Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market and Dividend Information
Tapestry, Inc.’s common stock is listed on the New York Stock Exchange and is traded under the symbol “TPR.”
As of July 31, 2020 , there were 2,123 holders of record of Tapestry’s common stock.
Any future determination to pay cash dividends will be at the discretion of Tapestry’s Board and will be dependent upon Tapestry’s financial condition, operating results, capital requirements and such other factors as the Board deems relevant.
The information under the principal heading “Securities Authorized For Issuance Under Equity Compensation Plans” in the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November 5, 2020, to be filed with the Securities and Exchange Commission (the “Proxy Statement”), is incorporated herein by reference.
Performance Graph
The following graph compares the cumulative total stockholder return (assuming reinvestment of dividends) of the Company's common stock with the cumulative total return of the Standard & Poor's ("S&P") 500 Stock Index and the “peer set" companies listed below over the five-fiscal-year period ending June 27, 2020 , the last day of Tapestry’s most recent fiscal year. The graph assumes that $100 was invested on June 26, 2015 at the per share closing price in each of Tapestry’s common stock, the S&P 500 Stock Index and a peer set index tracking the peer group companies listed below, and that all dividends were reinvested. The stock performance shown in the graph is not intended to forecast or be indicative of future performance.
During fiscal 2020, the Company established a new peer group consisting of:
•
L Brands, Inc.
•
PVH Corp.,
•
Ralph Lauren Corporation,
•
V.F. Corporation,
•
Estee Lauder, Inc.,
•
Capri Holdings Limited
The Company's old peer group consisted of:
•
L Brands, Inc.,
•
PVH Corp.,
•
Ralph Lauren Corporation,
•
Tiffany & Co.,
•
V.F. Corporation,
•
Estee Lauder, Inc.,
•
Capri Holdings Limited
The Company removed Tiffany & Co. from the peer set due to recent business updates associated with the company. Furthermore, Tapestry management selected the "revised peer set" on an industry/line-of-business basis and believes this updated set of companies represent good faith comparables based on their history, size, and business models in relation to Tapestry, Inc.
28
Fiscal 2015
Fiscal 2016
Fiscal 2017
Fiscal 2018
Fiscal 2019
Fiscal 2020
TPR
$100.00
$117.28
$140.99
$143.36
$101.04
$41.71
Revised Peer Set
$100.00
$91.12
$87.19
$120.36
$128.62
$104.69
Former Set
$100.00
$88.85
$88.80
$123.07
$126.73
$108.16
S&P 500
$100.00
$102.33
$120.38
$137.69
$152.03
$158.60
Stock Repurchase Program
The Company did not repurchase any shares of common stock during the fourth quarter of fiscal 2020. As of June 27, 2020, the Company had $600 million availability remaining in the stock repurchase program. The Company may terminate or limit the share repurchase program at any time. The Company is restricted from engaging in share buybacks during the Covenant Relief Period under Amendment No.1 to its Credit Facility.
29
ITEM 6. SELECTED FINANCIAL DATA
The selected historical financial data presented below as of and for each of the fiscal years in the five-year period ended June 27, 2020 has been derived from the Company’s audited Consolidated Financial Statements. The financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Consolidated Financial Statements and Notes thereto and other financial data included elsewhere herein.
Fiscal Year Ended (3)
June 27,
2020
June 29,
2019
June 30,
2018
July 1,
2017
July 2,
2016
(millions, except per share data)
Consolidated Statements of Operations:
Net sales
$
4,961.4
$
6,027.1
$
5,880.0
$
4,488.3
$
4,491.8
Gross profit
3,239.3
4,053.7
3,848.5
3,081.1
3,051.3
Selling, general and administrative ("SG&A") expenses
3,790.1
3,234.0
3,176.5
2,283.5
2,395.5
Operating income (loss)
(550.8
)
819.7
672.0
797.6
655.8
Net income (loss)
$
(652.1
)
643.4
397.5
591.0
460.5
Net income (loss) per share:
Basic
$
(2.34
)
$
2.22
$
1.39
$
2.11
$
1.66
Diluted
$
(2.34
)
$
2.21
$
1.38
$
2.09
$
1.65
Weighted-average basic shares outstanding
278.6
289.4
285.4
280.6
277.6
Weighted-average diluted shares outstanding
278.6
290.8
288.6
282.8
279.3
Dividends declared per common share
$
1.013
$
1.350
$
1.350
$
1.350
$
1.350
Consolidated Percentage of Net Sales Data:
Gross margin
65.3
%
67.3
%
65.5
%
68.6
%
67.9
%
SG&A expenses
76.4
53.7
54.0
50.9
53.3
Operating margin
(11.1
)
13.6
11.4
17.8
14.6
Net income (loss)
(13.1
)
10.7
6.8
13.2
10.3
Consolidated Balance Sheet Data:
Working capital
$
811.0
$
1,638.8
$
1,494.4
$
3,199.5
$
1,346.2
Total assets
7,924.2
6,877.3
6,678.3
