represented 57.3% of sales
as compared to $752 million and 70.1%, respectively, in the year
ago period.
- Operating income was $117 million on a reported basis,
while operating margin was 9.2% versus an operating loss of $685
million and an operating margin of (63.9)% in the prior year. On a
non-GAAP basis, operating income was $183 million, while operating
margin was 14.4%, which compares to an operating loss of $32
million and an operating margin of (2.9)% in the prior year.
- Net interest expense was $17 million in the quarter as
compared to approximately $13 million in the year ago period.
- Other expense was $4 million versus $6 million in the
prior year.
- Net income for the quarter was $92 million on a reported
basis, with earnings per diluted share of $0.32. This compared to a
net loss of $677 million with a loss per diluted share of $2.45 in
the prior year period. The reported tax rate for the quarter was
3.8% compared to 4.0% in the prior year period. On a non-GAAP
basis, net income for the quarter was $145 million with earnings
per diluted share of $0.51. This compared to a non-GAAP net loss of
$76 million with a loss per diluted share of $0.27 in the prior
year period. The non-GAAP tax rate for the quarter was 10.3%
compared to (48.2)% in the prior year.
- Inventory was $700 million at quarter-end versus ending
inventory of $853 million in the year ago period.
Fiscal third quarter results by brand were as follows:
Coach Third Quarter 2021
Results
- Net sales for Coach totaled $964 million for the fiscal
third quarter as compared to approximately $772 million in the
prior year, representing an increase of 25% and a return to
pre-pandemic revenue levels.
- Gross profit for Coach totaled $718 million, while gross
margin was 74.5% on both a reported and non-GAAP basis. This
compared to prior year gross profit of $476 million and gross
margin of 61.6% on a reported basis. On a non-GAAP basis, gross
profit was $538 million, while gross margin was 69.6% in the year
ago quarter.
- SG&A expenses for Coach were $467 million on a
reported basis and represented 48.4% of sales compared to $438
million and 56.6%, respectively, in the year ago period. On a
non-GAAP basis, SG&A expenses were $442 million and represented
45.8% of sales compared to expenses of $421 million and 54.5% of
sales in the prior year.
- Operating income for Coach was $251 million compared to
reported operating income of $38 million in the prior year, while
operating margin was 26.1% versus 4.9% a year ago. On a non-GAAP
basis, operating income was approximately $276 million compared to
$116 million in the prior year, while operating margin was 28.7%
versus 15.1% a year ago.
Kate Spade Third Quarter 2021
Results
- Net sales for Kate Spade totaled $252 million for the
fiscal third quarter as compared to $250 million in the prior year,
representing an increase of 1%, which included an impact related to
a strategic pullback in lower margin wholesale disposition
sales.
- Gross profit for Kate Spade totaled $160 million, while
gross margin was 63.5% on a reported and non-GAAP basis. This
compared to gross profit of approximately $123 million and gross
margin of 49.1% in the prior year on a reported basis, and $155
million and 62.0%, respectively, on a non-GAAP basis.
- SG&A expenses for Kate Spade were $169 million on a
reported basis and represented 66.9% of sales. This compared to
reported SG&A expenses of $214 million in the year ago period,
which represented 85.7% of sales. On a non-GAAP basis, SG&A
expenses were $149 million and represented 58.9% of sales, which
compared to $172 million and 68.9% of sales, respectively, in the
prior year period.
- Operating loss for Kate Spade was $9 million on a
reported basis, representing an operating margin of (3.4)%. This
compared to an operating loss of $91 million and an operating
margin of (36.6)% on a reported basis in the year ago period. On a
non-GAAP basis, operating income was approximately $12 million,
while operating margin was 4.6%. This compared to an operating loss
of $17 million and an operating margin of (6.9)% on a non-GAAP
basis in the previous year.
Stuart Weitzman Third Quarter 2021
Results
- Net sales for Stuart Weitzman totaled $57 million for
the fiscal third quarter compared to $51 million in the same period
of the prior year, representing a 13% increase. These results
included the negative impact of a North America wholesale timing
shift into the fourth fiscal quarter.
- Gross profit for Stuart Weitzman totaled $34 million on
both a reported and non-GAAP basis, while gross margin for the
quarter was 58.9%. This compared to prior year reported gross
profit of $18 million and gross margin of 35.4%. On a non-GAAP
basis, prior year gross profit was $28 million, while gross margin
was 54.7%.
