Announces $1 Billion Share Repurchase
Authorization
Tapestry, Inc. (NYSE: TPR), a leading New York-based house of
modern luxury accessories and lifestyle brands, today reported
third quarter results for the period ended March 30, 2019.
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the full release here:
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Discussion of Financial Results:
Victor Luis, Chief Executive Officer of Tapestry, Inc., said,
“We are pleased with our third quarter performance, highlighted by
increases in sales and gross margin on a constant currency basis in
each of our three brands. Most notably, we again drove positive
comps at Coach and generated a significant sequential comp
improvement at Kate Spade with Nicola Glass’s new collection
resonating with consumers globally. Further, we continued to make
key investments across our portfolio and to realize meaningful
synergies from the successful integration of Kate Spade as we
harness the power of our multi-brand model. Taken together,
adjusted EPS was in-line with our expectations for the
quarter.”
Share Repurchase Authorization:
The Company announced its Board of Directors has authorized the
repurchase of up to $1 billion of its outstanding common stock.
Pursuant to this program, purchases of shares of the Company's
common stock will be made subject to market conditions and at
prevailing market prices, through open market purchases.
Repurchased shares of common stock will become authorized but
unissued shares. These shares may be issued in the future for
general corporate and other purposes. In addition, the Company may
terminate or limit the stock repurchase program at any time.
Mr. Luis continued, “We’re also excited to announce the approval
of a $1 billion share repurchase authorization, demonstrating our
confidence in driving long-term, sustainable growth and value.
Through this program we will optimize our capital deployment and
enhance shareholder return, while maintaining our financial and
strategic flexibility. Importantly, we remain committed to our
longstanding capital allocation priorities supported by our strong
balance sheet and free cash flow: investing in our brands and
business, pursuing strategic acquisitions on an opportunistic basis
and maintaining our dividend.”
Non-GAAP Reconciliation:
During the fiscal third quarter, the Company recorded certain
charges associated with its Integration and Acquisition activities
and ERP implementation efforts as well as the benefit of Tax
Legislation changes. Taken together, these items decreased the
Company’s third quarter reported net income by approximately $4
million or about $0.02 per diluted share. Please refer to the
financial tables included herein for a detailed reconciliation of
the Company’s reported to non-GAAP results.
Overview of Third Quarter 2019
Tapestry, Inc. Results:
- Net sales totaled $1.33 billion
for the third fiscal quarter as compared to $1.32 billion in the
prior year, an increase of 1% on a reported basis and 2% in
constant currency.
- Gross profit totaled $916
million on a reported basis, while gross margin for the quarter was
68.8% compared to $908 million and 68.6%, respectively, in the
prior year. On a non-GAAP basis, gross profit totaled $921 million,
while gross margin was 69.2% as compared to $912 million and 68.9%,
respectively, in the prior year.
- SG&A expenses totaled $810
million on a reported basis and represented 60.8% of sales compared
to $749 million and 56.6%, respectively in the year-ago quarter. On
a non-GAAP basis, SG&A expenses were $780 million and
represented 58.6% of sales as compared to approximately $727
million and 55.0%, respectively, in the year-ago period.
- Operating income totaled $106
million on a reported basis, while operating margin was 7.9% versus
$159 million and an operating margin of 12.0% in the prior year. On
a non-GAAP basis, operating income was $141 million, while
operating margin was 10.6% versus $184 million and an operating
margin of 13.9% in the prior year.
- Net interest expense was $11
million in the quarter as compared to $17 million in the year ago
period.
- Net income for the quarter was
$117 million on a reported basis, with earnings per diluted share
of $0.40. This compared to net income of $140 million with earnings
per diluted share of $0.48 in the prior year period. The reported
tax rate for the quarter of (23.4)% compared to the prior year
reported rate of 1.3%. Additional Transition Tax guidance was
released by the U.S. Treasury this quarter, which resulted in the
reduction of the tax rate for the third fiscal quarter as compared
to prior year. On a non-GAAP basis, net income for the quarter
totaled $122 million, with earnings per diluted share of $0.42.
This compared to non-GAAP net income of $158 million with earnings
per diluted share of $0.54 in the prior year period. The non-GAAP
tax rate for the quarter was 6.8% compared to a 5.6% in the prior
year.
- Inventory was $811 million at
the end of quarter versus ending inventory of $714 million in the
year ago period.
