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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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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 |
Results Significantly Ahead of Expectations With Operating Income Exceeding Pre-Pandemic Levels
NEW YORK--(BUSINESS WIRE)--May 6, 2021--Tapestry, Inc. (NYSE: TPR), a leading New York-based house of modern luxury accessories and lifestyle brands, today reported results for the fiscal third quarter ended March 27, 2021.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., said, “Our third quarter results significantly outpaced expectations, underscoring the power of the Acceleration Program and enthusiasm for our brands. Through a sharpened focus on the consumer, we fueled new customer acquisition at Coach, Kate Spade, and Stuart Weitzman and delivered robust sales growth led by Digital and China. Importantly, for the third consecutive quarter, we achieved operating income gains – compared to both FY20 and FY19 – supported by a continued reduction in promotional activity, higher AUR, and disciplined expense management. This performance is a testament to our talented teams around the world, whose creativity, agility, and resilience have enabled us to successfully navigate a challenging backdrop and deliver for our customers, while positioning Tapestry to emerge from the pandemic stronger.”
Ms. Crevoiserat continued, “Building on this momentum, we are increasingly optimistic about our ability to generate sustainable top and bottom-line growth. Looking forward, while the environment remains volatile, we see encouraging signs of recovery as vaccination efforts progress, resulting in increased consumer confidence, strong demand for our categories, and improving in-store traffic trends. In this context, we remain focused on driving brand relevance and customer engagement through product innovation and compelling marketing, supported by data-driven insights and a digital-first mindset. We will also continue to lean into our competitive advantages, including our globally diversified, direct-to-consumer model, and distort investments to high-growth opportunities. We are confident that our clear, consumer-centric strategy, powerful brands, and differentiated, scalable platform uniquely position us to capture market share at higher levels of profitability.”
Tapestry, Inc. Fiscal Third Quarter 2021 Highlights
Acceleration Program Highlights
In the fiscal third quarter, the Company made meaningful progress against its Acceleration Program to sharpen its focus on the consumer, leverage data to lead with a digital-first mindset and transform into a leaner and more responsive organization:
Through these initiatives, the Company is better meeting the needs of each of its brands' unique customers to drive engagement and desire for its products, creating a strong foundation for profitable expansion.
Overview of Third Quarter 2021 Tapestry, Inc. Results
Fiscal third quarter results by brand were as follows:
Coach Third Quarter 2021 Results
Kate Spade Third Quarter 2021 Results
Stuart Weitzman Third Quarter 2021 Results
Non-GAAP Reconciliation
During the fiscal third quarter of 2021, the Company recorded the following charges on a reported basis:
Taken together, these items decreased the Company’s net income and earnings per diluted share by $53 million and $0.19, respectively. Please refer to the financial tables included herein for a detailed reconciliation of the Company’s reported to non-GAAP results.
Fiscal Year 2021 Outlook
Due to the dynamic nature of the Covid-19 crisis and lack of visibility, the Company is not providing detailed guidance for fiscal 2021. However, given Tapestry’s better-than-anticipated results year-to-date, and assuming a continued recovery emerging from the pandemic, the Company now expects revenue for the fiscal year to increase at a mid-teens rate compared to prior year on both a 52 and 53-week basis. This outlook now includes the expectation for fiscal year 2021 operating income and earnings per diluted to share to increase versus fiscal year 2019 on a 52 and 53-week basis.
The Company also notes that fiscal 2021 includes a 53rd week in its fourth fiscal quarter.
Conference Call Details
The Company will host a conference call to review these results at 8:00 a.m. (ET) today, May 6, 2021. Interested parties may listen to the conference call via live webcast by accessing www.tapestry.com/investors on the Internet or calling 1-877-510-8087 or 1-862-298-9015 and providing the Conference ID 5689959. A telephone replay will be available starting at 12:00 p.m. (ET) today, for a period of five business days. To access the telephone replay, call 1-800-585-8367 or 1-404-537-3406 and enter the Conference ID 5689959. A webcast replay of the earnings conference call will also be available for five business days on the Tapestry website. Presentation slides have also been posted to the Company’s website at www.tapestry.com/investors.
