Tapestry’s stock jumps as strong Coach sales fuel profit beat, raised outlook
Shares of Tapestry Inc. surged toward a six-month high in premarket trading Thursday after a profit beat and raised outlook, as strength in the fashion company’s Coach brand offset weakness at Kate Spade.
Net income for the quarter ending Dec. 30 was $322.3 million, or $1.39 a share, compared with $329.9 million, or $1.36 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of $1.63 were well ahead of the FactSet consensus of $1.46.
The stock
TPR,
climbed 2% in premarket trading, putting it on track to trade around the highest closing prices since Aug. 9, the day before the company announced an agreement to buy Capri Holdings Ltd.
CPRI,
the parent of the Versace, Michael Kors and Jimmy Choo brands.
Sales grew 2.9% to $2.08 billion, above the FactSet consensus of $2.06 billion.
Among the company’s brands, Coach sales increased 6.4% to $1.54 billion, above the FactSet consensus of $1.50 billion, while Kate Spade sales declined 6.1% to $460.4 million to miss expectations of $479.0 million. Stuart Weitzman sales fell 3.7% to $82.2 million, to top forecasts of $79.3 million.
“During the key holiday season, our passionate teams delivered for our customers, fueling brand magic through innovative product, engaging storytelling, and operational excellence,” said Chief Executive Joanne Crevoiserat. “Importantly, we drove record revenue and EPS, while advancing our strategic agenda.”
For fiscal 2024, the company raised its EPS guidance range to $4.20 to $4.25 from $4.10 to $4.15 but kept its revenue guidance intact at “approximately” $6.7 billion.
Regarding the Capri acquisition deal, Tapestry said it “remains confident” in its ability to close the deal this year.
Tapestry’s stock has soared 46.9% over the past three months through Wednesday, while the S&P 500
SPX,
has gained 14%.
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