Tapestry Q2 2020 Earnings Report
Key Takeaways
Tapestry, Inc. reported a 1% increase in net sales to $1.82 billion for the fiscal second quarter. Coach's sales increased by 2%, while Kate Spade's sales remained relatively flat and Stuart Weitzman's sales decreased by 7%. The company anticipates a negative impact from the coronavirus outbreak in China, estimating a potential reduction of $200-$250 million in sales and $0.35-$0.45 in diluted earnings per share for the second half of the fiscal year.
Net sales totaled $1.82 billion, a 1% increase compared to the prior year.
Coach's global comparable store sales increased by 2%, driven by e-commerce growth.
Kate Spade's comparable store sales declined by 4%, despite improvements in product and merchandising.
The company anticipates a negative impact of $200-$250 million in sales due to the coronavirus outbreak.
Tapestry
Tapestry
Tapestry Revenue by Segment
Forward Guidance
Tapestry anticipates a negative impact on second-half results due to the coronavirus outbreak, with an estimated reduction of $200-$250 million in sales and $0.35-$0.45 in diluted earnings per share.
Positive Outlook
- Strong underlying trends, notably at Coach, with sales growth accelerating from the holiday period.
- Confidence in effectively navigating through the period of uncertainty.
- Managing the situation to best protect people, brands, and every aspect of the business.
- Belief in the resilience of the Chinese people and the view that China represents a significant opportunity for the brands.
- Strong balance sheet, cash position, and globally diversified sourcing base and supply chain provide the flexibility to operate the Company for the long term.
Challenges Ahead
- Escalating coronavirus outbreak significantly impacting business in China, resulting in the closure of the majority of stores on the Mainland.
- Second half results could be negatively impacted by approximately $200-$250 million in sales.
- Second half results could be negatively impacted by $0.35-$0.45 in earnings per diluted share.
- If the situation further deteriorates, or the outbreak affects demand outside of the country, this impact could be worse.
- Continuing headwinds in Hong Kong SAR and challenges at Stuart Weitzman.
Revenue & Expenses
Visualization of income flow from segment revenue to net income