Maryland
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001-16153
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52-2242751
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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TPR
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New York Stock Exchange
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●
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Joanne Crevoiserat, the Company’s Chief Executive Officer, which had been reduced by 20%, will revert from the reduced rate of $1,040,000 to the
full rate of $1,300,000;
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●
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Andrea Shaw Resnick, the Company’s Interim Chief Financial Officer; Global Head of Investor Relations and Corporate Communications, which had been
reduced by 15%, will revert from the reduced rate of $595,000 to the full rate of $700,000;
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●
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Todd Kahn, Interim Chief Executive Officer & Brand President, Coach; President, Chief Administrative Officer, which had been reduced by 20%,
will revert from the reduced rate of $720,000 to the full rate of $900,000; and
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●
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Tom Glaser, Chief Operations Officer, which had been reduced by 20%, will revert from the reduced rate of $640,000 to the full rate of $800,000.
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TAPESTRY, INC. | |||
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By:
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/s/ David E. Howard
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David E. Howard
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Senior Vice President, General Counsel and Secretary | |||
99.1 |
99.2 |
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Exhibit 99.1
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Strong Operating Income & EPS Growth Demonstrates Progress on Acceleration Program
NEW YORK--(BUSINESS WIRE)--October 29, 2020--Tapestry, Inc. (NYSE: TPR), a leading New York-based house of modern luxury accessories and lifestyle brands, today reported results for the fiscal first quarter ended September 26, 2020.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., said, “We are very pleased with our first quarter results, which exceeded expectations and demonstrated the bold actions we are implementing as part of our Acceleration Program. We delivered strong profit growth across our portfolio of brands in the face of an unprecedented and challenging backdrop. We drove a meaningful sequential improvement in topline trends, supported by strength in Digital and China. At the same time, we expanded gross margin by deliberately reducing promotional activity and raising AUR, while also tightly controlling SG&A expense. Taken together, we achieved a significant increase in EPS and generated positive free cash flow.”
Ms. Crevoiserat continued, “Our performance underscores the power of our brands, the agility of our talented teams and the competitive advantage of Tapestry’s enabling platform. Importantly, it also reinforces the potential of our Acceleration Program. Guided by an unwavering focus on the consumer and supported by new ways of working, we are positioning the Company to successfully navigate the dynamic environment and drive long-term, sustainable growth.”
Tapestry, Inc. Fiscal First Quarter 2021 Highlights
Acceleration Program Highlights
In the first fiscal quarter, the Company made meaningful progress against its previously announced 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:
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 among new and existing customers, creating a strong foundation for profitable expansion.
Overview of First Quarter 2021 Tapestry, Inc. Results
Fiscal first quarter results by brand were as follows:
Coach First Quarter 2021 Results
Kate Spade First Quarter 2021 Results
Stuart Weitzman First Quarter 2021 Results
Non-GAAP Reconciliation
During the first fiscal quarter of 2021, the Company recorded the following on a reported basis:
Taken together, on a reported basis, these items decreased the Company’s operating income by $27 million, while increasing net income and earnings per diluted share by $71 million and $0.25, respectively. Please refer to the financial tables included herein for a detailed reconciliation of the Company’s reported to non-GAAP results.
Conclusion
Ms. Crevoiserat continued, “We are confident in the strong foundation we’re building and our ability to create long-term value for our stakeholders. As we enter the holiday season, our teams continue to focus on the factors within our control. We are putting the consumer first, delivering innovative, relevant and beautifully crafted product, while staying true to the unique purpose of each of our brands. We are also leaning into the opportunity to evolve with the changing landscape and shifting consumer needs and preferences. Given the strength of the first quarter, we are increasingly optimistic in our ability to drive sustainable top and bottom line growth over our planning horizon.”
