TAPESTRY INC
For the period ended Mar 30, 2024. Filed May 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2024 · Filed May 9, 2024
TPR$132.80-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-30; filed 2024-02-08.
0001116132-24-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-30; filed 2024-05-09.
0001116132-24-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 190 previous paragraphs and 188 current paragraphs.
98 unchanged; 70 reworded; 20 added; 22 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
THIRD QUARTER FISCAL 2024 COMPARED TO THIRD QUARTER FISCAL 2023
Current report
Third Quarter Fiscal 2024 Items
Current report
Tapestry, Inc. Summary – Third Quarter of Fiscal 2024
Current report
•Coach Net Sales increased 0.1% or $1.6 million to $1.15 billion in the third quarter of fiscal 2024. Excluding the impact of foreign currency, net sales increased 1.9% or $22.2 million. This increase in net sales was primarily due to an increase of $39.8 million in wholesale sales primarily driven by international, partially offset by a decrease of $21.8 million in net retail sales, mainly driven by e-commerce sales in North America.
Current report
SG&A expenses increased 3.6% or $31.1 million to $903.1 million in the third quarter of fiscal 2024 as compared to $872.0 million in the third quarter of fiscal 2023. As a percentage of net sales, SG&A expenses increased to 60.9% during the third quarter of fiscal 2024 from 57.8% during the third quarter of fiscal 2023. Excluding items affecting comparability of $35.0 million in the third quarter of fiscal 2024, SG&A expenses decreased 0.4% or $3.9 million to $868.1 million from $872.0 million in the third quarter of fiscal 2023. SG&A as a percentage of net sales increased 80 basis points to 58.6% as compared to 57.8% during the third quarter of fiscal 2023. This increase in SG&A as a percentage of net sales was primarily due to higher marketing spend, higher professional fees, partially offset by a decrease in selling costs.
Current report
•Coach Operating Income increased $20.5 million to $362.7 million in the third quarter of fiscal 2024, resulting in an operating margin increase of 170 basis points to 31.6%, as compared to $342.2 million and 29.9%, respectively, in the third quarter of fiscal 2023. This increase in operating margin was primarily attributed to:
Current report
◦SG&A expenses as a percentage of net sales, increased 30 basis points mainly due to by higher marketing spend, partially offset by a decrease in selling and distribution costs.
Current report
•Kate Spade Operating Income increased $2.0 million to $10.0 million in the third quarter of fiscal 2024, resulting in an operating margin increase of 90 basis points to 3.6%, as compared to $8.0 million and operating margin of 2.7% in the third quarter of fiscal 2023. This increase in operating margin was primarily attributed to:
Current report
◦Gross Margin, increased 110 basis points mainly due to lower freight costs;
Current report
◦SG&A expenses as a percentage of net sales, increased 20 basis points mainly due to an increase in distribution costs and higher information technology costs, partially offset by lower selling and compensation costs.
Current report
•Stuart Weitzman Operating Income decreased $5.5 million to a loss of $4.7 million in the third quarter of fiscal 2024, resulting in an operating margin decrease of 950 basis points to (8.4)%, as compared to operating income of $0.8 million and operating margin of 1.1% in the third quarter of fiscal 2023.
Current report
Other expense increased $5.8 million to an expense of $2.8 million in the third quarter of fiscal 2024 as compared to income of $3.0 million in the third quarter of fiscal 2023. This increase in other expense was related to an increase in foreign exchange losses.
Current report
Net income decreased 25.3% or $47.3 million to $139.4 million in the third quarter of fiscal 2024 as compared to $186.7 million in the third quarter of fiscal 2023. Excluding items affecting comparability, net income increased 1.9% or $3.4 million to $190.1 million in the third quarter of fiscal 2024 from $186.7 million in the third quarter of fiscal 2023.
Current report
First Nine Months of Fiscal 2024 Items
Current report
SG&A expenses increased 5.7% or $149.8 million to $2.79 billion in the first nine months of fiscal 2024 as compared to $2.64 billion in the first nine months of fiscal 2023. As a percentage of net sales, SG&A expenses increased to 55.0% during the first nine months of fiscal 2024 from 52.4% during the first nine months of fiscal 2023. Excluding items affecting comparability of $82.9 million in the first nine months of fiscal 2024, SG&A expenses increased 2.5% or $66.9 million to $2.71 billion from $2.64 billion the first nine months of fiscal 2023. SG&A expenses as a percentage of net sales increased 90 basis points to 53.3% compared to 52.4% in the first nine months of fiscal 2023. This increase in SG&A as a percentage of net sales was primarily due to higher compensation costs, increased occupancy costs, and higher marketing spend partially offset by a decrease in distribution costs.
