Tapestry reports net sales increase in third quarter of 2021
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Tapestry reports net sales increase in third quarter

07 May 2021 (Last Updated May 7th, 2021 16:41)

US-based fashion holding company Tapestry has reported a 19% increase in net sales to $1.27bn for the third quarter of the year, compared to $1.07bn a year prior.

Tapestry, which owns Coach, Kate Spade and Stuart Weitzman, recorded a net income of $91.7m, or $0.32 for each diluted share.

This is compared to a net loss of $677.1m, or $2.45 for each share, in the prior-year period.

The company’s revenue growth in the quarter was supported by a triple-digit increase in global digital sales, driven by new customer acquisition, and a revenue increase of around 175% in Mainland China.

In North America, sales for the quarter returned to pre-pandemic levels.

Tapestry reported 49 year-to-date net closures, reduced its stock-keeping unit (SKU) counts by between 30% and 50%, and deployed data and analytics tools.

The company said that its operating income exceeded the pre-pandemic levels. Its operating income in the quarter was $117m on a reported basis, while its operating margin was 9.2%.

Gross profit was $912m, gross margin was 71.6%, and SG&A expenses were $795m on a reported basis. SG&A represented 62.5% of the company’s sales.

Coach sales were up by 25% during the quarter compared with a year earlier, Kate Spade sales were up by 1%, and sales at Stuart Weitzman rose by 13%.

Tapestry CEO Joanne Crevoiserat said: “Our third-quarter results significantly outpaced expectations, underscoring the power of the Acceleration Programme and enthusiasm for our brands.

“Through a sharpened focus on the consumer, we fuelled new customer acquisition at Coach, Kate Spade and Stuart Weitzman and delivered robust sales growth led by Digital and China.

“For the third consecutive quarter, we achieved operating income gains compared to both last year and 2019.

“These were supported by a continued reduction in promotional activity, higher average unit retail (AUR) and disciplined expense management.”

Tapestry did not provide a detailed outlook for this year due to the uncertainty caused by the Covid-19 pandemic.

The company expects a mid-teens rate increase in revenue on both a 52-week and 53-week basis for the year.