Tapestry Inc. raised its guidance again for the year on stronger-than-expected sales at its biggest brand Coach.
The handbag company now sees revenue of more than $6.85 billion in the current fiscal year, the company said Thursday in a statement. That would be a 3 percent increase from the prior year. The company had already raised its sales guidance in November.
Tapestry reported an 11 percent sales increase at Coach in the most recent quarter. That jump in revenue was more than analysts had been expecting.
The shares rose 13 percent in Thursday premarket trading in New York.
Tapestry also raised its outlook again for profit. The company now expects earnings per diluted share of $4.85 to $4.90. It had previously expected a range between $4.50 to $4.55. The increase is in part because of the $2 billion accelerated share buyback the company announced in November. In addition to that programme, Tapestry said Thursday it has $800 million remaining under its previous share repurchase authorisation.
The company said its outlook embeds the expectation for an additional 10 percent tariff on goods imported from China into the US, which is expected to have an immaterial impact on fiscal 2025 results.
Tapestry’s results are in stark contrast to its rival Capri Holdings Ltd., which said on Wednesday that sales in the most recent quarter fell 12 percent. Tapestry executives had planned to acquire Capri, which owns Michael Kors and Versace, and reverse its sales slump. But after a federal judge ruled the deal would harm competition, the two companies called off the deal in November.
Since then, Tapestry’s shares have risen, underscoring the relief from some on Wall Street that Tapestry won’t get mired in turning around Capri and can instead focus on continuing to boost sales at Coach and lifting revenue at its struggling Kate Spade brand. Sales at Kate Spade fell 10 percent in the most recent quarter, more than expected.
By Jeannette Neumann
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