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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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General Counsel and Secretary
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Link to Download Tapestry’s Q4 and Full Year 2022 Earnings Presentation, Including Brand Highlights
NEW YORK--(BUSINESS WIRE)--August 18, 2022--Tapestry, Inc. (NYSE: TPR), a leading New York-based house of modern luxury accessories and lifestyle brands consisting of Coach, Kate Spade, and Stuart Weitzman, today reported results for the fiscal fourth quarter and year ended July 2, 2022.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., said, “We drove standout results this fiscal year and delivered accelerated revenue and profit growth across our portfolio – a direct reflection of the vibrancy of our brands and our team’s successful execution of the Acceleration Program. Through an unwavering focus on the consumer, supported by our transformed and diversified business model, we increased AUR, reached $2 billion in global Digital sales and acquired 7.7 million new customers in North America alone in FY22.”
“Looking forward, we see significant runway for long-term growth as we harness our powerful combination of iconic brands amplified by a data-rich platform that enhances our ability to build lasting customer relationships. Although the external environment is challenging, we are well-positioned given the durability of our category, the strength of our brands and the proven ability of our teams to respond effectively to change. These competitive advantages and established capabilities will enable us to fuel sustained top and bottom-line gains and drive meaningful shareholder value.”
Capital Deployment Actions
In Fiscal 2022, Tapestry returned approximately $1.9 billion to shareholders through a combination of share repurchases and dividends:
Looking ahead to Fiscal 2023, Tapestry expects to return approximately $1.0 billion to shareholders in the year given the Company’s robust balance sheet, significant free cash flow generation and outlook for continued growth. This includes the assumption for:
53rd Week Impact – Fiscal 2021
The results for the fourth quarter and fiscal year ending July 3, 2021 included 14 and 53 weeks, respectively, while the same periods in Fiscal 2022 included 13 and 52 weeks, respectively. As previously reported, the additional week in Fiscal 2021 contributed $93 million to Tapestry’s revenue and $0.09 to earnings per diluted share. For a complete reconciliation of revenue and operating income by segment, please refer to Financial Schedules 4 and 6 included herein.
Fourth Quarter and Full Year 2022 Financial Highlights
Fourth Quarter 2022:
Fiscal Year 2022:
Fiscal 2022 Acceleration Program Highlights
Throughout the fiscal year, Tapestry made 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:
Overview of Fourth Quarter 2022 Financial Results
Overview of Full Year 2022 Financial Results
Balance Sheet and Cash Flow Highlights
Non-GAAP Reconciliation
During the fiscal fourth quarter of 2022, Tapestry recorded certain items that decreased the Company’s pre-tax income by $11 million, net income by $8 million, and earnings per diluted share by $0.03. On a full year basis, these charges lowered the Company’s reported net income by $80 million or $0.30 per diluted share. These items included:
Please refer to Financial Schedules 3 – 6 included herein for a detailed reconciliation of the Company’s reported to non-GAAP results.
Fiscal Year 2023 Outlook
Tapestry expects the following for Fiscal 2023:
This outlook assumes the following:
Given the dynamic nature of these and other external factors, financial results could differ materially from the outlook provided.
Conference Call Details
The Company will host a conference call to review these results at 8:00 a.m. (ET) today, August 18, 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 4973027. 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
As previously announced, the Company plans to host an Investor Day on September 9, 2022 to discuss its long-term strategic initiatives and financial outlook.
In addition, the Company expects to report Fiscal 2023 first quarter results on Thursday, November 10, 2022.
