tapestry COACH | kate spade | STUART WEITZMAN © 2023 Tapestry, Inc. This presentation contains certain "frorward-looking statements" based on management's current expectations. Forward-looking statements which can be identified by the use of forvard-looking terminutogy such as "nray," "Wil," car," should," expect," "intend," "estimate, "continue," "project", "outlarıe," "roncast, " outlot)c," "antig "leveraging," "capitalizing" "teveloping" "launch," "chris, " "grow," "argeting" "build," "bould," "bould, " ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 1-16153 Tapestry, Inc. (Exact name of registrant as specified in its charter) Maryland 52-2242751 (State or other jurisdiction of incorporation or organization) (I.R.S. Empl ...

tapestry This presentation contains certain "forward-looking statements" based on management's current expectations. Forward-looking statements indude, but are not limited to statem by the use of forward-looking terminology such as "nay," "Will, "can, "should," "expect," "intend," "estimate, " "ontinue," "oreaces," "outlook, " "anticipate," "ternain c "leveraging," "capitalizing," "developing," "assume," "plan," "build," "pursue," "maintain," "on track," "well positioned to, "look forward to, " to aquine, " ...

Financial Data and Key Metrics Changes - The company achieved record revenue of $1.5 billion in Q1 2023, with an 8% increase in EPS on a currency-neutral basis, despite facing FX headwinds and COVID disruptions in China [38][39][40] - Revenue rose over 5% on a constant currency basis, with international markets delivering 11% growth compared to the prior year [39][40] - Gross margin declined due to freight pressure and FX headwinds, but operational gross margin expanded versus the prior year [42][44] Business Line Data and Key Metrics Changes - Coach brand saw a 4% increase in revenue on a constant currency basis, driven by growth in core leather goods and successful product introductions [16][24] - Kate Spade's revenue rose 10% in constant currency, with a 7% gain in North America and 23% growth in international markets [24][25] - Stuart Weitzman experienced growth in North America, aided by strength in the wholesale channel, while facing challenges in Greater China due to COVID [32][33] Market Data and Key Metrics Changes - In North America, sales rose slightly, with a nearly 45% increase on a two-year basis, while digital sales remained over 3x ahead of pre-pandemic levels [41][42] - International markets showed strong growth, with Europe sales increasing by 24% and APAC revenue rising by 9% despite challenges in Greater China [39][40] - The company noted a decline of 11% in Greater China sales due to COVID-related headwinds, although this was an improvement from the previous quarter [40] Company Strategy and Development Direction - The company is focused on driving sustainable growth through a consumer-centric and data-driven approach, emphasizing agility and innovation [9][10] - There is a commitment to enhancing omnichannel experiences and building lasting customer relationships, with a focus on emotional storytelling and product innovation [11][12][19][30] - The company plans to maintain disciplined pricing strategies and manage promotional activities carefully to support brand health [74][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating near-term challenges while remaining focused on long-term growth initiatives [37][58] - The outlook for fiscal 2023 has been tempered due to expectations of a delayed recovery in China, but the company remains optimistic about growth in other regions [48][50] - Management highlighted the importance of staying close to customers and adapting to changing market conditions [62][71] Other Important Information - The company plans to return approximately $1 billion to shareholders in fiscal 2023, including share repurchases and dividends [47][58] - Inventory levels were reported to be 39% above the prior year, with proactive measures taken to align inventory with updated revenue outlooks [45][46] Q&A Session Summary Question: Outlook heading into holiday - Management highlighted strong Q1 performance and expressed confidence in product offerings and inventory positioning for the holiday season, while maintaining realistic expectations given macro uncertainties [61][62] Question: Guidance details for North America and China - Management provided context on the guidance adjustments, noting a delay in the recovery for China and a modestly below-expectation performance in North America, while emphasizing ongoing investments in long-term growth [67][68][69] Question: Promotional and pricing strategy - Management discussed the focus on AUR increases and disciplined promotional strategies, noting no pushback from customers on recent price increases [74][75] Question: New customer acquisition trends - Management reported 1.4 million new customers in North America and emphasized the importance of omnichannel engagement, with customers shopping across both online and in-store channels [78][79] Question: Pricing analytics and SKU management - Management reiterated the focus on delivering value and innovation, with plans to continue driving AUR growth while managing promotional activities effectively [84][86]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended October 1, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 1-16153 Tapestry, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No ...

