Digital, China Drive Tapestry Profits, Sales Jump in Q4 and Year

Tapestry Inc. continued on its upward trajectory in the fourth quarter as the parent of Coach, Kate Spade and Stuart Weiztman returned to profitability, posting operating income of $259.7 million in the period ended July 3 against a loss of $280 million in the same period of last year.

Net sales more than doubled, hitting $1.62 billion in the fourth quarter compared to $715 million in the prior year, a 126 percent increase.

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For the year, operating income was $968 million versus an operating loss of $551 million in the prior year on a 16 percent increase in sales to $5.75 billion, up from $4.96 billion in the prior year.

As a result, the company reinstated its dividend program and will repay $400 million in bonds due in July 2022 by the end of this year.

The results were driven by strength in its digital efforts, which were up more than 35 percent over 2020 and more than 200 percent compared to pre-pandemic levels, and strong sales in mainland China, where volume grew some 60 percent compared to fiscal-year 2020 and over 40 percent versus pre-pandemic levels. North American sales were also stellar, jumping 165 percent over last year and in the high teens versus fiscal-year 2019.

Joanne Crevoiserat, chief executive officer of Tapestry, called fiscal 2021 “a transformational year for Tapestry. Through our acceleration program, we sharpened our focus on the consumer, leaned into digital and data and became a more agile organization. We reached customers in new ways and adapted to a rapidly changing environment, fueled by the power of our brands and passionate teams. Importantly, the traction of our strategy is clearly evidenced by our financial performance.”

She said the company saw strength in all three brands “highlighted by revenue exceeding pre-pandemic levels led by digital and China — two areas of significant opportunity.”

Looking ahead, she said Tapestry is “focused on driving our next phase of growth. We are in a position of strength, supported by our clear strategy, compelling brands and differentiated platform. We believe these competitive advantages will enable us to win with consumers and capture market share. Our conviction is underscored by the plans announced today to return over $750 million to shareholders in fiscal 2022 alone. Overall, we remain confident in our ability to accelerate growth and profitability across our portfolio long-term, enhancing value for all stakeholders.”

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