Slide 1: Tapestry
Tapestry
Slide 2: Forward-looking statements
© 2021 Tapestry, Inc. 2 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,” "s
Slide 3: Stretch What's Possible: Purpose
3 © 2021 Tapestry, Inc. Stretch What’s Possible STRETCH speaks to how tensions challenge and pull us in new directions. These tensions compel us to look beyond ourselves and embrace new perspectives, experiences and ideas. WHAT’S POSSIBLE refers to what happens when we embrace the creative tensions
Slide 4: Company values
© 2021 Tapestry, Inc. 4 DEDICATED TO THE DREAM HOLD TO HIGH STANDARDS EMBRACE DIFFERENCE BY DESIGN BREAK THROUGH WITH MAGIC AND LOGIC STAND TALLER TOGETHER Built by go-getters who saw unseen needs and took daring leaps, we channel that same passion today, doing what it takes to make the dream happen
Slide 5: Our brands
5 established 1986STYLISH, CONFIDENT, SOPHISTICATED established 1941AUTHENTIC, COURAGEOUS, INCLUSIVE © 2021 Tapestry, Inc. established 1986STYLISH, CONFIDENT, SOPHISTICATED established 1941AUTHENTIC, COURAGEOUS, INCLUSIVE established 1993JOYFUL, OPTIMISTIC, COLORFUL
Slide 6: Tapestry Revenue Breakdown
© 2021 Tapestry, Inc. 6 Tapestry Revenue Breakdown Global house of brands with strong direct to consumer distribution Figures as of FY21.
Slide 7: Leadership Team
7 Leadership Team © 2021 Tapestry, Inc. JOANNE CREVOISERATChief Executive Officer TODD KAHNCEO & Brand President, Coach LIZ FRASERCEO & Brand President, Kate Spade GIORGIO SARNÉCEO & Brand President, Stuart Weitzman ANDREA SHAW RESNICKChief Communications Officer TOM GLASERChief Operations Officer N
Slide 8: 1Q FY22 Overview & Outlook
© 2021 Tapestry, Inc. 8 1Q FY22 Overview & Outlook
Slide 9: Standout first quarter results reflect heightened customer engagement
9 Standout first quarter results reflect heightened customer engagement and demand for our brands Raised our outlook for the fiscal year, reflecting strong first quarter performance and underlying business trendsAnnounced an incremental $1 billion share repurchase program and plans to now return app
Slide 10: First Quarter Highlights
10 © 2021 Tapestry, Inc. 120 bps OPERATING MARGIN EXPANDED BY 140 bps GROSS MARGIN EXPANDED BY VS. 1Q21 AND BY 460 BPS VS. PRE-PANDEMIC LEVELS 9% ACHIEVED 2-YEAR REVENUE GROWTH OF REFLECTING 8 POINT IMPROVEMENT VS. PRIOR QUARTER 50% DROVE GLOBAL DIGITAL SALES APPROXIMATELY ABOVE 1Q21 AND 275% ABOVE
Slide 11: Revenue Trends by Geography
© 2021 Tapestry, Inc. 11 Revenue Trends by Geography Figures as of FY21. NORTH AMERICA OVER 40% VS. LY | UP HIGH TEENS VS. LLY Strong growth in Digital and continued improvement in B&M MAINLAND CHINA APPROX. 25% VS. LY | APPROX. 65% VS. LLYContinued momentum aided by the growing middle class JAPANDO
Slide 12: Operating income and revenue growth trends
© 2021 Tapestry, Inc. 12 Delivered operating income ahead of both FY21 and FY20, as 2-year revenue trends continued to accelerate sequentially OPERATING INCOME (% GROWTH) VS. PRIOR YEAR REVENUE (% GROWTH) Non-GAAP financials. Historical results include the headwinds associated with Covid-19 beginnin
Slide 13: CEO quote on strategy
