Jide Zeitlin, Chairman and Chief Executive Officer of Tapestry, Inc., commented: “We are pleased with our overall holiday results, which outperformed plan driven by continued momentum at Coach and a sequential improvement at Kate Spade. Coach delivered its ninth consecutive quarter of positive comparable store sales growth. North America led the global comp, with notable strength online, and higher average unit retail driving gross margin expansion. In aggregate our international business was even with the prior year with strong comp growth in Other Asia, Europe and Mainland China, offsetting continued weakness in Hong Kong SAR and a slight decline in Japan, reflecting the impact of the consumption tax increase".

Mr. Zeitlin concluded: “ (We found that) there is an opportunity to accelerate long-term growth in all three of our brands. To realize this potential, we need to become more responsive to changing consumer demands. This requires integrating data analytics and consumer insights in all aspects of the business, from design to product development to planning and allocation to marketing. We bring a sense of urgency to this work and are dedicating resources to formulate and implement our strategy to drive value and shareholder returns. We will share the key components of this plan at an analyst and investor day this summer.”

Tapestry's net sales totaled 1.82 billion US dollars for the fiscal second quarter as compared to 1.80 billion US dollars in the prior year, an increase of 1% on a reported and constant currency basis. Operating income totaled 363 million US dollars on a reported basis, while operating margin was 20.0% versus approximately 376 million US dollarsand an operating margin of 20.9% in the prior year. Net income for the quarter was 299 million US dollars on a reported basis, with earnings per diluted share of 1.08 US dollars. This compared to net income of 255 million US dollars with earnings per diluted share of 0.88 US dollars in the prior year period.

Net sales for Coach totaled 1.27 billion US dollars for the fiscal second quarter, 2% above prior year on a reported and constant currency basis. Global comparable store sales increased 2%, including a benefit of approximately 200 basis points driven by an increase in global e-commerce. Operating income for Coach totaled 383 million US dollars compared to reported operating income of 374 million US dollars in the prior year, while operating margin was 30.1% versus 30.0% a year ago.

Net sales for Kate Spade totaled 430 million US dollars for the fiscal second quarter as compared to 428 million US dollars in the prior year. Global comparable store sales declined 4%, including the benefit of approximately 300 basis points from global e-commerce. Operating income for Kate Spade was 68 million US dollars on a reported basis, representing an operating margin of 15.8%. This compared to operating income of 88 million US dollars and an operating margin of 20.6% on a reported basis in the year ago period.

Net sales for Stuart Weitzman totaled 116 million US dollars for the fiscal second quarter compared to 124 million US dollars reported in the same period of the prior year, a decrease of 7% and 6% on a reported and constant currency basis, respectively. Operating income for Stuart Weitzman was 10 million US dollars on a reported basis, while operating margin was 8.2% versus income of 10 million US dollars and 8.0%, respectively, in the prior year.

Tapestry has a new guidance, which now includes an estimated negative impact of the coronavirus outbreak in China of approximately 200-250 million US dollars in sales and 0.35US dollars - 0.45 US dollars in diluted earnings per share. The company also considers that given the dynamic nature of the situation, the potential financial impact to the business could be materially different. In the light of such assumptions, Tapestry expects revenue for fiscal 2020 to approximate 5.9 billion US dollars. In addition, the Company now projects earnings per diluted share to be approximately 2.15 US dollars to 2.25 US dollars.