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 2023 Outlook,” statements regarding the Company’s capital deployment plans, including anticipated annual dividend rates, 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 due to temporary closures of our manufacturing partners, price increases, temporary store closures, as well as production, shipping and fulfillment constraints, economic conditions, the ability successfully execute our multi-year growth agenda under our Acceleration Program, the ability to anticipate consumer preferences and retain the value of our brands, including our ability to execute on our e-commerce and digital strategies, the effects of existing and new competition in the marketplace, 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, the impact of tax and other legislation and the risks associated with climate change and other corporate responsibility issues, 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: Consolidated Statement of Operations
TAPESTRY, INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
For the Quarters and Years Ended July 2, 2022 and July 3, 2021 | ||||||||||||
(in millions, except per share data) | ||||||||||||
(unaudited) | (unaudited) (audited) | |||||||||||
QUARTER ENDED | YEAR ENDED | |||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||
Net sales |
$ |
1,624.9 |
$ |
1,615.4 |
$ |
6,684.5 |
$ |
5,746.3 |
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|||
Cost of sales |
|
505.7 |
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449.3 |
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2,034.1 |
|
1,664.4 |
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|||
Gross profit |
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1,119.2 |
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1,166.1 |
4,650.4 |
|
4,081.9 |
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||||
Selling, general and administrative expenses |
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870.7 |
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906.4 |
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3,474.6 |
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3,113.9 |
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|||
Operating income (loss) |
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248.5 |
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259.7 |
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1,175.8 |
|
968.0 |
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|||
Loss on extinguishment of debt |
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- |
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- |
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53.7 |
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- |
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Interest expense, net |
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11.9 |
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16.4 |
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58.7 |
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71.4 |
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|||
Other expense (income) |
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8.1 |
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1.1 |
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16.4 |
