Tapestry, Inc. · NYSE:TPR
Tapestry — Q1 FY2021 Earnings Presentation
55 slides from Tapestry's earnings presentation, Oct 29, 2020
Slide 1: COACH | kate spade | STUART WEITZMAN
COACH | kate spade | STUART WEITZMAN
Slide 2: Forward-looking statements
This presentation contains certain “forward-looking statements” based on management’s current expectations. Forward-looking statements include, but are not limited to statements which can be identified by the use of forward-looking terminology such as "may," "will," “can,” "should," "expect," "inten
Slide 3: Tapestry values, principles, brands and model
tapestry optimistic, innovative, inclusive OUR VALUES: brand-led, consumer-centric meritocracy OUR PRINCIPLES: global, unique & differentiated OUR BRANDS: disciplined, shared & scalable OUR MODEL: 3
Slide 4: Global house of brands defined by inclusivity
DEFINED BY INCLUSIVITY RATHER THAN EXCLUSIVITY, we area 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 every day for p
Slide 5: Our brands: Coach, Kate Spade, Stuart Weitzman
established 1941 INCLUSIVE AUTHENTIC COURAGEOUS established 1986 SOPHISTICATED STYLISH CONFIDENT established 1993 COLORFUL JOYFUL OPTIMISTIC 5
Slide 6: Tapestry product, geographic & channel breakdown
TAPESTRY PRODUCT, GEOGRAPHIC & CHANNEL BREAKDOWNGLOBAL HOUSE OF BRANDS WITH STRONG DIRECT-TO-CONSUMER DISTRIBUTION 6 As of FY20. Reflects adjustments to Wholesale penetration figure from previously reported number.
Slide 7: Leadership Team
Leadership Team Todd KahnInterim CEO and Brand President, Coach; President and Chief Administrative Officer Giorgio SarnéCEO and Brand President,Stuart Weitzman Liz FraserCEO and Brand President,Kate Spade Joanne CrevoiseratChief Executive Officer Andrea Shaw ResnickInterim Chief Financial Officer;
Slide 8: 1Q21 update
update 1Q21
Slide 9: 1Q21 results overview
DELIVERED TOP AND BOTTOM-LINE RESULTS MATERIALLY AHEAD OF EXPECTATIONS 1Q21 RESULTS OVERVIEW Generated strong profit growth across our portfolio of brands in the face of a challenging backdropAchieved a significant increase in EPS and generated positive free cash flow of $64 million REMAIN CONFIDENT
Slide 10: 1Q21 results exceeded expectations
Realized a significant reduction in SG&A expense year-over-year, reflecting effective cost management 20% 10 1Q21 RESULTS EXCEEDED EXPECTATIONS, HIGHLIGHTING THE power Non-GAAP Financials. e-commerce revenue growth, while simultaneously improving global store sales trends triple-digit Second consecu
Slide 11: Acceleration Program
PROGRAM acceleration
Slide 12: We are accelerating
12 acceleration noun /akˌseləˈrāSH(ə)n/ the act of accelerating; increase of speed or velocity. we are accelerating growth & profitability we are accelerating our focus on the consumer we are accelerating with agility & urgency together
Slide 13: Acceleration Program focus areas
13 SHARPEN OUR FOCUS ON THE CONSUMER Operate with a clearly defined purpose and strategy for each brand and an unwavering focus on the consumer at the core of everything we do LEVERAGE DATA & LEAD WITH A DIGITAL-FIRST MINDSET Build significant data and analytics capabilities to drive decision-making
Slide 14: Acceleration Program highlights
14 acceleration program HIGHLIGHTS MEANINGFUL PROGRESS AGAINST ACCELERATION PROGRAM IN THE FIRST QUARTER Recruited nearly 800,000 new customers across brands in North America throughour e-commerce channels Drove significant growth in China through compelling product assortments,enhanced marketing an
Slide 15: Tapestry's differentiated enabling platform
tapestry’s differentiated platform provides: CONSUMERINSIGHTS ACCESS TO GLOBAL TALENT DIGITAL INFRASTRUCTURE & CAPABILITIES GLOBALLY DIVERSIFIED SUPPLY CHAIN TAPESTRY IS AN enabling platform THAT ENHANCES OPPORTUNITIES FOR OUR BRANDS 15
Slide 16: Financial outlook
16 FINANCIAL OUTLOOK In FY21, we will focus on factors within our control to create a strong foundation for profitable expansion NEAR-TERM drive efficiency-led profit growth Non-GAAP Financials. Given our strong Q1 performance and assuming a continued slow and steady recovery from the pandemic, we n
Slide 17: Capital allocation priorities
NEAR-TERM PRESERVE CASH In the near-term, our priority is to preserve our cash on-hand and utilize free cash flow for revolver paydown in FY21. We will start this paydown in the second quarter. 17 CAPITAL ALLOCATION PRIORITIES LONG-TERM Committed to shareholder returns Over the long-term, our strate
Slide 18: CEO quote
18 “Given the strength of the first quarter, we are increasingly confident in our ability to drive sustainable top and bottom line growth that will create long-term value for all of our stakeholders.” Joanne Crevoiserat, chief executive officer
Slide 19: Overview by brand
OVERVIEWbyBRAND
Slide 20: Coach
bates ® COACH NEW YORK
Slide 21: Slide 21
Slide 22: Coach vision
Coach inspires the dreamer in all of us, connecting our modern lives with the spirit of the open road. our vision 22
Slide 23: Coach employees, countries and stores
11,000+EMPLOYEES 55+COUNTRIES 958DIRECTLY OPERATED STORES 23 As of FY20.