Upcoming Events
The Company expects to report fiscal 2021 fourth quarter and full year results on Thursday, August 19, 2021. To receive notification of future announcements, please register at www.tapestry.com/investors ("Subscribe to E-Mail Alerts").
Tapestry, Inc. is a New York-based house of modern luxury lifestyle brands. The Company’s portfolio includes Coach, Kate Spade and Stuart Weitzman. Our Company and our brands are founded upon a creative and consumer-led view of luxury that stands for inclusivity and approachability. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. To learn more about Tapestry, please visit www.tapestry.com. For important news and information regarding Tapestry, visit the Investor Relations section of our website at www.tapestry.com/investors. In addition, investors should continue to review our news releases and filings with the SEC. We use each of these channels of distribution as primary channels for publishing key information to our investors, some of which may contain material and previously non-public information. The Company’s common stock is traded on the New York Stock Exchange under the symbol TPR.
This information to be made available in this press release may contain forward-looking statements based on management's current expectations. Forward-looking statements include, but are not limited to, the statements under “Fiscal Year 2021 Outlook,” and statements regarding the Acceleration Program, including future charges under and future impacts of this program, the potential impact of the Covid-19 pandemic and success of mitigating actions, and statements that can be identified by the use of forward-looking terminology such as "may," "will," “can,” "should," "expect," "intend," "estimate," "continue," "project," "guidance," "forecast," “outlook,” "anticipate," “leveraging,” “sharpening,” transforming,” “creating,” accelerating,” “enhancing,” leaning into,” “innovation,” “drive,” “targeting,” “assume,” “plan,” “progress,” “optimistic,” “confident,” “future,” “uncertain backdrop,” “emerge,” “on track,” “positioned to,” “look forward to,” “looking ahead,” “to acquire,” “achieve,” “strategic,” “steady recovery,” “growth,” “view,” “stretching what’s possible,” or comparable terms. Future results may differ materially from management's current expectations, based upon a number of important factors, including risks and uncertainties such as the impact of the Covid-19 pandemic, the ability to control costs and successfully execute our growth strategies, expected economic trends, the ability to anticipate consumer preferences, risks associated with operating in international markets and our global sourcing activities, our ability to achieve intended benefits, cost savings and synergies from acquisitions, the risk of cybersecurity threats and privacy or data security breaches, the impact of pending and potential future legal proceedings, and the impact of legislation, etc. Please refer to the Company’s latest Annual Report on Form 10-K, quarterly report on 10-Q and its other filings with the Securities and Exchange Commission for a complete list of risks and important factors. The Company assumes no obligation to revise or update any such forward-looking statements for any reason, except as required by law.