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(0.7 |
) |
|||
Income before provision for income taxes |
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228.5 |
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242.2 |
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1,047.0 |
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897.3 |
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|||
Provision for income taxes |
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39.7 |
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42.4 |
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190.7 |
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63.1 |
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Net income (loss) |
$ |
188.8 |
$ |
199.8 |
$ |
856.3 |
$ |
834.2 |
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|||
Net income (loss) per share: |
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|||||||||||
Basic |
$ |
0.76 |
$ |
0.72 |
$ |
3.24 |
$ |
3.00 |
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|||
Diluted |
$ |
0.75 |
$ |
0.69 |
$ |
3.17 |
$ |
2.95 |
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Shares used in computing net income per share: | ||||||||||||
Basic |
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247.6 |
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279.2 |
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264.3 |
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277.9 |
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Diluted |
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252.3 |
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287.6 |
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270.1 |
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283.0 |
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Schedule 2: Detail to Net Sales
TAPESTRY, INC. | |||||||||||||||||||
DETAIL TO NET SALES | |||||||||||||||||||
For the Quarter and Year Ended July 2, 2022 and July 3, 2021 | |||||||||||||||||||
(in millions) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
QUARTER ENDED | |||||||||||||||||||
July 2, 2022 | July 3, 2021 | % Change vs. FY21 | Constant Currency % Change FY21 |
% change vs. FY21 Adjusted Net Sales %(1) |
% Change vs. FY19 | ||||||||||||||
Coach |
$ |
1,209.0 |
$ |
1,188.9 |
2 |
% |
4 |
% |
8 |
% |
10 |
% |
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Kate Spade |
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344.1 |
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341.6 |
1 |
% |
2 |
% |
8 |
% |
4 |
% |
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Stuart Weitzman |
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71.8 |
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84.9 |
(15 |
)% |
(15 |
)% |
(12 |
)% |
(16 |
)% |
|||||||
Total Tapestry |
$ |
1,624.9 |
$ |
1,615.4 |
1 |
% |
3 |
% |
7 |
% |
7 |
% |
|||||||
(1) The 'FY21 Adjusted Net Sales %' excludes the 14th week for the fiscal fourth quarter 2021. Refer within Schedule 4 to 'Details to Impact of the 14th Week in Fiscal 2021', for the Fiscal 2021 adjusted net sales. | |||||||||||||||||||
YEAR ENDED | |||||||||||||||||||
July 2, 2022 | July 3, 2021 | % Change vs. FY21 | Constant Currency % Change FY21 |
% change vs. FY21 Adjusted Net Sales %(2) |
