In the fiscal fourth quarter ended on June 27, Stuart Weitzman posted net sales of $33 million, down from $85 million in the same period of the prior year, largely due to the impact of the Covid-19 pandemic.
The brand, which is owned by the American group Tapestry, saw its gross profit shrink to $11 million on a reported basis, representing a gross margin of 34.2 percent, as compared to $29 million and 33.7 percent, respectively a year earlier. On an adjusted basis, the gross margin widened 59.4 percent from 54.8 percent.
Selling, general and administrative (SG&A) expenses were $92 million and represented 278.0 percent of sales. On an adjusted basis, SG&A costs reached $43 million or 128.9 percent of sales. The brand’s operating loss was $81 million on a reported basis, versus an operating loss of $30 million a year earlier, and $23 million on an adjusted basis against a loss of $9 million.
In the full year, Stuart Weitzman’s sales dropped to $286 million from $389 million, while the operating loss surged to $621 million from a loss of $51 million. The adjusted operating loss was $57 million, increasing from an operating loss of $17 million.
Tapestry indicated that Stuart Weitzman is building up its presence in boots, booties and sandals and expanding the casual assortment, while dramatically simplifying the product offering. The brand is also restoring profitability by focusing on markets and channels offering the greatest opportunities, notably China where the brand has strong momentum and high margins. It is also striving to strengthen its relationship with wholesalers by providing “relevant products and faster, more consistent execution,” as well as establishing a “robust digital presence” with “best-in-class multi-media content and depth of assortment.”
In the fourth quarter, Tapestry, which also owns the brands Coach and Kate Spade, posted an adjusted net loss of 70 million dollars, with a loss per diluted share of 0.25 dollars, compared with a net income of $175 million, or earnings per diluted share of $0.61, in the prior year period.
The net loss for the quarter was $294 million on a reported basis, with a loss per diluted share of $1.06. This compared to a net income of $149 million with earnings per diluted share of $0.51 dollars a year earlier. Net sales totaled $715 million compared to $1.51 billion.
The group’s net loss for the full year was $652 million on a reported basis, with a loss per diluted share of $2.34, compared to a net income of $643 million, with earnings per diluted share of $2.21 in the prior year. Full-year net sales totaled $4.96 billion, down from $6.03 billion
Tapestry booked charges that cut operating income by $989 million in the full year and by $210 million in the final quarter.
It expects a return to sustained top line growth in the second half of fiscal 2021, with a ”bottom line growth in each of fiscal 2021, 2022 and 2023,” said Joanne Crevoiserat, interim chief executive.
The company did not provide a detailed guidance for fiscal 2021. But thanks to its efficiency program, Tapestry expects to achieve about $300 million in gross run rate expense savings, of which $200 million projected for fiscal 2021.