Please ensure Javascript is enabled for purposes of website accessibility

Coach Parent Tapestry to Cut More Jobs as Losses Widen

By Rich Duprey – Apr 30, 2020 at 10:47AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But the luxury goods retailer will begin opening North American stores starting tomorrow.

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."

Different colored leather handbags

Image source: Coach.

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.

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tapestry. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tapestry, Inc. Stock Quote
Tapestry, Inc.
TPR
$28.43 (-1.59%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.