Tapestry, Inc. Reports Fiscal 2022 Third Quarter Results
- Achieved Revenue Growth of 13% Compared to Prior Year Led by Digital
- Drove Mid-Teens Increase in New Customer Acquisition Across Brands in North America
- Reported GAAP EPS of $0.46 and Non-GAAP EPS of $0.51, Significantly Ahead of the Company’s Expectations
- Now On Track to Return Approximately $1.9 Billion to Shareholders in Fiscal 2022
- Announces Board of Director’s Approval of New $1.5 Billion Share Buyback Authorization
Link to Download Tapestry’s Q3 2022 Earnings Presentation, Including Brand Highlights
NEW YORK–(BUSINESS WIRE)–Tapestry, Inc. (NYSE: TPR), a leading New York-based house of modern luxury accessories and lifestyle brands including Coach, Kate Spade, and Stuart Weitzman, today reported results for the fiscal third quarter ended April 2, 2022.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., said, “Our third quarter results significantly exceeded expectations led by continued strong growth in North America. We drove increased customer demand at Coach, Kate Spade and Stuart Weitzman, reflecting the vibrancy of each of our brands, the power of our platform and our team’s successful execution of our strategic initiatives.”
“Our performance reinforces the meaningful runway ahead across our portfolio. We are harnessing our unique blend of magic and logic – distinctive brands amplified by an agile and data-rich platform. These differentiators enable us to deliver the continuous innovation necessary to build lasting customer relationships in the context of a rapidly evolving landscape. We remain confident in our long-term growth opportunities and steadfast in our commitment to enhance value for our customers and shareholders.”
Capital Deployment
Given Tapestry’s year-to-date outperformance, robust balance sheet, significant free cash flow generation, and outlook for growth, the Company now expects to return approximately $1.9 billion to shareholders in Fiscal 2022, an increase from the prior outlook of over $1.5 billion. In addition, the Company’s Board of Directors has approved a new $1.5 billion share repurchase program.
- Share Repurchases: Tapestry now forecasts the repurchase of $1.6 billion in common stock in the fiscal year, an increase of $350 million from the prior outlook of $1.25 billion. In the fiscal third quarter, the Company deployed $500 million to buy back approximately 13 million shares of its common stock at an average cost of $37.06 per share. During the first nine months of Fiscal 2022, Tapestry repurchased 31 million shares of its common stock for $1.25 billion, or an average cost of $39.88 per share. As of quarter-end, $350 million remained on the existing authorization, which is intended to be utilized in the fourth fiscal quarter. In addition, there is $1.5 billion available under the newly announced authorization, which the Company expects to begin utilizing in Fiscal 2023.
- Dividend Payments: The Board of Directors declared a quarterly cash dividend of $0.25 per common share payable on June 27, 2022 to shareholders of record as of the close of business on June 3, 2022 for an annual dividend rate of $1.00 per share, or approximately $270 million returned to shareholders in the fiscal year. Tapestry remains committed to increasing its dividend at a faster rate than earnings growth over time.
Third Quarter 2022 Financial Highlights
- Fueled 13% revenue growth, including double-digit increases at each brand;
- Delivered global sales ahead of expectations despite a challenging external environment; Drove revenue growth of 22% in North America, fully offsetting a mid-teens decline in Mainland China due to pressures from the resurgence of Covid;
- Achieved another quarter of strong Digital revenue gains, which rose over 20% versus last year;
- Reinvested structural SG&A savings in the business, including higher spending on growth-oriented marketing initiatives; and
- Drove EPS ahead of expectations and FY19 pre-pandemic levels.
Third Quarter 2022 Acceleration Program Highlights
In the third quarter, Tapestry continued to make meaningful progress under its Acceleration Program by sharpening the Company’s focus on the consumer, leveraging data to lead with a digital-first mindset and transforming into a leaner and more responsive organization:
- Recruited over 1.4 million new customers across channels in North America, representing a mid-teens increase versus prior year, with growth in both stores and online;
- Maintained a consumer-centric lens and fostered emotional connections with customers, resulting in higher average spend, increased repeat transactions and the continued reactivation of lapsed customers across brands;
- Realized another quarter of global AUR gains at Coach, Kate Spade, and Stuart Weitzman in each brand’s respective core category, reflecting strong brand momentum, the increasing traction of their product offerings, and price increases on select items, as well as the continued benefits from structural changes to lessen promotional activity;
- Advanced Digital capabilities through significant investments in the channel, including in talent, to improve the customer experience and drive conversion; continue to expect to achieve $2 billion in revenue in the channel in the fiscal year, representing 30% of total sales; and
- Remain on track to realize gross run-rate savings of $300 million in FY22, which is funding investments in brand-building activities.
