Tapestry Inc. reported second-quarter earnings and sales that beat estimates as its turnaround plan continues to gain momentum.
The parent company of Coach, Kate Spade and Stuart Weitzman reported that its net income totaled $311.0 million, or $1.11 per share, for the quarter ended Dec. 26, up from $298.8 million, or $1.08 per share, in the year-ago period. Adjusted earnings per share of $1.15 beat analysts’ estimates for $1.00.
“Our results significantly outpaced expectations driven by the successful execution of our acceleration program,” said CEO Joanne Crevoiserat, who took the reins of the company in October following the resignation of Jide Zeitlin in July. “Our sharpened focus on the consumer fueled new customer acquisition across all brands with notable sales gains in digital and China.”
Crevoiserat noted that Tapestry’s profit growth came in the face of “unprecedented COVID-related external headwinds, including pressured bricks-and-mortar traffic, store closures and capacity limits, as well as higher freight costs and shipping constraints.”
Net sales fell 7% to $1.69 billion, down from $1.82 billion last year, but beating estimates of $1.63 billion.
By brand, Kate Spade sales fell 13% to $376 million, while sales at Coach decreased 4% to $1.23 billion. Stuart Weitzman sales totaled $85 million compared to $116 million last year.
E-commerce growth was in the triple digits. Digital sales accounted for nearly half of revenue in North America, and one-third of global sales.
Tapestry’s revenue in Mainland China rose 30% over last year. The company said it achieved record sales during Alibaba’s annual 11.11 mega-shopping event.
Tapestry expects sales for the full fiscal year to rise in the high-single digits on a 52-week basis, and 10% for 53 weeks.
“As we enter the second half of our fiscal year, we are optimistic for the future in spite of the uncertain backdrop,” stated Crevoiserat. “Looking forward, I am confident that Tapestry will emerge from the pandemic stronger, well-positioned to both capture market share at higher levels of profitability and fully unlock the flywheel of sustainable, long-term growth.”