Slide 1: Tapestry: Coach | kate spade | Stuart Weitzman
tapestry 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, the information provided on the slide entitled “Fiscal 2019 Financial Outlook”, as well as statements which can be identified by the
Slide 3: Highlights from the quarter
highlights from the
Slide 4: FY19 Third Quarter Results
FY19 THIRD QUARTER RESULTS Delivered sales growth and gross margin expansion in each of our brands on a constant currency basis. Drove continued positive global comparable store sales growth at Coach led by international markets and e-commerce channels. Generated eight-point sequential improvement i
Slide 5: FY19 Third Quarter & Year-to-Date: Financial Snapshot
FY19 THIRD QUARTER & YEAR-TO-DATE: FINANCIAL SNAPSHOT DELIVERED TOPLINE growth & EXPECTED synergies FY19 3Q FY19 YTD revenue $1.33B $4.51B operating income $141M $725M earnings per diluted share $0.42 $0.42 $1.97 Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix. FY19 YTD as of the nine
Slide 6: Board Approved $1B Share Repurchase Program
BOARD APPROVED $1B SHARE REPURCHASE PROGRAM UNDERSCORING confidence IN DRIVING LONG-TERM, SUSTAINABLE GROWTH through this program, we will: optimize our capital deployment enhance shareholder return share repurchase authorization maintain financial and strategic flexibility 6
Slide 7: Longstanding Capital Allocation Priorities
LONGSTANDING CAPITAL ALLOCATION PRIORITIES SUPPORTED BY STRONG BALANCE SHEET & CASH FLOW 1 Invest in our current brands and business Acquire new brands on a strategic and 2 opportunistic basis Return capital to shareholders through our 3 dividend and recently announced share repurchase authorization
Slide 8: Fiscal 2019 Financial Outlook
FISCAL 2019 FINANCIAL OUTLOOK FOCUS ON execution revenue low-to-mid single digit growth earnings per $2.55 to $2.60 diluted share We are focused on harnessing the power of our multi-brand model, unlocking the full potential of the strategic investments, to drive a return to double-digit operating in
Slide 9: Company Overview
company OVERVIEW
Slide 10: Defined by inclusivity rather than exclusivity, we are a global house of brands
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 every day fo
Slide 11: CEO Victor Luis quote
“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 12: Our values: Optimistic, Innovative, Inclusive
‘OPTIMISTIC INNOVATIVE INCLUSIVE, value
Slide 13: Our principles
BRAND-LED CONSUMER-CENTRIC MERITOCRACY, OUR principles
Slide 14: Our brands: Global and Unique
'GLOBAL&UNIQUE DIFFERENTIATED, O hrand:
Slide 15: Our model: Shared and Scalable
‘SHAREDS& SCALABLE DISCIPLINED, our model
Slide 16: Fiscal 2019 Strategic Priorities
FISCAL 2019 STRATEGIC PRIORITIES FOCUS ON execution HARNESS the FUEL DRIVE INVEST in POWER of BRAND GLOBAL DIGITAL & MULTIBRAND INNOVATION GROWTH DATA • Capture full benefit of • Accelerate product • Maximize the • Develop industry- multi-brand structure newness across opportunity with the leading c
Slide 17: Leadership Team
LEADERSHIP TEAM Victor Luis Chief Executive Officer Joshua Schulman Anna Bakst Eraldo Poletto CEO and Brand President, CEO and Brand President, CEO and Brand President, Coach Kate Spade Stuart Weitzman Todd Kahn Andrea Shaw Resnick Zeynep Schoenwaelder President, Chief Administrative Officer Interim
Slide 18: Corporate Responsibility
corporate RESPONSIBILITY
Slide 19: 2025 Corporate Responsibility Strategy & Goals
2025 CORPOR ATE 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
Slide 20: Three strategic pillars
CORPORATE SOCIAL RESPONSIBILITY OUR PROGRAM IS FOCUSED ON THREE strategic pillars 1 Having individuals from different backgrounds with OUR different experiences around the table creates a diversity PEOPLE of perspectives that enrich our organization. 2 OUR Tapestry is dedicated to reducing its envir
Slide 21: Our People: goals
CORPORATE SOCIAL RESPONSIBILITY 1 our people 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 Emplo