TAPESTRY, INC. | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
For the Quarter & Nine Months Ended March 27, 2021 and March 28, 2020 | ||||||||||||||
(in millions, except per share data) | ||||||||||||||
(unaudited) | (unaudited) | |||||||||||||
QUARTER ENDED | NINE MONTHS ENDED | |||||||||||||
March 27, 2021 | March 28, 2020 | March 27, 2021 | March 28, 2020 | |||||||||||
Net sales |
$ |
1,273.3 |
$ |
1,072.7 |
|
$ |
4,130.9 |
|
$ |
4,246.6 |
|
|||
Cost of sales |
|
361.4 |
|
456.5 |
|
|
1,215.1 |
|
|
1,506.2 |
|
|||
Gross profit |
|
911.9 |
|
616.2 |
|
|
2,915.8 |
|
|
2,740.4 |
|
|||
Selling, general and administrative expenses |
|
795.2 |
|
1,301.7 |
|
|
2,207.5 |
|
|
3,011.2 |
|
|||
Operating income (loss) |
|
116.7 |
|
(685.5 |
) |
|
708.3 |
|
|
(270.8 |
) |
|||
Interest expense, net |
|
16.9 |
|
13.5 |
|
|
55.0 |
|
|
39.8 |
|
|||
Other expense (gain) |
|
4.4 |
|
6.0 |
|
|
(1.8 |
) |
|
12.8 |
|
|||
Income before provision for income taxes |
|
95.4 |
|
(705.0 |
) |
|
655.1 |
|
|
(323.4 |
) |
|||
Provision for income taxes |
|
3.7 |
|
(27.9 |
) |
|
20.7 |
|
|
34.9 |
|
|||
Net income (loss) |
$ |
91.7 |
$ |
(677.1 |
) |
$ |
634.4 |
|
$ |
(358.3 |
) |
|||
Net income (loss) per share: | ||||||||||||||
Basic |
$ |
0.33 |
$ |
(2.45 |
) |
$ |
2.29 |
|
$ |
(1.28 |
) |
|||
Diluted |
$ |
0.32 |
$ |
(2.45 |
) |
$ |
2.25 |
|
$ |
(1.28 |
) |
|||
Shares used in computing net income per share: | ||||||||||||||
Basic |
|
278.2 |
|
276.1 |
|
|
277.5 |
|
|
279.4 |
|
|||
Diluted |
|
285.6 |
|
276.1 |
|
|
281.5 |
|
|
279.4 |
|
TAPESTRY, INC. | |||||||||||||||
DETAIL TO NET SALES | |||||||||||||||
For the Quarter & Nine Months Ended March 27, 2021 and March 28, 2020 | |||||||||||||||
(in millions) | |||||||||||||||
(unaudited) | |||||||||||||||
QUARTER ENDED | |||||||||||||||
March 27, 2021 | March 28, 2020 | % Change vs. FY20 | % Change vs. FY19 | Constant Currency % Change vs. FY20 |
|||||||||||
Coach |
$ |
963.5 |
$ |
772.5 |
25 |
% |
- |
% |
22 |
% |
|||||
Kate Spade |
|
252.4 |
|
249.5 |
1 |
% |
(10 |
)% |
- |
% |
|||||
Stuart Weitzman |
|
57.4 |
|
50.7 |
13 |
% |
(33 |
)% |
9 |
% |
|||||
Total Tapestry |
$ |
1,273.3 |
$ |
1,072.7 |
19 |
% |
(4 |
)% |
16 |
% |
|||||
NINE MONTHS ENDED | |||||||||||||||
March 27, 2021 | March 28, 2020 | % Change vs. FY20 | % Change vs. FY19 | Constant Currency % Change vs. FY20 |
|||||||||||
Coach |
$ |
3,064.2 |
$ |
3,008.3 |
2 |
% |
(4 |
)% |
- |
% |
|||||
Kate Spade |
|
868.4 |
|
985.4 |
(12 |
)% |
(16 |
)% |
(12 |
)% |
|||||
Stuart Weitzman |
|
198.3 |
|
252.9 |
(22 |
)% |
(35 |
)% |
(23 |
)% |
|||||
Total Tapestry |
$ |
4,130.9 |
$ |
4,246.6 |
(3 |
)% |
(9 |
)% |
(4 |
)% |
TAPESTRY, INC. | |||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
For the Quarter Ended March 27, 2021 |
|||||||||||||||
Items Affecting Comparability |
|||||||||||||||
GAAP Basis |
|
Acceleration Program |
|
Impairment |
|
Non-GAAP Basis |
|||||||||
