Tapestry, Inc. (NYSE:TPR) Q4 2016 Earnings Conference Call - Preliminary Transcript

Aug 09, 2016 • 08:30 am ET


Tapestry, Inc. (NYSE:TPR) Q4 2016 Earnings Conference Call - Preliminary Transcript


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Good morning, everyone. Sorry for the technical difficulties we had there on the line. We will start with my remarks and then proceed to Jane. And we will extend time at the end for Q&A. Again, apologies for the technical difficulties, I think we're up and running here again.

Let me just first thank you, Andrea, again, and welcome, everyone, to our call. As noted in our press release, we are delighted with our strong fourth quarter performance, in which we achieved positive North America comps, for the first time in over three years, and drove increases across key financial metrics.

Unidentified Speaker

These results capped a year where we returned the Coach brand to growth, while elevating brand perception globally, thereby reaching an important milestone in the transformation journey we laid out over two years ago.

Indeed, I could not be more pleased with and proud of our team's execution of the transformation plan over the last two years, as we track to our goals in spite of the significant and unanticipated volatility in tourist spending flows as well as the range of macroeconomic, geopolitical and promotional headwinds.

In the quarter, our North American direct businesses accelerated, while we continued to implement strategic actions to elevate our positioning and streamline our distribution in the very promotional department store channel. Our international businesses continued to generate growth, highlighted by double-digit increases in Mainland China and Europe, as well as sales gains in our directly operated businesses in Southeast Asia.

Most importantly, we achieved the expected inflection and profitability, as we leveraged our expenses in the growth in our business. Overall, our results give us confidence that the cumulative impact of our actions will continue to drive top and bottom line growth as we enter the new fiscal year.

Looking ahead for fiscal 2017, our strategic priorities for the Coach brand include reenergizing our brand and category by continuing to innovate and establish our unique modern luxury positioning.

We will continue the brand's elevation through a fuller expression of Coach 1941 in stores and online while driving our Men's business even further across all channels.

In addition, we will focus on raising brand awareness and relevance globally through the rollout of flagships in key fashion capitals, while continuing to renovate our existing store base. And in marketing, we will continue to differentiate Coach through a combination of fashion and heritage, distorting investments to key regions and ensuring the message is relevant and increasingly aspirational for the broader market. This will include the relaunch of Coach fragrance with our partner, Interparfums, starting this fall.

And for Stuart Weitzman, we will drive our leadership position in fashion boots during the key winter selling season; continue to diversify our offering outside of boots, by developing iconic styles in pumps, sandals and flats; drive global awareness and brand relevance through impactful marketing in the launch of New York and London flagships; and leverage our new leadership to bring the Stuart Weitzman brand into its next chapter of growth