Good day and welcome to the Tapestry Conference Call. Today’s call is being recorded. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Christina Colone, Vice President, Investor Relations.

Good morning and thank you for joining us. With me today to discuss our quarterly and annual results are Victor Luis, Tapestry’s Chief Executive Officer and Andrea Shaw Resnick, Tapestry’s Global Head of Investor Relations and Corporate Communications. Before we begin, we must point out that this conference call will involve certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, including projections for our business in the current or future quarters or fiscal years. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. Please refer to our Annual Report on Form 10-K, the press release we issued this morning and our other filings with the Securities and Exchange Commission for a complete list of risks and important factors that could impact our future results and performance. Non-GAAP financial measures are included in our comments today and in our presentation slides. You may find the corresponding GAAP financial information as well as the related reconciliations on our website www.tapestry.com/investors and then viewing the earnings release and the presentation slides posted today. Now, let me outline the speakers and topics for this conference call. Victor will provide an overview of our fourth quarter and full year 2019 results for Tapestry as well as our three brands. Andrea will continue with details on the financial and operational results and our outlook for FY ‘20. Following that, we will hold a question-and-answer session, where we will be joined by Todd Kahn Tapestry’s President and Chief Administrative Officer and Chief Legal Officer; Josh Schulman, CEO and Brand President of Coach; and Joanne Crevoiserat, Tapestry’s recently appointed CFO. Following Q&A, we will conclude with some brief summary remarks. I would now like to turn it over to Victor Luis, Tapestry’s CEO.

Good morning. Thank you, Christina and welcome everyone. As noted in our press release, 2019 was a year of meaningful evolution for Tapestry. Importantly, we made significant progress on our strategic initiatives against a difficult retail backdrop in North America. Touching on results by brand, we achieved solid and consistent performance at Coach, which speaks to the success of our transformation strategy, driving brand health and vibrancy. For the year, Coach’s international and digital channels led, while the brand also outperformed its direct competition in North America. Coach’s performance is key for two important reasons. First, Coach is the core of Tapestry. We understand that driving sustainable growth at Coach is essential to the success of our company overall. Therefore, we are incredibly proud of the brand’s results in spite of the volatile backdrop. Second, this performance reinforces our strategic intent to diversify our acquired brands across geographies and channels. Turning to Stuart Weitzman, we made advancements across product, people and processes, returning the business to top line growth. The SW team remains focused on driving improved profitability in the year ahead. At Kate Spade, we launched a new creative vision for the brand. And while there have been some green shoots, we clearly need more time to drive an inflection to positive comps, especially given the brand’s exposure to the competitive and traffic challenged North America market. We acknowledge that there are opportunities and are addressing those areas with a sense of urgency. As we look ahead, we are revising our outlook for FY ‘20 to reflect the current trends in our business, notably at Kate Spade. We believe this is prudent, particularly in light of the uncertain environment in North America and while we build the brand’s awareness in global markets. Importantly, with continued momentum at the Coach…

Thanks, Victor. I’m very excited to be here at Tapestry working with the talented teams across the globe as we execute our brand and growth strategies. I’m also looking forward to reconnecting with many of you on the line and meeting those new to me who follow our story in the months ahead.

Thank you, Joanne and before turning it over to Andrea, I’d like to recognize it for our hard work and energy over the last several months, that she has held the position of Interim CFO. Andrea, wear many hats within our organization. She is a mentor to many, and a key business partner to me and our leadership team, with an unparalleled understanding of our Company and its history. On behalf of our entire leadership team, thank you Andrea for year end less energy and leading the finance team in this period. With that, I’ll now turn the call over to Andrea for a discussion of our financial results, as well as our outlook for fiscal year ‘20.

Thanks, Victor for those kind words, and good morning everyone. Victor has just taken you through the highlights and strategies. Let me now take you through some of the important financial details as well as our outlook for fiscal year ‘20. Before I begin, please keep in mind that the comments I’m about to make are based on non-GAAP results, corresponding GAAP results, as well as the related reconciliations can be found in the earnings release posted on our website today. As Victor mentioned, it was an evolutionary year for the Company, we entered FY ‘19, understanding that it would be one of significant strategic investment as we built the foundation of our multi-brand platform. We also anticipated and achieved meaningful synergies from the successful integration of Kate Spade, in part funding these investments. At the same time, we delivered ongoing top and bottom line increases at Coach, the core of our house. That said, we did not drive the intended growth at Kate Spade and faced incremental industry wide promotional headwinds in the North America outlet channel. Overall, our EPS was in line with our most recent guidance. Now turning to some key financial details of the fourth quarter, sales in the quarter rose 2% on a reported basis and 4% in constant currency, with disparate results by brand. We continue to drive positive same-store sales at Coach and delivered strong sales growth at Stuart Weitzman, lapping a challenging quarter from a year ago, while Kate Spade comps declined 6% in Q4. Consolidated gross margin declined 60 basis points versus prior year. For context, we did project and guide to a gross margin contraction for the quarter pressured by Kate Spade, given the brand’s difficult prior year compare, which included the financial benefit of unusually high full-price selling, following…

Thank you. [Operator Instructions] Our first question comes from the line of Bob Drbul of Guggenheim Securities.