% Change vs. FY19 | ||||||||||||||
Coach |
$ |
4,921.3 |
$ |
4,253.1 |
16 |
% |
16 |
% |
18 |
% |
15 |
% |
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Kate Spade |
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1,445.5 |
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1,210.0 |
20 |
% |
20 |
% |
22 |
% |
6 |
% |
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Stuart Weitzman |
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317.7 |
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283.2 |
12 |
% |
11 |
% |
13 |
% |
(18 |
)% |
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Total Tapestry |
$ |
6,684.5 |
$ |
5,746.3 |
16 |
% |
17 |
% |
18 |
% |
11 |
% |
|||||||
(2) The 'FY21 Adjusted Net Sales %' excludes the 53rd week for the full year 2021. Refer within Schedule 6 to 'Details to Impact of the 53rd Week in Fiscal 2021', for the Fiscal 2021 adjusted net sales. |
Schedule 3: Items Affecting Comparability – 4Q22
TAPESTRY, INC. | ||||||||||||
GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
(in millions, except per share data) | ||||||||||||
(unaudited) | ||||||||||||
For the Quarter Ended July 2, 2022 | ||||||||||||
Items Affecting Comparability | ||||||||||||
GAAP Basis (As Reported) |
Acceleration Program | Non-GAAP Basis (Excluding Items) |
||||||||||
Cost of sales | ||||||||||||
Coach |
|
864.6 |
|
|
- |
|
|
864.6 |
|
|||
Kate Spade |
|
215.4 |
|
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- |
|
|
215.4 |
|
|||
Stuart Weitzman |
|
39.2 |
|
|
- |
|
|
39.2 |
|
|||
Gross profit(1) |
$ |
1,119.2 |
|
$ |
- |
|
$ |
1,119.2 |
|
|||
SG&A expenses | ||||||||||||
Coach |
|
515.2 |
|
|
2.7 |
|
|
512.5 |
|
|||
Kate Spade |
|
189.2 |
|
|
1.7 |
|
|
187.5 |
|
|||
Stuart Weitzman |
|
42.9 |
|
|
0.4 |
|
|
42.5 |
|
|||
Corporate |
|
123.4 |
|
|
6.3 |
|
|
117.1 |
|
|||
SG&A expenses |
$ |
870.7 |
|
$ |
11.1 |
|
$ |
859.6 |
|
|||
Operating income (loss) | ||||||||||||
Coach |
|
349.4 |
|
|
(2.7 |
) |
|
352.1 |
|
|||
Kate Spade |
|
26.2 |
|
|
(1.7 |
) |
|
27.9 |
|
|||
Stuart Weitzman |
|
(3.7 |
) |
|
(0.4 |
) |
|
(3.3 |
) |
|||
Corporate |
|
(123.4 |
) |
|
(6.3 |
) |
|
(117.1 |
) |
|||
Operating income (loss) |
$ |
248.5 |
|
$ |
(11.1 |
) |
$ |
259.6 |
|
|||
Provision for income taxes |
|
39.7 |
|
|
(2.7 |
) |
|
42.4 |
|
|||
Net income (loss) |
$ |
188.8 |
|
$ |
(8.4 |
) |
$ |
197.2 |
|
|||
Net income (loss) per diluted common share |
$ |
0.75 |
|
$ |
(0.03 |
) |
$ |
0.78 |
|
|||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
Schedule 4: Items Affecting Comparability – 4Q21
TAPESTRY, INC. | |||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
For the Quarter Ended July 3, 2021 | |||||||||||||||
Items Affecting Comparability | |||||||||||||||
GAAP Basis (As Reported) |
Impairment | Acceleration Program | Non-GAAP Basis (Excluding Items) |
||||||||||||
Cost of sales | |||||||||||||||
Coach |
|
898.0 |
|
|
8.1 |
|
- |
|
|
889.9 |
|
||||
Kate Spade |
|
221.0 |
|
|
- |
|
- |
|
|
221.0 |
|
||||
Stuart Weitzman |
|
47.1 |
|
|
- |
|
- |
|
|
47.1 |
|
||||
Gross profit(1) |
$ |
1,166.1 |
|
$ |
8.1 |
$ |
- |
|
$ |
1,158.0 |
|
||||
SG&A expenses | |||||||||||||||
Coach |
|
519.3 |
|
|
- |
|
0.7 |
|
|
518.6 |
|
||||
Kate Spade |
|
185.8 |
|
|
- |
|
0.1 |
|
|
185.7 |
|
||||
Stuart Weitzman |
|
50.1 |
|
|
- |
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(1.2 |