- SG&A expenses for Stuart Weitzman were $51 million
on a reported basis, which compared to reported SG&A expenses
of $549 million in the year ago period. On a non-GAAP basis,
SG&A expenses were $42 million as compared to $63 million in
the prior year period.
- Operating loss for Stuart Weitzman was approximately $18
million on a reported basis, compared to an operating loss of $531
million in the year ago period. On a non-GAAP basis, operating loss
was $8 million versus an operating loss of $35 million in the prior
year.
Non-GAAP Reconciliation
During the fiscal third quarter of 2021, the Company recorded
the following charges on a reported basis:
- Impairment: $46 million of pre-tax charges related to
store assets primarily as a result of the continued impact of
Covid-19.
- Acceleration Program: $20 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 now
expects to incur total charges of $205 to $220 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.
Taken together, these items decreased the Company’s net income
and earnings per diluted share by $53 million and $0.19,
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 year-to-date, and assuming a continued recovery emerging
from the pandemic, the Company now expects revenue for the fiscal
year to increase at a mid-teens rate compared to prior year on both
a 52 and 53-week basis. This outlook now includes the expectation
for fiscal year 2021 operating income and earnings per diluted to
share to increase versus fiscal year 2019 on a 52 and 53-week
basis.
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 8:00 a.m. (ET) today, May 6, 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
5689959. 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 5689959. 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 fourth quarter and
full year results on Thursday, August 19, 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,” “confident,” “future,” “uncertain
backdrop,” “emerge,” “on track,” “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
& Nine Months Ended March 27, 2021 and March 28,
2020 (in millions, except per
share data) (unaudited) (unaudited)
QUARTER ENDED NINE MONTHS ENDED March 27, 2021
March 28, 2020 March 27, 2021 March 28, 2020
Net sales
$
1,273.3
$
1,072.7
$
4,130.9
$
4,246.6
Cost of sales
361.4
456.5
1,215.1
1,506.2
Gross profit
911.9
616.2
2,915.8
2,740.4
Selling, general and administrative expenses
795.2
1,301.7
2,207.5
3,011.2
Operating income (loss)
116.7
(685.5
)
708.3
(270.8
)
Interest expense, net
16.9
13.5
55.0
39.8
Other expense (gain)
4.4
6.0
(1.8
)
12.8
Income before provision for income taxes
95.4
(705.0
)
655.1
(323.4
)
Provision for income taxes
3.7
(27.9
)
20.7
34.9
Net income (loss)
$
91.7
$
(677.1
)
$
634.4
$
(358.3
)
Net income (loss) per share: Basic
$
0.33
$
(2.45
)
$
2.29
$
(1.28
)
Diluted
$
0.32
$
(2.45
)
$
2.25
$
(1.28
)
Shares used in computing net income per share: Basic
278.2
276.1
277.5
279.4
Diluted
285.6
276.1
281.5
279.4
TAPESTRY, INC. DETAIL TO NET SALES For the Quarter & Nine Months Ended March 27, 2021
and March 28, 2020 (in
millions) (unaudited) QUARTER ENDED
March 27, 2021 March 28, 2020 % Change vs.
FY20 % Change vs. FY19 Constant Currency% Change vs.
FY20 Coach
$
963.5
$
772.5
25
%
-
%
22
%
Kate Spade
252.4
249.5
1
%
(10
)%
-
%
Stuart Weitzman
57.4
50.7
13
%
(33
)%
9
%
Total Tapestry
$
1,273.3
$
1,072.7
19
%
(4
)%
16
%
NINE MONTHS ENDED March 27, 2021
March 28, 2020 % Change vs. FY20 % Change vs.
FY19 Constant Currency %Change vs. FY20
Coach
$
3,064.2
$
3,008.3
2
%
(4
)%
-
%
Kate Spade
868.4
985.4
(12
)%
(16
)%
(12
)%
Stuart Weitzman
198.3
252.9
(22
)%
(35
)%
(23
)%
Total Tapestry
$
4,130.9
$
4,246.6
(3
)%
(9
)%
(4
)%
TAPESTRY, INC.