Overview of Third Quarter 2022 Financial Results
- Net sales totaled $1.44 billion for the third quarter compared to $1.27 billion in the prior year, representing a 13% increase.
- Gross profit totaled $1.01 billion on both a reported and non-GAAP basis, while gross margin was 69.9%. As anticipated, the Company’s gross margin was negatively impacted by incremental freight expense in order to maintain product flow to meet consumer demand, which totaled $63 million or 440 basis points. This compared to prior year gross profit of $912 million and gross margin of 71.6% on both a reported and non-GAAP basis.
- SG&A expenses totaled $836 million on a reported basis and represented 58.1% of sales compared to $795 million and 62.5%, respectively, in the year ago quarter. On a non-GAAP basis, SG&A expenses were $829 million and represented 57.7% of sales compared to $729 million and 57.3%, respectively, in the year ago period.
- Operating income was $169 million on a reported basis, while operating margin was 11.8%, which compares to operating income of $117 million and operating margin of 9.2% in the prior year. On a non-GAAP basis, operating income was $176 million, while operating margin was 12.2%. This compared to operating income of $183 million and an operating margin of 14.4% in the prior year.
- Net interest expense was $15 million in the quarter compared to $17 million in the year ago period.
- Other expense was $3 million in the quarter compared to $4 million in the prior year period.
- Net income for the quarter was $123 million on a reported basis, with earnings per diluted share of $0.46, which compares to $92 million and earnings per diluted share of $0.32 in the prior year period. The reported tax rate for the quarter was 19.2% compared to 3.8% in the prior year period. On a non-GAAP basis, net income for the quarter was $136 million with earnings per diluted share of $0.51. This compared to non-GAAP net income of $145 million with earnings per diluted share of $0.51 in the prior year period. The non-GAAP tax rate for the quarter was 13.8% compared to 10.3% in the prior year period.
Balance Sheet and Cash Flow Highlights
- At quarter-end, cash, cash equivalents and short-term investments totaled $1.07 billion and total borrowings outstanding were $1.59 billion.
- Inventory at quarter-end was $913 million versus ending inventory of $700 million a year ago. The increase in inventory versus prior year was driven by a higher level of in-transits.
- Free cash flow year-to-date was an inflow of $541 million compared to an inflow of $876 million in the prior year. Year-to-date CapEx and implementation costs related to Cloud Computing were $119 million versus $69 million in the year ago period.
- In May, subsequent to quarter-end, Tapestry took actions to optimize its capital structure, supporting the Company’s incremental share repurchase while maintaining its financial flexibility. The Company entered into a new credit facility to refinance and replace its existing credit facility which extends maturity to May 2027, upsizes the revolver to $1.25 billion and includes a $500 million five-year term loan. The proceeds of this term loan will be utilized to repay Tapestry’s July 2022 bonds totaling $400 million in Fiscal 2022, as well as for general corporate purposes.
Non-GAAP Reconciliation
During the fiscal third quarter of 2022, Tapestry recorded certain items that decreased the Company’s pre-tax income by $6 million, net income by $14 million, and earnings per diluted share by $0.05. These items included:
- Acceleration Program: Pre-tax charges of $6 million primarily associated with share-based compensation and professional fees incurred as a result of the development and execution of the Company’s comprehensive strategic initiatives. Tapestry continues to expect to incur total pre-tax charges of approximately $215 million to $220 million over the life of the Acceleration Program, including approximately $10 million in remaining charges in the fiscal fourth quarter, primarily consisting of share-based compensation and professional fees.
Please refer to Financial Schedules 3 – 6 included herein for a detailed reconciliation of the Company’s reported to non-GAAP results.
Fiscal Year 2022 Outlook
Tapestry’s Fiscal 2022 outlook is provided on a non-GAAP basis and excludes Acceleration Program and debt extinguishment charges as described in the “Fiscal Year 2022 Outlook – Non-GAAP Adjustments” section of this press release.
