CONTACTS:

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

TAPESTRY, INC. REPORTS FOURTH QUARTER AND FULL YEAR FISCAL 2024 RESULTS

Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., said, “Our fourth quarter results exceeded expectations, capping a successful year.  This is a testament to our passionate global teams whose creativity and exceptional execution continue to fuel our brands and business. Importantly, through an unwavering focus on powering innovation and consumer connections, we meaningfully advanced our strategic agenda in fiscal year 2024, delivering strong financial results against a dynamic backdrop.  From this position of strength, we have a bold vision for the future and a steadfast commitment to drive growth and shareholder value for years to come.”

Build Lasting Customer Relationships

Power Global Growth

 

 

 

 

 

 

Deliver Compelling Omni-Channel Experiences

 

 

 

Fuel Fashion Innovation and Product Excellence

 

 

 

(1) Greater China includes mainland China, Hong Kong SAR and Macao SAR, and Taiwan.

(2) Other Asia includes Malaysia, Australia, New Zealand, South Korea, Singapore, and other countries within Asia.

(3) Other primarily represents royalties earned from the Company’s licensing partners and sales in the Middle East.

As anticipated, the Board of Directors approved the return of $321 million to shareholders in Fiscal 2024 through dividend payments, for an annual dividend rate of $1.40 per common share, which represented an increase of 17% versus prior year and a dividend payout ratio of 39% on a reported basis.

In Fiscal 2025, Tapestry expects to maintain its annual dividend rate of $1.40 per common share, and the Company’s Board of Directors declared a quarterly cash dividend of $0.35 per common share payable on September 23, 2024, to shareholders of record as of the close of business on September 6, 2024.

On August 10, 2023, Tapestry, Inc. announced a definitive agreement to acquire Capri Holdings Limited, establishing a powerful global house of iconic luxury and fashion brands. Importantly, this transaction will bring significant benefits to the combined Company’s customers, employees, partners, and shareholders around the world.  Further, the acquisition builds on Tapestry’s track record as a consumer-centric brand-builder and disciplined operator and accelerates its strategic and financial growth agenda.

On April 22, 2024, the Federal Trade Commission (FTC) filed a lawsuit in an attempt to block the proposed acquisition.  The Company is confident in the merits and pro-competitive, pro-consumer nature of this transaction and looks forward to presenting its strong legal arguments in court, working expeditiously to close the transaction in calendar year 2024.

During the fiscal fourth quarter of 2024, the Company recorded certain items that decreased pre-tax income by $60 million, net income by $58 million, and earnings per diluted share by approximately $0.24.  For the full fiscal year, the Company recorded certain items that decreased pre-tax income by $227 million, net income by $184 million, and earnings per diluted share by approximately $0.79.   These items relate to costs associated with the proposed acquisition of Capri Holdings Limited, primarily financing charges and professional fees.

Please refer to Financial Schedules 3 and 4 included herein for a detailed reconciliation of the Company’s reported GAAP to non-GAAP results.

Tapestry expects the following for Fiscal 2025 on a non-GAAP basis:

Please note this outlook assumes the following:

Given the dynamic nature of these and other external factors, financial results could differ materially from the outlook provided.

The Company is not able to provide a full reconciliation of the non-GAAP financial measures to GAAP presented in this release and on the Company’s conference call because certain material items that impact these measures, such as the timing and exact amount of acquisition, financing, purchase accounting and integration-related charges and Company costs associated with the acquisition of Capri Holdings Limited have not yet occurred and cannot be reasonably estimated at this time. Accordingly, a reconciliation of the Company’s non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

The Company will host a conference call to review these results at 8:00 a.m. (ET) today, August 15, 2024.  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 2329867.  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.  In addition, presentation slides have been posted to the Company’s website at www.tapestry.com/investors.

The Company expects to report fiscal 2025 first quarter results on Thursday, November 7, 2024.

To receive notification of future announcements, please register at www.tapestry.com/investors (“Subscribe to E-Mail Alerts”).

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  “Financial Outlook,” statements regarding long term performance, statements regarding the Company’s capital deployment plans, including anticipated annual dividend rates and share repurchase plans, and statements that can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “should,” “expect,” “expectation,” “proposed acquisition,” “looks forward to,” “working expeditiously,” “potential,” “intend,” “estimate,” “continue,” “guidance,” “forecast,” “outlook,” “commit,” “anticipate,” “goal,” “leveraging,” “create,” accelerating,” “expand,” “unlock,” “generate,” “enhancing,”  “innovation,” “drive,” “targeting,” “assume,” “plan,” “effort,” “progress,” “confident,”  “future,” “uncertain,” “achieve,” “strategic,”  “growth,” “vision,” “we can stretch 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 economic conditions, recession and inflationary measures, risks associated with operating in international markets and our global sourcing activities, the impact of the Covid-19 pandemic, 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 ability to successfully implement the initiatives under our 2025 growth strategy, the effect of existing and new competition in the marketplace, the satisfaction of the conditions precedent to consummation of the proposed acquisition of Capri Holdings Limited (“Capri”), including the ability to secure regulatory approval in the United States on the terms expected, at all or in a timely manner, our ability to achieve intended benefits, cost savings and synergies from acquisitions including our proposed acquisition of Capri, the outcome of the antitrust lawsuit by the Federal Trade Commission against us and Capri related to the consummation of the proposed acquisition, our ability to control costs, the effect of seasonal and quarterly fluctuations on our sales or operating results; the risk of cybersecurity threats and privacy or data security breaches, our ability to satisfy our outstanding debt obligations or incur additional indebtedness, the risks associated with climate change and other corporate responsibility issues,  the impact of tax and other legislation, the risks associated with potential changes to international trade agreements and the imposition of additional duties on importing our products, our ability to protect against infringement of our trademarks and other proprietary rights, and the impact of pending and potential future legal proceedings, 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 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 Statements of Operations

Schedule 2:  Detail to Net Sales

Schedules 3 & 4:  Consolidated Segment Data and GAAP to Non-GAAP Reconciliation

Management utilizes 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.

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 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.

The segment operating income and supplemental segment SG&A expenses presented in the Consolidated Segment Data, and GAAP to non-GAAP Reconciliation Table above, as well as SG&A expense ratio, and operating margin, are considered non-GAAP measures. These measures have been presented both including and excluding acquisition costs for the fourth quarter and fiscal year ended June 29, 2024. In addition, segment Operating Income (loss), Net income (loss), and Net Income (loss) per diluted common share, have been presented both including and excluding acquisition costs for the fourth quarter and fiscal year ended June 29, 2024.

The Company also presents free cash flow, which is a non-GAAP measure, Free cash flow is calculated by taking the “Net cash flows provided by (used in) operating activities” less “Purchases of property and equipment” from the Condensed Consolidated Statement of Cash Flows. The Company believes that free cash flow is an important liquidity measure of the cash that is available after capital expenditures for operational expenses and investment in our business. The Company believes that free cash flow is useful to investors because it measures the Company’s ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet, invest in future growth and return capital to stockholders. Adjusted EBITDA is calculated as Net Income, excluding, Interest expense, Provision for income taxes, Depreciation and amortization, Cloud computing amortization costs, Share-based compensation and Items affecting comparability including Acquisition and Integration costs.

Schedule 5:  Condensed Consolidated Balance Sheets

Schedule 6: Condensed Consolidated Statement of Cash Flows

Schedules 7 & 8: Store Count by Brand

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