Announces Three-Year Roadmap to Drive
Sustainable, Profitable Growth and Significant Return of Cash to
Shareholders
- Expects to Achieve Revenue of $8 Billion by Fiscal Year
2025, Reflecting a Three-Year CAGR of 6% to 7%
- Anticipates Delivering Earnings per Diluted Share of More
Than $5 in Fiscal Year 2025, Driving a Low-to-Mid Teens Three-Year
CAGR
- Plans to Return $3 Billion in Capital to Shareholders
Cumulatively Through Fiscal Year 2025 via Share Repurchases and
Dividends, Supported by the Company’s Strong Free Cash
Flow
Tapestry, Inc. (NYSE: TPR), a leading New York-based house of
iconic accessories and lifestyle brands consisting of Coach, Kate
Spade, and Stuart Weitzman, is hosting its 2022 Investor Day at its
headquarters in New York City today. In conjunction with the event,
the Company is introducing its 2025 growth strategy and financial
targets, building on the success of its Acceleration Program.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc.,
said “Over the last two years, we radically transformed our
company, with a sharpened focus on the consumer and commitment to
brand building, delivering standout results. From this strong
foundation, we have tremendous runway and are poised to drive
continued growth across each of our iconic brands. The environment
is ever-changing, and we are ready to move at the speed of the
consumer with agility and intention. Importantly, we are confident
in our ability to fuel sustainable top and bottom-line gains and
generate significant cash flow, creating meaningful value for all
our stakeholders in the years to come.”
2025 Growth Strategy At its
Investor Day, Tapestry’s senior leadership team will present a
detailed overview of the Company’s 2025 growth strategy, designed
to amplify and extend the competitive advantages of its brands,
with a focus on four strategic priorities:
- Building Lasting Customer Relationships: The Company’s
brands will leverage Tapestry’s transformed business model to drive
customer lifetime value through a combination of increased
acquisition, retention and reactivation.
- Fueling Fashion Innovation & Product Excellence: The
Company will drive sustained growth in core handbags and small
leathergoods, while accelerating gains in footwear and lifestyle
products.
- Delivering Compelling Omni-Channel Experiences: The
Company will extend its omni-channel leadership to meet the
customer wherever they shop, delivering growth online and in
stores.
- Powering Global Growth: The Company will support
balanced growth across regions, prioritizing North America and
China, its largest markets, while capitalizing on opportunities in
under-penetrated geographies such as Southeast Asia and
Europe.
Long-term Financial Targets
Scott Roe, Chief Financial Officer and Chief Operating Officer of
Tapestry, Inc., said, “We have powerful brands that participate in
attractive and durable categories with a business model that is
both proven and profitable. We will remain balanced in our approach
to fueling revenue gains, operating margin expansion and earnings
increases. At the same time, we will continue to be disciplined
allocators of capital, with a plan to return $3 billion to
shareholders through FY25, supported by our strong free cash flow.
Together, we believe this will drive significant total shareholder
returns over our planning horizon.”
Tapestry is introducing its Fiscal 2025 financial targets,
including:
- Revenue of $8 billion, representing a three-year CAGR of
6% to 7%;
- Coach revenue growth at a mid-single-digit three-year
CAGR to $5.7 billion, while maintaining an operating margin of
30%;
- Kate Spade revenue growth at a high-single digit
three-year CAGR to $1.9 billion, while expanding operating margin
to mid-teens. The brand remains on track to achieve $2 billion in
revenue and high-teens operating margin;
- Stuart Weitzman revenue growth at a low-double digit
three-year CAGR to $450 million while expanding operating margin to
high-single-digits;
- Operating margin in the area of 19%, representing
expansion of approximately 100 basis points versus FY22;
- Earnings per diluted share of over $5, for a
low-to-mid-teens three-year CAGR; and
- Cumulative cash return of $3 billion to shareholders by
Fiscal 2025 supported by a targeted dividend payout ratio of 35% to
40% and share repurchases of at least $700 million annually.
These targets incorporate the Company’s previously announced
Fiscal 2023 outlook, which was provided with its fourth quarter
earnings results in mid-August. As previously noted, this outlook
assumed:
- No further appreciation of the USD; information provided based
on spot rates at the time of forecast;
- Continued gradual recovery in Greater China from Covid-related
disruption; no further significant lockdowns or incremental supply
chain pressures from the Covid-19 pandemic;
- No material worsening of inflationary pressures or consumer
confidence; and
- No benefit from the potential reinstatement of the Generalized
System of Preferences (GSP).
Given the dynamic nature of these and other external factors,
financial results could differ materially from the outlook
provided.
Investor Day Event Details
The live event will be available via webcast on the Company’s
Investor Day microsite beginning at 8:30am ET today. Presentation
slides and a recording of the event will also be available on the
investor section of the Company’s website,
www.tapestry.com/investors, after the conclusion of the Investor
Day.
About Tapestry, Inc. 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. To learn more about Tapestry, please visit
www.tapestry.com. For important news and information regarding
Tapestry, visit the Investor Relations section of our website at
www.tapestry.com/investors. In addition, investors should continue
to review our news releases and filings with the SEC. We use each
of these channels of distribution as primary channels for
publishing key information to our investors, some of which may
contain material and previously non-public information. The
Company’s common stock is traded on the New York Stock Exchange
under the symbol TPR.
This information to be made available in this press release may
contain forward-looking statements based on management's current
expectations. Forward-looking statements include, but are not
limited to, the statements under “2025 Growth Strategy,” and
“Long-term Financial Targets,” as well as statements regarding the
Company’s longer-term goals and targets, fiscal year 2023 outlook,
current assumptions, estimates, judgments, expectations, plans and
projections about the business, and statements that can be
identified by the use of forward-looking terminology such as "may,"
"will," “can,” "should," "expect," “potential,” "intend,"
"estimate," "continue," "project," "guidance," "forecast,"
“outlook,” “commit,” "anticipate," “goal,” “leveraging,”
“sharpening,” transforming,” “creating,” accelerating,”
“enhancing,” “innovation,” “drive,” “targeting,” “assume,” “plan,”
“progress,” “confident,” “future,” “uncertain,” “on track,”
“achieve,” “strategic,” “growth,” “view,” “stretching what’s
possible,” or comparable terms. Future results may differ
materially from management's current expectations, based upon a
number of important factors, including risks and uncertainties such
as the impact of the Covid-19 pandemic, including impacts on our
supply chain, the ability to control costs and successfully execute
our growth strategies, expected economic trends, the ability to
anticipate consumer preferences, risks associated with operating in
international markets and our global sourcing activities, our
ability to achieve intended benefits, cost savings and synergies
from acquisitions, the risk of cybersecurity threats and privacy or
data security breaches, the impact of pending and potential future
legal proceedings, and the impact of legislation, etc. In addition,
purchases of shares of the Company’s common stock will be made
subject to market conditions and at prevailing market prices.
Please refer to the Company’s latest Annual Report on Form 10-K and
its other filings with the Securities and Exchange Commission for a
complete list of risks and important factors. The Company assumes
no obligation to revise or update any such forward-looking
statements for any reason, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220909005061/en/
Tapestry, Inc. Media: Andrea Shaw Resnick Chief Communications
Officer 212/629-2618 aresnick@tapestry.com Analysts and Investors:
Christina Colone Global Head of Investor Relations 212/946-7252
ccolone@tapestry.com Kelsey Mueller 212/946-8183 Director of
Investor Relations kmueller@tapestry.com
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