Slide 24: Coach product, geographic & channel breakdown
coach product, geographic & channel breakdownDirect-to-consumer focused with diversified product categories & geographies 24 As of FY20. Reflects adjustments to Wholesale penetration figure from previously reported number.
Slide 25: Coach multi-year growth strategies
COACH MULTI-YEAR GROWTH STRATEGIES 25 Enhance brand & cultural relevance Deepen ENGAGEMENT WITH consumers Create INNOVATIVE & COMPELLING PRODUCT Drive DIGITAL SALES & NEW CUSTOMER RECRUITMENT Accelerate GROWTH IN CHINA Enhance profitability Exceed the expectations of our target consumers by geograph
Slide 26: Coach CEO quote
26 “We’re ready to reignite the accessible luxury segment by evolving our message from one rooted in high fashion imagery to one that is inclusive, culturally relevant and consumer-centric. We will focus on authentic communications that are grounded in our values and embody the courageous spirit of
Slide 27: kate spade new york
& kate spade NEW YORK
Slide 28: Slide 28
Slide 29: Kate Spade vision
OUR VISION A globally admired aspirational life & style brand, where people — our customers and teams — areat the center of everything we do.
Slide 30: Kate Spade employees, countries and stores
3,900+EMPLOYEES 35+COUNTRIES 420DIRECTLY OPERATED STORES 30 As of FY20.
Slide 31: Kate Spade product, geographic & channel breakdown
KATE SPADE product, geographic & channel breakdownOpportunity to reenergize & grow handbags, while focusing on markets with high brand awareness 31 As of FY20. Reflects adjustments to Wholesale penetration figure from previously reported number. OTHER ASIA12%
Slide 32: Kate Spade multi-year growth strategies
KATE SPADE MULTI-YEAR GROWTH STRATEGIES 32 Fulfill our promise as a lifestyle brand representing joy, optimism and colorAmplify brand messages through unique, best-in-class storytelling on a multi-category lifestyle platform Crystallize BRAND PURPOSE & Return TO A POSITION OF STRENGTH Instill A LASE
Slide 33: Kate Spade CEO quote
33 “I am incredibly optimistic about the long-term potential for Kate Spade. We have a brand that has a universal language of Joy, Optimism and Color. Our customers have historically deeply connected to our brand emotionally. If we embed this language in our product, marketing and customer experienc
Slide 34: Stuart Weitzman
STUART WEITZMAN
Slide 35: Stuart Weitzman
STUART WEITZMAN
Slide 36: Stuart Weitzman vision
Our vision STUART WEITZMAN IS THE EMBODIMENT OF STRENGTH IN FEMININITY – EMPOWERING AND INSPIRING WOMEN TO TAKE ON THE WORLD IN FASHIONABLE AND FUNCTIONAL FOOTWEAR. 36
Slide 37: Stuart Weitzman employees, countries and stores
950+EMPLOYEES 40+COUNTRIES 131DIRECTLY OPERATED STORES As of FY20. 37
Slide 38: Stuart Weitzman product, geographic & channel breakdown
STUART WEITZMAN product, geographic & channel breakdownOpportunity to focus on key geographies & channels with a compelling footwear assortment 38 REST OF WORLD14% As of FY20.
