Employees prepare a window display at a Kate Spade shop in The Shoppes at Marina Bay Sands shopping mall in Singapore on June 19, 2020 as retail shops reopen in Singapore following the further easing of restrictions that were in place due to the COVID-19 novel coronavirus.
Roslan Rahman | AFP | Getty Images
The company said it will reduce expenses and focus on digital growth as part of a turnaround plan. It said e-commerce sales shot up by triple digits versus the prior year.
Shares of the company rose by nearly 8% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting for the fiscal fourth quarter ended June 27, based on a survey of analysts by Refinitiv:
- Losses per share: 25 cents, adjusted vs. 57 cents, expected
- Revenue: $714.8 million vs. $663 million, expected
Tapestry reported a net loss of $293.8 million, or $1.06 per share, compared with a profit of $148.9 million, or 51 cents a share, a year ago.
Excluding special items, the company lost 25 cents per share.
Net sales dropped to $714.8 million from $1.51 billion a year ago.
Analysts had expected a loss of 57 cents per share, on revenue of $663.3 million, based on a Refinitiv survey.
Coach sales fell 53%, while sales at Kate Spade dropped 51%, and sales at its Stuart Weitzman brand plunged 61% during the quarter.
The company reported hopeful signs, however, that could bode well for its future. It said it returned to positive year-over-year sales growth in Mainland China. It also reopened the majority of the stores it operates across the globe.
The company committed to speeding along a turnaround plan. It said it will become leaner, more focused on its e-commerce business and appeal to consumers in new ways to drive up sales for Coach, Kate Spade and the Stuart Weitzman. It estimated it will reduce expenses by about $300 million, including $200 million projected in fiscal 2021.
Joanne Crevoiserat, Tapestry’s interim CEO, said the fourth quarter exceeded the company’s own expectations and showed the strength of its brands.
“Looking forward, Tapestry’s next chapter of growth is ours to write,” she said in a news release. “While the backdrop remains volatile, it has not changed our long-term objectives. Rather, it has been a catalyst to accelerate our strategic agenda.”
Crevoiserat, a former Abercrombie & Fitch executive, stepped into the role as the company looks for a permanent replacement.
Tapestry’s CEO Jide Zeitlin resigned in mid-July as the board began a probe into his personal conduct. He had been chairman since 2014 and had just taken over the CEO role in September from Victor Luis.
To buoy its finances during the pandemic, Tapestry said it cut corporate headcount costs by 20% and made other decisions to reduce operating expenses. The company ended the fiscal year with $1.4 billion in cash and short term investments, including a $700 million revolver draw down.