Current report
•Coach Operating Income increased $127.7 million to $1.26 billion in the first nine months of fiscal 2024, resulting in an operating margin increase of 230 basis points to 32.9%, as compared to $1.13 billion and 30.6%, respectively, in the first nine months of fiscal 2023. This increase in operating margin was primarily attributed to:
Current report
•Kate Spade Operating Income increased $8.5 million to $108.7 million in the first nine months of fiscal 2024, resulting in an operating margin increase of 140 basis points to 10.4%, as compared to $100.2 million and 9.0%, respectively, in the first nine months of fiscal 2023. This increase in operating margin was primarily attributed to:
Current report
◦Gross Margin, increased 160 basis points mainly due to lower freight costs;
Current report
Net income decreased 7.8% or $55.2 million to $656.7 million in the first nine months of fiscal 2024 as compared to $711.9 million in the first nine months of fiscal 2023. Excluding items affecting comparability, net income increased $71.2 million to $783.1 million in the first nine months of fiscal 2024 from $711.9 million in the first nine months of fiscal 2023.
Current report
•Other Assets were a source of cash of $73.6 million in the first nine months of fiscal 2024 compared to a source of cash of $13.4 million in the first nine months of fiscal 2023, primarily driven by a decrease in prepaid expenses due to less cloud computing project spend and a tax refund in the current year.
Removed paragraphs (22)
Previous report
Capri Holdings Limited Acquisition
Previous report
SECOND QUARTER FISCAL 2024 COMPARED TO SECOND QUARTER FISCAL 2023
Previous report
Second Quarter Fiscal 2024 Items
Previous report
Tapestry, Inc. Summary – Second Quarter of Fiscal 2024
Previous report
•Coach Net Sales increased 6.4% or $92.2 million to $1.54 billion in the second quarter of fiscal 2024. Excluding the impact of foreign currency, net sales increased 6.8% or $98.6 million. This increase in net sales was primarily due to an increase of $98.2 million in net retail sales driven by an increase in both store and e-commerce sales globally.
Previous report
SG&A expenses increased 7.7% or $74.5 million to $1.05 billion in the second quarter of fiscal 2024 as compared to $971.1 million in the second quarter of fiscal 2023. As a percentage of net sales, SG&A expenses increased to 50.2% during the second quarter of fiscal 2024 from 47.9% during the second quarter of fiscal 2023. Excluding items affecting comparability of $28.3 million in the second quarter of fiscal 2024, SG&A expenses increased 4.8% or $46.2 million to $1,017.3 million from $971.1 million in the second quarter of fiscal 2023. SG&A as a percentage of net sales increased 80 basis points to 48.7% as compared to 47.9% during the second quarter of fiscal 2023. This increase in SG&A as a percentage of net sales was primarily due to higher compensation costs, partially offset by a decrease in distribution costs.
Previous report
•Coach Operating Income increased $75.1 million to $528.3 million in the second quarter of fiscal 2024, resulting in an operating margin increase of 300 basis points to 34.3%, as compared to $453.2 million and 31.3%, respectively, in the second quarter of fiscal 2023. This increase in operating margin was primarily attributed to:
Previous report
◦SG&A expenses as a percentage of net sales, remained even to prior year mainly driven by higher compensation costs, partially offset by a decrease in distribution costs and depreciation.
Previous report
•Kate Spade Operating Income increased $3.1 million to $72.1 million in the second quarter of fiscal 2024, resulting in an operating margin increase of 160 basis points to 15.7%, as compared to $69.0 million and operating margin of 14.1% in the second quarter of fiscal 2023. This increase in operating margin was primarily attributed to:
Previous report
◦Gross Margin, increased 230 basis points mainly due to lower freight costs;
Previous report
◦SG&A expenses as a percentage of net sales, increased 70 basis points mainly due to higher compensation costs, higher marketing spend, increased occupancy costs, partially offset by a decrease in distribution and selling costs.
