The Coach Owner Experienced Q3 Financial Setbacks Following Strategic Merger With Michael Kors and Versace Owner
Tapestry Inc. experienced a 25.3 percent decline in third-quarter net income, falling to $139.4 million, or 60 cents a share, from $186.7 million, with costs related to the pending acquisition of Capri Holdings. The acquisition caused a decrease in revenue by 1.8 percent to $1.48 billion from $1.51 billion.
The company’s adjusted earnings per share of 81 cents surpassed analyst projections of 68 cents. Sales in North America dropped 3 percent but saw a 3 percent increase internationally. Digital sales accounted for over a quarter of total sales, with a significant increase post-pandemic.
CEO Joanne Crevoiserat expressed optimism for future growth despite challenges, reporting that Tapestry added 1.2 million new customers in North America, focusing on Gen Z and Millennials. The company expects net revenues for the fiscal year to remain flat and a rise in earnings per share by 8-9 percent. Tapestry stock declined 2.1 percent in premarket trading.
In light of the Federal Trade Commission’s resistance to the Capri acquisition, Tapestry defends its position, disputing claims that the merger would harm competition in the luxury handbag market, labeling the lawsuit as unreasonable. The company asserts that the FTC misunderstands the fashion industry’s dynamics and consumer behavior.