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tapestry the impact of the ongoing Covid-19 pandemic, including impacts on our supply chain due to temporary closures of our manufacturing partners, price increases, temporary store . closures, as well as production, shipping and fulfillment constraints; · the impact of economic conditions; · the ability to successfully execute our multi-year growth agenda under our Acceleration . Program; the impact of tax and other legislation; and ● this presentation contains certain "forward-looking statements" based on ...

Financial Data and Key Metrics Changes - Tapestry achieved record annual revenue of $6.7 billion in fiscal year 2022, reflecting a 18% increase compared to the previous year and a 35% increase versus pre-pandemic levels [13][43][60] - Earnings per share (EPS) for the year increased by 20% compared to last year and 35% compared to pre-pandemic levels, reaching $3.80 to $3.90 for fiscal year 2023 [43][56][60] - Free cash flow for the fiscal year was $759 million, with $1.9 billion returned to shareholders, including $1.6 billion in share repurchases [49][50][60] Business Line Data and Key Metrics Changes - Coach brand delivered 18% top line growth in fiscal year 2022, with a 15% increase over fiscal 2019 levels, and achieved a strong operating margin of 30% [17][18] - Kate Spade recorded over $1.4 billion in revenue, representing a 22% growth, while Stuart Weitzman maintained double-digit sales gains for the fiscal year [26][36] - Digital sales reached $2 billion for Tapestry, more than tripling from fiscal 2019 levels, with e-commerce representing nearly 30% of Coach's sales [12][23][33] Market Data and Key Metrics Changes - North America drove strong sales growth, with a 12% increase in the fourth quarter, while Greater China faced a 32% decline due to pandemic-related disruptions [44][45] - Japan saw over 25% sales growth on a constant currency basis, and Europe experienced approximately 65% growth compared to the previous year [46] - Digital channel sales rose high single digits in the quarter, while store and wholesale channels also saw continued growth [46] Company Strategy and Development Direction - Tapestry's strategic growth agenda, named the Acceleration Program, focuses on consumer-centricity, digital leadership, and operational efficiencies to drive brand building and high-return investments [9][10][16] - The company aims to expand customer reach, particularly among younger audiences, while increasing purchase frequency and retention rates across its brands [24][34] - Tapestry is committed to enhancing its digital capabilities and investing in high-growth opportunities in China and other markets [40][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to connect with consumers and deliver strong results despite challenging macroeconomic conditions [65] - The outlook for fiscal year 2023 anticipates constant currency revenue growth of 6% to 7%, with a reported revenue growth of 3% to 4% [54][60] - Management acknowledged potential headwinds, including currency fluctuations, ongoing COVID-related disruptions, and inflationary pressures, while emphasizing the strength of their brands and pricing power [53][56] Other Important Information - Tapestry achieved $300 million in run-rate expense savings, which supported growth initiatives and increased brand marketing to 8% of sales [14][15] - The company has made significant progress on corporate responsibility commitments, including partnerships for social justice and sustainability initiatives [15] Q&A Session Summary Question: Confidence in delivering strong year for shareholders - Management highlighted the acquisition of 15 million new customers in North America and record revenue levels, emphasizing the strength of their brands and the success of the Acceleration Program [65] Question: Shape of the year and GSP impact - Management provided insights on expected growth moderation in North America and anticipated improvements in China, with a potential $90 million annual benefit from GSP if passed retroactively [70][74] Question: Health of the store fleet and e-commerce impact - Management expressed confidence in the store fleet's profitability and emphasized the importance of physical stores while also highlighting significant growth in digital sales [76] Question: AUR trends and ticket increases - Management confirmed slight AUR decline in North America for Coach but anticipated a return to AUR growth with planned ticket increases [80] Question: SKU reduction and data analytics in product design - Management explained the use of data analytics to drive SKU reduction and improve product assortment, emphasizing the blend of creativity and analytics in the design process [83][85]

