Tapestry Inc. has recently posted its third quarter financial results which generally beat the market estimates. The company had its earnings-per-share at 54 cents-per-share which surpassed the estimated data of just 50 cents-per-share. Generally, this was a 17.4% increase on year-over-year basis.
The revenue of the fashion house added $1.32 billion from $995.2 million in the said period. The surge rooted from the higher sales of Coach products and the recent acquisition of Kate Spade. Market estimates only predicted a $1.3 billion data for the said period.
“Our solid third quarter performance was consistent with our expectations, as we achieved double-digit increases in sales and earnings per share. We leveraged these sales gains, tightly controlling costs, and delivered operating income growth ahead of the top line increase.” Victor Luis, Chief Executive Officer of Tapestry, Inc. told reports.
Coach has also helped Tapestry’s earnings report during the quarter. However, Stuart Weitzman and Kate Spade both had a rather negative effect unlike Coach. These two brands contributed to the declines of the company’s shares after indicating weak performances in its recent reports.
During the period, Coach has undergone a overhaul in terms of its designs. Also, the company has decided to reduce discounts which ultimately helped the brand generate a 3% increase in global sales.
Despite the revenue increase and improvement in Stuart Weitzman, the company also noted that the brand had suffered from production delays. This has caused lower sell-through of key carryover styles.
“At Stuart Weitzman, results were negatively impacted by execution issues including production delays and lower sell-through of key carryover styles.” Luis explained in a release.
Meanwhile, Kate Spade’s global sales had a 9 percent drop during the third quarter. Tapestry announced that the company is planning to minimize the wholesale distribution to amp up the brand’s sales. The parent company also noted the flash sales sites dented the records of the label as well.
“Kate Spade contributed to our overall performance. Most importantly, we were delighted to announce the appointment of Anna Bakst as CEO and Brand President. Together with Creative Director Nicola Glass, we now have the leadership team in place to drive the brand forward globally.” The CEO added.
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