© 2021 Tapestry, Inc. 13 “Our first quarter results and the momentum we’re delivering are evidence that our strategy is working. We’ve radically transformed our company, realizing material operating margin improvements, while fueling investments in key growth areas of our business. We are well-posit
Slide 14: Coach: 1Q Highlights
14 Coach: 1Q Highlights Non-GAAP Financials. 1Q FY22 Δ vs. FY21 Δ vs. FY20 NET REVENUE $ 1.11B +27% +15% OPERATING INCOME $ 367M +31% +52% Continued to develop our iconic families to create a foundation for our product pipeline in future seasons, with notable strength in key fami lies like Tabby and
Slide 15: Kate Spade: 1Q Highlights
15 © 2021 Tapestry, Inc. Continued to build out our core handbag offering by amplifying key platforms like Knott and Spade FlowerAcquired over 650,000 new customers across channels in North America while we continued to reactivate lapsed customersGrew global handbag AUR by low double digits compared
Slide 16: Stuart Weitzman: 1Q Highlights
16 Introduced new offerings for occasions, while our core collections continued to resonate and attract new and younger customers to the brandImproved operating margin compared to the prior year, increasing our confidence in a return to profitability this fiscal yearIncreased Digital sales by over 3
Slide 17: 1Q P&L Overview By Brand
© 2021 Tapestry, Inc. 17 TAPESTRY COACH KATE SPADE STUART WEITZMAN NET REVENUE $1.48B+26% vs. LY $1.11B+27% vs. LY $300M+25% vs. LY $67M18% vs. LY GROSS PROFIT $1.07B72.2% margin $831M74.5% margin $199M66.5% margin $39M57.9% margin SG&A EXPENSES $762M51.4% of sales $464M41.6% of sales $161M53.7% of
Slide 18: Expanding Capital Return Programs
© 2021 Tapestry, Inc. 18 Anticipated annual dividend rate of $1.00 per shareGoal to increase dividend at a faster rate than earnings growth over time Expanding Capital Return Programs Now expect to return $1.25 billion to shareholders in FY22, a meaningful increase vs. previous outlook of $750 milli
Slide 19: Capital Allocation Priorities
© 2021 Tapestry, Inc. 19 Capital Allocation Priorities to support strong returns and long-term profitable growth REINVEST IN THE BUSINESS through dividends and share repurchases RETURN CAPITAL TO SHAREHOLDERS 1 2 Committed to driving organic growth, profitability and shareholder value over the long-
Slide 20: FY22 Expectations
20 REVENUE Mid-teens growth to ~$6.6 billion GROSS MARGIN Modest decline vs. prior year SG&A EXPENSE Growth relatively in-line with sales, reflecting further investments, notably in marketing & Digital OPERATING MARGIN Modest expansion vs. prior year; mid-teens operating income growth NET INTEREST E
Slide 21: FY22 operating margin expectations
© 2021 Tapestry, Inc. 21 Expect to deliver strong underlying operating margin expansion, partially offset by higher freight costs FY21 FY22E Operational improvement, reflecting further AUR gains and expense leverage Freight headwinds FY19Pre-pandemic GSP benefit Incremental marketing 18.8% Modest ex
Slide 22: Acceleration Program
Acceleration Program © 2021 Tapestry, Inc. 22
Slide 23: Acceleration
23 © 2021 Tapestry, Inc. acceleration we are accelerating growth & profitabilitywe are accelerating our focus on the consumerwe are accelerating with agility & urgency together /akˌseləˈrāSH(ə)n/noun the act of accelerating; increase of speed or velocity.
