Tapestry, Inc. Reports Fiscal 2021 Third Quarter Results

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Tapestry, Inc. Reports Fiscal 2021 Third Quarter Results

Business Wire2021-05-06

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...

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·2021-05-06
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Reports Fiscal 2021 Third Quarter Results","media":"Business Wire","content":"<div>\n<p>Results Significantly Ahead of Expectations With Operating Income Exceeding Pre-Pandemic Levels\n\nDrove Sequential Improvement in Topline Trends and Outperformed Third Quarter Revenue Outlook\nGenerated...</p>\n\n<a href=\"https://finance.yahoo.com/news/tapestry-inc-reports-fiscal-2021-104500275.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tapestry, Inc. 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Reports Fiscal 2021 Third Quarter Results\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-06 18:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/tapestry-inc-reports-fiscal-2021-104500275.html><strong>Business Wire</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Results Significantly Ahead of Expectations With Operating Income Exceeding Pre-Pandemic Levels\n\nDrove Sequential Improvement in Topline Trends and Outperformed Third Quarter Revenue Outlook\nGenerated...</p>\n\n<a href=\"https://finance.yahoo.com/news/tapestry-inc-reports-fiscal-2021-104500275.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TERN","symbol_name":"Terns Pharmaceuticals, Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/tapestry-inc-reports-fiscal-2021-104500275.html","article_id":"2133578813","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2133578813","pubTimestamp":1620297900,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Results Significantly Ahead of Expectations With Operating Income Exceeding Pre-Pandemic Levels\n\nDro","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TERN":"Terns Pharmaceuticals, Inc.","CRCT":"Cricut, Inc.","TPR":"Tapestry Inc."},"translate_title":"Tapestry公司公布2021财年第三季度业绩","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CRCT":0.9,"TERN":0.9,"TPR":0.9},"content_text":"Results Significantly Ahead of Expectations With Operating Income Exceeding Pre-Pandemic Levels\n\nDrove Sequential Improvement in Topline Trends and Outperformed Third Quarter Revenue Outlook\nGenerated Triple-Digit Increase in Global Digital Sales, Fueled by New Customer Acquisition\nDelivered Strong Gross Margin Expansion Across Brands\nNow On Track to Exceed FY19 EPS for the Fiscal Year\n\nTapestry, 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.\nThis press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210506005339/en/\n (Photo: Business Wire)\nJoanne 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.\"\nMs. 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.\"\nTapestry, Inc. Fiscal Third Quarter 2021 Highlights\n\nAchieved sequential improvement in year-over-year revenue trends compared to both FY20 and FY19\nRealized 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\nPosted a revenue increase of approximately 175% in Mainland China versus FY20 and 40% growth compared to FY19\nDrove a mid-teens sales increase versus prior year in North America, representing a return to pre-pandemic levels\nExpanded gross margin across brands year-over-year, primarily driven by lower, more disciplined promotional activity overall\nReduced 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\nDelivered operating income growth and margin expansion – ahead of both FY20 and FY19 – for the third consecutive quarter\nGenerated $876 million of free cash flow year-to-date, underscoring the Company’s financial strength and flexibility\n\nAcceleration Program Highlights\nIn 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:\n\nRecruited 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;\nDelivered an increase in purchase frequency versus prior year through enhanced and consistent brand experiences across touchpoints and reactivated lapsed customers across brands;\nAchieved 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;\nEffectively 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;\nUtilized 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;\nContinued 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. \n\nThrough 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.\nOverview of Third Quarter 2021 Tapestry, Inc. Results\n\nNet sales totaled $1.27 billion for the third quarter as compared to $1.07 billion in the prior year, representing a 19% increase.\nGross 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%.\nSG&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.\nOperating 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.\nNet interest expense was $17 million in the quarter as compared to approximately $13 million in the year ago period.\nOther expense was $4 million versus $6 million in the prior year.\nNet 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.\nInventory was $700 million at quarter-end versus ending inventory of $853 million in the year ago period.\n\nFiscal third quarter results by brand were as follows:\nCoach Third Quarter 2021 Results\n\nNet 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.\nGross 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.\nSG&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.\nOperating 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. \n\nKate Spade Third Quarter 2021 Results\n\nNet 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.\nGross 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.\nSG&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.\nOperating 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.\n\nStuart Weitzman Third Quarter 2021 Results \n\nNet 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.\nGross 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%.\nSG&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.\nOperating 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.\n\nNon-GAAP Reconciliation \nDuring the fiscal third quarter of 2021, the Company recorded the following charges on a reported basis:\n\nImpairment: $46 million of pre-tax charges related to store assets primarily as a result of the continued impact of Covid-19.\nAcceleration 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.\n\nTaken 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.\nFiscal Year 2021 Outlook\nDue 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.\nThe Company also notes that fiscal 2021 includes a 53rd week in its fourth fiscal quarter.\nConference Call Details \nThe 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.\nUpcoming Events\nThe 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\").\nTapestry, 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.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":105205776,"gmtCreate":1620303770995,"gmtModify":1704341612038,"author":{"id":"3583107295640646","authorId":"3583107295640646","name":"Stellaching","avatar":"https://static.tigerbbs.com/44d42c6d30a2e5188558d76b1f45f1c2","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3583107295640646","idStr":"3583107295640646"},"htmlText":"Amazing","listText":"Amazing","text":"Amazing","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/105205776","repostId":2133578813,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":0,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}