Tapestry Inc., the luxury fashion house behind Coach, Kate Spade, and Stuart Weitzman, delivered better-than-expected results in its fiscal fourth quarter, even as it faces scrutiny over its proposed $8.5 billion acquisition of Capri Holdings.
The company's net income declined by 28.9% to $159.3 million, or 68 cents per share, compared to $224.1 million, or 95 cents per share, from the same period last year. Despite this decline, Tapestry's adjusted earnings per share of 92 cents surpassed Wall Street's forecast of 88 cents.
Revenue for the quarter slipped 2% to $1.59 billion, but still outpaced analysts' estimates of $1.57 billion. This performance was largely driven by Coach, whose sales held steady at $1.3 billion, counterbalancing declines in other brands—Kate Spade's sales dropped by 6% to $290.1 million, while Stuart Weitzman saw a sharp 19% decrease to $50.6 million.
Investor sentiment was positive, with Tapestry's shares rising 5.4% to $40.01 in premarket trading. CEO Joanne Crevoiserat highlighted the strong finish to the year amid a challenging environment, emphasizing the company's "bold vision for the future" and commitment to growth and shareholder value.
The acquisition of Capri Holdings, which would bring Michael Kors, Versace, and Jimmy Choo under Tapestry's umbrella, is seen as a strategic move to enhance the company's international presence. However, Capri's current struggles, including declining sales and softer global demand, have added complexity to the deal.
Tapestry's sales in North America dipped 1% to $1 billion, while Greater China and Japan experienced declines of 13% and 9%, respectively. Conversely, European sales surged by 26% to $92.3 million, offering a bright spot in the company's global operations.
For the full fiscal year, Tapestry's sales remained flat at $6.7 billion, with a 3% increase in Coach's business offset by decreases in other brands. The company successfully managed its inventory, reducing levels by 10% compared to the previous year. Looking ahead, Tapestry projects stable sales of approximately $6.7 billion and expects earnings per share to grow modestly to between $4.45 and $4.50.
As the company pushes forward with its Capri acquisition and seeks to bolster its global footprint, its Q4 performance underscores resilience and strategic focus amid challenging market conditions.
The company's net income declined by 28.9% to $159.3 million, or 68 cents per share, compared to $224.1 million, or 95 cents per share, from the same period last year. Despite this decline, Tapestry's adjusted earnings per share of 92 cents surpassed Wall Street's forecast of 88 cents.
Revenue for the quarter slipped 2% to $1.59 billion, but still outpaced analysts' estimates of $1.57 billion. This performance was largely driven by Coach, whose sales held steady at $1.3 billion, counterbalancing declines in other brands—Kate Spade's sales dropped by 6% to $290.1 million, while Stuart Weitzman saw a sharp 19% decrease to $50.6 million.
Investor sentiment was positive, with Tapestry's shares rising 5.4% to $40.01 in premarket trading. CEO Joanne Crevoiserat highlighted the strong finish to the year amid a challenging environment, emphasizing the company's "bold vision for the future" and commitment to growth and shareholder value.
The acquisition of Capri Holdings, which would bring Michael Kors, Versace, and Jimmy Choo under Tapestry's umbrella, is seen as a strategic move to enhance the company's international presence. However, Capri's current struggles, including declining sales and softer global demand, have added complexity to the deal.
Tapestry's sales in North America dipped 1% to $1 billion, while Greater China and Japan experienced declines of 13% and 9%, respectively. Conversely, European sales surged by 26% to $92.3 million, offering a bright spot in the company's global operations.
For the full fiscal year, Tapestry's sales remained flat at $6.7 billion, with a 3% increase in Coach's business offset by decreases in other brands. The company successfully managed its inventory, reducing levels by 10% compared to the previous year. Looking ahead, Tapestry projects stable sales of approximately $6.7 billion and expects earnings per share to grow modestly to between $4.45 and $4.50.
As the company pushes forward with its Capri acquisition and seeks to bolster its global footprint, its Q4 performance underscores resilience and strategic focus amid challenging market conditions.