Slide 22: Our People: progress
CORPORATE SOCIAL RESPONSIBILITY 1 our people Expanded our maternity leave in 2018 in the United States. Donated approximately $500,000 in fiscal 2018 to organizations that our employees are passionate about through our matching gift programs. Achieved a score of 100 for the fifth consecutive year on
Slide 23: Our Planet: goals
CORPORATE SOCIAL RESPONSIBILITY 2 our planet 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 s
Slide 24: Our Planet: progress
CORPORATE SOCIAL RESPONSIBILITY 2 our planet Achieved a 4.4% reduction in absolute Scope 1 and 2 CO2e emissions across Tapestry in fiscal 2018 over a 2017 baseline. Provided in-person compliance and anti-corruption training to over 120 suppliers and manufacturers in fiscal 2017 and early fiscal 2018
Slide 25: Our Communities: goals
CORPORATE SOCIAL RESPONSIBILITY 3 our communities Dedicate 100,000 volunteer service hours completed by our employees around the globe. Give $75,000,000 in financial and product donations to nonprofit organizations globally. Provide 50,000 people crafting Coach, kate spade new york and Stuart Weitzm
Slide 26: Our Communities: progress
CORPORATE SOCIAL RESPONSIBILITY 3 our communities Donated over $48 million through The Coach Foundation since its inception in 2008 and launched the “Dream It Real” initiative which supports young people as they pursue their dreams. Employed and empowered 162 women in Masoro, Rwanda through the Kate
Slide 27: Fiscal 2018 (image)
Slide 28: FY18 Milestones
FY18 MILESTONES 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
Slide 29: FY18 Financial Overview: Revenue
FY18 FINANCIAL OVERVIEW: REVENUE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY18 FY17 SW Kate 8% +31% Spade 22% GROWTH SW $5.9B $4.5B 6% Coach Coach 92% 72% 29
Slide 30: FY18 Financial Overview: Operating Income
FY18 FINANCIAL OVERVIEW: OPERATING INCOME STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY17 FY18 GROWTH $813M $992M +22% Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix. 30
Slide 31: FY18 Financial Overview: Earnings per Diluted Share
FY18 FINANCIAL OVERVIEW: EARNINGS PER DILUTED SHARE STRONG RESULTS DRIVEN BY KATE SPADE ACQUISITION AND ORGANIC GROWTH FY17 FY18 GROWTH $2.15 $2.63 +22% Note: Non-GAAP Financials. Non-GAAP reconciliation in Appendix. 31
Slide 32: 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 FY18 FY17 Outerwear Outerwear $12B $11B +7% GROWTH Handbag & Handbag & Footwear Footwear $83B Accessories $91B Accessories $28B $31B $43B $48B Source: Tapestry Global Market
Slide 33: ~70 Countries, 6 Continents
~70 COUNTRIES 6 CONTINENTS As of FY18.
Slide 34: 1,400+ Directly Operated Locations
1,400+ DIRECTLY OPERATED LOCATIONS As of FY18.
Slide 35: Brand Overview
OVERVIEW by
Slide 36: Coach
NN a , : oy aD COACH NEW YORK
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Slide 38: The Shops at Hudson Yards, New York City
THE SHOPS AT HUDSON YARDS NEW YORK CITY
Slide 39: Coach Create Pop-Up, Isetan Shinjuku, Tokyo
COACH CREATE POP-UP THE STAGE AT ISETAN SHINJUKU TOKYO, JAPAN
Slide 40: Joshua Schulman quote on Coach
“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 40 40
Slide 41: Coach Our Vision
OUR VISION Coach inspires the dreamer in all of us, connecting our modern lives with the spirit of the open road. 41
Slide 42: Coach: $4.22B annual revenue
$4.22B ANNUAL REVENUE 987 DIRECTLY OPERATED STORES 13,500 EMPLOYEES As of FY18. 42
Slide 43: 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 44: Coach Product & Geographic Breakdown
COACH PRODUCT & GEOGRAPHIC BREAKDOWN DIVERSIFIED ACROSS PRODUCT CATEGORIES AND GEOGRAPHIES Other Lifestyle Categories 8% Men's International 20% Women's 43% Handbags North 54% America 57% Women's Accessories 18% As of FY18. 44
Slide 45: Coach Fiscal 2019 Strategic Priorities