Third fiscal quarter results in each of the Company’s reportable
segments were as follows:
Coach Third Quarter of 2019
Results:
- Net sales for Coach totaled $965
million for the third fiscal quarter, as compared to $969 million
in the prior year on a reported basis, or an increase of 1% on a
constant currency basis. Global comparable store sales increased
1%, including a benefit of approximately 100 basis points driven by
an increase in global e-commerce.
- Gross profit for Coach totaled
$692 million, while gross margin was 71.7% on a reported and
non-GAAP basis. This compared to reported gross profit and margin
in the prior year of $691 million and 71.3%, respectively. On a
non-GAAP basis, gross profit was $692 million, while gross margin
was 71.4% in the prior year’s third quarter.
- SG&A expenses for Coach were
$452 million on a reported basis and represented 46.8% of sales. On
a non-GAAP basis, SG&A expenses were $447 million and
represented 46.3% of sales. This compared to expenses of $441
million or 45.5% of sales in the year-ago quarter on both a
reported and non-GAAP basis.
- Operating income for Coach
totaled $239 million compared to reported operating income of $250
million in the prior year, while operating margin was 24.8% versus
25.8% a year ago. On a non-GAAP basis, operating income was $245
million compared to $252 million in the prior year, while operating
margin was 25.4% versus 26.0% a year ago.
Kate Spade Third Quarter of 2019
Results:
- Net sales for Kate Spade totaled
$281 million for the third fiscal quarter as compared to $269
million in the prior year, an increase of 4% on a reported basis
and 5% in constant currency. Global comparable store sales declined
3%, including the positive impact of approximately 700 basis points
from global e-commerce.
- Gross profit for Kate Spade
totaled $178 million on a reported basis, while gross margin for
the quarter was 63.3% as compared to $171 million and 63.5%,
respectively, in the prior year. On a non-GAAP basis, third quarter
gross profit was $182 million, while gross margin was 64.8% as
compared to $172 million and 63.9%, respectively, in the year ago
period.
- SG&A expenses for Kate Spade
were $172 million on a reported basis and represented 61.2% of
sales. This compared to reported SG&A expenses of $158 million
in the year ago period, which represented 58.8% of sales. On a
non-GAAP basis, SG&A expenses were $169 million and represented
60.1% of sales. This compared to expenses of $149 million or 55.4%
of sales on a non-GAAP basis in the previous year.
- Operating income for Kate Spade
was $6 million on a reported basis, representing an operating
margin of 2.2%. This compared to operating income of $13 million
and an operating margin of 4.7% on a reported basis in the year ago
period. On a non-GAAP basis, operating income totaled $13 million,
while operating margin was 4.7%. This compared to operating income
of $23 million and an operating margin of 8.4% on a non-GAAP basis
in the previous year.
Stuart Weitzman Third Quarter of 2019
Results:
- Net sales for Stuart Weitzman
totaled $85 million for the third fiscal quarter compared to $84
million reported in the same period of the prior year, an increase
of 2% on a reported basis and 4% in constant currency.
- Gross profit for Stuart Weitzman
totaled $46 million on a reported basis, while gross margin for the
quarter was 54.3% as compared to $45 million and 54.1%,
respectively, in the prior year. On a non-GAAP basis, third quarter
gross profit was $47 million, while gross margin was 55.2% as
compared to $47 million and 56.6%, respectively, in the year ago
period. Excluding the impact of currency, non-GAAP gross margin
increased 70 basis points versus prior year.
- SG&A expenses for Stuart
Weitzman were $60 million on a reported basis and represented 70.2%
of sales as compared to $56 million or 67.3% of sales in the prior
year’s third quarter. On a non-GAAP basis, SG&A expenses were
approximately $60 million or 70.0% of sales as compared to $52
million or 61.8% of sales in the prior year.
- Operating income for Stuart
Weitzman was a loss of $14 million on a reported basis, while
operating margin was (15.9)% versus a loss of $11 million and
(13.2)%, respectively, in the prior year. On a non-GAAP basis, the
operating loss was $13 million or (14.9)% of sales versus a loss of
$4 million or (5.1)% of sales, respectively, in the prior
year.
Mr. Luis added, “As we look ahead, we are committed to executing
our strategic plan and achieving our near-term and long-range
financial targets. This includes our expectation of delivering
positive comps at both Coach and Kate Spade along with
profitability improvements at Stuart Weitzman, both in the fourth
fiscal quarter and in the years ahead. As such, we are maintaining
our EPS guidance for fiscal 2019 and our outlook for double-digit
operating income and EPS growth in fiscal 2020.”
