Tapestry, Inc.

(New York Stock Exchange)
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Bullish +75

Tapestry Lifts FY Outlook Amid Coach Boom

AI-generated analysis

πŸ“ˆ Tapestry raised its full-year outlook after the Coach brand drove significant sales growth in the fiscal third quarter.

πŸ’° The company posted a quarterly profit of $343.8 million, or $1.65 per share, compared to $203.3 million a year ago.

πŸ“Š Revenue surged 21% to $1.92 billion, surpassing analyst forecasts of $1.79 billion.

🎨 Adjusted earnings per share came in at $1.66, exceeding the $1.30 consensus estimate from FactSet.

πŸ‘œ Coach sales were a primary growth driver, increasing 31% to boost overall performance.

πŸ•ŠοΈ In contrast, Kate Spade revenue declined 10%, though it still contributed to the company's overall rise.

πŸ”­ Tapestry updated its full-year sales guidance upward to $7.95 billion from the previous $7.75 billion projection.

πŸ’΅ The company now projects annual earnings of $6.95 a share, up from prior guidance between $6.40 and $6.45.

πŸ“… These results cover the quarter ended in late March.

🏒 Tapestry owns the Coach and Kate Spade fashion brands.

Bullish Signals
  • Profit surged to $343.8 million, or $1.65 a share, representing significant growth from the prior year's $203.3 million, or 95 cents a share.
  • Adjusted per-share earnings of $1.66 exceeded analyst expectations of $1.30 per FactSet forecasts.
  • Total revenue increased 21% to $1.92 billion, surpassing the consensus forecast of $1.79 billion.
  • The Coach brand was a primary driver with revenue climbing 31%, offsetting a decline in the Kate Spade segment.
  • Tapestry raised its full-year sales guidance to $7.95 billion from the previous target of $7.75 billion.
  • Earnings per share outlook was upgraded to $6.95, an increase from prior projections of between $6.40 and $6.45.
  • Management's decision to lift the full-year outlook signals strong confidence in sustained demand fueled by Coach's performance.
Risk Factors
  • Tapestry's Kate Spade segment experienced a decline in revenue, contracting 10% compared to the prior year.
  • The company raised its full-year sales outlook to $7.95 billion from a prior guidance of $7.75 billion, indicating that previous projections were significantly understated.
Full Analysis
Tapestry Inc., the parent company of the Coach and Kate Spade brands, has significantly improved its full-year financial outlook following a robust performance in its fiscal third quarter that ended in late March. The company reported quarterly profits of $343.8 million, or $1.65 per share, which marks a substantial increase from the $203.3 million profit recorded during the same period in the prior year. When accounting for non-recurring items, Tapestry's adjusted earnings per share reached $1.66, surpassing the $1.30 analysts had predicted based on consensus data from FactSet. Revenue growth was a standout metric for the quarter, rising 21% to reach $1.92 billion, significantly exceeding the $1.79 billion that analysts had forecast. This broader revenue increase was primarily fueled by strong momentum within its Coach brand, which saw sales jump 31%. In contrast, the Kate Spade & New York segment experienced a 10% decline in revenue during the same period, though it did not offset the overall positive trend driven by Coach. As a result of this third-quarter performance, Tapestry is raising its full-year sales guidance from $7.75 billion to $7.95 billion. Additionally, the company has revised its earnings per share projection upward to $6.95, an increase from its previous guidance range of $6.40 to $6.45 a share. The market reaction highlights the divergent performance between its two major labels, with Coach serving as the primary engine for growth while Kate Spade faces continued challenges in a changing retail environment.