Tapestry Raises 2023 Earnings Outlook; On Track To Return $1 Bln To Shareholders

(RTTNews) - Tapestry, Inc. (TPR) said it is raising fiscal 2023 earnings outlook based on its operational outperformance in the second quarter, as well as favorability associated with a more moderate currency headwind than previously anticipated. These benefits are partially offset by a more modest revenue growth assumption for Greater China.

For fiscal 2023, Tapestry now expects: earnings per share of approximately $3.70 to $3.75, reflecting an increase to the previous outlook and a high-single-digit growth rate compared to the prior year on a non-GAAP basis despite a currency headwind of approximately $0.40. Revenue is projected to be approximately $6.6 billion, representing a slight decrease compared to the prior year due to approximately 300 basis points of FX pressure. On a constant currency basis, revenue is expected to grow approximately 2% to 3% over the prior year.

Analysts polled by Thomson Reuters expect the company to report profit per share of $3.65 on revenue of $6.61 billion. Analysts' estimates typically exclude special items.

Also, the company continues to expect to return approximately $1.0 billion to shareholders in fiscal 2023. Tapestry is on track to buy back approximately $700 million in common stock in the fiscal year. The company remains committed to its plan to pay shareholders an annual dividend of $1.20 per share in the current fiscal year, representing a 20% increase compared to prior year, totaling approximately $300 million.

Second quarter net income was $330 million, with earnings per share of $1.36 compared to reported net income of $318 million and earnings per share of $1.15 in the prior year period. In the prior year period, on a non-GAAP basis, net income was $368 million with earnings per share was $1.33.

Analysts on average had expected the company to earn $1.27 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Second quarter net sales totaled $2.03 billion compared to $2.14 billion in the prior year, representing a reported year-over-year decrease of approximately 5%. Excluding a 380 basis point headwind from currency due to the appreciation of the U.S. Dollar, revenue declined approximately 2% versus last year. Analysts on average had estimated $2.03 billion in revenue.

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