Previous report
•Stuart Weitzman Operating Income increased $0.7 million to $1.4 million in the second quarter of fiscal 2024, resulting in an operating margin increase of 80 basis points to 1.7%, as compared to $0.7 million and operating margin of 0.9% in the second quarter of fiscal 2023.
Previous report
Other income decreased $1.9 million to $4.7 million in the second quarter of fiscal 2024 as compared to $6.6 million in the second quarter of fiscal 2023. This decrease in other income was related to a decrease in foreign exchange gains.
Previous report
Net income decreased 2.3% or $7.6 million to $322.3 million in the second quarter of fiscal 2024 as compared to $329.9 million in the second quarter of fiscal 2023. Excluding items affecting comparability, net income increased 14.2% or $46.8 million to $376.7 million in the second quarter of fiscal 2024 from $329.9 million in the second quarter of fiscal 2023.
Previous report
First Six Months of Fiscal 2024 Items
Previous report
SG&A expenses increased 6.7% or $118.7 million to $1.89 billion in the first six months of fiscal 2024 as compared to $1.77 billion in the first six months of fiscal 2023. As a percentage of net sales, SG&A expenses increased to 52.5% during the first six months of fiscal 2024 from 50.2% during the first six months of fiscal 2023. Excluding items affecting comparability of $47.9 million in the first six months of fiscal 2024, SG&A expenses increased 4.0% or $70.8 million to $1.84 billion from $1.77 billion the first six months of fiscal 2023. SG&A expenses as a percentage of net sales increased 100 basis points to 51.2% compared to 50.2% in the first six months of fiscal 2023. This increase in SG&A as a percentage of net sales was primarily due to higher compensation costs, increased occupancy costs, and higher information technology costs partially offset by a decrease in distribution costs.
Previous report
•Coach Operating Income increased $107.2 million to $899.6 million in the first six months of fiscal 2024, resulting in an operating margin increase of 250 basis points to 33.3%, as compared to $792.4 million and 30.8%, respectively, in the first six months of fiscal 2023. This increase in operating margin was primarily attributed to:
Previous report
•Kate Spade Operating Income increased $6.5 million to $98.7 million in the first six months of fiscal 2024, resulting in an operating margin increase of 160 basis points to 12.9%, as compared to $92.2 million and 11.3%, respectively, in the first six months of fiscal 2023. This increase in operating margin was primarily attributed to:
Previous report
◦Gross Margin, increased 180 basis points mainly due to lower freight costs;
Previous report
Net income decreased 1.5% or $7.9 million to $517.3 million in the first six months of fiscal 2024 as compared to $525.2 million in the first six months of fiscal 2023. Excluding items affecting comparability, net income increased $67.8 million to $593.0 million in the first six months of fiscal 2024 from $525.2 million in the first six months of fiscal 2023.
Previous report
•Inventories were a source of cash of $103.8 million in the first six months of fiscal 2024 compared to a source of cash of $11.5 million in the first six months of fiscal 2023, primarily driven by reduction in inventory purchases and better sell through when compared to prior year.
Previous report
Capri Holdings Limited Acquisition
Reworded paragraphs (70)
Previous wording
•Results of operations. An analysis of our results of operations in thesecond quarter of fiscal 2024 compared to thesecond quarter of fiscal 2023 and firstsix months of fiscal 2024 compared to the firstsix months of fiscal 2023.
Current wording
•Results of operations. An analysis of our results of operations in thethird quarter of fiscal 2024 compared to thethird quarter of fiscal 2023 and first nine months of fiscal 2024 compared to the first nine months of fiscal 2023.
Previous wording
Tapestry, Inc. (the "Company") is a leading New York-based house of iconic accessories and lifestyle brands. Our global house of brands unites the magic of Coach, kate spade new york and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible.
Current wording
Tapestry, Inc. (the "Company") is a house of iconic accessories and lifestyle brands consisting of Coach, Kate Spade and Stuart Weitzman. Each of our brands are unique and independent, while sharing a commitment to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. We use our collective strengths to move our customers and empower our communities, to make the fashion industry more sustainable, and to build a company that’s equitable, inclusive, and diverse. Individually, our brands are iconic. Together, we can stretch what’s possible.
