Tapestry Inc. Reports Strong Q2 Growth, Primarily Driven by Coach

Updated 4:56 p.m. ET Feb. 5

Inspirational Growth in Sales

Tapestry Inc.’s Coach brand continues to propel the company forward, achieving significant growth in the fiscal second quarter. This impressive performance has led to a heightened outlook for the full fiscal year, signaling robust consumer confidence and operational excellence.

Sales Surge for Coach

In the latest quarter, Coach reported a remarkable 25% increase in sales, reaching $2.1 billion for the period concluding on December 27. Originally renowned for introducing the term “accessible luxury,” Coach is now solidifying its position in the upscale market, appealing to a broader demographic.

Struggles for Kate Spade

Conversely, Kate Spade, another brand under the Tapestry umbrella, faced challenges, with sales dropping 14% to $360 million. This decline aligns with management’s expectations as the brand resets its operations, emphasizing the need for a strategic overhaul.

Significant Earnings Boost

Tapestry’s net earnings soared by 81%, amounting to $561 million, while adjusted earnings per share rose 34% to $2.69. This performance exceeded analysts’ forecasts by 46 cents, illustrating the impactful financial resilience of the company. Total revenues also increased by 14%, showcasing strong overall growth.

International Performance Highlights

The company experienced noteworthy growth across various regions, with pro forma constant currency sales escalating by 17% in North America, 22% in Europe, and 18% in the Asia-Pacific area. These results highlight Tapestry’s expanding global footprint and diverse market appeal.

Investor Confidence and Shareholder Returns

Despite high expectations, Tapestry’s results pleasantly surprised investors, driving shares to an all-time high of $145.42. The company’s market capitalization now stands at $29.6 billion, reflecting a commendable valuation within the American fashion industry. Tapestry aims to return $1.5 billion to shareholders this fiscal year through dividends and share repurchases, further exemplifying its commitment to delivering shareholder value.

A Vision for Sustainable Growth

In an interview, CEO Joanne Crevoiserat expressed confidence in the company’s long-term strategy, focusing on sustainable growth and disciplined operations. With a commitment to creativity and innovation, Tapestry is creating a culture that inspires its teams and enhances customer experiences.

Looking Ahead

As Tapestry prepares for future endeavors, it anticipates an 11% revenue increase for the full fiscal year, targeting $7.75 billion in sales. Earnings per share are projected to rise significantly, demonstrating an optimistic outlook for the company as it continues to navigate the evolving fashion landscape.