Cost of sales | |||||||||||||||
Coach |
|
718.0 |
|
|
- |
|
|
- |
|
|
718.0 |
|
|||
Kate Spade |
|
160.2 |
|
|
- |
|
|
- |
|
|
160.2 |
|
|||
Stuart Weitzman |
|
33.7 |
|
|
- |
|
|
- |
|
|
33.7 |
|
|||
Gross profit(1) |
$ |
911.9 |
|
$ |
- |
|
$ |
- |
|
$ |
911.9 |
|
|||
SG&A expenses | |||||||||||||||
Coach |
|
466.6 |
|
|
4.7 |
|
|
20.4 |
|
|
441.5 |
|
|||
Kate Spade |
|
168.9 |
|
|
0.9 |
|
|
19.3 |
|
|
148.7 |
|
|||
Stuart Weitzman |
|
51.2 |
|
|
3.4 |
|
|
6.1 |
|
|
41.7 |
|
|||
Corporate |
|
108.5 |
|
|
11.4 |
|
|
- |
|
|
97.1 |
|
|||
SG&A expenses |
$ |
795.2 |
|
$ |
20.4 |
|
$ |
45.8 |
|
$ |
729.0 |
|
|||
|
|
||||||||||||||
Operating income (loss) | |||||||||||||||
Coach |
|
251.4 |
|
|
(4.7 |
) |
|
(20.4 |
) |
|
276.5 |
|
|||
Kate Spade |
|
(8.7 |
) |
|
(0.9 |
) |
|
(19.3 |
) |
|
11.5 |
|
|||
Stuart Weitzman |
|
(17.5 |
) |
|
(3.4 |
) |
|
(6.1 |
) |
|
(8.0 |
) |
|||
Corporate |
|
(108.5 |
) |
|
(11.4 |
) |
|
- |
|
|
(97.1 |
) |
|||
Operating income (loss) |
$ |
116.7 |
|
$ |
(20.4 |
) |
$ |
(45.8 |
) |
$ |
182.9 |
|
|||
Provision for income taxes |
|
3.7 |
|
|
(3.2 |
) |
|
(9.8 |
) |
|
16.7 |
|
|||
Net income (loss) |
$ |
91.7 |
|
$ |
(17.2 |
) |
$ |
(36.0 |
) |
$ |
144.9 |
|
|||
Net income (loss) per diluted common share |
$ |
0.32 |
|
$ |
(0.06 |
) |
$ |
(0.13 |
) |
$ |
0.51 |
|
|||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
TAPESTRY, INC. | |||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
For the Nine Months Ended March 27, 2021 | |||||||||||||||||||
Items Affecting Comparability | |||||||||||||||||||
GAAP Basis (As Reported) |
CARES Act 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. |
TAPESTRY, INC. | |||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
For the Quarter Ended March 28, 2020 | |||||||||||||||||||
Items Affecting Comparability | |||||||||||||||||||
GAAP Basis (As Reported) |
ERP Implementation | Organization-related & Integration costs |
Impairment | Non-GAAP Basis (Excluding Items) |
|||||||||||||||
Cost of sales | |||||||||||||||||||
Coach |
|
475.7 |
|
|
- |
|
|
- |
|
|
(61.9 |
) |
|
537.6 |
|
||||
Kate Spade |
|
122.5 |
|
|
- |
|
|
- |
|
|
(32.3 |
) |
|
154.8 |
|
||||
Stuart Weitzman |
|
18.0 |
|
|
- |
|
|
- |
|
|
(9.8 |
) |
|
27.8 |
|
||||
Gross profit(1) |
$ |
616.2 |
|
$ |
- |
|
$ |
- |
|
$ |
(104.0 |
) |
$ |
720.2 |
|
||||
SG&A expenses | |||||||||||||||||||
Coach |
|
437.6 |
|
|
- |
|
|
- |
|
|
16.4 |
|
|
421.2 |
|
||||
Kate Spade |
|
213.8 |
|
|
- |
|
|
0.3 |
|
|
41.5 |
|
|
172.0 |
|
||||
Stuart Weitzman |
|
548.7 |
|
|
- |
|
|
0.2 |
|
|
485.8 |
|
|
62.7 |
|
||||
Corporate |
|
101.6 |
|
|
2.8 |
|
|
2.9 |
|
|
- |
|
|
95.9 |
|
||||
SG&A expenses |
$ |
1,301.7 |
|
$ |
2.8 |
|
$ |
3.4 |
|
$ |
543.7 |
|
$ |
751.8 |
|
||||
Operating income (loss) | |||||||||||||||||||
Coach |
|
38.1 |
|
|
- |
|
|
- |
|
|
(78.3 |
) |
|
116.4 |
|
||||
Kate Spade |
|
(91.3 |
) |
|
- |
|
|
(0.3 |
) |
|
(73.8 |
) |
|
(17.2 |
) |
||||
Stuart Weitzman |
|
(530.7 |
) |
|
- |
|
|
(0.2 |
) |
|
(495.6 |
) |
|
(34.9 |
) |
||||
Corporate |
|
(101.6 |
) |
|
(2.8 |
) |
|
(2.9 |
) |
|
- |
|
|
(95.9 |
) |
||||
Operating income (loss) |