Previous wording
On August 10, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned subsidiary of Tapestry, and Capri Holdings Limited ("Capri") for $57.00 per share in cash for a total enterprise value of approximately $8.5 billion (the "Capri Acquisition"). The Capri Acquisition, once completed, will bring together six highly complementary brands with global reach, powered by the Company’s data-rich customer engagement platform and diversified, direct-to-consumer operating model. The transaction is expected to close during calendar year 2024. The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of new senior unsecured notes, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. During the quarter ended December 30, 2023, the Company issued $4.5 billion Capri Acquisition USD Senior Notes and €1.5 billion Capri Acquisition EUR Senior Notes which, in addition to the $1.4 billion of delayed draw Capri Acquisition Term Loan Facilities executed in the first quarter of fiscal 2024, completes the expected financing for the Capri Acquisition. Refer to Note 5, "Acquisitions" for further information.
Current wording
On August 10, 2023, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Sunrise Merger Sub, Inc., a direct wholly owned subsidiary of Tapestry, and Capri Holdings Limited ("Capri") for $57.00 per share in cash for a total enterprise value of approximately $8.5 billion (the "Capri Acquisition"). The Capri Acquisition, once completed, will bring together six highly complementary brands with global reach, powered by the Company’s data-rich customer engagement platform and diversified, direct-to-consumer operating model. The transaction is expected to close during calendar year 2024. The Company intends to finance the Capri Acquisition, inclusive of related fees and expenses, with the net proceeds of new senior unsecured notes, new term loans, cash on hand, cash on hand at Capri and anticipated future cash flow. On November 27, 2023, the Company issued $4.5 billion Capri Acquisition USD Senior Notes (the "Capri Acquisition USD Senior Notes") and €1.5 billion Capri Acquisition EUR Senior Notes (the "Capri Acquisition EUR Senior Notes" and, together with the Capri Acquisition USD Senior Notes, the "Capri Acquisition Senior Notes") which, in addition to the $1.4 billion of delayed draw Capri Acquisition Term Loan Facilities executed on August 30, 2023 (the "Capri Acquisition Term Loan Facilities"), completes the expected financing for the Capri Acquisition. The Company has received regulatory approval from all countries except for the United States. On April 22, 2024, the Federal Trade Commission ("FTC") filed a complaint against the Company and Capri in the United States District Court for the Southern District of New York seeking to enjoin the consummation of the Capri Acquisition. The FTC’s complaint alleges that the Capri Acquisition, if consummated, would violate Section 7 of the Clayton Act and that the Merger Agreement and the Capri Acquisition constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and should be enjoined. The Company believes the FTC’s claims are without merit, and intends to defend the lawsuit vigorously. Refer to Note 5, "Acquisitions," and Note 16, "Subsequent Events," for further information.
Previous wording
During the second quarter of fiscal 2024, the macroeconomic environment remained challenging and volatile. Several organizations that monitor the world’s economy, including the International Monetary Fund, continue to forecast growth in the global economy. Some of these organizations have recently revised the forecast slightly upwards since the first quarter of fiscal 2024. The updated forecast is still below the historical average, which is reflective of the current volatile environment, including tighter monetary and fiscal policies which have started to moderate inflation, financial market volatility, and the negative economic impacts of geopolitical instability in certain regions of the world.
Current wording
During the third quarter of fiscal 2024, the macroeconomic environment remained challenging and volatile. Several organizations that monitor the world’s economy, including the International Monetary Fund, continue to forecast growth in the global economy. Some of these organizations have recently revised the forecast slightly upwards since the end of the prior quarter. The updated forecast is still below the historical average, which is reflective of the current volatile environment, including tighter monetary and fiscal policies which have started to moderate inflation, financial market volatility, and the negative economic impacts of geopolitical instability in certain regions of the world.
Previous wording
In the second quarter of fiscal 2024, freight costs have continued to moderate as compared to prior year. As a result, during the three months and six months ended December 30, 2023, the Company incurred lower freight expense of $32.9 million and $54.1 million respectively, positively impacting gross margin by approximately 170 basis points and 160 basis points when compared to the prior year.
Current wording
In the third quarter of fiscal 2024, freight costs have continued to moderate as compared to prior year. As a result, during the three months and nine months ended March 30, 2024, the Company incurred lower freight expense of $15.9 million and $70.0 million respectively, positively impacting gross margin by approximately 100 basis points and 140 basis points when compared to the prior year.