) |
|
51.3 |
|
||||
Corporate |
|
151.2 |
|
|
- |
|
21.3 |
|
|
129.9 |
|
||||
SG&A expenses |
$ |
906.4 |
|
$ |
- |
$ |
20.9 |
|
$ |
885.5 |
|
||||
Operating income (loss) | |||||||||||||||
Coach |
|
378.7 |
|
|
8.1 |
|
(0.7 |
) |
|
371.3 |
|
||||
Kate Spade |
|
35.2 |
|
|
- |
|
(0.1 |
) |
|
35.3 |
|
||||
Stuart Weitzman |
|
(3.0 |
) |
|
- |
|
1.2 |
|
|
(4.2 |
) |
||||
Corporate |
|
(151.2 |
) |
|
- |
|
(21.3 |
) |
|
(129.9 |
) |
||||
Operating income (loss) |
$ |
259.7 |
|
$ |
8.1 |
$ |
(20.9 |
) |
$ |
272.5 |
|
||||
Provision for income taxes |
|
42.4 |
|
|
2.0 |
|
(2.2 |
) |
|
42.6 |
|
||||
Net income (loss) |
$ |
199.8 |
|
$ |
6.1 |
$ |
(18.7 |
) |
$ |
212.4 |
|
||||
Net income (loss) per diluted common share |
$ |
0.69 |
|
$ |
0.02 |
$ |
(0.07 |
) |
$ |
0.74 |
|
||||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
The amounts reflected above include the impact of the additional week on the fourth quarter of Fiscal 2021. The following table quantifies the impact of the additional week on Net Sales, Gross Profit, SG&A Expenses and Operating Income by Segment:
TAPESTRY, INC. | ||||||||||||||
DETAILS TO IMPACT OF 14TH WEEK IN FISCAL 2021 | ||||||||||||||
(in millions) | ||||||||||||||
(unaudited) | ||||||||||||||
For the Quarter Ended July 3, 2021 | ||||||||||||||
Non-GAAP | Impact of 14th Week |
Adjusted | ||||||||||||
Net Sales | ||||||||||||||
Coach |
$ |
1,188.9 |
|
$ |
67.7 |
|
$ |
1,121.2 |
|
|||||
Kate Spade |
|
341.6 |
|
|
21.7 |
|
|
319.9 |
|
|||||
Stuart Weitzman |
|
84.9 |
|
|
3.3 |
|
|
81.6 |
|
|||||
Total Net Sales |
$ |
1,615.4 |
|
$ |
92.7 |
|
$ |
1,522.7 |
|
|||||
Cost of sales | ||||||||||||||
Coach |
$ |
889.9 |
|
$ |
50.3 |
|
$ |
839.6 |
|
|||||
Kate Spade |
|
221.0 |
|
|
13.3 |
|
|
207.7 |
|
|||||
Stuart Weitzman |
|
47.1 |
|
|
2.0 |
|
|
45.1 |
|
|||||
Total Gross Profit |
$ |
1,158.0 |
|
$ |
65.6 |
|
$ |
1,092.4 |
|
|||||
SG&A expenses | ||||||||||||||
Coach |
$ |
518.6 |
|
$ |
21.7 |
|
$ |
496.9 |
|
|||||
Kate Spade |
|
185.7 |
|
|
8.6 |
|
|
177.1 |
|
|||||
Stuart Weitzman |
|
51.3 |
|
|
1.8 |
|
|
49.5 |
|
|||||
Corporate |
|
129.9 |
|
|
3.5 |
|
|
126.4 |
|
|||||
Total SG&A expenses |
$ |
885.5 |
|
$ |
35.6 |
|
$ |
849.9 |
|
|||||
Operating Income (Loss) | ||||||||||||||
Coach |
$ |
371.3 |
|
$ |
28.6 |
|
$ |
342.7 |
|
|||||
Kate Spade |
|
35.3 |
|
|
4.7 |
|
|
30.6 |
|
|||||
Stuart Weitzman |
|
(4.2 |
) |
|
0.2 |
|
|
(4.4 |
) |
|||||
Corporate |
|
(129.9 |
) |
|
(3.5 |
) |
|
(126.4 |
) |
|||||
Total Operating Income (Loss) |
$ |
272.5 |
|
$ |
30.0 |
|
$ |
242.5 |
|
Schedule 5: Items Affecting Comparability – FY22
TAPESTRY, INC. | |||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
For the Fiscal Year Ended July 2, 2022 | |||||||||||||||
Items Affecting Comparability | |||||||||||||||
GAAP Basis (As Reported) |
Acceleration Program |
Debt Extinguishment |
Non-GAAP Basis (Excluding Items) |
||||||||||||
Cost of sales | |||||||||||||||
Coach |
|
3,553.8 |
|
|
- |
|
|
- |
|
|
3,553.8 |
|
|||
Kate Spade |
|
912.0 |
|
|
- |
|
|
- |
|
|
912.0 |
|
|||
Stuart Weitzman |
|
184.6 |
|
|
- |
|
|
- |
|
|
184.6 |
|
|||
Gross profit(1) |
$ |
4,650.4 |
|
$ |
- |
|
$ |
- |
|
$ |
4,650.4 |
|
|||
SG&A expenses | |||||||||||||||
Coach |
|
2,079.9 |
|
|
6.7 |
|
|
- |
|
|
2,073.2 |
|
|||
Kate Spade |
|
754.6 |
|
|
5.9 |
|
|
- |
|
|
748.7 |
|
|||
