Tapestry is showing signs of the coronavirus. 🔐
The retailer, parent company to Coach, Kate Spade and Stuart Weitzman, reported quarterly earnings Thursday before the bell, falling short on both top and bottom lines.
By brand, top-line sales at Coach fell to $772 million, down from $965 million last year. Income was just $38 million, compared with $239 million last year. Sales at Stuart Weitzman also declined, to $51 million, down from $85 million last year. Operating loss was $531 million, compared with a loss of $14 million last year.
While some revenues were recovered through the online business, it was not enough to offset the losses caused by store closures. As of September 2019, Tapestry had 676 retail locations in North America: 392 Coach stores, 212 Kate Spade stores and 72 Stuart Weitzman stores. The re-openings will include things like curbside pickups, temperature checks for employees in North America and enforced social distancing in stores.
Andrea Resnick, Tapestry’s global head of investor relations and corporate communications, said canceling inventories will help the company save about $500 million.In addition, in an effort to add cash to the balance sheet, Tapestry drew down $700 million of its $900 million revolving credit facility in March. It also suspended its quarterly cash dividend, starting in the fourth quarter of fiscal 2020, and suspended its share repurchase program.
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