-By Mansi Suryavanshi.
INSIGHTS
- Net sales for Q3 FY23 at Tapestry were $1.51 billion, up 5% year over year.
- Revenue increased 9% after currency constraints were removed.
- Gross margin was 72.8%, while gross profit was $1.1 billion.
- A 20% increase in Greater China and a 20% gain in Japan and other Asia drove the significant overseas revenue growth.
Coach, Kate Spade, and Stuart Weitzman are just a few of the renowned accessories and lifestyle brands owned by Tapestry, Inc., a major New York-based company. In the third quarter of fiscal 2023 (FY23), the company recorded net sales of $1.51 billion, a 5% increase over the same period last year. Revenue grew by 9% year over year (YoY), currency effects excluded.
With a gross margin of 72.8%, the company’s gross profit in the third quarter of FY23 totaled $1.10 billion, offset in part by a 120-basis-point foreign exchange (FX) headwind and a 360-basis-point advantage from lower freight costs and operational improvements. In contrast, the gross profit for the preceding year was $1.01 billion, with a gross margin of 69.9%.
$872 million, or 57.8% of sales, was spent on selling, general, and administrative costs in the third quarter of FY23. During the same time the previous year, sales totaled $836 million, or 58.1% of total sales. Selling, general, and administrative costs on a non-GAAP basis were $829 million or 57.7% of sales in the prior year.
An estimated 170 basis point FX headwind decreased Tapestry’s operating income by $226 million in Q3 FY23, resulting in an operating margin of 15%. Operating income of $169 million and an operating margin of 11.8% were recorded in the previous year. Operating income on a non-GAAP basis for the prior year was $176 million, with an operating margin of 12.2%.
The business announced a net profit of $187 million and diluted profits per share of $0.78. In the same quarter the previous year, there had been a reported net income of $123 million and earnings per diluted share of $0.46. Net income was $136 million on a non-GAAP basis, compared to $0.51 in the same time last year for diluted profits per share.