Slide 39: Stuart Weitzman multi-year growth strategies
39 Listen and respond to our customers’ needs in order to design beautiful and on-trend shoes Renew REPUTATION FOR FIT, COMFORT & QUALITY Grow KEY CATEGORIES Restore pROFITABILITY Strengthen RELATIONSHIP WITH WHOLESALE PARTNERS Establish A ROBUST DIGITAL PRESENCE Build a leading presence in boots, b
Slide 40: Stuart Weitzman CEO quote
40 “For nearly 35 years, Stuart Weitzman has empowered women to feel confident, stylish and sophisticated through its unmatched combination of fit, comfort and quality. Looking ahead, our long-term strategy centers on one principle: focus. Focus on the customer. Focus on tightening the product offer
Slide 41: Corporate responsibility
corporate RESPONSIBILITY
Slide 42: 2025 corporate responsibility strategy & goals
Built on our values of Optimism, Innovation and Inclusivity, these goals solidify our commitment to responsible citizenship, as we recognize our role as a leader in our industry to effect real, measurable change. Addressing pressing global issues and contributing to a world that is inclusive, sustai
Slide 43: Corporate social responsibility: three strategic pillars
CORPORATE SOCIAL RESPONSIBILITY OUR PROGRAM IS FOCUSED ON THREE strategic pillars OUR PEOPLE Having individuals from different backgrounds with different experiences around the table creates a diversity of perspectives that enrich our organization. 1 OURPLANET Tapestry is dedicated to reducing its e
Slide 44: Our people: 2025 goals
Build diversity in North America Tapestry and brand leadership teams by increasing the number of North America-based ethnic minority leaders to better reflect the company’s general corporate population.Reduce gender and ethnicity differences in the Employee Inclusion Index scores from our Employee E
Slide 45: Our people: recent milestones
RECENTMILESTONES Established an Inclusion Council to ensure that people with diverse perspectives and backgrounds are included in business decisions.Recognized on the Forbes Diversity & Inclusion List in 2019 for the third consecutive year. Achieved a score of 100 for the sixth consecutive year on t
Slide 46: Our planet: 2025 goals
CORPORATE SOCIAL RESPONSIBILITY our planet 2 Achieve a 20% reduction in absolute Scope 1 & Scope 2 CO2e emissions & 20% reduction in absolute Scope 3 emissions from freight shipping over a 2017 baseline.Attain a 95% traceability & mapping of our raw materials to ensure a transparent & responsible su
Slide 47: Our planet: recent milestones
RECENTMILESTONES CORPORATE SOCIAL RESPONSIBILITY our planet 2 Reduced our 2019 carbon footprint by 2.4% from 2018 and a total of 6.7% from our 2017 baseline.Commercialized five different lining textiles and purchased an aggregate one million pounds of REPREVE® recycled polyester for use in kate spad
Slide 48: Our communities: 2025 goals
CORPORATE SOCIAL RESPONSIBILITY our communities 3 2025GOALS Dedicate 100,000 volunteer service hours completed by our employees around the globe.Give $75M in financial and product donations to nonprofit organizations globally.Provide 50,000 people crafting Coach, kate spade new york and Stuart Weitz
Slide 49: Our communities: recent milestones
RECENTMILESTONES CORPORATE SOCIAL RESPONSIBILITY our communities 3 Donated $22M in fiscal 2019 via grants from the Coach Foundation and kate spade new york Foundation, as well as through brand product donations.Engaged our employees to volunteer over 5,750 hours, serving our communities globally.Mad
Slide 50: Tapestry
tapestry
Slide 51: Appendix
APPENDIX
Slide 52: Non-GAAP financial measures
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 in a
Slide 53: GAAP to non-GAAP Reconciliation, quarter ended September 26, 2020
GAAP to non-GAAP ReconciliationFor the quarter Ended September 26, 2020 in millions, except per share data; unaudited GAAP BASIS(AS REPORTED) CARES ACT TAX IMPACT ACCELERATION PROGRAM NON-GAAP BASIS(EXCLUDING ITEMS) Coach $644.9 $— $— $644.9 Kate Spade 154.1 — — 154.1 Stuart Weitzman 31.2 — — 31.2 G
Slide 54: GAAP to non-GAAP Reconciliation, quarter ended September 28, 2019
GAAP to non-GAAP ReconciliationFor the quarter Ended September 28, 2019 in millions, except per share data; unaudited GAAP BASIS(AS REPORTED) ERP IMPLEMENTATION ORGANIZATION-RELATED & INTEGRATION COSTS IMPAIRMENT NON-GAAP BASIS(EXCLUDING ITEMS) Coach $677.6 $— $(0.1) $— $677.7 Kate Spade 191.5 — (1.
Slide 55: COACH | kate spade | STUART WEITZMAN
COACH | kate spade | STUART WEITZMAN