Coach, Kate Spade and Stuart Weitzman parent company Tapestry, Inc. acquired nearly 1 million new customers through its digital channels and reported a narrower-than-expected loss in its fourth quarter.
In Q4, 2020, Tapestry reported a loss of $294 million, or $1.06 a share, after income of $149 million, or 51 cents a share, in the year-earlier period. The company's adjusted per-share loss came to 25 cents, better than the 56 cents loss per share consensus of FactSet analysts, Marketwatch reports.
“This performance exceeded internal expectations, demonstrating the power of our unique brands and the decisive actions taken to adapt our business to the rapidly evolving environment and enhance financial flexibility,” said Joanne Crevoiserat, Interim CEO.
The apparel company and retailer saw its digital sales jump at a triple-digit rate in the quarter, with strong growth in every month, as it recruited new consumers into its brands at an accelerated pace.
Tapestry also said it will slash costs in light of the current retail environment, through reducing rent costs and driving procurement savings, including curtailing external third-party services. It also has been decreasing corporate costs through temporary compensation reductions for its board, management team, and employees.
The company estimates it will save $300 million from various initiatives, including $200 million projected for fiscal 2021.
“Leaning into the momentum that we're driving in our digital channels, we will offer immersive customer experiences across our e-commerce and social platforms,” said Crevoiserat. “I've been so impressed with the way our teams have responded to recent challenges and the innovation they've introduced to engage consumers over digital and social media platforms, reaching consumers where they are and how they want to engage with us. We've seen tremendous traction across our digital channels as a result, evidenced in part by the recruitment of new younger customers to our brand at an accelerated rate.
Tapestry recruited nearly one million new customers across brands in North America through its digital channels in Q4 and is also reengaging lapsed customers.
“And not only are we driving revenue growth online, but we're driving but we're driving profitability as well as our digital businesses carry higher operating margins than their respective bricks-and-mortar channels,” she noted.