“We are confident in the clarity of our vision, the strength of
our team and the benefits of our global, multi-brand platform. Our
model is distinctive – we are brand-led and consumer-centric – with
a culture built upon the values of optimism, innovation and
inclusivity. Each of our brands have differentiated attitudes,
bringing diversification to our portfolio. At the same time, each
can leverage Tapestry’s core capabilities and infrastructure to
drive meaningful synergies. Taken together, we are uniquely
positioned to capture the vast opportunities within the attractive
and growing global accessories, footwear and outerwear markets,”
Mr. Luis concluded.
Fiscal Year 2019 Outlook
The following fiscal 2019 outlook is provided on a non-GAAP
basis and replaces all previous guidance.
The Company expects revenues for fiscal 2019 to increase at a
low-to-mid-single-digit rate from fiscal 2018.
In addition, the Company projects earnings per diluted share in
the range of $2.55 to $2.60. This guidance continues to reflect
cost savings resulting from expected synergies related to the Kate
Spade acquisition of $100 to $115 million as well as the impact of
distributor consolidations and buybacks and systems investments.
This guidance includes the expectation for net interest expense to
be in the area of $50 million for the year. Further, the full year
fiscal 2019 tax rate is projected at about 18%.
Fiscal Year 2019 Outlook - Non-GAAP Adjustments:
The Company is not able to provide a full reconciliation of the
non-GAAP financial measures to GAAP presented in this release and
on the Company’s conference call because certain material items
that impact these measures, such as the timing and exact amount of
charges related to Integration and Acquisition and the costs
associated with the Company’s ERP implementation have not yet
occurred. Accordingly, a reconciliation of our non-GAAP financial
measure guidance to the corresponding GAAP measures is not
available without unreasonable effort. Where possible, the Company
has identified the estimated impact of the items excluded from its
fiscal 2019 guidance.
This fiscal 2019 non-GAAP guidance excludes (1) expected pre-tax
charges of approximately $35 million attributable to the Company’s
ERP implementation efforts; (2) estimated pre-tax Integration and
Acquisition charges of approximately $80 to $90 million (of which
approximately $15 million is estimated to be non-cash); and (3) the
impact of Tax Legislation of $9 million incurred in the second and
third quarters of fiscal 2019. The Company continues to refine its
integration plan and estimates for the ERP implementation
efforts.
Conference Call Details:
The Company will host a conference call to review these results
at 8:30 a.m. (ET) today, May 9, 2019. 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
9287715. 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 9287715. 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.
The Company expects to report fiscal 2019 fourth quarter and
full year financial results on Thursday August 15, 2019. 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. 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 2019 Outlook,” as
well as 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," “excited,” “moving,”
“leveraging,” “capitalizing,” “developing,” “drive,” “targeting,”
“assume,” “plan,” “build,” “pursue,” “maintain,” “on track,” “well
positioned to,” “look forward to,” “looking ahead,” “to acquire,”
“achieve,” “strategic vision,” “growth opportunities” 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 expected economic trends,
the ability to anticipate consumer preferences, the ability to
control costs and successfully execute our ERP implementation and
growth strategies, our ability to achieve intended benefits, cost
savings and synergies from acquisitions, the risk of cybersecurity
threats and privacy or data security breaches, and the impact of
tax legislation, etc. Please refer to the Company’s latest Annual
Report on Form 10-K 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.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters
and Nine Months Ended March 30, 2019 and March 31,
2018
(in millions,
except per share data)
(unaudited) (unaudited) QUARTER ENDED
NINE MONTHS ENDED March 30,
2019
March 31,
2018
March 30,
2019
March 31,
2018
Net sales $ 1,331.4 $ 1,322.4 $ 4,513.4 $ 4,396.3
Cost of sales 415.5 414.8 1,458.9
1,549.6 Gross profit 915.9 907.6 3,054.5 2,846.7
Selling, general and administrative expenses 810.1
748.6 2,410.3 2,363.1 Operating
income 105.8 159.0 644.2 483.6 Interest expense, net
10.6 16.9 36.9 59.6 Income
before provision for income taxes 95.2 142.1 607.3 424.0
Provision for income taxes (22.2 ) 1.8 112.8
238.2 Net income $ 117.4 $ 140.3 $ 494.5 $
185.8 Net income per share: Basic $ 0.40 $
0.49 $ 1.71 $ 0.65 Diluted $ 0.40 $ 0.48 $ 1.70 $
0.65 Shares used in computing net income per share:
Basic 290.0 286.2 289.5 284.7
Diluted 290.9 290.1 291.2
287.8
TAPESTRY,
INC.
