Tapestry Coach Store

Tapestry Reports Strong Performance for Second Fiscal Quarter

In Addition to Increased Sales, the Coach Owner’s Impending Acquisition of Capri Holdings is Still on Track

Tapestry Inc. maintained its growth trajectory in the second fiscal quarter, setting the stage for a significant expansion later this year with its planned acquisition of competitor Capri Holdings.

Despite a slight dip in net income for the quarter, which fell to $322 million from $330 million compared to a year ago, the company’s performance improved notably when excluding special items.

Adjusted net income surged by 14.2 percent to $377 million, translating to earnings per share of $1.63 — surpassing analysts’ expectations by 17 cents, according to FactSet.

Sales for the parent company of Coach, Kate Spade, and Stuart Weitzman increased by 3 percent to $2.08 billion for the quarter ending Dec. 30.

Joanne Crevoiserat, the chief executive officer, emphasized the dedication of Tapestry’s teams during the crucial holiday season, attributing the success to innovative products, compelling storytelling, and operational efficiency.

Crevoiserat stated, “We have an unwavering commitment to deliver sustainable growth and shareholder value,” affirming the company’s focus on consumer-centric strategies, brand development, and leveraging data-driven customer engagement platforms to enhance creativity, speed, and agility.

Tapestry revised its outlook for the year, now anticipating EPS of $4.20 to $4.25, up from the previous estimate of $4.10 to $4.15 announced in November. Revenues are projected to increase by 1 percent to approximately $6.7 billion.

The company confirmed its plan to finalize the acquisition of Capri, the parent company of Michael Kors, Versace, and Jimmy Choo, within this calendar year. To facilitate the transaction, Tapestry incurred $6.1 billion in debt in November but remains committed to reducing its gross leverage ratio to below 2.5x debt/adjusted earnings before interest, taxes, depreciation, and amortization within two years of completing the deal.

With regulatory approval from China granted in January, the acquisition of Capri is nearing its culmination, marking a significant step forward for Tapestry.