$ |
(685.5 |
) |
$ |
(2.8 |
) |
$ |
(3.4 |
) |
$ |
(647.7 |
) |
$ |
(31.6 |
) |
||||
Provision for income taxes |
|
(27.9 |
) |
|
(0.7 |
) |
|
(2.5 |
) |
|
(49.4 |
) |
|
24.7 |
|
||||
Net income (loss) |
$ |
(677.1 |
) |
$ |
(2.1 |
) |
$ |
(0.9 |
) |
$ |
(598.3 |
) |
$ |
(75.8 |
) |
||||
Net income (loss) per diluted common share |
$ |
(2.45 |
) |
$ |
(0.01 |
) |
$ |
- |
|
$ |
(2.17 |
) |
$ |
(0.27 |
) |
||||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
TAPESTRY, INC. | |||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
For the Nine Months Ended March 28, 2020 | |||||||||||||||||||
Items Affecting Comparability | |||||||||||||||||||
GAAP Basis (As Reported) |
ERP Implementation | Organization-related & Integration costs |
Impairment | Non-GAAP Basis (Excluding Items) |
|||||||||||||||
Cost of sales | |||||||||||||||||||
Coach |
|
2,030.6 |
|
|
- |
|
|
(0.1 |
) |
|
(61.9 |
) |
|
2,092.6 |
|
||||
Kate Spade |
|
576.4 |
|
|
- |
|
|
(1.2 |
) |
|
(32.3 |
) |
|
609.9 |
|
||||
Stuart Weitzman |
|
133.4 |
|
|
- |
|
|
(4.3 |
) |
|
(9.8 |
) |
|
147.5 |
|
||||
Gross profit(1) |
$ |
2,740.4 |
|
$ |
- |
|
$ |
(5.6 |
) |
$ |
(104.0 |
) |
$ |
2,850.0 |
|
||||
SG&A expenses | |||||||||||||||||||
Coach |
|
1,410.2 |
|
|
- |
|
|
(0.1 |
) |
|
57.9 |
|
|
1,352.4 |
|
||||
Kate Spade |
|
607.0 |
|
|
- |
|
|
1.1 |
|
|
66.7 |
|
|
539.2 |
|
||||
Stuart Weitzman |
|
673.8 |
|
|
- |
|
|
(1.9 |
) |
|
494.7 |
|
|
181.0 |
|
||||
Corporate |
|
320.2 |
|
|
23.6 |
|
|
27.4 |
|
|
- |
|
|
269.2 |
|
||||
SG&A expenses |
$ |
3,011.2 |
|
$ |
23.6 |
|
$ |
26.5 |
|
$ |
619.3 |
|
$ |
2,341.8 |
|
||||
Operating income (loss) | |||||||||||||||||||
Coach |
|
620.4 |
|
|
- |
|
|
- |
|
|
(119.8 |
) |
|
740.2 |
|
||||
Kate Spade |
|
(30.6 |
) |
|
- |
|
|
(2.3 |
) |
|
(99.0 |
) |
|
70.7 |
|
||||
Stuart Weitzman |
|
(540.4 |
) |
|
- |
|
|
(2.4 |
) |
|
(504.5 |
) |
|
(33.5 |
) |
||||
Corporate |
|
(320.2 |
) |
|
(23.6 |
) |
|
(27.4 |
) |
|
- |
|
|
(269.2 |
) |
||||
Operating income (loss) |
$ |
(270.8 |
) |
$ |
(23.6 |
) |
$ |
(32.1 |
) |
$ |
(723.3 |
) |
$ |
508.2 |
|
||||
Provision for income taxes |
|
34.9 |
|
|
(5.7 |
) |
|
(11.9 |
) |
|
(61.5 |
) |
|
114.0 |
|
||||
Net income (loss) |
$ |
(358.3 |
) |
$ |
(17.9 |
) |
$ |
(20.2 |
) |
$ |
(661.8 |
) |
$ |
341.6 |
|
||||
Net income (loss) per diluted common share |
$ |
(1.28 |
) |
$ |
(0.06 |
) |
$ |
(0.07 |
) |
$ |
(2.37 |
) |
$ |
1.22 |
|
||||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies. The financial information presented above, as well as gross margin, SG&A expense ratio, and operating margin, have been presented both including and excluding the effect of certain items related to the Acceleration Program and Impairment costs for the third quarter of fiscal year 2021 and the effect of certain items related to the tax benefit the Company received under the CARES Act, the Acceleration Program and Impairment costs for the first nine months of fiscal year 2021 and ERP Implementation, Organization-related & Integration Costs, and Impairment costs for the third quarter and first nine months of fiscal year 2020.