Fiscal Year 2021 Outlook
Due to the dynamic nature of the Covid-19 crisis and lack of visibility, the potential financial impact to our business cannot be accurately projected. Therefore, the Company is not providing detailed guidance for fiscal 2021. However, given the strong start to the fiscal year and assuming a continued steady recovery emerging from the pandemic, the Company continues to expect a topline inflection in the second half of the fiscal year, with both revenue and bottom line growth now projected for fiscal 2021.
The Company also notes that fiscal 2021 includes a 53rd week in its fourth fiscal quarter.
Conference Call Details
The Company will host a conference call to review these results at 7:30 a.m. (ET) today, October 29, 2020. 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 9406188. 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 9406188. 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 second quarter results on Thursday, February 4, 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. 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,” “roadmap,” "anticipate," “excited,” “moving,” “leveraging,” “sharpening,” transforming,” “deepening,” “creating,” accelerating,” “enhancing,” leaning into,” “strengthening,” “developing,” “drive,” “targeting,” “assume,” “plan,” “build,” “pursue,” “maintain,” “progress,” “future,” “emerge,” “assure,” “on track,” “well positioned to,” “look forward to,” “looking ahead,” “to acquire,” “achieve,” “strategic vision,” “strategic agenda,” “long-term objectives,” “steady recovery,” “growth opportunities,” “view,” 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, 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 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.
The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies. The financial information presented above, as well as gross margin, SG&A expense ratio, and operating margin, have been presented both including and excluding the effect of certain items related to the tax benefit the Company received under the CARES Act and the Acceleration Program for the first quarter of fiscal year 2021 and ERP Implementation, Organization-related & Integration Costs and Impairment for the first quarter 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.
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TAPESTRY, INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
At September 26, 2020 and June 27, 2020 | ||||||
(in millions) | ||||||
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(unaudited) |
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(audited) | |||
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September 26, 2020 |
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June 27, 2020 | |||
ASSETS |
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Cash, cash equivalents and short-term investments |
$ |
1,522.4 |
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$ |
1,434.4 |
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Receivables |
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251.1 |
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193.3 |
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Inventories |
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811.2 |
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736.9 |
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Other current assets |
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260.8 |
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188.5 |
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Total current assets |
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2,845.5 |
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2,553.1 |
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Property and equipment, net |
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753.0 |
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775.2 |
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Lease right-of-use assets |
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1,692.6 |
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1,757.0 |
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Other noncurrent assets |
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2,842.3 |
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2,838.9 |
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Total assets |
$ |
8,133.4 |
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$ |
7,924.2 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Accounts payable |
$ |
296.0 |
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$ |
130.8 |
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Accrued liabilities |
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470.1 |
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511.0 |
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Short-term lease liabilities |
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341.4 |
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388.8 |
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Current debt |
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711.5 |
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711.5 |
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Total current liabilities |
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1,819.0 |
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1,742.1 |
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Long-term debt |
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1,588.6 |
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1,587.9 |
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Long-term lease liabilities |
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1,739.9 |
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1,799.8 |
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Other liabilities |
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455.8 |
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518.0 |
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Stockholders' equity |
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2,530.1 |
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2,276.4 |
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Total liabilities and stockholders' equity |
$ |
8,133.4 |
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$ |
7,924.2 |
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TAPESTRY, INC. | ||||||||
STORE COUNT | ||||||||
At June 27, 2020 and September 26, 2020 | ||||||||
(unaudited) | ||||||||
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As of |
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As of | ||||
Directly-Operated Store Count: | June 27, 2020 | Openings | (Closures) | September 26, 2020 | ||||
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Coach |
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North America |
375 |
- |
(1) |
374 |
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International |
583 |
13 |
(13) |
583 |
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Kate Spade |
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North America |
213 |
3 |
- |
216 |
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International |
207 |
6 |
(5) |
208 |
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Stuart Weitzman |
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North America |
58 |
- |
(3) |
55 |
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International |
73 |
3 |
(18) |
58 |
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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Exhibit 99.2
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