The Company is modifying its Fiscal 2022 outlook due to (i) an estimated headwind of $0.25 to $0.30 due to incremental Covid-related pressure in China and (ii) an anticipated negative impact of approximately $0.17 based on the current expectation that the Generalized System of Preferences (‘GSP’) with retroactive benefit will not be adopted in the Company’s current fiscal year. Excluding these external factors, the Company’s projection would have been $0.25 to $0.30 ahead of its prior outlook driven primarily by healthy underlying momentum in the rest of the world, notably North America, and inclusive of a $0.04 contribution from additional share repurchase activity. The following outlook replaces all previous guidance:
- Revenue of approximately $6.7 billion, which represents a high-teens growth rate versus the prior year on a 52-week, comparable basis, and would mark a record level of sales for the Company.
- Net interest expense of approximately $62 million.
- Tax rate of approximately 18.0%, assuming a continuation of current tax laws.
- Weighted average diluted share count of approximately 271 million shares, incorporating the anticipated $1.6 billion in share repurchase activity throughout Fiscal 2022.
- Earnings per diluted share in the area of $3.45, representing nearly 20% growth versus the prior year on a 52-week, comparable basis.
Please note, due to the ongoing dynamic nature of the Covid-19 pandemic, financial results could differ materially from the current outlook due to a number of external events, including the potential for more widespread resurgences of the pandemic globally and resulting pressure on trends, as well as further supply chain disruptions, including potential continued production and distribution delays as well as increased costs, not contemplated in the Company’s estimates.
Conference Call Details
The Company will host a conference call to review these results at 8:00 a.m. (ET) today, May 12, 2022. Interested parties may listen to the conference call via live webcast by accessing www.tapestry.com/investors or calling 1-866-847-4217 or 1-203-518-9845 and providing the Conference ID 2898477. 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 1-800-283-4641 or 1-402-220-0851. 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 2022 fourth quarter and full year results on Thursday, August 18, 2022.
In addition, the Company plans to host an Investor Day in September 2022 to discuss its long-term strategic initiatives and financial outlook.
To receive notification of future announcements, please register at www.tapestry.com/investors (“Subscribe to E-Mail Alerts”).
About Tapestry, Inc.
Our global house of brands unites the magic of Coach, Kate spade new york and Stuart Weitzman. 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. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible. 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 2022 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, statements regarding the Company’s capital deployment plans, and statements that can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “should,” “expect,” “potential,” “intend,” “estimate,” “continue,” “project,” “guidance,” “forecast,” “outlook,” “commit,” “anticipate,” “goal,” “leveraging,” “sharpening,” transforming,” “creating,” accelerating,” “enhancing,” “innovation,” “drive,” “targeting,” “assume,” “plan,” “progress,” “confident,” “future,” “uncertain,” “on track,” “achieve,” “strategic,” “growth,” “we see significant growth opportunities,” “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 , including impacts on our supply chain, 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. In addition, purchases of shares of the Company’s common stock will be made subject to market conditions and at prevailing market prices. 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.
