Coach helps Tapestry results, but Stuart Weitzman stumbles
NEW YORK (AP) — A strong performance at Coach powered the results at its parent company Tapestry, but a weak showing from its Stuart Weitzman shoe brand and its Kate Spade business dragged shares of the company down sharply.
Tapestry is trying to create a global house of powerful brands and rely less on discounts to lure shoppers.
The company has been turning around the Coach brand by overhauling its design and scaling back on discounting. Coach enjoyed a 3 percent increase in global sales at stores opened at least a year.
While revenue at Stuart Weitzman improved during the quarter, the company said that the segment’s performance was hurt by production delays and lower sell-through of key carryover styles.
Kate Spade’s global sales at stores opened at least a year fell 9 percent during the quarter. The company is focusing on revving up that business by deliberately pulling back on wholesale distribution and flash sales sites, which have sullied the label.
Overall, revenue surged to $1.32 billion from $995.2 million, buoyed partly by the acquisition of Kate Spade and higher sales of Coach products. Analysts polled by Zacks Investment Research predicted $1.3 billion in revenue.
For the fiscal third quarter ended March 31, Tapestry Inc. earned $140.3 million, or 48 cents per share. A year ago the New York-based company earned $122.2 million, or 43 cents per share. Adjusted for costs related to mergers and acquisitions and pretax expenses, earnings came to 54 cents per share. That’s better than the 50 cents per share analysts polled by Zacks were calling for.
Tapestry now expects full-year earnings of $2.57 to $2.60 per share, compared to its prior guidance of $2.52 to $2.60 per share. It still anticipates revenue in a range of $5.8 billion to $5.9 billion. Analysts surveyed by FactSet expect earnings of $2.59 per share on revenue of $5.86 billion.
Shares tumbled nearly 12 percent, or $6.31, to close at $47.46 on Tuesday.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on TPR at https://www.zacks.com/ap/TPR