Hey, good morning. Joanne, welcome and congratulations. Best of luck.

Thanks Bob.

I guess, I’d like to focus just on the Kate Spade brand for a minute. Victor, are you still confident about Kate’s brand health? And I guess when you look at the results this quarter, how did you not see it coming and how will you fix it? When you look at it, contrasting it to the strong Coach brand performance, can you just talk a little bit about that as well? Thanks.

Okay. Thank you, Bob. Maybe I’ll start with the contrasting with Coach, get into Kate and then Josh can support at the end on the Coach’s performance, which of course is really outperforming, not only here in the U.S. but truly globally against our more direct competitive set, could not be prouder of that team and the work that they’re doing, they’re really hitting on all cylinders. On Kate, as you all know, we saw a significant improvement in the third quarter, and really many emerging signs of the traction post the launch of Nicola’s collection, we saw a positive conversion comps, we launched a new core family in Margot, late followed by Polly which is really checking and increasingly we received, really positive signs across categories, especially ready-to-wear in jewelry with the iconography of working well, that we launched. As we entered Q4 we were optimistic, of course we are supported by the Easter shift and with the amount of newness that we had coming in, starting in the outlet channel. What we saw though was through May, into June, but especially beginning in May was rapid deterioration in the North American environments, traffic declined. And especially in the outlet channel, this led to increasing promotion across competitors. And in fact, I would say across the channel. And as all of you know, Kate is disproportionately impacted, given its nascent international footprint and its dependence on North America relative to the Coach brand. In addition, I would add that Kate simply did not have the level of distinctive newness, that we needed to drive conversion in that channel, especially given the decreasing traffic and especially against the Saffiano heavy competition. For context, when we transformed the Coach brand, one of the strategies that we took early on, when Stuart…

Thank you, Victor. And good morning, Bob. So you know how we’re thinking about innovation at Coach is really at the heart, I think of how we’ve been able to drive the seven consecutive quarters of positive comps, and the gross margin expansion that we’ve been able to see this year. And so I’ll share a little bit about how we’re thinking about driving this balance of consistency and disruption within the brand, really across three pillars. So, the first is, we have to consistently innovate in our core. We have to – yes, every day in every channel have our core products at good, better, best price points with product excellence and innovation there. I think the best example of that, that we’ve talked about on numerous calls and – that you’ve seen in our stores is the re-launch of Signature, which is now into its second year and is continuing to drive a high AURs in our retail channel actually higher AURs than leather. And we have examples of that, of the innovation and core product in our outlet channel as well, whether that has been The Edit at best clinical prices or whether that has been a new introductions like Jet really speaking to our broad customer around the world. The second pillar is more about the disruption, and that is – and I call that collaboration or co-creation. And during this year we have had an unprecedented number of activations, pop-ups, drops, capsules where we’re either collaborating with a third-party or driving innovation around important cultural moments. So in this quarter, in this most recent quarter, we did at 360 activations around Mother’s Day, particularly important in North America, where it’s the visual, it’s the product, it is the whole experience we’ve done, third-party partnerships. We…

Yes. And I think I would just close to wrap up on those points there. Please if you haven’t had the opportunity, do take a couple of visits to a couple of key outlet stores in your region, and walk the competitive set compared with Coach’s execution and you’ll – I think very easily understand a lot of the great work that Josh has just explained, impacting across all channels at once. And we’re on that journey with Kate and I’m very confident in that team’s ability with Anna and Nicola and very talented folks, they have supporting them to execute accordingly.

Great. Thank you very much. Good luck.

Thank you.

[Operator Instructions] Your next question comes from the line of Irwin Boruchow of Wells Fargo.

Hi, good morning everyone. Just two quick questions on Kate. On the store growth pullback can you Victor is that tied to any specific region or is that broad-based globally, just overall? And then I appreciate all the guidance on the year for the business, but is there any chance you could give a little bit more color on your view of Kate for the year as you progress you kind of gave us some comp expectations for Q1. Can you help us how you’re thinking about how that business should progress through the year? Both comp and on operating profit metrics, anything that you’re comfortable sharing? And most specifically are you targeting a positive comp at some point this fiscal year? Thank you very much.

