Tapestry Inc.’s slow path to recovery continues, with new permanent chief executive officer Joanne Crevoiserat at the helm and a few tangible results beginning to take shape.
The fashion group — parent to the Coach, Kate Spade and Stuart Weitzman brands — reported quarterly earnings Thursday before the market opened, improving on bottom-line results amid a turbulent and increasingly uncertain retail landscape. Company shares shot up more than 10 percent during pre-market hours as a result.
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For the three-month period ending Sept. 26, total company revenues fell 14 percent to $1.17 billion, down from $1.35 billion a year earlier. But the company still managed to log $231 million in profits for the quarter, up from $20 million the same time last year.
This was largely achieved due to the company’s reduced selling, general and administrative expenses, which were $628 million for the quarter, down from $863 million the same time last year. Tapestry also had a $92 million tax benefit for the quarter under the Cares Act.
Meanwhile, all three brands fell on both top and bottom lines. At Coach, sales were $875 million for the quarter, down from $965 million last year. Revenues at Kate Spade were $240 million, compared with $305 million a year ago, while Stuart Weitzman logged $56 million in top-line sales, down from $86.5 million last year.
Bright spots for the group included the e-commerce and China businesses. Digital sales grew triple digits year-over-year, while revenues in Mainland China rose double digits during the quarter.
Tapestry had $27 million in pre-tax charges, which included reorganization and severance fees. The company expects between $185 million and $200 million in fees as a result of the Acceleration Program.
The retailer ended the quarter with $1.5 billion in cash and equivalents and $1.5 billion in long-term debt. Tapestry is not providing guidance, but does expect both top and bottom-line growth in 2021.
Shares of Tapestry, which closed down 0.51 percent to $21.31 a piece Wednesday, are down 17.6 percent year-over-year.
“We are confident in the strong foundation we’re building and our ability to create long-term value for our stakeholders,” Crevoiserat said. “As we enter the holiday season, our teams continue to focus on the factors within our control. 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.”
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