An uphill quarter for Tapestry. Coach remains stable. Kate Spade and Stuart Weitzman go low. During the first quarter of the 2019/2020 fiscal year, the US-based group registered a drop in sales and operating profits: -68%. Jide Zeitlin, president and CFO of Tapestry announces a “deep, complete and efficient revision of the whole business”.
Tapestry’s revenue during the first quarter 2019-2020 was of 1.36 billion USD, equal to -2% at current rates and 1% at constant rates. The analysts’ forecasts expected it to be 1.37 billion USD (IBES Refinitiv data). Gross profits, were just of 914 million USD, in comparison to the 935 million from the previous year. Operating profits, during the same period, fell to 52 million USD, against the 162 million from the first quarter of the 2018/2019 fiscal year: -68%.
Coach sold goods for 966 million USD, which is equal to a 1% increase at constant rates. Kate Spade’s revenue was of 306 million USD, down 6% at both constant and current rates. Stuart Weitzman stopped at 87 million USD, losing 9% at current rates and 8% at constant rates.
The CEO’s Comment, word by word
Jide Zeitlin, president and CEO of Tapestry, stated how: “Fiscal entries during the first quarter declined, in line with expectations, reflecting the product and merchandising challenges we’ve previously identified. Our business internationally was stronger than in North America where we managed continued industry headwinds. Kate Spade’s comparable store sales declined in line with expectations, reflecting the product and merchandising challenges we’ve previously identified. While Stuart Weitzman sales were negatively impacted by softer wholesale demand and continued operational challenges. Furthermore, we have begun a deep, comprehensive and efficient revision of our business. All these actions have been taken to face the organic growth and profitability opportunities at both short and long-term levels, thus stimulating organic growth and profitability for our entire portfolio”.