Tapestry Tops Q3 Estimates and Raises Outlook Despite Difficult Backdrop
Tapestry Inc. — having turned the page after its Capri Holdings acquisition fell through — isn’t letting any trade war or economic worries trip it up now.
The Coach and Kate Spade parent beat fiscal third-quarter earnings and sales estimates and raised its outlook for the rest of its year, which ends in two months.
Investors liked what they saw and sent shares of the company up 7.7 percent to $80.50 in premarket trading on Thursday.
Tapestry’s third-quarter net income increased 45.8 percent to $203.3 million, or 95 cents a share, from $139.4 million, or 60 cents, a year earlier.
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Adjusted earnings per share tallied $1.03 — 15 cents ahead of the 88 cents analysts forecast, according to Yahoo Finance.
Sales for the quarter ended March 29 grew by 7 percent to $1.58 billion, better than the $1.53 billion analysts projected.
Coach drove that gain, rising 13 percent to $1.29 billion, while Kate Spade fell 13 percent to $244.9 million and the soon to be divested Stuart Weitzman sank 18 percent to $46.2 million.
“Our third-quarter outperformance reinforces our position of strength,” said Joanne Crevoiserat, chief executive officer of Tapestry, in a statement.
“We accelerated top- and bottom-line growth and raised our outlook for the fiscal year, demonstrating the power of brand building and our connections with consumers around the world. Importantly, while the external backdrop is complex, our vision remains clear. We maintain a bias for action and will harness our competitive advantages, including our global scale, compelling value and strong fundamentals, to adapt and win in any environment. We are confident in our future and the meaningful opportunity to deliver durable growth and shareholder value.”
Tapestry now expects adjusted earnings per share of $5 this fiscal year, up from the $4.85 to $4.90 previously projected. Sales are set to increase 4 percent to about $6.95 billion, better than the 3 percent step up the company previously forecast.