Stuart Weitzman |
|
182.8 |
|
|
3.6 |
|
|
- |
|
|
179.2 |
|
|||
Corporate |
|
457.3 |
|
|
26.6 |
|
|
- |
|
|
430.7 |
|
|||
SG&A expenses |
$ |
3,474.6 |
|
$ |
42.8 |
|
$ |
- |
|
$ |
3,431.8 |
|
|||
Operating income (loss) | |||||||||||||||
Coach |
|
1,473.9 |
|
|
(6.7 |
) |
|
- |
|
|
1,480.6 |
|
|||
Kate Spade |
|
157.4 |
|
|
(5.9 |
) |
|
- |
|
|
163.3 |
|
|||
Stuart Weitzman |
|
1.8 |
|
|
(3.6 |
) |
|
- |
|
|
5.4 |
|
|||
Corporate |
|
(457.3 |
) |
|
(26.6 |
) |
|
- |
|
|
(430.7 |
) |
|||
Operating income (loss) |
$ |
1,175.8 |
|
$ |
(42.8 |
) |
$ |
- |
|
$ |
1,218.6 |
|
|||
Loss on extinguishment of debt |
|
53.7 |
|
|
- |
|
|
53.7 |
|
|
- |
|
|||
Provision for income taxes |
|
190.7 |
|
|
(3.4 |
) |
|
(12.9 |
) |
|
207.0 |
|
|||
Net income (loss) |
$ |
856.3 |
|
$ |
(39.4 |
) |
$ |
(40.8 |
) |
$ |
936.5 |
|
|||
Net income (loss) per diluted common share |
$ |
3.17 |
|
$ |
(0.15 |
) |
$ |
(0.15 |
) |
$ |
3.47 |
|
|||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
Schedule 6: Items Affecting Comparability – FY21
TAPESTRY, INC. | ||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION | ||||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the Fiscal Year Ended July 3, 2021 | ||||||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||
GAAP Basis (As Reported) |
CARES Act Tax Impact | Impairment | Acceleration Program | Non-GAAP Basis (Excluding Items) |
||||||||||||||||
Cost of sales | ||||||||||||||||||||
Coach |
|
3,149.0 |
|
|
- |
|
|
8.1 |
|
|
- |
|
|
3,140.9 |
|
|||||
Kate Spade |
|
768.4 |
|
|
- |
|
|
- |
|
|
- |
|
|
768.4 |
|
|||||
Stuart Weitzman |
|
164.5 |
|
|
- |
|
|
- |
|
|
- |
|
|
164.5 |
|
|||||
Gross profit(1) |
$ |
4,081.9 |
|
$ |
- |
|
$ |
8.1 |
|
$ |
- |
|
$ |
4,073.8 |
|
|||||
SG&A expenses | ||||||||||||||||||||
Coach |
|
1,836.9 |
|
|
- |
|
|
20.4 |
|
|
21.9 |
|
|
1,794.6 |
|
|||||
Kate Spade |
|
659.9 |
|
|
- |
|
|
19.3 |
|
|
4.4 |
|
|
636.2 |
|
|||||
Stuart Weitzman |
|
173.1 |
|
|
- |
|
|
6.1 |
|
|
(2.5 |
) |
|
169.5 |
|
|||||
Corporate |
|
444.0 |
|
|
- |
|
|
- |
|
|
65.8 |
|
|
378.2 |
|
|||||
SG&A expenses |
$ |
3,113.9 |
|
$ |
- |
|
$ |
45.8 |
|
$ |
89.6 |
|
$ |
2,978.5 |
|
|||||
Operating income (loss) | ||||||||||||||||||||
Coach |
|
1,312.1 |
|
|
- |
|
|
(12.3 |
) |
|
(21.9 |
) |
|
1,346.3 |
|
|||||
Kate Spade |
|
108.5 |
|
|
- |
|
|
(19.3 |
) |
|
(4.4 |
) |
|
132.2 |
|
|||||
Stuart Weitzman |
|
(8.6 |
) |
|
- |
|
|
(6.1 |
) |
|
2.5 |
|
|
(5.0 |
) |
|||||
Corporate |
|
(444.0 |
) |
|
- |
|
|
- |
|
|
(65.8 |
) |
|
(378.2 |
) |
|||||
Operating income (loss) |
$ |
968.0 |
|
$ |
- |
|
$ |
(37.7 |
) |
$ |
(89.6 |
) |
$ |
1,095.3 |
|
|||||
Provision for income taxes |
|
63.1 |
|
|
(95.0 |
) |
|
(7.8 |
) |
|
(17.6 |
) |
|
183.5 |
|
|||||
Net income (loss) |
$ |
834.2 |
|
$ |
95.0 |
|
$ |
(29.9 |
) |
$ |
(72.0 |
) |
$ |
841.1 |
|
|||||
Net income (loss) per diluted common share |
$ |
2.95 |
|
$ |
0.31 |
|
$ |
(0.10 |
) |
$ |
(0.23 |
) |
$ |
2.97 |
|
|||||
(1) Adjustments within Gross profit are recorded within Cost of sales. |
The amounts reflected above include the impact of the additional week within the full year of Fiscal 2021. The following table quantifies the impact of the additional week on Net Sales, Gross Profit, SG&A Expenses and Operating Income by Segment:
TAPESTRY, INC. | ||||||||||||||
DETAILS TO IMPACT OF 53RD WEEK IN FISCAL 2021 | ||||||||||||||