GAAP TO NON-GAAP RECONCILIATION
(in millions, except per share
data) (unaudited)
For the Quarter Ended March
27, 2021
Items Affecting
Comparability
GAAP Basis (As
Reported)
Acceleration Program
Impairment
Non-GAAP Basis (Excluding
Items)
Cost of sales Coach
718.0
-
-
718.0
Kate Spade
160.2
-
-
160.2
Stuart Weitzman
33.7
-
-
33.7
Gross profit(1)
$
911.9
$
-
$
-
$
911.9
SG&A expenses Coach
466.6
4.7
20.4
441.5
Kate Spade
168.9
0.9
19.3
148.7
Stuart Weitzman
51.2
3.4
6.1
41.7
Corporate
108.5
11.4
-
97.1
SG&A expenses
$
795.2
$
20.4
$
45.8
$
729.0
Operating income (loss) Coach
251.4
(4.7
)
(20.4
)
276.5
Kate Spade
(8.7
)
(0.9
)
(19.3
)
11.5
Stuart Weitzman
(17.5
)
(3.4
)
(6.1
)
(8.0
)
Corporate
(108.5
)
(11.4
)
-
(97.1
)
Operating income (loss)
$
116.7
$
(20.4
)
$
(45.8
)
$
182.9
Provision for income taxes
3.7
(3.2
)
(9.8
)
16.7
Net income (loss)
$
91.7
$
(17.2
)
$
(36.0
)
$
144.9
Net income (loss) per diluted common share
$
0.32
$
(0.06
)
$
(0.13
)
$
0.51
(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 Nine Months Ended March 27, 2021 Items
Affecting Comparability GAAP Basis(As Reported) CARES
Act TaxImpact AccelerationProgram Impairment
Non-GAAP Basis(Excluding Items) Cost of sales
Coach
2,251.0
-
-
-
2,251.0
Kate Spade
547.4
-
-
-
547.4
Stuart Weitzman
117.4
-
-
-
117.4
Gross profit(1)
$
2,915.8
$
-
$
-
$
-
$
2,915.8
SG&A expenses Coach
1,317.6
-
21.2
20.4
1,276.0
Kate Spade
474.1
-
4.3
19.3
450.5
Stuart Weitzman
123.0
-
(1.3
)
6.1
118.2
Corporate
292.8
-
44.5
-
248.3
SG&A expenses
$
2,207.5
$
-
$
68.7
$
45.8
$
2,093.0
Operating income (loss) Coach
933.4
-
(21.2
)
(20.4
)
975.0
Kate Spade
73.3
-
(4.3
)
(19.3
)
96.9
Stuart Weitzman
(5.6
)
-
1.3
(6.1
)
(0.8
)
Corporate
(292.8
)
-
(44.5
)
-
(248.3
)
Operating income (loss)
$
708.3
$
-
$
(68.7
)
$
(45.8
)
$
822.8
Provision for income taxes
20.7
(95.0
)
(15.4
)
(9.8
)
140.9
Net income (loss)
$
634.4
$
95.0
$
(53.3
)
$
(36.0
)
$
628.7
Net income (loss) per diluted common share
$
2.25
$
0.27
$
(0.15
)
$
(0.10
)
$
2.23
(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 March 28, 2020 Items
Affecting Comparability GAAP Basis(As Reported) ERP
Implementation Organization-related &Integration
costs Impairment Non-GAAP Basis(Excluding Items)
Cost of sales Coach
475.7
-
-
(61.9
)
537.6
Kate Spade
122.5
-
-
(32.3
)
154.8
Stuart Weitzman
18.0
-
-
(9.8
)
27.8
Gross profit(1)
$
616.2
$
-
$
-
$
(104.0
)
$
720.2
SG&A expenses Coach
437.6
-
-
16.4
421.2
Kate Spade
213.8
-
0.3
41.5
172.0
Stuart Weitzman
548.7
-
0.2
485.8
62.7
Corporate
101.6
2.8
2.9
-
95.9
SG&A expenses
$
1,301.7
$
2.8
$
3.4
$
543.7
$
751.8
Operating income (loss) Coach
38.1
-
-
(78.3
)
116.4
Kate Spade
(91.3
)
-
(0.3
)
(73.8
)
(17.2
)
Stuart Weitzman
(530.7
)
-
(0.2
)
(495.6
)
(34.9
)
Corporate
(101.6
)
(2.8
)
(2.9
)
-
(95.9
)
Operating income (loss)
$
(685.5
)
$
(2.8
)
$
(3.4
)
$
(647.7
)
$
(31.6
)
Provision for income taxes
(27.9
)
(0.7
)
(2.5
)
(49.4
)
24.7
Net income (loss)
$
(677.1
)
$
(2.1
)
$
(0.9
)
$
(598.3
)
$
(75.8
)
Net income (loss) per diluted common share
$
(2.45
)
$
(0.01
)
$
-
$
(2.17
)
$
(0.27
)
(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 Nine Months Ended March 28, 2020 Items
Affecting Comparability GAAP Basis(As Reported) ERP
Implementation Organization-related &Integration
