Tapestry lifts full-year outlook as Coach sales soar
Tapestry Inc. reported a knockout third quarter amid double-digit revenue and earnings growth as its Coach brand shows no signs of losing momentum.
The premium handbag and accessories company’s net income jumped 69% to $343.8 million for the quarter ended March 28. Earnings per share were $1.66, far ahead of analyst estimate of $1.28 per share.
Revenue increased 21% to $1.92 billion, also more than expected. (Excluding the impact of Stuart Weitzman, which was sold to Caleres in August, pro forma net sales growth was 25% on a nominal basis and 23% on a constant currency basis.)
Digital sales grew approximately 25%. Global brick-and-mortar sales increased over 20%.
By brand, Coach sales jumped 29% to $1.70 billion. The company is still working to turnaround its struggling Kate Spade brand. Sales fell 11% to $220 million, reflecting pressure from a strategic pullback in promotions at retail.
In other quarter highlights, Tapestry acquired 2.0 million new customers globally, led by accelerated Gen Z acquisition, while driving growth with existing customers. It achieved approximately 20% growth in footwear, led by sneakers within the Soho family, “reinforcing momentum of the One Coach strategy and long -term category opportunity," the company said.
In September, Tapestry unveiled its new three-year strategy, dubbed “Amplfy.”
“Our third quarter outperformance reflects the compounding benefits of our Amplify strategy, as we bring creativity, craftsmanship, and value to more consumers around the world,” said CEO Joanne Crevoiserat. “With disciplined execution and the consumer at the center of everything we do, we are translating insights into action at scale, fueling meaningful growth, expanding margins, and enduring brand desire. From this position of strength, we move confidently into the future with significant opportunity ahead.”
Tapestry raised its full-year outlook. It now expects revenues of $7.95 billion, up from its prior outlook of over $7.75 billion. Earnings per share are expected to come in at $6.95, up from the prior guidance of $6.40 to $6.45 per share.
As of March 28, the company had a total of 955 Coach stores (330 North America, 625 international stores) and 33 Kate Spade stores (180 North America, 155 international).
