On November 19, 2024, the US fashion brand Coach will feature its logo prominently in New York. Following a quarterly earnings report, Tapestry, the parent company of Coach, saw its stock rise by 15% after reporting better-than-expected boosts to its full-year revenue forecasts, now projecting over $6.85 billion and earnings per share between $4.85 and $4.90. This comes shortly after Tapestry abandoned a planned merger with Capri, which has faced declining sales for luxury brands like Versace and Michael Kors.
Tapestry reported strong performance for Coach, with an 11% year-over-year increase in sales, while its other brands, Kate Spade and Stuart Weitzmann, suffered declines of 10% and 15%, respectively. Tapestry CFO Scott Roe indicated that the company’s guidance accounts for a 10% tariff on goods imported from China, but noted that less than 10% of its procurement comes from China.
Tapestry is focusing on growth through product revamps and customer acquisition, particularly among younger demographics, having gained approximately 2.7 million new customers in North America, primarily Gen Z and Millennials. Key products include the popular Tabby shoulder bag and the new New York bag collection.
In terms of regional performance, North America accounted for nearly 70% of quarterly sales, while Europe saw a remarkable 45% revenue increase, contrasting with a 5% decline in Japan. Tapestry aims to revitalize Kate Spade by reducing the number of handbag styles and focusing on quality over discounts to enhance brand global positioning.
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