Tapestry, Inc. (NYSE:TPR) Q2 2015 Earnings Conference Call - Final Transcript

Jan 27, 2015 • 08:30 am ET


Tapestry, Inc. (NYSE:TPR) Q2 2015 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Coach Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the Global Head of Investor Relations and Corporate Communications at Coach, Andrea Shaw Resnick.

Andrea Resnick

Good morning and thank you for joining us. With me today to discuss our quarterly results are Victor Luis, Coach's Chief Executive Officer; and Jane Nielsen, Coach's CFO.

(Forward-Looking Cautionary Statements)

Now, let me outline the speakers and topics for this conference call. Victor Luis will provide an overall summary of our second fiscal quarter 2015 results, and will also discuss our progress on global initiatives across markets. Jane Nielsen will conclude with details on financial and operational results for the quarter and our outlook. Following that, we will hold a question and answer session. This Q&A session will end shortly before 9:30 am. We will then conclude with some brief summary comments.

I would now like to introduce Victor Luis, Coach's CEO.

Victor Luis

Good morning. Thanks, Andrea, and welcome everyone. As noted in our press release, our second quarter results were in line with our expectation and our annual guidance, adjusted for the stronger than expected dollar. We continue to see steady progress in our results, with sequential improvement in North America, our most challenging business, as we implement our brand transformation initiatives, including greatly reduced promotional impressions.

International growth rates remained fairly stable in local currency terms, with China and Europe driving segment performance. Our team continued to gain traction on the strategic plan outlined last summer to reinvigorate growth and drive brand relevance. And importantly, we continue to learn as we go along fine-tuning our actions across the key pillars of product, stores and marketing. As announced just after the quarter ended, we signed a definitive agreement to buy luxury designer footwear brand Stuart Weitzman, which we believe has significant domestic and international growth potential. Stuart Weitzman is a complementary brand, with many similar core equities and characteristics to Coach. It's a brand built on offering innovation, relevance and value to a loyal customer base. It has an increasing global recognition and a presence in 70 countries and is known for its craftsmanship and quality, fusing fashion and fit in a segment where comfort is a major driver of customer loyalty.

While we will develop each brand separately, over the long-term, we will learn from each other driving synergies across our respective businesses. Specifically, we will leverage Coach's international infrastructure and expertise in handbags and accessories to develop Stuart Weitzman's handbag and accessories business. And in turn, Coach will benefit from the Stuart Weitzman team's expertise in footwear development, where they are proven leaders in style and comfort.

We are very excited about our first acquisition and look forward to welcoming the Stuart Weitzman brand and organization into the Coach, Inc. family this spring. Also announced in our press release was the streamlining and reinforcement of our North American business unit and global marketing