Tapestry Inc reveals flatlining revenues in fiscal 2023

Tapestry Inc, which made headlines last week after acquiring Capri Holdings, has reported flatlined sales totalling £5.23 billion ($6.66 billion) for the fiscal year ending 1 June, compared to $5.25 billion ($6.68 billion) the prior year.

The American fashion giant, which boasts a portfolio including Coach, Kate Spade and Stuart Weitzman, saw sales increase by 3% on a currency neutral basis compared to the year before.

Gross profit totalled £3.7 billion ($4.71 billion), while gross margin was 70.8%. Meanwhile, operating income stood at $1.17 billion and operating margin was 17.6%.

Net income was £735 million ($936 million), with earnings per diluted share of £3.05 ($3.88) compared to a net income of £672 million ($856 million) and earnings per diluted share of £2.49 ($3.17) in the prior year.

During the fiscal year, the company drove customer engagement across brands, acquiring approximately 6.5 million new customers in North America alone, of which nearly half were Gen Z and Millennials consumers.

Geographically, the company saw international revenue growth of 13% at constant currency, with a 7% increase in Europe.

Direct-to-Consumer revenues were up by 3% at constant currency led by a mid-single-digit increase in stores. As for digital sales, they presented nearly 30% of revenues, approximately three times higher than pre-pandemic levels.

Looking ahead, for fiscal year 2024, the company expects revenues to approach £5.4 billion ($6.9 billion), which represents an increase of approximately 3-4%. Earnings per diluted share are expected to sit between £3.22 ($4.10) and £3.26 ($4.15), representing approximately 6-7% growth.

Joanne Crevoiserat, Chief Executive Officer of Tapestry Inc, commented: "We achieved record EPS this fiscal year, reinforcing the power of brand building, consumer-centric strategies, and disciplined execution. We drove revenue gains at constant currency, significant gross margin expansion, and double-digit EPS growth despite a rapidly shifting backdrop.

"We remain steadfast in our commitment to deliver revenue and profit gains across our current portfolio where our runway is significant. Further, last week, we announced that we entered into a definitive agreement to acquire Capri Holdings Limited, establishing a new powerful global house of luxury and fashion brands that expands our portfolio reach across consumer segments, geographies, and product categories."