Previous wording
In the second quarter of fiscal 2024, the U.S. Dollar continued to fluctuate as compared to foreign currencies in regions where we conduct our business. This trend has resulted in impacts to our business including, but not limited to, for the three and six months ended December 31, 2023, decreased Net sales of $7.1 million and $26.3 million, positive impact to gross margin of approximately 30 basis points and 10 basis points, and impact to operating margin of approximately 10 positive basis points and 10 negative basis points, respectively.
Current wording
In the third quarter of fiscal 2024, the U.S. Dollar continued to fluctuate as compared to foreign currencies in regions where we conduct our business. This trend has resulted in impacts to our business including, but not limited to, for the three and nine months ended March 30, 2024, a decrease in Net sales of $23.5 million and $49.8 million, a positive impact to gross margin of approximately 60 basis points and 20 basis points, and approximately 30 basis point positive impact to operating margin and no impact to operating margin, respectively.
Previous wording
During the second quarter of fiscal 2024, certain geopolitical events have impacted trade routes in the Red Sea which could potentially increase inventory transit times and costs in the second half of fiscal 2024 and into fiscal 2025. The Company is taking actions to minimize any potential disruptions and at this time, does not anticipate material impact to our business or operating results. We will continue to closely monitor the situation.
Current wording
During fiscal 2024, certain geopolitical events have impacted trade routes in the Red Sea which have modestly increased inventory in-transit times and costs. The Company has taken actions to minimize any potential disruptions and at this time, does not anticipate material impact to our business or operating results. We will continue to closely monitor the situation.
Previous wording
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities. Such disruptions continued during the first half of fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic. Starting in December 2022, certain government restrictions were lifted in the region and business trends improved. In the first half of fiscal 2024, the Covid-19 pandemic did not materially impact our business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook.
Current wording
The Covid-19 pandemic has resulted in varying degrees of business disruption for the Company since it began in fiscal 2020 and has impacted all regions around the world, resulting in restrictions and shutdowns implemented by national, state, and local authorities. Such disruptions continued during the first half of fiscal 2023, and the Company's results in Greater China were adversely impacted as a result of the Covid-19 pandemic. Starting in December 2022, certain government restrictions were lifted in the region and business trends improved. During the nine months ended March 30, 2024, the Covid-19 pandemic did not materially impact our business or operating results. We continue to monitor the latest developments regarding the Covid-19 pandemic and potential impacts on our business, operating results and outlook.
Previous wording
The following table summarizes results of operations for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.
Current wording
The following table summarizes results of operations for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.
Previous wording
The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The reported results during the second quarter of fiscal 2024 reflect certain items which affect the comparability of our results, as noted in the following table. There were no charges affecting comparability during the second quarter of fiscal 2023. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.
Current wording
The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The reported results during the third quarter of fiscal 2024 reflect certain items which affect the comparability of our results, as noted in the following table. There were no charges affecting comparability during the third quarter of fiscal 2023. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.
Previous wording
In the second quarter of fiscal 2024, the Company incurred charges as follows:
Current wording
In the third quarter of fiscal 2024, the Company incurred charges as follows:
Previous wording
•Acquisition Costs - Total pre-tax charges of $72.4 million attributable to the Capri Acquisition. These charges include:
Current wording
•Acquisition Costs - Total pre-tax charges of $67.9 million attributable to the Capri Acquisition. These charges include:
Previous wording
◦SG&A expenses: $28.3 million primarily related to professional fees recorded within Corporate.
Current wording
◦SG&A expenses: $35.0 million primarily related to professional fees recorded within Corporate;
Previous wording
◦Interest expense, net: $50.8 million of financing related charges, which primarily includes Bridge Facility financing fees, and the net impact of the Capri Acquisition Senior Notes;
Current wording
◦Interest expense, net: $32.9 million of financing related charges, which primarily includes the net impact of the Capri Acquisition Senior Notes.
Previous wording
These actions taken together negatively impacted operating income by $28.3 million, increased interest expense by $44.1 million and reduced the provision for income tax by $18.0 million resulting in a net decrease in net income by $54.4 million or $0.24 per diluted share.
Current wording
These actions taken together negatively impacted operating income by $35.0 million, increased interest expense by $32.9 million and reduced the provision for income tax by $17.2 million resulting in a net decrease in net income by $50.7 million or $0.21 per diluted share.
