Tapestry, Inc. · NYSE:TPR
Tapestry — Q4 FY2020 Earnings Presentation
54 slides from Tapestry's earnings presentation, Aug 13, 2020
Slide 1: Tapestry
tapestry COACH | kate spade | STUART WEITZMAN
Slide 2: Forward-looking statements
T his pr esentation 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," "int
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: Brands: Coach, Kate Spade, Stuart Weitzman
established 1941 INCLUSIVE AUTHENTIC OPTIMISTIC established 1986 SOPHISTICATED STYLISH CONFIDENT established 1993 COLORFUL JOYFUL OPTIMISTIC 5
Slide 6: Tapestry product, geographic and channel breakdown
TAPESTRY PRODUCT, GEOGRAPHIC & CHANNEL BREAKDOWNGLOBAL HOUSE OF BRANDS WITH STRONG DIRECT-TO-CONSUMER DISTRIBUTION 6 As of FY20.
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 CrevoiseratInterim Chief Executive Officer Andrea Shaw ResnickInterim Chief Financial O
Slide 8: Update 2020
update 2020
Slide 9: Fiscal 2020 Overview
FISCAL 2020 OVERVIEW ENTERED THE CALENDAR YEAR IN A POSITION OF STRENGTH As the coronavirus pandemic expanded globally, our results materially weakened due to numerous store closures across our fleet. ACTED SWIFTLY TO ENHANCE LIQUIDITY & FINANCIAL FLEXIBILITY We took decisive actions to adapt, inclu
Slide 10: 4Q20 results ahead of internal expectations
10 4Q20 RESULTS AHEAD OF INTERNAL EXPECTATIONS, DEMONSTRATING THE power OF OUR BRANDS & resilience OF OUR BUSINESS of global directly operated stores re-opened by quarter-end 100% Nearly year-over-year increase in sales triple-digit Digital strength with a Year-over-year revenue improved sequentiall
Slide 11: Acceleration Program
PROGRAM acceleration
Slide 12: Acceleration
12 acceleration noun /akˌseləˈr āSH(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: 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 14
Slide 15: Financial Outlook
15 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. Outlook assumes a continuation of the slow and steady recovery from the pandemic. Assuming a continued sl
Slide 16: Capital allocation priorities
NEAR-TERM PRESERVE CASH In FY20, as anticipated, we returned $700M to shareholders. However, due to the impact of Covid-19, we suspended our dividend and share repurchase programs while drawing down on our revolver to enhance liquidity.In the near-term, our priority is to preserve our cash on-hand i
Slide 17: Interim CEO quote
17 “Our steadfast commitment to our purpose and values, as well as our focus on our multi-year strategic agenda have remained constant. Looking forward, I am confident that Tapestry’s next chapter of growth is ours to write.” Joanne Crevoiserat, INTERIM chief executive officer
Slide 18: Overview by Brand
OVERVIEWbyBRAND
Slide 19: Coach
ra wouiee COACH NEW YORK
Slide 20: Slide 20
Slide 21: Coach vision
Coach inspires the dreamer in all of us, connecting our modern lives with the spirit of the open road. our vision 21
Slide 22: Coach employees, countries and stores
11,000+EMPLOYEES 55+COUNTRIES 958DIRECTLY OPERATED STORES 22 As of FY20.
Slide 23: Coach product, geographic and channel breakdown
coach product, geographic & channel breakdownDirect-to-consumer focused with diversified product categories & geographies 23 As of FY20.
Slide 24: Coach multi-year growth strategies
COACH MULTI-YEAR GROWTH STRATEGIES DEEPEN ENGAGEMENT WITH CONSUMERS * Enhance brand & cultural relevance CREAT: INNOVATIVE & COMPELLING PRODUCT DRIVE DIGITAL SALES & NEW CUSTOMER RECRUITMENT * Offer a true omnichannel experience + Exceed the expectations of our target consumers by geography and cust
Slide 25: Coach brand president quote
“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 New
Slide 26: Kate Spade
ge kate spade NEW YORK
Slide 27: Kate Spade
kate spade NEW YORK
Slide 28: Kate Spade vision
OUR VISION A globally admired aspirational life & style brand, where people — our customers and teams — are at the center of everything we do.
Slide 29: Kate Spade stores, countries and employees
As of FY20. 420 DIRECTLY OPERATED STORES 3ot COUNTRIES 3,900+ EMPLOYEES 29
Slide 30: Kate Spade product, geographic and channel breakdown
KATE SPADE PRODUCT, GEOGRAPHIC & CHANNEL BREAKDOWN OPPORTUNITY TO REENERGIZE & GROW HANDBAGS, WHILE FOCUSING ON MARKETS WITH HIGH BRAND AWARENESS GREATER REST OF CHINA WORLD 4% WOMEN'S HANDBAGS 56% “ NORTH AMERICA 78% DIRECT-TO- CONSUMER 88% ® As of FY20. 30
Slide 31: Kate Spade multi-year growth strategies
KATE SPADE MULTI-YEAR GROWTH STRATEGIES 31 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 32: Kate Spade CEO quote
32 “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 33: Stuart Weitzman
STUART WEITZMAN
Slide 34: Stuart Weitzman
STUART WEITZMAN
Slide 35: 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. 35
Slide 36: Stuart Weitzman stores, countries and employees
As of FY20. 131 DIRECTLY OPERATED STORES 40+ COUNTRIES 950+ EMPLOYEES 36
Slide 37: Stuart Weitzman product, geographic and channel breakdown
STUART WEITZMAN product, geographic & channel breakdownOpportunity to focus on key geographies & channels with a compelling footwear assortment 37 REST OF WORLD14% As of FY20.
Slide 38: Stuart Weitzman multi-year growth strategies
38 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 39: Stuart Weitzman CEO quote
39 “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 40: Corporate Responsibility
corporate RESPONSIBILITY
Slide 41: 2025 Corporate Responsibility Strategy and 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: 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 49: Tapestry
tapestry
Slide 50: Appendix
APPENDIX
Slide 51: 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 52: GAAP to Non-GAAP Reconciliation, quarter ended June 7, 2020
GAAP TO NON-GAAP RECONCILIATION FOR THE QUARTER ENDED JUNE 27, 2020 GAAP BASIS. ERP eee e impairment ACCELERATION _NON-GAAP Basis i ir ib it ota (AS REPORTED) IMPLEMENTATION isireC ration COSTS PROGRAM (EXCLUDING ITEMS) Coach $381.0 oo + cS + $381.0 Kate Spade 1065 = = = = 1065 Stuart Weitzman M4 -
Slide 53: GAAP to Non-GAAP Reconciliation, quarter ended June 9, 2019
GAAP TO NON-GAAP RECONCILIATION FOR THE QUARTER ENDED JUNE 29, 2019 GAAP BASIS ERP INTEGRATION & NON-GAAP BASIS in millions, except per share data; unaudited (AS REPORTED) IMPLEMENTATION ACQUISITION (EXCLUDING ITEMS) Coach $764.9 $ $0.1 764.8 Kate Spade 205.6 si (0.9) 206.5 Stuart Weitzman 28.7 i (1
Slide 54: Tapestry
tapestry COACH | kate spade | STUART WEITZMAN