Tapestry swings to a net loss of £541 million in Q3 as COVID-19 closes its retail stores

Tapestry Inc. (NYSE: TPR) released its financial results for the third quarter on Thursday that announced a roughly 20% decline in its quarterly sales. The company attributed to the downbeat performance to the Coronavirus pandemic that pushed 90% of the company’s stores to temporarily shut down or reduce working hours.

The owner of the NY-based Coach brand also highlighted its strategy to resume operations on Thursday. The company said that it plans on reopening around 40 of its countrywide stores in North America on Friday for curbside pickup. Using a phased-in approach, Tapestry expects to slowly invite shoppers back to its stores. The company also said that it will provide protective equipment like masks and gloves to its workers.

In South Korea and mainland China, Tapestry has already reopened almost all of its retail stores.

Following the release of the Q3 earnings report, Tapestry was reported around 2.5% down in premarket trading on Thursday.

Tapestry’s Q3 financial results versus experts’ forecasts

According to Refinitiv, analysts had expected the retailer to print £820 million in revenue in the third quarter. They had also anticipated the company to see 9.6 pence of loss per share in the recent quarter. In its financial report on Thursday, Tapestry boasted a higher revenue of £850 million in Q3 but its loss per share registered at a significantly higher £1.96 per share.

The American multinational luxury fashion holding company recorded its net loss at £541 million in Q3 that came in sharply lower than £94 million profit in the same quarter last year. Tapestry’s net sales were noted at £1.06 billion last year. Excluding special items, it saw a 21.57 pence of loss per share in the third quarter.

Other noticeable figures in Tapestry’s financial report

Other noticeable figures in Tapestry’s report on Thursday included an 11% decline in Kate Spade sales, 20% in Coach sales, and a much broader 40% decline in Stuart Weitzman sales. The company also highlighted that the sales growth in its e-commerce segment was not sufficient to offset the decline in revenue attributed to store closures.

The fashion retailer didn’t provide Q4 or full-year financial guidance citing the rising Coronavirus uncertainty. As of March 28^th, Tapestry had roughly £719 million in cash and investments securities. The company also has an additional £719 million worth of revolving credit facility.

Tapestry is considering cutting a few retail and corporate jobs to slash expenditures and shore up finances. The £3.76 billion company is currently over 36% down year to date in the stock market.