Sure. Thanks. In terms of the openings really our focus is on productivity, I mean you were planning above 40 locations for the year, we’re still planning between 30 and 40, we’re just being much more selective. And with the continued focus on Asia and especially in China where we are seeing the opportunity of course to leverage those investments as part of our greater program to build brand awareness there, which clearly remains the number one single growth opportunity for that brand and for us from an awareness perspective. In terms of Kate and through the year and comps, first and foremost, I think we gave guidance that we’re expecting low-to-mid single digit sales growth, driven by distribution. At this point I won’t be making a call on the exact timing of positive comps, particularly given the dependence of Kate Spade, what is the challenge North America environments of course we expect clear improvement throughout the year as significant newness hits, and of course as we enter a period of easier compares once we get into Q2, Q3 and Q4. But at this point, I would say that you should expect that our confidence in the mid-to-single digit total growth driven by distribution.

Thank you.

Thank you, Ike.

Your next question comes from the line of Erinn Murphy of Piper Jaffray.

Great. Thanks, good morning. I guess my question is around the EBIT dollar guide, I guess you moved from what would have been roughly $95 million of incremental EBIT growth, and now it looks like EBIT dollars are slightly down for the year. Can you just help us walk through the moving parts by brand, is that all Kate Spade or there, incremental investments? And are you still expecting Coach and Stuart Weitzman in that guide to be positive contributors to EBIT dollars? Thank you.

Sure Erinn. So, in terms of the primary change, absolutely correct, it’s really coming from Kate Spade where we now have taken down top line growth through a combination of lower than originally expected comp as well as the modern the modification in our store opening schedule. As you know, we had 40 to 50 originally planned, now we have 30 to 40 as Victor just mentioned. Those are the primary reasons, the primary delta from where we were. And then of course we do still have elevated SG&A specifically at the Kate brand associated with the new store openings that we opened this year, as well as we won’t anniversary the buyback until the end of the first quarter. So it is really primarily coming from the Kate Spade brand, we are looking for operating income generation at Stuart Weitzman, although the first quarter will be probably a similar operating loss to what we exited fourth quarter and of course Coach is, I would say, steady as she goes or it goes.

Great. Thank you so much.

Thank you.

Your next question comes from the line of Alex Walvis of Goldman Sachs.

Good morning, thanks for taking the question. I wanted to ask a question about the decision to bring footwear in-house at Kate Spade. And I wonder if you could reflect on the same strategy at Coach, how that’s progressed versus your plan on what’s worked well there? And why the decision to do that with Kate now and how that could be an opportunity and ways it could differ from the Coach experience?

Sure, very clear opportunity, Alex, for us. We’ve taken, basically the last, I would say, two to three years to establish a very solid product developments, production capacity in footwear in Asia, incredibly pleased to have with us Tom Glaser who comes of course from a very deep experience in that space, supporting our teams as we look to truly get best-in-class in all of these categories, so he will provide key leadership and we have a team at Kate that has experience in doing this. And I can tell you we’ve just shown the first Kate collection at Fanny as well of course of Coach and Stuart Weitzman, just basically wrapping up a week of markets here in New York across all three brands. And what I can share with you is that in all three brands the reaction has been superb. Kate it’s first collection, if I compare to Coach’s first collection three years ago, they’ve really taken a leap forward, whether it’s from a design perspective, silhouette style perspective, excuse me the usage occasion and in terms of product development, leveraging pricing and developing and the development capacity that we established with Coach, over the last three years. I go into the Kate first season with a lot more confidence than we entered Coach three years ago. I would also add that this season in Fanny, Josh and the Coach team have taken a very substantial lead role. We’ve been operating now for a few months, Josh and his team have with some new third-party development capabilities, especially in the core sneaker business, which as many of you know, is driving a huge trend in footwear, we just showed a new collection, which has been incredibly well received at wholesale and by our own teams, so fully…

Your next question comes from the line of Oliver Chen of Cowen & Company.

Hi, thank you. Regarding Kate Spade what are your thoughts regarding the customer reception of the newness ahead and how the sequencing may go as customers look to the changes? Also, I would love your thoughts on the codes of the Kate Spade house and how you evaluated? How those are performing or tweaks you may make? And then finally regarding Kate, just ensuring that there is a great level of distinctiveness versus Coach and that the segmentation is how you wanted. That would be great to hear this, your thoughts. Thank you.