Previous wording
The change in net sales for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 has been presented both including and excluding currency fluctuation impacts. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
Current wording
The change in net sales for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023 has been presented both including and excluding currency fluctuation impacts. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
Previous wording
Net sales in the second quarter of fiscal 2024 increased 2.9% or $59.1 million to $2.08 billion. Excluding the impact of foreign currency, net sales increased by 3.3% or $66.3 million.
Current wording
Net sales in the third quarter of fiscal 2024 decreased 1.8% or $27.1 million to $1.48 billion. Excluding the impact of foreign currency, net sales decreased by 0.2% or $3.6 million.
Previous wording
•Kate Spade Net Sales decreased 6.1% or $29.9 million to $460.4 million in the second quarter of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 6.0% or $29.5 million. This decrease in net sales was due a decrease of $26.2 million in net retail sales as a result of lower store and e-commerce sales and a decrease of $4.0 million in wholesale sales.
Current wording
•Kate Spade Net Sales decreased 5.6% or $16.5 million to $280.7 million in the third quarter of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 4.8% or $14.2 million. This decrease in net sales was due a decrease of $21.4 million in net retail sales as a result of lower store and e-commerce sales, partially offset by an increase of $5.7 million in wholesale sales primarily driven by North America.
Previous wording
•Stuart Weitzman Net Sales decreased 3.8% or $3.2 million to $82.2 million in the second quarter of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 3.2% or $2.8 million.
Current wording
•Stuart Weitzman Net Sales decreased 17.8% or $12.2 million to $56.1 million in the third quarter of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 16.9% or $11.6 million.
Previous wording
Gross profit increased 7.5% or $103.9 million to $1.49 billion in the second quarter of fiscal 2024 from $1.39 billion in the second quarter of fiscal 2023. Gross margin for the second quarter of fiscal 2024 was 71.6% as compared to 68.6% in the second quarter of fiscal 2023. This increase in Gross margin was primarily attributed to lower freight costs, favorable geography mix, and net pricing improvements. Refer to "Current Macroeconomic Conditions and Outlook" for further information.
Current wording
Gross profit increased 0.8% or $9.1 million to $1.11 billion in the third quarter of fiscal 2024 from $1.10 billion in the third quarter of fiscal 2023. Gross margin for the third quarter of fiscal 2024 increased 190 basis points to 74.7% as compared to 72.8% in the third quarter of fiscal 2023. This increase in Gross margin was primarily attributed to lower freight costs, favorable currency translation and net pricing improvements. Refer to "Current Macroeconomic Conditions and Outlook" for further information.
Previous wording
(1)In the second quarter of fiscal 2024, Corporate incurred charges affecting comparability of $28.3 million. Excluding those items affecting comparability, SG&A expenses increased 20.2% or $21.2 million to $125.9 million in the second quarter of fiscal 2024 as compared to $104.7 million in the second quarter of fiscal 2023.
Current wording
(1)In the third quarter of fiscal 2024, Corporate incurred charges affecting comparability of $35.0 million. Excluding those items affecting comparability, SG&A expenses increased 3.2% or $4 million to $128.7 million in the third quarter of fiscal 2024 as compared to $124.7 million in the third quarter of fiscal 2023.
Previous wording
Operating income increased 7.0% or $29.4 million to $447.6 million in the second quarter of fiscal 2024 as compared to $418.2 million in the second quarter of fiscal 2023. Operating margin was 21.5% in the second quarter of fiscal 2024 as compared to 20.6% in the second quarter of fiscal 2023. Excluding items affecting comparability of $28.3 million in the second quarter of fiscal 2024, operating income increased $57.7 million to $475.9 million in the second quarter of fiscal 2024 from $418.2 million in the second quarter of fiscal 2023; and operating margin increased 220 basis points to 22.8% in the second quarter of fiscal 2024 as compared to 20.6% in the second quarter of fiscal 2023. This increase in operating margin was primarily attributed to a 300 basis points increase in gross margin partially offset by an increase of 80 basis points in SG&A as a percentage of sales.
Current wording
Operating income decreased 9.8% or $22.0 million to $204.3 million in the third quarter of fiscal 2024 as compared to $226.3 million in the third quarter of fiscal 2023. Operating margin was 13.8% in the third quarter of fiscal 2024 as compared to 15.0% in the third quarter of fiscal 2023. Excluding items affecting comparability of $35.0 million in the third quarter of fiscal 2024, operating income increased $13.0 million to $239.3 million in the third quarter of fiscal 2024 from $226.3 million in the third quarter of fiscal 2023; and operating margin increased 110 basis points to 16.1% in the third quarter of fiscal 2024 as compared to 15.0% in the third quarter of fiscal 2023. This increase in operating margin was primarily attributed to a 190 basis points increase in gross margin partially offset by an increase of 80 basis points in SG&A as a percentage of sales.