GAAP TO NON-GAAP
RECONCILIATION
For the Quarters
Ended March 30, 2019 and March 31, 2018
(in millions,
except per share data)
(unaudited)
March 30, 2019
GAAP Basis(As Reported)
ERPImplementation(1)
Integration
&Acquisition(2)
Impact of
TaxLegislation(3)
Non-GAAP Basis(Excluding
Items)
Gross profit $ 915.9 $ - $ (5.0 ) $ - $ 920.9
Selling, general and administrative expenses 810.1 14.7 15.6 -
779.8 Operating income 105.8 (14.7 ) (20.6 ) - 141.1
Income before provision for income taxes 95.2 (14.7 ) (20.6 ) -
130.5 Provision for income taxes (22.2 ) (3.7 ) (2.4 ) (24.9
) 8.8 Net income 117.4 (11.0 ) (18.2 ) 24.9 121.7
Diluted net income per share 0.40 (0.05 ) (0.06 ) 0.09 0.42
March 31, 2018
GAAP Basis(As Reported)
OperationalEfficiency
Plan(4)
Integration
&Acquisition(2)
Impact of
TaxLegislation(3)
Non-GAAP Basis(Excluding
Items)
Gross profit $ 907.6 $ - $ (4.1 ) $ - $ 911.7
Selling, general and administrative expenses 748.6 2.9 18.3 - 727.4
Operating income 159.0 (2.9 ) (22.4 ) - 184.3 Income
before provision for income taxes 142.1 (2.9 ) (22.4 ) - 167.4
Provision for income taxes 1.8 (1.0 ) (12.1 ) 5.4 9.5
Net income 140.3 (1.9 ) (10.3 ) (5.4 ) 157.9 Diluted net
income per share 0.48 - (0.04 ) (0.02 ) 0.54 (1) Amounts as of
March 30, 2019 represent technology implementation costs. (2)
Amounts as of March 30, 2019 and March 31, 2018 represent charges
primarily attributable to acquisition and integration costs related
to the purchase of Kate Spade & Company, certain distributors
for the Coach and Stuart Weitzman brands and assumed operational
control of Kate Spade joint ventures. These charges include:
- Organization-related costs
- Limited life purchase accounting
adjustments
- Professional fees
(3) Amounts as of March 30, 2019 represent a tax benefit primarily
due to the transition tax related to foreign earnings deemed to be
repatriated. Amounts as of March 31, 2018 represent charges due to
the transition tax related to foreign earnings deemed to be
repatriated partially offset by the re-measurement of deferred tax
assets and liabilities. (4) Amounts as of March 31, 2018 represent
technology infrastructure costs.
TAPESTRY,
INC.
GAAP TO NON-GAAP
RECONCILIATION
For the Nine
Months Ended March 30, 2019 and March 31, 2018
(in millions,
except per share data)
(unaudited)
March 30, 2019
GAAP Basis(As Reported)
ERPImplementation(1)
Integration
&Acquisition(2)
Impact of TaxLegislation
(3)
Non-GAAP Basis(Excluding
Items)
Gross profit $ 3,054.5 $ - $ (9.1 ) $ - $ 3,063.6
Selling, general and administrative expenses 2,410.3 25.1 46.2 -
2,339.0 Operating income 644.2 (25.1 ) (55.3 ) - 724.6
Income before provision for income taxes 607.3 (25.1 ) (55.3
) - 687.7 Provision for income taxes 112.8 (6.3 ) (4.5 ) 9.2
114.4 Net income 494.5 (18.8 ) (50.8 ) (9.2 ) 573.3
Diluted net income per share 1.70 (0.06 ) (0.17 ) (0.04 ) 1.97
March 31, 2018
GAAP Basis(As Reported)
OperationalEfficiency
Plan(4)
Integration
&Acquisition(2)
Impact of TaxLegislation
(3)
Non-GAAP Basis(Excluding
Items)
Gross profit $ 2,846.7 $ - $ (110.9 ) $ - $ 2,957.6
Selling, general and administrative expenses 2,363.1 9.5 160.4 -
2,193.2 Operating income 483.6 (9.5 ) (271.3 ) - 764.4
Income before provision for income taxes 424.0 (9.5 ) (271.3
) - 704.8 Provision for income taxes 238.2 (3.1 ) (79.3 )
199.6 121.0 Net income 185.8 (6.4 ) (192.0 ) (199.6 ) 583.8
