Slide 1: Tapestry: Coach, Kate Spade, Stuart Weitzman
Tapestry COACH kate spade STUART WEITZMAN
Slide 2: Forward-looking statements
Tapestry This presentation contains certain “forward-looking statements” based on management’s current expectations. Forward-looking statements include, but are not limited to, the information provided on the slide entitled “Fiscal 2019 Outlook”, as well as statements which can be identified by the
Slide 3: Tapestry: a global house of brands
3 tapestry DEFINED BY INCLUSIVITY RATHER THAN EXCLUSIVITY, we are a global house of brands that embraces the exploration of individuality. We believe that true luxury is a freedom of expression that ignites confidence and authenticity. Approachable and inviting, we celebrate brands that create joy e
Slide 4: CEO quote: a different kind of company
“We’re a different kind of company. We have a collection of brands that have very specific and unique identities. All of our brands are based on great design, quality and craftsmanship. At the end of the day, all of our teams are focused on providing tremendous value for customers.” VICTOR LUIS, CEO
Slide 5: Optimistic, Innovative, Inclusive
Tapestry OPTIMISTIC INNOVATIVE INCLUSIVE 5
Slide 6: Leadership Team
6 tapestry LEADERSHIP TEAM Victor Luis Chief Executive Officer Michael Braine Chief Information Officer Todd Kahn President, Chief Administrative Officer and Secretary Ian Bickley President, Global Business Development and Strategic Alliances Sarah Dunn Global Human Resources Officer Joshua Schulman
Slide 7: Fiscal 2018 Milestones
7 tapestry Successfully completed the acquisition of Kate Spade and evolved into a true house of brands, establishing Tapestry as our new corporate identity. Strengthened our executive and creative leadership across our brands with a clear focus on executing our strategic vision. Brought fresh persp
Slide 8: FY18 Financial Overview: Revenue
8 tapestry FY18 FINANCIAL OVERVIEW: REVENUE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY18 $5.9B FY17 $4.5B +31% GROWTH 8 SW 8% Coach 92% Kate Spade 22% SW 6% Coach 72%
Slide 9: FY18 Financial Overview: Operating Income
9 tapestry FY18 FINANCIAL OVERVIEW: OPERATING INCOME STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH $813M $992M FY17 FY18 +22% GROWTH Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix
Slide 10: FY18 Financial Overview: Earnings per Diluted Share
10 tapestry FY18 FINANCIAL OVERVIEW: EARNINGS PER DILUTED SHARE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH $2.15 $2.63 FY17 FY18 +22% GROWTH Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix.
Slide 11: Opportunity in the global premium handbag, footwear and outerwear market
OPPORTUNITY ACROSS BRANDS IN THE ATTRACTIVE AND GROWING GLOBAL PREMIUM HANDBAG AND ACCESSORIES, FOOTWEAR AND OUTERWEAR MARKET Source: Tapestry Global Market Sizing Model, Euromonitor, Public Filings, Analyst Reports, NPD and Yano. Note: Growth noted is constant currency. $91B FY18 Handbag & Accessor
Slide 12: ~70 Countries
12 ~70 COUNTRIES 6 CONTINENTS As of FY18.
Slide 13: 1,400+ Directly Operated Locations
13 1,400+ DIRECTLY OPERATED LOCATIONS As of FY18.
Slide 14: Fiscal 2019 Strategic Priorities
HARNESS the POWER of MULTIBRAND FUEL BRAND INNOVATION DRIVE GLOBAL GROWTH INVEST in DIGITAL & DATA • Capture full benefit of multi-brand structure and synergies • Provide opportunities for talent movement across brands, regions and functions • Accelerate product newness across all brands • Maximize
Slide 15: Coach New York
COACH NEW YORK 15
Slide 16: Coach New York
COACH NEW YORK 16
Slide 17: Coach CEO quote
“For over 75 years, Coach has been part of the American landscape. As we write our next chapter, we’re building on our heritage of craftsmanship and confident New York style to deliver a complete lifestyle brand for modern lives.” JOSHUA SCHULMAN, CEO & BRAND PRESIDENT, COACH 17
Slide 18: Coach: Our Vision
Coach inspires the dreamer in all of us, connecting our modern lives with the spirit of the open road. OUR VISION 18
Slide 19: Coach key facts: employees, stores, revenue
13,500 EMPLOYEES 987 DIRECTLY OPERATED STORES $4.22B ANNUAL REVENUE As of FY18.