Sales and Revenue - In fiscal 2022, Coach represented 73.6% of total net sales, Kate Spade accounted for 21.6%, and Stuart Weitzman made up 4.8%[20]. - Tapestry, Inc. reported net sales of $6,684.5 million for fiscal 2022, a 16.3% increase compared to $5,746.3 million in fiscal 2021[211]. - Digital revenue reached $2 billion in fiscal 2022, accounting for 30% of total sales[200]. - Total net sales for Stuart Weitzman in fiscal 2022 were $317.7 million, maintaining a 5% share of total net sales[43]. - The wholesale segment accounted for approximately 34% of total net sales for Stuart Weitzman in fiscal 2022, with around 900 wholesale locations globally[40]. - The wholesale business for Coach comprised approximately 10% of total segment net sales for fiscal 2022, with products sold in over 1,700 locations globally[28]. - Kate Spade's wholesale business accounted for approximately 11% of total segment net sales for fiscal 2022, with products sold in around 1,000 locations[34]. Store Operations - The total number of Coach directly-operated locations was 945 in fiscal 2022, with a net change of 6 stores compared to the prior year[26]. - Kate Spade had 398 directly-operated locations in fiscal 2022, reflecting a net decrease of 9 stores from the previous year[32]. - In fiscal 2022, Stuart Weitzman operated 100 stores globally, a net decrease of 4 stores compared to the previous year, representing a 3.8% decline[38]. - The Company expects minimal change in overall store count in fiscal 2023, with reductions primarily in North America and Japan, offset by increases in Greater China[26][32]. - The company expects a modest increase in store count and square footage in mainland China for fiscal 2023, while anticipating a slight reduction in North America[38]. Financial Performance - Gross profit for fiscal 2022 was $4,650.4 million, representing 69.6% of net sales, down from 71.0% in fiscal 2021[211]. - Operating income for fiscal 2022 was $1,175.8 million, a 21.5% increase from $968.0 million in fiscal 2021[211]. - Net income for fiscal 2022 was $856.3 million, a slight increase of 2.7% from $834.2 million in fiscal 2021[211]. - The company achieved gross run-rate savings of approximately $300 million in fiscal 2022, funding investments in brand-building activities[200]. - Marketing expenses for the company in fiscal 2022 were $551.6 million, approximately 8% of net sales, an increase from $395.2 million or 7% of net sales in fiscal 2021[51]. E-commerce and Digital Strategy - The Company has e-commerce sites for Coach in multiple regions, including the U.S., Canada, Japan, and mainland China, enhancing direct customer access[27]. - E-commerce sales are available in the U.S., Canada, and mainland China, enhancing product accessibility for consumers[39]. - The company is increasingly focused on digital engagement, with a shift towards social media and online marketing to connect with consumers[132]. - The success of the company’s growth strategies hinges on the effective execution of digital and e-commerce priorities, as well as the introduction of new products[113]. Corporate Responsibility and Employee Engagement - The Company aims to utilize 100% renewable energy in its operations by 2025 and has set goals for environmentally responsible sourcing and waste reduction[76]. - The Company ties 10% of leadership annual incentive compensation to equity, inclusion, and diversity (EI&D) goals on a global level[74]. - The Company has committed to a $15 U.S. minimum wage for hourly employees as part of its compensation strategy[87]. - The Company maintains a corporate responsibility framework focused on three pillars: Our People, Our Planet, and Our Communities[74]. - The Company has established an Inclusion Council and various employee resource groups to promote equity, inclusion, and diversity[83]. Challenges and Risks - The ongoing Covid-19 pandemic has led to significant global business disruptions, prompting the Company to reinforce its liquidity and financial flexibility[18]. - The company continues to face supply chain challenges, including increased freight costs and logistic constraints due to the pandemic[100]. - The company is facing significant disruptions in shipments due to port congestion and logistics carrier disruptions, leading to increased inbound freight costs and longer in-transit times[18]. - The company’s business is subject to risks associated with international operations, including political instability and changes in macroeconomic conditions[107]. - Cybersecurity threats pose significant risks, with potential impacts on customer relationships and business operations due to data breaches or system disruptions[147]. Shareholder Returns and Stock Performance - The Company reinstated its quarterly cash dividend at $0.25 per common share for an annual rate of $1.00, returning approximately $260 million to shareholders