Gross profit for the quarter increased significantly to $1.49 billion and gross margin reached 71.6 percent. This improvement was attributed to a 170 basis point benefit from reduced transportation expenses and operational improvements, which compared favorably to the prior year's gross profit of $1.39 billion and a gross margin of 68.6 percent. Tapestry said in a press release.
Tapestry reported Q2FY24 net sales of $2.08 billion, up 3 percent year-over-year, with gross margin increasing to 71.6 percent. Operating income increased to $448 million and net income reached $322 million. International revenue grew 12 percent, with significant gains in Greater China and Europe. The company's inventory was reduced to $825 million.
Selling, general and administrative expenses totaled $1.05 billion, representing 50.2 percent of sales. On a non-GAAP basis, selling, general and administrative expenses were slightly lower at $1.02 billion, or 48.7 percent of sales. This represents an increase from the previous year, where selling, general and administrative expenses totaled $971 million, or 47.9 percent of sales.
Operating income showed solid growth, reaching $448 million as reported with an operating margin of 21.5 percent. Non-GAAP numbers were even stronger, with operating income of $476 million and operating margin of 22.8 percent, improving from last year's $418 million and operating margin of 20.6 percent .
Net income for the quarter was $322 million, translating to earnings per diluted share of $1.39. Non-GAAP net income was over $377 million, with earnings per diluted share of $1.63, demonstrating significant progress from the prior year's net income of $330 million and earnings per diluted share of $1.36.
Tapestry also highlighted its strong international performance, with revenue growth of 12 percent in constant currency across key regions. In particular, Greater China's income saw an increase of 19 percent, Japan increased by 6 percent, other countries in Asia increased by 9 percent, and Europe increased by 11 percent. Additionally, direct-to-consumer revenue grew 4 percent in constant currency, driven by mid-single-digit growth in both stores and digital channels.
The company ended the quarter with inventory of $825 million compared to $976 million a year earlier.
“Our second quarter results exceeded expectations, highlighting the power of brand building and disciplined execution. During the key holiday season, our passionate teams delivered for our customers, fueling brand magic through innovative products, engaging storytelling and operational excellence. Importantly, we delivered record revenue and earnings per share while advancing our strategic agenda. “Based on these results, we are raising our EPS outlook for the fiscal year,” he said. Joanne Crevoiserat, CEO of Tapestries.
Fiber2Fashion News Desk (DP)
