Tapestry exceeds expectations with strong quarterly results, raises outlook

Business

A Coach boutique in Chicago Image: Coach

Driven by robust growth at its core brand Coach, US fashion conglomerate Tapestry Inc. delivered surprisingly strong results for the second quarter of fiscal year 2024/25 on Thursday. In light of the positive performance, the company raised its full-year guidance.

In the second quarter, ending December 28th, the group achieved revenue of nearly 2.20 billion dollars, representing a 5 percent increase (5 percent in constant currency) compared to the same period last year.

Strong growth at core brand Coach drives group performance

Growth was fueled by the Coach label, which saw revenue increase by 11 percent (10 percent in constant currency) to 1.71 billion dollars. This significant gain was sufficient to more than offset declines at the group's smaller brands. Kate Spade revenue decreased by 10 percent (10 percent in constant currency) to 416.4 million dollars, while Stuart Weitzman revenue contracted by 15 percent (16 percent in constant currency) to 69.7 million dollars.

Thanks to a higher gross margin, operating income rose by 10 percent to 492.8 million dollars. Due to the repayment of a loan taken out for the now-abandoned acquisition of competitor Capri Holdings, reported net income declined by 4 percent to 310.4 million dollars. However, adjusted net income, excluding one-time items, increased by 19 percent to 450 million dollars.

Management raises targets for the current fiscal year

The latest figures prompted management to raise its full-year guidance. Revenue is now expected to grow by approximately 3 percent to 6.85 billion dollars. Previously, the company had projected growth of only 1 to 2 percent to 6.75 billion dollars.

The target for adjusted diluted earnings per share, previously set at 4.50 to 4.55 dollars, has been raised to 4.85 to 4.95 dollars. This would represent growth of 13 to 14 percent compared to the prior year.

This article originally appeared on FashionUnited.DE. It was translated to English using AI and edited by Rachel Douglass.

Tapestry