Coach parent Tapestry expects currency headwinds to impact FY23 results
For its first quarter Tapestry, Inc., parent to Coach, Kate Spade, and Stuart Weitzman, reported net sales of 1.51 billion dollars, an increase of approximately 2 percent.
The company said, excluding a 370 basis point headwind from currency due to the appreciation of the U.S. dollar revenue rose over 5 percent versus last year. Gross profit totaled 1.05 billion dollars, while gross margin was 70 percent.
The Company is updating its fiscal 2023 earnings outlook due to an estimated headwind of 20 cents based on incremental currency pressure resulting from the further strengthening of the U.S. dollar.
Commenting on the first quarter trading, Joanne Crevoiserat, CEO of Tapestry, Inc. said in a release: “Our results exceeded expectations despite the more challenging backdrop, demonstrating the strength of our iconic brands, the agility of our operating model, and the consistent execution of our global teams.”
Tapestry’s Q1 net income drops, adjusts outlook
The company’s operating income for the quarter was 254 million dollars, while operating margin was 16.9 percent compared to 295 million dollars and operating margin of 19.9 percent in the prior year. On a non-GAAP basis, prior year operating income was 307 million dollars, while operating margin was 20.7 percent.
Net income for the quarter was 195 million dollars with earnings per diluted share of 79 cents compared to reported net income of 227 million dollars and earnings per diluted share of 80 cents in the prior year period.
On a non-GAAP basis, net income was 235 million dollars with earnings per diluted share of 82 cents in the prior year period.
For fiscal 2023, Tapestry expects revenue of 6.5 billion dollars to 6.6 billion dollars. This represents a slight decline versus prior year on a reported basis due entirely to approximately 450 basis points of FX pressure. On a constant currency basis, revenue growth is expected to be roughly 2 percent to 4 percent.
Earnings per diluted share are expected to be 3.60 dollars to 3.70 dollars, representing mid-single digit growth compared to the prior year and includes a currency headwind of approximately 50 cents.