COACH FISCAL 2019 STRATEGIC PRIORITIES BALANCE FASHION FUEL DIGITAL CASCADE DRIVE GROWTH MODERNIZE, AUTHORITY & INNOVATION & LEATHERGOODS BEYOND CUSTOMIZE & UNIVERSAL ECOMMERCE INNOVATION BAGS PERSONALIZE APPEAL IN GROWTH MARKETING 45
Slide 46: kate spade new york
& kate spade NEW YORK
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Slide 48: The Shops at Hudson Yards, New York City
THE SHOPS AT HUDSON YARDS NEW YORK CITY
Slide 49: Anna Bakst quote on Kate Spade
“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 49 49
Slide 50: 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. 50
Slide 51: Kate Spade: $1.28B annual revenue
$1.28B ANNUAL REVENUE 342 DIRECTLY OPERATED STORES 5,500 EMPLOYEES As of FY18. 51
Slide 52: Kate Spade Fiscal 2018 Milestones
KATE SPADE FISCAL 2018 MILESTONES 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. Strengthe
Slide 53: Kate Spade Product & Geographic Breakdown
KATE SPADE PRODUCT & GEOGRAPHIC BREAKDOWN OPPORTUNITY TO EXPAND INTERNATIONALLY AND DEVELOP CLEAR GLOBAL POSITIONING OTHER INTERNATIONAL LIFESTYLE 17% CATEGORIES 24% WOMEN'S HANDBAGS 55% WOMEN'S ACCESSORIES NORTH 21% AMERICA 83% As of FY18. 53
Slide 54: Kate Spade Fiscal 2019 Strategic Priorities
KATE SPADE FISCAL 2019 STRATEGIC PRIORITIES EXPAND INTRODUCE LAUNCH CREATE LEVERAGE GLOBALLY: EXCEPTIONAL LIFESTYLE- IMMERSIVE TAPESTRY THINK GLOBAL, AND INSPIRING FOCUSED CHANNEL PLATFORM ACT LOCAL PRODUCTS BRANDING EXPERIENCES 54 54
Slide 55: Stuart Weitzman
STUART WEITZMAN
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Slide 57: The Shops at Hudson Yards, New York City
THE SHOPS AT HUDSON YARDS NEW YORK CITY
Slide 58: Eraldo Poletto quote on Stuart Weitzman
“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 58 58
Slide 59: 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 60: Stuart Weitzman: $374M annual revenue
$374M ANNUAL REVENUE 103 DIRECTLY OPERATED STORES 940 EMPLOYEES As of FY18. 60
Slide 61: 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 62: Stuart Weitzman Fiscal Strategic Priorities
S T U A RT W E I T Z M A N F I S C A L 2 0 1 9 S T R AT E G I C P R I O R I T I E S MAINTAIN DRIVE BOOT & SANDAL GROW BEYOND RESET EXPAND CONSUMER AUTHORITY FOOTWEAR: SUPPLY CHAIN GLOBALLY, DESIRE & ELEVATE WHILE ESTABLISH ORGANIZATION WITH FOCUS ON RELATIONSHIP EXPANDING OUR HANDBAG & PROCESS CHINA
Slide 63: Stuart Weitzman Product & Geographic Breakdown
S T U A RT W E I T Z M A N P R O D U C T & G E O G R A P H I C B R E A K D OW N O P P O RT U N I T Y T O E X P A N D T H E B R A N D I N T E R N AT I O N A L LY A N D A C R O S S C AT E G O R I E S HANDBAGS & OTHER 2% INTERNATIONAL 36% FOOTWEAR NORTH AMERICA 98% 64% As of FY18. Product breakdown pen
Slide 64: Tapestry
tapestry
Slide 65: Victor Luis 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 65 65
Slide 66: Appendix
APPENDIX
Slide 67: Non-GAAP financial measures notes
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 68: GAAP to Non-GAAP Reconciliation: Quarters
GAAP TO NON-GAAP RECONCILIATION FOR THE QUARTERS ENDED MARCH 30, 2019 AND MARCH 31, 2018 GAAP BASIS ERP INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) IMPLEMENTATION(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $915.9 $— $ (5.0) $— $9
Slide 69: GAAP to Non-GAAP Reconciliation: Nine Months
GAAP TO NON-GAAP RECONCILIATION FOR THE NINE MONTHS ENDED MARCH 30, 2019 AND MARCH 31, 2018 GAAP BASIS ERP INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) IMPLEMENTATION(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $3,054.5 $— $ (9.1)
Slide 70: GAAP to Non-GAAP Reconciliation: Years
GAAP TO NON-GAAP RECONCILIATION FOR THE YEARS ENDED JUNE 30, 2018 AND JULY 1, 2017 GAAP BASIS OPERATIONAL INTEGRATION & IMPACT OF TAX NON-GAAP BASIS (in millions, except per share data) (AS REPORTED) EFFICIENCY PLAN(1) ACQUISITION(2) LEGISLATION(3) (EXCLUDING ITEMS) Gross profit $ 3,848.5 $— $ (116.
Slide 71: Tapestry: Coach | kate spade | Stuart Weitzman
tapestry COACH | kate spade | STUART WEITZMAN