in fiscal 2022[166]. - During fiscal 2022, the Company repurchased 42.0 million shares of common stock for $1.60 billion and plans to repurchase approximately $700 million worth of stock in fiscal 2023[166]. - The Company’s stock performance over the five-year period ending July 2, 2022, showed a cumulative total return of $74.54 for Tapestry, compared to $172.67 for the S&P 500[185]. - The Company’s share repurchase program was authorized for up to $1.00 billion in November 2021, with an additional $1.50 billion authorized in May 2022[186]. International Operations - Approximately 37.6% of the company's net sales came from operations outside of the United States as of the end of fiscal year 2022[107]. - The company’s international expansion efforts may face challenges due to varying operational characteristics and consumer preferences in different markets[114]. - The company is exposed to foreign currency exchange rate fluctuations, which could negatively impact sales and profitability[159]. Supply Chain and Fulfillment - The company utilizes fulfillment centers in multiple countries, including the U.S., mainland China, and Europe, to optimize product distribution[62]. - E-commerce sales growth has necessitated additional fulfillment capacity, including a new multi-brand fulfillment facility in Las Vegas, Nevada, to enhance capabilities[111]. - The company relies on a limited number of fulfillment and sourcing centers, and any shutdowns could result in substantial inventory loss and delivery disruptions[110].

Financial Data and Key Metrics Changes - Revenue rose 13% compared to the prior year, with double-digit growth at each brand [55] - Earnings per diluted share for the quarter was $0.51, in line with the prior year and well ahead of expectations [61] - Gross margin improved due to higher full-price sell-throughs and lower discounting, despite $63 million pressure from incremental freight [59] Business Line Data and Key Metrics Changes - Coach achieved a sales increase of 11% compared to the prior year, with nearly 20% growth in North America [19] - Kate Spade's revenue rose 19%, including a 25% increase in North America [32] - Stuart Weitzman delivered significant operating margin expansion, with AUR growth over 20% in North America [44][46] Market Data and Key Metrics Changes - North America fueled results with 22% growth, while sales in Greater China declined at a low-teens rate [55] - Europe saw nearly 60% sales growth compared to last year, while Japan experienced mid-single-digit growth [57] - Digital sales grew over 20%, representing approximately 30% of total business [15][29] Company Strategy and Development Direction - The company is focused on building lasting relationships with customers to increase lifetime value through continuous innovation [10] - Emphasis on digital leadership and leveraging consumer data to enhance customer connections and execution [11] - The Acceleration Program has brought in nearly 13 million new customers over 21 months, with a focus on driving sustainable growth [14][18] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the resilience of the Chinese consumer and long-term growth opportunities despite near-term COVID-related headwinds [17] - The company expects to achieve $2 billion in digital revenue in fiscal '22, with further runway ahead [15] - Confidence in the ability to maintain margins and drive growth through pricing power and brand strength [88] Other Important Information - The company plans to return approximately $1.9 billion to shareholders in fiscal 2022, including $1.6 billion in share repurchases [64][77] - Inventory at quarter end was 30% above the prior year, primarily due to elevated in-transits amid supply chain challenges [62] Q&A Session Summary Question: Headwinds in China and positive trends elsewhere - Management noted strong growth in all regions outside of China, with North America delivering 22% growth, offsetting challenges in China due to COVID [80][82] Question: GSP potential and fiscal year outlook - Management highlighted strong brand momentum and consumer engagement, indicating confidence in future growth despite not providing explicit guidance [85][89] Question: Average unit retail momentum and promotional activity - Management confirmed pricing power across brands, with no consumer pushback on price increases, and emphasized the importance of maintaining brand value [92][94] Question: Demand deceleration in North America - Management observed strong consumer engagement and increasing acquisition metrics, indicating continued demand across categories [101] Question: Shanghai distribution center reopening and freight costs - Management provided insights on the slow reopening of the Shanghai distribution center and anticipated improvements in freight costs moving forward [110][116]