Slide 20: Coach Fiscal 2018 Milestones
COACH FISCAL 2018 MILESTONES Successfully reinvigorated the $300-$400 handbag price segment. Stuart Vevers created new expression of Signature and the customer immediately embraced his iteration of this brand icon. Grew categories outside of Women’s bags and small leathergoods–notably footwear, read
Slide 21: Coach Product & Geographic Breakdown
COACH PRODUCT & GEOGRAPHIC BREAKDOWN DIVERSIFIED ACROSS PRODUCT CATEGORIES AND GEOGRAPHIES 21 As of FY18. Other Lifestyle Categories 8% Men’s 20% Women’s Accessories 18% Women’s Handbags 54% International 43% North America 57%
Slide 22: Coach Fiscal 2019 Strategic Priorities
CASCADE LEATHERGOODS INNOVATION DRIVE GROWTH BEYOND BAGS BALANCE FASHION AUTHORITY & UNIVERSAL APPEAL IN MARKETING MODERNIZE, CUSTOMIZE & PERSONALIZE FUEL DIGITAL INNOVATION & ECOMMERCE GROWTH COACH FISCAL 2019 STRATEGIC PRIORITIES 22
Slide 23: Kate Spade New York
kate spade NEW YORK 23
Slide 24: y ms MOL)
UZ y ms MOL)
Slide 25: Kate Spade CEO quote
“Kate Spade has tremendous opportunity across product categories, channels and geographies. We are leveraging the brand’s global potential, bringing its unique and empowering feminine positioning to women around the world.” ANNA BAKST, CEO & BRAND PRESIDENT, KATE SPADE 25
Slide 26: Kate Spade: Our Vision
OUR VISION A globally admired aspirational life & style brand, delivering brand-enhancing profitable growth, where people – our customers and teams – are at the center of everything we do. 26
Slide 27: Kate Spade key facts: revenue, stores, employees
$1.28B ANNUAL REVENUE 342 DIRECTLY OPERATED STORES 5,500 EMPLOYEES 27
Slide 28: Kate Spade Fiscal 2018 Milestones
KATE SPADE FISCAL 2018 MILESTONES 28 Built the foundation to support global growth with significant progress integrating the brand onto the Tapestry platform. Executed strategies to ensure long‐term brand relevance, including the deliberate pullback in promotional flash and disposition sales. Streng
Slide 29: Kate Spade Product & Geographic Breakdown
KATE SPADE PRODUCT & GEOGRAPHIC BREAKDOWN OPPORTUNITY TO EXPAND INTERNATIONALLY AND DEVELOP CLEAR GLOBAL POSITIONING 29 As of FY18. OTHER LIFESTYLE CATEGORIES 24% WOMEN’S ACCESSORIES 21% WOMEN’S HANDBAGS 55% INTERNATIONAL 17% NORTH AMERICA 83%
Slide 30: Kate Spade Fiscal 2019 Strategic Priorities
KATE SPADE FISCAL 2019 STRATEGIC PRIORITIES 30 LAUNCH LIFESTYLE FOCUSED BRANDING CREATE IMMERSIVE CHANNEL EXPERIENCES EXPAND GLOBALLY: THINK GLOBAL, ACT LOCAL INTRODUCE EXCEPTIONAL AND INSPIRING PRODUCTS 30 LEVERAGE TAPESTRY PLATFORM
Slide 31: Stuart Weitzman
STUART WEITZMAN 31
Slide 32: 32
32
Slide 33: Stuart Weitzman CEO quote
“Stuart Weitzman footwear has long represented quality, style and the beautiful combination of form and fit. We are building on this foundation as we evolve into a global, multi-channel and multi-category fashion brand.” ERALDO POLETTO, CEO & BRAND PRESIDENT, STUART WEITZMAN 33 STUART WEITZMAN
