North America sales drive Tapestry’s Q2 results

Worldwide
Published:  11 February, 2021

The New York headquartered fashion Group said it achieved significant sequential improvement in revenue trends across all brands, led by North America, in the second quarter of its fiscal year 2021.

Tapestry’s net sales totalled US$1.69 billion for the second quarter of its fiscal year 2021, down from US$1.82 billion in the same quarter of the prior year, representing a 7% decline. Gross profit was US$1.17 billion, while gross margin was 69.6% on both a reported and non-GAAP basis, compared with prior year gross profit of approximately US$1.21 billion on a reported and non-GAAP basis and gross margin of 66.6% and 66.7% on a reported and non-GAAP basis, respectively. Operating income was US$389 million on a reported basis and operating margin 23.1%, compared with US$363 million and 20% in the prior year. Net income for the quarter was US$311 million on a reported basis, with earnings per diluted share of US$1.11, compared with a net income of US$299 million with earnings per diluted share of US$1.08 in the prior year period.

Net sales for Coach totalled US$1.23 billion for the fiscal second quarter, down 4% year-on-year, with gross profit at US$888 million and a gross margin of 72.5% on a reported and non-GAAP basis. Net sales for Kate Spade totalled US$376 million (-13%), down from US$430 million in the prior year, with gross profit totalling US$233 million and gross margin at 62.1% on a reported and non-GAAP basis. Net sales for Stuart Weitzman amounted to US$85 million (-27%), down from US$116 million, while gross profit totalled US$53 million on both a reported and non-GAAP basis, and gross margin for the quarter was 62.2%.

Tapestry now expects revenue for the fiscal year to increase at a high-single digit rate on a 52-week basis and in the area of 10% on a 53-week basis. This outlook continues to include the expectation for a topline inflection and strong bottom-line growth during the second half of the fiscal year.