costs Impairment Non-GAAP Basis(Excluding Items)
Cost of sales Coach
2,030.6
-
(0.1
)
(61.9
)
2,092.6
Kate Spade
576.4
-
(1.2
)
(32.3
)
609.9
Stuart Weitzman
133.4
-
(4.3
)
(9.8
)
147.5
Gross profit(1)
$
2,740.4
$
-
$
(5.6
)
$
(104.0
)
$
2,850.0
SG&A expenses Coach
1,410.2
-
(0.1
)
57.9
1,352.4
Kate Spade
607.0
-
1.1
66.7
539.2
Stuart Weitzman
673.8
-
(1.9
)
494.7
181.0
Corporate
320.2
23.6
27.4
-
269.2
SG&A expenses
$
3,011.2
$
23.6
$
26.5
$
619.3
$
2,341.8
Operating income (loss) Coach
620.4
-
-
(119.8
)
740.2
Kate Spade
(30.6
)
-
(2.3
)
(99.0
)
70.7
Stuart Weitzman
(540.4
)
-
(2.4
)
(504.5
)
(33.5
)
Corporate
(320.2
)
(23.6
)
(27.4
)
-
(269.2
)
Operating income (loss)
$
(270.8
)
$
(23.6
)
$
(32.1
)
$
(723.3
)
$
508.2
Provision for income taxes
34.9
(5.7
)
(11.9
)
(61.5
)
114.0
Net income (loss)
$
(358.3
)
$
(17.9
)
$
(20.2
)
$
(661.8
)
$
341.6
Net income (loss) per diluted common share
$
(1.28
)
$
(0.06
)
$
(0.07
)
$
(2.37
)
$
1.22
(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 Acceleration
Program and Impairment costs for the third quarter of fiscal year
2021 and the effect of certain items related to the tax benefit the
Company received under the CARES Act, the Acceleration Program and
Impairment costs for the first nine months of fiscal year 2021 and
ERP Implementation, Organization-related & Integration Costs,
and Impairment costs for the third quarter and first nine 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.
In addition to these non-GAAP measures, the Company has provided
comparisons to certain fiscal year 2019 results and trends, which
the Company believes is useful to investors and others in
evaluating the Company’s results, due to the significant impact of
the Covid-19 pandemic on the Company’s operations and financial
results, notably in the second half of fiscal year 2020.
TAPESTRY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS At March 27, 2021 and
June 27, 2020 (in
millions) (unaudited) (audited)
March 27, 2021 June 27, 2020 ASSETS
Cash, cash equivalents and short-term investments
$
1,659.2
$
1,434.4
Receivables
240.6
193.3
Inventories
700.3
736.9
Other current assets
296.5
188.5
Total current assets
2,896.6
2,553.1
Property and equipment, net
673.8
775.2
Lease right-of-use assets
1,555.2
1,757.0
Other noncurrent assets
2,840.4
2,838.9
Total assets
$
7,966.0
$
7,924.2
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts
payable
$
409.5
$
130.8
Accrued liabilities
527.0
511.0
Short-term lease liabilities
354.6
388.8
Current debt
-
711.5
Total current liabilities
1,291.1
1,742.1
Long-term debt
1,590.0
1,587.9
Long-term lease liabilities
1,576.3
1,799.8
Other liabilities
493.6
518.0
Stockholders' equity
3,015.0
2,276.4
Total liabilities and stockholders' equity
$
7,966.0
$
7,924.2
TAPESTRY, INC. STORE COUNT At
December 26, 2020 and March 27, 2021 (unaudited) As of As of
Directly-Operated Store Count:
December 26, 2020
Openings (Closures) March 27,
2021 Coach
North America
374
-
(17
)
357
International
586
8
(7
)
587
Kate Spade North America
216
-
(5
)
211
International
206
1
(5
)
202
Stuart Weitzman North
America
54
-
(5
)
49
International
55
4
(5
)
54
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005339/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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