Previous wording
◦Gross Margin, increased 300 basis points mainly due to lower freight costs, net pricing improvements and favorable channel and geography mix;
Current wording
◦Gross Margin, increased 200 basis points mainly due to lower freight costs, net pricing improvements and favorable currency translation;
Previous wording
•Corporate Operating Expenses increased 47.2% or $49.5 million to $154.2 million in the second quarter of fiscal 2024. Excluding items affecting comparability, Corporate operating expenses increased $21.2 million to $125.9 million from $104.7 million in the second quarter of fiscal 2023. This increase in operating expenses was attributed to an increase in SG&A expenses primarily due to higher compensation costs, increased occupancy costs, and higher professional fees.
Current wording
•Corporate Operating Expenses increased 31.3% or $39.0 million to $163.7 million in the third quarter of fiscal 2024. Excluding items affecting comparability, Corporate operating expenses increased $4 million to $128.7 million from $124.7 million in the third quarter of fiscal 2023. This increase in operating expenses was attributed to an increase in SG&A expenses primarily due to higher professional fees.
Previous wording
Net interest expense increased $41.3 million to $49.2 million in the second quarter of fiscal 2024 as compared to $7.9 million in the second quarter of fiscal 2023. Excluding items affecting comparability, net interest expense decreased $2.8 million to $5.1 million from $7.9 million in the second quarter of fiscal 2023. This decrease in Interest expense, net was mainly due to higher interest income partially offset by higher interest on the Term Loan due 2027.
Current wording
Net interest expense increased $25.9 million to $32.0 million in the third quarter of fiscal 2024 as compared to $6.1 million in the third quarter of fiscal 2023. Excluding items affecting comparability, net interest expense decreased $7.0 million to net interest income of $0.9 million from interest expense of $6.1 million in the third quarter of fiscal 2023. This decrease in Interest expense, net was mainly due to higher interest income partially offset by higher interest on the Term Loan due 2027.
Previous wording
The effective tax rate was 19.4% in the first six months of fiscal 2024 as compared to 19.6% in the first six months of fiscal 2023. Excluding items affecting comparability, the effective tax rate was 19.9% in the first six months of fiscal 2024. This increase in our effective tax rate was primarily attributable to the impact of vesting of equity compensation awards during the period partially offset by geographic mix of earnings.
Current wording
The effective tax rate was 17.7% in the third quarter of fiscal 2024 as compared to 16.4% in the third quarter of fiscal 2023. Excluding items affecting comparability, the effective tax rate was 19.9% in the third quarter of fiscal 2024 as compared to 16.4% in the third quarter of fiscal 2023. The increase in effective tax rate was primarily driven by discrete items recognized in the period partially offset by geographic mix of earnings.
Previous wording
Net income per diluted share was $1.39 in the second quarter of fiscal 2024 as compared to $1.36 in the second quarter of fiscal 2023. Excluding items affecting comparability, net income per diluted share increased $0.27 to $1.63 in the second quarter of fiscal 2024 from $1.36 in the second quarter of fiscal 2023. This change was primarily due to higher net income and a decrease in shares outstanding.
Current wording
Net income per diluted share was $0.60 in the third quarter of fiscal 2024 as compared to $0.78 in the third quarter of fiscal 2023. Excluding items affecting comparability, net income per diluted share increased $0.03 to $0.81 in the third quarter of fiscal 2024 from $0.78 in the third quarter of fiscal 2023. This change was primarily due to a decrease in shares outstanding and higher net income.
Previous wording
FIRST SIX MONTHS FISCAL 2024 COMPARED TO FIRST SIX MONTHS FISCAL 2023
Current wording
FIRST NINE MONTHS FISCAL 2024 COMPARED TO FIRST NINE MONTHS FISCAL 2023
Previous wording
The following table summarizes results of operations for the first six months of fiscal 2024 compared to the first six months of fiscal 2023. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.
Current wording
The following table summarizes results of operations for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.
