Tapestry’s momentum continued in the third quarter even amid a COVID-related showdown in China, one of its key markets.
The parent company of Coach, Kate Spade and Stuart Weitzman was not that optimistic about its fourth quarter, however, due to lockdowns in China. As a result, the company pared back its outlook for the year. On the positive side, Tapestry believes that the situation in China will start to improve in June.
Tapestry’s net income rose 33.8% to $122.7 million, or $0.46 a share, for the quarter ended April 2, compared with $91.7 million, or $0.32 per share, in the year-ago period. Adjusted earnings came in at $0.51. Analysts had expected earnings per share of $0.41.
Sales increased 13% to $1.43 billion. By brand, Coach’s sales rose 11% to $1.07 billion. Kate Spade sales rose 19% to $301.5 million, while sales at Stuart Weitzman rose 11% to $63.6 million.
Sales in North America rose 22% in the quarter from a year earlier. The increase fully offset a mid-teens decline in Mainland China due to the resurgence of COVID.
“Our third-quarter results significantly exceeded expectations led by continued strong growth in North America,” said Joanne Crevoiserat, chief executive officer. “We drove increased customer demand at Coach, Kate Spade and Stuart Weitzman, reflecting the vibrancy of each of our brands, the power of our platform and our team’s successful execution of our strategic initiatives.”
For the year, Tapestry expects revenue to total about $6.7 billion, down from $6.75 in its previous forecast.
As of April 2, Tapestry’s store count was as follows: Coach: 346 North America, 606 international; Kate Space: 207 North America, 192 international; and Stuart Weitzman: 40 North America, 57 international.