Tapestry delivered record holiday sales in the second quarter of fiscal 2022, fueled by growth in Kate Spade and Coach and a return to pre-pandemic revenue levels at Stuart Weitzman.
Overall, Tapestry’s net sales totaled $2.14 billion for the second quarter compared to $1.69 billion in the prior year, representing a 27% increase. Sales rose 18% compared to pre-pandemic levels. Gross profit totaled $1.46 billion on both a reported and non-GAAP basis, while gross margin was 68.1%.
On a call with FN, Tapestry CEO Joanne Crevoiserat credited the company’s Acceleration Program for the strong transformation it has undergone over the last 18 months.
Crevoiserat noted that customer acquisition was a big highlight for the company in the second quarter. Tapestry recruited nearly 3 million new customers across channels in North America, representing a low double-digit increase versus prior year, with growth in both stores and online. This brings total new customer acquisition to over 11 million over the past 18 months.
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Turning to footwear, Crevoiserat told FN that Tapestry has seen traction across all its brands in the category. Stuart Weitzman, which has been challenged in the past few years, saw a 37% revenue growth compared to last year and a return to pre-pandemic sales level. “Stuart Weitzman saw growth in special occasion styles, which were highlighted in our holiday campaign with Kate Hudson,” Crevoiserat noted. “Bridal continues to perform well, as well as boots and booties.”
Crevoiserat said that Stuart Weitzman’s “Nora” and “Stuart” boots were especially successful in the second quarter, as well as its updated “Lift” boot range. “Our compelling assortment, coupled with higher full price sell-throughs and a reduction in promotional activity drove our second consecutive quarter of AUR growth,” said Crevoiserat. “Going forward, we see continued opportunity to increase prices while maintaining our positioning within the overall market.”
Coach was also pleased with its footwear performance this quarter. “Our ‘Waverly’ pump did well this quarter, as did our ‘Citysole’ sneaker styles,” Coach brand president and CEO Todd Kahn added on the call. “We see a lot of growth potential in our North American wholesale business for footwear, and we are excited about the offering whether its sneakers, shearling styles, or special occasion.”
Staying with Coach, Tapestry made progress against its strategic initiatives in the brand while also focusing on its core ‘Tabby,’ ‘Willow’ and ‘Field’ handbag styles, which continue to drive its performance. This enabled a significant pullback in promotions and drove full-price selling, resulting in an increase in global handbag AUR, according to Crevoiserat.
Crevoiserat also noted that higher AURs are the goal across all brands as the company continues to face headwinds from inflation and the supply chain.
“We are not immune to some of the challenges our peers are also experiencing in our current environment,” Crevoiserat told FN. “We’ve moved aggressively to ensure we had enough product to meet the increase in demand we have seen across our brands, and I think our performance in the second quarter reflects the success we’ve had in this strategy.”
Looking ahead, Tapestry is increasing its outlook for fiscal 2022 and now expects revenue of approximately $6.75 billion, an increase from the prior outlook of $6.6 billion. This represents growth of nearly 20% versus the prior year, which would mark a record level of sales for the company.