(in millions) | ||||||||||||||
(unaudited) | ||||||||||||||
For the Fiscal Year Ended July 3, 2021 | ||||||||||||||
Non-GAAP | Impact of 53rd Week | Adjusted | ||||||||||||
Net Sales | ||||||||||||||
Coach |
$ |
4,253.1 |
|
$ |
67.7 |
|
$ |
4,185.4 |
|
|||||
Kate Spade |
|
1,210.0 |
|
|
21.7 |
|
|
1,188.3 |
|
|||||
Stuart Weitzman |
|
283.2 |
|
|
3.3 |
|
|
279.9 |
|
|||||
Total Net Sales |
$ |
5,746.3 |
|
$ |
92.7 |
|
$ |
5,653.6 |
|
|||||
Cost of sales | ||||||||||||||
Coach |
$ |
3,140.9 |
|
$ |
50.3 |
|
$ |
3,090.6 |
|
|||||
Kate Spade |
|
768.4 |
|
|
13.3 |
|
|
755.1 |
|
|||||
Stuart Weitzman |
|
164.5 |
|
|
2.0 |
|
|
162.5 |
|
|||||
Total Gross Profit |
$ |
4,073.8 |
|
$ |
65.5 |
|
$ |
4,008.3 |
|
|||||
SG&A expenses | ||||||||||||||
Coach |
$ |
1,794.6 |
|
$ |
21.7 |
|
$ |
1,772.9 |
|
|||||
Kate Spade |
|
636.2 |
|
|
8.5 |
|
|
627.7 |
|
|||||
Stuart Weitzman |
|
169.5 |
|
|
1.8 |
|
|
167.7 |
|
|||||
Corporate |
|
378.2 |
|
|
3.5 |
|
|
374.7 |
|
|||||
Total SG&A expenses |
$ |
2,978.5 |
|
$ |
35.6 |
|
$ |
2,942.9 |
|
|||||
Operating Income (Loss) | ||||||||||||||
Coach |
$ |
1,346.3 |
|
$ |
28.6 |
|
$ |
1,317.7 |
|
|||||
Kate Spade |
|
132.2 |
|
|
4.7 |
|
|
127.5 |
|
|||||
Stuart Weitzman |
|
(5.0 |
) |
|
0.2 |
|
|
(5.2 |
) |
|||||
Corporate |
|
(378.2 |
) |
|
(3.5 |
) |
|
(374.7 |
) |
|||||
Total Operating Income (Loss) |
$ |
1,095.3 |
|
$ |
30.0 |
|
$ |
1,065.3 |
|
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 SG&A expense ratio, and operating margin, have been presented both including and excluding Debt Extinguishment and Acceleration Program costs for the fourth quarter and full fiscal year 2022, as well as Impairment and Acceleration Program costs for the fourth quarter and full fiscal year 2021 and the effects of certain items related to the tax benefit the Company received under the CARES Act for the full fiscal year 2021. The financial information presented above has also been presented both including and excluding the impact of the 14th and 53rd week for the fiscal fourth quarter and full year 2021.
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, referred to as pre-pandemic levels, 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, starting in the second half of fiscal year 2020.
Schedule 7: Condensed Consolidated Balance Sheets
TAPESTRY, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
At July 2, 2022 and July 3, 2021 | |||||
(in millions) | |||||
(unaudited) | (audited) | ||||
July 2, 2022 | July 3, 2021 | ||||
ASSETS | |||||
Cash, cash equivalents and short-term investments |
$ |
953.2 |
$ |
2,015.8 |
|
Receivables |
|
252.3 |
|
200.2 |
|
Inventories |
|
994.2 |
|
734.8 |
|
Other current assets |
|
374.1 |
|
424.5 |
|
Total current assets |
|
2,573.8 |
|
3,375.3 |
|
Property and equipment, net |
|
544.4 |
|
678.1 |
|
Lease right-of-use assets |
|
1,281.6 |
|
1,496.6 |
|
Other noncurrent assets |
|
2,865.5 |
|
2,832.4 |
|
Total assets |
$ |
7,265.3 |
$ |
8,382.4 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable |
$ |
520.7 |
$ |
445.2 |
|
Accrued liabilities |
|
628.2 |
|
661.2 |
|
Short-term lease liabilities |
|
288.7 |
|
319.4 |
|
Current debt |
|
31.2 |
|
- |
|
Total current liabilities |
|
1,468.8 |
|
1,425.8 |
|
Long-term debt |
|
1,659.2 |
|
1,590.7 |
|
Long-term lease liabilities |
|
1,282.3 |
|
1,525.9 |
|