Schedule 1: Condensed Consolidated Statement of Operations
| TAPESTRY, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| For the Quarter and Nine Months Ended April 2, 2022 and March 27, 2021 | ||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| QUARTER ENDED | NINE MONTHS ENDED | |||||||||||||||
| April 2, 2022 | March 27, 2021 | April 2, 2022 | March 27, 2021 | |||||||||||||
| Net sales | $ | 1,437.5 | $ | 1,273.3 | $ | 5,059.6 | $ | 4,130.9 |
| |||||||
| Cost of sales |
| 432.4 |
| 361.4 |
| 1,528.4 |
| 1,215.1 |
| |||||||
| Gross profit |
| 1,005.1 |
| 911.9 |
| 3,531.2 |
| 2,915.8 |
| |||||||
| Selling, general and administrative expenses |
| 835.6 |
| 795.2 |
| 2,603.9 |
| 2,207.5 |
| |||||||
| Operating income (loss) |
| 169.5 |
| 116.7 |
| 927.3 |
| 708.3 |
| |||||||
| Loss on extinguishment of debt |
| – |
| – |
| 53.7 |
| – |
| |||||||
| Interest expense, net |
| 14.8 |
| 16.9 |
| 46.8 |
| 55.0 |
| |||||||
| Other expense (income) |
| 3.0 |
| 4.4 |
| 8.3 |
| (1.8 | ) | |||||||
| Income before provision for income taxes |
| 151.7 |
| 95.4 |
| 818.5 |
| 655.1 |
| |||||||
| Provision for income taxes |
| 29.0 |
| 3.7 |
| 151.0 |
| 20.7 |
| |||||||
| Net income (loss) | $ | 122.7 | $ | 91.7 | $ | 667.5 | $ | 634.4 |
| |||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.47 | $ | 0.33 | $ | 2.47 | $ | 2.29 |
| |||||||
| Diluted | $ | 0.46 | $ | 0.32 | $ | 2.42 | $ | 2.25 |
| |||||||
| Shares used in computing net income per share: | ||||||||||||||||
| Basic |
| 259.9 |
| 278.2 |
| 269.7 |
| 277.5 |
| |||||||
| Diluted |
| 265.5 |
| 285.6 |
| 275.9 |
| 281.5 |
| |||||||
Schedule 2: Detail to Net Sales
| TAPESTRY, INC. | |||||||||||||||||
| DETAIL TO NET SALES | |||||||||||||||||
| For the Quarter and Nine Months Ended April 2, 2022 and March 27, 2021 | |||||||||||||||||
| (in millions) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| QUARTER ENDED | |||||||||||||||||
| April 2, 2022 | March 27, 2021 | % Change vs. FY21 | Constant Currency % Change FY21 | % Change vs. FY19 | |||||||||||||
| Coach | $ | 1,072.4 | $ | 963.5 | 11 | % | 12 | % | 11 | % | |||||||
| Kate Spade |
| 301.5 |
| 252.4 | 19 | % | 21 | % | 7 | % | |||||||
| Stuart Weitzman |
| 63.6 |
| 57.4 | 11 | % | 10 | % | (25 | )% | |||||||
| Total Tapestry | $ | 1,437.5 | $ | 1,273.3 | 13 | % | 14 | % | 8 | % | |||||||
| NINE MONTHS ENDED | |||||||||||||||||
| April 2, 2022 | March 27, 2021 | % Change vs. FY21 | Constant Currency % Change FY21 | % Change vs. FY19 | |||||||||||||
| Coach | $ | 3,712.3 | $ | 3,064.2 | 21 | % | 21 | % | 17 | % | |||||||
| Kate Spade |
| 1,101.4 |
| 868.4 | 27 | % | 27 | % | 6 | % | |||||||
| Stuart Weitzman |
| 245.9 |
| 198.3 | 24 | % | 22 | % | (19 | )% | |||||||
| Total Tapestry | $ | 5,059.6 | $ | 4,130.9 | 22 | % | 22 | % | 12 | % | |||||||
Schedule 3: Items Affecting Comparability – 3Q22
| TAPESTRY, INC. | ||||||||||||
| GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
| (in millions, except per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| For the Quarter Ended April 2, 2022 | ||||||||||||
| Items Affecting Comparability | ||||||||||||
| GAAP Basis (As Reported) | Acceleration Program | Non-GAAP Basis (Excluding Items) | ||||||||||
| Cost of sales | ||||||||||||
| Coach |
| 780.0 |
|
| – |
|
| 780.0 |
| |||
| Kate Spade |
| 189.4 |
|
| – |
|
| 189.4 |
| |||
| Stuart Weitzman |
| 35.7 |
|
| – |
|
| 35.7 |
| |||
