Tapestry Inc. (TPR, Financial) released its fiscal fourth-quarter results before the opening bell on Aug. 13. The company recorded a loss for the quarter, but it was narrower than what Wall Street had anticipated. Revenue, on the other hand, surpassed expectations.
By the numbers
The company, which owns designer brands like Coach and Kate Spade, recorded a net loss of $294 million, translating to a loss per share of $1.06. The adjusted loss per share stood at 25 cents versus the expected loss of 57 cents. Revenue of $714.8 million was down 52.8% year over year, but surpassed analysts' projections of $663.3 million.
The full-year 2020 net loss amounted to $652.1 million, or $2.34 per share. Revenue totalled $4.96 billion, down from $6.03 billion last year.
At the end of the quarter, Tapestry had cash and short-term investments of a combined $1.4 billion, which included the $0.7 billion revolver drawdown.
Segment performance
In the Coach segment, net sales totaled roughly $517 million, down from $1.10 billion in the year-ago quarter. Net sales at Kate Spade stood at $164 million, down from $332 million last year. While the former reported a gross margin of 73.6% (up from 69.7% reported last year), the latter recorded a gross margin of 64.9% (up from 62%). The growth in gross margin was attributable to fewer markdowns on bags and jewelry.
Net sales amounted to $33 million for Stuart Weitzman. That compares with $85 million in the prior year. The gross margin was 34.2%, up from 33.7%.
The acceleration program
As part of its ongoing acceleration program, the maker of high-end shoes and handbags is looking to reduce expenses to the extent of around $300 million. Out of the said figure, the company plans to slash expenses of $200 million in fiscal 2021. The program also includes accelerating e-commerce growth. Digital sales in the quarter surged by triple digits as compared to the same period last year. In a statement, Interim CEO Joanne Crevoiserat commented on Tapestry's progress:
"Through our Acceleration Program, we are transforming into a world-class consumer centric organization that is more agile and data-driven with a digital-first mindset. We believe these initiatives will create stronger connections with our customers, fueling accelerated growth and profitability for Tapestry and each of our brands."
Guidance
Tapestry pulled its financial forecast for fiscal year 2021 due to the global uncertainty caused by the coronavirus pandemic. Regardless, the company predicts revenue for the upcoming fiscal year to be in line with the previous year.
Disclosure: I do not hold any positions in the stocks mentioned.
Read more here:
- Performance Food Group Reports Mixed 4th-Quarter Results
- Highlights From Macerich's 2nd-Quarter Results
- Marriott International Reports Mixed 2nd-Quarter Results
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
