Tapestry, Inc. (NYSE:TPR) Q2 2019 Earnings Conference Call Transcript

Feb 07, 2019 • 08:30 am ET


Tapestry, Inc. (NYSE:TPR) Q2 2019 Earnings Conference Call Transcript


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Good day, and welcome to this Tapestry 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 Andrea Resnick, Global Head of Investor Relations and Corporate Communications.

Andrea Resnick

Good morning, and thank you for joining us. With me today to discuss our quarterly results are Victor Luis, Tapestry's Chief Executive Officer; and Kevin Will, Tapestry's Chief Financial Officer. Before we begin, we must point out that this conference call will involve certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act including projections for our business in the current or future quarters or fiscal years. Forward-looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward-looking statements.

Please refer to our Annual Report on Form 10-K, the press release we issued this morning, and our other filings with the Securities and Exchange Commission for a complete list of risks and important factors that could impact our future results and performance. Non-GAAP financial measures are included in our comments today in our presentation slides. You may find the corresponding GAAP financial information as well as the related reconciliation on our website www.tapestry.com/investors and then during the earnings release posted today and the presentation slides.

Now, let me outline the speakers and topics for this conference call. Victor Luis will provide an overall summary of our second fiscal quarter 2019 results for Tapestry as well as our three brands. Kevin Wells will continue with details on financial and operational results of the quarter and our outlook for the balance of FY '19. Following that, we will hold a question-and-answer session where we will be joined by Todd Kahn, Tapestry's President and Chief Administrative Officer; and Joshua Schulman, Chief Executive Officer and Brand President of Coach. Following Q&A, we will conclude with some brief summary remarks. I'd now like to turn it over to Victor Luis, Tapestry's Chief Executive Officer.

Victor Luis

Good morning. Thank you, Andrea, and welcome everyone. As noted in our press release this morning, during the second quarter, our sales and gross profit rose successfully anniversarying the strong holiday results of the prior year. That said, this performance fell short of our expectations in the face of an increasingly volatile macroeconomic and geopolitical backdrop. Importantly, and as expected, we generated significant synergies while also making material systems and strategic brand investments across our portfolio.

Taken together, adjusted earnings per diluted share were even with the prior year. Across tapestry, we made significant progress on our strategic pillars during Q2, notably, maximizing the opportunity with the Chinese consumer globally. To this end, Coach held its first ever runway show in Shanghai, which was incredibly well received by the editorial community and generated more than 1.1 billion impressions. At Kate Spade and Stuart Weitzman where we are focused on driving awareness in the region, we invested in key talent, infrastructure as well as marketing partnerships with Chinese brand ambassadors,