5,831.6
4,892.7
Cash, cash equivalents and investments
1,434.5
1,233.9
1,250.0
3,158.7
1,878.0
Inventory
736.9
778.3
673.8
469.7
459.2
Total debt
2,299.4
1,602.7
1,600.6
1,579.5
876.2
Stockholders' equity
2,276.4
3,513.4
3,244.6
3,001.9
2,682.9
30
Fiscal Year Ended
June 27,
2020
June 29,
2019 (1)
June 30,
2018 (1)
July 1,
2017
July 2,
2016 (2)
Store Data:
Stores open at fiscal year-end:
Coach North America stores
375
391
402
419
432
Coach International stores
583
595
585
543
522
Kate Spade North America stores
213
213
200
—
—
Kate Spade International stores
207
194
142
—
—
Stuart Weitzman North America stores
58
71
68
69
64
Stuart Weitzman International stores
73
76
35
12
11
Total stores open at fiscal year-end
1,509
1,540
1,432
1,043
1,029
Store square footage at fiscal year-end:
Coach North America stores
1,758,668
1,802,410
1,835,543
1,884,204
1,892,146
Coach International stores
1,285,329
1,304,618
1,256,525
1,166,920
1,086,315
Kate Spade North America stores
603,487
578,649
495,121
—
—
Kate Spade International stores
291,322
267,349
171,754
—
—
Stuart Weitzman North America stores
102,784
125,336
117,869
117,944
105,264
Stuart Weitzman International stores
89,182
90,300
47,498
18,808
12,556
Total store square footage at fiscal year-end
4,130,772
4,168,662
3,924,310
3,187,876
3,096,281
Average store square footage at fiscal year-end:
Coach North America stores
4,690
4,610
4,566
4,497
4,380
Coach International stores
2,205
2,193
2,148
2,149
2,081
Kate Spade North America stores
2,833
2,717
2,476
—
—
Kate Spade International stores
1,407
1,378
1,210
—
—
Stuart Weitzman North America stores
1,772
1,765
1,733
1,709
1,645
Stuart Weitzman International stores
1,222
1,188
1,357
1,567
1,141
(1)
Refer to Part I, Item 1, "Business" for the number of stores acquired during the respective fiscal year for each brand.
(2)
The Company acquired the Stuart Weitzman Canada distributor in the fourth quarter of fiscal 2016 (which included the impact of an additional 14 retail stores in North America).
(3)
The Company recorded certain items which affect the comparability of our results. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information on the items related to fiscal 2020 and fiscal 2019. During fiscal 2018, the Company recorded adjustments in cost of sales and SG&A expenses of $116.4 million and $204.7 million, respectively, related to the Operational Efficiency plan and its Integration and Acquisition costs. During fiscal 2017, the Company recorded adjustments in cost of sales and SG&A expenses of $2.9 million and $22.3 million, respectively, related to the Operational Efficiency plan and its Integration and Acquisition efforts. During fiscal 2016, the Company recorded adjustments in cost of sales and SG&A expenses of $1.1 million and $122.0 million related to the Company's multi-year strategic plan to transform the Coach brand, announced in fiscal 2014, the Operational Efficiency Plan and Stuart Weitzman acquisition-related costs. The following table reconciles the Company's reported results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") to our adjusted results that exclude these items:
31
Net Income (Loss)
Fiscal 2020
Gross Profit
SG&A Expenses
Operating Income
Amount
Per Diluted Share
As Reported: (GAAP Basis)
$
3,239.3
$
3,790.1
$
(550.8
)
$
(652.1
)
$
(2.34
)
Excluding items affecting comparability
118.0
(871.2
)
989.2
923.3
3.31
Adjusted: (Non-GAAP Basis)
$
3,357.3
$
2,918.9
$
438.4
$
271.2
$
0.97
Net Income
Fiscal 2019
Gross Profit
SG&A Expenses
Operating Income
Amount
Per Diluted Share
As Reported: (GAAP Basis)
$
4,053.7
$
3,234.0
$
819.7
$
643.4
$
2.21
Excluding items affecting comparability
27.8
(103.5
)
131.3
105.3
0.36
Adjusted: (Non-GAAP Basis)
$
4,081.5
$
3,130.5
$
951.0
$
748.7
$
2.57
Net Income
Fiscal 2018
Gross Profit
SG&A Expenses
Operating Income
Amount
Per Diluted Share
As Reported: (GAAP Basis)
$
3,848.5
$
3,176.5
$
672.0
$
397.5
$
1.38
Excluding items affecting comparability
116.4
(204.7
)
321.1
362.4
1.25
Adjusted: (Non-GAAP Basis)
$
3,964.9
$
2,971.8
$
993.1
$
759.9
$
2.63
Net Income
Fiscal 2017
Gross Profit
SG&A Expenses
Operating Income
Amount
Per Diluted Share
As Reported: (GAAP Basis)
$
3,081.1
$
2,283.5
$
797.6
$
591.0
$
2.09
Excluding items affecting comparability
2.9
(22.3
)
25.2
18.3
0.06
Adjusted: (Non-GAAP Basis)
$
3,084.0
$
2,261.2
$
822.8
$
609.3
$
2.15
Net Income
Fiscal 2016
Gross Profit
SG&A Expenses
Operating Income
Amount
Per Diluted Share
As Reported: (GAAP Basis)
$
3,051.3
$
2,395.5
$
655.8
$
460.5
$
1.65
Excluding items affecting comparability
1.1
(122.0
)
123.1
91.2
0.33
Adjusted: (Non-GAAP Basis)
$
3,052.4
$
2,273.5
$
778.9
$
551.7
$
1.98
32