Yes. Great. Great question. Look, Kate has really unique positioning. And in many ways, I would say, first and foremost from an addiction perspective, definitely considered on the fashion and given its stronger reliance on ready-to-wear traditionally and other accessory categories, including jewelry tech, much SKUs much younger, much more millennial than Coach. And I would say, has a very strong in the hand bag space, a very strong and I’m talking here in North America now, because we’re very much in the early stages of building this business outside of Japan internationally, very strong suburban consumer who see that as a key wear-to-work resource and we’re really focused on providing that functionality. I think, that relative to differences between Coach and Kate, the teams are completely separate, Nicola and [indiscernible], they don’t come in and look at the Coach collections from Stuart, Stuart doesn’t go over and with the Kate collections, obviously in the fashion world they follow in general trends, but I think you’ll see, whether it’s in product and functionality, that you would go to the full price stores, it’s probably a good place to visit where they’re across from each other here at the Hudson Yards Mall here in Manhattan, where you can see Coach and Kate. The Kate experience and the Coach experience are very, very different. Kate speaking to her customer with its very specific codes in femininity, that I’m going to talk to in a minute and Coach to its customer with a much more urban fashion take, and I would say Stuart’s leverage of Coach is much more house of leather coats. If we look at Kate and the codes that we’ve launched, and I think I touched upon this in my remarks, in terms of our ability to compete effectively in…

Thank you. Very helpful. Best regards.

Thank you, Oli.

Your next question comes from the line of Mark Altschwager of Baird.

Right good morning. Thanks for taking my questions. Just I guess a few quick ones from me, kind of housekeeping here. But what is the share count implied in the flat EPS guide for fiscal 2020? And then how should we be thinking about free cash flow? I guess, based on your current outlook, could you do more than the $300 million on the buyback, without increasing your net leverage ratios? And then finally just hoping you could touch on inventory levels by brand, any pockets of excess inventory that you need to work through in the short run here? Thanks.

Sure. So, Mark, on the share count, think of anything between 282 and 286, depending on when we buy that $300 million worth of stock over the course of the year. We are committing to $300 million right now. And that’s all I think we’re willing to commit to you. And then in terms of your third question on cash flow, could we do more without tripping any leverage issue? Yes, we could, based on our projections of cash flow for the year. On the inventory so inventory was up as you know about 16%. On a two-year stack, I think that was around 8.5% for total Tapestry on pro forma basis, if you include Kate in the two-year comparison. Kate was actually down about 10% over the two-year period, because of the low levels on inventory as we exited 4Q last year, and given the full price selling that we’ve seen and a little bit of delayed delivery. We had projected it, we saw an increase in-transit, we talked about port congestion last quarter, I would reiterate that now in terms of where that excess is on the lower levels of sales, you can assume obviously that we have a little bit more than we’d like to have on Kate Spade. We are very confident that we can strategically manage through this, it’s going to be a balance on brand health versus promotional activities along we want to be very strategic in that, but we feel good given the currency of the inventory that we can work through that in the first half of the year.

Alright. Thanks, and best of luck.

Thanks Mark.

Thank you.

Your next question comes from the line of Jamie Merriman of Bernstein.

Thanks very much. Victor in your comments about Kate, you mentioned some of the initiatives that you have in terms of things like bringing in satchels and cross-body etc. Can you give us a sense of the timing of some of those initiatives, you know given the length of your supply chain and speed, when would you expect those initiatives to start to help? Thanks.

I think in the full price channel really is what I was referring to there, because I do think we’re very much in inventory in that type of style, we don’t have enough diversity in outlet, we don’t have enough diversification in outlet from the material and branding perspective, as well as bringing in, I would say incremental silhouettes to the core satchels where we are very much in inventory and outlet. In full-price there is definitely an opportunity there, and you’re going to see us bring those in fact every month over the next four to five months. We have two to three families launching in the next two to three months, that we expect to be very significant players along with Margot, which today is our key and most successful family in the full-price channel.

Thank you. That will conclude our Q&A. I will now turn it back over to Victor for some closing remarks.

Thank you everyone for being with us. It’s is our custom, I just want to take the opportunity to thank our teams across the globe for their hard work and dedication, couldn’t be prouder of their commitment in all of their efforts. As we had an amazing year of building the foundation that will certainly serve as the key to our growth for years ahead. I have a tremendous confidence in them and look forward to working and partnering with them to drive growth out of this foundation that we’ve built. Thank you.

Thank you. This does conclude today’s Tapestry conference call. You may now disconnect your lines and have a wonderful day.