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Dec 28, 2019
Tapestry Q2 2020 Earnings Report
Tapestry's second quarter 2020 results were reported, with overall holiday performance exceeding expectations due to Coach's continued momentum and Kate Spade's sequential improvement.
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
Revenue by Segment
Coach Revenue
CapyFin.comKate Spade Revenue
CapyFin.comStuart Weitzman Revenue
CapyFin.com 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