The Company operates on a global basis and reports financial results in U.S. dollars in accordance with GAAP. Percentage increases/decreases in net sales for the Company and each segment have been presented both including and excluding currency fluctuation effects from translating foreign-denominated sales into U.S. dollars and compared to the same periods in the prior quarter and fiscal year. The Company calculates constant currency net sales results by translating current period net sales in local currency using the prior year period’s currency conversion rate.
Net sales changes for the Company and each segment are based on absolute sales dollar changes and are not presented in accordance with the Company’s comparable sales definition utilized historically due to the uncertain business environment resulting from the impact of the Covid-19 pandemic.
Management utilizes these non-GAAP and constant currency measures to conduct and evaluate its business during its regular review of operating results for the periods affected and to make decisions about Company resources and performance. The Company believes presenting these non-GAAP measures, which exclude items that are not comparable from period to period, is useful to investors and others in evaluating the Company’s ongoing operating and financial results in a manner that is consistent with management’s evaluation of business performance and understanding how such results compare with the Company’s historical performance. Additionally, the Company believes presenting these metrics on a constant currency basis will help investors and analysts to understand the effect of significant year-over-year foreign currency exchange rate fluctuations on these performance measures and provide a framework to assess how business is performing and expected to perform excluding these effects.
In addition to these non-GAAP measures, the Company has provided comparisons to certain fiscal year 2019 results and trends, which the Company believes is useful to investors and others in evaluating the Company’s results, due to the significant impact of the Covid-19 pandemic on the Company’s operations and financial results, notably in the second half of fiscal year 2020.
TAPESTRY, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
At March 27, 2021 and June 27, 2020 | |||||
(in millions) | |||||
(unaudited) | (audited) | ||||
March 27, 2021 | June 27, 2020 | ||||
ASSETS | |||||
Cash, cash equivalents and short-term investments |
$ |
1,659.2 |
$ |
1,434.4 |
|
Receivables |
|
240.6 |
|
193.3 |
|
Inventories |
|
700.3 |
|
736.9 |
|
Other current assets |
|
296.5 |
|
188.5 |
|
Total current assets |
|
2,896.6 |
|
2,553.1 |
|
Property and equipment, net |
|
673.8 |
|
775.2 |
|
Lease right-of-use assets |
|
1,555.2 |
|
1,757.0 |
|
Other noncurrent assets |
|
2,840.4 |
|
2,838.9 |
|
Total assets |
$ |
7,966.0 |
$ |
7,924.2 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable |
$ |
409.5 |
$ |
130.8 |
|
Accrued liabilities |
|
527.0 |
|
511.0 |
|
Short-term lease liabilities |
|
354.6 |
|
388.8 |
|
Current debt |
|
- |
|
711.5 |
|
Total current liabilities |
|
1,291.1 |
|
1,742.1 |
|
Long-term debt |
|
1,590.0 |
|
1,587.9 |
|
Long-term lease liabilities |
|
1,576.3 |
|
1,799.8 |
|
Other liabilities |
|
493.6 |
|
518.0 |
|
Stockholders' equity |
|
3,015.0 |
|
2,276.4 |
|
Total liabilities and stockholders' equity |
$ |
7,966.0 |
$ |
7,924.2 |
TAPESTRY, INC. | |||||
STORE COUNT | |||||
At December 26, 2020 and March 27, 2021 | |||||
(unaudited) | |||||
As of | As of | ||||
Directly-Operated Store Count: | December 26, 2020 | Openings | (Closures) | March 27, 2021 | |
Coach | |||||
North America |
374 |
- |
(17 |
) |
357 |
International |
586 |
8 |
(7 |
) |
587 |
Kate Spade | |||||
North America |
216 |
- |
(5 |
) |
211 |
International |
206 |
1 |
(5 |
) |
202 |
Stuart Weitzman | |||||
North America |
54 |
- |
(5 |
) |
49 |
International |
55 |
4 |
(5 |
) |
54 |
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