Other liabilities |
|
569.5 |
|
580.7 |
|
Stockholders' equity |
|
2,285.5 |
|
3,259.3 |
|
Total liabilities and stockholders' equity |
$ |
7,265.3 |
$ |
8,382.4 |
Schedule 8: Condensed Consolidated Statement of Cash Flows
TAPESTRY, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||
For the Year Ended July 2, 2022 and July 3, 2021 | |||||||
(in millions) | |||||||
(unaudited) | (audited) | ||||||
July 2, 2022 | July 3, 2021 | ||||||
Cash Flows from Operating Activities | |||||||
Net income (loss) |
$ |
856.3 |
|
$ |
834.2 |
|
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||
Depreciation and amortization |
|
195.3 |
|
|
218.7 |
|
|
Covid-19 related impairment charges |
|
- |
|
|
45.8 |
|
|
Other non-cash items |
|
168.4 |
|
|
(5.3 |
) |
|
Changes in operating assets and liabilities |
|
(366.8 |
) |
|
230.3 |
|
|
Net cash provided by operating activities |
|
853.2 |
|
|
1,323.7 |
|
|
Cash Flows from Investing Activities | |||||||
Purchases of property and equipment |
|
(93.9 |
) |
|
(116.0 |
) |
|
Purchase of investments |
|
(540.4 |
) |
|
(0.7 |
) |
|
Other items |
|
380.7 |
|
|
25.7 |
|
|
Net cash provided by (used in) investing activities |
|
(253.6 |
) |
|
(91.0 |
) |
|
Cash Flows from Financing Activities | |||||||
Payment of dividends |
|
(264.4 |
) |
|
- |
|
|
Repurchase of common stock |
|
(1,600.0 |
) |
|
- |
|
|
Proceeds from debt, net of discount |
|
998.5 |
|
|
- |
|
|
Payment of debt extinguishment costs |
|
(50.7 |
) |
|
- |
|
|
Repayment of debt |
|
(900.0 |
) |
|
(711.5 |
) |
|
Other items |
|
38.5 |
|
|
45.5 |
|
|
Net cash provided by (used in) financing activities |
|
(1,778.1 |
) |
|
(666.0 |
) |
|
Effect of exchange rate on cash and cash equivalents |
|
(39.4 |
) |
|
14.7 |
|
|
Net (decrease) increase in cash and cash equivalents |
|
(1,217.9 |
) |
|
581.4 |
|
|
Cash and cash equivalents at beginning of period |
$ |
2,007.7 |
|
$ |
1,426.3 |
|
|
Cash and cash equivalents at end of period |
$ |
789.8 |
|
$ |
2,007.7 |
|
Schedule 9: Store Count by Brand – 4Q22
TAPESTRY, INC. | |||||
STORE COUNT | |||||
At April 2, 2022 and July 2, 2022 | |||||
(unaudited) | |||||
As of | As of | ||||
Directly-Operated Store Count: | April 2, 2022 | Openings | (Closures) | July 2, 2022 | |
Coach | |||||
North America |
346 |
- |
(3) |
343 |
|
International |
606 |
6 |
(10) |
602 |
|
Kate Spade | |||||
North America |
207 |
- |
- |
207 |
|
International |
192 |
4 |
(5) |
191 |
|
Stuart Weitzman | |||||
North America |
40 |
- |
(1) |
39 |
|
International |
57 |
4 |
- |
61 |
Schedule 10: Store Count by Brand – FY22
TAPESTRY, INC. | ||||
STORE COUNT | ||||
At July 3, 2021 and July 2, 2022 | ||||
(unaudited) | ||||
As of | As of | |||
Directly-Operated Store Count: | July 3, 2021 | Openings | (Closures) | July 2, 2022 |
Coach | ||||
North America |
354 |
3 |
(14) |
343 |
International |
585 |
45 |
(28) |
602 |
Kate Spade | ||||
North America |
210 |
- |
(3) |
207 |
International |
197 |
12 |
(18) |
191 |
Stuart Weitzman | ||||
North America |
48 |
- |
(9) |
39 |
International |
56 |
5 |
- |
61 |
Tapestry, Inc.
Media:
Andrea Shaw Resnick
Chief Communications Officer
212/629-2618
aresnick@tapestry.com
Analysts and Investors:
Christina Colone
Global Head of Investor Relations
212/946-7252
ccolone@tapestry.com
Kelsey Mueller
212/946-8183
Director of Investor Relations
kmueller@tapestry.com