Slide 24: Acceleration Program focused on better meeting customer needs
24 © 2021 Tapestry, Inc. Build significant data and analytics capabilities to drive decision-making and increase efficiencyOffer immersive customer experiences across our e-commerce and social channels Reevaluate the role of stores with an intent to optimize our fleet Move with greater agilitySimpli
Slide 25: Acceleration Program: 1Q Highlights
25 © 2021 Tapestry, Inc. Acceleration Program: 1Q Highlights Non-GAAP Financials. Drove higher repeat transactions and continued to reactivate lapsed customers across brands through a sharpened focus on the consumer Realized low double-digit revenue gains with Chinese consumers globally compared to
Slide 26: Realizing profit gains and structurally higher margins
SUSTAINABLE GAINSSustainably higher AUR and significant gross margin expansionImproved SKU productivity, in turn increasing inventory turn and providing clearer messages to consumers$300M in gross run-rate SG&A savings targeted for FY22, which, will help to fund investments in high-growth areas FOUN
Slide 27: Unlocking the flywheel
© 2021 Tapestry, Inc. 27 Focused on generating sustainable, demand-driven revenue and profit growth to fully unlock the flywheel Channels Products Brands DRIVING RECRUITMENT OF NEW CUSTOMERS INCREASING RETENTION AND LIFETIME VALUE OF EACH CUSTOMER Revenue & Profit Growth Purpose-ledAccessible luxury
Slide 28: Tapestry's differentiated platform
© 2021 Tapestry, Inc. 28 CONSUMER INSIGHTS GLOBALLY DIVERSIFIED SUPPLY CHAIN DIGITAL INFRASTRUCTURE & CAPABILITIES ACCESS TO GLOBAL TALENT TAPESTRY’S DIFFERENTIATED PLATFORM PROVIDES: Tapestry is an enabling platform that enhances opportunities for our brands
Slide 29: Overview by Brand
Overview by Brand © 2021 Tapestry, Inc. 29
Slide 30: © 2021 Tapestry, Inc. 30
© 2021 Tapestry, Inc. 30
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© 2021 Tapestry, Inc.
Slide 32: Coach vision: Courage to be real
© 2021 Tapestry, Inc. Being genuine and real has always been part of our ethos and part of the impact we make. Today, our customers seek meaningful connection and something real. This can only happen when they feel like they can be their true selves. Over time, we’ve learned that courage is contagio
Slide 33: Coach key facts
33 As of FY21. Net sales figure excludes the impact of the additional week in Q4. 50+ COUNTRIES 9,900 EMPLOYEES DIRECTLY OPERATED STORES 939 NET SALES $4.2B
Slide 34: Coach Revenue Breakdown
© 2021 Tapestry, Inc. 34 Coach Revenue Breakdown As of FY21. Direct to consumer focused brand with diversified product categories & geographies Women’s handbags
Slide 35: Coach FY22 Growth Strategies
© 2021 Tapestry, Inc. 35 Coach FY22 Growth Strategies GROW MEN’S Expand lifestyleBuild brand awarenessIncrease presence in AsiaDeliver revenue of $1B in the category over the planning horizon CONTINUE TO DRIVE GROWTH IN CHINA Capitalize on market trends of the emerging middle class and increased dig
Slide 36: Tomorrow's Vintage Pop-Up Store, Singapore
TOMORROW’S VINTAGE POP-UP STORESINGAPORE
Slide 37: © 2021 Tapestry, Inc. 37
© 2021 Tapestry, Inc. 37
Slide 38: kate spade new york
kate spade NEW YORK
Slide 39: Kate Spade: Joy Colors Life
© 2021 Tapestry, Inc. JOY COLORS LIFESince its launch in 1993 with a collection of six essential handbags, Kate Spade New York has always been colorful, bold and optimistic. Today it is a global lifestyle brand that designs extraordinary things for the everyday, delivering seasonal collections of ha
Slide 40: Kate Spade key facts
40 40+ COUNTRIES 4,000 EMPLOYEES DIRECTLY OPERATED STORES 407 NET SALES $1.2B As of FY21. Net sales figure excludes the impact of the additional week in Q4.
