KEY POINTS

  • Tapestry reported fiscal 1Q19 revenues of $1.38 billion, up 7.2% year over year and higher than the $1.35 billion consensus estimate. Adjusted earnings per share (EPS) was $0.48, higher than the consensus estimate of $0.45 and up 14.3% year over year.
  • Comparable sales were up 4% at Coach, beating the consensus estimate of 3.3%, and comparable sales were down 5% at Kate Spade, lower than the consensus estimate of down 2.5%.  
  • For the full year, the company raised its EPS growth forecast to $2.75–$2.80, up from $2.70–$2.80 and compared to the consensus estimate of $2.77. Tapestry reaffirmed its revenue guidance of $6.1–$6.2 billion compared to the consensus estimate of $6.16 billion.

Fiscal 1Q19 Results

Tapestry reported fiscal 1Q19 revenues of $1.38 billion, up 7.2% year over year and higher than the $1.35 billion consensus estimate. Adjusted EPS was $0.48, higher than the consensus estimate of $0.45 and up 14.3% year over year.

Segment Update

By segment, net sales for Coach increased 4% on a reported and constant currency basis, totaling $961 million for the first quarter, compared to $924 million in the prior year. Comparable sales were up 4% at Coach, beating the consensus estimate of 3.3%.

Net sales for Kate Spade increased 21% on a reported and constant currency basis, totaling $325 million for the first quarter compared to $269 million in the prior year. Comparable sales were down 5% at Kate Spade, below the consensus estimate of down 2.5%.  

Net sales for Stuart Weitzman decreased by 1% on a reported and constant currency basis, totaling $95 million for the first quarter compared to $96 million in the prior year. The company did not report comparable sales figures for Stuart Weitzman.

During the first quarter, the company added 24 net new stores across its brands. The new locations are primarily focused in international markets, taking the store total to 1,456 stores. 

Coach Create celebrated its one-year anniversary this month with its customization program; customization is offered in 110 stores, supported by over 200 on-site crafts people. This service will expand to over 150 stores by fiscal year-end, and over 200 locations offer the service through other facilities in North America and Asia.

The company reported that it is looking forward to fashion innovation across its brands and to continued distribution growth, notably in international markets, with the arrival of the inaugural collection under Kate Spade’s new Creative Director, Nicola Glass, in January 2019. 

Outlook

For the full year, the company raised its EPS growth forecast to $2.75–$2.80, up from $2.70–$2.80, compared to the consensus estimate of $2.77. Tapestry reaffirmed its revenue guidance of $6.1–$6.2 billion compared to the consensus estimate of $6.16 billion. 


Leave a Comment