Tapestry reported a net loss of US$677.1 million, or US$2.45 per share, compared with a profit of US$117.4 million, or 40 cents per share, in the same quarter of the previous fiscal year. Net sales for the Coach brand amounted to approximately US$772 million in the period, down from US$965 million a year earlier. The Kate Spade brand recorded net sales of about US$250 million compared with US$281 million in the prior year, while net sales for Stuart Weitzman totalled US$51 million for the fiscal third quarter compared with US$85 million in the same quarter of the Group’s fiscal year 2019.

“We entered the calendar year with strong underlying momentum. As the novel coronavirus expanded across the globe, our results materially weakened”, said Jide Zeitlin, Chairman and CEO, Tapestry. “No one is immune to the effects of this one-hundred-year storm. We are taking aggressive actions to assure that Tapestry emerges a strong company when conditions normalise”, he added. In China, approximately 90% of the Group’s stores on the Mainland were closed as of early February. By the end of the quarter, the vast majority of stores had re-opened, though traffic remained muted. As of mid-April, all stores were open and Tapestry said it has continued to experience a gradual improvement in the business week-to-week.

Tapestry said its supply chain continued to operate effectively over the third quarter given its globally diversified manufacturing and sourcing base, with relatively limited exposure to China. Subsequent to quarter-end, the fashion Group claims it has been successfully working with its service providers to balance changing levels of supply and demand. Measures taken by Tapestry to mitigate the impact of Covid-19 are said to include driving SG&A savings by eliminating non-essential operating costs, such as marketing, across all key areas of spend and reducing corporate compensation; tightly managing inventories by reflowing late spring and early summer product introductions and cancelling inventory receipts for late summer/early fall 2020, which is expected to result in over US$500 million of working capital savings.

Tapestry said it is reducing Capex by at least US$100 million in fiscal 2021 as compared to its run-rate spend of approximately US$275 million. It is also delaying or cancelling new store openings, while prioritising investment in high-return projects aligned with the multi-year growth agenda, notably in digital.