Slide 41: Kate Spade Revenue Breakdown
© 2021 Tapestry, Inc. 41 Kate Spade Revenue Breakdown As of FY21. Opportunity to build out handbag offering, while maximizing positioning as a lifestyle brand
Slide 42: Kate Spade FY22 Growth Strategies
© 2021 Tapestry, Inc. 42 Kate Spade FY22 Growth Strategies MAXIMIZE LIFESTYLE POSITIONING Strengthen the foundation of ready-to-wear, footwear and jewelry GROW DIGITAL Improve omni-channel experience and store productivityElevate strong digital platform to engage customers through a full brand expre
Slide 43: Apple Orchard at NYFW
© 2021 Tapestry, Inc. 43 APPLE ORCHARD AT NYFWNEW YORK
Slide 44: Stuart Weitzman
© 2021 Tapestry, Inc. 44 STUART WEITZMAN
Slide 45: Stuart Weitzman
STUART WEITZMAN
Slide 46: Stuart Weitzman vision
© 2021 Tapestry, Inc. 46 Stuart Weitzman shoes are designed for high fashion and high function. Known for over 35 years for its artisanal Spanish craftsmanship and precisely-engineered fit, the luxury footwear brand inspires women around the world to shine with confidence with every step. OUR VISION
Slide 47: Stuart Weitzman key facts
47 30+ COUNTRIES 800 EMPLOYEES DIRECTLY OPERATED STORES 104 NET SALES $280M As of FY21. Net sales figure excludes the impact of the additional week in Q4.
Slide 48: Stuart Weitzman FY22 Growth Strategies
© 2021 Tapestry, Inc. 48 STUART WEITZMAN FY22 GROWTH STRATEGIES FUEL CONTINUED GROWTH IN CHINA Expand our footprint and further invest in digitalIncrease cultural relevance with dedicated capsules ACCELERATE WHOLESALE PARTNERSHIPS Build upon momentum in FY21Continue to expand footprint in key accoun
Slide 49: Stuart Weitzman Revenue Breakdown
© 2021 Tapestry, Inc. 49 As of FY21. Remain focused on key geographies & channels with a compelling footwear assortment STUART WEITZMAN REVENUE BREAKDOWN
Slide 50: 5050 capsule collection
5050 capsule collectionPaper magazine
Slide 51: Our Social Fabric: Corporate Responsibility Strategy & 25 Goals
© 2021 Tapestry, Inc. 51 Our Social FabricCorporate Responsibility Strategy & 2025 Goals
Slide 52: Focus areas: People, Planet, Communities
52 Photo courtesy of Friends of the High Line. Our People 1 Our Planet 2 Our Communities 3 FOCUS AREAS We aim to bolster Tapestry’s purpose and culture by embedding equity, inclusion and diversity throughout our organization, holding our leaders accountable for our equity, inclusion and diversity go
Slide 53: Corporate responsibility goals
© 2021 Tapestry, Inc. 53 Increase 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 Engagement Survey.Demonstrate a focus on career pr
Slide 54: Recent milestones
© 2021 Tapestry, Inc. 54 RECENT MILESTONES Raised minimum wage of all U.S. Tapestry employees to at least $15 per hour. In FY22, began tying 10% of Tapestry leadership’s annual incentive compensation to equity, inclusion and diversity goals.Established four Employee Resource Groups (ERGs), including
Slide 55: Appendix
Appendix © 2021 Tapestry, Inc. 55
Slide 56: Non-GAAP measures explanation
tapestry <== 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
Slide 57: GAAP to non-GAAP reconciliation, quarter ended October 2, 2021
© 2021 Tapestry, Inc. 57 GAAP to non-GAAP reconciliation For the quarter ended October 2, 2021 in millions, except per share data; unaudited GAAP BASIS(AS REPORTED) ACCELERATION PROGRAM NON-GAAP BASIS(EXCLUDING ITEMS) Coach $831.0 $— $831.0 Kate Spade 199.2 — 199.2 Stuart Weitzman 38.5 — 38.5 Gross
Slide 58: GAAP to non-GAAP reconciliation, quarter ended September 26, 2020
© 2021 Tapestry, Inc. 58 GAAP to non-GAAP reconciliation For the quarter ended September 26, 2020 (1) Adjustments within Gross profit are recorded within Cost of sales. in millions, except per share data; unaudited GAAP BASIS(AS REPORTED) CARES ACT TAX IMPACT ACCELERATION PROGRAM NON-GAAP BASIS(EXCL
Slide 59: Tapestry brands
tapestry COACH kate spade STUART WEITZMAN