Diluted net income per share 0.65 (0.02 ) (0.67 ) (0.69 )
2.03 (1) Amounts as of March 30, 2019 primarily represent
technology implementation costs. (2) Amounts as of March 30, 2019
and March 31, 2018 represent charges primarily attributable to
acquisition and integration costs related to the purchase of Kate
Spade & Company, certain distributors of the Coach and Stuart
Weitzman brands and assumed operational control of Kate Spade joint
ventures. These charges include:
- Limited life purchase accounting
adjustments
- Professional fees
- Severance and other costs related to
contractual payments with certain Kate Spade executives
- Organization-related costs
- Inventory reserves established for the
destruction of inventory
(3) Amounts as of March 30, 2019 represent charges primarily due to
the transition tax related to foreign earnings deemed to be
repatriated. Amounts as of March 31, 2018 represent charges due to
the transition tax related to foreign earnings deemed to be
repatriated partially offset by the re-measurement of deferred tax
assets and liabilities. (4) Amounts as of March 31, 2018 primarily
represent technology infrastructure costs.
TAPESTRY,
INC.
GAAP TO NON-GAAP
RECONCILIATION - FOR SEGMENT RESULTS
For the Quarters
Ended March 30, 2019 and March 31, 2018
(in
millions)
(unaudited)
March 30, 2019 GAAP
Coach Kate Spade Stuart Weitzman
Corporate Non-GAAP Cost of sales
Integration & Acquisition - (4.3 )
(0.7 ) -
Gross profit $ 915.9 $
- $ (4.3 ) $ (0.7 ) $ - $ 920.9
SG&A
expenses Integration & Acquisition 5.5 3.0 0.1 7.0 ERP
Implementation - - -
14.7
SG&A expenses $ 810.1 $
5.5 $ 3.0 $ 0.1 $ 21.7 $ 779.8
Operating income $ 105.8 $ (5.5 ) $ (7.3 ) $ (0.8 ) $ (21.7
) $ 141.1
March 31, 2018 GAAP Coach
Kate Spade Stuart Weitzman Corporate
Non-GAAP Cost of sales Integration & Acquisition
(1.0 ) (1.0 ) (2.1 ) -
Gross profit $ 907.6 $ (1.0 ) $ (1.0 ) $ (2.1 ) $ -
$ 911.7
SG&A expenses Integration &
Acquisition 0.2 9.1 4.7 4.3 Operational Efficiency Plan
- - - 2.9
SG&A expenses $ 748.6 $ 0.2 $ 9.1 $
4.7 $ 7.2 $ 727.4
Operating income $
159.0 $ (1.2 ) $ (10.1 ) $ (6.8 ) $ (7.2 ) $ 184.3
TAPESTRY,
INC.
GAAP TO NON-GAAP
RECONCILIATION - FOR SEGMENT RESULTS
For the Nine
Months Ended March 30, 2019 and March 31, 2018
(in
millions)
(unaudited)
March 30, 2019 GAAP
Coach Kate Spade Stuart Weitzman
Corporate Non-GAAP Cost of sales
Integration & Acquisition (2.0 ) (5.4 )
(1.7 ) -
Gross profit $ 3,054.5
$ (2.0 ) $ (5.4 ) $ (1.7 ) $ - $ 3,063.6
SG&A
expenses Integration & Acquisition 5.5 10.1 12.2 18.4 ERP
Implementation - - -
25.1
SG&A expenses $ 2,410.3
$ 5.5 $ 10.1 $ 12.2 $ 43.5 $ 2,339.0
Operating income $ 644.2 $ (7.5 ) $ (15.5 ) $ (13.9 )
$ (43.5 ) $ 724.6
March 31, 2018 GAAP
Coach Kate Spade Stuart Weitzman
Corporate Non-GAAP Cost of sales Integration
& Acquisition (1.0 ) (106.4 ) (3.5
) -
Gross profit $ 2,846.7 $ (1.0 ) $
(106.4 ) $ (3.5 ) $ - $ 2,957.6
SG&A
expenses Integration & Acquisition 0.2 106.6 6.5 47.1
Operational Efficiency Plan - -
- 9.5
SG&A expenses $
2,363.1 $ 0.2 $ 106.6 $ 6.5 $ 56.6 $
2,193.2
Operating income $ 483.6 $ (1.2 ) $ (213.0 )
$ (10.0 ) $ (56.6 ) $ 764.4
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 Integration &
Acquisition-Related Costs and ERP Implementation-Related costs for
Tapestry, Inc. and separately by segment and the impact of tax
legislation for Tapestry, Inc.
