In the third quarter, Tapestry continued to make progress under its Acceleration Program by sharpening the company’s focus on the consumer, leveraging data to lead with a digital-first mindset. The retailer acquired over 1.4 million new customers across channels in North America and maintained a consumer-centric lens, fostering emotional connections with customers, resulting in higher average spend, increased repeat transactions and the continued reactivation of lapsed customers across brands.
Crevoiserat explained, as the retailer leans into digital capabilities and data and analytics capabilities, it’s developing not only systems, but also process and ways of working. “It’s the investments we’ve made in talent that are helping to drive our business,” she said.
Given the retailer’s better use of data analytics to improve assortment planning and marketing messaging, as well as strategic price increases, underlying trends remain strong despite pressure from incremental freight, said CFO Scott Roe.
“We’ve seen no consumer pushback on the price increases, and we’ve spent time to make sure we’re keeping the consumer at the center and through our transformation efforts using data to improve our assortment,” Crevoiserat later noted. “So the combination of magic and logic is coming to bear and enabling us to take price and again seeing no pushback.”
- Net sales totaled $1.44 billion for the third quarter compared to $1.27 billion in the prior year, representing a 13% increase.
- Gross profit totaled $1.01 billion on both a reported and non-GAAP basis, while gross margin was 69.9%. As anticipated, the Company’s gross margin was negatively impacted by incremental freight expense in order to maintain product flow to meet consumer demand, which totaled $63 million or 440 basis points. This compared to prior year gross profit of $912 million and gross margin of 71.6% on both a reported and non-GAAP basis.
- Net income for the quarter was $123 million on a reported basis, with earnings per diluted share of $0.46, which compares to $92 million and earnings per diluted share of $0.32 in the prior year period.