US’ Tapestry’s Q3 FY23 net sales rise 5% to $1.51 bn

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Tapestry, Inc, a leading New York-based house of iconic accessories and lifestyle brands consisting of Coach, Kate Spade, and Stuart Weitzman, has reported net sales of $1.51 billion in the third quarter (Q3) of fiscal 2023 (FY23), up 5 per cent compared to $1.44 billion in the previous year. Excluding currency headwinds, revenue increased by 9 per cent year-over-year (YoY).

The company’s gross profit reached $1.10 billion in Q3 FY23, with a gross margin of 72.8 per cent, reflecting a 360-basis-point benefit from lower freight expenses and operational improvements, partially offset by a 120-basis-point foreign exchange (FX) headwind. In comparison, the prior year’s gross profit was $1.01 billion, with a gross margin of 69.9 per cent.

Tapestry has reported Q3 FY23 net sales of $1.51 billion, a 5 per cent YoY increase.
Excluding currency headwinds, revenue rose 9 per cent.
Gross profit reached $1.1 billion, while gross margin was 72.8 per cent.
Strong international revenue growth was led by a 20 per cent rise in Greater China and 20 per cent growth in Japan and other Asia.

Selling, general, and administrative expenses amounted to $872 million in Q3 FY23, or 57.8 per cent of sales. This compares to $836 million, or 58.1 per cent of sales, in the prior year period. On a non-GAAP basis, selling, general, and administrative expenses were $829 million or 57.7 per cent of sales in the previous year.

Tapestry’s operating income reached $226 million in Q3 FY23, with an operating margin of 15 per cent, negatively impacted by an FX headwind of approximately 170 basis points. In the prior year, operating income was $169 million, with an operating margin of 11.8 per cent. On a non-GAAP basis, the previous year’s operating income was $176 million, with an operating margin of 12.2 per cent.

The company reported a net income of $187 million, with earnings per diluted share of $0.78. This compares to a reported net income of $123 million and earnings per diluted share of $0.46 in the prior year period. On a non-GAAP basis, net income was $136 million, with earnings per diluted share of $0.51 in the prior year period.

Tapestry’s international revenue growth was fuelled by a nearly 20 per cent increase at constant currency. This was led by a greater-than-expected inflection in Greater China, which rose approximately 20 per cent, as well as growth of over 20 per cent in Japan and other Asia, and a 4 per cent increase in Europe. The company also achieved a low-single-digit revenue gain in North America, driven by higher-than-anticipated transactions.

“Our strong third quarter results were significantly ahead of expectations, demonstrating the power of brand building, customer centricity, and our agile operating model. We delivered solid revenue gains, expanded both gross and operating margin, and drove robust earnings growth. Importantly, we continued to advance our strategic agenda, creating lasting customer relationships around the world through product innovation and compelling omni-channel experiences—a testament to the ingenuity of our talented teams,” said Joanne Crevoiserat, chief executive officer of Tapestry.

Fibre2Fashion News Desk (DP)

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