Coach owner Tapestry reported Thursday quarterly results that topped its own estimates, driven by triple-digit e-commerce growth and a strong rebound in China.
“We are very pleased with our first quarter results, which exceeded expectations,” CEO Joanne Crevoiserat said in a statement. “Our performance underscores the power of our brands.”
While the company, which also owns Kate Spade, is not offering a full-year outlook at this time due to the uncertainty stemming from the coronavirus pandemic, it said that given the strong start to fiscal 2021, it is now forecasting revenue and profits will grow for the year.
Tapestry shares were up nearly 10% in premarket trading.
Here’s how the retailer did during its fiscal first quarter of 2021, compared with what analysts were expecting, using Refinitiv data:
- Earnings per share: 58 cents, adjusted, vs. 23 cents, expected
- Revenue: $1.17 billion vs. $1.07 billion, expected
For the quarter ended Sept. 26, Tapestry said net income rose to $231.7 million, or 83 cents per share, from $20 million, or 7 cents a share, a year earlier, when Tapestry recorded more than $70 million in impairment charges.
Excluding one-time charges during the latest quarter, Tapestry earned 58 cents per share, outpacing analyst expectations for 23 cents per share from Refinitiv.
Sales fell 14% to $1.17 billion from $1.36 billion a year ago, buoyed by strength online and double-digit revenue growth in Mainland China. Despite the decline, sales topped analyst estimates of $1.07 billion.
Fewer consumers have been stocking up on purses and high-heeled shoes, as many have culled their spending on accessories and apparel during the pandemic.
Coach sales fell 9% from a year earlier to $875.4 million, while Kate Spade sales fell 21% to $240.4 million, and Stuart Weitzman sales dropped 35% to $56.4 million.
For those who are shopping, many purchases are shifting online. The company said it gained nearly 800,000 new customers across its three brands online in North America during the quarter.
Tapestry said its inventories at the end of the quarter totaled $811 million, compared with $880 million a year earlier.
Earlier this week, the company named Crevoiserat as chief executive officer, effective immediately. She had been serving as interim chief after Jide Zeitlin resigned abruptly in July, amidst an investigation into allegations regarding his personal behavior.
As of Wednesday’s market close, Tapestry shares are down about 21% this year. The company has a market cap of $5.9 billion.
Find the full earnings press release here.