Luxury nameplate Tapestry (TPR -1.59%) reported a wider-than-expected fiscal third-quarter loss as the COVID-19 pandemic forced the closure of 90% of its stores.
To cope with the decline, the owner of handbag makers Coach and Kate Spade and high-end shoemaker Stuart Weitzmann said it would be firing more employees, both at the corporate and retail level.
Chairman and CEO Jide Zeitlin said in a statement, "We are taking aggressive actions to assure that Tapestry emerges a strong company when conditions normalize."
An across-the-board decline
Revenue for the quarter tumbled 19% to $1 billion, leading to net losses of over $677 million, or $2.45 per share, compared to profits of $0.40 per share a year ago. Adjusting for one-time items, Tapestry reported a loss of $0.27 per share, down from profits of $0.42 per share last year and coming in dramatically below Wall Street's expectations of just a $0.02 per-share loss.
Sales for the Coach brand fell 20% year over year, but that led to operating income plummeting 84%. Kate Spade sales were down just 11%, but it swung to a loss of $91 million versus a $7 million profit last year. And Stuart Weitzmann sales fell 40%, but the brand also reported a massive $531 million loss compared to last year's $14 million loss.
Tapestry said most of its stores in China have reopened, but business, while improving, is still sparse. It intends to begin reopening its North American stores on May 1 as state and local stay-at-home orders allow, starting with 40 stores.