| Gross profit(1) | $ | 1,005.1 |
| $ | – |
| $ | 1,005.1 |
| |||
| SG&A expenses | ||||||||||||
| Coach |
| 494.5 |
|
| 1.5 |
|
| 493.0 |
| |||
| Kate Spade |
| 179.1 |
|
| 0.7 |
|
| 178.4 |
| |||
| Stuart Weitzman |
| 42.0 |
|
| (0.1 | ) |
| 42.1 |
| |||
| Corporate |
| 120.0 |
|
| 4.2 |
|
| 115.8 |
| |||
| SG&A expenses | $ | 835.6 |
| $ | 6.3 |
| $ | 829.3 |
| |||
| Operating income (loss) | ||||||||||||
| Coach |
| 285.5 |
|
| (1.5 | ) |
| 287.0 |
| |||
| Kate Spade |
| 10.3 |
|
| (0.7 | ) |
| 11.0 |
| |||
| Stuart Weitzman |
| (6.3 | ) |
| 0.1 |
|
| (6.4 | ) | |||
| Corporate |
| (120.0 | ) |
| (4.2 | ) |
| (115.8 | ) | |||
| Operating income (loss) | $ | 169.5 |
| $ | (6.3 | ) | $ | 175.8 |
| |||
| Provision for income taxes |
| 29.0 |
|
| 7.3 |
|
| 21.7 |
| |||
| Net income (loss) | $ | 122.7 |
| $ | (13.6 | ) | $ | 136.3 |
| |||
| Net income (loss) per diluted common share | $ | 0.46 |
| $ | (0.05 | ) | $ | 0.51 |
| |||
| (1) Adjustments within Gross profit are recorded within Cost of sales. | ||||||||||||
Schedule 4: Items Affecting Comparability – 3Q21
| 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. | ||||||||||||||||
Schedule 5: Items Affecting Comparability – 3Q22 YTD
| TAPESTRY, INC. | ||||||||||||||||
| GAAP TO NON-GAAP RECONCILIATION | ||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the Nine Months Ended April 2, 2022 | ||||||||||||||||
| Items Affecting Comparability | ||||||||||||||||
| GAAP Basis (As Reported) | Debt Extinguishment | Acceleration Program | Non-GAAP Basis (Excluding Items) | |||||||||||||
| Cost of sales | ||||||||||||||||
| Coach |
| 2,689.2 |
|
| – |
|
| – |
|
| 2,689.2 |
| ||||
| Kate Spade |
| 696.6 |
|
| – |
|
| – |
|
| 696.6 |
| ||||
| Stuart Weitzman |
| 145.4 |
|
| – |
|
| – |
|
| 145.4 |
| ||||
| Gross profit(1) | $ | 3,531.2 |
| $ | – |
| $ | – |
| $ | 3,531.2 |
| ||||
| SG&A expenses | ||||||||||||||||
| Coach |
| 1,564.7 |
|
| – |
|
| 4.0 |
|
| 1,560.7 |
| ||||
| Kate Spade |
| 565.4 |
|
| – |
|
| 4.2 |
|
| 561.2 |
| ||||
| Stuart Weitzman |
| 139.9 |
|
| – |
|
| 3.2 |
|
| 136.7 |
| ||||
| Corporate |
| 333.9 |
|
| – |
|
| 20.3 |
|
| 313.6 |
| ||||
| SG&A expenses | $ | 2,603.9 |
| $ | – |
| $ | 31.7 |
| $ | 2,572.2 |
| ||||
| Operating income (loss) | ||||||||||||||||
| Coach |
| 1,124.5 |
|
| – |
|
| (4.0 | ) |
| 1,128.5 |
| ||||
| Kate Spade |
| 131.2 |
|
| – |
|
| (4.2 | ) |
| 135.4 |
| ||||
| Stuart Weitzman |
| 5.5 |
|
| – |
|
| (3.2 | ) |
| 8.7 |
| ||||
| Corporate |
| (333.9 | ) |
| – |
|
| (20.3 | ) |
| (313.6 | ) | ||||
| Operating income (loss) | $ | 927.3 |
| $ | – |
| $ | (31.7 | ) | $ | 959.0 |
| ||||
| Loss on extinguishment of debt |
| 53.7 |
|
| 53.7 |
|
| – |
|
| – |
| ||||
| Provision for income taxes |
| 151.0 |
|
| (12.9 | ) |
| (0.7 | ) |
| 164.6 |
| ||||
| Net income (loss) | $ | 667.5 |
| $ | (40.8 | ) | $ | (31.0 | ) | $ | 739.3 |
| ||||
| Net income (loss) per diluted common share | $ | 2.42 |
| $ | (0.15 | ) | $ | (0.11 | ) | $ | 2.68 |
| ||||
| (1) Adjustments within Gross profit are recorded within Cost of sales. | ||||||||||||||||
Schedule 6: Items Affecting Comparability – 3Q21 YTD
| 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 Tax Impact | Acceleration Program | 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. | ||||||||||||||||||||
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.
Contacts
Tapestry, Inc.
Media:
Andrea Shaw Resnick
Chief Communications Officer
212/629-2618
[email protected]
Analysts and Investors:
Christina Colone
Global Head of Investor Relations
212/946-7252
[email protected]
Kelsey Mueller
212/946-8183
Director of Investor Relations
[email protected]