Previous wording
The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The reported results during the first six months of fiscal 2024 reflect certain items which affect the comparability of our results, as noted in the following table. There were no charges affecting comparability during the first six months of fiscal 2023. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.
Current wording
The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The reported results during the first nine months of fiscal 2024 reflect certain items which affect the comparability of our results, as noted in the following table. There were no charges affecting comparability during the first nine months of fiscal 2023. Refer to "Non-GAAP Measures" herein for further discussion on the Non-GAAP measures.
Previous wording
In the first six months of fiscal 2024, the Company incurred charges as follows:
Current wording
In the first nine months of fiscal 2024, the Company incurred charges as follows:
Previous wording
•Acquisition Costs - Total pre-tax charges of $98.7 million attributable to the Capri Acquisition. These charges include:
Current wording
•Acquisition Costs - Total pre-tax charges of $166.6 million attributable to the Capri Acquisition. These charges include:
Previous wording
◦Interest expense, net: $44.1 million of financing related charges, which primarily includes Bridge Facility financing fees, and the net impact of the Capri Acquisition Senior Notes;
Current wording
◦Interest expense, net: $83.7 million of financing related charges, which primarily includes the net impact of the Capri Acquisition Senior Notes and Bridge Facility financing fees;
Previous wording
◦SG&A expenses: $47.9 million primarily related to professional fees recorded within Corporate.
Current wording
◦SG&A expenses: $82.9 million primarily related to professional fees recorded within Corporate.
Previous wording
These actions taken together negatively impacted operating income by $47.9 million, increased interest expense by $50.8 million and reduced the provision for income tax by $23.0 million resulting in a net decrease in net income by $75.7 million or $0.33 per diluted share.
Current wording
These actions taken together negatively impacted operating income by $82.9 million, increased interest expense by $83.7 million and reduced the provision for income tax by $40.2 million resulting in a net decrease in net income by $126.4 million or $0.54 per diluted share.
Previous wording
Tapestry, Inc. Summary – First Six Months of Fiscal 2024
Current wording
Tapestry, Inc. Summary – First Nine Months of Fiscal 2024
Previous wording
The change in net sales for the first six months of fiscal 2024 compared to the first six months of fiscal 2023 has been presented both including and excluding currency fluctuation impacts. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
Current wording
The change in net sales for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 has been presented both including and excluding currency fluctuation impacts. All percentages shown in the tables below and the discussion that follows have been calculated using unrounded numbers.
Previous wording
Net sales in the first six months of fiscal 2024 increased 1.9% or $65.8 million to $3.60 billion. Excluding the impact of foreign currency, net sales increased by 2.6% or $92.1 million.
Current wording
Net sales in the first nine months of fiscal 2024 increased 0.8% or $38.7 million to $5.08 billion. Excluding the impact of foreign currency, net sales increased by 1.8% or $88.5 million.
Previous wording
•Coach Net Sales increased 5.1% or $130.3 million to $2.70 billion in the first six months of fiscal 2024. Excluding the impact of foreign currency, net sales increased 6.0% or $153.3 million. This increase in net sales was primarily due to an increase of $126.6 million in net retail sales driven by an increase in both store and e-commerce sales globally. The increase in net sales was also attributed to a $21.0 million increase in wholesale sales.
Current wording
•Coach Net Sales increased 3.6% or $131.9 million to $3.84 billion in the first nine months of fiscal 2024. Excluding the impact of foreign currency, net sales increased 4.7% or $175.4 million. This increase in net sales was primarily due to an increase of $104.7 million in net retail sales driven by an increase in store and to a lesser extent, e-commerce sales. The increase in net sales was also attributed to a $60.8 million increase in wholesale sales primarily driven by international.
Previous wording
•Kate Spade Net Sales decreased 6.0% or $48.6 million to $763.6 million in the first six months of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 5.7% or $46.6 million. This decrease in net sales was due a decrease of $33.6 million in net retail sales as a result of lower store and e-commerce sales and a decrease of $11.6 million in wholesale sales.
Current wording
•Kate Spade Net Sales decreased 5.9% or $65.1 million to $1.04 billion in the first nine months of fiscal 2024. Excluding the impact of foreign currency, net sales decreased 5.5% or $60.8 million. This decrease in net sales was primarily due a decrease of $55.0 million in net retail sales as a result of lower store and e-commerce sales.
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