Tapestry(US:TPR)2024-11-07 11:45Revenue Performance - Revenue totaled $1.51 billion, approximately in-line with prior year on both reported and constant currency basis, with FX representing a 40-basis point headwind[7] - Net sales for the quarter ended September 28, 2024 were $1,507.5 million, a slight decrease of 0.4% compared to $1,513.2 million in the same period last year[22] - Coach brand revenue grew 2% at constant currency to $1.17 billion, while Kate Spade revenue declined 6% and Stuart Weitzman grew 2%[9] - Coach brand sales grew 1% year-over-year to $1,170.6 million, with constant currency growth of 2%[23] - Kate Spade sales declined 7% to $283.2 million, with constant currency decline of 6%[23] - Stuart Weitzman sales increased 2% to $53.7 million, with constant currency growth of 2%[23] Gross Margin and Profitability - Gross margin expanded by 280 basis points to 75.3%, driven by operational improvements, lower freight expense, and FX tailwinds[6][7] - Gross profit increased to $1,134.9 million in Q1 2024, up 3.4% from $1,097.7 million in Q1 2023[22] - North America revenue declined 1%, but operating margin and profit dollars increased due to gross margin expansion[4] - Operating income was $252.0 million, down slightly from $253.2 million in the prior year period[22] - Net income decreased 4.3% to $186.6 million compared to $195.0 million in Q1 2023[22] - Diluted EPS was $0.79, down from $0.84 in the same quarter last year[22] Cash Flow and Financial Position - Cash flow from operating activities was $120 million, and free cash flow was $94 million, supporting long-term growth and shareholder returns[4][10] - Free cash flow for the period is calculated as $119.5 million (Net cash flows from operating activities) less $25.6 million (Purchases of property and equipment), resulting in $93.9 million[30][32][33] - Net cash provided by operating activities was $119.5 million for the period ending September 28, 2024, compared to $75.3 million for the same period in 2023[32] - Net cash provided by investing activities was $190.1 million, driven by $1,694.9 million in proceeds from maturities and sales of investments, offset by $1,479.2 million in purchases of investments[33] - Cash and cash equivalents increased by $320.9 million to $6,462.9 million as of September 28, 2024, compared to $6,142.0 million at the beginning of the period[34] - Total assets increased to $13,728.9 million as of September 28, 2024, compared to $13,396.3 million as of June 29, 2024[31] International Performance - International revenue grew 2% at constant currency, with Europe up 27% and APAC down 2%[4] - Coach's international store count decreased by 12 stores to 594 as of September 28, 2024, due to 16 closures and 4 openings[35] - Kate Spade's international store count decreased by 3 stores to 178 as of September 28, 2024, with 6 closures and 3 openings[35] - Stuart Weitzman's international store count remained flat at 60 stores as of September 28, 2024, with 2 openings and 2 closures[35] Direct-to-Consumer and Customer Acquisition - Direct-to-consumer sales were in-line with prior year, with digital revenue up high-single digits and brick-and-mortar sales down low-single digits[5] - The company acquired approximately 1.4 million new customers in North America, with over half being Gen Z and Millennials[3] Inventory and Expenses - Inventory increased to $1.03 billion, reflecting higher in-transit levels, consistent with expectations[10] - Corporate SG&A expenses increased to $154.2 million, up from $136.1 million in Q1 2023[24] - The company reported $33.4 million in acquisition costs affecting comparability in Q1 2024[24] Outlook and Guidance - The company raised its full-year revenue outlook to over $6.75 billion, representing 1% to 2% growth, and expects EPS of $4.50 to $4.55[13][14]