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
and gross margin for the Stuart Weitzman 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 revenue results by
translating current period revenue in local currency using the
prior year period’s currency conversion rate.
Guidance for certain financial information for the fiscal year
ending June 29, 2019 has also been presented on a non-GAAP
basis.
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.
SEGMENT
INFORMATION
For the Quarters
and Nine Months Ended March 30, 2019 and March 31,
2018
(in
millions)
(unaudited)
Coach Kate
Spade Stuart Weitzman Corporate
Total
Three Months
Ended March 30, 2019
Net sales $ 965.0 $ 281.1 $ 85.3 $ - $ 1,331.4 Gross profit
691.7 177.9 46.3 - 915.9 Operating income (loss) 239.5 6.1 (13.6 )
(126.2 ) 105.8 Income (loss) before provision for income taxes
239.5 6.1 (13.6 ) (136.8 ) 95.2
Three Months
Ended March 31, 2018
Net sales $ 969.3 $ 269.3 $ 83.8 $ - $ 1,322.4 Gross profit
691.3 171.0 45.3 - 907.6 Operating income (loss) 250.4 12.7 (11.0 )
(93.1 ) 159.0 Income (loss) before provision for income taxes 250.4
12.7 (11.0 ) (110.0 ) 142.1
Nine Months Ended
March 30, 2019
Net sales $ 3,174.3 1,034.9 $ 304.2 $ - $ 4,513.4 Gross
profit 2,231.5 658.0 165.0 - 3,054.5 Operating income (loss) 848.9
140.1 (20.8 ) (324.0 ) 644.2 Income (loss) before provision for
income taxes 848.9 140.1 (20.8 ) (360.9 ) 607.3
Nine Months Ended
March 31, 2018
Net sales $ 3,122.6 $ 972.8 $ 300.9 $ - $ 4,396.3 Gross
profit 2,169.4 502.6 174.7 - 2,846.7 Operating income (loss) 826.7
(55.8 ) 19.7 (307.0 ) 483.6 Income (loss) before provision for
income taxes 826.7 (55.8 ) 19.7 (366.6 ) 424.0
TAPESTRY,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
At March 30, 2019
and June 30, 2018
(in
millions)
(unaudited) (audited) March 30,
2019
June 30,
2018
ASSETS Cash, cash equivalents and short-term
investments $ 1,337.3 $ 1,250.0 Receivables 285.7 314.1 Inventories
811.1 673.8 Other current assets 228.3 194.7
Total current assets 2,662.4 2,432.6 Property and equipment,
net 921.6 885.4 Other noncurrent assets 3,385.9
3,360.3 Total assets $ 6,969.9 $ 6,678.3
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable
$ 260.6 $ 264.3 Accrued liabilities 735.3 673.2 Current debt
0.7 0.7 Total current liabilities 996.6 938.2
Long-term debt 1,601.5 1,599.9 Other liabilities 840.6 895.6
Stockholders' equity 3,531.2 3,244.6 Total
liabilities and stockholders' equity $ 6,969.9 $ 6,678.3
TAPESTRY,
INC.
STORE
COUNT
At December 29,
2018 and March 30, 2019
(unaudited)
As of As of
Directly-Operated Store Count:
December 29, 2018 Openings
(Closures) March 30, 2019
Coach
North America 399 1 (8) 392 International 585 11 (7) 589
Kate
Spade
North America 218 1 (7) 212 International 176 7 (2) 181
Stuart
Weitzman
North America 68 3 (1) 70 International 50 8 - 58
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190509005239/en/
Tapestry, Inc.Analysts & Media:Andrea Shaw ResnickInterim
Chief Financial OfficerGlobal Head of Investor Relations and
Corporate Communications212/629-2618Christina ColoneVice President,
Investor Relations212/946-7252
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