Tapestry lifts outlook as Coach soars in Q2
Luxury retailer Tapestry Inc. reported better-than-expected second-quarter earnings and sales fueled by a strong performance at Coach.
The parent company of Coach, Kate Spade and Stuart Weitzman released its results nearly three months after it called off its acquisition of Capri, whose portfolio includes Michael Kors, Versace and Jimmy Choo.
Tapestry’s net income fell to $310.4 million, or $1.38 a share, for the quarter ended Dec. 28. Adjusted earnings totaled $2.00 per share, ahead of the $1.25 analysts predicted.
Revenue rose 5% to $2.20 billion, topping the $2.11 billion analysts expected. Direct-to-consumer sales increased 4%, which included a high-single digit increase in digital revenue and a low-single digit increase in global brick and mortar sales.
By brand, Coach was the top performer, with sales rising 11% to $1.7 billion. Kate Spade sales fell 10% $416.4 million. Stuart Weitzman sales decreased 15% to $69.7 million.
Tapestry has been focused on driving new customer acquisition growth among younger customers and its efforts are paying off. The company said it welcomed approximately 2.7 million new customers to our brands in North America alone, of which over half were Gen Z and millennials.
“During the important holiday season, we meaningfully advanced our growth agenda, bringing innovation and craftsmanship to consumers around the world," said CEO Joanne Crevoiserat. “Our success is clearly reflected in the accelerated top and bottom-line gains we achieved, resulting in record quarterly revenue and adjusted earnings per share.”
Tapestry now expects full-year revenue of over $6.85 billion, up from its previous forecast of over $6.75 billion. It expects earnings per share of $4.85 to $4.90., up from its previous forecast of $4.50 to 4.55.
“We raised our outlook for the year, harnessing our position of strength to deliver superior results, while making strategic investments to extend our competitive advantages and power durable growth,” Crevoiserat said. “We remain confident in Tapestry’s bright future and the compelling opportunity for continued, significant value creation.”
