Tapestry Misses Q4 Earnings Estimates, Provides Below-Consensus FY24 Outlook

Tapestry Inc TPR, the New York-based house of lifestyle brands comprising Coach, Kate Spade, and Stuart Weitzman, reported Q4 FY23 sales of $1.62 billion, missing the analyst consensus of $1.65 billion.

EPS of $0.95 missed the analyst consensus of $0.97.

Gross profit rose to $1.17 billion from $1.12 billion a year ago, with margins increasing to 72.4% from 68.9% a year ago, reflecting the benefit of 200 basis points from lower freight expense and improved operations. 

Operating margin expanded to 16.9% from 15.3% a year ago, and operating income for the quarter stood at $274 million.

Tapestry held $742 million in cash, cash equivalents, and short-term investments as of July 1, 2023. 

Inventory at the end of FY23 stood at $920 million. 

Tapestry repurchased shares worth around $700 million, including $200 million in Q4. 

Dividend: TPR approved FY23 annual dividend of $1.20 per share, totaling about $283 million.

For FY24, the Board of Directors approved a quarterly cash dividend per share of $0.35 (+17% Y/Y) with an anticipated annual dividend per share of $1.40.

Outlook: Tapestry expects FY24 EPS of $4.10-$4.15 (+6% to 7% Y/Y) vs. the consensus of $4.23.

The company expects sales of $6.90 billion (+3% to 4% Y/Y) vs. $6.93 billion consensus.

Last week, the company announced the acquisition of Capri Holdings CPRI for $8.5 billion, which is expected to be completed in 2024.

Price Action: TPR shares are trading lower by 0.93% at $34.01 premarket on the last check Thursday.

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