Tapestry's Q4 Highlights: Top-Line Miss, Bottom-Line Beat, Challenging External Environment & More

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  • Tapestry Inc TPR, the owner of fashion brands Coach, Kate Spade, and Stuart Weitzman, reported fourth-quarter FY22 sales growth of 0.6% year-on-year to $1.62 billion, missing the consensus of $1.64 billion.
  • Adjusted EPS of $0.78 beat the analyst consensus of $0.77.
  • Gross profit fell 4% Y/Y to $1.12 billion, with the margin contracting 330 basis points to 68.9%.
  • The operating margin contracted 80 basis points to 15.3%, and operating income for the quarter decreased 4.2% to $249 million.
  • Tapestry held $953.2 million in cash and equivalents as of July 2, 2022. Net cash provided by operating activities for the twelve months totaled $853.2 million.
  • Inventory at the end of FY22 rose 35% to $994 million.
  • TPR returned $1.9 billion to shareholders in FY22 through share repurchases and dividends. Tapestry expects to return $1.0 billion to shareholders in FY23.
  • TPR's Board approved a 20% increase to the dividend, with a quarterly cash dividend of $0.30 per share payable on September 26, 2022, to shareholders of record on September 9, 2022.
  • "Although the external environment is challenging, we are well-positioned given the durability of our category, the strength of our brands and the proven ability of our teams to respond effectively to change," said CEO Joanne Crevoiserat, who recently joined General Motors Co GM Board.
  • Outlook: Tapestry sees FY23 EPS of $3.80 - $3.90 versus the consensus of $3.91.
  • The company expects FY23 sales to be ~$6.9 billion versus the consensus of $6.9 billion.
  • Price Action: TPR shares are trading lower by 1.10% at $36.70 in premarket on the last check Thursday.
  • Photo Via Company
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