Tapestry's Q3 sales rise, announces 1 billion dollars share buyback

For its third quarter to March 30, 2019, Tapestry, Inc. reported net sales of 1.33 billion dollars, an increase of 1 percent on a reported basis and 2 percent in constant currency. The company’s gross profit reached 916 million dollars on a reported basis, while gross margin for the quarter was 68.8 percent compared to 908 million dollars and 68.6 percent, respectively, in the prior year. The company also announced the repurchase of up to 1 billion dollars of its outstanding common stock.

Commenting on the trading results, Victor Luis, Chief Executive Officer of Tapestry, said: “We are pleased with our third quarter performance, highlighted by increases in sales and gross margin on a constant currency basis in each of our three brands. Most notably, we again drove positive comps at Coach and generated a significant sequential comp improvement at Kate Spade with Nicola Glass’s new collection resonating with consumers globally.”

Highlights of Tepestry’s Q3 results

On a non-GAAP basis, gross profit totalled 921 million dollars, while gross margin was 69.2 percent compared to 912 million dollars and 68.9 percent, respectively, in the prior year.

Operating income for the quarter was 106 million dollars on a reported basis, while operating margin was 7.9 percent versus 159 million dollars and an operating margin of 12 percent in the prior year. On a non-GAAP basis, operating income was 141 million dollars, while operating margin was 10.6 percent versus 184 million dollars and an operating margin of 13.9 percent in the prior year.

Net income for the quarter was 117 million dollars on a reported basis, with earnings per diluted share of 40 cents compared to 140 million dollars with earnings per diluted share of 48 cents in the prior year period. On a non-GAAP basis, net income totalled 122 million dollars, with earnings per diluted share of 42 cents compared to 158 million dollars with earnings per diluted share of 54 cents in the prior year period.

Tapestry’s Q3 performance across brand segments

Net sales for Coach were 965 million dollars for the third fiscal quarter, an increase of 1 percent on a constant currency basis. Global comparable store sales increased 1 percent, including a benefit of approximately 100 basis points driven by an increase in global e-commerce.

Net sales for Kate Spade were 281 million dollars, an increase of 4 percent on a reported basis and 5 percent in constant currency. Global comparable store sales declined 3 percent, including the positive impact of approximately 700 basis points from global e-commerce.

Net sales for Stuart Weitzman totalled 85 million dollars, an increase of 2 percent on a reported basis and 4 percent in constant currency.

Picture credit:Kate Spade via Business Wire

 

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