Slide 34: Stuart Weitzman: Our Vision
OUR VISION STUART WEITZMAN IS ON A JOURNEY TO EVOLVE INTO A GLOBAL MULTI-CATEGORY ACCESSORIES BRAND. LOOKING FORWARD, THE BRAND WILL PRODUCE INNOVATIVE ACCESSORIES BASED ON A FOUNDATION OF WARDROBE ESSENTIALS THAT FOSTER AN EMOTIONAL CONNECTION WITH WOMEN OF ALL AGES. THE GOAL IS TO ESTABLISH STUART
Slide 35: Stuart Weitzman key facts: revenue, stores, employees
As of FY18. 940 EMPLOYEES 103 DIRECTLY OPERATED STORES $374M ANNUAL REVENUE 35
Slide 36: Stuart Weitzman Fiscal 2018 Milestones
STUART WEITZMAN FISCAL 2018 MILESTONES ACQUIRED STUART WEITZMAN NORTHERN CHINA BUSINESS FROM DISTRIBUTOR PARTNER. APPOINTED ERALDO POLETTO, CEO & BRAND PRESIDENT, EDMUNDO CASTILLO, HEAD OF PRODUCT DESIGN, AND FRANCESCA BERTONCINI, HEAD MERCHANT, TO EXECUTE THE LONG-TERM VISION. GAINED TRACTION IN EV
Slide 37: Stuart Weitzman Fiscal 2019 Strategic Pillars
STUART WEITZMAN FISCAL 2019 STRATEGIC PILLARS EXPAND GLOBALLY, WITH FOCUS ON CHINA GROW BEYOND FOOTWEAR: ESTABLISH HANDBAG BUSINESS MAINTAIN BOOT & SANDAL AUTHORITY WHILE EXPANDING OUR FOOTWEAR EXPRESSION DRIVE CONSUMER DESIRE & ELEVATE RELATIONSHIP WITH THE CUSTOMER RESET SUPPLY CHAIN ORGANIZATION
Slide 38: Stuart Weitzman Product & Geographic Breakdown
STUART WEITZMAN PRODUCT & GEOGRAPHIC BREAKDOWN OPPORTU N I T Y TO E X PAND THE BRAND INTERNATIONALLY AND ACROS S CAT E G O R I E S As of FY18. Product breakdown penetration figures for Direct businesses (excluding 38 China). STUART WEITZMAN HANDBAGS & OTHER 2% FOOTWEAR 98% INTERNATIONAL 36% NORTH AM
Slide 39: Financial Outlook
Financial OUTLOOK 39
Slide 40: Fiscal 2019 Outlook
$2.70 to $2.80 leverage to bottom line revenue operating income earnings per diluted share mid-single-digit growth tapestry FISCAL 2019 OUTLOOK FOCUS ON execution
Slide 41: Capital Allocation Priorities
Invest in our brands and business Acquire new brands on a strategic and opportunistic basis Return capital to shareholders, with a focus on dividends 41 tapestry CAPITAL ALLOCATION PRIORITIES MAINTAINING A STRONG AND FLEXIBLE BALANCE SHEET
Slide 42: CEO closing quote
“We want Tapestry to be a company where employees love to work, great brands aspire to be part of and investors believe in.” VICTOR LUIS, CEO 42 tapestry
Slide 43: Appendix
APPENDIX 43
Slide 44: Non-GAAP financial measures
44 The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared i
Slide 45: GAAP to Non-GAAP Reconciliation for years ended June 30, 2018 and July 1, 2017
45 tapestry GAAP TO NON-GAAP RECONCILIATION FOR THE YEARS ENDED JUNE 30, 2018 AND JULY 1, 2017 (in millions, except per share data) GAAP BASIS (AS REPORTED) OPERATIONAL EFFICIENCY PLAN(1) INTEGRATION & ACQUISITION(2) IMPACT OF TAX LEGISLATION(3) NON-GAAP BASIS (EXCLUDING ITEMS) Gross profit $ 3,853.
Slide 46: Tapestry: Coach, Kate Spade, Stuart Weitzman
Tapestry COACH kate spade STUART WEITZMAN