Coach Parent Tapestry Gains On Q2 Bottom-Line Beat, FY23 EPS Outlook Boost
Benzinga
2023-02-10
Tapestry Inc (NYSE:TPR), the New York-based house of lifestyle brands consisting of Coach, Kate Spade, and Stuart Weitzman, reported a second-quarter FY23 sales decline of 5% year-on-year to $2.025 billion, marginally missing the analyst consensus of $2.03 billion.
Adjusted EPS of $1.33 beat the analyst consensus of $1.27.
Gross profit fell 4.7% Y/Y to $1.39 billion, with the margin expanding 50 basis points to 68.6%.
Operating margin contracted 100 basis points to 20.6%, and operating income for the quarter decreased 9.7% to $418 million.
Tapestry held $846 million in cash and equivalents as of Dec. 31, 2022.
Inventory at the end of Q2 rose 30.1% to $976 million. The company said it remains on track to end the fiscal year with inventory up single digits versus the prior year.
Tapestry is on track to repurchase $700 million in common stock in the current fiscal year. During the first six months of FY23, Tapestry spent $300 million to repurchase 8.4 million shares.
TPR continues to anticipate paying an annual dividend of $1.20 per share, representing a 20% increase compared to prior year, totaling approximately $300 million.
Outlook: Tapestry raised its FY23 EPS outlook from $3.60-$3.70 to $3.70-$3.75 versus the consensus of $3.65.
The company expects FY23 sales of $6.6 billion (prior view $6.5 billion - $6.6 billion) versus the consensus of $6.61 billion.
Price Action: TPR shares are trading higher by 6.07% at $45.83 on the last check Thursday.